HC Deb 04 November 1966 vol 735 cc922-31

Order for Second Reading read.

3.25 p.m.

The Solicitor-General (Sir Dingle Foot)

I beg to move, That the Bill be now read a Second time.

This is one of those salutary Measures of law reform which Parliament and the country have now come to expect from a wise and beneficent Administration. It was introduced in another place on 16th June last by my noble Friend the Lord Chancellor and I would recommend a study of his speech to anyone interested in the subject of family law. I hope that the Bill will meet with approval on both sides of the House. I propose to deal with the Clauses as briefly as I possibly can.

Clause 1 deals with the statutory legacies payable on intestacy to a surviving spouse. The current law is contained in the Administration of Estates Act, 1925, as amended by the Intestates' Estates Act, 1952. It provides, among other things, that, if there is no issue, parent, brother or sister, or issue of a brother or sister surviving, the surviving spouse takes the whole of the residuary estate. If there is surviving issue, the surviving spouse takes all the personal chattels, and, in addition, is entitled to a charge of £5,000 free of duty on residuary estate, and a life interest in half the residuary estate.

If there is no surviving issue but there is a parent, brother or sister, or their issue surviving, the surviving spouse takes the personal chattels and, in addition, is entitled to a charge of £20,000 free of duty on the residuary estate, and an absolute interest in one-half of the residuary estate.

Clause 1 affects only the charges of £5,000 and £20,000—commonly known as "statutory legacies". The other provisions governing the rights of the surviving spouse, or other persons entitled on an intestacy, are unaffected save in so far as the increases in the statutory legacies must necessarily reduce the amount available for the children or other relatives.

I should perhaps explain that the statutory legacy where the intestate leaves issue was originally £1,000 and was raised to £5,000 in 1952 following the recommendation of a Committee presided over by my old friend Lord Morton of Henryton. The Morton Committee felt that the proper object of the statutory legacy in these cases was to give the surviving spouse sufficient capital to purchase the matrimonial home without unduly prejudicing the interest of the children. It recommended the increase in the amount because of the fall in the value of money since 1926.

As we are all aware, that fall has continued. We are now, therefore, proposing to make the statutory legacy £8,750. This would restore it to its 1952 value as a means of purchasing the matrimonial home. For the same reason we propose, where there is no surviving issue, but there is a parent, brother or sister—or their issue—surviving, to raise the charge of £20,000 which goes to the surviving spouse to £30,000.

Clause 2 amends the Inheritance (Family Provision) Act, 1938, as amended by Schedule 3 of the Intestates Estates Act, 1952. The 1938 Act in its original form provided that the maximum that could be awarded to the dependants was two-thirds of the annual income. There was a proviso which laid it down that if the testator had already left his widow two-thirds of the income of the estate she could not make application to the court. The 1952 Act removed the limitation that the court would not award the widow more than two-thirds in any case, but it left the proviso untouched. The result was that although the court could generally award the widow more than two-thirds its hands were still tied if the two-thirds had been left her in the Will. This, as I am sure the House will agree, is an anomalous state of affairs. We propose to remove the anomaly.

Clause 3 is introduced as a result of a decision in the Court of Appeal in the case of In re Gale, 1966. Before that decision the courts had from time to time made orders that a widow should have half or three-quarters, or whatever they thought the appropriate fraction of the income of the estate. The Court of Appeal held that on the true construction of the 1938 Act this could not be done and that the only permissible form of order was an order for a fixed amount ascertainable from the income of the estate at the date of the order.

The result, of course, was that a number of orders which had already been passed were invalid. We are restoring their validity. I say at once, as the Lord Chancellor said in the other place, that this is retrospective legislation. I hope that I am as much alive as any Member of the House to the dangers of retrospection, but I hope that the House will agree with me that this is a case where it is permissible and, indeed, fully justified.

On Clause 4, under the 1938 Act a lump sum payment could be made for maintenance out of the deceased's estate for a spouse or child if the estate did not exceed £5,000. The same provision was made by Section 26 of the Matrimonial Causes Act in 1965. Experience has shown that this limitation is undesirable. There have been many cases where judges would have wished to order a lump sum payment, but are unable to do so because of the limitation contained in these Statutes. We therefore propose to remove it.

