Lords Sitting of 12 May 1892

MORTMAIN AND CHARITABLE USES ACT AMENDMENT BILL.
Amendments reported (according to Order); and Bill to be read 3a on Monday next.

CONVEYANCING AND LAW OF PROPERTY ACT (1881) AMENDMENT BILL.
REPORT OF AMENDMENTS.
Order of the Day for the Report of Amendments to be received, read.
Title.
Amendment moved, to leave out ("with reference to leaseholds.")—(The Lord Herschell.)
Amendment agreed to.
Clause 1.
Amendment moved, in page 1, line 7, to leave out ("leaseholds.")—(The Lord Herschell.)
Amendment agreed to.
Amendment moved,
At end of Clause, to insert as sub-section (3) sub-section (2) of Clause 3, leaving out ("Section two") and inserting ("of this Section."—(The Lord Herschell.)
Amendment agreed to.
Clause 2.
Amendment moved,
In page 1, line 21, to leave out ("the before mentioned,") and after ("fourteen") insert ("of the Conveyancing and Law of Property Act, 1881.")—(The Lord Herschell.)
Amendment agreed to.
Clause 3.
LORD HERSCHELL: My Lords, at the end of Clause 3, page 2, line 10, I move to add—
"But this proviso shall not preclude the right to require the payment of a reasonable sum in respect of any legal or other expense incurred in relation to such licence or consent."
I move it in conformity with an Amendment made in the Standing Committee
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when I promised to bring up an Amendment in that sense.
Amendment moved,
In page 2, line 10, add at end ("but this proviso shall not preclude the right to require the payment of a reasonable sum in respect of any legal or other expense incurred in relation to such licence or consent.")—(The Lord Herschell.)
THE MARQUESS OF BATH: I wish to ask the noble and learned Lord whether, in the case of licences to assign for which the common custom is that a fee is paid, not a large fee, but a fee of a guinea generally, to an agent, would this Clause prevent that?
LORD HERSCHELL: It certainly would not prevent it. If anything had been done it probably would be that in that case the fee of a guinea to the agent for making any inquiry necessary with regard to the charges would not be precluded by this provision. It would be as the Clause stands; but it was to meet such cases that the proviso was put in.
*THE PRIME MINISTER AND SECRETARY OF STATE FOR FOREIGN AFFAIRS (The Marquess of SALISBURY): My Lords, I understand that this Clause will not include the case of a special covenant to pay money in respect to assignment. The Clause as it stands I understand really to say that if there is only a covenant against disposing of land or property leased without licence or consent such covenant shall not carry with it, or be intended to carry with it, the liability to fine; but if there is a special condition inserted that a fine shall be paid I presume this Clause would not prevent it.
LORD HERSCHELL: I am not sure that it would; but I do not myself feel any responsibility in respect of this Clause, because the Clause, as it now stands, is one that was carried in opposition to my contention before the Grand Committee. But if the noble Marquess asks me, I am not sure that there might not be a possibility of its excluding a fine in such a case. If it is desired to preserve a fine probably it would be possible to do so by saying "unless otherwise expressed" in the lease.
*THE MARQUESS OF SALISBURY: I think that was the intention, as I

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understood it, of the Grand Committee, and I did not understand that that by itself was opposed by the noble and learned Lord. I think it would be better to insert words to that effect.
THE LORD CHANCELLOR (Lord HALSBURY): My Lords, I have not seen this before, but, as the Bill now stands, there is no doubt whatever that it would prohibit the receipt of any fine or money compensation even where the original covenant had expressly provided it; and, therefore, if it is intended to preserve the right in cases where it is expressly covenanted, it ought to be provided for so as to be beyond doubt.
*THE MARQUESS OF SALISBURY: Would not the best way be to express it in words "unless there be special provision to the contrary"?
LORD HERSCHELL: "Unless special provision to the contrary is made herein."
*THE MARQUESS OF SALISBURY: Have you any objection to that?
LORD HERSCHELL: None. Although I am responsible for the Clause, that was the intention no doubt of the Grand Committee. I think if the words are adopted in line 7 "unless the lease contains an express provision to the contrary" that will be sufficient.
Amendment agreed to.
