SETTLED LAND AND TRUSTEE ACTS (COURT'S GENERAL POWERS) BILL [Lords] (Hansard, 20 April 1943)

§ The Attorney-General (Sir Donald Somervell)
I beg to move, "That the Bill be now read a Second time."
This Bill will, I think, prove wholly non-controversial. As its Title says, it deals with settled land, and it extends the powers of the courts to sanction expenditure out of capital in respect of repairs, maintenance and management of settled land, subject to rather strict conditions. The first condition is that the person who would normally bear that expenditure, who would be the tenant for life, has to satisfy the court that his available income from all sources is insufficient to meet this expenditure on maintenance or management which would normally fall to be met out of income, and he has to show that that is due to war circumstances. The war circumstance that strikes the eye is the very large increase in direct taxation, but there are also cases where the income of settled estates has been drastically affected by war damage; properties from which rents previously came no longer bring in any rents. In the second place, that stile having been got over, he has to satisfy the court—and this is really the basic principle of the Bill—that the expenditure is in the interests of all those concerned; that it is in the interests of the property and the upkeep of the property, whether agricultural or house property, that this expenditure should be made, and not for some personal extra comfort for himself. Cases have been brought to our attention where undoubtedly, owing to the diminution of the income of the life tenant owing to war taxation or war damage or other war circumstance, not only are the interests of those affected now and hereafter prejudiced, but the national interest is being prejudiced, in that the expenditure on management and repairs, which ought to be met whether the land is agricultural or house property, is not, and cannot be, met.
The Bill has received the general blessing of those who are specially concerned with this branch of the law. I hope that it will commend itself to the House. It is hedged about with fairly strict conditions. The court is entitled 1635 to look at all the circumstances before making an order, but I believe it will meet what one may call hard cases in that the individual is affected, but they are hard cases owing to the fact that property has deteriorated owing to lack of maintenance.

§ Mr. Hutchinson (Ilford)
My right hon. and learned Friend has pointed out that the purpose of this Bill is to enable the capital moneys of settled estates to be applied in certain circumstances to income purposes. The reason why it has been found necessary for provision of this sort to be made is because of the altered position of the tenant for life, arising out of the increased taxation consequent upon the war. The tenant for life is not the only person who to-day finds that he must meet, out of his capital, expenses which would normally be met from income. There are many people, besides tenants for life, who are in this unfortunate situation. The purpose of my intervention is to invite my right hon. and learned Friend to consider whether, at a later stage of this Bill, its usefulness might not be further increased, if the power to expend capital moneys which the Bill confers upon the tenant for life was to be extended in certain directions. My right hon. and learned Friend pointed out that, before these expenditures can be undertaken, it is necessary to obtain the sanction of the court. That involves an application to the court. I want to invite him to consider whether, in respect of certain classes of expenditure, it might not be practicable to enable the tenant for life to undertake certain expenditure without the necessity of making any application to the court. I do not suggest to my right hon. and learned Friend that power to do that should be unrestricted. I would like him to consider whether, within certain limits and in respect of certain classes of expenditure, the usefulness of this Bill would not be increased if the tenant for life was saved the additional expense of making an application to the court. At a later stage of this Bill we shall have an opportunity to consider matters of this nature in greater detail. I intervene to-day for the purpose of directing my right hon. and learned Friend's attention to the matter, in the hope that he will be good enough to give the point some consideration before the Committee stage is reached.

§ Sir Ernest Shepperson (Leominster)
The only point I want to put to my right hon. and learned Friend is this: By giving the tenant for life power to use the capital sum for improvement, because he has not the available money to do it owing to taxation, are we not putting him into the position where he can still carry on without making the sacrifices that other individuals in the country are called upon to make? Does not this Bill enable him to do what he wants to do at the expense of those who follow him in the estate, in the normal way?

§ The Attorney-General
I can only speak again by leave of the House, but perhaps I might reply to the point just put by my hon. Friend the Member for Leominster (Sir E. Shepperson). I would not like there to be any misapprehension with regard to that suggestion. The answer is "No." The safeguards in the Bill have been carefully designed to prevent the power being sanctioned by the court where the result would be merely to allow the tenant for life to escape the sacrifices which are imposed on everyone else. Undoubtedly there are cases in which the tenant for life, having made the same and, possibly, even greater, sacrifices than have been made by those in an equivalent position with, say, no landed property, is left unable to keep the property in proper repair and to pay the proper expenses of management. The court is enjoined to look at the circumstances of the case, and my hon. Friend may rest assured that the court would not sanction this resort to capital, which they always lean against, if there was any reason to suppose that this expenditure could be made by the life tenant merely making the sacrifices which people with similar incomes are making, and are expected to make, in present circumstances.

§ Mr. Kirkwood (Dumbarton Burghs)
I would like to ask the Attorney-General a question. Will the tenant be required to undergo a means test?

§ The Attorney-General
Yes.

§ Mr. Kirkwood
In the event of the land being reconditioned, does it mean that it would go back to the landlord after being reconditioned by the Government?

§ The Attorney-General
That has nothing to do with this Bill.

§ Mr. Deputy-Speaker (Mr. Charles Williams)
I was about to say that that was outside the scope of this Bill.

§ Dr. Peters (Huntingdon)
I think this Bill is very much needed, because, speaking as one who has to deal with estates in my own practice, I know the great need for it. But it creates, of course, a very great precedent, and we must be careful what we do. My hon. and learned Friend the Member for Ilford (Mr. Hutchinson) suggested certain circumstances whereby the tenant for life should be permitted to do certain things without resort to the courts. He has not defined what was in his mind, but I would say that it would be a dangerous thing to permit the tenant for life to do certain things without full investigation by the court.

§ Mr. Hutchinson
My hon. Friend appreciates that the tenant for life may do that in certain circumstances already, under the existing law?

§ Dr. Peters
I am talking with a full knowledge of the present law, but we are now dealing with a substantial alteration, and I urge the Attorney-General to look carefully into the suggestion which my hon. and learned Friend has made.