HL Deb 08 December 1927 vol 69 cc602-732

Order of the Day for the House to be put into Committee read.

Moved, That the House do now resolve itself into Committee.—(The Lord Chancellor.)

LORD BUCKMASTER

My Lords, I will not detain you for a moment on this Motion, but there are two things to which I think attention should be directed. The first is that people who consider that single-chamber government is adequate to the legislative necessities of this country should consider the number of Amendments to this Bill that stand in the name of the noble and learned Viscount upon the Woolsack, the Lord Chancellor.

LORD CARSON

Hear, hear!

LORD BUCKMASTER

Some of them undoubtedly are the result of the debate on the Second Reading of the Bill; but I do not think the noble Viscount would deny that by far the greater number are due to the fact that this Bill has come in an imperfect form from another place. What would happen if there were no Second Chamber to revise and remedy these mistakes it is difficult to understand. The second thing is that this list of Amendments is a formidable one and its adequate discussion must take a great deal of time. What are we going to do with the other Bills that come before us this Session? Are we going to say that we have not time to consider them, or are we only going to give a maimed and mutilated attention to matters which deserve our full and anxious consideration? Both these questions arise, I think, upon the Motion that the House should go into Committee upon this Bill. I am only anxious, of course, that the Committee stage should begin at once, and I hope your Lordships will not think that I have wasted the three minutes which I have taken in making these remarks.

THE LORD PRIVY SEAL (THE MARQUESS OF SALISBURY)

My Lords, it always interests me when a noble Lord sitting on the Liberal Benches has a word to say in favour of your Lordships' House. I am not sure whether the noble and learned Lord was a member of this House when the Parliament Bill was passing through. Had he been a member of your Lordships' House we should have reckoned him as one of our supporters, because the noble and learned Lord's friends on that occasion did their best to check the power of your Lordships' House and to prevent it from operating as an effective Second Chamber. Now the noble and learned Lord is a few years older and perhaps I may be allowed to say to some extent wiser, and he has realised what a fatal mistake was made on that occasion when the powers of your Lordships' House were seriously curtailed. I hope that when we come to consider the reforms of the House of Lords we shall find the noble and learned Lord one of the warmest supporters of the Government in carrying out what may be necessary to make your Lordships' House efficient.

As regards the pressure upon your Lordships' time at this period of the Session, I will not be hypocrite enough to pretend that I do not profoundly regret it. I do not say that any blame is to be attached to any individual. I am certain that my colleagues in another place have done their utmost to hurry forward the business there and we are grateful to that most efficient colleague of ours the Chief Whip in the House of Commons for all he has done to help us; but, owing to the method of discussion in that House now and the practices which prevail there, it is almost impossible to get business through in a reasonable time. I hope the observations of the noble and learned Lord will re-echo not merely in your Lordships' House but elsewhere, and will induce a spirit of reasonable discussion in another place which will restore to your Lordships the opportunity of doing your duty as a revising chamber.

EARL BEAUCHAMP

My Lords, I think the remarks just made by the noble Marquess should be regarded rather as a jest or as a red herring put directly across the legitimate points raised by my noble and learned friend. I may remind the noble Marquess that while the Parliament Act was passing through Parliament my noble and learned friend was, in another place, one of its staunchest defenders. But that was not the point to which he directed the attention of the noble Marquess. No doubt the Leader of the House is anxious to direct the attention of your Lordships to it rather than to the point which was the kernel of the remarks of my noble and learned friend. It is obvious that we might well have met earlier in the month of November, or even in October, and in view of the number of Bills which His Majesty's Government are asking us to pass that would have been a very reasonable step to have taken.

The real gravamen of the charge, which the noble Marquess did not understand, is, if he will allow me to say so, quite a different one from that to which he tried to direct your Lordships' attention. Amendments have been put down by the noble and learned Viscount upon the Woolsack which are considerable both in number and extent. That is not altogether a point with regard to the one-chamber system of government. It has been our painful experience during the last two or three years that no Amendments of substance are allowed in your Lordships' House. What I look forward to with much interest is to see whether in the course of these discussions any Amendment of substance is admitted and accepted by His Majesty's Government. It is practically a one-chamber system of government so long as the majority in one House dictates the policy of this House as well, and refuses to your Lordships' House any opportunity of introducing serious Amendments. That has been our experience in the past and we look forward with interest to see whether His Majesty's Government propose to continue that policy in future. If it does then it will be a continuation of what I describe as a system of single-chamber government. However, I am not going to be led astray by the noble Marquess into defending the Parliament Act on this occasion for it would be almost out of order to do so.

VISCOUNT SUMNER

My Lords, may I add one word to what has already been said on this matter? I would point, out that the first thing that was done after the Bill had passed its Second Heading and it was decided to go into Committee in the ordinary way, was that the noble and learned Viscount on the Woolsack put down a list of Amendments which I counted up to 78. Out of those 78 I think only 7 could by any possibility be called Amendments of substance. The rest were drafting Amendments and I think, without being censorious, even another place could manage to choose its language with more success and discrimination so that such Amendments would not be required. The learned Lord Chancellor should not have, in addition to all his many other labours, immediately to set about producing 70 Amendments as a first instalment of this measure which has passed through the other House after much discussion.

VISCOUNT HALDANE

My Lords, my purpose is twofold, and first of all to say that I agree with what the noble and learned Viscount has just said. It is almost inevitable that there should be a certain number of Amendments of a legal kind, but until we come to those Amendments we cannot say whether or not they have substance. My second purpose is to say that I wholly dissociate myself from the analogy which has been brought in of the Parliament Act. That was brought in for the purpose of preventing this House from thwarting the decisions of the majority of the electors of the country expressed by a Government with a large majority in the other House. It did not interfere with what we are doing to-day or with this kind of procedure. It was directed to high policy and for high policy it was established. When we come to the general purposes of this Bill the point of view of those with whom I am associated on this Bench is this. We do not regard this as a perfect Bill, but we do regard it as a step forward. Therefore we are in sympathy with it and we have given it our support by abstaining from prolonging the discussions unnecessarily. We shall listen to the Amendments as they are brought forward and if they further the general purpose of the Bill then we shall not put difficulties in their way, but we shall have to see what those Amendments really mean and what the attitude of the House is towards them. With those observations I differentiate myself so far from what has been said from the Liberal Bench and I also do not quite agree with everything that was said from the Government Bench.

THE LORD CHANCELLOR (VISCOUNT CAVE)

My Lords, as a point has been made about the Amendments, may I say a word upon this matter? It is true that on the day after the Second Reading of the Bill was passed and so soon as the Motion was made to refer it to a Select Committee had been negatived, I put down a long list of Amendments, nearly all of them drafting Amendments. In regard to them may I point out that the procedure in another place differs from our procedure? When Amendments are put down on Report here and are carried we have a further opportunity of revising their terms and moving Amendments after Third Reading. In the other House they have not that advantage, and if a number of Amendments have been accepted on Report in the other House it may become necessary to revise their language when the Bill gets to this House, so that we may see that the final form of the Bill is satisfactory. My first Amendments were entirely a matter of form and did not arise out of points of substance raised in the debate on Second Reading.

On Question, Motion agreed to.

House in Committee accordingly:

[The EARL of KINTORE in the Chair.]

LORD CARSON moved that Parts I and II of the Bill be postponed until after the consideration of Part III. The noble and learned Lord said: The object of this Motion is that we may at once proceed to consider the proposals, commencing with Clause 20, which deal with setting up the tribunal to whom these cases are to be referred. A good deal of the debate which we had last week turned upon the tribunal, and I think your Lordships will see that if we first know what is the tribunal to whom it is proposed to send the various questions that arise under the Bill we shall get on much more quickly in dealing with these proposals themselves. For instance, there are a number of Amendments on the Paper as to how questions raised—questions of law or questions of fact or mixed questions of law and fact—are to be dealt with. In every branch of Parts I and II your Lordships will find that the most complicated questions are to be sent to the tribunal as set up in the Bill, a tribunal which I think even those who opposed the Motion for sending the Bill to a Select Committee think ought to be altered.

When you take Part II, which deals with general amendments of the law of landlord and tenant, turns certain of the covenants upside down and revolutionises the whole method of dealing with those covenants, you find these words:— Any difference as to the reasonableness of any such sums shall, if both parties agree, be referred to the tribunal, and where a dispute as to the reasonableness of any such sum has been determined by a court of competent jurisdiction or the tribunal, the landlord shall be bound to grant the licence or consent on such terms as the court or tribunal considers reasonable. There are questions to be submitted to the tribunal, therefore, which are just as great as those I have been dealing with for four and a half hours this morning in your Lordships' House. I understand the Lord Chancellor will accept my proposal, so I will move it without further words.

Moved, That Parts I and II of the Bill be postponed until after the consideration of Part III.—(Lord Carson.)

THE LORD CHANCELLOR

I feel that this would be a convenient course to adopt, but I would like to suggest that my noble and learned friend should move to postpone Parts I and II until after Clause 20. I do not think it would be necessary to go through all the detailed clauses before coming to Part I.

LORD CARSON

With great respect I think we should go through the whole because you will find definitions of landlord and tenant. Having regard to the way in which covenants and the questions of improvement and goodwill are to be dealt with, it is very important to consider what definition your Lordships will put upon them when we are examining the other questions which arise, the changes in the law which are to affect the landlord and the tenant as defined by the Bill.

THE LORD CHANCELLOR

I think the other course would be more convenient, but I will not dispute the matter.

On Question, Motion agreed to.

VISCOUNT SUMNER moved, after Clause 19, to insert the following new clause:—

Trial of claim and applications under Part I of Act.

.—(1) A claim for compensation or for the grant of a new lease and all other applications under Part I of this Act which the tribunal has power to hear and decide, shall be triable in the High Court, but where either the total amount claimed is less than five hundred pounds or the annual value of the holding in question does not exceed one hundred pounds, the claim or application shall be triable in the county court of the district in which the holding is situate instead of in the High Court, and where any such claim or application is so dealt with the High Court or the county court, as the case may be, shall be the tribunal for the purposes of the foregoing provisions of this Act:

Provided that where the claimant or applicant and all persons affected agree that the claim or application shall be made to and tried by the tribunal, the claim or application shall be so made and tried.

(2) Whenever a judge of the High Court or a judge of the county court shall think fit to be assisted by an assessor on the hearing of any question arising under this Act he shall give directions accordingly. Such assessor shall be one of the panel of referees hereinafter mentioned and shall be selected in the manner hereinafter prescribed.

(3) The reference committee hereinafter mentioned may make rules relating to applications to and proceedings before the High Court and the county court under this section.

The noble and learned Viscount said: The effect of the Amendment which I have put down on the Paper is to supersede Clause 20 in all material particulars. It appears rather curiously on the Paper as an Amendment on page 20, line 2. All that that means is that it comes in after the words "Part III—General" and before Clause 20. The principle upon which I ventured to draft this Amendment, which I will explain to your Lordships in detail in a moment, is this. As the Bill was originally drafted it provided, in Part I, for new remedies given by Statute to the tenant and introducing into the well-known law of landlord and tenant very extensive changes, and it prescribed, oddly enough, that in deciding questions with regard to these new rights a perfectly new tribunal should be created. But that was not enough. It further provided that this perfectly new tribunal should be compulsory, and that on all questions of fact its decision should be final.

It is true that in a certain class of case there was power given to the High Court to remove the case and entertain and try a claim itself, upon the rather curious ground not merely of difficult questions of law but of the magnitude of the amount at stake. That advantage should not be confined to persons who have large amounts at stake, I think; and should not be taken away from all those whose transactions are not large. The result—the happy result, as I venture to think—of the discussion which took place when this Bill was before your Lordships last week, was that on all sides and from all quarters of the House remarks were made about that plan, which ranged from chilly admiration to violent condemnation. I do not think the original Clause 20 had a friend left at the end of the evening. At any rate, we now have upon the Paper Amendments by many of the most eminent hands and also this one by myself, and, above all, an Amendment by the Lord Chancellor. To that Amendment it will be necessary to direct particular attention because I. think it is not unfair to assume from its character that the compulsory reference of these disputes to an amateur tribunal of surveyors or something of that kind is now abandoned as the principle of the Bill, and it is recognised that subject to the question what course should be resorted to, parties who are engaged in these disputes ought to have access direct whenever they choose to His Majesty's Courts.

The question, therefore, lies in substance between providing that the case may go to the county court if it is of a magnitude suitable for the jurisdiction of the county court, which is the ordinary principle on which actions are referred from the High Court to the county court, or whether the county court should be in the first instance the appointed tribunal, with some power, upon an application being made or upon general consent, to go to the High Court. I venture to think that upon principle, and especially in a Bill of this magnitude and character, it is important that nobody should be shut out from access to the High Court of Justice. Remember that not only are there many cases of great magnitude, not only are there many new questions of law, not only will there certainly be at the beginning a large stock of new questions to be decided, but there are also innumerable cases in which smaller claims will be raised all over the country and in which, owing to the fact that landlords are not all rich and tenants are not all magnanimous, there will certainly be bitter dissensions between the parties such as ought to be decided in the Court to which the party who has to pay will be most content to be taken.

Accordingly, partly, I confess, in defence of what I conceive to be the Constitutional rights of the King's Courts, partly in the hope that at the very beginning authoritative decisions will be given which will clear the ground and make it possible to arrive at agreed solutions afterwards. I propose that the scheme should be of this kind: A claim for compensation and all the other applications that are attendant upon it—such as the grant of a new lease instead of the payment of money, a settlement of the terms of the new lease and that kind of thing—"which the tribunal has power to hear and decide"—that covers, I think, the whole of the matters that arise under Part I—"shall be triable in the High Court"; and then, of course, the usual procedure of the High Court will apply with regard to evidence and with regard to appeals and the ordinary practice and procedure— but where either the total amount claimed is less than five hundred pounds or the annual value of the holding in question does not exceed one hundred pounds, the claim or application shall be triable in the county court of the district in which the holding is situate instead of in the High Court, and whore any such claim or application is so dealt with, the High Court or the county court, as the case may be, shall be the tribunal for the purposes of the foregoing provisions of this Act. The result of that is, I hope, to insert throughout all the opportunities for new litigation and new applications with which Part I bristles a comprehensive provision that the case shall be triable in the High Court, with a limited jurisdiction conferred upon the local court that is most convenient having regard to the locality of the premises in question.

Then there is the following proviso:— Provided that where the claimant or applicant and all persons affected agree that the claim or application shall be made to and tried by the tribunal, the claim or application shall be so made and tried. I insert that proviso for this reason. Much has been said against the tribunal. I do not, of course, as a practical man fail to recognise that there are many cases in which persons sitting and forming part of the panel would be capable of giving a sensible, perhaps a rapid and possibly (though not very probably) an inexpensive decision, and I did not think that, after the trouble that had been devoted to the construction of this tribunal in another place and the high hopes that appear to have been raised by the idea of getting everything finally decided by an eminent surveyor or valuer, it was quite right to sweep away the tribunal and the panel constructed with so much care.

Accordingly, if the parties—I mean all the parties, because it is not right that it should be done except by consent—like to go to that tribunal, then I think they ought to have the power to do so. This will have another advantage in that, if upon trial the new tribunals work well, the number of cases in which all parties will agree to go to the tribunal will undoubtedly increase. The tribunal is itself upon its trial. It may perfectly well be that, guided on the law by decisions of the High Court and with good will, if such a thing be possible under this Act between landlord and tenant, by consent many cases may be referred to them. At any rate I wish to keep the door open for them.

The next part of the Amendment says:— Whenever a Judge of the High Court or a Judge of the county court shall think fit to be assisted by an assessor on the hearing of any question arising under this Act he shall give directions accordingly. Such assessor shall be one of the panel of referees hereinafter mentioned and shall be selected in the manner hereinafter prescribed. That preserves the machinery by which the Lord Chief Justice, the Master of the Rolls, the President of the Incorporated Law Society and the President of the Surveyors' Institution will, after deep thought and large discrimination, select suitable practical men all over the country and will provide rules which will specify how they are to be selected for particular cases, what the procedure is to be, who is to tax the costs and all the rest of it. I wish to extend the advantages of this chosen panel as much as possible, so that both the High Court and the county court may have the advantage of the assistance of members of it.

They have, of course, powers at present of sending suitable questions to special referees, but if the Lord Chief Justice, the Master of the Rolls, the President of the Incorporated Law Society and the President of the Surveyors' Institution have laid their heads together and selected a panel of the fittest men in the country for this particular kind of case, I think it would be an advantage that the Judge of either Court should be able to say that he will have one of them to help him. An assessor is one thing, but a reference to a layman to hear a case and to determine it is quite another. The great value of an assessor is that he sits at the Judge's elbow and gives him a hint when not to pay too much attention to expert witnesses, whereas the disadvantage of a single-handed Rhadaman-thus, who decides all questions of fact and fails or refuses to recognise that anything is a question of law, is that of a person who is apt to rub everybody up the wrong way and to produce results which are anomalous and which will lay down no general rule.

That is, briefly, the nature of the Amendment which I venture to propose. I will not trouble your Lordships with the small Amendments that will have to be made in the existing Clause 20, of which I am bound to say that, so far as I am concerned, not very much will survive. But if I may do so, without presuming to spoil the ground for the Lord Chancellor's Amendment in any way by trying to discuss it when we are not on it, might I point out the difference between the two Amendments? In the case of the Lord Chancellor's scheme, which your Lordships will find on pages 29, 30 and 31 of the Marshalled List of Amendments, the county court is compulsorily the tribunal—

THE LORD CHANCELLOR

Perhaps I had better explain the scheme.

VISCOUNT SUMNER

I bow to that at once. Let me conclude by saying that there are differences between the Lord Chancellor's scheme and mine which I venture to hope may be resolved in favour of my scheme. When your Lordships have heard them both you will decide. There is, however, one small difficulty, and that is that your Lordships might adopt my scheme first; but I suppose that when the Lord Chancellor addresses your Lordships upon this question he will contrast his view with mine, and I agree that he is the proper person and very much more fit than I to explain his clause. I beg to move.

Amendment moved— Page 20, line 2, at end insert the said new clause.—(Viscount Sumner.)

THE LORD CHANCELLOR

The debate has taken a turn which, I confess, I did not anticipate when my noble and learned friend Lord Carson moved to postpone Parts I and II. I thought he desired that I should at once explain the new clause which it is proposed to insert in place of Clause 20. The noble and learned Viscount, Lord Sumner, has moved a clause which, of course, if carried, would take the place of Clause 20, for it sets up a totally different tribunal from that which Clause 20 sets up, but he has not moved to leave out Clause 20 and insert his clause. He has moved to insert his new clause after Clause 19, and so has obtained priority for his proposal. However, I cannot deal with his Amendment without dealing with the whole subject, and I hope that I shall be allowed in this debate to explain, in my own words, what is the purpose of the Amendment which I have put down, and how it would differ from that which the noble and learned Viscount has moved.

I promised in the previous debate to reconsider the whole question of the tribunal. I agree that there were from different parts of the House objections taken to the proposal in the Bill, mainly, I think, because noble Lords did not wish to deny to the King's subjects access to the ordinary Courts of Justice in this country, or to set up what were called lay tribunals, not responsible to any higher authority. We want to meet that point, but at the same time to adhere to the view which we have taken throughout, that on these questions of value and detail it is of advantage to have the first opinion from some person specially familiar with that kind of inquiry, and also—and this is a point which bears closely on my noble and learned friend's Amendment—we desire not to overload our Courts; that is, not to require a Court to deal with this kind of matter from the beginning, to have an action commenced there, to have counsel heard by the Judge, whether of the High Court or of the county court, to have experts called before him, and so to occupy a great part of the time of the Court in investigating these matters.

Let me add that really our Courts have not the time to deal from the beginning with all this new business. If you adopted this Amendment, and directed that every proceeding should be begun in the Courts, either in the High Court or the county court according to value, you would be adding a volume of work to the work already done by the Courts which they could not really carry out, and we should have to appoint a number of additional Judges. More than that, in the county court districts we should have to build additional court-houses for those Judges to sit in. You would find the Courts absolutely overloaded by the work thrown upon them by this Bill. It is to avoid that that our proposals have been very carefully thought out, and what we suggest is that every proceeding shall be commenced in the county court of the district where the property in question is situate, and that the matter may be transferred to the High Court in either of two events—namely, if the parties so desire and agree, or if the High Court, on application made to it, so direct.

That would bring up to the High Court all matters of sufficient importance for that purpose, but as to all other matters which would remain in the county courts, we propose that in the first instance the cases shall be automatically referred to a member of the panel of referees to be selected by the County Court Judge or by his registrar. In other words, he would not begin by requiring a hearing with counsel and experts, but would merely make an immediate, uncontroversial order referring the matter to a referee on the panel for inquiry and report. The referee would, of course, hear the matter as we originally proposed, but he would not finally decide it. He would report under the County Court Acts and rules to the Judge of the County Court, and then either party would be at liberty to object to that report. If no objection were taken the County Court Judge would make an order approving the report and giving final judgment. If objection were taken by either side he would hear the objection and give his decision.

Therefore in the end you would have a report by an expert, and a decision by a Judge, which we think would fulfil all the requirements put forward in the recent debate. Of course there would be, under the existing County Court Acts, an appeal on matters of law to a Divisional Court, but not further without leave of the Court, and so you would get an opportunity in every case for a decision by a Judge of our Courts on all points—first on the question of fact, which the County Court Judge would have power to decide, and afterwards if necessary by an appeal on any question of law. I suggest to your Lordships that that carries out all the requirements which were so forcibly urged in the recent debate. We shall keep our system of expert inquiry, but we shall have a system of decision by a Judge. I suggest that it is a better plan than that put forward by my noble and learned friend who moved this Amendment.

His Amendment has the great objection that it throws the whole burden of these decisions from the beginning upon the Courts, either the High Court or the county court. In every case you would have a writ or plaint commencing the proceedings, you would have a defence, and a hearing with counsel and witnesses on both sides, and a judgment, and all that would take place in the Court itself, occupying hours and sometimes days of the Judge's time. We want to avoid that intolerable burden, as I think it would be, upon our Courts, and we suggest that it would be better to adopt the simpler process which we suggest, which would save the Courts from that burden, but would in the end leave the decision to the Judges of this country. I do not propose at the present moment to occupy a longer time, or to deal with the details of my proposal. I have explained what is the big distinction between the noble Viscount's proposal and our proposal, and in the view which I hold of the matter I ask your Lordships not to accept the Amendment moved by my noble and learned friend.

LORD CARSON

My Lords, I must say that I have listened with a good deal of regret, and some astonishment, to the statement of my noble friend the Lord Chancellor. What is his objection to the noble and learned Viscount's proposal? The noble and learned Viscount simply and solely proposes that, in cases arising under this Bill, His Majesty's subjects should have the same rights as they have in every other case. I assure your Lordships that the difficulties of the Bill, the complications of the Bill, and the amount of property that may be at stake under the Bill, are not less than in those cases which are engaging His Majesty's Judges either in the county courts or in the Supreme Court every day. And what is the reason why the subject, whether he be landlord or tenant, is to be debarred from asserting his rights in the ordinary way, either in the county court or the Supreme Court? The Lord Chancellor actually says he is to be deprived of his right to go to the Courts because the Courts would not have time to hear him, it would add so much to the volume of the work.

Is that a real reason? If the Courts are not sufficient, surely we have not come to such a pass that we have to set up additional tribunals of an extraordinary character and at enormous expense. Every kind of question which arises under this Bill can be paralleled by similar questions that are decided every day in the Common Law Courts and in the Court of Chancery; and, indeed, many of the clauses of the Bill raise questions of importance far greater than many raised in the cases which are discussed from day to day in His Majesty's Courts. Therefore the first question I ask is: what is the difference between these rights and any others? Are we to say every time a Bill is passed in the future that our Courts are so overworked that we must find some other method of disposing of disputes, rather than allow His Majesty's subjects to go to the Courts? Your Lordships can lay this down as a precedent for taking away the ordinary rights of His Majesty's subjects, if you wish, but I hope you will pause before you do it.

What does the Lord Chancellor propose instead of Lord Sumner's very simple proceeding? Lord Sumner proposes that these matters should go to the Courts in the ordinary way—to the county court if the matter is under £500 (which is some extension of the county court procedure), and to the Supreme Court if it is over that amount; and, if there is a difficulty about valuation, or anything of that kind, the High Court Judge or the County Court Judge who hears the case can be assisted by an assessor drawn from the panel. Could anything be more businesslike than that? But what does the Lord Chancellor propose? As far as I can see everything is to be brought into the county court, though there is then to be the large expense, if anyone goes to the trouble of making a motion, of bringing the matter up to the Supreme Court—which, I may tell you, will not be done for nothing—and there you will have an argument as to whether the case is a proper one. Then, when that is done, what is to happen? The whole case is to be referred in the first instance to the expert on the panel, and you have to go to the expert and have a full trial before him on every question connected with the case, questions of law and fact alike. Having got his decision, you then have another hearing before the county court or the Supreme Court. All the Lord Chancellor does is to give two hearings, instead of one, before a decision is come to.

I know very well what will happen. When the matter goes from the expert to the Supreme Court or the county court all sorts of questions will arise as to what were questions of law and what questions of fact, whether the expert considered this point of law and that point of fact; and the whole matter will be in a state of extreme difficulty and confusion before the High Court or the county court, as the case may be. I can easily see, from very long experience, that when it comes to the Supreme Court or the county court it may be that the whole hearing before the referee will become absolutely abortive, and the county court may hold that all that the referee heard, having regard to the proper view of the law, should not have been heard at all, or parts of it should not have been heard at all; and it may be that in those circumstances there is no advantage whatever in having the expert, and the Judge may have to commence all over again and send the case back to the expert.

Now all that is avoided by the very simple procedure proposed by Lord Sumner. He says: Do not have separate hearings; let the Judge sit and have the man from the panel sitting behind him, the one directing the other on what they know, and let them consider afterwards between them how the matter is to be discussed. That is not unknown in our Courts. In the Admiralty Courts you have assessors brought in who have a knowledge of the sea and who advise the Judge on various matters, and the Judge keeps them right on points of law. With all these complications and consequent expense that expense in thousands of cases will come out of the property. I suggest that the Lord Chancellor's proposal would therefore be a denial of justice to these people—landlord and tenant. For my own part I cannot understand what fault is to be found in the proposals of Lord Sumner, and if he goes to a Division I shall support him.

