CLAUSE 36.—(Liability for repair, maintenance and insurance of fixed equipment.) (Hansard, 5 June 1947)

§ Mr. York
I beg to move, in page 37, line ii, to leave out "whether created before or," and to insert, "created."
The purpose of this Amendment is to restrict the provisions of Clause 36 to agreements made after the coming into operation of the Bill, and I think a good deal of criticism was levelled in this particular connection during an earlier stage of the Bill. It seems to us that it is wrong to make a provision which will lead inevitably to the upsetting of well established customs and agreements signed some years ago. That upsetting may be caused through an arbitration arising out of regulations which the Minister will make under Clause 36 (I), and it appears to us that it is highly undesirable that the old agreements, which have been working well in the past and in connection with which there are no complaints, should be upset by new regulations which have no bearing on the particular problems in the light of which those covenants were made.
The owner and the tenant managed to abide by their covenant sufficiently well in the past and now that things are, perhaps, looking more stable, there does not seem to be any reason why an owner 465 should wriggle out of conditions which may be more onerous than those which the regulations will lay down. For that matter, the same thing applies to the tenant. It is right and proper that the rent of a holding should go to arbitration from time to time. That is reasonable and necessary, but the terms and conditions of the tenancy agreement entered into freely between the landlord and the tenant at the beginning of the tenancy should not be subjected to what amounts to a three yearly review if they have been entered into before this Bill comes into force. It is for those reasons that we put forward this Amendment.

Mr. Vane
I beg to second the Amendment.
This. Clause is apparently part of the Minister's attack on the ancient customs in this country which play such a big part in agricultural valuations. Presumably he hopes in future to try to arrange Clauses for liability of repair which follow more or less closely certain models which he is going to make. It is a pity that the right hon. and learned Gentleman the Member for Montgomery (Mr. C. Davies) is not here because, as the author of one of the best-known books on agricultural customs, he could, I hope, bear me out when I say that there is reason behind these many differences. I think there will be a great many unnecessary complications if tenancy 4greements which were signed some years ago are now to be reviewed, and although some hon. Members who are less well acquainted with agricultural agreements may think there is great injustice if more liability for repair falls on one party than on the other, I do not think that that is really so. The cost of the additional liability is almost always reflected in the rent, and whereas a case can be made for simplifying covenants and agreements entered into after the Bill comes into force, there can be no case for bringing under review at the same time the many varieties of covenant entered into in the past.

§ The Solicitor-General
We think that this Amendment should not be accepted. Hon. Members will ask what justification there is in making this in a sense retrospective. I will endeavour to show why we think that it should be in this case. Clause 36 assumes that there will be regulations which will adjust upon a reasonable basis the liability as between land- 466 lord and tenant with regard to the maintenance and so on of fixed repairs. Assuming that those regulations do adjust them on a fair basis, I should have thought that it would be in the general interest that the adjustment should be made not only in relation to agreements entered into after the Bill comes into force, but it should be competent—I do not say it should necessarily ensue—to do the same in regard to agreements already in force.
I urge on hon. Members that it is not an automatic process. When the regulations have been made either party may go to the other and suggest that the regulations should be embodied in the existing agreement. That is all that happens. If the other party refuses, the matter may be taken to arbitration under the 1923 Act. The hon. Member for Ripon (Mr. York) pointed out that in the event of it coming before an arbitrator, an adjustment can be made in the rent proportionate to the shifting of the incidence of liability with regard to maintenance. I ask hon. Gentlemen to assume, in considering the Amendment, that the adjustment which is proposed by the regulations is reasonable and fair. Assuming that is so, surely, it is in everybody's interest that it should be possible in the case of an existing agreement just as in the case of an agreement entered into after the Bill comes into force to incorporate ex hypothesi a fair and just apportionment of liability as between the landlord and tenant.
I should have thought that either side bound under the terms of an existing agreement might wish to take advantage of a Clause of this sort. It might be perfectly fair that the liabilities should be altered and patent to both of them that that should be the case. One might have a landlord labouring under what was to him a grossly unfair agreement. He might say, "I would like this to go to an arbitrator. If some of this liability is taken from me I am perfectly prepared to submit to a reduction in the rent." If the Amendment is accepted, that cannot he done and that person must continue to labour under a purely fortuitous or unwise agreement made by a predecessor or by him in a moment of lack of proper consideration.
It means that people may be caught by unfortunate agreements they have entered into before the Act comes into 467 force and are precluded from relief of which they may very well wish to avail themselves. I emphasise and underline that this is a chance of having the matter heard before an arbitrator. It does not force anything on anybody. The only thing that can be forced on a person is that if he is in a position to take advantage of what may be an unfair agreement, he can be forced to go before an arbitrator. The agreement can be fairly apportioned and there is a fair apportionment of the rent. I hope that the Amendment will not be pressed because it would be disadvantageous to a great many persons who are saddled by agreements which impose an unfair burden on them, whether they are landlords or tenants. It is simply to give persons who are bound by existing agreements the chance of getting the thing reviewed by an arbitrator with a consequent alteration of rent.

