COURTS (EMERGENCY POWERS) (SCOTLAND) BILL [Lords.] (Hansard, 25 January 1944)

§ The Lord Advocate (Mr. J. S. C. Reid)
I beg to move, "That the Bill be now read a Second time."
In 1939, the time of the outbreak of war, separate Courts (Emergency Powers) Acts were passed for Scotland and England. As the House is aware, the main provisions were to require that the leave of the Court should be got before creditors could exercise certain rights against debtors. In that way, a good measure of protection was given to debtors if their inability to pay was due to war circumstances. The Scots Act has, I think I may claim, worked smoothly. Very few cases have come before the Court of Session, and there has been no amendment from the outbreak of war until now. In England, where war circumstances have been very different in some districts, there have been four amending Acts in the interval. On each occasion when an amending Bill was proposed for England it was our duty in Scotland, and in particular my duty, to consider how far, if at all, we should adopt parallel legislation. On each occasion I came to the conclusion that that would not be desirable. Most of these amendments impose a great deal of extra restriction on those who seek to enforce their legal rights, and some additional burdens on the Courts. I took the view that we should not propose amending legislation for Scotland until there seemed to be somewhat immediate necessity for it. But I think the time has come when I ought to ask the House to pass an amending Bill.
Much the most important of the Clauses in this Bill is Clause 1. Under the principal Act, relief could be given to debtors only if the contract under which the obligation arose was made before the outbreak of war. That was, of course, on the footing that people who make contracts during the war do so with their eyes open, and normally take steps to provide for what may happen in various circumstances as the war goes on. But a great many things have happened during the war which no one could reasonably have anticipated in the case of a contract made in 1939 or 1940. In England this original restriction was removed in 1941. I began to make inquiries shortly after 634 that, and for the last 18 months I have been making fairly extensive inquiries, to find out whether there was any real necessity for introducing this corresponding change into Scots law, but I have yet to find any single case where the absence of the provision of Clause 1 has made any difference, or where the Clause could have been of any advantage to anybody. There has been no representation brought to my notice nor have I found any real demand for this change. But time moves on and circumstances change, and every day it becomes more likely that something will arise that might cause hardship if this alteration were not made. I realise that this alteration imposes considerable additional burdens on many people, but I think it would be unsafe to leave the matter as it is any longer, because if a case arose there would be considerable and irremediable hardship. Therefore, I ask the House to accept the principle of Clause 1. I should say that I have, within the last few weeks, received notice that the appropriate committee of solicitors in Scotland has recommended that this change should be made. Of course, any debtor who seeks to take advantage of this wider protection must show that the war circumstances on which he relies have arisen after the contract has been made, and not before.
The other two Clauses cover much narrower fields and are rather technical. Clause 2 arises in this way. One of the stages at which protection may be sought by debtors is when the creditor seeks to take possession of or to realise property which has been pledged for the due performance of the debtor's obligations and then the debtor makes default and the creditor seeks to attach the property. Generally speaking, the property belongs to the debtor himself, and then there is no difficulty: the existing Act applies. But where one person pledges his property in security for some other person's obligations, the owner of the property is not entitled, under the existing Act, to seek protection, because he is not a person under any obligation. That matter arose in England in circumstances which would not be exactly paralleled in Scotland, and the form of the English remedy was not precisely applicable in Scotland. I took the view, rightly or wrongly, that it would not be proper to come to Parliament for a separate Act dealing with this very small point, which can occur only in a handful 635 of cases at most, but it so happened that in one case the circumstances were such that had this provision been in operation it could have been appealed to—whether with any success or not I do not know; that would depend on the facts of the case. Therefore, I think it is plainly right that we should take advantage of the opportunity afforded by bringing in Clause 1 to take Clause 2 in addition.
Clause 3 represents another rather technical matter. Where you have a hire-purchase contract, the court may give relief if the seller, shall I call him, seeks to regain possession of the articles which he has let out or sold because the instalments have not been paid. But the contract may be so obscure that, although the court gives protection against resumption of possession, nevertheless there is a forfeiture of the purchaser's rights, so that when the time comes for him to resume payment he finds that his right to do so has gone and that ultimately he will lose the article. Well, that does not seem at all just. This matter was apparently raised in England as early as 1940. I have never heard of a corresponding case in Scotland, and I have had no representations that the Clause is necessary, but there does seem to be some justification for it, and it seems to me that we ought to adopt this Clause, although I have never found a case to which it could apply.

