§ Amendments reported (according to Order).
§ Clause 2:
§ Certificate required for grant of moneylender's excise licence.
§ (7) Where any person, being the holder of a certificate, is convicted of any offence ender this Act or under the Moneylenders Acts, 1900 and 1911, the court—
- (a) may order that any certificates held by that person shall either he suspended for such time as the court thinks fit, or shall be forfeited, and also, if the court
356 thinks fit, may declare that person and, in the case of a company, any person responsible for the management of the company to be disqualified for obtaining a certificate for such further time after the expiration of the certificates as the court thinks fit; and
- (b) shall cause particulars of the conviction and of any order made by the court under this subsection to be endorsed on every certificate held by the person convicted, and shall cause a copy of those particulars to be sent to the authority by whom any certificate so endorsed was granted:
§ Provided that where upon the conviction of a company a person alleged to be responsible for the management of the company is disqualified by order of the court for obtaining a certificate, he may appeal against the order as if he had been the person convicted.
§ LORD DESBOROUGHmoved, at the end of subsection (7), to leave out "against the order as if he had been the person convicted" and insert "in like manner as if he had been convicted and as if the order has been a sentence passed on his conviction. "The noble Lord said: My Lords, I understand that my noble and learned friend approves of this Amendment, which I venture to think is an improvement to the Bill.
Page 4, leave out line 16 and insert ("in like manner as if he had been convicted and as if the order had been a sentence passed on his conviction").—(Lord Desborough.)
§ On Question, Amendment agreed to.
§ Clause 3:
§ Courts to which proceedings on moneylending transactions are to be taken.
§ 3.—(l) His Majesty may by Order in Council direct that proceedings by a moneylender for the recovery of money lent by him or for enforcing any agreement or security relating to any such money, or any class of such proceedings, may be brought in any court specified in the Order, notwithstanding any limit imposed by statute on the jurisdiction of that court, and that such proceedings, or any class of such proceedings, shall be excluded from the jurisdiction of any court in which they might otherwise have been brought, and any such Order may contain such provisions as appear to His Majesty expedient with respect to the making of rules of court for regulating the procedure to be followed in the case of any such proceedings.
§ (2) Before any Order in Council is made under this section a draft thereof shall be laid before each House of Parliament for a 357 period of not less than forty days during the Session of Parliament, and if either House before the expiration of the said period presents an address to His Majesty against the draft or any part thereof, no further proceedings shall be taken thereon, but without prejudice to the making of a new draft Order.
LORD CARSONhad on the Paper an. Amendment to add to the clause the following new subsection:—
(3) All sums contained in promissory notes or other bills of exchange, personal bonds or any other documents which may competently be protested or recorded for execution in the books of any court it, Scotland, so far as granted in favour of registered moneylenders, shall be recoverable only by way of an action for payment in the appointed court in Scotland, and shall not be recoverable by summary diligence or by proceeding on an extract registered protest or an extract registered bond against any party liable thereunder.
§ The noble and learned Lord said: My Lords, I do not propose to move this Amendment as I have put down an alternative Amendment which comes later on the Paper.
LORD MUIR MACKENZIE moved to leave out Clause 3 and insert:
Proceedings by a moneylender for the recovery of money lent by him or for enforcing any agreement or security relating to any such money shall be brought in the county court, notwithstanding any limit of amount applicable to that court, and rules of court shall be made for regulating the procedure to be followed in the case of any such proceedings.
§ The noble Lord said: My Lords, I would not move to leave out the clause if I had any idea that it would be embarrassing to the noble Lord who is in charge of the Bill, or that it would really conflict with what was done in the Joint Select Committee. The main objection that I would put forward to the clause as it stands is that it has always been regarded as a matter of principle that where jurisdiction is given to a Court it is done upon the face of the Statute and not in any indirect way.
§ I think there is more than one defect in the clause as it stands. The object of the clause was very clearly stated by the noble and learned Lord on the Second Reading. He said that he desired to remove what at present is a formidable engine of oppression—namely, that the moneylender threatens the debtor with costly and elaborate proceedings in the High Court. The noble and 358 learned Lord therefore desired to provide a less costly and more acceptable means of enforcing such remedy as the moneylender is entitled to. Under the clause as it stands I do not think that object would be likely to be achieved. The Privy Council may say that exclusive jurisdiction in these cases must be with the High Court, or it might go to the other extreme and say that these cases might be heard in the innumerable small courts of the country. That, I think, would be even more oppressive than the state of affairs that now exists.
