HL Deb 19 November 1918 vol 32 cc208-22

THE EARL OF NORTHBROOK rose to call attention to the amount of compensation awarded to the Royal Agricultural Hall Company by the Losses Commission; and to ask His Majesty's Government whether any steps can be taken to assure to the company adequate compensation for the loss they have sustained.

The noble Earl said: My Lords, before calling attention to the treatment which the Royal Agricultural Hall Company have received in the matter of compensation awarded to them by the Losses Commission, I should like to explain that I am not a director or interested in the management of this company. I am not a share- holder, nor have I any pecuniary interest in the company. It is only because the company have been for many years closely associated with agriculture through the Shire and Hunter Horse Shows, with the annual Smithfield Club Fat Stock Show, with the Dairy Show, and with the Royal Agriculture Society of England, and because of the serious financial position in which the company will be placed by the inadequate compensation awarded to them, that have been induced to call attention to the matter.

I notice that the Minister of Labour, in moving the Second Reading of the Ministry of Labour (Requisition of Premises) Bill in the House of Commons last week, admitted that the procedure and practice of the Defence of the Realm Losses Commissioners had given much dissatisfaction, but he expressed his belief that there had been an improvement of late. He added that he recognised that the Government ought not to act arbitrarily against the interests of citizens. I hope Mr. Roberts is right in his belief that there has recently been an improvement in the procedure and practice of the Losses Commissioners, but even if that be so it is very little consolation to those whose cases have been dealt with previously in an arbitrary and possibly hard manner; and I think that it is only reasonable to ask that such cases should now be reconsidered so that the awards of compensation may conform to the improved practice and procedure which has now been adopted by the Losses Commission.

With regard to the case of the Royal Agricultural Hall Company, I may explain that the Agricultural Hall consists of two parts. There is the Great Hall, to which the offices and other rooms are attached, and there is an adjoining smaller hall, known as the Gilbey Hall, which is frequently let separately and used for smaller exhibitions. In 1916 the Post Office took possession of the Gilbey Hall on June 26, and they occupied it until December 16. For the first two months of their occupation the Post Office refused to come to any arrangement as to the amount of rent that was to be paid. The hall was then commandeered. A claim was made by the company for £1,408 10s., being the proportion of rent applicable to this hall. The Losses Commission, after considering the claim, awarded the company £134 7s. 6d.; they refunded to the company the amount that they had paid in rates, amounting to about £241, and they allowed the very modest sum of three guineas towards the costs of the application.

I come now to the position of the company in regard to the occupation by the Government of the whole of the premises, including the Great Hall, the offices attached to it, and the Gilbey Hall. In 1914 when the war broke out soldiers were billeted in the Hall, and a considerable loss, amounting to about £2,000, was incurred by the company. There is no question of compensation arising in that case. In 1915 a limited number of exhibitions was able to be held, and no claim for compensation was therefore made. In 1916 the Ministry of Munitions issued an order prohibiting the display of machinery at exhibitions. In consequence eight exhibitions had to be abandoned, and a claim for £8,000 was made for losses; but no compensation was allowed on the ground that there was no direct interference with the company's business. I am ready to admit that possibly in this case the decision of the Commissioners was a correct one.

Then I come to the year 1917, when the Government took possession of the whole of the premises on May 2. A claim was made by the company to the amount of £18,498 in respect of loss of rents from exhibitions for which they held contracts. The claim was heard by the Losses Commission on January 8 in the present year, and the Chairman of the Commission intimated that the company could not claim for exhibitions prohibited in 1916 because, even if the Hall had been commandeered in 1917, they could not have been held in that year; and the chairman of the Commissioners further said that he thought the company were not doing justice to themselves in this claim that they had then made. He suggested that an alternative claim might be made, on the basis of what could be earned by the company if the premises were let for other than exhibition purposes, assuming the company had no contracts and were free to let the hall. The hearing was adjourned to enable the company to prepare a claim on that basis. An alternative claim, on the basis of letting the premises for factory purposes, amounting to about £19,000, was therefore prepared by the company at considerable expense, two surveyors having been employed to make the valuation. The adjourned hearing took place on the 6th of June. This claim was, however, practically ruled out of court, on the plea advanced on behalf of the Government, that as the company were under contract to hold certain exhibitions, which had not been prohibited, they would not have been able to let the premises for factory purposes.