Mr. Joynston-Hicks
I did not quite follow the Solicitor-General. The object of this Amendment is to preserve the sanctity of existing contracts between landlord and tenant before this Bill comes into force. The burden of his argument was that it was unfair not to give this opportunity to two consenting parties who were in agreement as to the desirability of varying the contract.

§ The Solicitor-General
I did not say two parties who are in agreement I said, to give an opportunity to one person who is burdened with an unfair agreement to insist upon the matter going to an arbitrator in order that the arbitrator can fairly apportion the agreement and the rent.

§ Mr. Joynson-Hicks
I think that if the Solicitor-General refers to the OFFICIAL REPORT tomorrow he will find I am correct in saying that the major burden of his argument was where it appeared to both parties to be desirable to vary the terms of the agreement. I will pass from that if he did not intend to say that but, obviously, if that was so, they could vary the agreement without recourse to arbitration or any other statutory requirement. Where it is desired on the part of one party who feels himself aggrieved by the terms of his contract to have the right to proceed to arbitration for variation of that contract, it is a principle which goes to undermine the whole basis of contractual 468 liability in all matters to do with the country. Suppose in any business relationship where a contract has been entered into one party feel aggrieved It may be that the trend of prices or the transport facilities of the country have not come up to expectations and enabled him to carry out his side of the bargain as well as he had anticipated. If this principle is admitted in this direction, why should not any party who has entered into a contract and subsequently feels himself aggrieved by it, have the right to go to an arbitrator and say, "I misjudged the expectations when I entered into this contract. Relieve me of the burden of the liability." I am surprised that the Solicitor-General who has such a large experience of dealing with contracts of all sorts, should so seek to undermine one of the basic principles of our constitution with regard to the sanctity of contracts by such an argument.

§ Lord Willoughby de Eresby
I want to say a word in support of the hon. Member for Chichester (Mr. Joynson-Hicks). It is a very dangerous principle if we accept it, that contracts which have been arrived at freely and voluntarily by two sides can be upset at the whim of one party. I think the Solicitor-General was possibly unwise or might possibly have misled the House in using the word "unfair." I do not think anyone would regard as unfair a contract arrived at quite voluntarily and freely by two sides. What has happened is that the conditions in agriculture have varied very much compared with what they were when the contract was made. The House should realise that if one is going to alter the arrangements of contracts for tenancy agreements, it will adversely affect the farmer rather than the landlord. Most of the contracts for tenancy agreements I can think of were made before the war when agriculture was in an extremely depressed condition and when it was almost impossible to let a farm. One almost had to pay someone to farm it. Conditions have changed. It seems to me that if a man came along and took a farm in those circumstances it is rather hard if the terms of his agreement can now be altered. I am with the right hon. Gentleman in his wish to see a greater uniformity of tenancy agreements as a whole throughout the country but I think we 469 are accepting a dangerous principle if we say that contracts which have been arrived at can now be altered.

§ Mr. York
I beg to move, in page 37, line 17, at the end to insert: within the period of two months from the making of such request. This is a small point but one which I think will commend itself to the Government. It has been accepted by the House that the proceedings of arbitration should not be held up indefinitely because of the dilatory behaviour of one party or other to the arbitration. We suggest, therefore, that a time limit of two months should be placed upon the matter so that the arbitration shall be brought into effect within that time. I hope the Government will accept the Amendment.

Mr. Vane
I beg to second the Amendment.
Whereas I think it is a pity that so many matters which could be settled between a landlord and tenant are being brought, under this Bill, either before the agricultural committee or arbitrator or other third party, I still think that if so many matters are to be adjudged in those various ways, it should be done with reasonable speed.

§ Mr. Marquand
I was not surprised, in the discussion on the previous Amendment to this Clause, that hon. Members opposite expressed a great deal of enthusiasm for freedom of contract between individuals, but I am a little surprised that they should now propose, apparently, to set a time limit on reaching agreement in such private contracts. It seems to me that this suggests a limitation on the voluntary character of the contract which is being entered into. Is it not somewhat to limit the voluntary nature of a contract to impose upon the two parties a very short time limit in which they can arrive at agreement? I would suggest too that a provision of this kind is unnecessary and undesirable. If one of the parties makes a request to the other to modify the existing terms, and does not allow the other party reasonable time in which to reply before referring the matter to arbitration, there is little doubt that an arbitrator would hold that he had acted unreason- 470 ably and would require him to pay all the cost of the arbitration. I should have thought that would be a sufficiently effective deterrent to either of the parties giving insufficient time. Again it must be remembered that here are two parties negotiating together, and the very fact that they enter into this negotiation suggests some possibility of agreement between them. It might happen that those parties were prepared to make the necessary modifications to the existing terms but that their negotiations might take a little longer than two months. On the whole, therefore, I think it would be more in character with freedom of contract between two individuals not to impose a time limit of this character.