LORD HERSCHELL: My Lords, there is only one other Amendment that I have to propose, which deals with a case much more limited than that which was dealt with in the Amendment which was rejected by the Grand Committee. It is intended to enable the Court to relieve against the forfeiture in respect of an assignment being made without licence, where the Court thinks it reasonable that such relief should be given, and in such terms as the Court thinks fit. My Lords, a provision of this description is entirely on the lines of previous legislation, because now in numerous cases,—in fact in the majority of cases, where there is a breach of covenant, which is expressed by the lease to give the right to forfeiture, the Courts have been given power by Parliament to relieve against the forfeiture on such terms as they think right, securing to the lessor that he shall not be injured by the act of the tenant.
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My Lords, I venture to think that that may well be extended to the present case. No one of course would desire that the Court should relieve in any case in which the landlord's interest would be prejudiced by their relieving against the forfeiture, and I do not believe that if this Clause is passed into law, under this provision any more than under previous provisions by which the Courts have been able to give relief, any wrong would be done to the lessor. My Lords, not only is this Clause confined to power to the Court to give relief where it thinks fit, but it is limited to that class of cases where the lessee has himself a substantial and valuable interest under the lease; because it only applies where there are seven years of the lease yet to run, and where the rent which the lessee has to pay does not exceed one-third of the annual value; so that it only applies where really it is a valuable property to the lessee, and where therefore the lessee may be expected, to say the least of it, not to make any assignment which would be likely to be injurious to the value of the lease; because of course he has, for seven years to come, twice as great an interest in the property leased as the lessor has. Now I may be asked whether such a provision as this is necessary. Have there been cases of hardship, owing to the want of power in the Court to relieve against the forfeiture? My Lords, a case came before the Court of Appeal very recently, which undoubtedly was a case of great hardship, and which they felt to be a case of great hardship; but in which they could afford no relief. A valuable lease of premises in the City of London had been granted, and there was a provision that the lessee was not to assign without licence, but that that licence was not to be arbitrarily or unreasonably withheld. There was an arrangement made by which a portion of the premises was to be leased to a perfectly respectable tenant—that was proved and admitted. The matter was put into the hands of a solicitor to carry out; but, by an oversight of his clerk, permission was not asked of the lessor to make the assignment. There can be no doubt that if permission had been asked the lessor

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would have given it, and, I think probably, could have been made liable if he had not granted it, because there was no doubt about the propriety of the proposed lessee, and the liability of the original lessee to the landlord still remained; so that his pecuniary interest could not be affected. He kept his liability of the original lessee under the covenant, and would get, in addition, the liability of the new lessee. No licence having been obtained, through an oversight, and the lease having been so assigned, the lessor brought and succeeded in an action to recover this valuable property from the lessee, and the Court held that it was powerless to afford the lessee any relief, although it was a mere oversight on the part of the clerk, and the landlord was in no way prejudiced by the proceedings. That seems to me a very hard case, and I would submit that that is a case in which the Court, not having the power, ought to have the power given it to relieve against forfeiture. I believe that that is not a solitary case by any means, and there is no doubt that there are cases in which, I believe, not infrequently these provisions about assignment are inserted rather in the interest of the solicitor to the lessor than of the lessor himself. There was another case brought before me in which also there was an oversight on the part of the solicitor in regard to asking for a licence. There were proceedings for a forfeiture, but the forfeiture was not finally insisted upon, upon payment of a considerable sum of money. Of that sum of money not half went to the lessor. There was a charge made for an alienation fee, but there were charges made in lieu of preparation of the licence of assignment in further charge, none of which of course had ever been required, by which the solicitor to the lessor obtained something like twenty-five guineas without anything having been done. Now it has been feared that, under a provision of this sort, the landlord might not have complete protection; but I think the Court may safely be trusted to give him that. It is quite clear that a lessee, coming to a Court to be relieved of forfeiture, would be required by the Court to show that the landlord could
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not possibly be prejudiced, and the Court might, I think, be safely trusted to secure the landlord's interest in that respect, either by way of allowing the responsibility of the proposed tenant, or upon security that the premises should not be applied to any purposes to which they ought not to be applied. My Lords, these are the grounds upon which I ask your Lordships to assent to this Amendment, which, as I have said, after all only gives power to the Court to relieve, and only in a case where the interest forfeited is very valuable to the lessee. I had hoped that the Noble Marquess might have been induced to regard this Amendment, which is of much more limited scope than the one proposed in the Grand Committee, favourably; but of course, if he is unable to do so, although I shall regret it, I shall not certainly, after the Division which took place, propose to ask your Lordships to divide upon a proposal of this description. The main proposal was defeated, and I have made this smaller proposal to your Lordships; but, if the noble Marquess does not see his way to withdraw his opposition to that proposal, I shall not force the matter to a Division.