§ Mr. Neil Maclean (Glasgow, Govan)
I would like to ask a question. Is this Bill being made retrospective?

§ The Lord Advocate
No, Sir. I do not think it is possible to make the powers retrospective. What the Bill says, broadly, is that, in a number of circumstances, any creditor who wishes to get a decree from the court, or to use some other remedy, must come to the court and ask leave to put that remedy in operation. Well, if he has already put the remedy in operation, I do not see how that can be undone, and it is only by undoing what has been done that, as far as I can see, you can make this retrospective.

§ Mr. Maclean
That puts me in a position to criticise the Law Officers of Scotland, at this stage, for bringing in a Bill after this has been punishable on people in Scotland. There are firms in my constituency who, by legal action and other means, wished to retain their factories 636 and carry them on under circumstances which would enable them to add to the sum total of war work. But they were put behind and well down with their production because their plant was actually advertised for sale in the Glasgow papers and bills were set up around the factory by the lending party—an English assurance company—and, but for the action of a Scottish bank, these people would have been put out of business. The production of war materials was slowed down by the action of this company in England in endeavouring to sell up the factory and machinery. There is another point. Most of the machinery in that factory was engaged in doing essential work under contract with various Departments which authorised them to carry out that work. The work of the machinery would enable the war to be brought to a speedier termination, if possible, than would have been likely if, as a unit, that factory had been put out of action. There is an Order in Council which makes it punishable for any individual to offer for sale any machinery or machine that is doing essential war work without the permission of the particular Department of the Government for which it is doing the contract. Such permission was not given to that particular assurance company, and I would like to know from the Law Officers for Scotland, in whose domain it happened, whether in the circumstances they do not intend to take any action for such a violation of the Order-in-Council by a very wealthy English assurance company.
It has been stated that this new Clause in the Bill will be essential to protect in the future anyone in similar circumstances from the same ordeal as this firm had to go through. The case was taken into the Court of Session and was brought to the floor of the House of Lords. They lost their appeal to the House of Lords, and a rather curious thing about it was this. From what I can gather and from what the Law Officer of the Crown has just told us, if any particular individual would guarantee the debt, and it was possible for him to realise sufficient to pay the debt or satisfy the creditor with the largest instalment, then his position was met in the English Act by an Amendment, but the Law Officer of the Crown did not think it was worth repeating in the Scottish Act. One of these individuals who had pledged his property had five tenements in Clydebank, 637 from which he drew an income. During the two nights of blitz that took place, these five tenements were among the properties destroyed, and they are not occupied to-day and no income is derived from that bombed property. That was put forward as a reason why this particular debt could not be met—that it was due to circumstances of war. The Court of Session ruled that out, and in the House of Lords it was ruled out. I want to know whether a matter of that kind ought not to have come within the ambit of the law as it was in England at the time these cases were heard. The Lord Advocate comes now with an Amendment locking the door of the stable after the horse has gone and giving no compensation to the firm which has lost several thousand pounds by the blundering of the Scottish Law Officers through an oversight. They pride themselves on these things, but laws have been passed in England to protect debtors against sales. They did not even make it their job to see that any particular creditor, either in Scotland or England, whose debtor was in Scotland, could take him into court.
Other people will still be in danger if this Act is not made retrospective. The Lord Advocate is not putting up anything like a probable or natural case for those who are in debt in Scotland, as they have no safeguards in the Amendment he has put into the amending Bill. As far as this English Equity and Law Life Assurance Society is concerned, there is not much equity for individuals. Is the Lord Advocate prepared to take action against this insurance company for offering for sale, in violation of an Order, machinery, and a factory that was engaged in essential war work? I hope his reply will show that he is going to prevent attempts by any individual who is a creditor, whether he be in Scotland or in England, to put into bankruptcy firms which are trying to do what they can for the war effort. This may not be a large factory, but the machinery was for the most part invented by and patented by members of the firm, who showed initiative of that kind in order to support the war effort of this country, and they ought to have the support and protection of the Law Officers of the Crown in Scotland.