§ Mr. York
The point at issue is not that the negotiations leading up to the arbitration should only take two months, but that once arbitration has been decided on, the arbitration should take place within two months.

§ Mr. Deputy-Speaker (Mr. Hubert Beaumont)
It will be for the convenience of the House if we take the next two Amendments together.

§ Mr. York
I beg to move, in page 37, line 21, to leave out from "that," to "such," in line 22, and to insert "no."
If the proviso were amended by the next Amendment as well, it would then read: Provided that no such reference shall be made before the expiration of three years from either of the following dates, that is to say—

(a) the commencement of the tenancy, or

(b) the date as from which there took effect an award of an arbitration on a previous reference under this Subsection relating to the same tenancy."
It would be undesirable to disturb a repairing covenant of the tenancy agreement immediately after the commencement of the tenancy. Although I do not think this is a very large alteration to the meaning of the Clause, it makes it quite certain that an arbitration will not take place immediately after the commencement of the tenancy. That is undesirable because it would vary the rent immediately. These Amendments taken together bring the Clause into line with Clause 34.

Mr. Vane
I beg to second the Amendment.
471 While I think the Minister is bound to agree that little can be said for entering into any agreement about which there may be arbitration on one of the major conditions the following day, I think he will agree also that arbitration dealing with the modification of a repairing covenant, such as is envisaged here, is much more practical if it follows the same line as arbitration affecting rent. I believe it is not possible to go to arbitration on rent until the tenancy has been running three years, so I am sure he will think it is desirable to make this follow a parallel course.

§ Mr. T. Williams
I am sorry that I am unable to accept the Amendment and I hope to be able to give solid reasons in a minute and a half. The purpose of these two Amendments is to provide that there shall be no arbitration on existing terms relating to maintenance, repair and insurance, until three years from the start of the tenancy. The reason for my refusal to accept the Amendment is because it would help one or other in certain circumstances to drive an unreasonable bargain, and that we want to prevent. Since both parties will know that, should they drive a hard or an unreasonable bargain when they are negotiating a tenancy agreement, the other can revert to arbitration, then I think a more balanced view will be taken of the agreement. If, therefore, the terms of the agreement are reasonable, neither of the parties will want to go to arbitration. If there were no power to go to arbitration for three years and very few farms were available with security of tenure, as is foreshadowed by hon. Members in many of their speeches, it might be an encouragement here and there to drive a hard bargain.
The reason why arbitration on maintenance and repair is treated differently from rent in Clause 34 is that in this case with a statutory Clause there will be a yardstick, a standard by which to measure these things. This will serve as a guide to whether or not those terms and conditions are reasonable. If they are, there will be no need for arbitration, but it the terms imposed by one party upon the other are unreasonable there ought to be a possibility of arbitration. In resisting the Amendment we wish to preserve better relationships and agreements.

§ Mr. Joynson-Hicks
I do not understand what the Minister is getting at here at all. He has referred mysteriously to the possibility of somebody driving a hard bargain. It is not a question in this case of two people, one in a superior position and one in an inferior, entering into an agreement, or of a minor requiring protection. It is a situation between a person who is a tenant on the one hand, prepared to undertake extensive operations upon the land, negotiating the terms of his tenancy with the owner of the land on the other. If the tenant is not capable of doing it he is not capable of running the farm. I do not know what the right hon. Gentleman has in mind when he talks about hard bargains. He referred to these provisions as a yardstick whereby the reasonableness of repair clauses could be measured. I see his point, but it is most dangerous. I realise that with a set of model clauses we must have a model repair clause, which can be called a yardstick, but if one is to try to relate every existing tenancy agreement and repair clause to the yardstick of a model clause, one has to deny the fact of the differentiation of the circumstances which exist in each case. It will be impossible for farming operations and the relationship of landlord and tenant to be carried on in a proper, businesslike way if people are to be denied the right of free negotiation and are to be standardised to the yardstick of a model clause. The right hon. Gentleman is expressing a most singular lack of confidence in the ability of persons in this industry when he argues in favour of the rejection of the Amendment on the ground that they should be denied the free right of negotiation which they have had for a very long time and which has not operated to the detriment as yet of the agricultural industry.

