HL Deb 16 March 1926 vol 63 cc575-86

Order of the Day for the Second Reading read.

THE LORD CHANCELLOR (VISCOUNT CAVE)

My Lords, the object of this Bill is to effect some amendments which are urgently required in the Statutes passed last year for dealing with the Law of Property and Trustees. These, of course, are consolidating Statutes and their origin is mainly to be found in the Act of 1922. I have, of course, not the least intention of going back into the controversy which preceded the passing of that Act. It was carried, and since that time everybody has done his utmost to facilitate the smooth working of the Act. It will, I suppose, be many years—probably ten years or more—before we shall have had enough experience to enable us to form a firm opinion upon the value of the changes which began in 1922 and were put into definite shape last year. But when changes so great were being made in our system of real property law, when Parliament was practically re-weaving the very complex fabric of that law, it was, I think, impossible to expect that some stitches should not be dropped, or that same omissions should not be made in that legislation. Some such emissions or defects have been found, and it is to remedy the more urgent of them that this Bill is brought in.

It is a Bill of a somewhat technical character, and not very interesting, I think, to most members of your Lordships' House, and I do not propose to deal with all its clauses in detail. I will only mention three of them, which deal, as I think, with the most important points. Clause 1 of this Bill arises out of Section 1 of the Settled Land Act of 1925, under which land which is conveyed subject to a family charge, generally a jointure or some other kind of annuity is to be treated as settled land. Mainly, I think, the object of that provision was that there might be somebody who could sell the land free from the charge—that the man who owned the land subject to the charge could sell it as free property, the owner of the charge being, of course, protected by the requirement that the purchase money should go into the hands of trustees, where it would be held to protect his interests as well as the interests of the owner. The object was to make land freely saleable.

That was, no doubt, a laudable purpose, but this particular provision has been found to cause some inconvenience and some delay. In particular, attention was called at the end of last year to certain estates where plots of land had been sold to small purchasers, indemnified by the owner of the estate against some family charge. The family charge was, of course, secured by other lands which were amply sufficient to meet it, and the purchaser never would have heard of it again. But, of course, in law the land remained subject to the charge, and so when this provision of one of the Acts came into operation, those plots of land, it was held, could not be sold without going through the form of appointing trustees and having the proceeds paid to those trustees.

I did my best in a debate last year to induce everybody to get over the difficulty by the process of obtaining a release of the charge before this Act came into operation on January 1. In sore cases I think that was done; in others it could not be, or was not done, and I am told that in those latter cases real inconvenience has been caused and there has been delay in completing sales and in building houses. If so, of course, that must be met at once, and the object of the clause is to meet that difficulty by providing, as it does in general terms, that nothing in the Settled Land Act of l925 shall prevent a person in whom the land is vested subject to a prior interest, from having the land subject to that prior interest. Then follow other words, to deal the particular case that, has arisen and to make this Bill retrospective, so that it takes effect as from January 1 last. That, I think, is the most pressing clause in the Bill.

I will next refer to Clause 3, the effect of which is this. Under the Acts of last year two trustees are generally required to receive purchase money or to do certain other acts. The object of that provision is to protect the beneficiaries, because it has often been found that they are not so safe in the hands of a single trustee as in the hands of two or more. But an exception is made in favour of what is called a "trust corporation." A "trust corporation" can be a sole trustee. The class of trust corporations is strictly limited by certain rules which I have had the duty of making under the Act, and which have been so framed as to secure, so far as possible, that trust corporations shall be solvent corporations, but there is an omission in the Act which cannot be cured by rules. It appears that the term "trust corporation" does not include certain bodies which have trust property. The Treasury Solicitor is one, the local authorities sometimes have trust properties, and certain charitable corporations are trustees. It is not plain that they can perform the duties of trustees alone, because they are not yet trust corporations. This Bill seeks to make them trust corporations and so to get rid of that difficulty.