The Losses Commission have now awarded the company the sum of £6,000 a year, and £26 5s. towards the cost of the application, made on the suggestion of the chairman, which cost the company several hundred pounds They have indemnified the company also against rates, which amount to less than £1,000 a year. Exhibitions which have not been prohibited, and which could have been held if the hall were not commandeered, occupy only about four months in the year—namely, from the end of December to the end of April—and for those exhibitions rents amounting to £5,464 would have been paid through the contracts that had been entered into. This would have left a period of eight months in the year, during which the hall could undoubtedly have been let for one purpose or another, but no allowance is made by the Commission for the use of the premises during that period. Indeed, it would appear that the Commissioners merely based their award on the fact that had the hall not been commandeered, the company would have been able to let the hall during the first four months of the year for a sum of £5,464.

I should like briefly to refer to what is the effect of this award on the financial position of the company. Before the war the receipts of the company were on the average about £20,000 a year. For the last seventeen years they have been able to pay a dividend of 8 per cent. to the shareholders. Since 1914 no dividend has been paid, but a considerable loss has been incurred in each year. Under the decision of the Commissioners the company have to maintain the hall in a satisfactory condition, and in addition to this heavy expenditure they have to pay interest on debenture stock, interest on bank loans, insurance and management. They are bound to lose from £1,000 to £1,500 a year under the present conditions, and moreover, as the Government are to pay rent for the period only of three months after giving up possession, whereas it requires at least six months and probably nine months to prepare for an exhibition, the company will sustain further loss at the end of the Government's occupation of their premises.

I do not for a moment suggest that the company can expect to be placed in as favourable a position as that which they were in before the commencement of the war. It might possibly be held by some persons that the shareholders of the company are not entitled to receive even a reduced dividend dining the period of the Government's occupation of the premises. I cannot subscribe to that. It seems to me that although they might not be able to receive the full dividend of the pre-war period, at any rate some consideration should be shown to those who have invested money in the company, and that they are entitled to such compensation as will enable the company to pay at any rate a reduced dividend to the shareholders. I contend this, and I think it is an exceedingly reasonable contention, that the company are entitled to receive an annual payment which will enable them to meet their liabilities, and that the award by the Losses Commission of £6,000 a year is quite insufficient for that purpose. As I have already explained to your Lordships, with the payment of £6,000 a year this company, besides not being able to pay any dividends to the shareholders, is bound to incur an actual loss of £1,000 to £1,500 a year. I venture to submit that that is not an equitable award as to the compensation that they are entitled to receive. I therefore beg to ask the Question which I have placed on the Notice Paper—namely, whether any steps can be taken to assure to the company adequate compensation for the loss they have sustained.


My Lords, I am sorry to say that I fear the answer which I have to give will not be very satisfactory to my noble friend. I have to say that the Government do not feel that any step can be taken to assure to the company further compensation than what has been awarded to them by the Defence of the Realm Losses Commission. My noble friend and the House know that in these cases, where buildings and premises have been requisitioned under the Defence of the Realm Act, there is no right on the part of the owners of those premises or buildings to any compensation at all. Although I am not a lawyer myself, I believe that the noble and learned Lord on the Woolsack is prepared to bear me out when I say that these payments made by the Defence of the Realm Losses Commission must be considered entirely as payments ex gratia on the part of the Crown. The Defence of the Realm Losses Commission, of which my noble friend Lord Terrington, who is present in his place this afternoon, is chairman, is a judicial body against whose decisions no appeal, so far as I am aware, is provided. That Commission has inquired into, I suppose, hundreds of cases since it was first set up, and although I am perfectly willing to admit on behalf of the Government that there is dissatisfaction on the part of certain people who have not got all they expected to get from the Commission—I might, in fact, include myself among them, having made a small claim, on which the award was nil—on the whole I believe that the decisions of the Defence of the Realm Losses Commission have been regarded by the public as, at all events, some compensation to the owners of the property or premises that have been requisitioned.

