CLAUSE 39. — (Destination of payments in certain cases.) (Hansard, 25 February 1941)

§ Sir K. Wood

I beg to move, in page 33, line 9, at the end, to insert: ( ) A devise or bequest of an interest in, or in the proceeds of sale of, land which sustains war damage in respect of which a value payment is made, or in, or in the proceeds of sale of, a tenancy in respect of which a payment is made under Section eleven of this Act, contained in a testamentary disposition made before the occurrence of the war damage shall, in the absence of any contrary intention expressed therein or in any other testamentary disposition made by the testator, have effect as if it had included a bequest of any such payment, or of any part of any such payment, to which the testator might become entitled in respect of that interest. This Amendment concerns an important matter. It deals with cases where interest in land, or in the proceeds of land, which has suffered war damage, passes, under a will made before the war 431 damage occurs. If the interest left to a person by the will is a freehold or a tenancy that goes on, and if the property is so badly damaged before the testator's death that a value payment is made in respect of it, the person to whom it is left will suffer the loss of taking a badly damaged property and the persons to whom the residue of the testator's property is left will suffer nothing. It is, therefore, right that the value payment should go to the former. If the interest left is a tenancy which the testator disclaims after the damage, the person to whom it is left would, apart from this Amendment, take nothing. The Amendment assumes that the testator would intend the beneficiary to take something and in effect substitutes the value payment for the destroyed interest. This will prevent the testator's intention being defeated by inadvertence. If the testator adverts to the matter and desires to revoke the gift in the altered circumstances, the Amendment leaves it open to him to do so by altering his will. No provision of this nature is needed for cost of works payments or for value payments, etc., for land which sustains war damage before a will in respect of it is made. In the former case, the person named in the will will take the property and any expense that he incurs in repair will be made good to him. In the latter, the testator has the opportunity of making express arrangements as to the disposal of the payment.

I hope the Committee will accept the Amendment as reasonable, in the circumstances in which we are faced.

§ The Attorney-General

I beg to move, in page 33, line 9, after the words last inserted, to insert: ( ) Where a hereditament sustains war damage at a time when an interest therein is the subject of a contract of sale or of a notice to treat served under an enactment authorising the compulsory acquisition thereof, any value payment in respect of the damage, or share of such a payment, or payment under Section eleven of this Act, payable to the vendor in respect of that interest, shall, unless the contract is rescinded or the notice ceases to have effect, be held by him upon trust for the purchaser: Provided that any lien upon that interest to which the vendor is entitled by virtue of the contract shall extend to that payment or share. 432 This Amendment deals with the case of property which sustains damage at a time when it is the subject of a contract of sale or a notice to treat, under compulsory acquisition procedure, and a value payment or a payment under Clause 11, in respect of a tenancy in a property of exceptional rate value, falls to be made. Under a contract of sale the property sold belongs in equity to the purchaser, and is at his risk, from the date of the contract. The vendor will be entitled to the purchase money, notwithstanding the destruction of the property, and his only substantial interest in it after the contract is made is that he is entitled to a lien on it to secure the payment of the purchase money. In these circumstances, justice requires that the purchaser should have the benefit of any value payment or payment under Clause 11, except that the vendor should have a lien on it until the purchase money is paid. Probably the general law would bring this about if the Amendment were not made, but it is desirable that the rights of the parties should be made clear. The legal position is in substance the same when a notice to treat for a compulsory acquisition is served as it is when a contract for sale is made, and it is therefore treated in the same way under the Amendment. The general law would conduce to that result, but it is desirable that it should be clearly stated in the Bill.