Amendment moved,
To leave out Sub-section (2) and insert as new Sub-section (2)—"Where a lessor is proceeding by action or otherwise to enforce a right of re-entry or forfeiture under any covenant, condition, proviso, or stipulation in a lease against assigning, underletting, or parting with the possession of the land or property leased without consent, the lessee may apply to the Court for relief, and the Court may grant or refuse relief as the Court thinks fit, and in case of relief may grant it on such terms as it thinks fit; provided that the unexpired residue of that term created by the lease exceeds seven years, and the rent reserved by the lease does not exceed one-third of the full annual value thereof."—(The Lord Herschell.)
*THE MARQUESS OF SALISBURY: My Lords, I think this matter is one of more importance than the noble and learned Lord opposite imagines: And although, after the announcement with which he has closed his speech, I might fairly abstain from troubling your Lordships with any observation, I think it would be more fitting that I should just briefly state why this seems to me to be a very dangerous alteration to make. It is an alteration which was

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deliberately excluded from Lord Cairns' Act of 1882, the Conveyancing Act. There, while the Court was given power to relieve against several causes of forfeiture, where there was in the lease a prohibition against assignment, there the forfeiture was deliberately maintained. Therefore I think it can hardly be said that this is on all fours with recent legislation; on the contrary, it is directly opposed to the principle which recent legislation has adopted. But what I feel really is that it is applying to English leases the principle of free sale. We know what free sale is in Ireland—we do not want it in this country. Of course there may be grievances; there may be cases where the leases have been improperly framed or improperly administered. I do not for a moment wish to take up the position that on account of the landlords' rights I would resist any inquiry into some malfeasance or the adoption of any remedy that may be proposed. On the contrary, if the noble and learned Lord wishes to press for inquiry, so far as I am concerned, I shall be very glad to assist him in inquiring into the matter; but my contention is that a very wide and far-reaching change, a change of a character we know well by the experience of the sister country, is being introduced into our English law with absolutely no inquiry whatever as to the grievances needed to be redressed, or the mode in which they can be most conveniently met. Now the noble and learned Lord gave us the grounds on which he had acted. I listened to them with great curiosity. What were they? That an attorney's clerk, in drawing out a deed, had made a blunder, and in consequence great injury had accrued to the parties affected.
LORD HERSCHELL: I am sorry to interrupt the noble Marquess; but there was no blunder in drawing out the lease. The lease was drawn out in proper form. The blunder was in the oversight in not asking for the licence.
*THE MARQUESS OF SALISBURY: But my point is that the grievance arose from the oversight of the attorney's clerk, and an oversight on the part of attorneys' clerks is a cause of human suffering which no action in this House
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can possibly remedy. It is not that the law was wrong; it is not that the law was unjust; it is not that the deed was oppressive; it is that the attorney's clerk made a blunder, and that really is the summary of the whole case on which this alteration is asked for. Now my Lords, there is something very peculiar about this bit of legislation. It has tried to do good by stealth, and blushes to find it fame. Last year this Bill was sent up to us on the very last day of the Session. It was adopted by the noble Earl opposite (Earl of Kimberley), I think wholly unconsciously as to its importance, and he asked us—I do not complain of his conduct—to pass it through all its stages on a single day. I frankly confess that until he mentioned it I had not seen the Bill. But I earnestly pressed upon your Lordships, and happily with success, not to adopt such an alteration in the existing contracts without examination. This year the Bill passed through the House of Commons in every stage after half-past Twelve at night without the slightest discussion of its details. I do not know what the force is, but there is a very strong and silent force in favour of this Bill. I have no doubt that the noble and learned Lord who brings it forward has adopted it in all good faith, and I think I am merely tracing his action to that confidence in Judges which in him is natural and graceful, though perhaps he may carry it we think to an extraordinary and extravagant length. My Lords, what this Bill does is to put the Judge in the shoes of the landlord. If a landlord inserts into a lease a condition that assignment shall not take place without his consent, he is now the master to agree or to refuse. If this Bill passes he will no longer be the master to agree or to refuse; it will always be in the power of the lessee to go to a Judge and ask the Judge to revise the landlord's decision. Now the Judges, if you tell them what they are to do, are, in this country, absolutely to be trusted. We all of us are prouder perhaps of our Judges than of any other institution in the country; but the Judges have always shrunk from unlimited discretion; they have always asked that the law should tell them what to do, and then they will do it, and in-

