HC Deb 17 June 1954 vol 528 cc2282-92

3.42 p.m.

The Secretary of State for the Home Department and Minister for Welsh Affairs (Sir David Maxwell Fyfe)

I beg to move, in page 19, line 28, to leave out Subsection (3).

I suggest that it would be convenient to deal at the same time with the other two Amendments to the Clause, in lines 33 and 35.

My right hon. and learned Friend the Member for Kensington, South (Sir P. Spens) argued in Committee that living accommodation occupied by an employee of the tenant should be protected under Part II only if it was comprised in the same tenancy as the tenant's business premises. The Amendment produces that result.

The second Amendment in page 19, line 33, is an important one which embraces a considerable concession to the point of view advanced in Committee. It substantially widens the scope of Part II in relation to mixed tenancies comprising both business premises and living accommodation occupied by the tenant. In the case of such mixed tenancies Part II as at present drafted applies only to the business premises.

Those who were on the Committee will remember that when a Government Amendment to clarify the position was moved the right hon. and learned Gentleman the Member for Neepsend (Sir F. Soskice) urged strongly that the living accommodation ought to be covered as well, and he divided the Committee on the point. The effect of the Amendment in line 33 is to protect the living accommodation as well as the business accommodation, subject only to the limitation which is introduced for cases where the business use is in breach of covenant. Where the tenancy covers a shop and the flat above it, with the tenant living in the flat, he will be protected in the whole premises. If a doctor uses part of his house as a consulting room, his whole house will be protected, and not just the consulting room. The Amendments affect only premises outside the Rent Acts limits, because mixed premises within the Rent Acts limits are excluded from Part II by Clause 42 (1, d), because they are already protected by the Rents Act.

The third Amendment excludes from Part II a tenancy where the business use is carried on in breach of covenant against business use and where the landlord has not consented to or acquiesced in the breach. That is the corollary of the two previous Amendments. If what the landlord let to the tenant was a house and if he imposed this restriction against business use, the tenant ought not to get protection in the house under Part II simply because he has contravened the restriction and used the house for business purposes.

I think that the right hon. and learned Member for Neepsend will agree that the Amendment applies only to a restriction against all forms of business use or to a restriction against one or more of the classes of business which are mentioned in the definition of the word "business." The Amendment does not affect the tenant whose lease allows him to use the premises for one type of shop but not for another, or as an office but not for light industry, or for wholesale but not retail trade. A tenant who is in breach of a restriction of this type is not excluded from Part II, although the breach may be a ground on which the landlord can oppose the grant of a new tenancy under paragraph (c) of Clause 30 (1). I hope that right hon. and hon. Gentlemen will appreciate that we have met them on the major point which is the question of mixed premises.

Sir Frank Soskice (Sheffield, Neepsend)

I wish to express my gratitude to the Secretary of State for acceding to the view advanced in Committee about premises occupied for residential purposes. by a tenant who carries on business at the same premises. That view was advanced by the Opposition, and my hon. Friends are grateful to the right hon. and learned Gentleman for acceding to it.

There is one purely drafting point which I ask the right hon. and learned Gentleman to consider. Is he satisfied that the drafting which he has selected achieves the purpose he has in mind? The words he uses are to the effect that premises are included when they are occupied by the tenant and persons employed by him for the purpose of the business by reason of which the tenancy is one to which the Bill applies.

Perhaps the Solicitor-General will consider the point as well. Is it certain in the case of a shop with a flat over it, with a tenant living in the flat, that the flat is a part of the premises occupied for the purpose of the business? That is a drafting question which I hope the right hon. and learned Gentleman will consider.

Sir D. Maxwell Fyfe

indicated assent.

Sir F. Soskice

The third Amendment in line 35 does not spring from any violently expressed desire from our side of the Committee. Speaking for myself, I should have thought that the position was not unreasonable. Suppose a tenant is in breach of a restriction which prevents him from carrying on business, in principle I should have thought that it was not unreasonable that there should be some remedy in the case of a tenant who breaks the provisions of a restrictive clause in his tenancy.

I note, and it is of great importance that the subsection is not to be applicable if the landlord or his predecessor in title has consented to the breach or the immediate landlord has acquiesced in it. That is an absolutely essential safeguard, because, if it were not for the safeguard, many tenants who, half unwittingly sometimes, transgress a restrictive provision of this sort would find themselves deprived of the advantage which the second part of the Bill gives. I am sure that the Home Secretary would agree that that would be a very deplorable result.