THE EARL OF HALSBURY

I confess I listened with amazement to the Lord Chancellor's suggestion that the Judges of the County Court were in any way less engaged in work than Judges of the High Court.

THE LORD CHANCELLOR

I did not suggest that.

THE EARL OF HALSBURY

Then I do not quite follow what is the excellence of the suggestion to put this responsibility on the Judges of the County Court instead of the Judges of the High Court. But it is quite obvious what is going to happen if the matter goes to the county court. I have always considered that legislation by reference is a very happy relief to the draftsman of a Bill, but an extremely bad thing for the person who attempts to understand it. If you look at the Amendment of the Lord Chancellor, subsection (2), you will see that reference is made to Section 6 of the County Court Act, 1919. I think from that section you will see exactly what is going to happen if the Lord Chancellor's Amendment is carried. Section 6 says: Subject to county court rules, the Judge may in any case, with the consent of the parties, refer any action or matter or any question arising therein to the registrar or a referee for inquiry and report, and may direct how such reference shall be conducted, and may remit any report for further inquiry and report"— Now this is what I want to call attention to:— and on consideration of any report or further report the Judge may give such judgment or make such order in the action or matter as may be just. … Therefore the Judge can take the report of the panel referee and give judgment on that without any further hearing at all.

Is that really in the spirit of what was suggested on the Second Reading? Is not that leaving it practically in the hands of the panel expert? The Judge has only got to lead his report and to say: "Well, it seems to me a sensible report. I will give judgment." The noble and learned Viscount, the Lord Chancellor, says "No." I have referred your Lordships to the section of the Act. I may be wrong about the matter of law, but if the Lord Chancellor assures us that it is not so why should not something be put in to make it clear? I should have thought that the Act was clear, that having received the Report, the Judge could give judgment on the Report.

THE LORD CHANCELLOR

My noble and learned friend must know that this is all provided for by rules, and that the rules provide that notice of the report shall be given to both sides. Some one must apply to the Courts with regard to the report and the Judge makes his order after hearing the parties.

THE EARL OF HALSBURY

I am sorry, but I must maintain my point. The Act of Parliament gives the Judge perfect power to give judgment on the report without any further evidence being taken, and no rule can affect that. Of course, either party can be heard on the report. What I am pointing out is that the Judge has power to give judgment then and there on the report without hearing any further argument. That is provided by the Act and no rule can get out of it. I see the noble and learned Marquess (Lord Reading) opposite shaking his head. I naturally bow to his very great knowledge, but I have looked into the Act of Parliament and, with great respect to him, I cannot see that you can get out of it. It seems to me that the Lord Chancellor's Amendment allows the Judge, if he so desires, to give judgment straight away on the report of the expert. Of course, the parties can be heard as to whether he should or whether he should not; that is perfectly true; but the Judge can say: "No; I have seen the report and I do not want to hear any further evidence."

THE LORD CHANCELLOR

No.

THE EARL OF HALSBURY

I am again in disagreement with my noble and learned friend and with noble Lords opposite, but I think I am in agreement with my noble and learned friend who sits beside me.

LORD CARSON

Not on the question of its not being heard; but on the question of hearing evidence my noble friend is quite right.

THE EARL OF HALSBURY

That is what I said. I am very sorry, but I thought I explained very carefully that the Judge, if he so desires, can on hearing both parties say: "I am not going to hear any further evidence; I shall act on the report." If he chooses to do that he can. Again, the noble and learned Marquess opposite shakes his head.

THE MARQUESS OF READING

The point is a small one. The learned Judge is not entitled to give judgment in the circumstances mentioned until both parties have appeared before him, as they have a right to do.

THE EARL OF HALSBURY

It is entirely my fault. I never meant to go beyond what I am saying—that the County Court Judge can give judgment after he has heard both parties, on the report and nothing else. I have not appeared much in the county courts for the last two or three years, but before that I appeared a great deal in them. If your Lordships knew the congestion of work due to the Rent Restrictions Acts under which the county courts are now suffering you would not suggest putting on the County Court Judge the burden of having to go into every case, when there is a perfectly short way out by his taking the word of his expert and saying: "Well, I shall take the word of my expert. I will allow each side to say what it likes about it. After all, I have dealt with the expert for some time and I know he is a perfectly good and proper fellow, or I think he is, and I shall take his word." If you do that you will not be putting the matter into the hands of the Court at all, but into the hands of the expert witness and you are only camouflaging it by suggesting that it is to go to the county court with this report.

Why on earth, when it has been discovered after many years that the assessors in the Court of Admiralty do aid the Court and that when a county court is dealing with workmen's compensation cases a medical assessor is an excellent person to sit with the Judge, you should abandon all that procedure which has been found to work so well and go to something totally different—namely, the report from an expert on which the Judge can act without any further evidence—I do not know. For this reason I suggest that the noble and learned Viscount who moved the Amendment is right when he says that the subject ought to be entitled to go to the Courts of this country and ought not to be left with what he will be left with practically—the report of one expert. For these reasons, if the noble and learned Viscount goes to a Division I shall vote with him.

LORD BUCKMASTER

I regret that this debate turns so much upon legal questions that lawyers occupy your Lordships' time. None the less it is essentially what might be described as a professional question. It is the question as to how best to secure that speedy and cheap justice may be brought to people who have controversies under this Bill. I must admit that when I heard the speech of the noble and learned Viscount, Lord Sumner, I was very greatly impressed and thought that he had provided a proper and easy exit from the difficulties the Bill presents. But the noble and learned Viscount the Lord Chancellor has convinced me that my first impression was wrong, and for these reasons. It is not only that you will overburden our Courts with work. That, it seems to me, would be a necessary and inevitable consequence of accepting the Amendment standing in the name of Lord Sumner. Every case then would be compelled to go either to the county court or to the High Court, and these cases must be many.

It is not only that, but what to my mind is equally important, yon will multiply the expense of these proceedings in such a way that they will become burdensome beyond degree upon all the litigants. If there is one thing which remains until this day a reflection upon our system of administering justice and which hitherto we have been unable to remove, it is the cost of litigation. That is the thing that bears with enormous weight upon innocent litigants, who frequently have to hazard what may be the whole of their savings in order to get justice from the courts of law. That is a thing which has been present to my mind for a very long time, and I think that the noble and learned Viscount, the Lord Chancellor, considered it when he pointed out that he had adopted a method by which that risk would be minimised as far as possible.

The real difference between the view I first entertained of the Amendment of the noble and learned Viscount, Lord Sumner, and the contention of the Lord Chancellor is this. I agree entirely with the view of Lord Sumner as to the importance of the constitutional rights of the citizen to have access to the Courts. At the same time I do not want the citizen to have those constitutional rights so emphasised that in the course of exercising them a man is ruined. I really am not exaggerating what well may happen in the case of small litigation under this measure when I say that the weight of the cost of the expert witness and the necessary burden and cost of counsel may be such as to rob victory of all its spoils. That is the reason why I think the Amendment of the learned Lord Chancellor should be accepted. As for the rest, there really is not anything so serious as the noble Earl, Lord Halsbury, suggested. At this moment there is power in the Courts to refer. They can refer if they like and when the report comes back it will be dealt with exactly in the same way as the report that would be made under the Amendment of the noble and learned Viscount, the Lord Chancellor. There is practically no difference between the one and the other.

The only difference is this. The Lord Chancellor's Amendment insists that there shall be the preliminary reference and the other leaves it to the discretion of the Judge. In those circumstances I think that the compulsory reference is right and that when it comes back it can then be fully argued if necessary on any question of law and, if not, it can be accepted by the County Court Judge. There is only one thing that might be suggested. I think it might be possible to blend the two Amendments in this way, that up to £500 it, should go into the county court and beyond that figure into the High Court, the procedure being the same in each case. I see no objection to that. The important big cases would then be retained in the High Court and the smaller ones would go to the county court but, with that modification, I hope your Lordships, in the interests of the litigants themselves, will disregard everything else and support the Amendment of the noble and learned Viscount on the Woolsack.

THE EARL OF HALSBURY

I did not like to interrupt the noble and learned Lord who has just spoken but he was quoting me as having suggested that Section 6 of the County Court Act, 1919, laid it down there would be no difference in the reference arising out of that Act. Under the Amendment of the Lord Chancellor there is every difference in the world. Section 6 is governed by this: the consent of the parties; then, an absolute right of access to the Courts. Under this Amendment that is not so.

LORD BUCKMASTER

I merely said that in the one case it was compulsory and in the other optional. That is exactly what you said.

LORD JESSEL

The noble and learned Lord, Lord Buckmaster, said this was a purely professional debate. I am reminded of the saying about fools entering where angels fear to tread when I venture to address your Lordships' House, but I was very much struck by the remarks of Lord Buck-master in regard to the expenses. If I may say so, I do not think he has read the noble Viscount's clause as he might have done. If you look at the end of page 27 of the Marshalled List you will read:— Provided that where the claimant or applicant and all persons affected agree that the claim or application shall be made to and tried by the tribunal, the claim or application shall be so made and tried.

LORD BUCKMASTER

Both parties agreed.

LORD JESSEL

There is no reason, if they want to avoid expense, why they should not agree to go to the tribunal. The real case that I think the noble Viscount made out for his clause is that once these matters have been taken before a Judge and grave decisions come to, then the rest will follow. People will be quite satisfied to go to the tribunal that has been set up later on, if they so agree. The object of the noble Viscount's clause, it seems to me, is that in the first instance the Court should be the proper tribunal; and it is because of that and because I think it would be much easier for the County Court Judge or the High Court Judge himself to have the assistance of an assessor instead of having only the view of the expert witness brought before him, that I shall vote in favour of the noble Viscount's clause.

LORD PHILLIMORE

I think we should be grateful to the Lord Chancellor for having gone so far to meet the objection which was raised on a previous occasion, but I suggest to him that his clause is still open to the criticism that it is more a formal than a material alteration, and I think I that he would probably meet a great deal of criticism and possibly some cavil if he would take some such words as these. Instead of "stand referred," which would simply seem to mean the purely formal order of the Judge, he should accept words like these: "be referred with such directions as the Judge may give." That would enable the Judge to put before the referee the proper questions and would really make some use of the original application and would, I think, very much protect the subject. If the Lord Chancellor would make the further concession suggested by the noble and learned Lord, Lord Buckmaster, of making in the large cases the tribunal as of right the High Court and not the county court, then I venture to say, having considered this matter a great deal, he would meet most of the objections. I do not say he can do it to-day but I hope if not to-day he will do something in that direction on Report.

VISCOUNT SUMNER

My noble and learned friend has performed the obsequies of my poor little Amendment and has proceeded to discuss the Amendment which I dare say will presently be before your Lordships—namely, that of the noble and learned Viscount—and he has had the assistance of my noble friend opposite in that matter. But before the grave now yawning closes over my Amendment I should like to say a few words in answer to the Lord Chancellor, and perhaps, if I am very fortunate, I may persuade my noble friend opposite to turn round again and once more think that on the whole my Amendment has slightly the best of it. The principle I would submit to your Lordships is this. If you enact that new and far-reaching liabilities shall be created which fall upon a very large number of His Majesty's subjects, you are bound to give the person so made liable all the old remedies to which under the old law he was entitled. You have no excuse that I can see for altering the Common Law by Statute and drastically changing the liabilities of landlords, and imposing very considerable liabilities upon tenants and saying that nevertheless, for the most part, they must be kept away from the adjudication of the High Court. Least of all have you any right to do that when the main objection is the question of cost. Litigation is spread all over the face of this Bill and in litigation costs, like the poor, are always with us. I know of no litigation in which you can ensure that the costs of having the case properly prepared and properly argued can be kept down where the parties think the matter of sufficient pecuniary importance or their tempers got up sufficiently to insist on having the best assistance.

But, for what it may be worth, I have a little provision in this matter: The Reference Committee hereinafter mentioned may make rules relating to applications to and proceedings before the High Court and the county court under this section. If it is legitimate to enact that there shall only be one expert witness on each side, unless a special order be made, I should think it was legitimate to make a rule prescribing that there shall be only one counsel on each side, unless with special leave, and that on taxation the modest 5 and 2, or whatever takes its place in these days—I suppose a modest 25 and 2—would be more proper, indeed should be the utmost that should be allowed for any case on taxation. But I do not know how costs can be cured except by abolition of litigation.

Then as to the apprehension that the Courts will be overloaded. How that may be I do not know. We have no information before us of the number of cases which it is anticipated will arise, and I think I am not misquoting my noble and learned friend the Lord Chancellor when I say that in his final speech the other evening he said that he himself did not know how many cases there would be. It is impossible for us to tell whether the number of cases that will arise will be such as to overload the Courts or not, but what I would point out is that if cases go into Court some Court has got to be overloaded and whether it is the High Court or the county court appears to me to make remarkably little difference in comparison with getting cases tried in the most satisfactory manner. I would point out also in reference to what is called the automatic reference to the expert, which may be all very well in its way, that that can as easily be applied in the High Court as in the county court. It is equally possible at the commencement of a case in either tribunal to say that the first thing to be done is to go before the referee and have a report on the facts which very possibly may dispose of the case, because it may prove that the amount he is disposed to recommend is not very great and that the case is stated so as to bring the parties to terms.

But remember if you are going to begin in the county court you first have a duplicate proceeding before the referee. I am quite sure that for a very considerable time every case in which there is a new point bearing upon the construction of the Act will be the subject of appeal to the Divisional Court, and unless leave is refused rather arbitrarily will be appealed to the Court of Appeal, but let us trust no further, because the interest of landlords as of tenants, and I am afraid also the interest of mortgagees and reversionaries, are acutely affected all through this Bill. Every solicitor will be anxious to get at the earliest moment to know how he is to advise his clients and every point that turns up that is worth discussing at all is certain to be appealed to the High Court, and I think ought to be appealed to the High Court, because it is in the High Court that you can get reported decisions which bind not only inferior courts but Judges of the High Court themselves, whereas in spite of the excellent judgments given in the county court, they have not the same weight and will not be equally well known.

Then there is the question of the expense of additional Judges and additional buildings. The difference is simply between additional High Court Judges and additional County Court Judges because, after all, no Judge can try more than one case at a time. The only difference is between the stipends of those august individuals. Bear this in mind. Part I applies only to improvements hereafter to be effected and only to improvements after three years have elapsed from their completion so that, except for the preliminary cases when a man sends in his plan and specification and the landlord quarrels with it and there is an application to settle what the improvement is to be, there will not be any claim for compulsory improvement for three years. Where the High Court will be three years hence does not lie in our hands. It may be that all this will be profoundly modified by that time. At all events there will be in that interval a breathing space for the Court which will be principally occupied, so far as compulsory cases are concerned, with goodwill cases and they will be cleared out of the way. I beg your Lordships not to be led astray by the mirage of cheap justice. In this country justice is never cheap. It is difficult enough to get it at all. The only thing we can do is to say that a good part of the cost of getting justice shall be the luxury of the man who applies for it and that the loser shall not have to pay the whole of the cost. That can perfectly well be done by a rule.

As my noble and learned friend Lord Buckmaster has left his place I am afraid that he must have felt it was unsafe to continue to lend an ear to my persuasion. With regard to his suggestion, my clause does already divide litigation by a standard of money, the amount of the claim or the annual value of the tenancy, which will send one class of case to the county court and another to the High Court. If he will address himself to the Lord Chancellor on the subject I have no doubt he will be received with courtesy, but as far as I am concerned I am converted already and it is in my clause. I think this is a very important matter for this reason: in the discussion of Amendments to Parts I and II and in the actual course of events when Parts I and II have become law, it will be very much more easy to take risks with regard to doubtful cases, very much more easy to come to terms with an antagonist, when it is known that the best legal decision is available to the parties who seek it. That will lay a broad foundation for knowing what the new law is and for avoiding litigation and coming to terms or for going to arbitration and confining disputes to the most practical details.

When we consider how these claims will range from great buildings to small buildings, from alterations that will ruin a poor landlord or ruin a poor tenant up to arrangements that may affect widespread properties and many other buildings than those directly concerned. I do not think in practice the public will find that it is as well satisfied with the decisions of the County Court Judges, subject to appeal, as it would be with the decisions of the High Court Judges, no doubt subject to appeal also but I think less likely to be appealed against. I am sorry to trouble your Lordships because we have a great deal before us, but I must press my Amendment to a Division.

LORD PHILLIMORE

Before we go to a Division it really would be an assistance if we could have some statement from my noble and learned friend the Lord Chancellor. If a Judge of the High Court, or the county court as the case may be, were to be given the power of settling the issue by giving directions to the referee, if one knew that the referee's mind would be applied a priori to the real points at issue, it would relieve some of us who know the practice in the Courts of Justice. If we could get some such promise I for one should support the Government.

THE LORD CHANCELLOR

I had intended to say that I think that the power which the noble and learned Lord suggests is already in the County Courts Act. The County Courts Act enables the County Court Judge to give directions to the referee when he refers a case for inquiry and report. That power will be imported, as I believe, by the words of this Bill. As regards the second point raised by Lord Buckmaster, as to whether it might be made a direction that any claim over £500 should go to the High Court, I will very certainly consider that point and see if I can meet the noble and learned Lord at a later date.

LORD BUCKMASTER

Although I am a Free Trader, I strongly dislike imported considerations in an Act of Parliament. Instead of importing them, will my noble and learned friend the Lord Chancellor incorporate them? If we know they are there then we shall be more satisfied.

LORD PHILLIMORE

Though it may be in the county court rules, it is not in the High Court rules, and where High Court cases are concerned we should really want some such words as suggested.

LORD MERRIVALE

I hope regard will be had to what Lord Phillimore has said. There is a separate system of reference in this Bill, and I submit that having regard to the separate system of reference the general terms in the Bill might be held not to apply to that system of reference under the County Courts Act. I do not see such a clear incorporation as would necessarily secure what I now believe to be the intention of the noble and learned Viscount, the Lord Chancellor.

THE LORD CHANCELLOR

I am so sure of my ground that I will undertake either to satisfy my noble friend Lord Phillimore that what I say is right or to agree to the insertion of appropriate words.

Clause 20:

Tribunal.

20.—(1) The tribunal for the purposes of this Act shall be such one of a panel of referees appointed for the purposes of this Act by the Reference Committee hereinafter mentioned as may be selected in manner provided by rules made by the Reference Committee.

Provided that where a claim for compensation or the grant of a new lease has been made under this Act, and it appears to the

On Question, Whether the proposed new clause shall be there inserted?—

Their Lordships divided: Contents, 39; Not-Contents, 80.

CONTENTS.
Halsbury, E. [Teller.] Biddulph, L. Leigh, L.
Ilchester, E. Carson, L. Merthyr, L.
Malmesbury, E. Castlemaine, L. Montagu of Beaulieu, L.
Midleton, E. Clifford of Chudleigh, L. Monteagle, L. (M. Sligo.)
Morton, E. Clinton, L. Mowbray, L.
Northbrook, E. Dynevor, L. Newton, L.
Selborne, E. Fairfax of Cameron, L. Ponsonby, L. (E. Bessborough.)
Faringdon, L.
Bertie of Thame, V. Harris, L. Queenborough, L.
FitzAlan of Derwent, V. Hylton, L. Saltoun, L.
Sumner, V. [Teller.] Jessel, L. Strachie, L.
Younger of Leckie, V. Kintore, L. (E. Kintore.) Strathspey, L.
Lamington, L. Sydenham of Combe, L.
Avebury, L. Lawrence, L. Wittenham, L.
NOT-CONTENTS.
Cave, V. (L. Chancellor.) Lucan, E. [Teller.] Glenarthur, L.
Onslow, E. Hampton, L.
Balfour, E. (L. President.) Plymouth, E. [Teller.] Hanworth, L.
Russell, E. Hemphill, L.
Salisbury, M. (L. Privy Seal.) Sandwich, E. Heneage, L.
Scarbrough, E. Howard of Glossop, L.
Stanhope, E. Kilmaine, L.
Sutherland, D. Stradbroke, E. Knaresborough, L.
Wellington, D. Yarborough, E. Kylsant, L.
Lovat, L.
Bath, M. Burnham, V. Manners, L.
Camden, M. Cecil of Chelwood, V. Meldrum, L. (M. Huntly.)
Lincolnshire, M. (L. Great Chamberlain.) Chelmsford, V. Merrivale, L.
Haldane, V. Monk Bretton, L.
Reading, M. Peel, V. Ormonde, L. (M. Ormonde.)
Ullswater, V. Parmoor, L.
Airlie, E. Phillimore, L.
Beauchamp, E. Arnold, L. Ritchie of Dundee, L.
Birkenhead, E. Ashton of Hyde, L. Somerleyton, L.
Caithness, E. Buckmaster, L. Somerton, L. (E. Normanton.)
Cavan, E. Charnwood, L.
Chesterfield, E. Clwyd, L. Southborough, L.
Cranbrook, E. Conyers, L. Southwark, L.
De La Warr, E. Cottesloe, L. Stanmore, L.
Grey, E. Cushendun, L. Sudley, L. (E. Arran.)
Hewe, E. Darling, L. Swaythling, L.
Iddesleigh, E. Daryngton, L. Templemore, L.
Iveagh, E. Ernle, L. Teynham, L.
Leven and Melville, E. Gage, L. (V. Gage.) Thomson, L.
Lovelace, E. Gainford, L. Wargrave, L.

Resolved in the negative, and Amendment disagreed to accordingly.

High Court or a Judge thereof, on an application made for the purpose by the claimant or other person affected by the claim, that on account of the magnitude of the claim and the questions of law involved the case is one which it is desirable should be tried in the High Court, the High Court or a Judge thereof may order that the claim shall be tried in the High Court; and in the event of any such order being made, or in the event of the claimant and all persons affected by the claim agreeing that the claim shall be tried by the High Court, the claim shall be so tried, and the High Court shall be the tribunal for the purposes of the foregoing provisions of this Act.

(2) The Reference Committee may make rules as to the manner of selection of the referee to whom any application or matter under this Act is to be made or referred, regard being had to the knowledge of the locality possessed by such referee, and as to the time within which and the manner in which any such application or reference is to be made, and as to the procedure in relation to any such application or reference, and for prescribing anything which under this Act is to be prescribed, and, with the consent of the Treasury, for prescribing the fees to be paid in connection with any such application or reference.

(3) In any proceedings before the tribunal not more than one expert witness on either side shall be heard unless the tribunal otherwise directs.

(4) The decision of the tribunal on any question of fact shall be final and binding on the parties and the persons claiming under them respectively, but the tribunal may and shall, if the High Court so directs, state at any stage of the proceedings in the form of a special case for the opinion of the High Court any question of law arising in the course of the proceedings, and may state its award as to the whole or any part thereof in the form of a special case for the opinion of the High Court, and an appeal shall, with the leave of the High Court or the Court of Appeal, but not otherwise, lie from any decision of the High Court to the Court of Appeal, and the decision of that court shall be final and conclusive and shall not be subject to appeal to any other court.

(5) Subject to rules made by the Reference Committee the costs of any proceedings before the tribunal shall be in the discretion of the tribunal, which may direct to and by whom and in what manner those costs or any part thereof shall be paid, and the tribunal may in any case disallow any costs which the tribunal considers to have been unnecessarily or unreasonably incurred, and the costs ordered to be paid shall be taxed by such officer and in such manner as may be prescribed.

The rules of the Reference Committee made under this subsection may provide for applying, subject to the necessary adaptations and exceptions, the provisions of subsections (1), (2) and (3) of Section five of the Acquisition of Land (Assessment of Compensation) Act, 1919, relating to costs of proceedings under that Act.

(6) Any order of the tribunal may, by the leave of the High Court or a Judge thereof, be enforced in the same manner as a judgment or order of the court to the same effect, and after such leave has been given may be registered under the Land Charges Act, 1925, as an order affecting land.

(7) The Reference Committee for the purposes of this Act shall consist of the Lord Chief Justice of England, the Master of the Rolls, the President of the Law Society, and the President of the Surveyors' Institution.

(8) Nothing in this Act shall prevent an agreement being made for referring to arbitration under the Arbitration Act, 1889, any matter which under this Act is to be determined by the tribunal.

Such an agreement may be contained in the original lease or may be made in writing at any date subsequent to the date of the lease.

THE LORD CHAIRMAN

I think that it will be to the convenience and in accordance with the sense of the House, that the Amendments to Clause 20 standing on the Paper should not be moved, as the Lord Chancellor will move to leave out that clause altogether. I therefore suggest that I should call upon him to move the omission of Clause 20, in order to insert his new clause, which is on the Paper.

THE LORD CHANCELLOR

I beg to move to leave out Clause 20, and to insert the new clause on the Paper. It has been fully debated, and I will not trouble your Lordships with a speech. I will, of course, consider the points which have been raised in the course of the discussion.

Amendment moved— Pages 20 and 21, leave out Clause 20 and insert the following clause:—

Provisions as to tribunal.

(".—(1) The tribunal for the purposes of Part I of this Act shall be the county court within the district of which the premises or any part thereof are situated acting under and in accordance with this section:

Provided that—

  1. (a) if before commencing proceedings in the county court the claimant or applicant and all persons affected agree that the claim or application should be heard by the High Court; or
  2. (b) if on an application being made to the High Court within the prescribed time the matter is transferred to the High Court in accordance with and subject to the provisions of Section one hundred and twenty-six of the County Courts Act, 1888;
a Judge of the High Court without a jury shall, in respect of the matter, be the tribunal for the purposes of Part I of this Act.

(2) Where proceedings are commenced in the county court in respect of any claim or application under Part I of this Act, the matter shall, unless the parties otherwise agree, or it is otherwise prescribed, stand referred for inquiry and report to such one of the panel of referees appointed by the Reference Committee hereinafter mentioned as may be selected by the county court, as if with the consent of the parties the matter had been so referred to him in pursuance of Section six of the County Courts Act, 1919.

(3) The power of selecting a referee from the panel shall, unless any of die parties object, be exercisable by the registrar of the county court, and if there is such an objection by the Judge.

(4) In any proceedings before the referee not more than one expert witness on either side shall be heard unless the referee or the Judge of the county court otherwise directs.

(5) County court rules may be made for regulating proceedings under this section, and those rules may fix the remuneration of referees and may provide for applying, subject to the necessary adaptations and exceptions, to costs of proceedings in county courts under this section, the provisions of subsections (1), (2) and (3) of Section five of the Acquisition of Land (Assessment of Compensation) Act, 1919, relating to costs of proceedings under that Act.