The only other clause that I want to refer to is Clause 4, which deals with registered charges. As your Lordships may know, these Acts require charges to be registered in the register of charges, so that anybody who is buying land may go and search the register and find out whether there are any mortgages or encumbrances to be cleared off. But it is, of course, difficult to carry that search down to the moment of the purchase. A purchaser may have made his search two days ago, may complete his purchase today, but something may have got upon the register between the date of the search and the date of completion. That is got over in all sorts of ways, by telegraphing and so on, but it is desirable to make things work more smoothly, and what is now proposed is that an application to register shall not take effect for two days after it is lodged. That means that if a purchaser gets a clean certificate of search he can complete within two days without any fear of being ousted by some new charge. But there are provisions which make that more convenient, for the holder of the charge. We are using the system of priority notices, which has been found to work in connection with the Land Transfer Acts, so that a man, without going to register, can give notice in advance and make sure that some notice of his charge appears. I will not go into details, but that is the substantial effect: of this clause. There are also other changes, mainly of a minor character, that I need not go into.

This Bill has been the cause of a good deal of trouble and anxiety, for it has had to be very carefully prepared and carefully considered it has been submitted to the Committee over which Mr. Justice Romer presided last year, and, although that Committee contains some of the most eminent conveyancers whom we have and they are satisfied with the Bill as it stands, I do not suppose for a moment that it will meet all the points which have been raised, some of them I think without sufficient ground, and still less will it meet all the points that will be raised in the future. If, however, your Lordships pass the Bill it will prevent some litigation and will, I think, help to make these Statutes work smoothly and yell. I beg to move.

Moved, That the Bill be now read 2a.—(The Lord Chancellor.)

VISCOUNT HALDANE

My Lords, I think this is a thoroughly proper Bill. The noble and learned Viscount on the Woolsack describes it as technical. It is highly technical; in fact, it obviously emerges out of the conveyancers' workshop at Lincoln's Inn. The reason of that is that they found it necessary in order to get along in their daily business. As to the first part, which is dealt with in Clause 1 to which the Lord Chancellor referred, a question regarding it was raised in this House at the end of the last Session. I never thought the point a very formidable one. It was a point that could be got round by various contrivances; but matters are much simplified and alarm is removed when the thing is dealt with as it is dealt with in this Bill. It gets rid of the question as to vesting deeds, of which so much has been heard in conveyancing circles. As to Clause 3 and the question of the definition of a trustee which is dealt with there, I take sonic blame to myself. I noticed the point when the Bill was originally before your Lordships' House, and I should have called your Lordships' attention to it, but I did not quite appreciate the extent to which it left things to discretion. Anyhow, it is now put right by what is in the Bill. The third point is a purely technical one and I agree with its inclusion. I hope your Lordships will pass this Bill.

One thing I will say in conclusion. I am not so sanguine as some people as to believe that this is the last of these Bills with which your Lordships will have to deal. I believe you will receive a group of them, I dare say ten or even twenty, before a very long time is passed. We have entered upon a new system of law far more new than the public recognises. This revolutionary House initiated it with the object of sweeping away all obstructive traditions and we must take the consequences of the extent to which the House put out its hand. That we have got to the end of the alterations of the law I, for one, am convinced is not the case. But we have made a beginning with this Bill and I hope we shall have many successful Bills in future.

LORD HYLTON

My Lords, there is one point in connection with this Bill which I hope the noble and learned Viscount on the Woolsack will elucidate. I have had occasion to know in connection with several estates that for the last ten, twenty and perhaps thirty years the tenant for life has been in the habit on the advice of his solicitors of executing contracts for sale and conveyances of land and no difficulty whatever has occurred. Since the passing of what is known in the legal profession as the Birkenhead Act of 1925 we have been told that we can no longer sell with good title unless a new deed is executed and a new trustee appointed, and great inconvenience has been caused throughout the country. A day or two ago I had a letter from a well-known solicitor saying that the Birkenhead Acts "may or may not simplify the process of conveyancing in the long run, but for the time being they cause extra expense to owners of property."

There is another point also which I should like to bring to the Lord Chancellor's attention. I am informed that since the passing of the Birkenhead Act wherever a conveyance is made containing restrictive covenants some new form of registration must be gone through. It is true that I am informed that this expense will be put on the purchaser but that only increases the cost of the conveyance to the purchaser. In the previous case that I quoted there has been expense caused to the vendor.

These are matters which laymen cannot possibly understand, and I think it is very unfortunate that when the Birkenhead Act was passed the laymen in your Lordships' House were not afforded a little more assistance by the legal luminaries who shine on its benches as to what was going to be the effect of the Act. I think I am right in saying that the great majority of laymen in this House had no idea that there was not going to be any cheapening of the expense but rather a great increase in it, and I would ask the noble and learned Viscount, whose lucid explanations one cannot fail to understand, to tell us whether the Bill he has just brought forward will remedy in any way the grievances I have mentioned.