§ Mr. Maxton (Glasgow, Bridgeton)
I listened to the right hon. and learned Gentleman giving a brief explanation of 638 the Bill. I cannot make out what the purpose or object of it is, and I hope he will have another try. There may be others besides myself who are incapable of appreciating a mere abbreviated explanation. It says: Where the appropriate court refuses leave under Sub-section (3) of Section one of the principal Act to take or resume possession of goods let under a hire purchase agreement or to do diligence on any decree for the delivery of any such goods, or gives such leave subject to restrictions and conditions, and the hirer or purchaser, before possession is taken or diligence is done. Who does this diligence? Who takes this decision and by what authority is it done? The opening paragraph of the Clause says: Where the appropriate court refuses leave. Presumably a case has come before the court with regard to some article on hire-purchase. The owner of the article tries to persuade the court to give decree and take possession and to give diligence. The court refuses, presumably for some good reason which has been given by the hirer. The court having refused, the hirer may retain his possession of the article by paying all the outstanding instalments. I cannot understand it. If the court has refused to give power to take possession or to do diligence the hirer is retaining possession of the article in any case. I would not dream for one moment that our Scottish Law Officers would introduce a Clause containing no purpose, but as the representative of a Scottish division where constituents frequently have troubles of this kind, I would like an explanation of the matter.
I want to deal with another matter and one which is excluded from the Bill. I had a case brought to my notice recently, and I understand that it is not exceptional. Many owners of property in Scotland are refusing to do the normal repairs and maintenance work required for keeping a house in decent habitable condition. They have very good excuses. There are many limitations on the getting of labour and materials in order to carry out the repairs, but the impression I have formed from many complaints brought to me is, that the excuse of war exigencies is being a little overworked. I particularly feel that there ought to be something done in the way of changing the legal procedure as typified by this case. A lady has been tenant of a house for 21 years and has 639 paid her rent with regularity. Over a very extended period she has endeavoured to get the owner, through the factor, to make the necessary repairs to a chimney.

§ Mr. Deputy-Speaker (Mr. Charles Williams)
This hardly comes in under the Bill.

§ Mr. Maxton
I understand—and you will correct me, Mr. Deputy-Speaker, if I am wrong, and I am always willing to be guided by you in these matters—that this is a Second Reading of the Bill.

§ Mr. Deputy-Speaker
I have the hon. Gentleman's suggestion that it should come in, but that is about the farthest he can go. He can suggest that there should be a Clause to that effect and that the Bill is deficient in that respect.

§ Mr. Maxton
That is all I am desiring to do. When the right hon. and learned Gentleman and his colleague the Secretary of State for Scotland have put the House to the trouble of discussing a Bill for putting the emergency powers of the courts in Scotland on to a more workmanlike basis, they ought to try to make it a Bill to cover all the more outstanding grievances that arise in connection with legal administration in Scotland. The case I am putting before the House is one of judicial procedure.

§ Mr. Maclean
And not exceptional.