(6) The Reference Committee for the purposes of this Act shall consist of the Lord Chief Justice of England, the Master of the Rolls, the President of the Law Society and the President of the Surveyors' Institution, and the Committee shall have power to appoint such persons as they think fit to be members of the panel of referees either generally or for particular localities, and to remove from the panel any person so appointed.

(7) Nothing in this Act shall prevent an agreement being made for referring to arbitration under the Arbitration Act, 1889, any matter which under this Act is to be determined by the tribunal.

Such an agreement may be contained in the original lease or may be made in writing at any date subsequent to the date of the lease.")—(The Lord Chancellor.)

LORD CARSON

I do not propose to trouble your Lordships with a speech on the Amendment of the Lord Chancellor, but I would like to point out that, owing to the course which has been taken, there will be no opportunity of moving Amendments to the Lord Chancellor's clause. If that is so, I suppose what we shall have to do will be to put down Amendments on the Report stage.

On Question, Amendment agreed to.

Clause 21 agreed to.

Clause 22 [Service of Notices]:

THE LORD CHANCELLOR

These are all drafting Amendments.

Amendments moved—

Page 22, line 9, leave out ("or to")

Page 22, line 10, leave out ("or given")

Page 22, line 17, leave out ("or to")

Page 22, line 18, leave out ("or given")

Page 22, line 22, leave out ("receive")

Page 22, line 25, leave out ("receive")

—(The Lord Chancellor.)

On Question, Amendments agreed to.

Clause 22, as amended, agreed to.

Clause 23 agreed to.

Clause 24:

Interpretation.

24. For the purposes of this Act, unless the context otherwise requires— The expression "tenant" means any person entitled in possession to the holding under any contract of tenancy, whether the interest of such tenant was acquired by original contract, assignment, operation of law or otherwise; The expression "predecessors in title" means any person through whom the tenant has derived title, whether by assignment, by will, by intestacy, or by operation of law; The expression "landlord" means any person for the time being entitled to receive the rents and profits of any premises; The expression "term of years absolute" has the same meaning as in thy Law of Property Act, 1925; The expression "prescribed" means prescribed by regulations made by the Reference Committee.

THE LORD CHANCELLOR

This is a definition only, to go in after the definition of "tenant."

Amendment moved—

Page 23, line 31, at end insert:— ("The expression 'landlord' means any person who under a lease is, as between himself and the tenant or other lessee, for the time being entitled to the rents and profits of the demised premises payable under the lease.")—(The Lord Chancellor.)

On Question, Amendment agreed to.

THE EARL OF MIDLETON moved, in the definition of "tenant," after "tenancy," to insert "for a year or any longer period." The noble Earl said: I desire to bring before your Lordships an important point, to which considerable reference was made in the course of the debate on the Motion of Lord Harris, but on which there was no time for the Lord Chancellor to make any reply. I say frankly that I do not propose to raise again the questions of principle which were raised in that discussion, but I do most earnestly desire to ask the Lord Chancellor to tell us what it really is the intention of the Government to do. As the Bill reads now, every tenant, whether he holds from year to year, or from month to month, or from week to week, can become a leaseholder under this Bill. The curious position is that we have to read the effect of this Bill side by side with the Rent Restrictions Act, which it is understood is coming up to this House in the course of the next few days, with no possibility of amendment by your Lordships' House, because it is to be included in the Expiring Laws Continuance Bill. Look at the position, which I cannot believe it was ever the intention of the Government to create. A tenant who comes under the Rent Restrictions Act cannot be removed, and may be living at a rent which is quite inequitable, unless the landlord can find him another house at a similar rent which is equally convenient. In scores of cases it has been found that the tenant has only to sit tight and he cannot be removed.

Under this Bill he can come to the landlord, although he is only a tenant from week to week, and ask to make some improvement which the landlord may not deem desirable, but which the tribunal may say it thinks is a desirable improvement. The landlord is then forced to agree, and at the end of his tenancy, if he stays for three years—under the Rent Restrictions Act many people have been staying for seven or eight years—the tenant can compel the landlord to pay him for an improvement which the landlord does not regard as an improvement, or give him such a period as the tribunal may consider equitable. I cannot believe it is the intention of the Government to deal with improvements so made in respect of these small tenancies, to which the Bill as at present drawn applies. I pointed out before, and I again venture to point out, that if it is equitable in a case of a man who is holding under a tenancy which has long expired, and which the landlord urgently desires to end—if it is equitable that he should be given this advantage, how can you look the genuine leaseholder in the face and say: "You did that under a contract, which we will not break, although your unexhausted improvements at the end of the lease are such as to entitle you to every consideration at the hands of the landlord? I ask, for the purpose of information, whether the Government do not really consider that there should be some limitation with regard to this question.

Then consider the matter from another point of view. It is only a few minutes since every lawyer almost who addressed your Lordships on the last clause, was dealing with the immense mass of litigation which would inevitably arise, and from which it was thought highly desirable to shield the High Court and the county court by any arrangement which could be made. All the distinguished lawyers who addressed us made it perfectly clear that at present there is absolutely no barrier to small litigants being ruined—as Lord Carson pointed out had been the case in a great many cases in which he was engaged in the old days—and losing all the advantage which they had secured from the landlord by reason of the costs of litigation. Look at the other side, the case of the landlord. Here you get a mass of tenants, yearly, monthly or weekly, on whose behalf, by anybody who likes to back them, the landlord may be taken into Court to defend himself against that which really will be of great disadvantage to his property. I hope there will be some consideration of such cases. If all this is to be done for the tenant at will while the genuine leaseholder is left in the cold, we have carefully considered with very high legal advice how we could deal with the question. We have not the slightest desire to put down any Amendment on which we should be met, as we were met last week, with the reply that we shall cause untold disappointment, that we shall do injury to this House, and that we are not, as it were, playing the game with regard to the Bill. We fail to see how it is possible to alter this or to put any restriction on it except by restricting the Bill to tenants who have at least a yearly tenancy.

Those who desire that real equity should be done as between classes would put it much higher, and would suggest such a period as five or three years, which would be in accordance with the period during which tenants must remain there in order to obtain the advantage of the Bill. I have put down the very modest period of a year in the hope of drawing from the Lord Chancellor some expression of what the real policy of the Government is. We are perfectly aware that the Government take the view that they intend at all hazard to accept this very ill-digested Amendment made in the House of Commons, which, without the knowledge of a great number of persons, was inserted in the Bill at the very latest stage there. If that is so we must leave on them the responsibility for a provision which, I am convinced by the opinion of every person of experience who has examined it on our behalf, will lead to a most undesirable and lamentable flooding of the Courts, which will leave a great deal of inequity as between different classes, and which, I submit, will not reflect credit on the revising power of your Lordships' House.

Amendment moved— Page 23, line 29, after ("tenancy") insert ("for a year or any longer period").—(The Earl of Midleton.)

THE LORD CHANCELLOR

I do not in the least complain of my noble friend's moving this Amendment, and I will not ask the Committee to resist it unless they are convinced that it had better not be accepted. I desire, if we do succeed in resisting any Amendment to do so wholly upon reasons which commend themselves to the Committee. But may I put the point as it strikes me? My noble friend is afraid of a case where a weekly or monthly tenant makes an improvement and at the end of his tenancy claims compensation for it. Now, in the first place, I should think the cases are rare where a weekly or monthly tenant, or a tenant for less than a year, offers to spend money in improving his landlord's property. But I do not think my noble friend has drawn sufficient attention to the provision in Clause 2 (1) (c), which provides that the tenant shall not be entitled to compensation in respect of any improvement made less than three yeas before the termination of the tenancy. If a tenant, whether he be a weekly or a monthly tenant, has spent a large sum in improvements, and has continued to be a tenant for not less than three years afterwards, and the value of his improvements is still unexhausted, I do not see why he should not be treated as if he had been a tenant for the whole three years or more, and be entitled to compensation accordingly. The words which my noble friend seeks to insert were originally in the Bill—I make him a present of that. They were moved out in another place, and were omitted without a Division, although the interests of the landowners were fully represented in the other House, because in the end they were so convinced that the case I have put to-day could not be refuted. As at present advised, it seems to me that the Bill is right. If you have a case of a tenant holding on for so long a time, who has spent his money in improvements, he ought to be treated as if he had been a lessee for the whole of that time.

THE EARL OF MIDLETON

Really the noble and learned Viscount has not met my point at all. He talks as if the landlord could have got rid of the tenant, but he cannot under the Rent Restrictions Acts; he has no power of giving the tenant notice. You may say that after some years the man has some rights, but he has only got rights because the landlord cannot obtain the tenancy under the Rent Restrictions Acts. Under those Acts and this Bill the whole position of the landlord is changed. If we cannot convince the Government they must accept the responsibility, but honestly I think it is not sufficient, without any regard to the flooding of the Courts—as to which the Lord Chancellor did not say a single word—or any regard to the great expenditure which will be forced on the landlords, or any consideration of the provision of the Rent Restrictions Acts which everybody in this country knows require amendment—simply to say "No" to the Amendment. I protest against that method of dealing with our case.

THE EARL OF HALSBURY

Can the Lord Chancellor tell us whether or not a person who is still continuing in possession by reason of the Rent Restrictions Acts comes in under Clause 24? I should have thought he must, because the clause refers to anybody who is in possession by operation of law or otherwise. If he does I have very much doubt whether the noble Earl's Amendment cures the matter, because that Amendment refers to "a year or any longer period," and it might not cure it.

On Question, Amendment negatived.

THE LORD CHANCELLOR

The next three Amendments are formal Amendments.

Amendments moved—

Page 23, line 32, after ("title") insert ("in relation to a tenant or landlord").

Page 23, line 33, after ("tenant") insert ("or landlord").

Page 23, leave out lines 36 to 38.—(The Lord Chancellor.)

LORD CARSON

May I ask why the last words are left out? Is there to be no definition of the word "landlord" in the Bill?

THE LORD CHANCELLOR

We have just inserted one.

On Question, Amendments agreed to.

LORD CARSON moved to add to the definition of "landlord" "but shall not include a mortgagee in possession of such premises." The noble and learned Lord said: The object of this Amendment is to carry out what I understood the Lord Chancellor to say on the last occasion, that nothing is being enacted which will in any way affect the security of, or throw obligations upon, the mortgagee who has advanced his money upon an estate. It is plain that unless these words are put in a mortgagee who enters into possession, as he is entitled to do as one of his remedies if his interest is in arrears, will become liable to the whole of the obligations which are put upon the landlord in relation to the land. That is a very important matter. I have received communications from various quarters pointing out that one of the probable results of this Bill will be that it will be very much harder to raise money when a landlord requires it for the purposes of his property.

Another thing which is much more feared is that mortgagees, particularly where trustees have lent money upon mortgage, will begin to call in their mortgages at a time when it will be very difficult and inconvenient to pay them off. That may lead, as I am sure this Bill will lead in many cases outside mortgages, to the sale of the properties rather than that they should be encumbered by the revolutionary provisions of this Bill. I propose, therefore, to protect the mortgagee.

There cannot be anything more unfair than that when a man, particularly as a trustee, has lent funds upon an estate to which the Bill applies, he should be made liable, if he is enforcing his remedy, to all the obligations of a landlord and to the finding of all these moneys for compensation for goodwill and improvements and all the other obligations in the Bill; seeing that he has merely entered into possession for the purpose of recouping the money he has absolutely paid. At the time he made his mortgage he was first or second mortgagee and knew where he stood. But under this Bill heaven only knows what his position may be or what amount may be put upon him. I beg to move.

Amendment moved— Page 23, line 38, after ("premises") insert ("but shall not include a mortgagee in possession of such premises.")—(Lord Carson.)

LORD HARRIS

I have a question to put to the noble and learned Viscount on the subject of mortgages and also on the definition of landlord.

LORD CARSON

The latter is finished with.

THE LORD CHANCELLOR

The noble Lord can ask his question on this clause.

LORD HARRIS

I will confine myself to the question of mortgages. It does not seem to be altogether clear how far mortgages are bound. Presumably the ordinary rule would apply and the mortgagee would be under no obligation to the tenant under a lease granted after the date of the mortgage contrary to the mortgage deed; otherwise he would be bound. It is suggested that this should be made clear.

THE LORD CHANCELLOR

I think that is exactly the effect of the Bill. A mortgagee not in possession would not be bound to pay any compensation at all. He has the first charge, and no charge can be created prior to his charge. But if he goes into possession he is practically the owner of the property. It often happens that a man in possession holds until the end of time. The mortgagor may have no equity left worth asserting at all and the real owner may be the mortgagee in possession. He has the benefit of the improvements that have been made by the tenant. They may have been made before he took his mortgage in which case he gets the benefit of the property as improved. They may have been made after he took his mortgage in which case, again, he has the benefit of the improvements. In either case he gets the benefit under the terms of the Bill. The tenant has paid the money, the improvement is unexhausted. I cannot see that in this particular case, in the case of a mortgagee in possession, the tenant should not have the ordinary rights of a tenant. That is exactly in accordance with the advice given to the noble Lord, Lord Harris, and I think he will find that is the effect of the Bill.

LORD BUCKMASTER

I would like to point out to the noble and learned Lord, Lord Carson, that he need not be uneasy about the mortgagee.

LORD CARSON

I am not uneasy about anything.

LORD BUCKMASTER

I only want to point out that it is a small matter though it is really one of substance. A mortgagee in possession is a person who has exercised the right he possesses under the mortgage of taking possession of the property. The moment he takes possession the Statute of Limitations begins to run in his favour and he may acquire absolute ownership and destroy the whole claim of the mortgagor. If instead of entering into possession he merely appoints a receiver, as he can do in writing under the Conveyancing Act, he gets all the advantages that a mortgagee in possession has excepting this right of acquiring the property by adverse possession. He receives the rent. He can let the property and he can manage it. He does everything except be in possession. Therefore, if the mortgagee desires to assert the right to possession in order that he may thereby assert the right of ownership it does seem to me that he should be under the obligation of a landlord.

LORD CARSON

I am very much obliged to the noble and learned Lord for the information he has just given. I can assure him that I have heard some

of it before though, no doubt, it is very important that your Lordships' House should hear it also. Notwithstanding what the noble and learned Lord says, I still assert that by the provisions of this Bill and by the definitions of "landlord" and "tenant" you are taking away from the mortgagee a right he now has—the right of going info possession and of collecting the rents and profits without the provisions of this Bill. That cannot be disputed. The moment this Bill passes all the obligations that it puts upon a landlord will be put upon the mortgagee if he goes into possession. That is what I am complaining of.

The country and the landlords should know, and the people who are investing their money should know, that one of the Acts of a Conservative Government takes away from a mortgagee the rights he now has of entering into possession without, any such obligations as are in this Bill. All these obligations which are put upon him will come in priority to his security and thereby, of course, his security will be weakened. There can be no question about that. It may be right or it may be wrong to do it. It may be that no one ought to be concerned or be uneasy about a mortgagee, as my noble and learned friend opposite says. But I think that it is well that it should be understood by people both inside and outside of your Lordships' House, that not only does this Bill place obligations upon landlords who are owners of property but it also places them upon the mortgagee who tries to exercise the right he now has of recouping himself for the money he has lent and which was not subject in any way to such obligations as are in the Bill. That seems to me to be a very clear matter. If the Government say that they are willing to mulct the mortgagee in this kind of way and that is part of their policy I suppose they can carry it in the House, but I think in an important matter of this kind I shall ask the House to divide.

On Question, Whether the proposed words shall be there inserted?

Their Lordships divided:—Contents, 38; Not-contents, 73.

CONTENTS.
Bath, M. Ilchester, E. Midleton, E.
Leven and Melville, E. Morton, E.
Caithness, E. Lovelace, K. Northbrook, E.
Halsbury, E. [Teller.] Malmesbury, E. Selborne, E.
Bertie of Thame, V. Clifford of Chudleigh, L. Lamington, L.
FitzAlan of Derwent, V. Clinton, L. Lawrence, L.
Sumner, V. Dynevor, L. Leigh, L.
Younger of Leckie, V. Fairfax of Cameron, L. Mowbray, L.
Faringdon, L. Queenborough, L.
Avebury, L. Harris, L. Saltoun, L.
Carson, L. [Teller.] Hylton, L. Strathspey, L.
Castlemaine, L. Jessel, L. Sydenham of Combe, L.
Charnwood, L. Kintore, L. (E. Kintore.) Wavertree, L.
Wittenham, L.
NOT-CONTENTS.
Cave, V. (L. Chancellor.) Russell, E. Howard of Glossop, L.
Sandwich, E. Kilmaine, L.
Balfour, E. (L. President.) Scarbrough, E. Knaresborough, L.
Stanhope, E. Kylsant, L.
Salisbury, M. (L. Privy Seal.) Stradbroke, E. Manners, L.
Meldrum, L. (M. Huntly.)
Sutherland, D. Cecil of Chelwood, V. Merrivale, L.
Wellington, D. Chelmsford, V. Merthyr, L.
Haldane, V. Monteagle, L. (M. Sligo.)
Camden, M. Peel, V. Ormonde, L. (M. Ormonde.)
Lincolnshire, M. (L. Great Chamberlain.) Ullswater, V. Phillimore, L.
Ponsonby, L. (E. Bessborough.)
Reading, M. Ashton of Hyde, L.
Biddulph, L. Ritchie of Dundee, L.
Airlie, E. Buckmaster, L. Somerleyton, L.
Beauchamp, E. Clwyd, L. Somerton, L. (E. Normanton.)
Birkenhead, B. Cottesloe, L.
Bradford, E. Cushendun, L. Southborough, L.
Chesterfield, E. Darling, L. Southwark, L.
Cranbrook, E. Daryngton, L. Stanmore, L.
De La Warr, E. Ernle, L. Strachie, L.
Grey, E. Gage, L. (V. Gage.) Sudley, L. (E. Arran.)
Howe, E. Gainford, L. Swaythling, L.
Iddesleigh, E. Glenarthur, L. Templemore, L.
Iveagh, E. Hampton, L. Teynham, L.
Lucan, E. [Teller.] Hanworth, L. Thomson, L.
Onslow, E. Hemphill, L. Wargrave, L.
Plymouth, E. [Teller.] Heneage, L.

On Question, Motion agreed to.

Resolved in the negative and Amendment disagreed to accordingly.

THE LORD CHANCELLOR moved, before the last paragraph, to insert: The expression 'statutory company' means any company constituted by or under an Act of Parliament to construct, work or carry on any gas, water, electricity, tramway, hydraulic power, dock, canal or railway undertaking; and the expression 'public utility company' means any company within the meaning of the Companies (Consolidation) Act, 1908, or a society registered under the Industrial and Provident Societies Acts, 1893 to 1913, carrying on any such undertaking. The noble and learned Viscount said: These words "statutory company" and "public utility company" occur in the Bill and it is desirable to define them in accordance with the definitions found in the Finance Act. I beg to move.

Amendment moved— Page 24, line 14, at end insert the said words.—(The Lord Chancellor.)

THE LORD CHANCELLOR

The next Amendment in my name is consequential on the adoption of the new Clause 20. I beg to move.

Amendment moved— Page 24, line 10, leave out ("regulations made by the Reference Committee") and insert ("County Court Rules").—(The Lord Chancellor.)

THE LORD CHANCELLOR moved to insert as a new subsection:— (2) The designation of landlord and tenant shall continue to apply to the parties until the conclusion of any proceedings taken under or in pursuance of this Act in respect of compensation. The noble and learned Viscount said: This is a designation which follows word for word Section 57 (2) of the Agricultural Holdings Act. It really is machinery. I beg to move.

Amendment moved— Page 24, line 16, at end insert the said new subsection.—(The Lord Chancellor.)

Clause 24, as amended, agreed to.

LORD HARRIS

Now I may ask the question that I have been requested to put to the noble and learned Viscount as regards the word "landlord"? This definition is taken from the Agricultural Holdings Act, and only in February last its vagueness was criticised by the Lords Justices in the Court of appeal in Richards v. Pryse (1927). It appears to be very desirable to amplify the definition, so as to avoid the questions which are otherwise likely to arise between vendor and purchaser and mortgagor and mortgagee.

THE LORD CHANCELLOR

That is exactly what we have done. If the noble Lord had followed my Amendments he would find that the Committee has consented to delete the definition of "landlord" which was found in the Bill and to put in a new and better definition.

Clause 25:

Short title, commencement and extent.

25.—(1) This Act may be cited as the Landlord and Tenant Act, 1927.

(2) This Act shall come into operation on the thirtieth day of September, nineteen hundred and twenty-seven.

(3) This Act shall extend to England and Wales only.

THE LORD CHANCELLOR moved, in subsection (2), to leave out "thirtieth day of September, nineteen hundred and twenty-seven" and to insert "twenty-sixth day of March, nineteen hundred and twenty-eight." The noble and learned Viscount said: This Amendment is to alter the date. We propose March 26, that is the day after Lady Day.

Amendment moved— Page 24, lines 19 and 20, leave out ("thirtieth day of September, nineteen hundred and twenty-seven") and insert ("twenty-sixth day of March, nineteen hundred and twenty-eight").—(The Lord Chancellor.)

Clause 25, as amended, agreed to.

Clause 1:

Tenant's right to compensation for improvements.

1.—(1) Subject to the provisions of this Part of this Act, a tenant of a holding to which this Part of this Act applies shall, if a claim for the purpose is made in the prescribed manner—

  1. (a) in the case of a tenancy terminated by notice within one month after the notice was sent or received by the tenant; and
    2. 646
  2. (b) in any other case not more than thirty-six nor less than twelve months before the termination of the tenancy;
be entitled at the termination of the tenancy, on quitting his holding, to be paid by his landlord compensation in respect of any improvement (including the erection of any building) on his holding made by him or his predecessors in title, not being a trade or other fixture which the tenant is by law entitled to remove, which at the termination of the tenancy adds to the letting value of the holding:

Provided that the sum to be paid as compensation for any improvement shall not exceed—

  1. (a) the capitalised value of the net addition to the letting value of the holding as a whole which may be determined to be the direct result of the improvement; or
  2. (b) the reasonable cost of carrying out the improvement at the termination of the tenancy, subject to a deduction of an amount equal to the cost (if any) of putting the works constituting the improvement into a reasonable state of repair except so far as such cost is covered by the liability of the tenant under any covenant, or agreement as to the repair of the premises.

(2) In determining the capitalised value of such net addition as aforesaid, regard shall be had to the purposes for which it is intended that the premises shall be used after the termination of the tenancy, and if it is shown that it is intended to demolish the buildings or to use the premises for a different purpose, and that after such demolition or change of user the improvement will not add to the letting value of the premises, regard shall be had to the length of time likely to elapse between the termination of the tenancy and the demolition or change of user.

(3) In the absence of agreement between the parties all questions as to the right of compensation under this section, or as to the amount thereof, shall be determined by the tribunal hereinafter mentioned, and if the tribunal determines that, on account of the intention to demolish the buildings or to change the user of the premises, no compensation or a reduced amount of compensation shall be paid, the tribunal may authorise a further application for compensation to be made by the tenant if effect is not given to the intention within such time as may be fixed by the tribunal.

THE EARL OF HALSBURY had given Notice to move in subsection (1), after "Subject to the provisions of this Part of this Act," to insert "and as respects leases made before the commencement of this Act containing a covenant or agreement against the making of improvements without licence or consent subject to the provisions of this Act relating to such leases." The noble Earl said: I would rather not move this Amendment, because the Amendments to Clause 20 have made, I think, a very material difference. But although I do not propose to move it now, I should like to reserve my right to move it on Report.

THE EARL OF MIDLETON had given Notice to move to leave out from the beginning of paragraph (a) down to and including "case" in paragraph (b). The noble Earl said: In view of what has taken place just now I do not propose to move this Amendment, but I should like to ask the Lord Chancellor if he would kindly tell me definitely whether the Government have formed any estimate whatever of the number of tenancies which, by the inclusion of all these small tenancies of less than one year, would be brought under the Bill. This is one of the points we strongly desired to have brought out before a Select Committee. We have no power ourselves to make any investigation, and we would ask the Government, as they are responsible for including this very large number of persons, what the number is likely to be, especially in view of all that has been said about congestion in the Courts.

THE LORD CHANCELLOR

The point really does not arise on this Amendment, which deals with a wholly different matter, but however that may be I cannot give the noble Earl any figures.

THE EARL OF MIDLETON

I think the position is most unsatisfactory. The matter has been discussed and the Government refuses to ascertain the number. I do not propose to move my Amendment.

THE LORD CHANCELLOR moved, in subsection (1) (a), to leave out "sent or received" and to insert "served on or". The noble and learned Viscount said: This is a drafting Amendment.

Amendment moved— Page 1, lines 15 and 16, leave out ("sent or received") and insert ("served on or").—(The Lord Chancellor.)

EARL RUSSELL

You want to leave out the words "sent or," not "received," do you not?

THE LORD CHANCELLOR

No, the Amendment is right as it is on the Paper. The Bill will then read "one month after the notice was served on or by the tenant."

LORD PHILLIMORE had given Notice to move, in proviso (a) in subsection (1), after "value," to insert "if any." The noble and learned Lord said: Presuming that the Lord Chancellor intends to move the Amendment which he has on the Paper, I have no wish to move my Amendment, or the consequential one which follows it.

THE LORD CHANCELLOR moved, in proviso (a) in subsection (1), to leave out "the capitalised value of". The noble and learned Viscount said: The omission of these words will bring the clause into conformity with Clause 4. The effect will be that the amount of compensation will represent the net addition to the value of the holding. We no longer propose to take a rental addition and capitalise it, but to ascertain the net addition to the value.

Amendment moved— Page 2, line 11, leave out ("the capitalised value of").—(The Lord Chancellor.)

LORD DYNEVOR

I hope the Lord Chancellor will not press this Amendment. The words of the Bill are preferable to the Amendment. The Bill says "the capitalised value of the net addition to the letting value." The Amendment says "the net addition to the value of the holding," which is quite another thing. The whole of the difficulty has arisen because a definition of the word "goodwill" is not in the Bill. The Bill says compensation is to be given for the loss of goodwill, but the Bill does not say what goodwill is. I certainly sympathise with the Government, and I have no doubt that the Home Secretary rode hard till he came to the fence of goodwill. That fence he found was too big to get over, and so he and his colleagues went round and said: "Let us call it 'the capitalised value.'" The two things are as much apart as a silk purse and a sow's ear. They have nothing whatever to do with each other. We have some faint idea of where we are under the Bill as it stands, but the Lord Chancellor's Amendment makes the compensation payable more formidable than ever. I do hope he will not press the Amendment but will let us have the Bill as it stands.