I feel some apprehension as to whether the new provision may not give rise to uncertainty and litigation in some cases. Subject to that apprehension, I should have thought that the provision was not unreasonable.

Mr. M. Turner-Samuels (Gloucester)

I am not satisfied about what will be the effect of the first two Amendments. I fully acknowledge the declared intention of the Home Secretary to mitigate the rather drastic consequences of the exclusion of subsection (3), but I am not at all sure that what the first Amendment gives with one hand is not taken away by the second Amendment with the other hand.

As I understand it, the object of subsection (3) was to exclude everyone from the benefits conferred by the Rent Restrictions Acts other than the tenant or the employee who, by the effect of this subsection, is made to stand in the shoes of the tenant. What the first Amendment does is all right because it sweepingly discards subsection (3) and thereby gets rid of an objection about which we complained in Committee and which would undoubtedly work profound injustices if it were allowed to stand.

That concession having been made, the next Amendment seeks to recreate the very objection which we raised in Committee. It goes on, in other words, to repeat and define exactly the same situation as we found in subsection (3), namely, that the protective benefits of the Rent Restrictions Acts are not to apply unless the person concerned is either the tenant or the employee of the tenant. If that interpretation is right, it invalidates the very thing which I believe that the Home Secretary is anxious to achieve. Perhaps he can elaborate on that view a little in order to satisfy us and people outside who are seriously concerned about the matter and feel that this will have precisely the same effect as the subsection would have had if it had remained as it was.

I am not at all certain that the third Amendment will not open the door to injustices. This is a situation in which one can get a multiplicity of cases with a variety of circumstances, all of which ought to have specific and individual consideration in order that there should be no possibility of wrong or injustice being done to the tenant. While the proposed Amendment provides some benefit, it may nevertheless have some very unpleasant consequences for the tenant.

I concede that if a tenant is carrying on premises such as a house for wrong purposes for which a private dwelling should not be used, there may be some ground for its effect, for no one would object to the tenant being put out bag and baggage in such a case, but prohibition clauses are today drawn with such flexibility of language and magnitude of field that it is possible to get a case in which serious injustice may be done to the tenant, and, consequently, he ought to have the opportunity of going to court to prevent dispossession in such a case. Surely there should be some line of demarcation in a proper case where there has been a breach of a prohibition which is not of the character about which any decent person would agree straight away that the tenant should go.

If right is to be done in the matter, there should be some modification or some halfway house between what is left out of the Bill and what is sought to be put in it by means of this provision. While I agree that certain prohibitions ought to be provided for, I ask the Home Secretary, if he cannot consider a modification instanter, to look into the matter between now and when the Measure gets to another place and see whether there can be some scaling down, some modification, so that a tenant who is guilty of a breach of some prohibition of a different character to the one to which I have alluded may be protected even if the landlord or someone else has to have compensation.

Mr. David Weitzman (Stoke Newington and Hackney, North)

With reference to the third Amendment, there is a good deal in the last observations made by my hon. and learned Friend the Member for Gloucester (Mr. Turner-Samuels) with regard to the question of a breach of a prohibition, however expressed. What we are doing there is to deny a tenant a very valuable right because there has been on his part a breach of a prohibition which may have been a considerable one or a very small one. I should have thought that it would be possible to give the tenant some relief in the case of a technical error or small breach, as in the case of forfeiture, where the court constantly gives relief. It would be a good thing if the Home Secretary looked at the matter again to see whether he can help in that way.

There is also a drafting point which seems rather important. I suppose the Home Secretary would agree that it is rather unnecessary to put in words which really bear no meaning and might create doubt. The beginning of the third Amendment speaks about the tenant carrying on a business and so on in breach of a prohibition, and the concluding words of the paragraph are: … unless the immediate landlord or his predecessor in title has consented to the breach or the immediate landlord has acquiesced therein. If the immediate landlord has consented to the breach and acquiesced therein, there is no breach. He can only be in breach, after all, if a breach has been committed, but if the landlord has waived the breach or has consented to it, no court will uphold the plea that there has been a breach. The breach will have gone, and it seems to me that these last words are clearly unnecessary. The reason I raise this drafting point is that, when we have words like these, there is a danger of creating doubt, and I respectfully suggest that the Clause should be looked at again from that point of view.