Clause 5 provides for a uniform time limit for three types of application by a dependant for provision out of the estate of a deceased person.

Clause 6, together with Schedule 1, empowers the court to make interim awards on applications under the Act of 1938 or Section 26 of the Matrimonial Causes Act, 1965. This again arises from a recent decision in the Court of Appeal, which held that there was no power in Section 26 to make interim orders. It also arose from a suggestion made by Lord Denning in another place on 16th June last.

Clause 7 confers on the county courts jurisdiction to entertain applications for maintenance out of the estate of a deceased parent, spouse or former spouse in cases where the value of the net estate does not exceed £5,000.

I do not see the hon. Member in his place at the moment, but I think that this Clause should give special satisfaction to my hon. Friend the Member for Nelson and Colne (Mr. Sydney Silverman). When a Family Provision Bill was before the House in 1937, in the days when my hon. Friend and I, then in opposition, sometimes embarked on an attempt at law reform, he proposed that the county court should be given this jurisdiction. It was resisted by the Government of the day. I am glad to think that after a lapse of 28 years my hon. Friend has at last had his way. He generally has his way sooner than that.

Clause 8 deals with the definition of an adopted child. There was a distinction in the 1938 Act. That is no longer accurate since it has been extended by later Acts of Parliament. We are now bringing the definition up to date.

Clause 9 repeals subsection (5) of Section 47 of the Administration of Estates Acts, 1925. In 1958, Lord Justice Harman declared that this subsection was misleading and meaningless. I respectfully share his view, because it could still mislead. We are, therefore, proposing to prune the Statute Book which I am sure hon. Gentlemen will agree is always a worthwhile exercise.

The only other feature of the Bill to which I should refer is the Third Schedule. This is what is known as a Keeling schedule. I am one of the rapidly diminishing band—and the right hon. and learned Gentleman the Member for St. Marylebone (Mr. Hogg) was another—who sat in the House with the late Mr. Keeling in the 'thirties. Then, as now, we complained, possibly with rather more reason, about legislation by reference, the kind of legislation which produced Acts which were difficult enough even for lawyers to construe and wholly incomprehensible to anyone else.

It was Mr. Keeling who wrote to the Prime Minister suggesting that where it was proposed to amend earlier legislation there should be a schedule to the amending Bill showing what the original Act would look like if all the Amendments proposed in the Bill were included in it. That device was fairly frequently adopted immediately after the war. For some reason it fell out of favour during the 'fifties, but my noble Friend the Lord Chancellor takes the view that in this kind of legislation we should again resort to it. I hope that all Members will agree.

3.34 p.m.

Sir Peter Rawlinson (Epsom)

The Solicitor-General was in good humour and was humorous, particularly as he introduced the Bill by saying that it was what we had come to expect from this wise and benevolent Government.

The Solicitor-General


Sir P. Rawlinson

I thought that the Solicitor-General said "benevolent". In either case, we on this side appreciate a good joke.

I welcome the Bill as a good and sensible piece of law reform. The hon. and learned Gentleman seemed to think that we were seeing a great deal of law reform under the present Administration. It is not nearly as much as we were led to expect we should receive. Nevertheless, I certainly welcome this piece of legislation, because I am sure that it is an improvement and will be an improvement in the administration of this part of our law.

It is the importation of the principles of the 1938 Act, bringing them up to date. I have always felt that old-age, apart from inflicting its bodily injuries, also sometimes brings spiritual injuries. The acts of some persons by trying to cut from their provision their wives and families has inflicted, and still inflicts, very grave and unfair damage upon some people. This is particularly so when people become old and forgetful. I am very glad that the Bill tries to bring more up to date the levels at which it is right that the courts should be able to interfere. The value of money, as the Lord Chancellor pointed out in another place, has fallen by about 50 per cent. since 1952. It is therefore right that Clause 4(1) should bring these figures more up to date.

The provision in Clause 2 seems to be sensible and wise. This has relation to what I might call the two-thirds rule, though it may be more appropriate to the Solicitor-General and I to think of the term "the two-thirds rule" in another context.