LORD CARSON

I really do not know what the meaning of the Lord Chancellor's Amendment is. I do not know why he proposes to strike out the words "the capitalised value," because it seems to me he leaves the matter entirely at large. The valuers or the tribunal, whatever it may be, will be left entirely at large without any way of arriving at the sum. If you first find out what the improvement adds to the letting value of the holding you can capitalise that. I think that was wide enough, but as far as I can see you are now putting in nothing at all except to say "the net addition to the value of the holding as a whole which may be determined to be the direct result of the improvement." I understand that by a subsequent Amendment the Lord Chancellor proposes to strike out the word "letting." How is that net addition to the value to be determined? When you find the letting value, if you are not allowed to capitalise it, how are you to get at it?

I do not quite understand what the Lord Chancellor said about Clause 4. He said this Amendment would bring about some uniformity, but, in the moment I have had to look at it, all I can see is that Clause 4 says that the sum to be awarded as compensation for such goodwill shall not exceed such addition to the value of the holding at the termination of the tenancy as may be determined to be the result of the carrying on of the trade, or business. … That can have no application to the cost of improvements. How can you get at it by looking at the period during which he has carried on his trade? I can see no direction at all. It is left entirely at large and at the sweet will of the arbitrator, or to the report of the expert, to say whatever he wishes to say is the value, leaving out, as I understand, the letting value of the holding. If you leave out the letting value and also the capitalised value, how you get at it I am sure I do not know, but I am sure that the Lord Chancellor does.

THE LORD CHANCELLOR

My noble friends are really rather difficult to satisfy. Clause 4, as Lord Carson says, prescribes that the landlord shall pay any addition to the value of the holding—a very simple phrase—in the case of goodwill. We propose to simplify this clause and to refer to the net addition to the value of the holding which is "the direct result of the improvement"—again a very simple phrase. The valuer would very often, I suppose, take the letting value and allow so many years' purchase, but we do not bind him down to that. He is to find out the real addition to the value of the holding, and I really think it is difficult to find simpler words or words more applicable.

LORD PHILLIMORE

I confess that I rather looked at this clause from the point of view of the landlord, and from that point of view I proposed to put in the words "if any" because I was not going to admit that there would be any value at all. Now that the Lord Chancellor proposes to take out "the capitalised value" and leave merely the words "the net addition to the value" I think one is sufficiently protected, and that is why I did not move my Amendment.

THE LORD CHANCELLOR

My next Amendment is consequential.

Amendment moved— Page 2, line 12, leave out ("letting").—(The Lord Chancellor.)

VISCOUNT BERTIE OF THAME moved to add to subsection (1): or (c) the amount paid by the tenant to his predecessor in title in respect of any such improvement. The noble Viscount said: I think it is quite possible that, owing to the cost of production going up, an improvement may increase in value, and it does not seem to me fair that a tenant should reap a benefit with which he has had nothing to do. I therefore beg to move.

Amendment moved— Page 2, line 23, at end insert ("or (c) the amount paid by the tenant to his predecessor in title in respect of any such improvement").—(Viscount Bertie of Thame.)

THE LORD CHANCELLOR

I am afraid that this Amendment would not be workable. The case put, I suppose, is that a tenant improves a holding and then sells it for a price or a premium of some kind to a purchaser. How can you find out how much of the purchase money paid by the purchaser is paid for the improvement? It is impossible to say. It is far better to take the value to the landlord at the end of the term, limited as it is by the other paragraphs of this clause, and not to put upon the tenant an impossible inquiry as to how much he paid because of the improvement. I hope that the noble Viscount will not insist upon this Amendment.

Amendment, by leave, withdrawn.

LORD JESSEL moved to add to subsection (1): (c) The amount of the loss at the termination of the tenancy sustained by the tenant by reason of the cost of the improvement. The noble Lord said: On behalf of my noble friend Lord Erskine, in whose name this Amendment stands as well as in my own, I beg to move. So far as I can see, this is a reasonable Amendment, because the compensation should be paid only for loss or damage and, if the landlord sees that the tenant got back all his outlay with interest and possibly with profit, there is no reason why the landlord should have to pay. For instance, an improvement may be made by dividing a large shop into two and a tenant, by letting out one of the shops, may get substantial profit on the outlay. All this could be ascertained at the end of the term, and I venture to think that, since the property belongs to the landlord and not to the tenant, this Amendment would do substantial justice.

Amendment moved— Page 2, line 23, at end insert the said new paragraph.—(Lord Jessel.)

THE LORD CHANCELLOR

Of course it is possible to put these things in all kinds of different ways, but the principle of the Bill is that the landlord pays for what he gets out of the tenant, what the tenant leaves behind him and what it is really worth to his landlord. In fact, he is to pay for the gain which he makes and not for the loss which the tenant makes. If once you depart from that, you get into all kinds of complications. I should add that for the last forty-four years we have had an exactly similar principle laid down and carried out in the Agricultural Holdings Acts. There, too, the landlord pays compensation for the unexhausted value of the tenant's improvements, and this even although it may be argued that the tenant, by enjoying the improvements for a time, has partly recouped himself for the expenditure. I think that it would be unfortunate if this new principle were incorporated in the Bill.

LORD JESSEL

I will not press the Amendment.

Amendment, by leave, withdrawn.

THE LORD CHANCELLOR

My next Amendment is consequential.

Amendment moved— Page 2, line 24, leave out, ("capitalised value of") and insert ("value attributable to").—(The Lord Chancellor.)

LORD HARRIS moved, in subsection (2), after "demolish," to insert "or reconstruct." The noble Lord said: This seems to me to be a possible change of a character which ought to be provided for. I beg to move.

Amendment moved— Page 2, line 28, after ("demolish") insert ("or reconstruct").—(Lord Harris.)

THE LORD CHANCELLOR

I agree; but the noble Lord will see that this is entirely met by my next Amendment, which covers this and other points.

LORD HARRIS

If the noble and learned Viscount says that his Amendment will meet the point, I accept his assurance.

Amendment, by leave, withdrawn.

THE LORD CHANCELLOR moved, in subsection (2), to leave out "the buildings" and to insert "or to make structural alterations in the premises or any part thereof." The noble and learned Viscount said: We were afraid that the Bill as drawn would apply only if the premises were completely demolished, but would not apply in the case of partial demolition or reconstruction. We put down these words with a view to covering that point.

Amendment moved— Page 2, line 28, leave out ("the buildings") and insert ("or to make structural alterations in the premises or any part thereof").—(The Lord Chancellor.)

THE LORD CHANCELLOR moved, in subsection (2), to omit "and that after such demolition or change of user the improvement will not add to the letting value of the premises." The noble and learned Viscount said: This is really consequential on my last Amendment. The provisions of the clause would apply only where the demolition or reconstruction will absolutely destroy the value of the improvement, but need not mean the total destruction of the premises. The effect of this Amendment is that the tribunal will be able to have regard to the effect of the demolition or change of user, whether immediate or prospective, and to the question whether the effect of the demolition or change of user will be to destroy or only to diminish the value of the improvement.

Amendment moved— Page 2, line 29, leave out from ("purpose") to ("regard") in line 31.—(The Lord Chancellor.)

THE LORD CHANCELLOR

My next Amendment is consequential.

Amendment moved— Page 2, line 32, after ("had") insert ("to the effect of such demolition, alteration or change of user on the additional value attributable to the improvement and").—(The lord Chancellor.)

LORD CARSON

With regard to this Amendment, I should like to ask a question. I do not understand why the words "change of user" are there. Is it meant to be the same, or is it to use the premises for a different purpose? It has been pointed out to me that it may mean an entirely different thing.

THE LORD CHANCELLOR

It is intended to refer to use for a different purpose, but I will look into the words again.

Amendment moved— Page 2, line 33, after ("demolition") insert ("alteration").—(The Lord Chancellor.)

VISCOUNT BERTIE OF THAME moved, in subsection (2), to insert the following new subjection: () Where the letting value of the holding is increased by reason of the use thereof or of any premises thereon in a manner which could be restrained by any court, or is contrary to the law, or is detrimental to the health of the inmates of the premises or to the public health, the amount of that increased letting value shall not be taken into account. The noble Viscount said: I have made bold to adopt Clause 2, subsection (4), of the Acquisition of Land (Assessment of Compensation) Act, 1919, which seems to be a suitable clause to go into this Bill.

Amendment moved— Page 2, line 34, at end insert the said new subsection.—(Viscount Bertie of Thame.)

THE LORD CHANCELLOR

I think the noble Viscount is under a misapprehension. Clause 1 does not give a right to compensation in respect of use, but only in respect of structural improvements which increase the value of the premises themselves. Structural alterations to enable premises to be used for immoral or illegal purposes will surely not increase the value of the premises for any purpose to which the landlord designed to put them, and I cannot imagine that compensation could be claimed by the tenant for such a purpose as that.

VISCOUNT BERTIE OF THAME

I do not see that the noble and learned Viscount has explained why this subsection is in the other Act and cannot be put in this.

THE LORD CHANCELLOR

The two Acts deal with different matters.

Amendment, by leave, withdrawn.

Amendment moved— Page 2, line 40, leave out ("the buildings") and insert ("or alter").—(The Lord Chancellor.)

LORD JESSEL moved to insert the following new subsections: (4) Nothing in this Part of this Act shall authorise the tenant to make any improvement which is calculated or likely to diminish the value of any adjoining or adjacent, property; (5) Nothing in this Part of this Act shall authorise the tenant to make any building or erection upon any part of the holding heretofore unbuilt upon and upon which the tenant is by his contract of tenancy restrained from building: The noble Lord said: I think the subsections which I have put down explain themselves.

Amendment moved— Page 3, line 2, at end, insert the said new subsections.—(Lord Jessel.)

LORD PHILLIMORE

Does the noble Lord mean adjacent property belonging to the same landlord, or belonging to a stranger? If it is the same landlord, I understand the importance of the Amendment, but if it is belonging to a stranger, it does not seem to me to have anything to do with the Bill.

THE EARL OF HALSBURY

I do not know whether I am in order in calling attention to the fact that I am raising the same point on Clause 3 of the Bill procedure for anybody who is aggrieved. The Amendment at present before the House does not seem to provide any procedure by which any person can appear before a tribunal, or take up the matter.

THE LORD CHANCELLOR

This Amendment is moved in the wrong place. Clause 1 only entitles a tenant to claim compensation for improvements already executed, and does not authorise a tenant to make improvements. It is really on Clause 3 that this arises.

Amendment, by leave, withdrawn.

Clause 1, as amended, agreed to.

Clause 2:

Limitation on tenant's right to compensation in certain cases.

2.—(1) A tenant shall not be entitled to compensation under this Part of this Act—

  1. (a) in respect of any improvement made before the commencement of this Act; or
  2. (b) in respect of any improvement made in pursuance of a statutory obligation or of any improvement which the tenant or his predecessors in title were under an obligation to make in pursuance of a contract entered into, whether before or after the passing of this Act, for valuable consideration, including a building lease; or
  3. (c) in respect of any improvement made less than three years before the termination of the tenancy; or
  4. (d) if within one month after the making of the claim under section one, subsection (1), of this Act the landlord serves on the tenant notice that he is willing to grant to the tenant a renewal of the tenancy at such rent and for such term as, failing agreement, the tribunal may consider reasonable, and if the tenant does not within one month from the service of the notice send to the landlord an acceptance in writing of the offer the tenant shall be deemed to have declined the offer.

(2) Where an offer of the renewal of a tenancy by the landlord under this section is accepted by the tenant, the rent fixed by the tribunal shall be the rent which in the opinion of the tribunal a willing lessee other than the tenant would agree to give and a willing lessor would agree to accept for the premises, having regard to the terms of the lease, but irrespective of the value of the improvement in respect of which compensation would have been payable.

(3) The tribunal in determining the compensation for an improvement shall in reduction of the tenant's claim take into consideration any benefits which the tenant or his predecessors in title may have received from the landlord in consideration expressly or impliedly of the improvement.

THE EARL OF HALSBURY moved, in subsection (1) (a), after "made," to insert "or begun." The noble Earl said: My Lords, I am moving this Amendment for my noble friend Viscount FitzAlan. We do not mind whether it is accepted or not, but the point is this, that it has been brought to our attention that there have already been divergent legal opinions as to whether or not a work which has been begun, but not finished, comes under the Bill. The object of the Amendment is to make it quite clear whether it does or does not.

Amendment moved— Page 3, line 5, after ("made") insert ("or begun").—(The Earl of Halsbury.)

THE LORD CHANCELLOR

If the noble Earl does not mind I would rather keep the Bill as it is. He will notice that compensation is not payable under the Bill in respect of any improvements unless notice has been served under Clause 3, and either the landlord has not objected or the tribunal has sanctioned the improvement. There is no reason why in the case of an improvement begun, but not completed, before the commencement of the Act, the procedure of notice should not be adopted, and if this condition is fulfilled compensation would, of course, be payable.

Amendment, by leave, withdrawn.

LORD JESSEL moved, after paragraph (a) of subsection (1), to insert the following new paragraphs: (b) in respect of any improvement which is intended or calculated to facilitate the carrying on of a trade or business other than a trade or business of the kind for which the premises were expressly let by the terms of the contract or tenancy; or (c) in respect of any improvement which would alter the architectural character of the exterior of the premises; or (d) in respect of the reconstruction of any building or part of a building which the tenant by his contract of tenancy is bound to keep in repair, and which reconstruction is rendered necessary in order to comply with that obligation; or. The noble Lord said: I beg to move.

Amendment moved— Page 3, line 6, at end, insert the said paragraphs (b), (c) and (d).—(Lord Jessel.)

THE LORD CHANCELLOR

The noble Lord has not explained this Amendment, but he proposes that no compensation should be payable in respect of improvements in these three categories. The first category is:— any improvement which, is intended or calculated to facilitate the carrying on of a trade or business other than a trade or business of the kind for which the premises were expressly let by the terms of the contract or tenancy. Has the noble Lord forgotten that the tenant, if he means to claim compensation, must get the landlord's consent to the improvement or the consent of the tribunal? If he is going to make an improvement for a purpose not sanctioned by the lease of course the landlord will object, and the tribunal will not sanction the improvement; or, if the tribunal does, and the improvement is a proper improvement for the purpose, then compensation follows because the value of the property has been improved. That applies both to (b) and (c). In each case the tribunal must consent, or there will be no compensation. As to (d), that, I think, is already covered by the Bill, which refers to improvements which a tenant is bound by his contract to make.

LORD CARSON

I cannot help thinking that this Amendment is of very much more importance than it appears to be at first sight. Paragraph (b) of the Amendment means that where a tenant has contracted and received a lease for the purpose of carrying on a particular kind of trade, which will be the kind of trade which would bring in the most rent to the landlord, the tenant is not to have compensation if he turns the premises into an entirely different kind of place, for the purpose of carrying on another trade for which the landlord has not let him the premises. It seems to me to be taking away a great deal from the landlord if the tenant can not only disregard the contract to occupy the premises for the trade for which they were let, but can proceed to reconstruct the whole premises in order to make them effective for carrying on another trade which the landlord does not want. The only answer that the Lord Chancellor gives to that invasion of the landlord's right, which indeed takes away from the landlord the entire control of the objects for which he has let his property—and not only takes that away, but enables the tenant then to claim compensation for having turned the premises into entirely different premises, for a different business—the only answer given by the Lord Chancellor is that this can be referred to the tribunal.

One of the great objections to the whole of this class of legislation is that it lays down no guidance or direction whatsoever for the tribunal which it sets up. Just fancy going before the tribunal and asking the tribunal to settle the question of what ought to be paid to the tenant under our law for turning the premises into a different kind of business premises from those which under his contract he was bound to carry on there. Of course Parliament can do anything it likes, but a proposal that the landlord is to pay for the breach of contract is a kind of legislation to which one has not grown accustomed. Under this Government we shall get accustomed to something even more extraordinary in the future. Then the matter comes before the Court. I do not know, I am sure, what the Court will say is the reason why it should give compensation—on what basis or principle, on what equity or common law right. The Bill says nothing about it. I should have thought the Amendment a most reasonable proposal.

THE LORD CHANCELLOR

If the noble Lord who moved this Amendment feels very strongly about it I can promise that I will carefully consider paragraph (b). I cannot hold out any hopes about paragraphs (c) and (d).

Amendment, by leave, withdrawn.

THE LORD CHANCELLOR moved, in subsection (1) (d), to leave out "one month" and to insert "two months." The noble and learned Viscount said: I propose to give the landlord two months after the making of the claim to compensation, instead of one month, in which to serve notice on his tenant that he is willing to grant a renewal of the tenancy.

Amendment moved— Page 3, line 18, leave out ("one month") and insert ("two months").—(The Lord Chancellor.)

THE LORD CHANCELLOR moved, in subsection (1) (d), after "willing", to insert "and able," and after "tenant," where that word secondly occurs, to insert "or obtain the grant to him of." The noble and learned Viscount said: Both these Amendments are really to make the language of this paragraph correspond with that of paragraph (b) of the proviso to Clause 4 (1).

Amendments moved—

Page 3, line 21, after ("willing") insert ("and able").

Page 3, line 21, after ("tenant") insert ("or obtain the grant to him of").—(The Lord Chancellor.)

LORD DYNEVOR moved, in subsection (1) (d), after "offer," to insert "to refer the consideration of the rent and term to the tribunal." The noble Lord said: This Amendment is an explanatory one. I want to make it quite clear that the offer is to refer the consideration of the rent and term to the tribunal: that is to say, the offer is not at a specified rent, but an offer to have it adjudicated upon. I hope the Lord Chancellor will explain whether I am right or wrong in my reading of the Bill.

Amendment moved— Page 3, line 27, after ("offer") insert the said words.—(Lord Dynevor.)

THE LORD CHANCELLOR

If I rightly understand the Amendment, the purpose of it is to require the landlord to make a definite offer and refer that offer only to the tribunal, so that, if the tribunal does not approve it, the landlord may withdraw his offer and pay compensation. I think there are objections to that. When the landlord receives the tenant's claim for compensation he may admit it or contest it, or he may offer a renewal of the tenancy, to be settled on such terms as, failing agreement, the tribunal consider reasonable. In other words, he may say: "I put myself in the hands of the tribunal to fix the terms of my new lease," but he should not be entitled simply to offer the lease at so much a year and on no other terms at all. He must, if he offers a lease, undergo the consideration of the tribunal. If the landlord is to have this right of making and withdrawing an offer, why should not the tenant have a similar right and, if he is dissatisfied with the compensation awarded by the tribunal, say: "After all, I will go back to the landlord's offer to renew and will take a lease"? It is far better to leave the offer open for terms which the tribunal will approve.

LORD DYNEVOR

On a point of order, has not the Lord Chancellor answered my third Amendment?

THE LORD CHANCELLOR

Yes, I read the two together.

LORD DYNEVOR

The Amendment to page 3, line 27, is the one I moved. I have not come to line 28 yet, which is quite a separate one. All these Amendments are separate although they appear together on the Paper.

THE LORD CHANCELLOR

I know they are separate, but I thought they were connected together and that one would fall with the other.

LORD DYNEVOR

They are not connected together.

THE LORD CHANCELLOR

The subsection would read in this way— … if the tenant does not within one month from the service of the notice"—

LORD DYNEVOR

My Amendment is to line 27 on page 3.

THE LORD CHANCELLOR

Yes— send to the landlord an acceptance in writing of the offer to refer the consideration of the rent and term to the tribunal the tenant shall be deemed to have declined the offer. I do not at present see any objection to that taken by itself; but I would like to consider it if the noble Lord does not mind putting it down for the Report stage. I am rather disposed to agree to it.

LORD DYNEVOR

I will put it down on Report.

Amendment, by leave, withdrawn.

LORD DYNEVOR moved, at the end of subsection (1), to insert: Provided that where the consideration upon which he is prepared to renew the tenancy has been definitely stated by the landlord, the tribunal shall not without the consent of the landlord vary either the term or rent submitted by him, but shall proceed to fix the amount of compensation payable to the tenant in accordance with the provisions of this Act. The noble Lord said: I have not yet put my point to your Lordships. The offer of a lease is voluntary by the landlord and trustees would be advised about the rent. They might not like to take a lower one and would prefer to pay the compensation. The tenant cannot make the landlord go to the tribunal for a lease, and I think it would be a hardship on the tenant where the landlord refuses to make an offer for a new lease and the tenant is debarred from the possibility of getting one. Under my Amendment the landlord must grant the lease at his figure if the tribunal says it is fair. I beg to move.

Amendment moved— Page 3, line 28, at end insert the said new proviso.—(Lord Dynevor.)

THE LORD CHANCELLOR

I have really dealt with the point, and I should not have recognised the Amendment by the noble Lord's description of it. It runs as follows:— Provided that where the consideration upon which he is prepared to renew the tenancy has been definitely stated by the landlord"— that is an offer of a new lease upon certain terms as to rent and otherwise— the tribunal shall not without the consent of the landlord vary either the term or rent submitted by him. That is the point I dealt with. That is not in favour of the tenant; it is in favour of the landlord. It enables him to make an offer once for all at a certain rent. If that is too high then the whole offer falls. Our proposal is that he shall offer a renewal of the lease upon terms to be fixed by the tribunal, which is quite a different thing. I am afraid I cannot accept his Amendment.

LORD PHILLIMORE

I think there is a good deal of force in the suggestion of the noble Lord, Lord Dynevor. As I understand, it comes to this. At present if the landlord goes to the tribunal under this offer he is liable to have any rent or any terms fixed upon him. Lord Dynevor wants him to have an opportunity, if he goes to the tribunal and the tribunal fixes a rent or a length of term as to which he would rather pay than have them, to withdraw his offer to go before the tribunal and to pay instead. That is what I think he means, and it seems to me well worth consideration.

THE LORD CHANCELLOR

I think the form of the Amendment would have to be altered.

LORD DYNEVOR

I will not press it.

Amendment, by leave, withdrawn.

THE LORD CHANCELLOR

The next Amendment is drafting.

Amendment moved— Page 3, line 35, leave out the third ("of") and insert ("attributable to").—(The Lord Chancellor.)

VISCOUNT YOUNGER OF LECKIE moved, in subsection (2), after the first "consideration," to insert "the time during which the tenant may have enjoyed the advantage of the improvement, and the rent at which the holding had been held, and." The noble Viscount said: This Amendment appears to be a reasonable one. At all events there is a precedent for it. The words are taken from the Town Tenants (Ireland) Act, 1906. They were put down in respect of the wrong clause in Standing Committee and were refused by the Government as inconsistent with the Bill. They were not discussed on Clause 2. I beg to move.

Amendment moved— Page 3, line 40, after ("consideration") insert the said words.—(Viscount Younger of Leckie.)

THE LORD CHANCELLOR

I really have dealt with this point. Like a previous Amendment it alters the principle of the Bill. That principle is that the landlord pays for what he gets and not for what the tenant loses by improvement. It is really immaterial for this purpose whether the improvement has proved of benefit to the tenant or not. The only point we deal with is whether at the end of the tenancy the improvement has added to the letting value of the property. If it has so added the landlord must pay for what he receives. If you alter that principle I am afraid you will get into endless contradictions, and I should say that it was far better to adhere to the terms of the Bill. I may add that this Amendment was moved in another place, was discussed at great length both in Committee and on Report, and was rejected. I hope that the noble Viscount will not press it.

VISCOUNT YOUNGER OF LECKIE

I do not wish to press the Amendment.

Amendment, by leave, withdrawn.

VISCOUNT SUMNER moved, in subsection (3), after "landlord," to insert "or his predecessors in title." The noble and learned Viscount said: I propose the insertion of these words which appear to have been omitted by inadvertence. I beg to move.

Amendment moved— Page 3, line 42, after ("landlord") insert ("or his predecessors in title").—(Viscount Sumner.)

VISCOUNT BERTIE OF THAME moved, in subsection (3), after "landlord," to insert "or otherwise." The noble Viscount said: The object of this Amendment is to permit the tribunal to take into consideration benefits received in respect of improvements otherwise than from the landlord; for example, by the tenant having sublet at an increased rent. It was said in another place on this point that a man may let on a forty years' lease. His tenant sublets for twenty-one years having made some improvements. He sublets it at such a rent that at the end of the twenty-one years he has entirely recouped his outlay on the improvements. He may sublet at a profiteering rent. Having received full compensation in that way for the improvements, he should not be able to come to the original landlord in respect of those improvements. The tenant has put himself in the position of a landlord. I beg to move.

Amendment moved— Page 3, line 42, after ("landlord") insert ("or otherwise").—(Viscount Bertie of Thame.)

THE FIRST COMMISSIONER OF WORKS (VISCOUNT PEEL)

I understand the noble Viscount is dealing with cases where the tenant gets some advantage from some other source than the landlord. Where he gets it from the landlord it is dealt with in another subsection, but the question whether he gets an advantage from a third person is surely not relevant. It is much the same point as that which my noble and learned friend has just dealt with. The question is: What is the advantage the landlord gets? That is the proper test.

Amendment, by leave, withdrawn.

Clause 2, as amended, agreed to.

Clause 3:

Landlord's right to object.

3.—(1) Where a tenant of a holding to which this Part of this Act applies proposes to make an improvement on his holding he shall serve on his landlord notice of his intention to make such improvement, together with a specification and plan showing the proposed improvement and that part of the existing building affected thereby, and if the landlord, within three months after the receipt of the notice, serves on the tenant notice of objection, the tenant may, in the prescribed manner, apply to the tribunal, and the tribunal may, after ascertaining that notice of such intention has been served upon any superior landlords interested and alter giving such persons an opportunity of being heard, if satisfied that the improvement is of such a nature as to be calculated to add to the letting value of the holding at the termination of the tenancy, and is reasonable and suitable to the character thereof, and will not diminish the value of any other property belonging to the same landlord, or to any superior landlord from whom the immediate landlord of the tenant directly or indirectly holds, and after making such modifications (if any) in the specification or plan as the tribunal thinks fit, or imposing such other conditions as the tribunal may think reasonable, certify in the prescribed manner that the improvement is a proper improvement:

Provided that if the landlord proves that he has offered to execute the improvement himself in consideration of a reasonable increase of rent, or of such increase of rent as the tribunal may determine, the tribunal shall not give a certificate under this section unless it is subsequently shown to the satisfaction of the tribunal that the landlord has failed to carry out his undertaking.

