CLAUSE 2.—(Power of court to take account of other liabilities.) (Hansard, 3 July 1940)

§ Vice-Admiral Taylor (Paddington, South)
I beg to move, in page 2, line 42, to leave out "may," and to insert: 937 shall unless good cause to the contrary is shown. The object of the Amendment is to carry out the purpose of the Clause as stated. It is hereby declared for the removal of doubt that on an application for leave to exercise any of the rights or remedies … I want to remove doubt more than it is removed in the Clause as it stands. In its present form it is left to the discretion of the court as to whether account is taken of other liabilities, and there is therefore no compulsion in the matter as far as the court is concerned. It says: In determining the restrictions and conditions (if any) subject to which the leave is to be given; may take account of other liabilities. That does not impose the necessity on the court of taking account of the other liabilities. I should like to state two cases that I have in mind. In one there are several landlords concerned and the tenant is unable to meet the rent which he ought to pay to those several landlords. All but one comes to an agreement with the tenant as to what he shall pay, but one stands out, will not come to any agreement and takes proceedings in the court. He proves to the satisfaction of the court that the tenant can pay him in full. An order is then made out that he shall pay in full. That means that the agreement that has been come to with the other landlords is null and void. It leads inevitably to the loss of the tenant's business, he will have to go into the bankruptcy court, all the money that has been put into the business is lost, and the whole business goes by the board. That seems to me to be a most unfair proceeding. If there was an obligation on the court to take into account all the other liabilities, that would not arise. The other liabilities would have to be taken into account notwithstanding the fact that one landlord has taken proceedings.
I have a case of a widow of an officer who was killed in the last war who is in receipt of a pension of £3 a week. Owing to the war she is unable to meet her rent. She can pay only half. Early this year the landlord pressed for possession. In June he made an application to distrain. The case came before Master Moseley. An affidavit was filed setting forth the full position of the defendant. Master Moseley asked, "Can she pay the contractual rent?" He was told, "No, 938 only half the rent." He made an order for possession. In regard to the rent in arrear, he gave leave to distrain, but suspended it if the rent was paid at the rate of £5 a month. When exception was taken to this decision, Master Moseley said that, of course, the order could be appealed against. As a matter of fact this unfortunate widow has lost her business, the landlord has taken possession, and she is entirely ruined. What protection is there under the Courts (Emergency Powers) Act in that case? There is simply none. The Master exercised his judgment, no doubt, but he could not have taken into account the conditions brought about by the war and given a fair judgment.
It may be argued that there is an analogy between a landlord and a butcher or baker, but there is none at all. The landlords, in their leases for these apartment houses, definitely state that the premises are to be used for that purpose, and they realise perfectly well that they cannot possibly obtain their rent unless the premises are let. It is a business proposition. If they are not let, they cannot obtain the rent agreed to in the lease. Owing to conditions created by the war it is impossible for these people who signed a lease prior to the war, when conditions were quite different, to carry out the obligation on them of meeting this rent. In the case of a butcher or baker it is quite a different thing. You want to buy so much meat, and you agree to take it at a certain price. If the bill is not paid, the butcher has a perfect right to take proceedings. That is a contract of the moment and not one made prior to the war in conditions quite different from those of to-day. There is no parallel whatever there. I should like to mention the case of a man in my constituency who had nine houses. There were several landlords and one landlord had one of a pair of houses. The tenant could not meet the rent which was demanded, owing to the war. One landlord took proceedings in court and the matter came up for hearing before the Registrar at Marylebone County Court, who said: I know all about the Courts (Emergency Powers) Act. I sat and gave decisions in the last war under the Act. It is the same Act. I know how it worked then and I propose doing the same now. No tenant can expect to stay in possession without paying his rent. All I am concerned with is deciding how he can pay. What do you offer? 939 I ask what protection there is under the Courts (Emergency Powers) Act when that is said in court? An offer of £5 a month was made, but the Registrar said that was not enough and made an order for £10. It was explained that it was only current revenue which could pay this rent. He said he was not concerned with that. The landlord's solicitors complained of payment not being made at a greater rate, and that nothing had been gained by waiting until January this year to issue those proceedings, whereupon the Registrar remarked: You should have issued them earlier. You have only yourselves to blame for waiting. If the rent is due you can issue proceedings. I repeat, What protection is there under the Courts (Emergency Powers) Act when that is what occurs in court? I hope I have made it clear that this Bill requires strengthening. The original Act did not contain sufficient protection for these people. The conditions to-day are entirely different from what they were before the war and therefore greater protection is necessary, and the people are not getting it. There are numerous other cases which I could cite. I claim that to remove doubt it is necessary to insert the Amendment, because that would make it certain that the court "shall" take into account all the other liabilities, and not give an order to one creditor which places him in a privileged position and leaves the other creditors out of account. I hope the Attorney-General will accept this Amendment.