The noble Earl who put this Question on the Paper has dealt with some rather complex and intricate figures with regard to different portions of the premises that were taken by the Government, and in reference to which more than one hearing was held before Lord Terrington's Commission. Perhaps I may be allowed to give to the House the facts as they have been presented to me by the Commission, although my noble friend perfectly understands that I do not for a moment intend to infer that he has not given perfectly accurate figures and statements. It appears that the main hall of the Royal Agricultural Company, Ltd., was requisitioned by the War Department and occupied by the Royal Flying Corps in May last year. I think the noble Earl said on May 2. The company submitted to the Losses. Commission a claim for compensation for the occupation of the property, and it was heard on January 8 of the present year. Counsel appeared for the company and the Crown on the hearing. The loss claimed for was in respect of rent expected to be received by the company during the period of occupation from parties who had agreed to rent the building for the holding of exhibitions of various kinds at different periods of the year. It transpired on the hearing, however, that the greater number of the exhibitions could not be held owing to a general Order of the Minister of Munitions, made as far back as December, 1915, prohibiting the holding of such exhibitions throughout the country without licence, and by evidence it was shown that no such licences had been, or could be, obtained.

As to three exhibitions, however—the Clothing and Drapery Exhibition, the Horse Show, and the World's Fair—the prohibition did not apply, and in respect of these the War Office admitted an estimated gross loss of £5,840, or a net loss, after deduction of rates (against which the applicants received an indemnity from the Crown) of approximately £5,000. The Commission was satisfied that the other exhibitions in respect of which the claim was made could not have been held, and that in respect of these no loss accrued which it was within their power to take into consideration. No compensation has ever been awarded for a loss arising from the enforcement of an Order of general application; that is to say, one that is of a general character and applies to and affects all His Majesty's subjects, as distinguised from an Order affecting a particular property or a particular subject interferedwith. Such was the nature of the general Order of the Ministry of Munitions which prohibited exhibitions and operated to prevent the company receiving rents in this case. That, no doubt, is the Order to which I have already referred as having been issued by the Ministry of Munitions in the month of December, 1915. The Commission took into account the allowance to be made in respect of the possibility of temporary lettings during the period that exhibitions were not being held, and in the result awarded £6,000 a year, together with an indemnity against rates and tenants' taxes in respect of the portion occupied, the rateable value of which was agreed at £2,415, this indemnity to include water rate.

There was an adjourned hearing held by the Commission on June 6 this year when a claim on an alternative basis of what might probably have been derived from the lettings of the occupied portions of the premises for purposes other than exhibitions—namely, for storage or a factory—was submitted and evidence adduced and counsel heard on both sides. The Commission came to the conclusion, after carefully weighing the evidence, that this alternative basis was not sustainable, and agreed to make their determination on the basis of the first claim to which I have already alluded. Secondly, there was a separate claim made by the company in respect of the occupation of Gilbey Hal, from June to December, 1916. I think my noble friend happened to refer to that first. Here also there were two alternative claims. The first was for £1,408 in respect of loss of rent and other receipts from exhibitions contracted to be held at the Hall and from sub-tenants, and the second was for £1,713 in respect of the loss of the probable amount which might have been derived from letting the occupied portion for storage or as a factory. A further claim for £448 for services rendered and gas and water supply was dealt with locally by the Office of Works.