(2) The tenant shall, at the request of any superior landlord or at the request of the tribunal, supply such copies of the plans and specifications of the proposed improvement as may be required.

(3) Where no such notice of objection as aforesaid to a proposed improvement has been served within the time allowed by this section, or where the tribunal has certified an improvement to be a proper improvement, it shall be lawful for the tenant to execute the improvement according to the plan and specification served on the landlord or according to such plan and specification as modified by the tribunal or by agreement between the tenant and the landlord or landlords affected, anything in the lease of the premises to the contrary notwithstanding: Provided that nothing in this subsection shall authorise a tenant to execute an improvement in contravention of any restriction created or imposed—

  1. (a) for naval, military or air force purposes;
  2. (b) for civil aviation purposes under the powers of the Air Navigation Act, 1920.

(4) A tenant shall not be entitled to claim compensation under this Part of this Act in respect of any improvement unless he has, or his predecessors in title have given notice thereof under this section, and (in case the landlord has given notice of objection thereto) the improvement has been certified by the tribunal to be a proper improvement and the tenant has complied with the conditions, if any, imposed by the tribunal, nor unless the improvement is completed within such time after the service on the landlord of the notice of the proposed improvement as may be agreed between the tenant and the landlord or may be fixed by the tribunal, and where proceedings have been taken before the tribunal, the tribunal may suspend the execution of any order as to costs until the expiration of the time so fixed for the completion of the improvement.

THE LORD CHANCELLOR moved, in subsection (1), to leave out "building" and insert "premises." The noble and learned Viscount said: The Bill requires that a plan of the building affected by the improvement shall be given. Of course it may be that there is no building; that there really is only a site on which a building is to be put. Therefore it is proposed to leave out the word "building" and insert "premises."

Amendment moved— Page 4, line 7, leave out ("building") and insert ("premises").—(The Lord Chancellor)

VISCOUNT SUMNER moved, in subsection (1), before "calculated," to insert "best." The noble and learned Viscount said: The object of my Amendment is this. The proceeding contemplated is that a tenant, having served notice of the intention to make the improvement and the landlord certifying notice of objection, the tenant may then go to the tribunal. What may the tribunal do? It has to be satisfied that the improvement is of such a nature as to be calculated to add to the letting value of the holding. You can easily see circumstances in which this kind of dispute might arise. The tenant says: "I can satisfy the tribunal that the building I want to put up will add to the letting value; you cannot deny that." If the tribunal are satisfied of that and some other things that do not matter for the moment, they then have to certify that the tenant is making a proper improvement. The landlord says: "I am not in a position to dispute that there is some improvement, but what I say is that a good job ought to be made if it is to be tackled at all. Instead of having a botching improvement made we ought to have the best improvement that will add to the letting value. I am the person who has to pay for it in the long run and if there is to be anything of the kind I think it ought to be the best that is calculated to add to the value."

The simplest instance is this. The tenant proposes to erect a one-storey shed. The landlord says: "At the end of the tenancy it would not be a desirable-looking thing and would involve trouble about repairs; let it be made of better material." The tenant would then be entitled to claim the tribunal's decision, saying: "That is not the question for you. If you are satisfied that what I propose will add to the letting value then I have satisfied the conditions of the clause." If the word "best" is put in, then, if the thing is to be done at all, it has to be done in the most reasonable way to obtain the best result. At the end the tenant will have had his enjoyment of it and the landlord will have to pay for it I beg to move.

Amendment moved— Page 4, line 15, after ("be") insert ("best").—(Viscount Sumner.)

VISCOUNT PEEL

I am not afraid of the word "best" that my noble and learned friend wishes to put in, but it might perhaps be extended rather widely. I do not think that any qualifying or additional words are necessary, because if the landlord says that the tenant's specifications could be improved then, by Clause 3, the tribunal is given the power to qualify them. If, on the other hand, it says that they could not very well be improved by modifications and that some other scheme would be far better, then the tribunal can refuse its certificate unless the tenant agrees to that other scheme. In those circumstances it does not seem necessary to add any further words. The landlord seems to be well protected already.

Amendment, by leave, withdrawn.

EARL RUSSELL moved, in subsection (1), after "thereof," to insert "and of the neighbourhood." The noble Earl said: This is, I think, almost the only Amendment moved from this side. I do not know whether that gives me some hope that I may be more successful with the noble Viscount than his own friends have been. The Amendment is of a reasonable character. If your Lordships will look at the words you will see what they mean. The tribunal has to be satisfied that the improvement is of such a nature as to be calculated to add to the letting value and is reasonable and suitable to the character thereof. I suggest adding "and of the neighbourhood." It seems to me that it might be possible that you might have an improvement made to a small and attractive grocer's or baker's shop in a pretty country village, turning it perhaps into one of those horrible petrol pump places and almost entirely spoiling the village. That would not be suitable to the character of the neighbourhood and it would not be really an improvement. It is rather a strong order, is it not, to force a thing of that kind upon a landlord under this Bill and compel him to pay for it? You might have other things of the same kind in a town. For instance, in some old world town you might have somebody proposing to rebuild premises with some very glaring kind of brick or colour or design which would be totally unsuitable to the neighbourhood in which the building was situated.

It has been pointed out that there is not too much guidance to the tribunal and this is only one of the matters that the tribunal will have to take into consideration. I think it is not altogether unreasonable to allow them to look, not merely at the building itself and not merely at what it will turn into, but also at the surrounding circumstances and at the question whether it is such a building as any reasonable and decent landlord would wish to see put up, which is practically what my Amendment comes to. This Amendment was moved in another place and obection was taken to it on what I regard as an entirely fallacious ground—namely, that it would enable third parties to be heard before the tribunal as to the character of the neighbourhood. It is clear that it does not introduce any new parties to the question at issue before the tribunal. New witnesses it might introduce, but that is quite a different thing. The only parties would still be the landlord and tenant. I hope, as it is so reasonable in character, that I may persuade the noble and learned Viscount opposite to accept the Amendment. I beg to move.

Amendment moved— Page 4, line 17, after ("thereof") insert ("and of the neighbourhood").—(Earl Russell.)

THE LORD CHANCELLOR

I am a little apprehensive lest the Amendment in this form should have the effect of admitting the intervention of people other than the landlord and tenant. At all events it would, as the noble Earl said, lead to the calling of additional witnesses. It has another hardship about it that it would force the tenant to prove affirmatively that the improvement was suitable to the neighbourhood. That, I think, is to put too great a burden upon him. I appreciate the moderation of the noble Earl and his friends in not moving too many Amendments on this Bill, but I would refer him to an Amendment in the name of the noble Lord, Lord Charnwood, which appears under Clause 3, page 4, line 25:— Provided that in considering whether the improvement is reasonable and suitable to the character of the holding the tribunal shall have regard to any evidence brought before it by the landlord or any superior landlord (but not any other person) that the improvement is calculated to injure the amenity or convenience of the neighbourhood. That of course shifts the burden and throws it upon the landlord. I think that is fairer. We would be disposed to consider that Amendment, but I would rather have it moved at a different place—namely, at the end of subsection (1) where it would come in properly as a further proviso to the clause. I hope the noble Earl will consider that meets the substance of his argument, although the words proposed are somewhat different.

VISCOUNT HALDANE

Nobody wishes to bring new parties into a question like this. It is quite right that care should be taken to prevent outside people from coming into a dispute between landlord and tenant, and if there is anything that can be done on Report to safeguard that I think the noble and learned Viscount should consider it, because undoubtedly this Amendment raises a valuable principle. Landlords and tenants should not be able, by bargaining amongst themselves, to put up something which is a nuisance to the neighbourhood; some protection against that seems to be required. I hope the Lord Chancellor will consider whether Lord Charnwood's Amendment can be accepted on that point.

EARL RUSSELL

If the noble and learned Viscount will accept Lord Charnwood's Amendment, I think that would go a very long way towards meeting the point I have raised. If I understand him to say that, I will not press it now but reserve the right to raise the matter on Report if I think it has not been satisfactorily dealt with.

LORD JESSEL

Does the noble Earl, Lord Russell, support Lord Charnwood's Amendment as it stands on the Paper, because that Amendment says the tribunal is only to have regard to evidence brought before it by the landlord, but not by any other person?

EARL RUSSELL

That is clearly right. That surely ought to be so. I do not think you can have societies for beautifying the countryside or for prohibiting advertising coming in in these disputes. That I do agree with.

THE LORD CHANCELLOR

I am proposing to accept that, leaving myself free to reconsider the matter if objection should be taken elsewhere.

Amendment, by leave, withdrawn.

THE EARL OF HALSBURY moved to omit from subsection (1) the words "belonging to the same landlord, or to any superior landlord from whom the immediate landlord of the tenant directly or indirectly holds." The noble Earl said: This I do consider a very important Amendment. It affects directly the question of people other than landlord and tenant coming into the dispute. What is to be the effect on the next-door neighbour? Under this Bill as it stands the tribunal can allow a particular improvement. As between a particular landlord and a particular tenant I will assume it is an improvement, but it may be very detrimental to the next-door neighbour. It may obscure his ancient lights. He has no redress whatever, because it is done by the leave of the tribunal. Take another case, which is a very common case. You get it both in the modern town-planning scheme and also in the much older instance where you have a row of houses owned by different landlords, but with restrictive covenant, that there is to be no outside alteration to the structure of the house.

Such an alteration might damage the property in the row very much indeed, and surely if it is going to diminish the value of a man's property, he at least ought to be allowed to be heard and to be allowed to appear before the tribunal and say: "Well, I daresay as between Smith and Jones you are doing justice, but what about me, Robinson?" Is he to be damaged? Is that the general scheme of the Bill? I think not. I think that, as explained by the noble and learned Viscount on the Woolsack, that was not intended to be the idea of the Bill. If in case of a dispute between one tenant and landlord another landlord is hit, clearly he ought to have the opportunity of coming in if he objects and saying what he wants done about the matter. I have put down, in conjunction with my noble friend Viscount FitzAlan, another Amendment which is intended to deal with the same thing. Lord Jessel raised it on Clause 1. I thought the simplest way to do it was by the words I have put in my Amendment, that is to say, when the tribunal considers that it will not diminish the value of any other property. That is limited as the Bill stands to property belonging to the same landlord or any superior landlord from whom the immediate landlord of the tenant directly or indirectly holds. What I propose is to leave out those words so that any man who feels aggrieved may appear to protect his own property, even although Smith and Jones have a little difference of opinion, before the tribunal.

Otherwise you might get quite an absurd position. Under the Law of Property (Amendment) Act, 1926, you can go to the Court of Chancery and ask for relief against restrictive covenants. Supposing the tenant of No. 3 goes to the Court of Chancery and the Court does not think he is reasonable, the tenant of No. 4 can go to the tribunal and get leave to build something which is going to damage No. 5 very badly indeed. I suggest that your Lordships should give this very careful consideration, and I do ask the noble and learned Viscount on the Woolsack to give it his consideration. If he thinks the particular method proposed in my Amendment is a bad method, but that the same effect could be obtained by another Amendment, of course I should not press this. But I do want to urge that some protec- tion should be given to the unfortunate landlord who is not a party to any dispute but may find himself in a very serious position.

Amendment moved— Page 4, line 18, leave out from ("property") to ("and") in line 21.—(The Earl of Halsbury.)

LORD PHILLIMORE

The noble Earl has filled me with horror. He has suggested that there is nothing in this Bill which enables anybody to do anything with regard to a third person. This is a matter purely of relations between landlord and tenant, not of authorising a tenant to do work in the sense of authorising him against the rest of the world. You are authorising him to claim to make an improvement against his own landlord. For heaven's sake do not put in words which would imply that the tribunal to be set up is to decide something concerning other parties.

VISCOUNT PEEL

I think the noble and learned Lord opposite has answered the point. This question is one between landlord and tenant. If you are going to bring in third parties I am afraid you will largely increase the amount of business and even go far, as has been suggested, to break down the county courts. The tribunal, I understand, in considering the improvement and the character of the improvement, would not of course consider the particular house or building as if it were in isolation from the rest of the world. The tribunal would deal with general considerations. The noble Earl suggested that an improvement might take away somebody else's ancient lights. I thought there were other remedies for the infringement of ancient lights. I hope the noble Earl will not press the Amendment and introduce third parties into something that is entirely a domestic matter.

LORD CARSON

This seems to me to be an Amendment of considerable importance. It raises the very important point of what is to be the effect of the orders of the tribunal and how far they will affect, if at all, the rights of others or cause damage to other property which does not belong to the same landlord. It is all very well to say it is quite right to allow improvements because it is only dealing with cases where landlord and tenant have not come to terms, and have gone before the tribunal, and the tribunal has to consider whether the improvement diminishes the value of any other property belonging to the same landlord. Why do you approve that? What has the tenant to do with other property belonging to the same landlord? Of course the reason is, to take a residential district, that a landlord may have had covenants with various tenants that the place should be reserved as a residential district, which might be a reason why people bought houses or settled down there. I suppose if the tenant tried to turn the place into a public-house or something of that kind the tribunal might say that it would diminish the value of other property, assuming they did not conclude that it was likely to approve the value of other property, in that neighbourhood.

You take into account only the value of other property belonging to the same landlord, but you may have a row of houses just adjoining, or on one side of the street, belonging to one landlord, and on the other side another belonging to another landlord, and the making of this alteration may injure the estate which, by special covenants entered into, the tenants had supposed to be preserved for them as an estate of the kind that they wanted and where they wish to live. I think this is a very serious consideration. Lots of people are very proud of their small residential houses in the suburbs and elsewhere. It would be a shock to them to find that a so-called improvement can be set up turning the place into something entirely different, simply because it will not diminish the value of any other property of the same landlord.

I have not considered the question, but the point which my noble friend has raised is an extremely important point. He takes the case of a house adjoining another which does not belong to the same landlord, and of an improvement which will interfere with a neighbouring tenant. Suppose some sort of machinery is put up to carry on some kind of business. This might interfere greatly with some poor author or somebody else who has bought the house next door. It comes before the tribunal and the tribunal makes an order under the Bill allowing this to be done, and they say it does not diminish the value of the landlord's holding but adds to it; otherwise it would not be an improvement. But what is the effect of that order of the tribunal upon the house next door?

LORD PHILLIMORE

None.

LORD CARSON

My noble and learned friend, in a very easy and ready way, says "None," but when he has to sit for four or five hours here to consider the matter I think be will see that there is a great deal to be said about it. If the effect is none, it ought to be put in the Bill. He may say that the effect is none and then find all kinds of litigation arising from a conflict of orders. One Court gives you a certificate that you may put up this improvement and then the man next door can say that, notwithstanding the order of the Court, he is going to get an order from another Court to pull the improvement, down because it interferes with his rights.

LORD PHILLIMORE

Hear, hear.

LORD CARSON

My noble and learned friend is very pleased with that, but it does not seem to me to be a very satisfactory proceeding to have two Courts, one doing one thing and another exactly the opposite. I know what my noble friend means and what, I suppose, the noble Viscount means when he calls this a domestic matter, or words to that effect. That is all very well, but there is nothing on the face of the Bill to show the position, and it ought to be on the face of the Bill that it is not in any way to be allowed to interfere with the rights of people next door. For my part I think it is ludicrous and ridiculous to have two Courts making directly contrary orders, and I hope that further consideration will be given to this point.

EARL RUSSELL

I find it impossible to believe that there can be any confusion of mind on the part of a noble and learned Lord so distinguished as the noble and learned Lord who has just spoken, and I feel that the confusion must be in my own mind. I hope the noble and learned Viscount, the Lord Chancellor, will tell me if I have misunderstood this matter. As I understand it, on the point he raised as to why the tribunal were to have regard to other property belonging to the same landlord, this arises, I suppose, from the fact that the landlord tries to tie the tenants by various covenants, and you are giving this tribunal power to some extent to overlook those covenants and to override them, though they are to have regard to the question whether it is reasonable that those particular covenants should be enforced in that particular case or not.

But when you come to outside parties, how can a judgment between A and B possibly conclude anything as against C? How can the rights of a third person be affected by any judgment between two parties? Surely neither the landlord nor the tenant are going to be able to do a thing which they were not able to do before, nor are they able to prevent anything which they could not have prevented under the ordinary law. I cannot see how a judgment between these two people can possibly affect the rights of a neighbouring owner to prevent a thing being done, or his right to demand that the action be restrained by a Court. That is the impression that I have formed.

THE LORD CHANCELLOR

The noble Earl is absolutely right. This Bill does not affect any rights of a third party. If the third party is going to have his light cut off or any of his covenants infringed, he has his separate remedy. It is a pure inquiry as between landlord and tenant. The decision of the tribunal affects nobody else. In order to make this point clear—and perhaps this may assist my noble and learned friend—I have an Amendment down to subsection (3) of Clause 3 to insert, after "tenant," the words "as against the immediate and any superior landlord." He will find that the subsection then runs:— Where no such notice of objection .… has been served .… it shall be lawful for the tenant as against the immediate and any superior landlord to execute the improvement … That, I think, exactly covers the point.

THE EARL OF HALSBURY

I desire this Amendment, but I feel that if it is not carried by your Lordships I shall get so much benefit from the increased litigation that will follow that my feelings are divided. This Bill, as I understand it, allows a tribunal, which we now understand is going to be the county court, to make an order and give a certificate that a tenant may do something. Why, if that certificate is given by the county court, is it said that it docs not affect anybody else? The noble Earl opposite suggested that a judgment between two people would not affect a third person who was not a party to the proceedings. Has he never heard of a judgment in rem? Here is a judgment with regard to a building, as to whether the building may or may not be made or put in a particular place. What is the third party going to do? Is he to go to the High Court for a prohibition against the tribunal making any such order? Has he got to wait until the building is put up and then start High Court litigation for a mandatory injunction to pull it down again? What is the unfortunate man to do? Surely it would be more practicable, if he is going to be aggrieved by a particular alteration, to allow one Court to try both cases at the same time, and to say either "No, you are unreasonable here, the improvement is not going to hurt you," or else, "Yes, you have made out your case and I do not think you ought to be hurt by this improvement." For this reason I suggest that some Amendment of this kind is necessary, to protect the unfortunate third person, for whom Lord Phillimore does not seem to have any sympathy. Otherwise he may be completely injured by means of this Bill, and by a Court deliberately saying to a tenant: "You can go on with the work."

LORD PHILLIMORE

If the noble and learned Earl will only think for a moment he will see that the landlord and tenant together cannot injure a third person, and all that this matter does is to implement an agreement between the landlord and tenant by a compulsory order against the landlord to do something which he ought to agree with the tenant. It cannot possibly touch a third person, and with regard to what the noble and learned Lord, Lord Carson, said, the superior landlord is put in for the very excellent reason that the Lord Chancellor has insisted upon more than once, and that is, that it is the Magna Charta of the landlord with regard to this Bill that it is not the tenant's loss but the landlord's gain. It is the landlord who is not to get the gain which he ought not to get; it is not the tenant's loss which is protected; and if the superior landlord has one house damaged and one house improved, he is not affected very much either way. That is why adjacent property belonging to the same landlord is taken into consideration.

THE EARL OF HALSBURY

The noble and learned Lord invited me to think. I have done so, and I am quite unable to understand why the breach of a restrictive covenant, allowed by the Court, is the implementing of a contract between two people.

Amendment, by leave, withdrawn.

[The sitting was suspended at fire minutes before eight o'clock and resumed at a quarter after nine o'clock.]

LORD PHILLIMORE moved, in subsection (1), immediately before the proviso, to insert: If the landlord has a superior landlord and does not propose to serve a notice of objection himself, he shall within the three months, transmit the tenant's notice to his superior landlord and inform the tenant that he has so transmitted it, and the superior landlord shall have a further three months within which to determine whether he shall serve a notice of objection.

The noble and learned Lord said: I may be mistaken, but I think I have found here a gap which requires to be filled up. Your Lordships know that a great deal of this town property is not held direct by the occupying tenant from the landlord. There is constantly a middleman with an intermediate lease and the Bill contemplates that and provides for it. It provides that if the landlord gives notice and the matter comes before the tribunal, the tribunal shall see that the superior landlord has an opportunity of coming in and defending his interests. But it does not seem to me that the Bill provides for the case where the main landlord—the intermediate landlord—does not propose to object and does not give an opportunity to his superior landlord to object. Those of your Lordships who are familiar with our legal procedure will know how that is met in cases of ejectment—how the tenant on whom notice of ejectment is served is bound to communicate with his superior landlord so that the latter can come in and defend.

What I propose is that if the intermediate landlord, who is himself the tenant to a superior landlord, receives a notice from a tenant of his intention to make repairs and does not himself see any objection, the superior landlord shall not be ousted from the opportunity of making a suggestion. I propose in those cases that the main landlord shall be bound to pass the notice on to the superior landlord, who shall have a reasonable time for considering—I have put in three months, but that is a pure matter of arrangement—whether he will object though his immediate tenant will not object.

Amendment moved— Page 4, line 25, at the end insert the said words.—(Lord Phillimore.)

THE LORD CHANCELLOR

There is a difficulty about this Amendment which I dare say has occurred to the noble and learned Lord. He proposes to provide for a series of notices, and to allow each superior landlord three months within which to object. Now, if there is, as there often may be in London, a chain of landlords, one above the other, sometimes as many as six, each of them would have three months; thus it may be eighteen months before the tenant can proceed with his improvement. I think we have a better proposal in the Bill. If the noble and learned Lord will look at Clause 7, line 15, he will see that a mesne landlord will not be entitled to make a claim under this section unless he has, within the time and in the manner prescribed, served notice and the documents of the claim on his superior landlord. If he fails to give that notice he cannot recover from his superior landlord. Therefore the superior landlord is absolutely protected unless proper notice is given. In regard to the time prescribed, the proposal is to prescribe a period of quite a short time, say a week, so that every landlord will get notice within a week or two or three weeks, otherwise the right to compensation will go. I think that is sufficient sanction to secure that the notice shall be given, and I think upon the whole that will be proper protection to the chain of higher landlords. The noble and learned Lord need not press his Amendment.

LORD PHILLIMORE

I am not sure about that unless the clause really gives time. The Lord Chancellor means it is proposed to make the time prescribed a very short time?

THE LORD CHANCELLOR

Yes.

LORD PHILLIMORE

It would be better to say so in the Bill. However that may be, it gives the superior landlord a shorter time and it may give one landlord very little time indeed. The landlord may have some other scheme to propose than a mere opposition to the improvement. No doubt that clause gives a great deal of protection, but I cannot help thinking that it would be desirable to put my Amendment in even, as I said, if a very much shorter period of time was given to each landlord within which to object. I am not quite satisfied with Clause 7, though I agree it does cover some of the mischief.

THE LORD CHAIRMAN

Does the noble and learn ad Lord persist in his Amendment?

LORD PHILLIMORE

I will not divide the House.

Amendment, by leave, withdrawn.

THE EARL OF HALSBURY moved, in subsection (1), immediately before the proviso, to insert: "Any person alleging that the effect of such improvement will diminish the value of his property may appear and be heard by the tribunal." The noble Earl said: I have talked about this before. Not only have I talked upon it but I have thought upon it, and I have had occasion to comment upon it. I should like to know why any person alleging that the effect of such improvement will diminish the value of his property should not be allowed to appear at the tribunal. Is this going to be another plea, because you choose to pass this sort of legislation, that you will not pay for it? I gather this is the same point as I have taken before; but it is not quite the same point. I was told before to think; I was told that I was entirely wrong and that this Bill had nothing whatever to do with anything except matters between landlord and tenant. Would the Lord Chancellor give expression to that, and if he did would it bind a single County Court Judge? If, in fact, a person is aggrieved by this Bill, why should he not be heard? I propose to press this Amendment to a Division and I beg to move.

Amendment moved— Page 4, line 25, at end insert the said new words.—(The Earl of Halsbury.)

VISCOUNT PEEL

The noble Earl has told us that he has spent a great deal of perception upon this Amendment—

THE EARL OF HALSBURY

I was asked to.

VISCOUNT PEEL

I was rather speaking in laudatory terms of his efforts. I think he has arrived at precisely the same conclusion as he did before dinner, and I do not know that I can offer any further observations on the subject. The general law, of course, as regards improvements remains exactly as it was, and everybody has precisely the same remedies as they had before. All that is done here is that an arrangement is made as between the tenant and the landlord to enable certain compensation to be paid if the tribunal thinks it is a proper amount. It is, as I said, a domestic matter. The other point that was raised was, why should you consider the effect that it might have on the landlord's other property and not on somebody else's property? The answer to that is fairly obvious. It is rather hard that the tenant should be claiming some advantage or compensation against the landlord when by this particular measure he may be diminishing the value of some other part of the landlord's property. In that case you balance one advantage against another and it remains purely a domestic matter. I hope the noble Earl will not seek again to bring in third parties, nor to argue their position before the tribunal.

THE EARL OF MIDLETON

The noble Viscount says it is a domestic matter, but is it a domestic matter?

LORD PHILLIMORE

I think the answer may be put in few words—an injury to a neighbour which the landlord and tenant cannot effect by agreement they cannot effect by disagreement.

THE EARL OF HALSBURY

May I answer the noble Lord? All your Lordships know that one of the commonest things that you can have is a restrictive covenant applying to a row of houses and prohibiting anyone from building outside the line of the houses. But according to this Bill the tribunal is entitled to tell the tenant that he can do that. The Lord Chancellor says that he is not entitled. Why does not he say so in the Bill? You can have a declaration by the tribunal, which is now the High Court, saying in certain cases that you can have the building put out against this restrictive covenant. You can get a Judge on the King's Bench side telling the tenant: "You can build out," and on the same day you can get a Judge on the Chancery side issuing an order to prevent the tenant doing it. Is that good legislation? Can anybody tell me that this Bill does not allow these things to take place? You get a Judge on the King's Bench side giving a declaration that the tenant is entitled to do it and certifying that he may do it, and at the same time you get an injunction granted by a Chancery Judge saying that he may not do it. Is that the legislation that the Lord Chancellor or any of the legal authorities in the Conservative Government can be proud of? I should have thought they might have given a little more attention to it before they brought this Bill before the House. They might have given a little more attention to this House and allowed us to have a little more time to deal with it instead of, if I may say so—and I am sure it will not be taken as any personal suggestion—acting so that this particular House is no longer the revising chamber. The revising chamber has been changed from your Lordships' House to the office of the Lord Chancellor.

