§ Sir K. WoodI beg to move, in page 16, line 18, to leave out from "than ' to the end of line 25, and to insert:
one third of the price of acquisition of that interest he shall be entitled to be indemnified by the mortgagee to the following extent, that is to say—This is an Amendment which I explained to the Committee in considerable detail in my general statement, when I dealt with all the Amendments in relation to mortgagors, mortgagees, and similar matters.
- (a)if the amount secured by the mort gage at the relevant date does not exceed one half of the said price, against one sixth of his net liability;
- (b)if the said amount exceeds one half but does not exceed two thirds of the said price, against one third of his net liability
- (c) if the said amount exceeds two thirds but does not exceed three quarters of the said price, against half his net liability;
- (d) if the said amount exceeds three quarters of the said price, against two thirds of his net liability."
§ Mr. BarnesI should be obliged if the Chancellor of the Exchequer would elucidate one point concerning arbitration or valuation. The right hon. Gentleman will appreciate that a fair number of disputes may arise between borrowers and building societies. Whereas two individuals, in equal circumstances, would probably see the advantage of avoiding any legal costs and avail themselves of the arbitration procedure, it might be that, although the majority of building societies would adopt a reasonable attitude in such matters, some societies might adopt an arbitrary attitude or rule concerning a certain category of cases. As the majority of borrowers from building societies are people of small means, who would not venture to assert their rights in the courts, the building societies would have the advantage of going to the courts, and the mortgagors would be at a disadvantage. Can the Chancellor indicate whether, in a matter of this sort, the building societies will be expected to take a reasonable view? I know that one cannot take away from them their rights within the law, but sometimes, in matters of taxation and so on, the Chancellor gets a general understanding that a benefit will be passed on to the consumers or users. Therefore, I ask 417 whether we may have a general assurance that the building socieies will treat these provisions in the spirit which the Committee intends.
§ Sir K. WoodThe Committee will remember that in my statement I said that if the parties agreed, there was a certain procedure that could be adopted, but that if they did not agree, the ordinary rights of going to the courts would apply. I feel sure hon. Members will agree with me when I say that we could not deprive the subject of the right of going to the courts in such circumstances. In reply to the hon. Member for East Ham, South (Mr. Barnes), I have every reason to think that the building societies will operate these provisions in the spirit in which I am sure the Committee desires them to do so. I have had many conferences with the building societies concerning this Bill, and I can say that they have endeavoured, while having regard to their own proper interests, to consider my proposals from the point of view of the national interest. If a case arose in which I thought they were not carrying out the intention of the Measure, I would not hesitate to speak to them about it, but I have not the slightest reason to think that at any rate the great majority of the building societies, who have only the public interest to serve, will not have regard to the wishes of the Committee. If occasion arose, I would undoubtedly point that out to them, but I hardly think it will be necessary.
§ Amendment agreed to
§ Further Amendments made:
§ In page 17, line 17, leave out "value," and insert "price of acquisition."
§
In line 18, leave out "value of all the," and insert
of the price of acquisition of the interest and of the value of all the other—[Sir K. Wood.]
§
The following Amendment stood upon the Order Paper in the name of SIR K. WOOD:
In page 17, line 20, leave out subsection (4), and insert: —
( ) In relation to a case—
the foregoing provisions of this Section shall have effect as if any reference to the price of acquisition of the interest were a reference to the value of the interest.
§ The ChairmanIn relation to this Amendment and the Amendment in page 17, line 47, I have received a request which really amounts to asking that these two Amendments should be dealt with in a different form so as in effect to be new Amendments. The Chancellor of the Exchequer has given his general explanation, and I think the Committee understands and approves what is meant; but it would have been a little unfortunate, if this matter were going 'to be debated, that these new Amendments should not have been put on the Order Paper. I think it is necessary in present circumstances that I should explain the point exactly to the Committee so that they may be aware of the proposed Amendments. In page 17, line 20, there will be an Amendment simply to leave out Sub-section (4) and not to insert any words. When we reach the Amendment in page 17, line 47, there is on the Paper an Amendment to add at the end a long passage—that will now be to add that passage with the insertion therein of the words which are not being moved in on this Amendment in line 20, but which it is now intended shall be brought in as part of the words to be moved in on the Amendment to line 47.
§ Sir K. WoodI beg to move, in page 17, line 20, to leave out Sub-section (4).
I regret any inconvenience which may have been caused in this matter. It is a question of the Amendment having been put down in the wrong place. I think the Committee will fully appreciate that the draftsmen have had a considerable task in dealing with these Amendments.
§ Amendment agreed to
§ Further Amendments made:
§ In page 17, line 29, after "hundred," insert "and fifty."
419§ In line 32, leave out "two hundred and fifty," and insert "five hundred."— [Sir K. Wood.]
§ Sir K. WoodI beg to move, in page 17, line 42, after "created," to insert
to secure a capital sum (whether with or without interest).It may happen that on the sale of an interest in consideration of a rent charge a mortgage, as defined by Clause 83, is created to secure the payment of the rent charge. Clause 20 does not quite fit this case, and on the analogy of the exclusion of rent charges from Clause 18 and the Fourth Schedule—and also, of course, there is no question in such a case of a relation analogous to that of landlord and tenant—there is no case for the mortgagor receiving an indemnity. The Amendment rules out such cases by confining the claim to mortgages to secure a capital sum.
§ Amendment agreed to.
§ Further Amendment made: In page 17, line 47, at the end, add:
§
Provided that this Section does not apply to a mortgage which was created on the occasion of the acquisition by a person of an interest in, or on the occasion of the execution of any such works as aforesaid for the benefit of, more than one contributory property, or was substituted for a mortgage so created.
( ) Where a claim for indemnification under this Section is made by a direct or indirect contributor in respect of a contributory property to which this Section applies, as being a property which consists of or comprises premises used, or suitable for use, for residential purposes, and a dispute arises as to the value of the interest of the contributor or of any other property subject to the mortgage, then, if a request in that behalf is made to the Commissioners of Inland Revenue by the contributor and the mortgagee, the Commissioners may certify the value of the interest or other property in question, and the determination of the Commissioners shall be final and conclusive as between the contributor and the mortgagee.
( ) For the purposes of this Section—
( ) In relation to a case—
the foregoing provisions of this Section shall have effect as if any reference to the price of acquisition of the interest were a reference to the value of the interest." — [Sir K. Wood.]
§ Clause, as amended, ordered to stand part of the Bill.
§ Clauses 21 and 22 ordered to stand part of the Bill.