HC Deb 17 June 1954 vol 528 cc2438-41

12.15 a.m.

Mr. W. Wells

I beg to move, in page 19, line 35, at the end, to insert: (5) For the purposes of this section premises shall be deemed to be occupied by the tenant for the purposes of a business carried on by him when the tenant is an individual and the premises are occupied by a company in which the tenant holds not less than one half in value of the issued share capital and are so occupied for the purposes of a business carried on by the company. This is the first Amendment dealing with Part II of the Bill, relating to the security of tenure of business, professional and other tenants. It raises a new point, which was not discussed in Committee, and to understand it it is necessary, first, to look at subsection (1), which says: Subject to the provisions of this Act, this Part of this Act applies to any tenancy where the property comprised in the tenancy is or includes premises which are occupied by the tenant and are so occupied for the purposes of a business carried on by him or for those and other purposes. The object of the Amendment is to extend the protection given by Part II of the Bill to the case of a tenant who does not carry on the business himself but forms a company to do so, and where, because of the tenant's interest in it, the company does not formalise its arrangements with the tenant in such a way as to render the company the tenant itself. While it may well seem that this is not a very important case, the situation frequently arises, in practice, where the tenant of premises uses them for the purpose of a business of which he is virtually the owner, or is the owner in conjunction with what, in simple non-technical language; one would call a partner, who owns another part of the capital of the venture.

It seems to me to be a manifest injustice, or at any rate is likely to lead to a manifest injustice, that where a man invests his money in a business and carries it on at particular premises for a number of years, and everybody assumes, quite understandably, that the business and the tenant are really one and the same, when this Bill becomes law the tenant and any partner he may have in the business should have the rude shock of discovering that they are not protected by the Bill because of the mere technicality that the tenant was one individual and the business was, in law, a different individual, namely, the company.

As I have said, it appears to be a point not of very great importance, but I have found out from other practitioners of the law far more experienced in these matters than I am that it is a very common occurrence. It is one that I think should be dealt with by this Bill. Indeed, it would be unjust if it were not so dealt with. I hope that even at this late hour the Government, even if they are unable to accept the Amendment at this stage, will give it very careful thought and perhaps introduce an Amendment in another place dealing with the point. It is in that expectation that I have moved the Amendment.

Mr. G. Thomas

I beg to second the Amendment.

The Solicitor-General

I regret to have to inform the hon. Gentleman that we cannot accept this Amendment. One reason is that its drafting is quite inadequate to deal with the purpose which lies behind it. I am sure the hon. Gentleman will not want me to explain that in detail at this hour of the night, but it would require a very long and complex Amendment to cover the point he has in mind and to make sure of covering it satisfactorily. The words "controlling interest" would require rather comprehensive definition.

This does not mean that we are not sympathetic to the point he is raising, and we have already given it very careful consideration. As I say, it would mean a very lengthy, complicated and involved piece of drafting to deal with the point. While we will consider it again, it seems undesirable to complicate this already complicated Bill still further to meet a case which I doubt very much is likely to arise so very often, and which, if it does arise, it will almost certainly be within the power of the tenant to remedy.

The tenant can assign his tenancy to the company in which he has a controlling interest. A covenant against absolute assignment might be a bar, but, if there is no such covenant, the assent to the assignment could not be unreasonably withheld. Or, if the tenant does not wish to do it that way, he can sublet to the company, in which case the company will come within Part II of the Bill.

While I think that the ventilation of this point at this late hour has served a useful purpose in that it may perhaps help to draw particular tenants' attention to this point, one has to weigh in the balance the desirability of leaving it to them, or, alternatively, putting in, as I say, a very lengthy and complicated piece of legislation which might cause more confusion and might not enable tenants to realise the full extent of their rights under the Bill. We shall give further consideration to the matter. We are not unsympathetic to it. I hope the hon. Gentleman will realise that, but I am not expressing any undertaking that anything can or will be done. In these circumstances, I hope the hon. Gentleman will withdraw the Amendment.

Mr. Hale

Would it not be possible in general words to give the county court judges power to determine in this matter? Most efforts in this House to express complex questions in long series of words fail, for reasons that are well known to all of us. The more one tries to cover a matter in detail the more surely one fails to do so. I should think we could by general words give the county court judge power to come to a conclusion in the matter, by reasonably satisfying himself that here is a tenant who is carrying on business in a company in which he has a predominant interest, or in the management of which he is participating, and that this is the tenant's business in the sense that he has a predominant interest in it. Could not some such words be put into the Bill in another place? That might improve the Bill.

The Solicitor-General

I will certainly have a look at that, but I think one has also to have a look at the position of the landlord, for one would not want matters to go as far as the county court without the landlord's being able to find out where he stood. However, without giving any undertaking, I will consider the matter.

Mr. W. Wells

In view of what the right hon. and learned Gentleman has said I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.