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variably do do it. But in this Clause there is no guide whatever to the Judge; he is not told on what ground he is to relieve, or not to relieve; on what ground he is to protect the interests of the landlord, or the interests of the tenant. All that the clause does is, crudely and roughly, simply to put him in the place of the landlord, and to say that the Judge shall decide whether the landlord shall be allowed to refuse the assignment or not. Now my Lords, my fear as to this discretion is that the Judge will treat it simply as a pecuniary question; he will simply ask himself, Is the landlord receiving any pecuniary injury? And I maintain that in the extensive relations which exist, the various and multifold relations which exist throughout this country between landlord and tenant, there are many other questions, besides those of mere money, that are brought up when the landlord is asked whether he likes to change one tenant for another. It does not follow that because the change can take place without any injury to the landlord's purse, therefore it is one that he counted on, or that will be agreeable to him, or that he ought to be properly forced to submit to. Suppose you have let your land for eight years for a very low rent, or suppose, what often happens, that a fine has been paid on entry. Under this clause a tenant will be able to assign his lease, of course for such a consideration that will pay the fine, and absolutely to take no notice whether the landlord cares to have the new tenant or not. I ask your Lordships as men who know the relations of landlord and tenant in the country, being landlords of farms, landlords of houses, and so on, whether it will not be a serious impediment to every kind of lease if this power shall be allowed? Is it not often the case that men will not desire to have a lessee who may be very satisfactory to the out-going tenant who never sees him again, but very disagreeable to the landlord, who will have to live by him for the rest of the term? I ventured before the Standing Committee to name three cases; they are cases which may all arise under this Clause, and they seem to me to be cases in which the landlord has the right to look for protection.
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I will take the first, the case of a villa owner who has bought a couple of houses, as they often are, semi-detached; he lives in one and lets the other, and has let the other on a fine—on a beneficial lease. It is a matter of very serious importance to him who is his next door neighbour, separated only by a fence between one garden and the other, and he has, no doubt, chosen somebody with whom he thinks he can live out his term very pleasantly. Is it fair, without his being asked at all, without his having any remedy whatever, that somebody wholly disagreeable to him should be put in? In the same way in county society there may be somebody introduced who may cause disunion where union existed before, and who is wholly unacceptable to the people among whom he is placed. Is it fair that the landlord shall not have the power to provide against such an event? And the third, and I think the most serious case is one connected with our laws upon public morality. By the Act of 1865 the landlord is made punishable if he has knowingly permitted his house to be used for an improper purpose. Supposing a lease has been given by fine, and supposing under this Bill it is proposed to assign the lease to somebody who is very strongly suspected of having this intention, under the existing law the landlord would simply refuse it, and there would be an end of the matter. But under the law, as it is proposed to be, he will have to go into court and prove the intention to use the house for an immoral purpose; and there is all the difference and distance in the wordl between knowing perfectly well that a thing is true, and being able to bring witnesses into court who can prove it according to the English laws of evidence. My Lords, on these grounds I say that primâ facie, in the absence of all inquiry, there is no cause for destroying the rights of the landlord; there is no injury shown which we ought to remedy at so great a cost; and that, if there really is any case of abuse, any class of misdeed against which great objection is felt, the proper course is to ask for an inquiry, to bring the cases up before your Lordships' House, and to show that there is sufficient cause for some modification of the law. I have

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no doubt that when sufficient cause is shown your Lordships' will be ready and willing to modify the law; but I maintain that, as no cause is shown, to do so would be both inexpedient and unjust. I, therefore, move that the new sub-section be not agreed to.