THE EARL OF MIDLETON

My Lords, with reference to the questions asked by my noble friend Lord Hylton, I appeal to the noble and learned Viscount, on the Woolsack to consider the effect of the recent Act on the charges made by solicitors. By a previous Act, beginning, I think, with last year, the charges made by solicitors on small transactions were very largely increased. It has been the main object of the whole of this class of legislation to endeavour to cheapen the transfer of land. I will not trouble your Lordships with the scale, which is well known, I have no doubt, to the Lord Chancellor, but it must be realised that if a small holder wants to buy a parcel of land of £100 in value, or to purchase a house of a less value than that, he finds before he has concluded the bargain that in one way or another he has to spend £7 or £8 in legal expenses. When the Act of 1925 was brought before your Lordships' House we were led to believe that the establishment of the register would cheapen and facilitate the process of transferring land. But from what has just fallen from my noble friend Lord Hylton, it, would appear that there has been an increase in the cost owing to the system of registration. Meanwhile, under the provisions of an Act brought forward by a previous Lord Chancellor, solicitors are getting a much larger share of the plunder than they were before. At this moment estates are changing hands at a great rate, and no hindrance whatever ought to be offered to the breaking-up of estates near large towns where land is especially needed for development. And I would ask the Lord Chancellor whether, before the Bill reaches the Committee stage, he would consider these questions of expenditure and institute a revised scale for smaller parcels, especially in cases where the registration of the land ought to reduce the cost of conveyancing rather than increase it.

LORD PHILLIMORE

My Lords, I believe I have the honour of having had the noble and learned Viscount on the Woolsack as a sharer in my doubts as to the expediency of all this legislation. My doubts before and in the year 1922 have, unfortunately, been more than confirmed by what has happened since. I wonder if your Lordships have the least idea of the number of pages on the Statute Book that you have contributed to inflict upon people who have to study the law of the land. The Act of 1922, brought in by a former Government, the Coalition Government, had 312 pages of the ordinary print of the Statutes. It was passed in that year, but it was agreed that it should not come into operation until January 1, 1925. The Act of 1924 postponed that to January 1 of this year. At the end of 1924, so late that it is called the Act of 1925, what is called the Law of Property (Amendment) Act was passed. That had 139 pages. In 1925 we got the real Law of Property Act, which we have now. That started by repealing whole chunks of the law of 1922, leaving some but repealing others. It had 203 pages. Then came the Settled Land Act with 116, the Trustee Act with 53, the Land Registration Act with 105, the Land Purchase. Act with 18, the Administration of Estates Act with 44. These yield nearly 990 pages. It is no doubt true that some of these Acts repeal portions of previous ones, but I think that there are 900 pages left.

I remember that a noble and learned Lord—not I think in your Lordships' House at this moment—in 1922 gave his blessing to the Act of 1922 with a statement that he hoped the day would soon come when the simple citizen would be able to buy a piece of land without the assistance of any lawyer. A simple citizen trying to make out the difficulties in 900 printed pages! I am very much grieved to hear both the noble and learned Viscount on the Woolsack and the noble and learned Viscount near me (Viscount Haldane) speak as if this process of amendment and re-amendment must be expected to continue, and to continue in such detail as this measure points out to you it will have to be done. It is not so much the actual clauses as what are called the minor amendments which are in the Schedule, and they are really as if you said—"Instead of 'caterpillar' read 'falcon,'" or "Instead of 'ass' read 'man.'" The alterations are as different apparently from the original as they possibly could be. I trust that those who advise His Majesty's Government are taking real care in this matter. Your Lordships' House has the pride of being a House of revision, of seeing that imperfect, rough-hewn Statutes are turned into something really reasonable, and your Lordships ought not to be asked to make amendments of this kind unless it is certain they have gone through a great number of sieves and crucibles, and that really they will not want re-amendment in the course of another year. I trust the greatest possible care will be taken before any of these amendments are finally submitted to us.