THE EARL OF MIDLETON

I would like to ask the question: what is the protection for the third party in the Bill?

THE LORD CHANCELLOR

The Common Law of this country.

THE EARL OF MIDLETON

What is Common Law? I do not profess to be a lawyer and we have a right to know. Has a third party a right to a notice? I have seen these things done under the Common Law and the third party does not always get a notice. Does he get it under this Bill?

THE LORD CHANCELLOR

Of course not. The third party is not affected at all by the Bill. I have said so many times. If the noble Earl does not follow what I say I cannot help it.

THE EARL OF HALSBURY

Cannot we possibly have some Amendment? I am not suggesting that the Amendment I have put down is perfect, but cannot we have some Amendment which says definitely that the third party is not affected? It is no good having an expression even from the Lord Chancellor speaking in this House. It has got to be laid down by something in the Bill which the people who have to interpret the Bill will understand. Cannot we have something in the Bill which says in terms that the third party is not affected?

THE LORD CHANCELLOR

I have already said so, and I have called attention to an Amendment of my own. If the noble Earl will not listen of course he cannot understand.

THE EARL OF HALSBURY

I have not only listened, but I have thought, and I have considered the Amendment to which the noble and learned Viscount referred. I do not think this helps in the very least.

LORD LAMINGTON

Would the Lord Chancellor say whether a third party is in a worse position under this Bill?

THE LORD CHANCELLOR

Not in the least.

THE EARL OF MIDLETON

It is most unsatisfactory. We asked for an explanation and we are only met with a discourteous negative. We have a right in this House to a proper explanation. I do protest against the tone of the Lord Chancellor with regard to it and I ask again why should we not have it put in the Bill that in this question, in which third parties are deeply interested, the third party has a right before the tribunal.

THE LORD CHANCELLOR

I do not think the noble Earl will accuse me of want of courtesy to him. I think I am entitled to point out that we have argued this—possibly the noble Earl was not in the House—for a long time. I have said, I am afraid so often as to weary the House, that no third party can be affected by the decision of this tribunal. It is a matter between landlord and tenant, to decide whether a tenant shall have compensation for improvements. It does not affect in any way the rights of any third party, and really, I submit to the noble Earl with all deference that there is no reason why notice should be given to him.

THE EARL OF MIDLETON

I do not like to trouble the House again, but I must answer the Lord Chancellor. It is not a domestic matter between the landlord and the tenant if a tenant wishes to build out to the detriment of a third party. The third party has a right to be considered. It is not right to say it is a domestic matter. It is a question in which the third party has a right to be heard, and as far as we can gather he will not have that right.

LORD PHILLIMORE

I hold no brief for the Government. I simply speak as a lawyer and, I may say, as a landlord well versed in the law of real property. A decision as between two people interested in one house as to their respective rights in that house does not in any way touch the rights or wrongs or remedies of the person in the next house. A decision that I have got a lease for three months of a house when my landlord says it is only two months gives me no rights against my neighbour. A decision that as between the landlord and myself I have a right to build or not to build does not give me any right as against my neighbour. My neighbour is left exactly where he was, with the right to restrain me from doing anything, though the Judge has said that as against my landlord I have a right to claim that it is an improvement. I can assure the noble Earl—as I say I hold no brief for the Government—that there is not the slightest reason for supposing that third parties are in any wav affected by the Bill.

LORD CARSON

I do not want to enter into legal controversy. We all have our own opinion, and eventually it will fructify to the benefit of my profession, which is at all events something to look forward to by those who are still carrying on. But I would like to say, in order that you may know it, a word on behalf of the tenant, having regard to the eminent opinion that has just been given. The tenant must now understand, when he proposes to make an improvement and goes to the tribunal which authorises him to make that improvement and, on the faith of an order, executes the improvement, he may have a lawsuit against him the next day for carrying out that order of the Court.

THE EARL OF HALSBURY

I cannot quite understand why the noble and learned Lord, Lord Phillimore, is so averse from putting in terms in the Bill the duty towards his neighbour which he has so ably suggested.

LORD PHILLIMORE

I will tell the noble Earl. If he really is so meticulous, let him put a clause at the end of the measure to the effect that "nothing in this Act shall prejudice third parties." If he liked to do that, it would be perfectly meticulous, but there would be no great harm.

THE EARL OF HALSBURY

If the noble and learned Viscount, the Lord Chancellor, will accept that, I will be perfectly prepared to withdraw this Amendment. My method is not one that I particularly care about. My only point was that I wanted to protect the third party. If the Lord Chancellor would accept the suggestion made by Lord Phillimore—

LORD PHILLIMORE

I do not suggest it.

On Question, Amendment negatived.

LORD JESSEL moved, in subsection (I), immediately before the proviso, to insert:— And any work so certified shall be carried out by the tenant under the supervision and to the reasonable satisfaction of the landlord's surveyor whose fees shall be paid by the tenant. The tribunal shall be entitled as a term of such certificate, to impose upon the tenant the obligation of reinstatement if required by the landlord at the end of the lease and to order payment of such deposit as security for reinstatement as the tribunal may consider reasonable and necessary.

The noble Lord said: The reasons for this Amendment are as follows. It is almost an invariable rule when granting a licence for structural alteration to ask that the work be done under the supervision and to the satisfaction of the landlord's surveyors. Generally the landlord asks the tenant to reinstate, if required, at the end of the term, and in many cases it is usual to demand a deposit as security for this reinstatement. Landlords have sometimes found that at the end of the term the tenant has not reinstated the premises. So long as the tenant is a man of substance this does not matter, but sometimes it turns out that the tenant is a man of straw, or he may have gone away and cannot be found. Accordingly, I think it necessary that some protection of this kind should be put in for the benefit of the landlord. I am glad to say that there are a good many more landlords in this country than there used to be, and this fact makes a great deal for the security of the State and social wellbeing. Many landlords are not very wealthy men, and it is in their interest that I venture to put forward this Amendment.

Amendment moved— Page 4, line 25, at end insert the said words.—(Lord Jessel.)

VISCOUNT PEEL

There are several classes of cases, I think, to which the Amendment moved by my noble friend applies. There are those improvements which are agreed upon between the landlord and tenant, and in those cases it is provided that they must follow the specification. In those cases the tenant has every incentive to follow the specification because, if he does not, he will not be complying with the terms of the arrangement. In a second class of case there is the same security, because the tenant has every inducement to abide by the specification, but it would be open to the tribunal in any such case to lay down that the work should be carried out under the landlord's direction. The other portion of the Amendment deals with the question of deposits. It would, of course, hamper the arrangements, because the deposits would tie up the capital of the tenant during the lease, and the landlord at the end of the lease would be able to offer a nominal sum as compensation for the improvement and secure acceptance by threatening to require reinstatement at the tenant's expense. As regards improvements which do not add to the letting value, Clause 18, subsection (2), says that the landlord is not precluded from requiring as a condition of such licence or consent, where such a requirement would be reasonable, an undertaking on the part of the tenant to reinstate the premises in the condition in which they were before the improvement was executed, All those classes of cases seem therefore to be covered, and I cannot think of any other class which would require the Amendment as put forward by my noble friend.

LORD PHILLIMORE

I would suggest to the noble Viscount that there is one portion of this Amendment which ought to be accepted. I cannot think that there is any reason for not accepting this portion, "And any work so certified shall be carried out by the tenant to the reasonable satisfaction of the landlord's surveyor whoso fees shall be paid by the tenant." That is a common arrangement when it is done by common consent. I do not think it should be done under his supervision which means a much larger charge, but surely the landlord is entitled to be satisfied that the work is carried out. It is quite true that the tenant has an interest in carrying out the work, but there are razors made to sell and not to shave, and there are improvements which may look very well but which a practical surveyor would find were in fact jerry-built. I cannot help thinking that the Government ought to accept that part at least of the Amendment. I say nothing about the rest.

VISCOUNT HALDANE

Speaking with some considerable personal experience of the working of this kind of clause, I can only say that even in the amended form proposed by Lord Phillimore I have seen it work very oppressively. A large landlord with an active surveyor proceeds to take in hand, in a most meticulous fashion, supervision of what is being done by the tenant, and it is almost impossible for the tenant to satisfy certain surveyors. Some surveyors are good and some are sensible, but some are far from being either good or sensible, and I should object very much if this were carried to the extent proposed by the Amendment or even to the modified extent proposed by Lord Phillimore. If the landlord is injured he has his remedy by the ordinary law, and if he has not his remedy by the ordinary law we do not propose to give him any by the provisions of this Bill.

LORD CARSON

I must say that I think the proposal of Lord Phillimore is a most reasonable one. As to the rest of the Amendment I am not qualified to speak on it, but here again you are leaving open all these controversies in order that you may have litigation. If ever there was a Bill which will create thousands and thousands of actions and set landlord and tenant in the position of plaintiff and defendant for the rest of their tenure, this is the Bill. What is this modest proposal? It is that when the Court or tribunal authorises the making of certain improvements these improvements shall be done to the satisfaction of the landlord's surveyor.

LORD PHILLIMORE

To the "reasonable satisfaction."

LORD CARSON

Yes, I believe that is the phrase. I always assume it is reasonable satisfaction. Look at what will happen if that is not so. The moment these improvements come into controversy, it will be said: "Quite true, all this was litigated upon and gone into by the tribunal years before, but now comes the question did you ever carry out those improvements, and, if you did so, to what extent?" Whereas you put an end to the whole of the controversy if his own surveyor has certified that they were carried out to his satisfaction. Otherwise you may have what was not a real carrying out at all. The answer to it is, according to the noble and learned Viscount, Lord Haldane, that there are very unreasonable landlord's surveyors. I dare say there are, and there are very unreasonable tenant's surveyors and very unreasonable lawyers and very unreasonable Lord Chancellors and ex-Lord Chancellors. In fact, there are unreasonable people in every walk of life, but if we are to wait and not take these precautions because there are unreasonable men in various professions we may as well shut up shop. For my own part, I cannot imagine anything more reasonable than this—though I may be unreasonable in thinking so—nor anything more tending to bring about an absence of litigation at the end, when the letting value of these improvements has to be estimated and paid by the landlord. However, I suppose any efforts we make, even though we are lawyers, to prevent litigation are resented by His Majesty's Government who, in their efforts to create a universal peace throughout the land, have only one idea, so far as I can see—namely, to turn everybody into litigants.

THE LORD CHANCELLOR

I thought until to-night there were no unreasonable Lords of Appeal, but I am rather surprised at the unreasonable tone my noble friend takes on all these Amendments. I was about to say before he rose that I was struck by what the noble Lord, Lord Phillimore, said and if he will put down the first part of his Amendment on Report I will see what can be done.

LORD JESSEL

I thank the noble Lord for his concession.

Amendment, by leave, withdrawn.

LORD CHARNWOOD moved, in subsection (1), immediately after the proviso, to insert:— Provided further that in considering whether the improvement is reasonable and suitable to the character of the holding the tribunal shall have regard to any evidence brought before it by the landlord or any superior landlord (but not any other person) that the improvement is calculated to injure the amenity or convenience of the neighbourhood.

The noble Lord said: Those of your Lordships who were not here when Lord Russell moved his Amendment will find this Amendment of mine put down on the Paper for line 25. I do not think I need repeat anything that was said by my noble friend Lord Russell. This was put down as possibly expressing more accurately what both he and I intended. If I understand rightly, I am fortunate enough in my way of putting this not very contentious point, for the noble and learned Viscount agrees to it, but he wishes to consider the exact wording of it later. If that is so, I hope at a later stage he will consider whether any other wording is required, and I hope, too, that he will preserve a sufficiently wide definition of the kind of public interest which the landlord will be able to assert. I have changed the wording of the Amendment as it appears on the Order Paper by making it read "Provided further."

Amendment moved— Page 4, line 25, at end insert the said proviso.—(Lord Charnwood.)

VISCOUNT PEEL

This Amendment is one which appeals to me very much in my official capacity, because it is in line with everything that I am trying to do in the Office of Works. The noble Lord has been very careful to limit the Amendment so that it does not add to the number of persons who can come into the Court and tell their story. I understand that under it outsiders with views on aesthetics are not allowed to come in and interfere, but the matter is only represented as between the landlord and tenant. I do not know how far the convenience of the tenant in this way ought to be interfered with on æsthetic grounds. But if the noble Lord presses the Amendment I am ready to accept it, subject to I his condition, that the actual wording may be reconsidered before Report.

LORD CHARNWOOD

I, of course, quite understood that the actual wording would need reconsideration later. I am much obliged to the noble Viscount. I do want to press that the landlord ought to be able to object to an improvement, not merely on the ground that it is financially injurious to himself, but on the ground that, by execution or design, it will utterly destroy the amenities of the neighbourhood, or that a building, say, on some vacant land, may be placed in a way which will greatly detract from the convenience and benefit of the whole neighbourhood. Provided that the words take a sufficiently wide and liberal view of the sort of real public interest that might be considered, I should be most delighted to see the wording changed at a later stage.

THE EARL OF HALSBURY had given Notice to move to add to subsection (2), "and the tenant shall also supply such copies to the landlord or tenant of any adjoining or adjacent property who applies in writing therefor, with an undertaking to pay the reasonable cost thereof." The noble Earl said: I think this Amendment is very reasonable except for the phrasing at the end which ought to have been differently worded. Instead of "with an undertaking to pay the reasonable cost thereof" I should like to substitute the words "upon payment of the reasonable cost thereof."

Amendment moved— Page 4, line 37, at end insert ("and the tenant shall also supply such copies to the landlord or tenant of any adjoining or adjacent property who applies in writing therefor, upon payment of the reasonable cost thereof").—(The Earl of Halsbury.)

THE LORD CHANCELLOR

I thought we had discussed this matter, and that this Amendment was purely consequential on an Amendment which the Committee had not accepted. We do not want to bring in third parties. This is another attempt to bring in third parties who happen to be landlords or tenants of adjacent property. The transaction is wholly between landlord and tenant.

THE EARL OF HALSBURY

I do not see why on earth it is that you will not bring in third parties, and that they should not be allowed to point out what is being done next door to them. And, if you do not bring in third parties, what is the meaning of the proviso to Clause 3 (3): Provided that nothing in this subsection shall authorise a tenant to execute an improvement in contravention of any restriction created or imposed—

  1. "(a) for naval, military or air force purposes;
  2. "(b) for civil aviation purposes under the powers of the Air Navigation Act, 1920."
If you are not bringing in third parties, what is the purpose of that? And are you not to allow a private person to see at least what is being done against him when there is going to be a declaration by a Court, possibly the High Court, that the tenant may do a thing, and that he has got to wait until that has been carried out and the thing has been done in order to get an injunction against him on the other side of the Court? Surely he ought to be allowed to be given notice of what is intended and what is being done.

On Question, Amendment negatived.

THE LORD CHANCELLOR moved, in subsection (3), after the first "tenant," to insert "as against the immediate and any superior landlord." The noble and learned Viscount said: This Amendment is intended to make it clear that the certificate of the tribunal will not entitle the tenant to make an improvement which would conflict with the rights of any third party. It is only his rights as against the landlord, whether immediate or superior, that are to be affected. I beg to move.

Amendment moved— Page 4, line 42, after ("tenant") insert ("as against the immediate and any superior landlord").—(The Lord Chancellor.)

THE EARL OF HALSBURY moved, in subsection (3), after "premises." to insert "made after the commencement of this Act." The noble Earl said: This, I think, really is more or less a question of words that may possibly have been omitted in drafting. I think it was meant to be that the leases were to be made after the commencement of the Act. I beg to move.

Amendment moved— Page 5, line 3, after ("premises") insert ("made after the commencement of this Act").—(The Earl of Halsbury.)

THE LORD CHANCELLOR

This would confine the operation of the Bill to leases made alter the commencement of the Act and so it would not operate for the benefit of any tenant under any existing lease. Some of them may have eighty or ninety years to run and they would have to wait all that time before they had the benefit of these provisions. The Bill is confined to future improvements but not to future leases. I hope your Lordships' House will maintain that provision.

THE EARL OF HALSBURY

I do not press the Amendment.

Amendment, by leave, withdrawn.

THE LORD CHANCELLOR moved, after subsection (3), to insert: (c) for securing any rights of the public over the foreshore or bed of the sea. The noble and learned Viscount said: This Amendment is intended to protect not third parties but the public. The Board of Trade are apprehensive lest the right conferred on the tenant by this section should authorise him to construct works which will affect the rights of the public, such as the rights of fishing or rights of navigation, and so on. We want to make it clear that it will not do so. I beg to move.

Amendment moved— Page 5, line 9, at end insert the said paragraph.—(The Lord Chancellor.)

LORD CARSON

I really do not know why this is necessary. If what we have been told all along up to this point is true—namely, that this is really a domestic matter between landlord and tenant—why do you put in special provisions securing the rights of the public over the foreshore and bed of the sea, when you have paid no regard to the rights of the public who have bought houses in the neighbourhood? You say it is only a matter between landlord and tenant and a domestic matter. Why is this provision to be put in here if that is true? Surely, if these rights are to be preserved or could be affected by the tribunal under the Bill, provision ought to be made for serving notice in certain cases on some Government Department of what was going to be done. Here, again, you may have a tenant imagining that he can do this, that and the other, and then when he comes before the tribunal he will find that the rights of the public are to be secured. I really do not find any consistency between what we have been allowed to believe in dealing with Amendments up to this point with the object of endeavouring to protect the rights of third parties, and this provision that the tribunal are to examine and try out a case between the tenant and the landlord and the Naval and Military or Air Forces and the Civil Aviation Forces, and now for securing the rights of the public over the foreshore and the bed of the sea. I foresee in one of those great trials the whole of these great Departments being represented before the County Court Judge and giving their separate evidence and putting in their various pleas. My confidence has begum to be shaken in the advisers of His Majesty's Government when we find these extraordinary inconsistencies.

THE LORD CHANCELLOR

There are no inconsistencies. The noble Lord forgets that the Board of Trade grants the lease. In these cases it is the landlord.

THE LORD CHANCELLOR

The next three Amendments standing in my name are drafting.

Amendments moved—

Page 5, line 13, leave out ("given notice thereof") and insert ("served notice of the proposal to make the improvement").

Page 5, line 14, leave out ("given") and insert ("served").

Page 5, line 23, leave out ("suspend the execution of") and insert ("defer making").—(The Lord Chancellor.)

THE LORD CHANCELLOR moved to insert the following new subsection:— (5) Where a tenant has executed an improvement of which he has served notice in accordance with this section and with respect to which either no notice of objection has been served by the landlord or a certificate that it is a proper improvement has been obtained from the tribunal, the tenant may require the landlord to furnish to him a certificate that the improvement has been duly executed; and if the landlord refuses or fails within one month after the service of the requisition to do so, the tenant may apply to the tribunal who, if satisfied that the improvement has been duly executed, shall give a certificate to that effect. Where the landlord furnishes such a certificate, the tenant shall be liable to pay any reasonable expenses incurred for the purpose by the landlord, and if any question arises as to the reasonableness of such expenses, it shall be determined by the tribunal.

The noble and learned Viscount said: This subsection is proposed in order that the tenant may be able to obtain evidence of the execution of an improvement at the time it is executed which may be available when a claim for compensation is afterwards made. The claim may be made many years after the improvement is executed, and in the absence of some evidence such as would be furnished by the certificate which this subsection provides for both the tenant and the landlord might be put to considerable expense in proving the facts. I beg to move.

Amendment moved— Page 5, line 25, at end insert the said new subsection.—(The Lord Chancellor.)

LORD CARSON

As far as I can see I think this is an improvement. At the same time I would like to point out that it creates another lawsuit.

VISCOUNT SUMNER

Will the Lord Chancellor give attention to the last words:— Where the landlord furnishes such a certificate, the tenant shall be liable to pay any reasonable expenses incurred for the purpose by the landlord. The most ordinary way in which the landlord can put himself in a position to take advantage of this is to have sent a surveyor to inspect what has been done from time to time, which is almost equivalent to a contract that the work shall be done to the satisfaction of the landlord's surveyor. If the words are intended to cover that it appears to me, if I may respectfully say so, to be a very wise provision, but if it is supposed to be restricted to the reasonable expense of having a certificate properly provided and that kind of thing, it strikes me as rather insufficient. If, as I said, it is framed in the wider sense it would be satisfactory to know that that is the real intention of the clause.

THE LORD CHANCELLOR

I think that would be the effect of the clause.

Clause 3, as amended, agreed to.

Clause 4:

Compensation for goodwill.

4.—(1) Then tenant of a holding to which this Part of this Act applies shall, if a claim for the purpose is made in the prerscribed manner—

  1. (a) in the case of a tenancy terminated by notice, within one month of receiving the notice; and
  2. (b) in any other case, not more than thirty-six nor less than twelve months before the termination of the tenancy;
be entitled at the termination of the tenancy on quitting the holding to be paid by his landlord compensation for goodwill if he proves to the satisfaction of the tribunal that by reason of the carrying on by him or his predecessors in title at the premises of a trade or business for a period of not less than five years goodwill has become attached to the premises by reason whereof the premises could be let at a higher rent than they would have realised had no such goodwill attached thereto:

Provided that—

  1. (a) the sum to be awarded as compensation for such goodwill shall not exceed such addition to the value of the holding at the termination of the tenancy as may be determined to be the direct result of the carrying on of the trade or business by the tenant or his predecessors in titles, and in determining such addition the tribunal shall, if it is proved that the premises will be demolished wholly or partially, or used for a different and more profitable purpose, have regard to the effect of such demolition or change of user on the value of the goodwill to the landlord;
  2. (b) the tenant shall not be entitled to compensation in respect of such goodwill if within two months after the making of the claim the landlord serves on the tenant notice that he is willing and able to grant to the tenant or obtain the grant to him of a renewal of the tenancy of the premises at which the trade or business is carried on at such rent and for such term not exceeding fourteen years as, failing agreement, the tribunal may consider reasonable; and if the tenant does not within one month from the service of the notice send to the landlord an acceptance in writing of the offer the tenant shall be deemed to have declined the offer;
  3. (c) in the case of licensed premises the sum payable as compensation for goodwill under this section shall not include any addition to the value of the premises attributable to the value of the licence;
  4. (d) the tribunal shall, in determining the amount of compensation for goodwill, have regard to the intentions of the tenant as to carrying on the trade or business elsewhere and shall disregard any value which is attributable exclusively to the situation of the premise;
    5. 694
  5. (e) compensation under this section shall not be payable if the tenant has determined the tenancy or failed to exercise an option for a further term contained in the lease or agreement;
  6. (f) where any Government Department, or a local or public authority, or a charity or a statutory or public utility company have, in pursuance of the powers contained in the lease, terminated the lease by resuming possession of the premises for the purpose of the Department, or any other Government Department, or of the authority, or of the charity or of the undertaking of the company, or where premises the tenancy whereof has expired by effluxion of time are required for any such purpose no compensation shall be payable under this section.

(2) Where an offer of the renewal of a tenancy by the landlord under this section is accepted by the tenant, the rent fixed by the tribunal shall be the rent which in the opinion of the tribunal a willing lessee other than the tenant would agree to give and a willing lessor would agree to accept for the premises having regard to the terms of the lease, but irrespective of any goodwill which may have become attached to the premises by reason of the tenant or his predecessors in title having carried on thereat a particular trade or business.

(3) In the absence of agreement between the parties all questions as to the right of compensation under his section, and as to the amount thereof, shall be determined by the tribunal.

THE LORD CHANCELLOR

The first Amendment standing in my name is drafting. I beg to move.

Amendment moved— Page 5, line 30, leave out ("of receiving the notice") and insert ("after the service of the notice on the tenant").—(The Lord Chancellor.)

LORD LAMINGTON moved, in subsection (1), to leave out "five" ["five years goodwill"] and insert "fifteen." The noble Lord said: I move this Amendment on behalf of my noble friend Lord Banbury of Southam, whose absence I regret. Five years is a short time in which to establish goodwill that is due to the energy, intelligence and work of the tenant. I think it is only reasonable, that fifteen years should be inserted. It will require fully that period of time for any ordinary mortal to work up what could possibly be called a genuine goodwill.

Amendment moved— Page 5, line 39, leave out ("five") and insert ("fifteen").—(Lord Lamington.)

VISCOUNT PEEL

I think your Lordships will agree that fifteen years is rather a long time to allow for this goodwill to be established. The period of five years was arrived at as the result of considerable discussion in another place and was a compromise between opposing views. As it was a compromise and seems a reasonable period, perhaps your Lordships will not disturb it.

LORD LAMINGTON

There is no object in putting your Lordships to the trouble of a Division, but I do think five years is a short time, and really suggests something in the nature of a gambling or speculative transaction.

Amendment, by leave, withdrawn.

LORD JESSEL moved, in subsection (1), after "five years," to insert "definitely ascertainable." The noble Lord said: I beg to move this Amendment on behalf of Lord Erskine, in whose name it stands on the Paper. We have now tome to the clause which deals with the question of goodwill. It is unfortunate that in the other House no proper definition could be made of "goodwill." Various attempts were made, but nothing really eventuated. It was such a nebulous thing that it could not be defined. My noble friend Lord Erskine wants to put in the words "definitely ascertainable." The reason of that is that if a landlord is to be made to pay for goodwill which is alleged to become attached to premises the tribunal must be satisfied that it is not a nebulous quality, but something definitely ascertainable. I know it is a very difficult thing, but it is an attempt on the part of my noble friend to get something tangible. If I may be allowed to say so, with the object of saving your Lordships' time, the same point is dealt with in another Amendment standing in the name of Lord Erskine to insert the word "permanently." The intention in that case is to ensure that if a landlord has to pay for goodwill, it must be for something which is attached to the premises as a permanent thing and not something evanescent.

Amendment moved— Page 5, line 39, after ("years") insert ("definitely ascertainable").—(Lord Jessel.)

