§ Mr. Graham PageI beg to move Amendment No. 4, in page 8, line 6, after 'other', insert 'valid'.
The Amendment is short and sweet. Like all the Clauses in this part of the Bill, the Clause seeks to amend the 1954 Act, and in this case it seeks to amend provisions relating to compensation when a landlord is entitled to refuse to renew a lease. Section 30 of the 1954 Act sets out seven grounds for refusing renewal of a lease. In the case of the three 502 mentioned in the Clause—those in paragraphs (e), (f) and (g) of Section 30(1)—compensation is payable by the landlord if the renewal of the lease is refused. Those paragraphs relate to cases in which there has been a sub-letting of part of the property, and it would be detrimental to the landlord to continue that sub-letting; where the landlord intends to reconstruct the property; or where he wishes to take it over himself. The compensation is payable only by order of the court, as the law stands.
No direct power is granted by the Act for the parties to come to an agreement on this and the landlord to pay out the amount of compensation which he is directed to pay by the Act. As I have already said this evening, that amount of compensation is a very controversial matter, but all we are dealing with here is whether the landlord can pay that money without an order of the court. Ordinary individuals can agree between themselves, and there is no difficulty. The difficulty arises where the landlord has limited powers, as for example, a trustee, or an incorporated body which might be acting ultra vires.
The Clause allows compensation to be be given without the need to go to the court for an order. But it sanctions that only where no grounds other than those I have mentioned—those in paragraphs (e), (f) and (g) of Section 30(1) of the 1954 Act—are specified in the landlord's notice objecting to the renewal. Let us suppose that, as so often happens, the landlord says, "I have a good ground on reconstruction. I want to reconstruct the premises, but I do not know whether I shall succeed on that. The tenant has not been very good anyway, so let us throw in a few more of the seven grounds in Section 30." So instead of just stating that he wants to pull the premises down and rebuild, he says that the tenant has broken a covenant. This may be just a make-weight in this case, but once he has put it in both parties lose the benefit of the Clause.
What I propose is that if there are other grounds in the landlord's notice refusing renewal than those relating to sub-letting, reconstruction, or the landlord's taking over the premises himself, they shall not exclude the benefits under the Clause if they are invalid grounds 503 Only if those other grounds stated in the notice are valid will the notice force the parties to go to the court.
The Clause is one of those useful Amendments to the 1954 Act. It could be made more useful if we did away with the formalities as much as we can. If, through an abundance of caution, the landlord has included some other terms in the notice, he has precluded himself from agreeing with the tenant to pay compensation without obtaining a court order. I do not think that he can even put things right by withdrawing the application. The latter part of the Clause says that the compensation can be paid if the application is not proceeded with or is withdrawn. But there is a condition that it must be an application based on the landlord's notice, in which no other grounds than paragraphs (e), (f) and (g) are stated.
I am convinced that my proposal will assist the proper working of the Clause.
§ The Solicitor-GeneralThis Amendment alters the scope of Clause 11, which enables a tenant who is dispossessed on certain statutory grounds to obtain compensation either without making, or after withdrawing, an application to the court. The Amendment was foreshadowed in a debate which we had on this subject in Committee. Clause 11 enables compensation to be paid in these circumstances where the landlord has specified no other ground in his notice than a ground stated in paragraphs (e), (f) or (g) of Section 30(1) of the 1954 Act.
As the hon. Member for Crosby (Mr. Graham Page) rightly said, these grounds are, broadly, where the application for a new tenancy is made by a sub-tenant occupying part of the premises the landlord is in a position to let or sell the premises as a whole and ought to get possession of the part occupied by the sub-tenant since otherwise he will suffer substantial loss; or requires possession so as to demolish or reconstruct the premises; or intends to occupy the premises himself for business or residential purposes.
The Amendment requires compensation to be paid in those circumstances where the landlord has specified no other valid ground. In other words, if the landlord includes in his notice a ground 504 other than those in paragraphs (e), (f) and (g) which he cannot justify, the Amendment would enable the tenant to obtain compensation without an application to the court.
I regard the intention of the Amendment as laudable, because it seems to me to prevent the landlord from forcing the tenant into court by the device of including in his notice a ground which he cannot sustain. But the difficulty arises because of this circumstance, that the question whether a ground is valid must of its nature be for the court to determine, and if the landlord included an invalid ground in his notice the only way ultimately in which its validity could be tested would be by an application to the court, which is the very step which the Clause is designed to avoid.
As I said earlier, the Clause, in its present form, is designed to enable the landlord and the tenant to behave reasonably. If one of them does not behave reasonably, the outcome of this language is that they must go to court, and on that hypothesis the outcome is an appropriate one. Landlords who use the device of specifying an invalid ground would be vulnerable to the costs sanction on any application to the court.
For the reasons which I have given, I must advise the House to reject the Amendment.
§ Amendment negatived.