HC Deb 20 June 1967 vol 748 cc1428-33

(1) Where a tenant of a house having a right under this Part of this Act to acquire the freehold is prevented from giving notice of his desire to have the freehold because the person to he served with the notice cannot be found, or his identity cannot be ascertained, then on an application made by the tenant the High Court may, subject to and in accordance with the provisions of this section, make such order as the Court thinks fit with a view to the house and premises being vested in him, his executors, administrators or assigns for the like estate and on the like terms (so far as the circumstances permit) as if he had at the date of his application to the High Court given notice of his desire to have the freehold.

(2) Before making any such order the High Court may require the applicant to take such further steps by way of advertisement or otherwise as the Court thinks proper for the purpose of tracing the landlord; and it after an application is made to the High Court and before the house and premises are vested in pursuance of the application the landlord is traced, then no further proceedings shall be taken with a view to the house and premises being so vested, but subject to subsection (7) below—

  1. (a) the rights and obligations of all parties shall be determined as if the applicant had, at the date of the application, duly given notice of his desire to have the freehold; and
  2. (b) the High Court may give such directions as the Court thinks fit as to the steps to be taken for giving effect to those rights and obligations, including directions modifying or dispensing with any of the requirements of this Act or of regulations made under this Act.

(3) Where a house and premises are to be vested in a person in pursuance of an application under this section, then on his paying into the Supreme Court the appropriate sum there shall be executed by such person as the High Court may designate a conveyance in a form approved by the High Court and containing such provisions as may he so approved for the purpose of giving effect so far as possible to the requirements of section 10 above; and that conveyance shall he effective to vest in the person to whom the conveyance is made the property expressed to be conveyed, subject as and in the manner in which it is expressed to be conveyed.

(4) For the purpose of any conveyance to be executed in accordance with subsection (3) above, any question as to the property to be conveyed and the rights with or subject to which it is to be conveyed shall be determined by the High Court, but it shall be assumed (unless the contrary is shown) that the landlord has no interest in property other than the property to he conveyed and, for the purpose of excepting them from the conveyance, any underlying minerals.

(5) The appropriate sum to be paid into the Supreme Court in accordance with subsection (3) above shall be such amount as a surveyor selected by the President of the Lands Tribunal may certify to be at a fair valuation the price payable in accordance with section 9 above, together with the amount or estimated amount remaining unpaid (as determined by the High Court) of any pecuniary rent payable for the house and premises up to the date of the conveyance.

(6) Where a house and premises are vested in a person in accordance with this section, the payment into the Supreme Court of the appropriate sum shall be taken to have satisfied any claim against the tenant, his executors, administrators or assigns in respect of the price payable under this Part of this Act for the acquisition of the freehold in the house and premises.

(7) An application under this section may be withdrawn at any time before execution of a conveyance under subsection (3) above and, after it is withdrawn, subsection (2)(a) shall not apply; but where any step is taken (whether by the landlord or the tenant) for the purpose of giving effect to subsection (2)(a) in the case of any application, the application shall not afterwards be withdrawn except with the landyord's consent or by leave of the High Court, and the High Court shall not give leave unless it appears to the Court just to do so by reason of matters corning to the knowledge of the applicant in consequence of the landlord being traced.

(8) A conveyance executed under subsection (3) above shall have effect as provided by that subsection notwithstanding any interest of the Crown in the property expressed to be conveyed.—[Mr. Willey.]

Brought up, and read the First time.

The Minister of State, Ministry of Housing and Local Government (Mr. Frederick Willey)

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

Although the Clause stands in my name, I do not claim to be the parent. This will subsequently be known as the "Rossi Clause" of the Bill. It owes everything to the hon. Member for Hornsey (Mr. Rossi) and his diligence and pertinacity in Standing Committee. I asked him to withdraw a proposed Clause which I recognised was well drafted so that we could have the advice and assistance of Parliamentary Counsel. I present the Clause as improved, but acknowledge the debt we owe to the hon. Gentleman.

Mr. Speaker

The Question is, That the Clause—

Mr. Hugh Rossi (Hornsey)

rose—

Mr. Speaker

Is the hon. Gentleman seeking to catch my eye? He had better hurry up.

Mr. Rossi

May I thank the right hon. Gentleman for the way in which he has introduced the Clause and accepted the principle enunciated in Committee? There are two criticisms that I must make about the new Clause as it appears on the Notice Paper. Perhaps the right hon. Gentleman will not think me too churlish if I draw attention to those two matters in spite of what he has said.

First, in Committee we sought to give jurisdiction to the county court in this matter, whereas the Minister has seen fit to give the power to the High Court, and presumably it follows that this will become a Chancery Division matter. I accept immediately that the wealth of experience in dealing with conveyancing matters of this kind in the courts is found in the Chancery Division rather than any other judicial tribunal. However, procedure in the Chancery Division is somewhat long-winded and very expensive.