§ I do not remember whether or not, the noble and learned Lord mentioned it on Second Reading, but it is quite obvious that the principal courts to which these cases ought to go, with a view to providing a cheaper and easier tribunal, are the county courts and the object of my Amendment is to put upon the face of the Bill the county court. It is quite unnecessary to have any roundabout proceeding of going to the Privy Council in order to get them to make an order. In fact, speaking from long experience, I think what would happen is that the Privy Council would communicate with the Lord Chancellor and invite him to say what order ought to be made. While I have mentioned the county court I am not unaware that there are some other courts of which it could not be suggested that it would he inappropriate to allow them this jurisdiction. At the moment I have in mind the Passage Court at Liverpool, or the Salford 'Court at Manchester, or the Tobzey Court.. Bristol. There may be some others which I do not at the moment recall. If it were thought desirable that these courts should be added, I submit that the proper authority for dealing with the matter is the Lord Chancellor and words might, if necessary, be put in at the next stage to that effect. But the county courts seem to me to he quite sufficient in number and in all other respects. I beg to move the Amendment that stands in my name.
Leave out Clause 3 and insert the said new clause.—(Lord Muir Mackenzie.)
§ LORD CARSON
My Lords, so far as I am concerned I am entirely in sympathy with the Amendment moved by the noble Lord, Lord Muir Mackenzie. In fact, as I brought in the Bill originally I had put in a clause to a similar effect because in 359 my opinion—and I think it has been proved by experience—it becomes utterly impossible for a man who is in the condition in which a man must be who has borrowed from a moneylender at these high rates, to dispute a matter at all in the Supreme Court without help. The expenses are so great that as a rule the whole proceeding goes by default in a very summary fashion under the Rules the Supreme Court. So far as I am concerned I should be glad if this clause were restored to the Bill. The Committee left it in the more elastic form in which it appears at present in the Bill, but I should think in a matter of this kind that it would be more satisfactory that Parliament itself should indicate to what courts such cases should be taken rather than that it should be left to the legal element in the Government to determine it by Rules which, no doubt, under this section have to be laid before Parliament. But generally that is a matter of mere form. I dare say the learned Lord Chancellor himself, so far as he is personally concerned, would much rather that the matter should be decided by Parliament, but there may be reasons that do not occur to me which render it preferable to keep the Bill in its present state.
I ought, I think, to say to your Lordships that the Parliamentary Bills Committee of the Faculty of Procurators in Glasgow, who have issued a very careful report upon the Bill, recommend that the Bill itself should name the Court into which these cases are to be brought. They say this:—In the opinion of the Committee, it would be preferable that in Scotland such action should not be competent in the Court of Session, and that it should be made compulsory that all such actions be raised in the Sheriff Court. In their opinion the reference in this section to Orders in Council being passed to define the Courts in which actions may he brought, should be deleted, and it should be declared in the Bill what Courts shall he competent to hear the cases to which the Bill refers. There is no reason why decision should be deferred, and the postponement involved by this section can only promote uncertainty and confusion.Of course, that is merely the opinion of the Private Bills Committee of the Faculty of Procurators in Glasgow. It may be that in Edinburgh they would take a different view. Therefore I am not putting it forward as the considered opinion of the whole of the Scottish legal 360 fraternity. It may be, also, that the Scottish Office may wish to consider this matter and may have something to say upon it. But so far as I am personally concerned, the Amendment of the noble Lord brings back the Bill into the form in which I originally introduced it into the House, and unless His Majesty's Government see some objections to it, I hope your Lordships will agree to the Amendment.
