HC Deb 22 November 1954 vol 533 cc948-53

Lords Amendment agreed to: In page 11, line 1, at beginning insert: (1) In this Act any reference to the sale or purchase of an interest in land includes a reference to the sale or purchase of such an interest by way of feu; and in relation to any such sale or purchase—

  1. (a) the price shall be taken for the purposes of this Act to be the capital value of the feu-duty, or, as the case may be, the aggregate consideration represented by the grassum and the capital value of the feu-duty; and
  2. (b) the last preceding section and sections eleven and forty-five of this Act shall have effect as if the interest sold were identical with the seller's whole interest in the land immediately before the sale.—[Special Entry.]

Lords Amendment: In page 11, line 26, at end insert: and, so far as required for the purposes of that Part, for the purposes of the Third Schedule to the principal Act,

Commander Galbraith

I beg to move, "That this House doth agree with the Lords in the said Amendment."

This is a drafting Amendment. Restricted value in Part V of the 1947 Act involves the application of the Third Schedule of that Act. It is desired to put beyond doubt the substitution, for the purpose of the present provision, of the date of sale for the appointed day is effective in that Schedule.

Question put, and agreed to. [Special Entry.]

Lords Amendment: In page 12, line 16, after "forty-eight" insert: and at the date of the sale the development specified in the certificate had not been completed

Commander Galbraith

I beg to move, "That this House doth agree with the Lords in the said Amendment."

It may be convenient if we discuss this Amendment together with the following Amendment in line 23. These are little more than drafting Amendments. The definition of "restricted value" in subsection (2) provides the basis on which the payment made in respect of a private sale is to be assessed. Anything already received over and above the restricted value is, under Clause 5 (4, b) to be deducted from the value of the claim holding in arriving at the sum payable.

The purpose of the proviso to subsection (2) is to adapt these provisions to cases where part or the whole of the land sold was the subject of a certificate issued by the Secretary of State under Section 77 of the 1947 Act certifying it as "dead-ripe" land. The principal effect of such a certificate was that the development specified in it should be catried out free of development charge, and the corresponding development value was excluded from any claim on the £300 million fund. This development charge exemption was something for which the owner would quite properly have been paid by the purchaser, and it is, therefore, necessary to add the value of the exemption to the rectricted value in order to arrive at the amount of the payment properly due.

Question put, and agreed to. [Special Entry.]

Subsequent Lords Amendment agreed to: In page 12, line 23, leave out from "of" to "if" in line 25 and insert: so much of that development as had not been completed if it had been completed and." [Special Entry.]

Lords Amendment: In page 13, line 10, at end insert: Provided that where the whole or part of any liability or prospective liability which was or, as the case may be, would have been taken into account in calculating that restricted value had ceased to exist before the date of the compulsory acquisition or sale, the Board, or, as the case may be, the Lands Tribunal may, if they think it just and proper so to do, waive in whole or in part, as may appear to them appropriate, any reduction otherwise falling to be made under this subsection.

Commander Galbraith

I beg to move, "That this House doth agree with the Lords in the said Amendment."

It might be to the convenience of the House if we discussed this Amendment with the Amendment in page 14, line 3. This Amendment is somewhat technical in character, but I do not think that the House will disagree with its object.

Subsection (4) is concerned with cases where the restricted value of land, as found under Part V of the 1947 Act, was a minus quantity A minus restricted value would result whenever the value of the land restricted to its existing use was less than the capitalised feu duty or other charge to which it was subject. Thus an acre of land might have been feued for building at £50 per annum. Restricted to agriculture, that land might be worth only £5 per annum, in which case the feuar's interest would, on the restricted basis, be a liability of £45 per annum. Capitalised, that would give a minus restricted value of, say, £900.

One result of the acquisition of the feuar's interest was that he was freed from any further liability to pay the feu duty. That being so, he ought not to receive any part of his Part V claim which resulted from the minus restricted value, because that minus value arose out of his liability for the feu duty. The subsection, therefore, provides for the amount of the minus to be subtracted from the claim.

Mr. D. Johnston

The right hon. and gallant Gentleman has told the House why the Amendment is necessary, but he has not said what it does. I have difficulty in understanding why, when the liability which causes the minus valuation is removed, the payment or the value which the holder of the claim may receive depends on a waiver by the Board and upon the board making such apportionment as it thinks proper. Indeed, it depends upon the board thinking it just and proper to make a waiver.

Why is it, if the liability which results in the minus valuation is removed, that the holder should not receive the compensation which he would have received had this liability not existed at the time when the claim was considered? Why should it depend upon equitable considerations, which, apparently, can only be considered by the board? That is the first question.

Secondly, what is envisaged by the words "just and proper"? What is thought to be "just" and what is thought to be "proper"? Does it depend upon timing when the liability is removed, or does it depend upon the manner in which the liability is removed, or what considerations have the Government in mind when they introduce these words and instruct the board or the Lands Tribunal to determine whether or not the minus quality of a claim may be changed in accordance with its interpretation of these words?

It is a very difficult subject, and I should be most grateful if the right hon. and gallant Gentleman or the Lord Advocate would explain in what circumstances it is envisaged that this provision will operate, why it is phrased in these terms, and why it is made subject to equitable considerations and not to legal rights.

Commander Galbraith

If I may have permission to reply, the answer to the hon. and learned Member's first point is this: that the provision will not function fairly where the liability which gave rise to the minus restricted value had disappeared, in whole or in part, before the acquisition of the land. For example, the feuar may have redeemed the feu duty. The Amendment proposes to meet this possibility by giving the Central Land Board—and the Lands Tribunal—power to waive the reduction provided for in the subsection, as far as appropriate. Cases are not likely to be many and the circumstances may vary widely; and it is, therefore, necessary that there should be a discretion. That is the most economical solution.

I was asked what was envisaged as being "just and proper." As I have said, the circumstances here are likely to vary greatly. It is not right that the man should not receive any part of the Part V claim which resulted from a minus restricted value because that minus value arose out of his liability to his feu duty. That is what those bodies have to consider—the justice and reasonableness of the case submitted to their discretion.

Mr. Woodburn

What is the legal meaning of "just and proper," about which there is some doubt? Is there a distinction between "just" and "proper"? What will this cost?

Commander Galbraith

If I may have permission to reply, I have said that the cases are likely to be very few indeed and, therefore, the cost cannot be very great.

Mr. Thomas Fraser (Hamilton)

Could we have "unjust and proper" and "just and improper"? Can we be told the meaning of the words "just and proper"? Will the Lord Advocate tell us?

The Lord Advocate

I should have thought it was possible to be unjust and proper or just and improper. The two words mean different things. The question of justice is a question of what is fair. The question of whether it is proper raises a matter of propriety, of appropriateness. The two words are not exactly the same. The intention is to cover a general discretion in order to secure a fair result.

Question put, and agreed to. [Special Entry.]