§ Mr. Maxton
It is very widespread. This lady, after repeated attempts to get the factor to carry out the improvement, goes to a local tradesman and gets the job done herself. It costs some 30s., and when the next quarter's rent is due she subtracts that amount from the rent, which seems a reasonable thing to do. It is the landlord's job. He has been unable or unwilling to find someone to do it and she has got it done herself. Her husband, who is actually the tenant, and is the captain of a merchant ship sailing the seas, is summoned to the court for not paying the full rent. The court, in the absence of the man and his wife—she does not come because she has not been summoned, and he is sailing a ship on the far Seas to bring petrol over for the landlord's motor car—gives a decree to take diligence on her goods, and the factors, the clerks, and the sheriffs' officers come climbing up the stairs and knocking at the door and all the neighbours know——

§ Viscountess Astor (Plymouth, Sutton)
They do not do that in England.

§ Mr. Maxton
Well, you are lucky, but this is a Scottish Measure.

§ Viscountess Astor
They are wild.

§ Mr. Maxton
If the Noble Lady will allow me——

§ Mr. Maclean
If it is time for the Noble Lady to go, she should go; the rest of us can wait.

§ Mr. Maxton
The Noble Lady has not listened to a word I have said or I am sure she would realise that this is as important as the matter she is interested in a little later on. I can assure her that when we get on to the business in which she is interested I will not try to make a mess of it.

§ Viscountess Astor
We shall never get on to it.

§ Mr. Maxton
Oh, yes, you will and I shall not interrupt. The woman has judgment given against her in her absence and the Sheriff's officers are permitted to seize the goods in the house, and I am told that she has absolutely no legal remedy whatever; the judgment of the Court having been given, she has to pay this sum with expenses, or have her goods seized and sold by auction. I ask, Mr. Deputy-Speaker, is it not a reasonable amendment that should have been put into this Bill, to make it possible that housewives, and particularly the wives of men who are away ham home through the exigencies of national service, should have some right of protection, some support from the ordinary judicial procedure, against landlords who are using the war situation of the nation to escape from the duty imposed upon them to keep their properties reasonably watertight and habitable? I hope that the right hon. and learned Gentleman in his reply will have something to say about this matter. I do not want to hold up the factors of that particular property to public obloquy, and I am quite willing to give him the names of the factors and the address of the house privately.

§ Mr. McLean Watson (Dunfermline)
I would like to put a question to my right hon. and learned Friend, before he replies to the Debate, on a matter which has been put before me on this question 641 of hire-purchase. It is rather a different angle from that put by my hon. Friend the Member for Bridgeton (Mr. Maxton). I wonder if the Lord Advocate could tell us how many Government employees are protected against traders claiming debts due to them either by hire-purchase or otherwise? I have had representations made to me by traders in my constituency, and I have also had representations made to me by the County Clerk, raising the point that certain Government employees cannot be proceeded against in the courts for debts they have incurred. I wonder if the Lord Advocate could tell the House how many Government Departments can take on debts and, after making a few initial payments, refuse to continue payments? The matter is one which has been brought to my attention several times. I hope the Lord Advocate will say why he has not taken steps in this Measure to make good what has been an injustice to traders in our area. I do not want to prevent the Lord Advocate from having an opportunity of replying to the Debate and I will leave the matter there, though I could have said a great deal more on this matter.

