§ [SECOND READING.]
§ Order of the Day for the Second Reading read.
§ THE LORD CHANCELLOR
My Lords, this Bill to which I ask your Lordships to grant a Second Reading is designed to extend, in favour of officers and men of His Majesty's Forces, the provisions of the Courts (Emergency Powers) Act of 1914, 701 and also to remove certain difficulties arid injustices that appear to have arisen in the operation of that Statute. Possibly your Lordships will allow me to recall to your memories the terms of the Courts (Emergency Powers) Act of 1914. It is quite obvious that, owing to the extremely smooth and unsensational working of that Statute, its effect has not been fully understood and recognised by the community. That, I think, is greatly to its credit. It shows that it effected nothing drastic and unreasonable, and that on tire whole we have reason to congratulate ourselves that the Act was passed enabling certain protection to be given in certain deserving cases. How little it is known is shown by the fact that some of the requests that have been made to extend further facilities to men who have recently been called to the Colours have in effect asked nothing more than the re-enactment of a Statute which was already upon the Statute Book.
The Act of 1914 provided that in the case of every contract that was entered into before the passing of the Act no creditor should be at liberty to proceed to enforce the judgment he obtained in respect of that contract. without the leave of the Court. At the same time nobody was at liberty to levy distress, to sell or foreclose mortgaged property, or take any of the proceedings by which judgments are made effectual against debtors, without the leave of the Court. Time measure was designed to meet the difficulties of the public at large in relation to their ordinary contracts, and it had no special application to men who were removed from their ordinary occupations for the purpose of joining the Colours to serve His Majesty in the field. That it has operated so smoothly is, think, due to this Courts of Law, in fact, do not exist for the purpose of enabling creditors to oppress men who, though they may owe money, are by honest misfortune unable to pay. In the ordinary circumstances of life those cases are met by the creditor himself with fairness and consideration. The real purpose of the Courts is to enforce payment against reluctant debtors. I am quite satisfied that the fact that so comparatively few cases have arisen for the Courts to consider under an Act so far-reaching and wide in its operations as the Statute to which I have referred is simply due to the people themselves arranging matters without the necessity of calling in the aid of the Courts.
The proposal is to extend the Statute so that its operation may cover, in respect of 702 men who have joined His Majesty's Forces, contracts that were made after the Act as well as before. It was thought originally that this was not desirable. The war came like a thunderclap; nobody had anticipated it, and the consequence was that all contracts were on foot as though we were in times of peace. But once war had begun it was considered necessary that men should consider their contractual obligations in relation to the war itself, anti that it would not be fair in those cases to prevent the ordinary operation of the law as it would stand if we were not at war. Now of course, new conditions have arisen. A number of men have been called to the Army, some by compulsion whilst some under steess of patriotic feeling have attested and expressed themselves ready to go, although their absence from home nary cause something closely akin to collapse in the whole of their contractual relations with other people. There may be cases—there are sure to be some cases—where married men who have attested are under obligations with regard to rent which they may be wholly unable to meet when they are removed from the occupation in which t hey earn their income: and I feel sure that your Lordships would regard it as unfortunate in the last degree if it were not possible for the Government to do something to meet such a case as that.
The first purpose of this Bill is to extend, but to extend only in favour of officers and men of His Majesty's Forces, the provisions that are enacted by Section 1 of the Courts (Emergency Powers) Act to all contracts Whenever they were made, whether before the war began or up to the time when this Bill receives the Royal Assent. The next provision is a different one. Under the Statute as it was originally passed rent that was not, greater than £50 a year was rent in respect of which distress could not be levied, even although the contract of tenancy had been made after the Statute had come into operation; it was an exception to the general provisions of the Act. This Bill contains a totally new and different proposal. It proposes that any officer or man in His Majesty's Forces who is the tenant of any premises under a tenancy from year to year or for any longer period may apply and, if the Court think right, may get his contract cancelled. The reason for that I indicated just now. A professional man earning, say, £1,000 or £1,500 a year, may be renting a house running into a rent of £100 a year on a lease of seven years. When he is called to 703 the Colours his income may cease at once. Outstanding debts, of course, may be coming in, but from that time his income will cease. He will be in this position. He will be saddled with a house far beyond his means, and with the necessary and concomitant burden of the rates. If you do not allow that man some relief he will be piling up a debt which he will not be able to meet when he comes back, or his family may have to leave the house while all the time being under the obligation to pay the rent.