The Commission again held that the first alternative claim was sustainable, and on the same basis as before the claim was allowed and they awarded £134 7s. I think the Losses Commission, in assessing the compensation, applied to this claim that is brought forward by the noble Earl this afternoon the principles embodied in the Warrant under which they exercise jurisdiction precisely in the same way in which they have been applied to all the other claims, amounting I think to several hundreds—my noble friend will correct me if he thinks proper—which came within their purview. Whilst the Government regret that the applicants should feel aggrieved that this entails some sacrifice on their part, it is one which they share in common with many others of their fellow-subjects. I am afraid that is all the answer I can give to my noble friend on behalf of the Government. The House will be able to judge from the speeches they have heard from the noble Lord who is Chairman of the Defence of the Realm Losses Commission on this subject or similar subjects in the earlier part of the session, that the noble Lord is well able to justify the decisions which have been made by this Commission.


My Lords, the noble Lord who has just sat down began by telling us that he was afraid his reply would be most unsatisfactory to the noble Earl who asked this Question. I venture to say that he had good reason for his fears, because his statement amounts to nothing but a blunt refusal to meet the appeal made by the noble Earl. As I followed the noble Earl's speech, I think he made out a very clear claim to the right to compensation of a considerable charac- ter. The noble Lord met him by saying, so far as he was aware, the general public had complete confidence in the Losses Commissioners and were of opinion that in all cases which had been referred to them some compensation at all events had been received. So far as I was able to follow the speech of my noble friend—unfortunately I hear so ill that there may have been portions of it that I was unable to catch—I gathered that he will not agree with that opinion at all, and I am bound to say that it does seem to me that the treatment awarded to the Royal Agricultural Hall company for the very heavy losses which it has been made perfectly clear they have sustained is unsatisfactory in the highest degree. I venture to think that this will teach us at least one lesson, and that is that when we have before us, as I understand we shall have, another Bill prolonging for the second time the effect of the Defence of the Realm Act, we shall know how we ought to treat it.


My Lords, before Lord Terrington speaks, I should like to say a word or two on the question of principle. I think the same principle of compensation ought to be adopted whether exgratia or whether it is given in the ordinary legal form. I do not think your Lordships will differ from that principle, but I also think that as much evil may be done by giving too much compensation as by giving too little, and you may have the evil as much on one side as on the other if you are not careful.

What I wanted to say before Lord Terrington spoke was this. I wish to ask him whether he dealt with compensation in this case on the proper basis—namely, that the person claiming compensation should be indemnified against the losses arising from the act in respect of which compensation is claimed. The noble Lord will understand what I mean. For instance, if it is true that compensation was claimed in respect to the loss on certain shows, that is a loss common to every one, because shows of that kind had been generally stopped. Then, although there may be considerable loss, I think the noble Lord himself acknowledged that compensation could not be properly claimed in respect of a loss of that kind. In other words, it was a loss which came not from the act of the Government in respect of which compensation was claimed, but from a general act which affected all persons equally.

But there is another side of the claim on which I hope the noble Lord will say a word if he answers the allegations that have been made. That is, as I understood, on his own initiative he suggested that compensation might be based not on the loss from the shows, but on the loss to which the Hall might be put in respect of parties, although at the time it had been let for certain shows for four months of the year in respect of which no compensation, according to his view, was claimable. And I entirely agree, if I understand the basis on which he acted. But I do not feel so satisfied with regard to the other point, and I hope the noble Lord will explain why it was that the other claim, based on wider grounds, was also disallowed. I am not suggesting that the action was not quite proper, because these compensation claims involve sometimes much difficulty and difference in detail, and you have to consider the details of the evidence. I ask whether the noble Lord is satisfied that in this case the owners were indemnified, in spite of the loss they have undoubtedly suffered.