I was glad to hear what the hon. and learned Gentleman said about retrospective legislation. He said that he was as alive as anybody in the House to the dangers of that principle. I hope that he will go round spreading that gospel among all his friends and colleagues to ensure that all of them are as alive as he is to the general dangers of retrospective legislation. In the Bill, which arises from the case of In re Gale, it was obviously right, since grave injustices and difficulties can arise, that there should be this provision. It is necessary since the decision of the Court of Appeal.

As to the direction to the courts over time limits, I have always believed that great discretion should be given to the courts, because accidents and slip-ups can happen and sometimes injustice is caused. It is right that the court should be given, after it has heard the circumstances, more flexibility to deal with these problems, particularly in such matters as time limits. I am glad that this sensible step has been taken. It is also sensible that county courts should be brought into this jurisdiction.

I did not have the good fortune of being in the House with Mr. Keeling, The Solicitor-General, my right hon. and learned Friend the Member for St. Marylebone (Mr. Hogg) and also, I gather, my hon. Friend the Member for Hendon, South (Sir H. Lucas-Tooth) were all Members of the House in Mr. Keeling's time. Mr. Keeling should certainly go to fame as a back bencher, if that is what he was, who proposed an extremely sensible proposition. I thoroughly agree that in Bills of this kind it is of the greatest use to have the Third Schedule, or the Keeling Schedule, as we have it in the Bill. I hope that this practice will always be followed in subsequent Bills of this nature. I welcome the Bill and commend it to the House.

3.38 p.m.

Sir Hugh Lucas-Tooth (Hendon, South)

I, too, welcome the Bill. I do so all the more warmly because it was I who introduced the Intestates' Estates Bill, 1952, which is being brought up to date by this Bill. I was unable to conduct that Bill through Parliament, because I became a Minister shortly after my good fortune in the Ballot, but, Mr. Speaker, I handed the Bill over to your predecessor, who conducted the Bill through the House. That Bill also contained a Keeling Schedule, which I think has been of use to those who have to consider these matters. I do not wish to comment on any of the Clauses. There may be Committee points to be taken, but I think that they are all thoroughly in the nature of Committee points.

The matter to which I wish to refer is a point which was made by the Lord Chancellor in another place. He suggested that the recommendations of the Russell Committee—that is to say, the Committee on the Law of Succession in Relation to Illegitimate Persons—might be incorporated in the Bill while it was passing through this House. As a member of that Committee, I can say, I think, with certainty, that a number of the recommendations of the Russell Committee are excellent and that the sooner they are made law the better. But one of the recommendations—and extremely important and an extremely controversial one—was the subject of a dissenting note by myself, and I do not think that it should be brought into the Bill by Amendment at a very late stage.

I was therefore anxious to consider what my position to the Bill should be on Second Reading. I have taken the best advice open to me as a back-bench Member and I am advised that without any real doubt all the recommendations of the Russell Committee would be out of order if anyone sought to bring them into this Bill. It is in that belief that I shall simply give a welcome to the Bill and hope that it becomes law at the earliest possible moment.

3.42 p.m.

Mr. Charles Fletcher-Cooke (Darwen)

The learned Solicitor-General took great credit for the rapidity with which the Government recognised in Clause 1 the fall in the value of money. It is true that whenever the alteration is to be made at the expense of somebody else and not of the Treasury—in this case it is those who would succeed on intestacy beyond the right of the widow—there is a certain amount of rapidity, which contrasts very much with the rapidity when it is at the expense of the Treasury that such reforms have to be made. Nevertheless, Clause 1 is obviously right, as is part of Clause 4.

I wish to direct my remarks to Clause 2 and Clause 4, because in my view this is a very considerable invasion of the testator's right as we have known it. In the 1938 and 1952 Acts great care was taken to see that the rights of free testamentary bequests were not invaded too far. I do not regard as an anomaly, al though apparently both Front Benches do, a case in which a testator has deliberately fixed the amount of money which he thinks he should leave to his spouse at two-thirds, but has not been entirely forgetful, to use my hon. and learned Friend's words. I do not agree that it should therefore follow that that limitation should be swept away. I can well understand the argument if he simply cut his wife out altogether or she cut her husband out altogether in a rage, or perhaps from lack of memory, as is often the case, that he or she is married. That is a totally different case. But it is a different matter where the testator has deliberately selected the figure of two-thirds as the figure which he considers to be the right provision for his spouse.