§ THE LORD CHANCELLOR (VISCOUNT CAVE)
My Lords, the opinion of the noble Lord in charge of the Bill has, of course, great weight, but I think we should hesitate before accepting this Amendment as it stands. The effect of the Amendment is that all proceedings for recovery of money lent by a moneylender, or for enforcing any agreement or security, must be brought in the county court. That seems to me to be going much too far. It would not be right to refer an action involving£10,000, or perhaps even£100,000, or security to that value, to the county court. It would be quite contrary to our usual practice. The clause as it stands is that recommended by the Special Committee. That is why it found its way into the Bill. It has the advantage that it would enable an Order in Council to limit the amount in respect of which actions are to be taken by the county court and to leave the more important actions to be tried in the High Court. It also has the advantage that it would enable provision to be made for actions to be heard not only in county courts but in some of the other courts to which the noble Lord, Lord Muir Mackenzie, has referred, and in some eases those courts I think would be more appropriate than the county court itself. The matter had better not be dealt with off hand, but if the noble Lord thinks some specific provision should be made in the Bill as to the courts which are to be resorted to, or as to power to make Rules of Court, I think his opinion certainly ought to be accepted. I suggest, therefore, that the noble Lord might withdraw his Amendment now and confer with the noble Lord in charge of the Bill before the next stage.
§ LORD MUIR MACKENZIE
I am very much obliged to the Lord Chancellor and I should like to avail myself of his offer to take counsel as to the best 361 method of dealing with this matter. Therefore, with the leave of the House, I will withdraw my Amendment for the present.
§ Amendment, by leave, withdrawn.
VISCOUNT BERTIE OF THAMEhad given Notice to move to insert the following clause after Clause 4:—
Every moneylender shall clearly state in all advertisements, circulars or other documents issued by him in the course of his business as a moneylender—
(a) his licensed name in legible characters of at least the same size as any other name therein; and
(b) under what, if any, other name or names than his own he has carried on the business of a moneylender since the passing of the Moneylenders Act, 1900;
upon conviction of failing to do co, he shall be liable to a fine not exceeding twenty pounds for each offence.
§ The noble Viscount said: My Lords, when this Bill was last before us I understood from the noble Lord, Lord Desborough, that he wished me to take counsel with the noble Lord, Lord Marshall of Chipstead, with a view to compiling a new Amendment. I therefore ventured, in collaboration with the noble Lord, to put clown this Amendment. I notice, however, that the Government have put down an Amendment with a similar effect and as it is merely a matter of words I do not propose to move my Amendment.
LORD DESBOROUGHmoved, after Clause 4, to insert the following new clause:—
—(1) Every advertisement, circular and other document issued by a moneylender for the purposes of his business as such shall show—
(a) in such manner us to he not less conspicuous than any other name, the name under which he is licensed under this Act; and
(b) any name, other than his own name, under which he was before the commencement of this Act registered as a moneylender under the Moneylenders Act, 1900.
(2) Any moneylender who issues any document in contravention of the provisions of this section shall be liable on summary conviction to a fine not exceeding twenty pounds in respect of each offence.
§ The noble Lord said: 'My Lords, I am very much obliged to my noble friend for withdrawing his Amendment. I think we are both trying to meet the same 362 object and, as was promised on the last occasion, the Parliamentary draftsman did undertake to combine the two Amendments. I am glad to know that Lord Bertie thinks we have not been wholly unsuccessful in achieving that object. There is very slight difference between us. Our object is the same and I need not weary 3our Lordships, but will simply move the Amendment on the Paper.
Page 6, line 22., at end insert the said new clause.—(Lord Desbuorough.)
§ On Question, Amendment agreed to.
§ Clause 6:
§ Restriction on, cite of interest to be charged.
§ 6.—(1) Where proceedings are taken by a moneylender for the recovery of any money lent after the commencement of this Act or for the enforcement of any agreement or security made or taken after the commencement of this Act in respect of money lent either before or after the commencement of this Act, and the interest charged in respect of the sum actually lent or any part thereof remaining unpaid exceeds the rate of 4 per cent um per month, or the corresponding rate in respect of any other period, the court shall, unless the contrary is proved, presume that the interest charged is excessive and that the transaction is harsh and unconscionable within the meaning of subsection (1) of Section one of the Moneylenders Act, 1900.