§ The Lord Advocate
With the leave of the House, let me first deal with the two points as to why certain things are not in this Bill. This is not a general Bill to amend the law of Scotland; it is a Bill to amend the Courts (Emergency Powers) Act and accordingly its scope is limited. The hon. Member for Bridgeton (Mr. Maxton) wants me to bring in a Clause to amend the law of landlord and tenant as to liability for rent, and my hon. Friend the Member for Dunfermline (Mr. Watson) wants an Amendment of the law about arrestment of wages. Both of those would be quite outside the scope of this Bill. With regard to the last, it is a fact that you cannot arrest the wages of a servant of the Crown, and as that is the normal way of recovering debt you may be precluded in certain circumstances from getting your money, but that is a universal rule which applies throughout Scotland to all servants of the Crown and I am afraid I cannot deal with it further just now.
To come to the two points about the Bill itself. The hon. Member for Bridgeton wants to know the meaning of Clause 3. I did not go into it in detail 642 because, as I said, the circumstances had in fact never arisen, so far as I know, in Scotland and it is very technical, but I will try to explain it. Supposing the purchaser under a hire-purchase agreement falls into arrear with his instalments, then the seller tries to take back the goods. He has to go to the Court to get authority. The Court says, "No, war circumstances have caused the instalment to be in arrear and you cannot take back the bicycle"—or whatever it is. All is well as long as that Court order stands, but there will come a day, sometime, when things have got to be squared up, and it depends on the way in which the contract is drafted. Some contracts, as the hon. Gentleman well knows, are very stringent, and may contain a provision which affects the whole right of the purchaser, by reason of his having fallen into arrear in the first instance in paying his instalments. Therefore, if the law were allowed to stand as it is to-day, the seller might be able to say, "It is perfectly true the Court has held the status quo for a time, but the Court order is off now. I declare your rights forfeited, and I take back the bicycle and you have got no remedy." It is to alter that state of affairs that we are bringing in this Clause, so that, when the occasion for the Court's stand-still order comes to an end, the purchaser may be able to say, "Now I have got the money to pay these instalments in arrear, and I tender you the money," and the seller will have to take the money and not seek to recover the bicycle. I hope I have made that clear.

§ Mr. Maxton
I do not see the circumstances.

§ The Lord Advocate
As I say, they have not occurred in Scotland, but they have occurred in England, and we thought it right to guard against their occurring in Scotland. I have tried to make it as clear as I can, and I am afraid I cannot make it clearer. My hon. Friend the Member for Govan (Mr. Maclean) raised a point about Clause 2. I said earlier that I had had to choose between bringing in all the English Amendments at the time they were made and thereby imposing a good deal of extra work, and possibly embarrassing a lot of people in Scotland, or, on the other hand, holding my hand with the risk that something unexpected might occur. The circumstances of the case to 643 which he refers are extremely unusual and, frankly, had not been foreseen. I may have been wrong in weighing the balance between a certain amount of difficulty and embarrassment to a large number of people and considerable hardship for one person. But I thought it was proper not to introduce that single point by way of a separate Bill at that time. I thought it would be better to wait until Clause 1 appeared to be ready for introduction into this House. That is a frank statement of how it occurred. The hon. Member is entitled to his opinion if he thinks I exercised my judgment wrongly but, looking back, I am by no means sure that I was wrong.

§ Mr. Maclean
It cost the firm £3,000. They had to pay it and the right hon. and learned Gentleman did not.

§ The Lord Advocate
One has to weigh up what might happen on the one hand and what might happen on the other. Whatever you do you cause a certain amount of trouble and expense to somebody. I took the view that it would be better to stay as we were, and I am not sure that I was wrong.

§ Mr. Maclean
We think you were wrong.

§ The Lord Advocate
Well, that is the reason for it, and I cannot give any further explanation. Finally, the hon. Member asked me a question with regard to the advertising of a certain article for sale. That was brought to my notice some months ago and was fully investigated at my direction. I considered the information which was obtainable, and came to the conclusion that the facts disclosed did not amount to an infringement of the Order and that a prosecution would not succeed. I therefore directed that no further proceedings should be taken.

§ Mr. Maclean
Does the right hon. and learned Gentleman suggest that these machines, which were doing war work, were not advertised for sale publicly by this equity assurance company in England? Does he say that? If he does will he look at the "Glasgow Herald," one of the Scottish papers which carried the advertisement, and see the proof there?

§ The Lord Advocate
I am well aware that there was an advertisement. I saw it and I did consider whether the facts amounted to an infringement of a certain 644 Order. In considering the question—although this is really out of Order on this Bill—I came to the conclusion that no offence had been disclosed. That being so I could not prosecute.