THE EARL OF KIMBERLEY: My Lords, the noble Marquess has alluded to the course I took last Session, and I wish to say a word partly in my own defence. The reason, as I stated at the time, why I undertook to bring that Bill before the House at what was no doubt the very end of the Session was that I understood, subject to correction, that the noble and learned Lord on the Woolsack was in favour of the Bill. It being a Bill essentially of a legal character I certainly could not have undertaken on my own responsibility to bring forward such a Bill at the end of the Session, unless I had had the belief that it was sanctioned by high legal authority. The noble and learned Lord has explained exactly his position in the matter, and I have not a word to say in complaint of what he said. I believe he generally favoured the Bill; but certainly he was not prepared to go to the full extent of recommending to the House at that moment that the Bill should pass; and, on finding that the noble and learned Lord had only given a qualified approval to the Bill, I of course did not persevere with it. My Lords, with regard to the present Clause I cannot help thinking that the noble Marquess has taken a somewhat exaggerated view of the whole matter. In the first place he said that we should be introducing free sale into this country. I entirely agree with the noble Marquess in deprecating the introducation of the principle of free sale; but surely this is not in the smallest degree the principle of free sale. That would be to say that in all cases where there was a convenant against assigning in a lease that covenant shall be held to be null and void, and that the tenant shall have the right, notwithstanding, to part with the lease to another tenant. But no such proposition as that is made. The proposition is merely to enable the Court to relieve the lessee from the consequences of what may have been an oversight.
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The noble Marquess talks very lightly of the oversight of an attorney's clerk, and says that you cannot prevent the consequences of an oversight. That is exactly what we say you can do; because, if you pass a clause of this sort, you will prevent such an oversight as that. And surely everybody who is concerned with business must feel that it is a very great hardship if, when there is an oversight and nothing more, on the part of a person whom you employ to transact business which you cannot transact for yourself, we do not apply a remedy, if it be possible, to such cases. In the present instance what is the remedy proposed? Simply that remedy which exists in every case with regard to leases, except in the case of assignment, and the case of forfeiture on account of damage. The principle, therefore, upon which the Legislature has undoubtedly proceeded is to prevent the consequences of such an oversight, and to relieve the lessee from the hardship that he will incur. My noble and learned Friend (Lord Herschell) has pointed out to you that this is no imaginary case. A case came the other day as he said before the Courts, and the learned Judges in that case—who I suppose may be considered to be able to form an opinion upon a matter of that kind—gave it as their opinion that it was a case of extreme hardship, and they regretted that the state of the law was such that they could not relieve the lessee from the consequences. Why are we to distrust the Judges so much in a matter of this kind? It seems to me that supposing the proposition was made to sanction that assignment of the lease to such a tenant as the noble Marquess alluded to, who would be likely to misuse the lease, that would be a very valid ground of objection before the Court, and the Court would, I imagine in every case, require clear and ample proof that the tenant to whom the lease was to be transferred was such a tenant as could not do injury to the landlord's interest. My Lords, if the Court cannot be trusted to do that I should like to know what it can be trusted for? I should suppose that the interest of the landlord would be perfectly safe in the hands of the Court in that matter. Why should we refuse to cure this possible

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hardship? My Lords, I also think that in the interests of lessors it is exceedingly desirable, in the present state of public opinion on the subject of long leases, that there should not be any hardship of this kind to tenants. I feel an interest in the preservation of the rights of lessors; I feel a personal interest in it; but, what is more important, I feel that it is a matter of public interest. I do not wish the rights of property to be injured—on the contrary I earnestly desire them to be preserved; but I am perfectly certain that nothing is so likely to make the preservation of the rights of property difficult as to push the matter to the extreme where hardship arises from the law. We want to preserve the substantial right of property; but we want so to frame our laws that they shall not incidentally produce hardship on those who hold property under a superior lessor. For that reason I regret that the noble Marquess does not see his way to the introduction of this limited and very guarded Clause of my noble and learned Friend. The noble Marquess of course is master of the situation, and therefore there is nothing to be done except, as my noble and learned Friend proposed, not to press the Clause further.
THE LORD CHANCELLOR: My Lords, I only wish to say that so far as I am concerned I think the noble Earl has a little over-stated what I said last Session. I did not express any approval of the Bill. I think the qualified approval that I gave was, when I was privately consulted upon the matter, that it seemed to me to exclude from its operation almost every lease whatsoever; and therefore I did not think it would do much harm.
THE EARL OF KIMBERLEY: Perhaps I may be allowed to explain that what I meant to say was that I understood that the noble and learned Lord was in favour of the Bill, and that that was the reason why I brought the Bill forward. The noble and learned Lord expressed his view afterwards in the House, which was very different from what I had been told.
Amendment negatived.
Bill reported as amended; and to be read 3a To-morrow.
House adjourned at a quarter after Five o'clock.