My Lords, in response to the appeal which has been made, I should like to say one or two things. In the first place, the Losses Commission is a quasi-judicial tribunal; it is absolutely impartial, and sits to decide, like any other tribunal, claims between the subjects of the Crown. I think it would be an extremely inconvenient practice if your Lordships were to encourage litigants before this tribunal to ask that the decisions of the tribunal should be reviewed in your Lordships' House, without your Lordships having before you the evidence which had been adduced, and without having seen or heard those who are parties to the case. Your Lordships would not attempt to do it with regard to any other tribunal in the land. The claims have run into thousands, and have involved millions of money, and it will be apparent to your Lordships' House that to encourage such incidents as have arisen this afternoon and occupied a great deal of your Lordships' time, would be very unfair to the parties to the suit, and would not be very fair to the Commission either.

Now this case is extremely simple. Had the noble Earl been aware of the regulations under which the Commission is bound to act, he would not have lent himself to submitting this to the House. Under the Warrant under which the Commissioners act, they have not a discretion. There are many people who imagine that they submit claims to the Commissioners and that the Commissioners exercise their discretion as to what they will award with respect to those claims. That is not so. With the sanction of Parliament, the Warrant lays down strictly the principles on which the Commissioners act, and applicants to the Commission have to do two things. First, they have to establish that there has been an interference by the Crown with the applicants' business or property. Secondly, they have to establish that there had been direct monetary loss flowing from that interference. I say "direct," because the Warrant says "direct and substantial loss." This means that the consequential losses cannot be considered by the Commission.

In this case what happened is this. The main Hall of the Royal Agricultural Hall Company was occupied by the War Department for the purpose of the Flying Corps in May, 1917. The claim submitted to the Commission was for the taking and using by the War Department of that Hall. The claim was for a sum of £18,000, and was based upon the loss of rents receivable by the company from the letting of the Hall for exhibitions. When the claim came to be examined by the Commission it was found that those exhibitions, with the exception of three, could not possibly have been held; and therefore that the company could not have derived the revenue in respect of which they claimed a loss. With regard to the three, they could have been held. It was admitted in respect of them that the loss was £5,800, and when rates amounting to £900 were deducted the net loss was £5,000. The whole of that loss was awarded to the company as the whole loss they could claim in respect of these exhibitions. It does, perhaps, appear hard that the exhibitions in respect of which they could not claim, were exhibitions which had been prohibited by the Government. They were prohibited by the Minister of Munitions under a General Order in December, 1915, which applied to all exhibitions throughout the country; and therefore they were in precisely the same position as all other of His Majesty's subjects who held fairs or exhibitions, precisely in the same position, too, as muncipal corporations throughout the country who came with claims for loss of rents for fairs. The Commission were unable to award a single penny, because it is a fundamental principle that where a general Order has been made under the Defence of the Realm Act which applies to all His Majesty's subjects universally, no compensation can be paid. It is a common sacrifice which the whole people have to bear. It is only when the order entails active interference which affects particular property for the particular subject that a claim can be allowed.

In these circumstances it was not in the power of the Commission to give compensation, except in respect of the loss arising in connection with the three exhibitions, and every penny of that loss was awarded to the Royal Agricultural Company. When the case had been presented to us and had been stated by the eminent and skilled counsel who appeared for the company, I felt the hardship to the company, and I suggested to him, Do you think that you could possibly let this Hall for any other purpose than for these exhibitions? Do you not think that it would be wise for you to consider whether you could not present a claim for that? Evidently they had not considered that. This shows, at all events, that the Commissioners were anxious that the company should consider whether they could not derive some other revenues upon which the Commission could compensate—showing, as I say, the Commissioners' desire to do everything they could to meet them. Counsel thanked me for the suggestion, and asked if we would allow an adjournment so that they could consider it.

Six months later, on that alternative, they came before the Commission, and adduced evidence to show that they thought they could derive revenue from letting the premises for factory or storage purposes. I pointed out that one difficulty was that they had contracts with these three other exhibitions, which would stand in the way of turning the building into a factory or letting it for storage purposes, and that therefore they could not do that. Secondly, skilled evidence was produced by the Crown to show that it could not be turned into a factory except at enormous loss, which would be more than anything the Commission could entertain, and would counter balance any revenue that they would derive. Consequently the London County Council regulation absolutely prohibited it from being turned to any such purpose.

