§ Amendments reported (according to Order).
§ * LORD DAVEYMy Lords, I apologise to the House, and to the noble Earl in charge of this Bill, the Earl of Selborne, for not having put my Amendments on the Paper for the Standing Committee. Circumstances, however, over which I had no control, compelled me to be elsewhere, which accounts for my troubling your Lordships with the Amendments at this stage. Section 3 of Clause 3, as it stands, provides that:
Where default is made in complying with the Statutory condition as to residence, the local authority may take possession of the house, and where default is made in complying with any of the other statutory conditions (whether the statutory condition as to residence has or has not been complied with), the local authority may either take possession of the house, or order the sale of the house without taking possession.Under this clause, if default is made in complying with the statutory condition as to residence, the local authority is empowered only to take possession of the House, and not to order the sale of it without taking possession. I do not see any reason for making this distinction in the clause, and as I am afraid it will lead to very inconvenient results I have placed an Amendment on the Paper which, if agreed to, will make the clause read as follows:Where default is made in complying with any of the statutory conditions the local authority may either take possession of the house or order the sale of the house without taking possession.
§
Amendment moved—
In page 3, line 14, to leave out from 'with' to 'any' in line 16; and in line 17, to leave out 'other', and leave out from 'conditions' to 'the' in line 18."—(Lord Davey.)
§ THE EARL OF SELBORNEI am prepared to accept the noble and learned Lord's Amendment, which is, in my opinion, a distinct improvement.
§ Amendment agreed to.
§ * LORD DAVEYMy next Amendment is in Section 4 of the same clause, which provides that in the case of the breach of any condition other than that of punctual payment of the principal and interest of the advance, the authority shall, not less than two months previously to taking possession or ordering a sale, call on the proprietor to comply with the condition and, if he so complies within those two months, shall not take possession or order a sale as the case may be. Under this clause, if the owner makes default in the condition as to residence, notice must be given to him, and nothing can be done for two months, during which time the house will probably remain derelict. The effect of my Amendment would be to make the clause read:
In the case of the breach of any condition other than that of punctual payment of the principal and interest of the advance, or the condition as to residence," etc.The effect will be to enable the local authority, whenever default is made as to the conditions of residence, to put their powers in force.
§
Amendment moved—
In line 22, after 'advance,' to insert 'or the condition as to residence.'"—(Lord Davey.)
§ THE EARL OF SELBORNEI quite admit that the case described by the noble and learned Lord is a possible one, but his Amendment, if accepted, would deprive the purchaser of the locus pœnitentiœ which I think is legitimately his under certain circumstances. His absence may be a temporary one during which he may have lent or let his house. He may, under the provisions of this Bill, be absent for a certain purpose, and he might have overstayed what I will call the leave allowed him under the Bill. Therefore, I think the Amendment of the noble and learned Lord might prove exceedingly harsh. There is no provision made, not only in this particular clause, but generally, for the case of a proprietor who simply abandons his property and who cannot be traced, and to meet that case, if the noble and learned Lord will withdraw his Amendment, I will propose the insertion, in line 23 989 of the same page, after the word "shall," of the words "unless the address of the proprietor cannot be ascertained." The section would then read:
In the case of the breach of any condition other than that of punctual payment of the principal and interest of the advance, the authority shall, unless the address of the proprietor cannot be ascertained, not less than two months previously to taking possession or ordering a sale, call on the proprietor," etc.That will obviate the necessity for a notice in the case referred to by the noble and learned Lord.
§ * LORD DAVEYI shall not press this Amendment to a Division, but it is necessary that words should be inserted enabling the local authority, when the proprietor has given notice to the local authority that he has abandoned possession, to take possession at once.
§ THE LORD CHANCELLOR (The Earl of HALSBURY)Will the noble and learned Lord put down for the Third Reading the words which he would like inserted?
§ * LORD DAVEYI will do so. In the meantime I withdraw my Amendment.
§ Amendment (by leave of the House) withdrawn.
§ Clause 4:—
§ * LORD DAVEYMy next Amendment is to Clause 4. The first section provides that where the ownership of a house has been acquired by means of an advance under this Act, the person who is the proprietor shall be personally liable for the repayment of any sum due in respect of the advance until he ceases to be proprietor, by reason of a transfer made in accordance with this Act. The object of the clause is to provide that where a mortgager is allowed to transfer his property with a mortgage upon it he shall cease to be personally liable, and it was probably intended that the transferee should become so, but the clause does not say so. I move an addition to the clause providing that in the case of any such transfer the transferee shall become personally liable.
§
Amendment moved—
In page 3, line 38, at end of Sub-section 1 to add 'and in the case of any such transfer the transferee shall become personally liable for the repayment thereof.'"—(Lord Davey.)
§ THE EARL OF SELBORNEThe noble and learned Lord has not noticed an Amendment which was made in the Standing Committee. The point the noble Lord has called attention to has already been provided for in Sub-section 3 of Clause 10, which says that where the ownership of a house is acquired by means of an advance under this Act, the purchaser of the ownership, or, in the case of any devolution or transfer, the person in whom the interest of the purchaser is for the time being vested shall be the proprietor of the house for the purposes of this Act.
§ Amendment (by leave of the House) withdrawn.