One proposal to meet such a case would be to enable the Court to have the power to cancel the claim for rent during the war; but that, to my mind, is obviously undesirable. I think it is of the utmost importance that we should interfere as little as may be with debts that arise under the contractual obligations as between man and man. After all, the whole commercial fabric of this country rests on the basis of contract, and anything which undermines that basis can only have disastrous results. But though that is an obvious truth with regard to the normal affairs of life, it is also equally true that at a moment like this sonic effort may be made to meet such a case as I have described. I am sure that, speaking generally, what would be desired would be that as far as possible everybody should bear some share of such a burden. It clearly would not he right to throw the whole burden of the loss of rent upon the landlord. That would probably be to create another hard case in the place of the hard case you relieve. I am quite satisfied of this, that in by far the greater number of cases the landlord would meet this case himself. I am quite convinced that he would either say, "if it is impossible for it to be carried on, I will cancel the tenancy" or he would do what I know has been done, and say, "While this is on, I will forego my rent." But, of course, it is not open to every man to be generous like that, because his means may not permit, All that this Bill desires to do in such a case is to place in the hands of the Court the power, if there is an inability to continue payment in the circumstances I have described, to determine the tenancy; and the tenancy is to be determined upon such terms as the Court may think fit, and upon the Court exercising that discretion. the tenancy ends. I trust that your Lordships will think that this is the right way of meeting a very great difficulty. It is quite clear that provision 704 could not be made for the payment of all these rents out of the public purse. That would be obviously wrong. It is equally plain, to my mind, that the tenant ought not to be allowed to remain and the rent cancelled against the landlord's will. The only thing that is left is this, that if the inability to meet the obligation is due to the circumstance of the man having joined the Forces—that must be the essential condition—the Court should have the power, after considering every fact and subject to such conditions as the Court thinks right, to declare that the lease should be cancelled and the obligations should end. That is by far the most important provision of this Bill.
The further provisions to which I have to refer are those which relate to the removal of difficulties and inequalities that have been found in the working of the original Statute, and which arc dealt with in Clause 3. The first is this. The Act hindered, as I have told your Lordships, the exercise of rights that a mortgagee who was in possession was at liberty to effect. But it has been held that the prohibition in the Act against foreclosing a mortgage without the leave of the Court does not prevent a mortgagee from commencing proceedings for foreclosure, procuring the appointment of a receiver, and obtaining a decree for foreclosure nisi; nor does it prevent him from appointing a receiver under the Conveyancing and Law of Property Act, 1881. The effect is that a mortgagor who is prevented by circumstances attributable to the war from paying off his mortgage may be subjected to much trouble and expense. Clause 3 (1) (a) and (b) of this Bill are intended to make it necessary for the mortgagee to obtain the sanction of the Court before taking any proceedings to enforce his mortgage. As the matter stands it is a little hard on the mortgagor that before the discretion of the Court is invoked a mortgagee should be at liberty to institute proceedings for foreclosure, and. carry the matter right through until the decree for foreclosure is imminent. I think your Lordships will agree that the proper thing is to impose the discretion of the Court on the institution of the proceedings, and then, if the Court thinks that proceedings can be properly instituted for foreclosure, they will proceed and the proper decree be obtained in the usual way. The expression "enter into possession" by the mortgagee is by Clause 3 of this Bill 705 made to include the appointment of a receiver of mortgaged property.
The other alteration is a little more important. The Courts have held that the provision in the Act preserving the power of a mortgagee in possession to realise his security by sale without applying to the Court extends to mortgagees with whom stocks and securities have been deposited to cover loans. The effect of Clause 3 (1) (c) is to reverse this decision. Paragraph (c) provides that the expression "a mortgagee in possession" shall not include a mortgagee of property other than land or some interest in land. I think your Lordships will realise, difficult as it is to deal with land to-day, that the astonishing fluctuations in stocks and shares make it even more hard for a mortgagee of per-serial property if that were dealt with without the control of the Court.