LORD DYNEVOR

My Lords, I should like to express to my noble and learned friend on the Woolsack my very best thanks for having dealt in this Bill, Clause 1, with the question that I raised in your Lordships' House at the end of December last. I am quite ready to accept from him that the amendment fully covers my point, and I again offer to him my grateful thanks.

THE EARL OF MALMESBURY

My Lords, I do not want to take up the time of your Lordships, but I should like also to express my thanks to the noble and learned Viscount on the Woolsack for bringing in a Bill at an early date to amend, if he will forgive me saying so, the mistakes of the previous Acts. I think we cannot too clearly understand that any Act of Parliament which imposes further liabilities in the way of high legal costs upon the owners of land at the present time is a very serious matter. This applies to all sorts of estates, whether they be large or small. Most of them are already very highly burdened with taxation and rates. With regard to the point made by my noble friend Lord Hylton, I was very glad to find that that point had occurred to him, and perhaps the noble and learned Viscount on the Woolsack will tell us in reply what is the particular object of this vesting deed. I asked my solicitor the other day a question in regard to the need of applying to the Court to appoint trustees in the case of a new and wider settlement. I wished to know what was the object of creating a deed transferring the legal estate to me. I said: "Does this give me any more power over the estate than I had before?" The reply was in the negative. I, therefore, would like to know what is the real advantage between having the legal estate vested in trustees as now, or as proposed in the tenant for life. I hope that between now and the Committee stage of the Bill the noble and learned Viscount on the Woolsack will be good enough to explore, as far as possible, every means whereby real estate will be greatly relieved. Otherwise I see before me a whole vista of case-made law.

THE LORD CHANCELLOR

My Lords, I hope I shall be relieved of the task of dealing with all the points that some of my noble friends have raised. My noble and learned friend Lord Phillimore complains that the Acts of last year fill a great many pages. Of course they do. That is the case with all Consolidation Acts. They repeal and re-enact in a short series of Statutes, Acts which extend over many generations. If my noble and learned friend took the trouble—I am sure he will not—of counting up the pages repealed and the pages re-enacted he would find that the total volume of the Statute Book has been greatly reduced, and the task of mastering it has been made easier than it was when he and I learned our law a good many years ago.

My noble friend Lord Hylton raised two points. First, he asked whether this Bill dealt with the vesting deed. The provision requiring a vesting deed in the case of real estate was in the Act of 1922. His objection to it comes, therefore, a little late in the day. The position, I understand, is that where (as in his case) an estate is settled, a short deed has to be executed vesting the property in the statutory owner, who no doubt would be himself. The purpose is to point out someone who, in respect of every piece of land in the country, can make a title to a purchaser, the interests of the persons entitled in remainder being protected by the appointment of trustees. If the object of the framers of the Act is attained, the result will be, not of course now but after the lapse of a short time, that titles will be simpler. There will be everywhere one person who, as in the case of stock, owns the property, and the process of conveyancing should be simpler and the cost of conveyancing less.

My noble friend Lord Hylton has asked a question about restrictive covenants. There is a new provision that restrictive covenants upon land shall be registered. That is for the protection of people who buy property. It is very hard for the purchaser, say, of a. plot of land in a town to find that, although he did not know it, there are covenants preventing him from using the land as he pleases. In future these covenants must be registered so that an intending purchaser can go to the registry and make a search and it there are no covenants registered he will know the land is free.

Then, the Earl of Midleton asked about costs. Of course, this Bill does not deal with costs in any way. I was surprised to hear him say that the purchaser of a small plot of land for £100 might be let in for £7 or £8 costs. I do not think that can be true. I have had the duty, and it is a very burdensome one, of considering scales of costs upon the special Committee dealing with that matter and of trying to protect purchasers, especially small purchasers, from heavy charges. I think we did reduce the solicitor's charges for small purchases. Of course, they are not so small when they are carried out under the ordinary law as in the case of purchases under the Land Transfer Act. There most be some difference, but the Committee have done their utmost to reduce the charges.

That, I think, answers all the points put to me. I can only add, to reassure my noble friend Lord Phillimore, that the greatest care has been used in framing this Bill. The subject is unattractive. It is a very technical and difficult one, but I have had the best advice I could get in putting the Bill into shape and I have myself given a good deal of trouble to see that it covers all the points referred to. I hope that explanation will satisfy your Lordships.

On Question, Bill read 2a, and committed to a Committee of the Whole House.