One must always remember that there are an infinite variety of domestic relationships and that it may have been with great care and thought that the decision was taken. To equate the two decisions, as is now to be done and as was not done up to now, strikes me as requiring some justification. It should not merely be swept aside as an anomaly which the law has somehow thrown up.

In the same sense I would refer to Clause 4. Of course it is absolutely right that the lump sum, with a limit of £5,000, should now be increased, on the principle of the fall in the value of money, presumably to the figure of £8,750 given in Clause 1, but it by no means follows that there should be a complete and absolute withdrawal of the limitation. Clause 4 says that whereas in the past, where the whole estate was under £5,000, a lump sum would be given to the spouse instead of an annual income, it is now proposed that there shall be no limit to the amount of the estate which can provoke a lump sum award. It seems to me on the logic of the Solicitor-General that in future it should be estates of under £8,750 which give rise to this, on the basis that any income awarded—and this was the only justification for the limit—would be so small as not to give the widow anything to live on.

When this legislation was originally passed in 1938 and subsequently, the limitations on lump sum awards were very carefully thought out. Now they are to be swept away, and we have had no justification in principle for sweeping away what has hitherto been regarded as an imortant barrier to the freedom of testamentary bequest. There should be a reason in principle why lump sums should be awarded in future, however large the estate, but we have heard no reason. In the 1938 debate it was said that it was wrong to award large sum payments in place of annual income, and that they should be given only where the estate was so small that an annual income would be insufficient to make much difference to the surviving spouse.

On that last point, could the Solicitor-General explain why there has been a change of principle, and what is the justification for it? I regard it as an invasion of the rights of testamentary bequest, which should be invaded to a certain extent. That is no doubt accepted on both sides of the House, but it is not accepted on both sides that there should be no point at which these rights no longer stand. It seems that it is assumed in the manner of introduction in both Clauses 2 and 4 that one can push this frontier on indefinitely, until in the end we come to no rights of testamentary bequest at all, and the courts may rewrite a person's will according to how they think he should have made it.

3.43 p.m.

The Solicitor-General

With the permission of the House, I shall address the House once more in the light of what has been said. First, I thank the right hon. and learned Member for Epsom (Sir P. Rawlinson) for the way in which he received the Bill. In passing, I add that I very much agree with him on the subject of time limits. I always feel that where there is a limitation of time the courts should have unfettered discretion to extend the time. Both he and I know from experience that where there is not that unfettered discretion it can lead to very considerable injustice.

The hon. Member for Hendon, South (Sir H. Lucas-Tooth) referred to the Russell Committee, of which he was a member. I have received advice very similar to his and it may very well be—I must not anticipate—that it is not open to us to seek to amend the Bill to bring in the Russell Committee's recommendations. But if I am wrong we shall have the opportunity of hearing from the hon. Gentleman when we reach the Committee stage.

The one note of criticism was struck by the hon. and learned Member for Darwen (Mr. Fletcher-Cooke), who drew a contrast between two Clauses. He pointed out that under Clause 1 we merely raise the limits from £5,000 to £8,000 and from £20,000 to £30,000, whereas when we come to lump sum payments under a later Clause we impose no limit.

I should have thought that different considerations were involved. In Clause 1 we deal with a state of affairs in which there is a conflict between the interests of widows and the interests of other people entitled to benefit from the estate. So far as possible, we have to hold the scales evenly between the two. In the later Clause we deal simply with the way in which the benefits are paid to those who are entitled.

In the earlier legislation we introduced for the first time the principle of lump sum payments. Since then, we have had considerable experience. As I said earlier, experience has shown that the limitation is undesirable, and there have been many cases, I am informed, in which the judges would have wished to order a lump sum payment, but have been unable to do so because of the limitation on the amount of the estate contained in the law as it stands. I think that, in the light of experience, there is no reason why we should fetter the discretion of the court, and that is why this change is proposed.

It only remains for me to thank the House for the way in which the Bill has been received. No doubt we shall discuss other matters in Committee.

Question put and agreed to.

Bill accordingly read a Second time.

Bill committed to a Committee of the whole House.—[Mr. R. W. Brown.]

Committee upon Monday next.