§ Clause 5:—
§ * LORD DAVEYMy next Amendment is a more serious one. It is to leave out Sub-sections 1, 2, 3, and 4 of Clause 5. I confess that the thought has occurred to me more than once that this clause was framed by a person who had not the most elementary acquaintance with the relations between mortgagor and mortgagee. The clause, as at present drafted, will play havoc with those relations. The sub-sections I object to provide that where a man goes out of residence, and the local authority find it necessary, for the preservation of their security, to take possession, but the property is not immediately available for sale, the local authority shall pay to the mortgagor a sum equal to the value of his interest in the house, after deducting there from the amount of the advance then remaining unpaid, and any sum due for interest. The effect of this is that a person, finding that trade has left the district, that house property has gone down in value, and that the house is a burden to him, may go out of residence, inform the local authority that he has done so, and, though the property is not available for sale, they have no other course open to them but to take possession, and the fact of taking possession compels the mortgagee, as the price of his doing so, to buy the mortgagor's interest at an arbitration value. I have heard protests against buying other people's property compulsorily by arbitration, but it is still more objectionable that any man, and that man my own debtor, 991 should compel me to buy his property at an arbitration value as the condition upon which I can realise my security. That is preposterous. Sub-section 2 provides that, where a local authority take possession of a house, they shall pay to the proprietor such sum as may be agreed upon, or a sum equal to the value of the interest in the house at the disposal of the local authority, after deducting there from the amount of the advance then remaining unpaid, and any sum due for interest. The value is to be settled by a county court judge as arbitrator, or by a single arbitrator. Unless the local authority afterwards sell the house for more than the principal and interest and costs involved, including the sum paid to the mortgagor, they will be actually out of pocket, and the ratepayers will have to suffer. It also works out unfavourably to the mortgagor himself, because it deprives him of all opportunity of redemption if the house should afterwards improve in value, or if, as may happen, it should be sold at a price which would leave a handsome balance in excess of the value which may have been put upon it at the time of the arbitration. My other objection to this clause is that it is not consistent with itself, because it contemplates that the money is not to be paid to the proprietor until the sale takes place, but, if it is not to be paid till then, why go through a process of expensive arbitration to find out what the mortgagor's share is? Why not wait till the sale takes place, and retain the amount of the advance then remaining unpaid and any sum due for interest, and hand the balance over. The noble Earl will see that this is so if he will look at Sub-section 4, which provides that all costs of, or incidental to, the taking possession, sale, or other disposal of the house (including the costs of the arbitration, if any) incurred by the local authority, before the amount payable to the proprietor has been settled, either by agreement or arbitration, shall be deducted from the amount otherwise payable to the proprietor. I am not aware that any reason has been given why the ordinary provisions as between mortgagor and mortgagee should not exist under this Bill.
§
Amendment moved—
In page 4, line 3, to leave out Sub-sections 1, 2, 3, and 4."—(Lord Davey.)
§ THE EARL OF SELBORNEThe case contemplated by this clause is one where, for non-compliance with the statutory conditions, the local authority enters in and either takes possession or insists on an immediate sale. If the case was one of immediate sale, I do not understand that the noble and learned Lord would have urged any objection. The case, however, is one of taking possession. Granted that taking possession is allowed, two schemes are possible. One, no doubt, is such a scheme as that which the noble and learned Lord has just adumbrated, and the other is the scheme which the Bill has followed—that is to say, of bringing to a definite and final determination the relations existing between the local authority and the purchaser. The position of mortgagor and mortgagee was not adopted for reasons which seemed to the promoters of the Bill to be valid reasons. It seemed to them that it would be undesirable to establish this relationship, because it would involve, among other things, the keeping of accounts of every item of receipts and expenditure connected with the house, and would place the local authority under all the disadvantages attaching to mortgagees in possession. The local authority, though they would always prefer to sell than take possession, would not have power to sell, whether a sale was advisable or not. It was considered to be a distinct advantage to avoid such complications, and to determine once and for all the relations to be established between the local authority and the purchaser. What we have to look to, to prevent loss to the local authority, is that they should exercise real care in the advances which they make, and all the provisions in connection with advances by the local authority have been drawn up with a special view of seeing that this matter was attended to, and that no local authority which, from want of experience, would be unable properly to administer this Act, should be entitled to its administration. Therefore, although I am prepared to admit that the scheme of the noble and learned Lord is a good one, yet I must say that we have adopted the alternative scheme and must abide by it.
§ Amendment (by leave of the House) withdrawn.
§ Clause 6 amended.
§ THE EARL OF DENBIGHMy Lords, in accordance with a statement I made 993 when this Bill was in Committee, I have to move an Amendment to make the Bill properly apply to Ireland. My Amendment takes the form of a new clause to be inserted after Clause 14, and provides that where a local authority make an advance under this Act in Ireland they shall cause the title to the premises in respect of which the advance is made to be registered under the Local Registration of Title (Ireland) Act, 1891, and shall pay the cost of first registration out of the advance.
§
Amendment moved—
In page 12, after Clause 14, to insert new clause:
§ Amendment agreed to.
§ Bill to be read 3a on Thursday next; and to be printed as amended. (No. 190.)