§ LORD DESBOROUGHmoved, in subsection (1), to leave out "or any part thereof remaining unpaid exceeds the rate of 4 per centum per month" and insert "exceeds the rate of forty-eight per cent. per annum. "The noble Lord said: My Lords, this Amendment has two effects—the omission of the words "or any part thereof remaining unpaid" and the alteration of "four per centum, per month "to "forty-eight per centum per annum. "As regards the first point, the words "or any part thereof remaining unpaid" were inserted by my noble friend Lord Carson in order to make it clear that where a loan was repaid by instalments the rate of interest is not to be calculated as though the whole loan was in the hands of the borrower right up to the time when the last instalment was paid. My noble friend Lord Carson, I understand, now agrees that his object is fully attained by the specific provisions of Clause 75, which will govern all calculations of the rate of 363 interest. In these circumstances the words "or any part thereof remaining unpaid" are not needed in Clause 6. Their retention might lead to some misunderstanding of Clause 15 and they are better omitted. As regards the rate of interest, I understand my noble friend is quite willing to accept the Amendment that the rate of interest should be forty-eight per cent. per annum., and it is therefore unnecessary for me to enter into any calculations as to monthly payments or the lengths of various months of the year. I beg to move the Amendment in my name.
Page 7, line 2, leave out from ("lent") to ("or") in line 3 and insert ("exceeds the rate of forty-eight per cent. per annum").—(Lord Desborough.)
§ LORD CARSON
My Lords, I think this is an improvement in the Bill. It was proposed by my noble friend on the last occasion that the interest should be one per cent. per week. The objection I had to that was that not only was it increasing the amount fixed by the Committee but also that it was rather a deceptive way of stating interest, and might lead those who do not calculate things out to think they were getting loans at a very small rate of interest, whereas really they were getting loans at a high rate. I think it is better to put it at per annum and as four per cent. per month was fixed by the Committee I think it fair that it should be put at forty-eight per cent. per annum.
§ On Question, Amendment agreed to.
§ VISCOUNT HALDANE
My Lords, before we pass to the next Amendment there is a question I should like to ask of the noble Lord in charge of the Bill. On scrutiny of the Bill I find something which seems to me to be an omission. The Bill does not apply to pawnbrokers; that is to say, pawnbroking business is left to be regulated by the Pawnbrokers Act. But the Bill is so drawn as to cover part of the pawnbroking business which is called pledge-broking; that is, if an advance is made by a pawnbroker of more than£10 on a specific article at present he comes under the Pawnbrokers Act and carries on business lawfully, but the Bill, as it stands at the present time, will sweep all pledge-braking within its purview, and 364 I doubt whether that was the intention of my noble and learned friend.
I have looked into the point and I think that an Amendment at the end of Clause 15 will meet the case and put the pledge-broker upon the same footing as anybody else. I think it will be right to restrict his rate of interest, and I had some ideas as to what that rate should be, but I should like to know from my noble and learned friend, assuming that he takes the same view as I do of the propriety of exempting the pledge-broker from the disability which the Bill imposes upon him, what rate of interest he should be allowed to have for the concession. He is not a moneylender and does not charge 48 per cent. or anything like that. He is naturally to be allowed to carry on his business, and the only question is, on what terms?
I have framed a clause which, owing to pressure of time, I have only this moment had an opportunity of showing to my noble and learned friend. What I would ask him now is his view of the general point. If he agrees with me, perhaps the most convenient course would be that I should ask the leave of the House—for I cannot do so at this stage without the leave of the House—to print this clause in the Bill and then, when the Bill comes up as amended for Third Reading, your Lordships could alter it, strike the clause out or do what you like, but you would have the advantage of seeing the somewhat complicated clause in its context in the Bill. -Unless you see it in its context it is not very easy to follow. I feel that we have overlooked something which amounts to an injustice and that it is right that we should even now put it straight if it can be done. I am desirous of knowing what my noble and learned friend in charge of the Bill thinks on this point.
§ LORD CARSON
My Lords, my noble and learned friend has given me an opportunity of seeing the proposal with reference to this class of business and I am bound to say that I think that there is a point that requires serious consideration regarding the bonâfide business carried on in connection with pawnbroking where loans are above£10 and security is taken. Nobody wants in the slightest degree to interfere with a business which is entirely different from 365 ordinary moneylending and I am aware that those who carry on this business in connection with pawnbroking have certain fears, I think not unreasonable fears, that the Bill may improperly hit their business. They are willing, if I understand my noble and learned friend aright, to have restrictions upon their rate of interest inserted in the clause which eliminates them from the purview of the Act.