THE LORD CHANCELLOR

I really do not think these words would be helpful. Goodwill is goodwill. If it is put in the Statute as definitely ascertain- able goodwill it does not seem to me to carry the matter further. That is not a good test. We propose a test in the next succeeding words of the section. It must be goodwill attached to the premises "by reason whereof the premises could be let at a higher rent than they would have realised had no such goodwill attached thereto." That, of course, the tenant will have to prove. If he proves that, surely there is a definite goodwill for which compensation ought to be paid. I am afraid I shall have to say the same thing about the further Amendment to which the noble Lord referred.

LORD JESSEL

I am not greedy. I have received two concessions to-night, and I know how difficult a matter this is to deal with. As I do not want to be too meticulous, and as it passes the wit of both Houses, as far as I can make, out, to find an adequate definition, I shall not press this on behalf of my noble friend.

Amendment, by leave, withdrawn.

LORD HARRIS moved, in subsection (1), after "five years," to insert "before the date on which the claim is made." The noble Lord said: It is suggested to me that something more precise should be inserted to define the period and that the words of which I have given notice would improve the clause. There is nothing in the Bill to say when the period is to begin.

Amendment moved— Page 5, line 39, after ("years") insert ("before the date on which the claim is made").—(Lord Harris.)

VISCOUNT PEEL

Of course under the Bill goodwill only arises after the tenant or his predecessor has been five years in occupation of the premises. If there is an agreement between landlord and tenant no question will arise, but if they go to the Court the five years will have to be shown at the date of the hearing to have elapsed since the time of occupation. That seems to fix pretty closely the period of five years. Both alternatives being thus provided for, I think my noble friend's point is really met.

LORD HARRIS

It is suggested to me that there might be a change of the class of business during the term of a lengthy tenancy, and the period of five years might be concerned with the business of some previous tenant.

VISCOUNT PEEL

Would not that have to be shown? That would come out at the trial before the tribunal, because, if there had been a change of tenancy, there would not be an agreement between landlord and tenant.

THE LORD CHAIRMAN

Does the noble Lord press the Amendment?

LORD HARRIS

No.

Amendment, by leave, withdrawn.

LORD PHILLIMORE moved to omit all words in proviso (a) in subsection (1), after "title," and to insert "and if it is proved that by reason of the premises being about to be demolished or used for a different and more profitable purpose the goodwill is of no value to the landlord none shall be allowed." The noble Lord said: As the noble and learned Viscount has said more than once, the question in this case is not what the tenant loses but what the landlord gains. We have now approached the question of goodwill, and it is very carefully defined in the first part of the clause. But when we come to the proviso, I confess that I am puzzled by these words:— … and in determining such addition the tribunal shall, if it is proved that the premises will be demolished wholly or partially, or used for a different and more profitable purpose, have regard to the effect of such demolition or change of user on the value of the goodwill to the landlord. If there is demolition—I will not say partial demolition—or a change of user, there is no goodwill. The tenant may have lost something, because he has lost his place, but the landlord has gained nothing.

Those, words "have regard to" frightened me from the first moment I read them. I was afraid of them when it was in the power of a surveyor to decide the question, and I am just as much afraid when it is in the power of the Judge. I think that the words I suggest will make the meaning more clear:— And if it is proved that by reason of the premises being about to be demolished— I have left out "partially"— or used for a different and more profitable purpose the goodwill is of no value to the landlord none shall be allowed. That is what I think the section means to say, but I am afraid the expression "have regard to" will be supposed to have a different effect. It is in one sense "have regard to," but it is a good deal more—it is treated as a negative. On that short ground I beg to move the Amendment.

Amendment moved— Page 6, line 8, leave out from ("title") to end of line 14, and insert the said words. (Lord Phillimore.)

THE LORD CHANCELLOR

I think my noble friend has not noticed that our words refer to cases where it is proved that the premises will be demolished "wholly or partially." When they are partially demolished and restored in some other way goodwill might remain.

LORD PHILLIMORE

Yes.

THE LORD CHANCELLOR

That is why we would keep the words "have regard" to these facts and not confine it to the word "demolished," when the goodwill is of no value and no compensation is paid. In that case, of course, none would be allowed, because there is none possible. Compensation cannot be payable where the goodwill is of no value to the landlord. If my noble friend's words were accepted, you would destroy the provision for the case where goodwill partially remains.

LORD PHILLIMORE

You may provide for "partially" as you please, but the tribunal is to have regard to the effect of such demolition. It may be "wholly" or "change of user." But if there is this change of user the value of the goodwill to the landlord is gone. I quite agree they may partially demolish. I should leave out the word "partially" altogether, as I have done in my Amendment, but if it is true that by reason of the premises being about to be demolished, or used for a different and more profitable purpose, the goodwill is of no value to the landlord, then I think no compensation should be allowed. You do not want the word "partially." If you do, provide for it separately. The words "change of user" in the clause are most dangerous.

THE LORD CHANCELLOR

I will read what the noble and learned Lord has said. I do not promise anything, but I am sure he has some ground for what he has said.

On Question, Amendment negatived.

LORD DYNEVOR moved, in proviso (a) of subsection (1), to leave out "and more profitable." The noble Lord said: Clause 4(1) (a) deals with the sum to be awarded as compensation for goodwill, and it says that the tribunal shall if it is proved that the premises will be demolished wholly or partially, or used for a different and more profitable purpose, have regard to the effect of such demolition or change of user on the value of the goodwill to the landlord. I can understand the words "demolished," and "used for a different purpose," but I want to know why it must be a "more profitable purpose." If the premises are going to be used for a different purpose the goodwill disappears, as the landlord is not using the tenant's goodwill in re-letting the premises, and it makes no difference if he is re-letting them for a more profitable purpose or not. I hope that the Government will accept the Amendment, or give an explanation why those words are put in the clause.

Amendment moved— Page 6, lines 11 and 12, leave out ("and more profitable").—(Lord Dynevor.)

VISCOUNT PEEL

The object of those words is something of this kind—namely, to prevent a landlord from depriving a tenant of compensation merely by reason of the fact that he refuses to take a particular offer. Let me take the case of a man engaged as a fruiterer, whose lease comes to an end. There is a certain goodwill attaching to the business of a fruiterer. The landlord gets an offer from a butcher, say of £150, and he gets a higher offer, say of £200, from a fruiterer, the latter offer being higher because of the goodwill attached to the premises. In that case it is not thought fair that the landlord should avoid taking the higher offer, merely in order to prevent his late tenant getting compensation for goodwill. That is the class of case aimed at by the inclusion of these words.

LORD PHILLIMORE

The noble Viscount does not see that that is departing from the whole canon of the measure: the question is not what the tenant loses, but what the landlord gains. In that case the landlord does not gain anything from the goodwill, though he may prevent the tenant gaining. That is the reason I object to the subsection altogether.

LORD CARSON

I do not think the noble Viscount has given us any answer at all. It does not deal with such a case as he mentions. Supposing a landlord wishes to start something less profitable, which has nothing whatever to do with the previous business carried on by the tenant there, what does he get by the goodwill? What you are asked to estimate is what does the landlord get by the goodwill. That is the only ground why he should give compensation. Supposing the landlord wishes to put his son or someone else into the premises to carry on an entirely new and less profitable business with no relation to the previous business, why has he to pay compensation? I do not understand the meaning of the answer. How will it be known whether the business is more profitable until you have tried it for some time? Supposing the landlord starts his son in a business there, how long will you give him before you are able to prove that it is more profitable? Is your object really to try to make the landlord carry on the same business as was carried on there before? Surely it is interference with property, and all these different cases are such interferences with property as will render it impossible to manage any property at all. The Amendment is a very sensible one. You allow a landlord to use it for a different purpose, but you say it must be a different and a more profitable one. We have had no answer to that point.

THE EARL OF MIDLETON

I wish to ask the Government a question about a case that has taken place very recently. A landlord, solely for the benefit of the neighbourhood, built a post office in a cottage. After the postmaster had occupied the cottage without any increase of rent for twelve or fourteen years he was unable to fulfil the duties and the landlord proposed to put the next postmaster into the same cottage. Under the Rent Restrictions Act, he was informed that he had no power to remove the tenant and compensation was demanded of him, although for a considerable number of years he had foregone increased rent in the public interest. The postmaster maintained that if he went out he must be paid. Under this clause is he not similarly entitled to goodwill? He will say there is a goodwill attached to those premises. He did not create it or spend the money to make it; but, according to the clause, the landlord will have to pay him for goodwill in order, in the public interest, to get him out and enable somebody else to act as postmaster.

THE LORD CHANCELLOR

I think such a case would be provided for by the provisions in Clause 5, subsection 3 (b), in the case of a new lease, and that the tribunal would be entitled to take all the facts into account. But it is difficult to deal with a concrete case like that without having some time to look into it. What I was anxious to say in answer to the general argument is this. In the case put by the noble Viscount of the fruiterer going out the landlord gets the shop with the fruiterer's goodwill—I am putting that as a hypothesis—and he has to pay compensation for the goodwill. But in order to avoid that payment he says: "No, I will let it to somebody else, even although I get a lower rent, because by so doing I avoid paying compensation." That, I think, is what these words mean.

They were carefully considered elsewhere, and I could not consent to alter them to-day, but I think that the definition of "profitable" might be considered. Lord Carson asks, with force, how you are to tell whether a purpose is more profitable. Of course, the meaning is "more, profitable to the landlord," namely, at a higher rent. I am quite willing to make it clear, and to propose some words on Report which would make the sense unmistakable. If noble Lords are not content with my definition when I put it on the Paper they can, of course, raise the point again.

THE EARL OF HALSBURY

I was not quite certain what the noble Viscount, Lord Peel, really meant. Did he mean that if one fruiterer followed another that would be for a different purpose, because the wording of the proviso is "for a different and more profitable purpose"?

THE LORD CHANCELLOR

Of course not; the same.

LORD DYNEVOR

In the circumstances, I will not press the Amendment.

Amendment, by leave, withdrawn.

THE LORD CHANCELLOR moved, in proviso (c) in subsection (1), to leave out "value of the licence" and to insert "fact that the premises are licensed premises." The noble and learned Viscount said: It is not really the value of the licence that is in question, it is the increased value of the premises, in view of the fact that they are licensed premises. I want to make that clear.

Amendment moved— Page 6, line 34, leave out ("value of the licence") and insert ("fact that the premises are licensed premises").—(The Lord Chancellor.)

LORD DYNEVOR moved, in proviso (d) in subsection (1), after "elsewhere," to insert "and to the steps which the tenant may have taken to obtain any suitable alternative accommodation." The noble Lord said: Under proviso (d) the tribunal, in deciding the compensation for goodwill, must "have regard to the intentions of the tenant as to carrying on the trade or business elsewhere." I suggest that the intention of the tenant is not sufficient, and that the tribunal should consider what actual steps the tenant may have taken to get suitable alternative accommodation. He may say he intends to do a great many things, but what he should show is that he has actually tried to get suitable accommodation before he comes before the tribunal.

Amendment moved— Page 6, line 38, after ("elsewhere") insert the said words.—(Lord Dynevor.)

THE LORD CHANCELLOR

I think that the steps which a tenant may have taken to obtain alternative accommodation may be relevant to the question before the tribunal—namely, what the landlord gains by having this goodwill attached to his property. If the tenant has taken no steps to obtain accommodation elsewhere of course the tribunal would draw its own inference and might have regard to that fact. But I think it is a pity to put into the Bill only one element which the tribunal will consider when there are, of course, others open to it. I suggest that we should trust the tribunal, especially now that it is the Court, to take all the facts into consideration. I hope this Amendment will not be pressed.

LORD DYNEVOR

I cannot say that I think the answer the Lord Chancellor has given is a very satisfactory one, but in the circumstances I will not press the Amendment.

Amendment, by leave, withdrawn.

LORD CARSON moved, in proviso (d) in subsection 1, after "elsewhere," to insert "and may make it a condition of its award that the tenant shall undertake not to carry on the trade or business within such distance of the premises as may be specified in the award." The noble and learned Lord said: This is an Amendment to prevent anything like action on the part of the tenant which would establish again in the neighbourhood the goodwill for which he had already been paid. I would ask the attention of your Lordships to the framing of this comical section. It says:— the tribunal shall, in determining the amount of compensation for goodwill, have regard to the intentions of the tenant as to carrying on the trade or business elsewhere … How on earth are you to get at the intentions of the tenant? The tenant will come before the Court. He will make his claim for the goodwill. He may express or impute all the intentions in the world. What binds him? The very day after he gets payment for this goodwill he can go down the street elsewhere and start again. There is nothing in the Bill to prevent him doing that. All I ask is that if he receives payment for his goodwill he shall have upon him the provision I am seeking to insert which gives the tribunal power to make it a condition of its award that the tenant shall undertake not to carry on the trade or business within such distance of the premises as may be specified in the award.

We are perfectly well acquainted in the Courts with conditions of that character and with covenants entered into that if a man gives up his business or goes out of a business in which he is in partnership with another he shall not start a business next door and interfere with the business of the man he is leaving. All I ask is to have that principle applied here. I can hardly imagine that the Government contemplate, in trying to do something for these poor tenants, allowing them, as well as being paid compensation for the goodwill (whatever that may mean) to be entitled the very next day to go down the street and start a similar business.

As the Government are not very sympathetic to the landlords, may I put it upon the tenant in this case? The landlord when he takes the business over may let the house with the goodwill to a tenant, who will be in this predicament. Having taken the house at a rent fixed on the fact that there is a goodwill, he may find the old owner of the shop turning up a few days later, taking a new shop and going round to all his old customers, saying: "Come to the old firm. We always dealt very happily together. I am even better off than I was because I have sold my goodwill and have a bit in hand which enables me to start again in a better way." I hope the Government will consider this question and will see that the opportunity for frauds of this kind is not left open. In fact the whole of this subsection (d) requires a good deal of consideration. I have not put down any other Amendment to it. In the last two lines I think I may congratulate the Government on giving us another few law suits. I beg to move.

Amendment moved— Page 6, line 38, after ("elsewhere") insert the said words.—(Lord Carson.)

THE LORD CHANCELLOR

The noble and learned Lord cannot resist the temptation of having a gibe at every clause; nevertheless I think his proposal quite reasonable and I am prepared to accept it.

THE EARL OF HALSBURY moved, after paragraph (d) in subsection (1), to insert the following new paragraph:— (e) where the landlord proves that the value of the goodwill has been created or increased owing to restrictions imposed by the landlord whether by agreement with the tenant or not, upon the letting for a competitive trade or business of other premises in the neighbourhood owned by or under the control of the landlord, or that the value of the goodwill has been created or increased by the landlord rather than by the tenant, the tribunal shall have regard thereto and may refuse the application for compensation or may award a reduced amount of compensation.

The noble Earl said: Never an optimist, I hope the Lord Chancellor may think fit to look happily upon this Amendment. The effect of it is this. You get a case that very often happens now in modern improvements and town planning where a landlord deliberately tries to keep up the goodwill of a Particular business by putting in a restrictive covenant against himself that he will not allow-other business to be carried on in that particular district. You may get the landlord of one public-house undertaking that another public-house shall not come within a certain radius; or you may get the landlord of a draper's shop saying there shall not be another draper's shop within a certain radius. The person who is at least partially responsible for the goodwill in such cases is the landlord. I am not saying in this Amendment that lie is wholly responsible. What I am suggesting is that that is one of the circumstances that the tribunal can take into consideration when dealing with the question of goodwill.

I felt my spirits rise when the Lord Chancellor, answering I think it was Lord Carson, said that of course the tribunal ought to take every circumstance into consideration. If so, surely this is a circumstance that the tribunal ought to be told specifically to take into consideration. The tribunal are going to have difficulty in understanding exactly what they have or have not to take into consideration. Let it be put down in black and white that this is one of the things they must take into consideration. I beg to move.

Amendment moved— Page 6, line 40, at end insert the said new paragraph.—(The Earl of Halsbury.)

LORD PHILLIMORE

This, I think, is an Amendment which was sketched by Lord Ernle on Second Reading. I do not see him in his place at the moment. I know what he was thinking of. He has had great experience of estate management as manager of one of the largest estates in this country, and that led him to discover that it is not at all infrequent that a landlord of a large estate, in the interests of good estate management, restricts the number of public-houses upon his property. In addition to that he very often buys up and destroys a public-house by giving up the licence. By doing that he increases the goodwill of the public-houses which remain. The same thing may happen in regard to a fried fish shop or anything else, but the most prominent instance is a public- house, which is also the one in which the landlord sacrifices most. It is in that class of case that I venture to submit to His Majesty's Government that regard should be had to the landlord's action, and that he should have, so to speak, a slice of the compensation, or rather it would be the other way, and the compensation awarded against him would be diminished because part of it is the fruit of his own exertions.

VISCOUNT PEEL

The object of this Amendment is really to prevent a land lord having to pay compensation for value which is due to action he has taken himself. That seems on the face of it to be a fair proposal. I only want to put one question to the noble Earl. The first part of the Amendment—"where the landlord proves that the value of the goodwill has been created or increased owing to restrictions imposed by the landlord whether in agreement with the tenant or not"—seems to be definite. The later words—"or that the value of the goodwill has been created or increased by the landlord rather than by the tenant"—are not so definite. I do not know whether the noble Earl would be content to move the Amendment without those words.

THE EARL OF HALSBURY

I should be perfectly prepared to withdraw my Amendment and re-consider it and move if on Report stage.

Amendment, by leave, withdrawn.

THE LORD CHANCELLOR moved, at the end of paragraph (e) in subsection (1), to leave out "Agreement" and insert "in a collateral agreement, unless, in the case of an option, the terms of the option are such that the tenant could not reasonably be expected to exercise it." The noble and learned Viscount said: There are two points in this Amendment. The word "agreement" is not the right word because a lease includes an agreement and the intention was to refer to some collateral agreement. Then, as regards the second point, there are cases where the tenant has an option which is quite useless when the term comes to an end. For instance, if the character of the neighbourhood has changed completely, he would not want to exercise his option. We want to provide for such a case.

Amendment moved— Page 7, line 3, leave out ("agreement") and insert ("in a collateral agreement, unless, in the case of an option, the terms of the option are such that the tenant could not reasonably be expected to exercise it").—(The Lord Chancellor.)

Amendment moved— Page 7, line 23, after the second ("of") insert ("the value of").—(The Lord Chancellor.)

Clause 4, as amended, agreed to.

LORD CARSON

May I venture to ask to what hour it is proposed we should sit? We have made very rapid progress. Some of us have been here since half-past ten this morning. It might be reasonable, now that we have just finished a clause, that we should adjourn before starting another clause.

THE LORD CHANCELLOR

I hope we shall at least get Clause 5 to-night.

EARL BEAUCHAMP

Might I venture to hope that we are going to sit a good deal longer. Really it is most unfortunate that the House should not be able to sit later than a quarter to eleven.

Clause 5:

Right to new lease in certain cases.

5.—(1) Where the tenant alleges that, though he would be entitled to compensation under the last foregoing section, such compensation would not compensate him for the loss of goodwill he will suffer if he removes to and carries on his trade or business in other premises, he may in lieu of claiming such compensation, at any time within the period allowed for making a claim under the said section, serve on the landlord notice requiring a new lease of the premises at which the trade or business is carried on to be granted to him.

(2) Where such a notice is so served, the tribunal, on application being made for the purpose either by the landlord or by the tenant not less than nine months before the termination of the tenancy may, if it considers that the grant of a new tenancy is in all the circumstances reasonable, order the grant of a new tenancy for such period (being a term of years absolute) not exceeding fourteen years and on such terms as the tribunal may determine to be proper, but if the tribunal is precluded on any of the grounds mentioned in paragraph (b) of the following subsection from making such an order the tribunal may award such compensation as is provided under the last foregoing section:

Provided that the rent fixed by the tribunal as the rent payable under the new tenancy shall be such rent as the tribunal may determine to be the rent which a willing lessee other than the tenant would agree to give and a willing lessor would agree to accept for the premises having regard to the terms of the tenancy, but irrespective of any goodwill which may have become attached to the premises by reason of the tenant or his predecessors in title having carried on thereat a particular trade or business.

(3) Where the tenant is the applicant, the grant of a new lease under this section shall not be deemed to be reasonable—

  1. (a) unless the tenant proves that he is a suitable tenant and that he would be entitled to compensation under the last foregoing section, but that such compensation would not compensate him for the loss he would suffer if he removed to and carried on his trade or business in other premises; or
  2. (b) if the landlord proves—
    1. (i) that the premises are required for occupation by himself or where the landlord is an individual for occupation by a son or daughter of his over eighteen years of age; or
    2. (ii) that he intends to pull down or remodel the premises; or
    3. (iii) that vacant possession of the premises is required in order to carry out a scheme of re-development; or
    4. (iv) that for any other reason the grant of such a lease of the premises would not be consistent with good estate management, and for this purpose regard shall be had to the development of any other property of the same landlord:
Provided that if the grant of a new lease is refused by the tribunal on any such ground as is mentioned in paragraph (b), the tribunal may make it a condition of refusal that if the landlord fails to carry out his intention within such period as may be allowed by the tribunal, the landlord shall pay to the tenant such compensation as the tribunal may fix not exceeding the amount of the loss which the tenant has suffered by reason of having been deprived of his right to the grant of a new lease under this section.

(4) Where the landlord proves to the satisfaction of the tribunal that the premises, though not required immediately on any such ground as aforesaid, will be so required after the lapse of a certain period, the term for which the lease is granted shall not extend beyond the expiration of that period, unless the lease is made subject to a condition that the landlord may at any time after the expiration of that period, on giving not less than six months' notice in writing, resume possession of the premises if he requires them for any such purpose as aforesaid.

(5) Every lease granted under this section shall, if the landlord so requires, be subject to a condition that if at any time after the expiration of seven years from the commencement of the term thereof the premises are required for the purpose of carrying out a scheme of re-development, the landlord, on satisfying the tribunal that the premises are so required, and on giving not less than twelve months' notice in writing to the tenant, may determine the lease and resume possession of the premises upon payment of such compensation as the tribunal may determine to be the value of the unexpired residue of the term of the lease.

(6) Where the landlord is a Government Department or a local or public authority or a statutory or public utility company and it is proved that the premises, though not required immediately for the purposes of the Department or of any other Government Department or of the authority or of the undertaking of the company, may be so required at some future time, the tribunal shall not order the grant of a lease unless the lease is made subject to a condition that the landlord may at anytime on giving not less than six months' notice in writing resume possession of the premises if he requires them for any such purpose.

(7) The tribunal shall not order the grant of a new lease under this section if the landlord offers as an alternative thereto to sell to the tenant the landlord's interest in the premises for such consideration as, failing agreement, the tribunal may determine, and the duration of the landlord's interest is in the opinion of the tribunal adequate, and the consideration may as to the whole or any part thereof if the tribunal so determines be in the form of a terminable rent charge for such amount and of such duration not exceeding the duration of the landlord's interest as the tribunal may fix.

(8) No claim for a new lease under this section shall arise in respect of goodwill attaching to the premises and attributable to the trade or business carried on thereat during the term of a new lease granted in pursuance of this section, without prejudice however to the right to make a claim for compensation under the last foregoing section in respect of goodwill created during the term of such new lease.

(9) Where the immediate landlord is a mesne landlord, the expression "landlord" in this section shall include any superior landlord who may be affected by the order of the tribunal:

Provided that the tenant shall not be under the obligation to send a notice under this section to any landlord except his immediate landlord, but his immediate landlord, if a mesne landlord, shall send a copy of the notice to his immediate landlord, who shall in his turn send a copy thereof to his immediate landlord if he may be affected by the provisions of this section, and so on, and if any such landlord fails so to send a copy of the notice to his immediate landlord he shall be liable to pay to the tenant compensation for any loss the tenant may suffer in consequence of such failure, the amount of such compensation to be determined by the tribunal.

(10) Where an order for a new lease is made under this section, the landlord shall be bound to grant, and the tenant shall be bound to accept, a lease in accordance with the order:

Provided that before making an order binding any superior landlord the tribunal shall satisfy itself that notice of the application to the tribunal for a new lease has been served on him and that he has had an opportunity of appearing before the tribunal.

(11) Where the term for which, in the opinion of the tribunal, a new lease should be ordered to hi granted would extend beyond the termination of the lease held by the immediate landlord, the power of the tribunal under this section to order the grant of a new lease shall include power to order the grant of such lease and reversionary leases that the combined effect thereof will be equivalent to the grant of a new lease for such term as aforesaid:

Provided that every such lease and reversionary lease shall be so framed as to confer on the landlord granting the lease the same rights of distress as he would have enjoyed had he retained a reversion expectant on the termination thereof.

(12) A new lease under this section shall if the landlord so requires contain a covenant prohibiting the carrying on of any trade or business and the doing of any act prohibited by the original lease.

(13) Where it appears to the tribunal that proceedings under this section cannot be completed and a new lease in accordance with the order of die tribunal entered into before the termination of the tenancy of the tenant, and that the delay is not due to any default on the part of the tenant, the tribunal may make an interim order authorising the tenant to continue in possession of the premises for such time after the termination of his tenancy and on such terms as the tribunal may allow.

LORD PHILLIMORE

Will the Lord Chairman take my Motion now to omit this clause?

THE LORD CHANCELLOR

When the noble and learned Lord sees the Amendments to the clause he may change his mind. Is it not usual to take such a Motion on the Question that the clause stand part?

LORD PHILLIMORE

I am content so long as it is taken some time.

THE LORD CHANCELLOR moved, in subsection (1), to leave out "such compensation" and insert "the sum which could be awarded to him under that section." The noble and learned Viscount said: The language here is rather awkward, and we think this phrase will be better.

Amendment moved— Page 7, line 33, leave out ("such compensation") and insert the said new words.—(The Lord Chancellor.)

THE LORD CHANCELLOR moved, in subsection (2), after the first "tenancy," to insert "or where the tenancy is terminated by notice within two months after the service of the notice." The noble and learned Viscount said: This gives a little longer time.

Amendment moved— Page 8, line 1, after ("tenancy") insert the said words.—(The Lord Chancellor.)