If this Clause is to be used—and I would like to see it used—I would like to have available to tenants a simple, quick and cheap procedure. I fear that this will not be found in the Chancery Division. I would have hoped that some form of regulation could be produced along the lines suggested in Committee, which would have enabled the county court to deal with the matter. That is my first criticism.

The second is that although the new Clause provides for payment of the value of the freehold interest into court where the landlord cannot be found, it does not appear to provide for the payment out of the money after a period of time has elapsed and everyone has become satisfied that the landlord will never be found and will, therefore, never claim the money. There has been a great deal of public comment on the Bill about windfalls. It would appear that here is a windfall for the State, because the money will go into court and there it will remain for a very long time and subsequently be taken out by the Government and used for various purposes, as unclaimed funds are from time to time.

The whole object of the new Clause proposed in Committee was that where a tenant could not find the freeholder and had not paid his ground rent for a number of years because it had not been claimed, such a tenant should be given the right to acquire the freehold title by a form of procedure under the control and jurisdiction of the courts. The courts would require the tenant to satisfy them beyond all reasonable doubt, providing for evidence to show that the landlord, the freeholder, had disappeared and that active steps, such as advertisements, had been taken to try to find him. The court would have to be absolutely satisfied that despite all this he could not be found.

We also wanted to ensure that the tenant would pay a proper price. Again, there would be provision by regulation for assessment of the price the tenant had to pay for the freehold interest, and the court would again have to be satisfied on expert evidence that the right price was to be paid. The money would go into court, which would issue a certificate vesting the freehold title in the tenant, who would then be free to dispose of the property as he wished.

Without this procedure, the tenant would remain in possession of his property until the natural term of his lease expired. Examples were given in Committee of 500-years freehold let on a primrose, where the freeholder had never bothered to collect. In these circumstances, if the tenant remained in possession for 12 years after the expiry of his contractual right, he would be able to acquire the freehold by adverse possession, as a squatter. It would thus never be necessary for a tenant to use this procedure. If it is too cumbersome and expensive, no tenant will use it, but will wait until he has acquired squatter's rights.

Subject to these two criticisms, the Clause will be a dead letter from the moment that it goes on the Statute Book. Unless a tenant is to rely on his squatter's rights, as he can in any case, he must have something cheap and quick and uncomplicated. I ask the right hon. Gentleman to reconsider the matter on these lines, perhaps later in the course of the Bill.

4.0 p.m.

Mr. Emlyn Hooson (Montgomery)

I should also like the right hon. Gentleman to reconsider the Clause. I refer to the first requirement that it should go to the Chancery Division. Procedure for dealing with householders should be as simple and swift as possible. The Chancery Division always frightens people off. The Minister should consider this again or give some cogent reasons why it is necessary to use the High Court rather than the county court, particularly as he will seek later to reintroduce the original limitations. Surely there is no reason why the county court should not deal with these matters. It is competent to do so. County court judges and, more importantly, registrars, are accustomed to them and there is no reason to substitute the High Court.

Mr. Willey

I am willing to consider this again to assist the hon. Gentleman in improving the Bill. Lawyers never agree on jurisdiction. We have considered this carefully and there was much discussion in Committee on jurisdiction. Our best advice is that there would be difficulties in referring this to the county court. Knowing the interest of the hon. Member for Hornsey (Mr. Rossi) in primroses, we made a special provision that the rent would be a pecuniary rent, so that vanloads of primroses would not turn up for delivery.

On payment out, there is equity between leaseholders. The leaseholder opts to take advantage of the Bill. We feel that we should leave the payment in court, which does not prejudice the leaseholder, so that anyone can prove title for ever and a day. We are willing to consider this again, as it may go against the hon. Gentleman's first intentions.

Mr. Leslie Hale (Oldham, West)

I have a direct personal interest in some Clauses of the Bill, though not this one, because my landlords are the Dulwich College Estate governors. When I was a member of the Leasehold Committee, years ago, and a member of the ad hoc Committee in this House on leasehold, I had no interest, and up to that time never had. It is fortuitous that I now have a leasehold house and I have, therefore, tried to refrain from controversy. I would vote along these lines, although I doubt that there is any advice on the subject.

One matter which has escaped notice is the situation of houses in Oldham, many of them on 999-year leases. One customarily dismisses this as something so remote that people will not be concerned, but I am sure that landlords would welcome any enfranchisement which would save the costs of collection of trifling sums every six months under a long lease and, of course, for property in which they would have no residual interest for 800 or 900 years. Most are very small properties.

A very serious problem was created when large estates were split up and the obligation to pay the rent for a large plot was vested in one person. When 14 houses were built upon it, he still had that obligation to collect the share of the ground rent from each of the 40 people, which is somewhat difficult. I know that, in such leases, these people have to apply—

Mr. Speaker

Order. I hesitate to interrupt the hon. Gentleman, for whom we all have a high regard, but he must