§ Mr. Glenvil Hall (Colne Valley)
I should like to support the plea which has been made by the hon. and gallant Member for South Paddington (Vice-Admiral Taylor). I suppose that the battle over whether the word is to be "may" or "shall" has gone on for a good many years and taken up a good many hours of debate in this House, and, unfortunately, the Law Officers who have put the word "may" into their Bills nearly always carry the day; but I should like to feel that in response to the representations which have been made to-night, and in view of the knowledge which the learned Attorney-General must have of cases in the courts, he will for once allow us to put "shall" instead of "may." By a curious chance, before I came into the House I was reading in the Library 940 a book dealing with the law, and a very learned lawyer there committed himself to the assertion that if the Poor Prisoners Defence Act, 1930, had contained the word "shall" instead of "may," so far as the courts of summary jurisdiction are concerned, it would have worked very much better than it has done. I have not the slightest doubt that before it was passed an attempt was made in this House to make it obligatory instead of permissive, and that the learned Attorney-General of the time, with all the eloquence at his command, assured the House that "may" was the correct word and that "shall" ought not to be used; but as a result the law is not as strong as it might be, and many a poor person has lacked the assistance which I am positive the legislature wanted him to have.
It may be supposed that this is a small Measure, and that this Bill is small because it does not cover many pages; but, as the Attorney-General and the Committee know, the original Act was one of the most important which this House passed in the early days of September, 1939. It has been of the utmost value, but it was obvious at the time, because it was passed quickly and with a certain lack of experience, that amendment would be necessary. I beg the Attorney-General to realise that now is a chance which may not occur again for some time and that this small Amendment is not captious or dilatory but one which, in the opinion of the hon. and gallant Member, should be introduced.
I cannot understand why the drafters of the Bill and the Government should go out of their way to put in the Clause, in order that the matter might be better understood and clarified, and then wish to leave it still permissive to the judges to take other liabilities into account, if they wish to do so, and as they can, and do, at present. My contention, which I hope may carry weight, because, in my view, it is logical and beyond dispute, is that, if you put the Clause in at all in order to make the matter absolutely clear to the courts, this Committee should, in common fairness to the courts, the House of Commons, the public and the debtors who will be helped by this Measure, make it obligatory and not permissive.

§ Sir Robert Tasker (Holborn)
Under the Courts (Emergency Powers) Act, the 941 courts have power to deal with rates. Recently, we passed a Measure to give power to the Metropolitan boroughs such as is enjoyed by provincial boroughs, in relation to rates. The liabilities do not oral there. There is the question of water, gas, electric light, and coal. It seems to me that those were overlooked when we passed, somewhat hurriedly, the Courts (Emergency Powers) Act. The Lord Chief Justice has called attention to the fact that various authorities are empowered to pass rules and regulations and enforce them. In fact, of course, the Metropolitan Water Board and the electric light and gas companies are laws unto themselves. As regards water, it is obvious that unless you have it, you cannot carry on your business, and the water authorities request and require you to pay for the supply in advance. That is a liability. If you do not pay in advance I believe that the authorities actually have no power to cut off the supply until one quarter has expired.

The Deputy-Chairman
The hon. Member is anticipating somewhat. There is an Amendment on the Paper in relation to water. We can deal with the question of water when we reach that Amendment.

§ Sir R. Tasker
I do not want to do more than take the analogy of other liabilities.

The Deputy-Chairman
The hon. Member must not anticipate. That is one of the Rules.

§ Mr. Ralph Etherton (Stretford)
This proposition only carries out the sentiments which were expressed by the Attorney-General himself on the Second Reading of this Bill, and in the circumstances I hope he will see fit to accept what, in my submission, is a very reasonable proposition. The purpose of this Clause is to remove doubt. What the proposal of the hon. and gallant Member does is to remove all doubt. The Clause needs strengthening so as to remove all possible question of doubt, and that is what the words which are proposed to be inserted will effect. Therefore, I hope the Attorney-General will see fit to accept this Amendment.

§ The Attorney-General
Whether my right hon. and learned Friend the present 942 Solicitor-General, when he was the Attorney-General in 1930, adduced the argument against the provision in the Pool Prisoners Defence Act, to which the hon. Member for Colne Valley (Mr. Glenvil Hall) referred, I cannot say, but I think this Amendment raises quite different issues, and I think it is open to real objection. The first objection, which is not the one to which I attach most importance, although I do attach importance to it, is this: This is a declaratory Clause. I have always taken the view, and I think most of the courts have, that under the original Act they were entitled to, and indeed in all proper cases should, take into account other liabilities. The reason why we brought this Clause forth is because some courts took a different view. I am not sure that any appreciable number do now, but in the early stages of the administration people put forward the argument that you must simply look at the debt and say, "Has the person got enough to pay?" It therefore seemed desirable, that argument having been put forward and in some cases having had weight attached to it, that we should declare that no such blinkers were placed on the courts by the original Act. But undoubtedly the original Act did not compel the courts in any way. It left it a matter of discretion. If you put those words in here, you plainly could not read this Clause as a declaratory Clause, and I think that would be a disadvantage because it then might be thought that there were doubts on the other Clause, and people who have to construe these things would say, "Parliament obviously did not intend that the earlier Clause should entitle you to look at other liabilities, because they passed a separate Clause some months later to enable you to do this." Therefore, I attach importance to retaining the declaratory form. Doubt might be thrown on what had already been done and on cases already impending.
The second point is this: If you put in these words, I think you would create great confusion. It would then read: The court shall take account of all other liabilities, whether present or future. There may be cases in which there is no evidence of other liabilities before the court. If you put in these words, you 943 are telling the court that it should not proceed until it has taken account of all other liabilities, present or future. You are, therefore, putting a duty on them to inquire into all other liabilities, whether present or future.