§ Mr. York
We have warned the Minister in connection with several Amendments that he was straining the proper, traditional usage of the covenants of tenancy agreements. I cannot help feeling that although we all acknowledge the possibility of unscrupulous men trying to get undue advantage over tenants, it is no deterrent to them to know that within three years the tenant can take the matter to arbitration. Secondly, if there is a lack of repair or maintenance on the farm caused by the tenant not doing what 473 the tenant thinks unreasonable, the Committee will very soon know that there is something wrong. By and large, I believe it to be a matter of too small importance that advantage might be taken of agreements being rather too onerous, to make it worth while to break down the present general acceptance of the sanctity of contract. All we can say is that if the Minister will not accept our warnings we must let him go his way and that we believe that he will learn in time that we have been on the right lines.

§ Mr. T. Williams
I would just like to say that the Clause is designed to bring the landowner and the tenant nearer together. I should hate, consciously, willingly or with malice aforethought, to do anything that I thought would estrange them. The Subsection is there to allow arbitration to be resorted to if necessary. The unscrupulous person to whom the hon. Member for Ripon (Mr. York) has just referred is not universal. He is a type of person in respect of whom we have constantly to legislate, but I hope the hon. Member will not think I am unreasonable in trying to keep the relationship between landlord and tenant upon an even keel.

§ Mr. York
I beg to move, in page 37, line 29, after the first "the," to insert: character and situation and other relevant. This Amendment is consequential upon one which was accepted by the Minister to Clause 14. That Amendment was for the purpose of including "all other relevant circumstances," and it was accepted by the Minister. I hope that he will now be able to accept this Amendment.

Mr. Vane
I beg to second the Amendment.
I hope that the Minister will see that acceptance of the words here proposed will have the effect of bringing landlord and tenant closer together.

§ The Solicitor-General
I am grateful to hon. Members opposite for having taken up this point. I do not propose to advise the House to accept the Amendment. If the Amendment were accepted it would, we feel, rather narrow the circumstances which can be taken into consideration beyond the degree to which we desire them to be narrowed, and I believe 474 beyond the degree to which hon. Gentlemen opposite would also desire them to be narrowed. I am grateful to them because we were a little doubtful whether the words which we have used are quite satisfactory. They have forcibly directed our attention to the point which might otherwise have escaped our attention, vigilant though it is. What we desire to embrace by the words in the Clause as it stands, are all the circumstances including the personal circumstances. It might be very relevant, for example, to take into consideration the fact that the owner of agricultural land lives a considerable way from the land, or the arbitrator may have to take into account the personal circumstances of the tenant.

Mr. Vane
On behalf of the hon. Member for Thornbury (Mr. Alpass) may I ask that the political beliefs of either party should not be taken into account?

§ The Solicitor-General
Nor is the colour of his hair, nor the look of his face, taken into account. The political beliefs are so personal as to be regarded in the same province as possession of the face, or hair. We do not take that into account, but other personal circumstances which would affect the question of fairness or unfairness, and convenience or inconvenience. If the Amendment were adopted, it might well preclude such circumstances being taken into account. We want to enable the arbitrator to take a rather wider view, and in his consideration to embrace such circumstances as I have mentioned. But, having had our attention called to the point, we rather wonder whether our own wording is quite wide enough, though, at the same time as we express gratitude and give an undertaking to look at these words again, I must advise the House not to accept the Amendment.

§ Captain Crookshank
It is not at all surprising that the Government are once more obliged to us for our help during the passage of this Bill. We are getting quite used to it, and we accept from the hon. and learned Gentleman that he will look at this matter again. Our reason for putting the Amendment forward was that we succeeded in getting these words put into Clauses 10 and 11 when there was any question of considering management and husbandry. We regarded them as 475 necessary here. I am not at all sure that the enormous widening which the hon. and learned Gentleman wants is right and I should have to think about that also. I quite see that in many cases personal circumstances are relevant, but in this case one of the circumstances stated was that of the landlord living a long way away. At first sight I cannot see that that is very relevant as a liability for a repair covenant. I agree that the words are not quite right and accept the hon. and learned Gentleman's promise to look at them again.

§ The Solicitor-General
I beg to move, in page 37, line 34, to leave out Subsections (4) and (5).
This Amendment is consequential on the new Clause which was on the Order Paper under the title "Supplementary Provisions to s. 36 and s. 37." When moving that Clause, I pointed out that the last two Subsections were in identical terms subject to one alteration to the last two Subsections of Clause 36which I now seek to leave out. In other words, I adumbrated that this Amendment would be necessary.