4.0 p.m.

Sir D. Maxwell Fyfe

I will certainly look at the points of drafting which have been raised by the right hon. and learned Member for Neepsend (Sir F. Soskice) and will look into the wider point raised by the hon. and learned Member for Gloucester (Mr. Turner-Samuels). I do not think the latter would expect me to commit myself at the moment, but I will certainly look into it. I should also like to express my thanks to the right hon. and learned Gentleman opposite for his welcome for this Clause.

Mr. Leslie Hale (Oldham, West)

I should like to mention one other point which I hope the right hon. and learned Gentleman will look into in reference to this Clause. I heard you, Sir Charles, put the Question on the first Amendment, and I understood that we were discussing all these three Amendments together, and that you have acquiesced in that course.

The Chairman

I have agreed that it would be better to discuss these three Amendments together.

Mr. Hale

I want to confine myself to the third Amendment. At three o'clock in the morning, I found the first two Amendments exceedingly worrying, but I have long since formed the conclusion that any view which I might have formed on the meaning of a complicated Clause is invariably wrong. Indeed, my right hon. and learned Friend the Member for Neepsend (Sir F. Soskice) took the view that I was wrong, and the Home Secretary himself also says I was wrong. I therefore think that there may be a prima facie case to be made out for the fact that I am mistaken; at any rate, I found these words very confusing.

The difficulty is in considering the third Amendment. The question is what powers will be given to the tribunal. The tribunal has to decide whether the tenant has rights or whether he has lost his rights. In the new subsection which the Government now put forward, the question whether we give any more validity, utility or purpose to these words depends entirely on the extent to which we give the courts some discretion. The whole series of Amendments which we are now discussing is based very largely on the analogies of the Rent Restrictions Acts and on the procedure of those Acts, and instead of the complexity of having two or three different systems prevailing in almost every single case, we now get back to what the court thinks is reasonable.

In the third of these Amendments, there are two disputed clauses and two questionable phrases. Here again, one is in a difficulty if one did not have the privilege of being a member of the Standing Committee, because all the references are to pages and lines of the Bill which no longer exist. I do not know what the right hon. and learned Gentleman meant when he said that there was pressure from this side in Committee on some of the Amendments, and when he referred to the speech of the right hon. and learned Gentleman the Member for Kensington, South (Sir P. Spens). Having read every word of the OFFICIAL REPORT of the discussion, I do not know to what he was referring. The right hon. and learned Member for Kensington, South was moving one Amendment, which the Home Secretary said was a landlord's Amendment and which he said he would refuse, because he did not want it to be thought that he was taking one side against the other, and the fact that he was refusing what he called a landlords' Amendment would indicate that he was keeping to a middle course. Then another hon. Member said that he moved an Amendment for exploratory purposes because he wanted an explanation, and I was not surprised to read what followed. When I left the consideration of this matter, I thought that no one had suggested that Clause 23 should be amended at all. I am wrong, but if somebody could tell me by whom it was said, whether it was overlooked by the reporters, or where it may be found, it would help me to understand the situation.

Sir D. Maxwell Fyfe

The hon. Gentleman will find the report in columns 365 to 370 of the OFFICIAL REPORT.

Mr. Hale

I am much obliged, but I know that, of course. That is the place where Clause 23 was discussed, and those are the speeches to which I have made reference. What I want to know is where anyone on this side suggested that Amendments should be made. These are the speeches by the right hon. and learned Member for Kensington, South and others in respect of an exploratory Amendment which the right hon. and learned Gentleman resisted in order to show that he was standing up to the landlords. It is no use arguing about those matters now. I had read the OFFICIAL REPORT, but apparently the interpretation which I placed upon it was not the right one.

The reason I venture to address the Committee on these Amendments is this. Clause 23 strikes me as being the most generous Clause in the Bill, and I personally was very surprised and pleased when I saw the Clause in the Bill. I am not trying to be funny or ungenerous. I hardly expected from a Conservative Government a comprehensive Clause of this nature which carries out the Minority Report of the Leasehold Committee. This was the effect of the unanimous Report of that Committee, and the proposal in this Clause was the personal work of the late Lord Uthwatt. Very little has been said, except by the right hon. and learned Gentleman himself, about Lord Uthwatt, and so I hope the Committee will bear with me while I say that we are indebted to that very distinguished man for a very distinguished piece of public service. I myself very much appreciated the opportunity of being brought into contact with that great and generous-hearted man, a man of great ability as well as simplicity, who was one of the most distinguished men of his generation.