The question that arises is, what ought to be the rate of interest? I am exceedingly anxious that no such rate should be put into the Bill as will lead to an argument of this kind: Parliament has enacted that a pawnbroker lending money and getting security, which may be full security, may have some very considerable rate of interest, and therefore, if those who lend on security can get such a rate of interest, those who lend without security ought surely to get six or seven or eight times as much. I am rather afraid of that kind of argument, based on any figure that may be put into the Bill. For my own part, I should have thought that, if these people received this immunity from the conditions of the Bill, a fair provision would be that they should not exceed, say, 10 per cent. I do not know whether that meets the view of this class of business people, nor do I know whether it meets the view of the noble and learned Viscount, but, if the rate were anything higher than that, I think it would be likely to imperil the limits which we hope to put upon the amount charged in the case of necessitous people by those who are taking advantage of their necessity. Otherwise I should certainly, so far as my opinion is worth anything, look favourably upon the claim that these people should be exempted from the Bill.
The noble and learned Viscount has also shown me certain other additions which it is thought may be necessary with regard to the carrying on of this business. I have not been able to go through them in such a way as to form an opinion of them in detail, nor have the Home Office or the Board of Trade seen them, as it is so important that they should. Accordingly, assuming that the rate of interest that I have mentioned meets the views of my noble and learned friend, his suggestion that the matter should be printed in the Bill, on the understanding that the House is not bound in any way 366 to accept finally the details of this clause, seems to me to be a businesslike way of carrying the matter through. When we see the clause in its context in the Bill then, if necessary, either the Home Office, the Board of Trade, the Scottish Office or any of the parties concerned can properly amend this clause so as to bring it into conformity with their views.
§ THE LORD CHANCELLOR
My Lords, it appears to me that the great difficulty in the way of taking the course suggested by the noble and learned Viscount is that, so far as I am aware, nobody in your Lordships' House except the two noble and learned Lords who have spoken, would be able to see the clause before it is put in the Bill. I would suggest, therefore, that the proper course is to put an Amendment down for the consideration of the House.
§ VISCOUNT HALDANE
My Lords, I should certainly have agreed that that was the best course, but the Amendment is rather long and it is difficult to read except in its context in the Bill. My only purpose was to put it in so that it might be read. I am in your Lordships' hands. I can put it down as an Amendment to be moved after the Third Reading, but I am bound to tell your Lordships that it will not be so easy to read as if you had it in the context of the Bill. However, in view of the Lord Chancellor's observations, that is the course which I will adopt.
§ Clause 17:
§ Application to Scotland.
§ 17.This Act shall apply to Scotland subject to the following modifications
§ LORD CARSONmoved to add the following new subsection:
§ "(5) Notwithstanding anything to the contrary in any Act contained, summary execution or diligence shall not be competent upon any bill of exchange or, promissory note or upon any bond or obligation registered in the books of any Court, where such bill, promissory note, bond or obligation has been granted to or in favour of a moneylender."
The noble and learned Lord said: My Lords, the object of this Amendment is to protect the borrower from a certain summary proceeding, of which I was certainly not aware but which appears to exist in Scotland and is not provided for
in the Bill. This also is an Amendment suggested by the Committee to which I have already referred. They describe the present procedure in Scotland, and they add:—
At present a Moneylender's Bill may be protested, and, in order that a defence may be stated, the granter of the Bill requires to consign the amount appearing to be due as a condition of suspension. From the nature of the ease, consignation is rarely possible in moneylending transactions, and summary diligence in such cases is an injustice to the borrower, if he has a genuine defence under the Acts.
In other words, once a Bill is protested and the protest recorded—whether they are right in saying that the whole amount would have to be consigned is, I believe, doubtful from the information that I have—at all events, a very considerable sum would have to be brought in if this summary procedure were adopted. The whole object of the Bill is to try to enable the borrower who has a defence to pursue his defence in accordance with its provisions, and therefore the Amendment which I put down is to meet the matter to which attention has been drawn by the Faculty of Procurators in Glasgow. In effect, putting it shortly, it is to give to the Scottish borrower practically the same opportunity of defence as we have given in the case of the English borrower, and that is why I have moved it in the adaptation clause, rather than in any other part of the Bill. I beg to move.
Page 12, line 43, at end insert the said new subsection.—(Lord Carson.)
§ On Question, Amendment agreed to.