The second subsection of Clause 3 is one to which your Lordships will not think much consideration need be given. It provides that where a petition has, whether before or after the passing of this Bill, been presented for the winding up of any company, the Court shall have the like discretion as to staying proceedings under the petition as by subsection (3) of Section of the principal Act is conferred on Courts having jurisdiction in bankruptcy in relation to bankruptcy proceedings.
I think I have now covered the whole of the provisions of this Bill. I have, perhaps, been dealing with a. very dry, and I fear a rather uninviting, subject; but it is obviously one of great importance, and I am sure one to which Your Lordships would be anxious to give as favourable consideration as possible, owing to the purpose for which the Bill is introduced and the persons whom it is designed to relieve. If it were possible I am satisfied that your Lordships' House would be anxious that at the end of the war the burdens which fall on individuals should, as far as possible, be borne equally. It is an unpleasant thing to think that when the war ends the brave and the generous man will suffer and the mean and the cowardly man go free. But when the war does end we know that it will be impossible to remedy all inequalities. Some people will have suffered heavy losses, some will be ruined, and some will have grown rich. Those are circumstances that it is impossible for any Government to prevent. It is essential that they must arise. But what we can do is to devise as far 706 as possible some means of softening the blow to people who most deserve to be protected, and the object of this Bill is to attain that end.
§ Moved, That the Bill be now read 2a.—(The Lord Chancellor.)
§ EARL LOREBURN
My Lords, I have listened to what my noble friend has said. The situation is a difficult one. The provisions to which he has referred are, perhaps, a little complicated of their own nature; I do not mean in the exposition of them. It seems to me that the Government have propounded the best view in very difficult circumstances. Certainly the Bill ought to be read a second time; and so far as I have heard the clauses explained, it seems to me that they are equitable and fair. We look forward to the end of the war and to the difficulties that will arise then. I am glad to hear my noble and learned friend say that equality of sacrifice is something that will be kept in mind at that time. I am perfectly certain that this will be very necessary if you are to reconcile the people of this country to the inequalities of sacrifice existing at this moment.
§ VISCOUNT MIDLETON
My Lords, I am sure we all appreciate the interesting account which the noble and learned Lord has given of this Bill, and the appeal he made at the end will, I am sure, commend itself to all your Lordships. But I wish to ask one question. Those who are serving in His Majesty's Forces are relieved in the early part of the Bill; but the latter part of the Bill applies to all persons, not necessarily to those who are serving. The noble and learned Lord has told us that this part contains some very important and rather intricate provisions. The Bill was printed only yesterday, and I would appeal to the noble and learned Lord to let a sufficient interval elapse before he takes the Committee stage in order that those outside may have some idea with regard to the latter provisions of the Bill whether what is intended is carried out or whether the Bill goes in some respects further than is intended.
§ THE LORD CHANCELLOR
My Lords, the appeal which has been made by the noble Viscount is essentially a reasonable one, and I may say that I was anxious that the Bill should he placed before your Lordships as early as possible in order that full time might be given for its considera 707 tion. Any material postponement now, of course, would mean that we could not get the Bill through before the House adjourned for the Easter recess. However, I am far from saying that there ought not to be further time for the consideration of Clause 3. But the point with regard to that is this, that Clause 3 has nothing whatever to do with the man who has joined His Majesty's Forces. Clauses 1 and 2, with regard to the release from rent and the extension of the provisions of the original Statute to contracts made after the war, relate exclusively to men who have joined His Majesty's Forces. If it were thought desirable that Clause 3 should be abandoned, that could be done at once, and the Bill passed as far as the men in the Forces are concerned. It might be better to leave out the other provisions and let them be taken separately, I do not know whether that would meet the noble Viscount's view.
§ VISCOUNT MIDLETON
I am sure that everybody is anxious that relief should be given in the first case; but if the noble and learned Lord would give time for the consideration of the latter part of the Bill we should be grateful.
§ On Question, Bill read 2a, and committed to a Committee of the Whole House To-morrow.