The Committee will agree that, as far as business premises are concerned, this is a comprehensive non-class-war Clause. I do not believe in the class war. I believe in taking money away from the rich and giving it to the poor because it does the poor material good and it does the rich spiritual good. If we are talking about tenants, whether we mean of a small retail shop or a small factory, security matters to both, and I am glad that something is done in this Clause in that respect, because it is certainly the best—indeed the important—Clause in the Bill.

Let us now come to the question of the newspaper shop. The right hon. and learned Gentleman will say that the newspaper shop in residential premises is generally protected, and, generally speaking, so it is, but there are many that are not. This applies particularly to the case of weekly tenancies which have gone on for years and about which nobody knows what are the precise terms. The right hon. and learned Gentleman now introduces this Clause which has never been discussed in which he uses the words "however expressed." I do not know anything about leasehold law, and I hope I never shall. I have never made very much of an effort at understanding law, and I am quite convinced that, had I ever made such an effort, I should not have succeeded; but one does get practical experience and one knows what the problems of the people are.

One of their problems is that these terms were expressed in little booklets formerly costing ld. apiece, which were varied about every six months. When a new issue appeared, someone altered part of it, and at one time one found that one could do certain things, and at another, according to the different edition of the booklet, they were prohibited. Thus, at one stage one could carry on a business, and at another stage one could not, because these terms varied from time to time.

These are the facts about the newspaper shop, and when the right hon. and learned Gentleman uses the term "however expressed" in this Clause, how are we to get over that difficulty? I suggest to the right hon. and learned Gentleman that the county court has always been found to be a court of rather more equity in its jurisdiction and a rather more realistic system. It has always been put forward and established as a court in which successful decisions may be arrived at by the judges in dealing with these day-to-day problems as far as the Rent Restrictions Acts are concerned. When they consider hardship, they have to balance it against hardship in an imaginative way and to say, "Does it hurt one person more than another?" There is no legal formula and there is no way which can be argued about. The county court judge is usually a decent man, and if there is a certain amount of human misery on each side, he has to decide between them.

If the right hon. and learned Gentleman wishes to put this part of the Bill into a very much more healthy and happy state, he will give the county court judge the power to act reasonably and to say in appropriate cases, "This is a tiny technical breach which was caused by misunderstanding. There was nothing deliberate or perverse about it. We shall disregard it." Let the right hon. and learned Gentleman do that, and he will make this a much healthier Bill, will cut out a lot of litigation and uncertainty and will come very much nearer to doing justice.

Mr. William Wells (Walsall)

The Amendment before the Committee is far too strictly framed to be in the interests of justice. In our everyday life we are familiar with the change that takes place in the development of a district. It is common knowledge that large housing estates go through a change of economic circumstances, and when a district becomes less prosperous than it was before there is tacit disregard on all sides of covenants of this kind.

I am sorry that I was unable to hear the Government's explanation of the Amendment. If the Amendment is agreed to, there will be districts where such covenants have been disregarded for many years and then, as a result of the Amendment, the landlord will be able to give a business tenant the advantages of this part of the Bill. I very much regret that the Amendment has been put forward by the Government at this stage.

Amendment agreed to.

Further Amendments made: In page 19, line 33, leave out from "tenancy," to the end of line 35, and add: to which this Part of this Act applies, means the property comprised in the tenancy, there being excluded any part thereof which is occupied neither by the tenant nor by a person employed by the tenant for the purposes of a business by reason of which the tenancy is one to which this Part of this Act applies.

In line 35, at the end, add: () Where the tenant is carrying on a business, in all or any part of the property comprised in a tenancy, in breach of a prohibition (however expressed) of use for business purposes which subsists under the terms of the tenancy and extends to the whole of that property, this Part of this Act shall not apply to the tenancy unless the immediate landlord or his predecessor in title has consented to the breach or the immediate landlord has acquiesced therein. In this subsection the reference to a prohibition of use for business purposes does not include a prohibition of use for the purposes of a specified business, or of use for purposes of any but a specified business, but save as aforesaid includes a prohibition of use for the purposes of some one or more only of the classes of business specified in the definition of that expression in subsection (2) of this section.

Clause, as amended, ordered to stand part of the Bill.

4.15 p.m.