§ Mr. Tinker
What do you mean by future?

§ The Attorney-General
"Future" means accruing, payable in futuro, further instalments under a hire-purchase agreement, and things of that sort. That, I think, would be most unfortunate. I know that it is not what the hon. and gallant Gentleman has in mind. I have considered whether one could have a form of words which would say that they were to take into account liabilities, present or future, if proved before them. I made inquiries about that, but I came to the conclusion that that would be restrictive, rather than effecting what the hon. and gallant Gentleman wants. It would suggest that the court could not take into account all liabilities unless they were proved in the ordinary sense. In many cases, in affidavits there may not be strict proof. There may be some general statement as to liabilities. There may be a general impression in the class of case that the hon. and gallant Gentleman has in mind as to the nature of the business and of the sort of liabilities which are liable to accrue. Therefore, there is an advantage in leaving the words vague, and not putting in a mandatory provision which would suggest that the court has to inquire, and can proceed only on the basis of fairly strict proof.
These reasons lead me to advise the Committee not to accept the Amendment. It would alter the declaratory form and compel the court to undertake an obligatory inquiry which nobody wants. I have not succeeded in finding a form of words which, while not going as far as that, might indicate that stricter proof is required. With regard to the individual cases which the hon. and gallant Gentleman referred to, it is always difficult to deal with individual cases when one has no opportunity of looking into them, but I felt that the real gravamen of his speech was a wider issue than this particular Amendment. He really wants a provision under which, in the case of certain business premises, the rent really can be [...] down during a period when the war 944 has taken away the business. That does not really arise on this Amendment, but goes to the general structure and scheme of the Act.

§ Vice-Admiral Taylor
The Attorney-General said that I wished to have rent cut down. On the contrary, I wish the true position, as it is, to be taken into account. Owners of apartment houses and so on, who depend on the letting of their apartments, have received certain sums of money, which, directly owing to the war, have been cut down, and it is quite impossible for them to meet the rent. It is no use imposing on these people an obligation to pay more than they have got. That merely means that they will have to go out of business, and be put into the bankruptcy court. The rent has to be cut down because of the facts of the case. I want the court to take into consideration what the facts are, and to make an order in conformity with those facts. In the cases I have mentioned that is not being done, and that is very unfair and very wrong. I believe that the Attorney-General is in sympathy with the principle of my Amendment. I believe that he thinks that there should be some further protection for these people. Otherwise, he would not have taken the trouble to endeavour to find some form of words. The whole question is whether the Attorney-General can find a form of words which will carry out in principle what I desire to obtain—greater protection for these people. Although the Attorney-General may have failed up to now, I beg of him to endeavour between now and the Report stage to find some means by which this further protection can be given.

§ Sir R. Tasker
I understood my right hon. and learned Friend to say that the decision of the court would depend upon the ability to pay, and surely ability to pay covers not only rent but every other obligation? Will not the court take that into consideration in determining the rent?

§ The Attorney-General
The Act covers all obligations. The hon. and gallant Gentleman asked whether I would consider this before the Report stage. We hope to get all stages tonight. We are very anxious to get the Bill, and a great many people are anxious. This is very 945 unlikely to be the last word on this subject, though I do not think one could find a form of words which would exactly meet the point of the hon. and gallant Gentleman under this accountancy Clause. I think it right to tell him that we are anxious, if the House will let us have the Bill to-night, to get this legislation through.

§ Vice-Admiral Taylor
The Bill will have to go to another place.

§ The Attorney-General
It has been there already.

§ Vice-Admiral Taylor
Will it not go back?

§ The Attorney-General
Yes, maybe.

§ Vice-Admiral Taylor
It may go back to another place, and may not there be another opportunity to insert something in another place to meet this point?

The Deputy-Chairman
The hon. and gallant Gentleman has asked me a question. The Bill will go back to another place if Amendments are made here, but they can make Amendments in another place only to Amendments that we have made, and they cannot insert new Amendments. Therefore, I think his point would not be met.