The Commission, carefully weighing in the most sympathetic spirit towards the Agricultural Hall the circumstances, came to the conclusion that the first basis—namely, the loss of rents and income from exhibitions—was the only basis on which they could legitimately award compensation, and they awarded not only the £5,000 but an extra £1,000 a year for any possible lettings in the interval which could not be obtained. In these circumstances the Commission are fully satisfied that they did justice, and more than justice, to the claim that was submitted to them. That is the sum and substance of the whole case, and I hope that I have satisfied your Lordships that the Commission are not deserving of the attack which has been made upon them. I finish as I began with a protest against attempting to review in this House decisions of the tribunal which has carefully and accurately weighed the evidence.


My Lords, I beg to thank my noble friend for his reply, with which, as he anticipated would be the case, I am not satisfied. I wish to say, in answer to the noble Lord who has just sat down, that I have no desire whatever to make any attack upon the Commission over which he presides. I may say that personally I have no quarrel whatever with the Losses Commission. I am more fortunate than my noble friend who replied just now, for I made a claim—it was a small one—and I received the amount which I claimed. I have, therefore, no personal feelings in the matter.

I do not know whether I made my point quite clear, and the noble Lord will perhaps excuse me if I repeat it. As I understand it, it was on the suggestion of the noble Lord, the chairman of the Losses Commission—and I know that it was made in a most friendly and conciliatory spirit—that the company decided upon the grounds on which they based their claim—namely, that they should make a claim on the basis that the hall could be let for purposes other than exhibitions. That claim was made, and it entailed very considerable expenditure upon the company in the employment of surveyors and others to ascertain what the hall could have been let for. It is quite true that the company were under contract for certain exhibitions which are not prohibited at the present time. Therefore those contracts existed. But those exhibitions only covered a very short period of the year—the first four months of the year. I understand that the compensation granted to the company was based upon the losses sustained through those exhibitions for four months in the year, the period in respect of which the company had entered into contracts. That left eight months of the year free to the company during which, as the noble Lord himself had suggested, they might have let the hall for other purposes, and they understood from the noble Lord's suggestion that those were legitimate grounds on which the claim for compensation could be based. Perhaps I have misunderstood the position, and no doubt the noble Lord is better acquainted with it than I am.


I think the noble Earl is under a wrong impression. It is not that the hall was let for four months and that there were eight months left. There were three exhibitions spread over different portions of the year, and the intervals remaining were such that it would be extremely difficult for the hall to be let at all in respect of such periods, but in respect of any loss that might thus be sustained the company got an extra £1,000 a year.


I can only say that that is not the information that was placed before me, and if it is wrong I regret it. I am only speaking on the facts as they have been presented to me, and it is on that basis that I present them to your Lordships. I only wish to say in conclusion that I quite recognise that the position of the Losses Commission is an exceedingly difficult one. No doubt very often, though they would have sympathy, they are unable to give it practical effect owing to the strict regulations laid down. The result is that in this case a company which was in a well-to-do position is now not only unable to pay any dividend, but is placed in a situation in which the amount of compensation awarded does not cover the liabilities imposed upon them to keep the hall in a proper state of maintenance and pay interest on the debentures. Both noble Lords have mentioned that the hall is occupied by the Royal Flying Corps. I think that it must be rather unsatisfac- tory to the Royal Agricultural Hall Company, who have I think received very scanty compensation for the exhibitions that they were unable to hold, when they find that the Royal Flying Corps are now running an exhibition their own in the company's building. There is at the present time an exhibition under the auspices of the Royal Flying Corps being held in the Royal Agricultural Hall. It opened last month, and is to continue until the middle o January, and for admission to it a charge of 1s. a head is being made. I can hardly think that Parliament when they gave authority to the Government to commandeer buildings for the purpose of carrying on the war ever anticipated that those buildings would be used by the Government for running exhibitions with the object of making a profit.