VISCOUNT SUMNER moved, in subsection (1), after the first "may," to insert "if it finds the allegation mentioned in subsection (1) of section five to have been proved by the tenant and." The noble and learned Viscount said: Subsection (1) begins by saying: Where the tenant alleges that, though he would be entitled to compensation under the last foregoing section, such compensation would not compensate him for the loss of goodwill he will suffer if he removes to and carries on his trade or business in other premises, he may in lieu of claiming such compensation, at any time within the period allowed for making a claim under the said section, serve on the landlord notice requiring a new lease …. A valuation on his part entitles him to go and make this claim. Subsection (2) says: Where such a notice is so served, the tribunal, on application being made for the purpose either by the landlord or by the tenant not less than nine months before the termination of the tenancy may, if it considers that the grant of a new tenancy is in all the circumstances reasonable, order the grant of a new tenancy …. I cannot doubt that the framers of the clause intended that the tenant should do more than allege that compensation should be given, and should satisfy the tribunal that this is so.

As it stands, however, the tribunal would be entitled and bound to find that, without any proof of the truth of the allegation, the new tenancy should be granted, because it was reasonable in lieu of compensation. That is why I propose a humble and sincere effort to express what I suppose to be the intention of the Bill. It might be argued that this would be inferred from the words as they stand and that the grant would not be reasonable unless there were proof of the allegation. But it is better to say plainly what you mean and not compel people to go to their solicitors and take advice as to what proof is expected. The section would, I think, be clearer, and not any the worse for the alteration that I suggest.

Amendment moved— Page 8, line 1, after ("may") insert ("if it finds the allegation mentioned in subsection (1) of section five to have been proved by the tenant and").—(Viscount Sumner.)

THE LORD CHANCELLOR

I think the Amendment is unnecessary, not because it is implied, but because the words are already in the Bill. I think my noble and learned friend has not fully in mind subsection (3) of this clause. In order that a tenant may have compensation he must, under paragraph (a), prove— that he is a suitable tenant and that he would be entitled to compensation under the last foregoing section, but that such compensation would not compensate him for the loss he would suffer if he removed to and carried on his trade or business in other premises.

VISCOUNT SUMNER

I admit that I had not noticed that. I beg to withdraw the Amendment.

Amendment, by leave, withdrawn.

THE LORD CHANCELLOR

My next Amendment is verbal.

Amendment moved— Page 8, line 27, leave out ("such compensation") and insert ("the sum which could be awarded to him under that section").—(The Lord Chancellor.)

THE EARL OF HALSBURY had given Notice to move, after paragraph (a), in subsection (3) to insert the following new paragraph:— (b) Where the landlord proves that the value of the goodwill has been created or increased owing to restrictions imposed by the landlord, whether by agreement with the tenant or not, upon the letting for a competitive trade or business of other premises in the neighbourhood owned by or under the control of the landlord, or that the value of the goodwill has been created or increased by the landlord rather than by the tenant; or

The noble Earl said: This clause seems to me to be on a par with the earlier clause which the noble Viscount, Lord Peel, was good enough to say that he would consider between now and Report. I will not now move the Amendment.

THE LORD CHANCELLOR

I beg to move my next Amendment.

Amendment moved— Page 9, line 40, after ("proved") insert ("to the satisfaction of the tribunal").—(The Lord Chancellor.)

LORD CARSON moved, in subsection (8), after "section," to insert "or of a renewal of a lease granted in lieu of compensation under the last foregoing section."

THE LORD CHANCELLOR

I accept it.

Amendment moved— Page 10, line 21, alter ("section") insert ("or of a renewal of a lease granted in lieu of compensation under the last foregoing section").—(Lord Carson.)

Amendment moved— Page 10, line 24, after ("lease") insert ("or renewal").—(Lord Carson.)

THE LORD CHANCELLOR

These next Amendments are consequential and drafting.

Amendments moved—

Page 10, line 30, leave out ("send") and insert ("serve"), and leave out ("to") and insert ("on")

Page 10, line 32, leave out ("send") and insert ("forthwith serve")

Page 10, line 33, leave out ("to") and insert ("on")

Page 10, line 34, leave out ("send") and insert ("forthwith serve"), and leave out ("to") and insert ("on")

Page 10, line 36, leave out ("send") and insert ("serve")

Page 10, line 37, leave out the first ("to") and insert ("on")

—(The Lord Chancellor.)

THE LORD CHANCELLOR moved to add to subsection (11): "a reversionary lease granted in pursuance of such an order shall be deemed to be a lease authorised by Section 99 of the Law of Property Act, 1925." The noble and learned Viscount said: This is to meet a point which arises under the Law of Property Act, 1925. By Section 99 of that Act a lease granted by a mortgagor is not binding on a mortgagee unless it is made to take effect in possession not less than twelve months after its date. If therefore a landlord who under subsection (11) is ordered to grant a reversionary lease has mortgaged his interest and the reversionary lease will not take effect until more than a year after it is granted, it will not be binding on the mortgagee. It seems only right that where the tribunal has ordered a landlord to grant a reversionary lease that lease should not be liable to be upset by the mortgagee of the landlord's interest.

Amendment moved— Page 11, line 19, at end insert ("a reversionary lease granted in pursuance of such an order shall be deemed to be a lease authorised by section 99 of the Law of Property Act, 1925").—(The Lord Chancellor.)

LORD PHILLIMORE moved to leave out Clause 5. The noble Lord said: I have reason to think there was some stiffness shown by His Majesty's Government in the other House with regard to this clause, and therefore I hope I shall get the assistance of all noble Lords interested in this matter in pressing my objection upon the Government. I also know I am addressing a body of reasonable men, and I only hope that I will have a careful hearing for what I have to say. I look at the clause first of all from the point of view of the tenant. The tenant earns goodwill and the landlord ex hypothesi has secured it for himself, and the landlord has to make compensation. Let him do it to the full, but in all our law and all our ways of conducting business compensation is estimated by money. It can be quantified in money and if it can be quantified in money in other cases, a fortiori it can be quantified in money in this case. It is not a case of turning a man out of house and home and spoiling the amenities of his house. It is a question of trade and a question of money, and what is lost in money can be repaid in money.

There is no difficulty in estimating goodwill. On the contrary, the clause we have just passed assumes that you can estimate goodwill. Every practical estate agent and surveyor will tell you that you can estimate goodwill. If, instead of it being an outgoing tenant and a landlord, it was a tenant assigning his lease to another tenant or two freeholders passing the property with the goodwill attached, there would be no difficulty in valuing the goodwill on the part of the vendor or purchaser. There is no reason why in this particular case the loss to the tenant, being purely a money loss, should not be estimated in money, and there is no reason for giving this peculiar power of doing mischief to the tenant. The tenant can be amply compensated in all other cases. There can be no case where money will not compensate the tenant. The money may have to be large or it may have to be measured with some imagination by the surveyor, but it can always be measured.

Looking at the point of view of the landlord, he has of course been an unreasonable creature and not entitled to any special treatment. He is not for that reason to be blackmailed. If you say that a tenant can get a new lease instead of an old one, you thereby enable the tenant to hold up possibly an improvement over an acre of ground and to stop developments which would be very much to the advantage of all the people in the neighbourhood. One man in the middle of a large number of houses may say: "I have got an order from the tribunal that I may have my lease renewed and I am going to have it renewed, or else I am going to ask for blackmail for ten times the value of the property." I see no good but merely an instrument of spite and blackmail in this clause, and I humbly hope that your Lordships will throw it out.

Amendment moved— Leave out Clause 5.—(Lord Phillimore.)

VISCOUNT PEEL

The noble Lord, who has moved the rejection of the clause, considers that it is only an instrument of blackmail and that it ought to be thrown out. May I call attention to what the clause actually does and why the necessity for it arises? It arises, of course, from the fact that the amount of compensation payable by the landlord is limited to the amount of the value attributable to the goodwill which the tenant would leave behind him if he quitted the premises, and the principle of the Bill, of course, is that the landlord is not to be called upon to pay for anything beyond the amount from which he profits from the goodwill created by the tenant. The noble and learned Lord said that all these things could be valued in money. Possibly they can, but the sum payable by the landlord would, in the great majority of cases and in a great many cases which one can easily recall, be quite inadequate to compensate the tenant for what he would lose if he were forced to move his business elsewhere. Clause 5, therefore, enables the tenant, as an alternative to compensation, to ask for a new lease. The clause is drawn so that the landlord really only has to grant a new lease in cases where, in the ordinary course of events, he would re-let the property.

The noble and learned Lord dwelt on the hardship and unfairness to the landlord. He said he might want to redevelop a whole acre of ground, and only one house or so might stand in the way. But I do not think he has fully considered the provisions of subsection (3) (b)), because it says that the grant of the new lease under this section will not be deemed to be reasonable if the landlord proves, for instance, that he intends to pull down and re-model the premises—in that case no lease is granted; or again, that vacant possession of the premises is required in order to carry out a scheme of re-development. That precisely meets the point of the noble and learned Lord. This granting of the lease does not stand in the way of any scheme of re-development, because that is one of the positive conditions laid down in this clause. As to the rent, the rent which the sitting tenant will have to pay under the new lease will be the full rack-rent which any person other than the tenant will be willing to pay, subject to one qualification only, that that part of the rack-rent, which reflects the value of the goodwill created by the exertions of the sitting tenant is not to be demanded from the sitting tenant himself.

Supposing this clause was omitted what might very easily happen is that an unscrupulous landlord might use the necessity of the sitting tenant to continue his premises in which he has built up his business to exact from him a rent largely in excess of that which any other tenant would give for the business. To meet cases of this kind this clause is essential. Further, all those cases where the land is required by the landlord for development are safeguarded in the clause.

LORD PHILLIMORE

The noble Viscount says that the landlord is only to pay as much as the tenant gains, but that there might be circumstances in which it would be impossible for the landlord to pay that sum.

VISCOUNT PEEL

No. I did not say it would be impossible to pay that sum, but that there would be a very large gap between the value of the goodwill created by the tenant and the amount of that goodwill that would inure to the landlord and it was because of that large gap and of the great interest the tenant had in going on in the same premises that an unscupulous landlord might very easily exact a large rent which no other tenant except the man on the premises would pay.

LORD PHILLIMORE

Exactly what I thought. In those cases the tenant is to get more than the landlord gains. I thought the rule of the Statute would be that the tenant was only to get what the landlord gains—not what the tenant loses. The noble Viscount has suggested that there are cases where the transfer of the landlord's gains to the tenant will not compensate the tenant and it is for those cases he proposes that this lease should be given. It shows the very mischief of this clause. It grants the tenant more than the landlord gains, and it is for that reason that I ask your Lordships to reject this clause.

Clause 6:

Right of landlord to offer alternative accommodation.

6. The tenant shall not be entitled to compensation under section four or the right to a new lease under section five if within one month after the tenant has made a claim under section four, subsection (1), or served a notice under section five, subsection (1), the landlord serves on the tenant notice that he is willing to grant to the tenant at such rent and for such term as the tribunal may consider reasonable a tenancy of other premises which, in the opinion of the tribunal, would reasonably preserve to the tenant the goodwill of his business.

THE LORD CHANCELLOR moved to leave out "or the right" and insert "of this Act or." The noble and learned Viscount said: I beg to move the Amendment which stands in my name on the Paper.

Amendment moved— Page 11, line 34, leave out ("or the right") and insert ("of this Act or").—(The Lord Chancellor.)

THE LORD CHANCELLOR

The next Amendment is drafting.

Amendment moved— Page 11, line 35, after ("five") insert ("thereof").—(The Lord Chancellor.)

Clause 6, as amended, agreed to.

THE LORD CHANCELLOR moved, after Clause 6, to insert the following new clause:

Provision when claim is both for improvement and goodwill.

". Where in respect, of any holding a claim for compensation has been made both for improvements and for goodwill, and the landlord has offered in lieu of compensation for either such claim to grant to the tenant, or obtain the grant to him of, a renewal of the tenancy, the rent under such renewal shall be fixed if both such claims are valid, irrespective of any increased value of the premises attributable either to the improvements or to the goodwill."

The noble and learned Viscount said: I should like to make an addition to the Amendment on the Paper, and, after the words "shall be fixed," to insert "if both such claims are valid." Then the effect will be that if the tenant has a double claim for improvements and for goodwill and the landlord offers to grant a lease in lieu of compensation the rent shall be fixed without regard either to the increased value of the premises attributable to the improvements or the goodwill. I beg to move.

Amendment moved— Page 11, line 43, insert the said new clause.—(The Lord Chancellor.)

LORD LAMINGTON moved, after Clause 6, to insert the following new clause:

Restriction on frivolous applications.

". If—

  1. (a) a claim for compensation under this Part of this Act has been made by a tenant and the tribunal has decided that the tenant is not entitled to such compensation, and notice of a claim under this Part of this Act is thereafter served on the landlord or his successor in title in respect of the same premises; or
    2. 719
  2. (b) notice of his intention to make an improvement has been served on the landlord by a tenant or his successor in title, where the tribunal has refused to certify the same or a similar improvement in respect of the same premises; or
  3. (c) the tenant has served on the landlord a notice under section five of this Act requiring a new lease of premises to be granted to him, in a case where the tribunal has already refused to grant such new lease,
the landlord may, in the prescribed manner, apply to the county court of the district in which the premises are situate, and if the court is satisfied that the claim or notice is in the circumstances frivolous or oppressive, the court may make an order prohibiting the tenant from making any further claim for compensation or serving any such notice as aforesaid under this Part of this Act during his tenancy or for such period, and subject to such conditions (including the payment of costs in respect of the application) as the court thinks fit."

The noble Lord said: This Bill is based upon the quite inaccurate view that many hardships arise from the leasehold system. If ever this Bill becomes law I imagine that those alleged hardships will be far surpassed by those that will accrue to owners of premises in our great cities. The noble and learned Viscount opposite appears to be under the delusion that a landlord is always a big landlord. My noble friend Lord Jessel referred to the increase in the number of small owners. It would be a hardship on those who have invested their savings in one shop and bought another from someone nearby that they should be subjected from time to time to what is really blackmail, so that the tenant or tenants may get not less but something more by way of compensation. The needy lawyer or surveyor is sure to suggest to such people: "Why not apply to your landlord for compensation or renewal? There will be no expense. We will make a division between us of whatever proceeds accrue."

Unluckily, one cannot protect these small landlords from the operations of these people, but they can be protected by not allowing renewed attempts on the part of tenants to get some benefit at the expense of their landlords. I hope that the noble and learned Viscount will allow this clause to be inserted so as to give protection to those who have put their hard-earned money into house property or land of the character which comes within the operation of this Bill. I beg to move.

Amendment moved— Page 11, line 43, at end insert the said clause.—(Lord Lamington.)

VISCOUNT PEEL

This clause, I understand, is to prevent a tenant from making numerous or repeated claims: (a), for compensation in respect of the same premises; (b), for a certificate that an improvement is a proper one; and (c), for the grant of a new lease. With regard to (a) and (c), the Amendment of my noble friend is really not necessary because in the nature of things that claim can only arise once—that is to say when the tenant quits the holding. As regards the certificate that the improvement is a proper one, that I agree might be made more than once in respect of the same or similar improvements, but there is one wholesome deterrent and that is that this gentleman would invariably have to pay the costs of the landlord and to most of us, I think, that would usually be a formidable deterrent. There is only one other case that might have happened, namely, as there are several referees the tenant might have chanced his luck, as it were, trying to find one more favourably inclined than another. That has been all swept away by the Lord Chancellor.

THE EARL OF MIDLETON

The noble Viscount has made a case against two of the items, but is it quite clear that the costs are a sufficient deterrent? Frivolous and vexatious demands are made. After all many people like to try their luck. Would not the noble Viscount, consider the words in the third case?

THE LORD CHANCELLOR

I think the costs are a very strong deterrent. As at present advised I do not think any more is required.

Amendment, by leave, withdrawn.

Clause 7:

Rights of mesne landlords.

7. Where, in the case of any holding, there are several persons standing in the relation to each other of landlord and tenant, the following provisions shall apply:— Where more than one landlord is concerned and they do not agree as to offer of a renewal under section four (1) (b) in lieu of the payment for goodwill provided for in that section, the tribunal shall be empowered to decide which course shall be followed.

THE LORD CHANCELLOR

The first two Amendments are drafting. I beg to move.

Amendments moved—

Page 12, line 3, leave out ("landlord and tenant") and insert ("lessor and lessee")

Page 12, line 20, leave out ("or") and insert ("and").—(The Lord Chancellor.)

THE LORD CHANCELLOR moved to leave out all words in the last paragraph after "Where more than one landlord is concerned and they do not agree as to" and insert "whether an offer of the renewal of the tenancy in lieu of compensation for an improvement or for goodwill should be made, the matter shall be referred to the tribunal, and the decision of the tribunal as to whether or not any such offer is to be made shall be binding on all the landlords concerned." The noble and learned Viscount said: This is to make the clause clear. It applies not only to offers under Clause 4 (1) (b) but to offers under Clause 2 (1) (d). I beg to move.

Amendment moved— Page 12, line 32, leave out from ("to") to the end of the clause and insert the said words.—(The Lord Chancellor.)

THE LORD CHANCELLOR

The next Amendment is drafting.

Amendment moved—

Page 12, line 36, at end insert as a new subsection: ("(2) In this section, reference to a landlord shall include reference to his predecessors in title.").—(The Lord Chancellor.)

Clause 7, as amended, agreed to.

Clause 8 agreed to.

Clause 9:

Right of entry.

9. The landlord of a holding to which this Part of this Act applies, or any person authorised by him, may at all reasonable times enter on the holding or any part of it, for the purposes of this Part of this Act.

THE LORD CHANCELLOR moved, after "for," to insert "the purpose" of executing any improvement he has undertaken to execute and of making any inspection of the premises which may reasonably be required for." The noble and learned Viscount said: This is to define the purpose for which the landlord is entitled to enter the premises. It confines it to the purpose of executing an improvement he has undertaken to execute or making an inspection. I beg to move.

Amendment moved— Page 13, line 8, after ("for") insert the said words.—(The Lord Chancellor.)

Clause 9, as amended, agreed to.

Clause 10 [Right to make deductions]:

THE LORD CHANCELLOR

The Amendments on this clause are drafting.

Amendments moved—

Page 13, line 13, after ("due") insert ("to the landlord")

Page 13, line 14, leave out ("as aforesaid")—

(The Lord Chancellor).

Clause 10, as amended, agreed to.

Clause 11:

Application of 13 & 14 Geo. 5. c. 9. s. 20.

11. Section twenty of the Agricultural Holdings Act, 1923 (which relate to charges in respect of money paid for compensation), as set out and modified in the First Schedule to this Act, shall apply to the case of money paid for compensation under this Part of this Act, including any proper costs, charges, or expenses incurred by a landlord in opposing any proposal by a tenant to execute an improvement, or in contesting a claim for compensation.

THE LORD CHANCELLOR moved, after "compensation," to add "and to money expended by a landlord in executing an improvement the notice of a proposal to execute which has been served on him by a tenant under this Part of this Act." The noble and learned Viscount said: This is an omission we want to supply. I beg to move.

Amendment moved— Page 13, line 26, after ("compensation") insert the said words.—(The Lord Chancellor.)

Clause 11, as amended, agreed to.

Clause 12 [Power to apply and raise capital money]:

Amendments moved—

Page 13, line 35, after ("this") insert ("Part of this").

Page 14, line 6, after ("life") insert ("statutory owner").—(The Lord Chancellor.)

THE LORD CHANCELLOR moved, in subsection (3), after "life" to insert "or in a fiduciary position." The noble and learned Viscount said: This is to get the trustee's assent.

Amendment moved— Page 14, line 10, after ("life") insert ("or in a fiduciary position").—(The Lord Chancellor.)

Clause 12, as amended, agreed to.

Clause 13:

Power to grant leases notwithstanding statutory restrictions.

13. Where the powers of a landlord to grant leases are subject to any statutory restrictions he shall, notwithstanding any such restrictions, be entitled to offer to grant and to grant any such lease as would under this Part of this Act relieve him from liability to pay compensation thereunder and any lease which he may be ordered to grant under this Part of this Act.

LORD DYNEVOR moved, after "landlord," to insert "or a person in a fiduciary position." The noble Lord said: This is a similar Amendment to one which the Lord Chancellor moved on Clause 12. I think the words should be inserted to clarify the clause and allow the trustee as well as the landlord to act.

Amendment moved— Page 14, line 19, after ("landlord") insert ("or a person in a fiduciary position").—(Lord Dynevor.)

THE LORD CHANCELLOR

I think this point is covered by a later Amendment of mine on line 20. I consulted the conveyancing counsel, who has approved all my Amendments, and I think this is covered by the words of the later Amendment.

LORD DYNEVOR

If the Lord Chancellor assures me of that I will withdraw.

Amendment, by leave, withdrawn.

THE LORD CHANCELLOR moved, after the first "to," to insert "sell or." The noble and learned Viscount said: This is one of the conveyancing points.

Amendment moved— Page 14, line 19, after ("to") insert ("sell or").—(The Lord Chancellor.)

Amendments moved—

Page 14, line 20, after ("statutory") insert ("or other").

Page 14, line 21, after ("restrictions") insert ("or any rule of law to the contrary").

Page 14, line 22, after the first ("to") insert ("sell or").

Page 14, line 22, after the second ("to") insert ("convey such reversion or").

Page 14, line 24, leave out ("any") and insert ("to execute any conveyance or").

Page 14, line 25, after ("to") insert ("make or").—(The Lord Chancellor.)

Clause 13, as amended, agreed to.

Clause 14 agreed to.

Clause 15:

Landlord's right to reimbursement of increased taxes, rates or insurance premiums.

15. Where the landlord is liable to pay any taxes (otherwise than by deduction from rent) or rates (including water rate) in respect of any premises comprised in a holding, or the premiums on any fire insurance policy on any such premises, and in consequence of any improvement executed by the tenant on the premises under this Act the assessment of the premises or the rate of premium on the policy is increased, the tenant shall be liable to pay to the landlord sums equal to the amount by which—

  1. (a) the taxes or rates payable by the landlord are increased by reason of the increase of such assessment:
  2. (b) the fire premium payable by the landlord is increased by reason of the increase in the rate of premium;
and the sums so payable by the tenant shall be deemed to be in the nature of rent and shall be recoverable as such from the tenant, anything to the contrary in the Rent and Mortgage Interest (Restrictions) Acts, 1920 to 1923, contained notwithstanding.

VISCOUNT SUMNER moved, before "the premiums of any fire insurance policy," to insert "has undertaken to pay." The noble and learned Viscount said: I move this on behalf of my noble and learned friend Lord Carson.

Amendment moved— Page 15, line 21, after ("or") insert ("has undertaken to pay").—(Viscount Sumner.)

Clause 15, as amended, agreed to.

Clause 16:

Holdings to which Part I. applies.

16.—(1) The holdings to which this Part of this Act applies are any premises held under a lease, other than a mining lease, made whether before or after the commencement of this Act, and used wholly or partly for carrying on thereat any trade or business, and not being agricultural holdings within the meaning of the Agricultural Holdings Act, 1923.

(2) For the purposes of this section premises shall not be deemed to be premises used for carrying on thereat a trade or business—

  1. (a) by reason of their being used for the purpose of carrying on thereat any profession;
  2. (b) by reason that the tenant thereof carries on the business of subletting the premises as residential flats, whether or not the provision of meals or any other service for the occupants of the flats is undertaken by the tenant:

Provided that so far as this Part of this Act relates to improvements premises used for carrying on a profession shall be deemed to be premises used for carrying on a trade or business.

VISCOUNT SUMNER moved, in subsection (1), after "partly," to insert "but only so far as concerns such part." The noble and learned Viscount said: Holdings to which this part of the Act applies are any premises used wholly or partly for carrying on thereat any trade or business. I wish to have inserted, after "partly," the words "but only so far as concerns such part." It is obvious that premises as described in this clause would cover any dwelling in one part of which a business is carried on. I do not suppose it is intended to allow by this Bill a right to recover the cost of improvements in the dwelling-house part of the premises, but only in respect of the part used for trade purposes. I thought the part of the Bill referring to improvements and goodwill was only to apply so far as concerned the part used for business. It can apply only to improvements, because goodwill cannot attach to the part used as a dwelling-house. It would be a pity to introduce into a Bill which does not deal with dwelling-houses as such a provision which might be expected to include improvements at the dwelling-house in the premises at which business is carried on.

Amendment moved— Page 15, line 41, after ("partly") insert ("(but only so far as concerns such part)").—(Viscount Sumner.)

THE LORD CHANCELLOR

In substance I agree with my noble friend, but I am not sure that the words are in the right place.

VISCOUNT SUMNER

If the Lord Chancellor will be good enough to consider the point before the Report stage I shall be happy to accept his judgment.

THE LORD CHANCELLOR

I will do so.

Amendment, by leave, withdrawn.

THE EARL OF MIDLETON moved, after subsection (1), to insert the following new subsection: () This Part of this Act shall not apply to any holding let to the tenant during his continuance in any office, appointment or employment, or for the temporary convenience or to meet a temporary necessity of either the landlord or the tenant, provided that any such contract of tenancy made after the commencement of this Act shall be in writing signed by the parties thereto, and shall express the purpose for which the tenancy is created.

The noble Earl said: I rather hoped that I should not have to argue this Amendment. It seems obviously fair. I am sure it is not intended that persons occupying holdings for temporary purposes or as office holders, or for the temporary convenience of the landlord or tenant, should have the right to compensation or to a new lease. I would point out that it would be unfair to leave the matter in doubt, and I suggest that a contract should be drawn out fairly between those concerned. There have been some very bad cases under the Rent Restrictions Acts of premises occupied solely for the purposes of a man's employment, either under a company or under a private individual, having been occupied for years because they were excepted under the Act. I move this Amendment in the hope that the Government will see fit to accept it.

Amendment moved— Page 16, line 2, at end insert the said subsection.—(The Earl of Midleton.)

VISCOUNT PEEL

I was rather waiting to hear whether the noble Earl had any specific cases in which he could allege that hardship had arisen.

THE EARL OF MIDLETON

No doubt I could supply the noble Viscount with cases, but I should have thought it was obvious. We have been prohibited from discussing the Rent Restrictions Acts, which are not before us, but there are innumerable cases under those Acts. I am most anxious to safeguard the point.

VISCOUNT PEEL

If the noble Earl presses the point, I have no objection to accepting the Amendment, subject to reconsideration on Report.

VISCOUNT SUMNER moved, in the proviso in subsection (2), to leave out "a" and to insert "the." The noble and learned Viscount said: This Amendment merely introduces my next Amendment, which I propose to explain. It is rather anomalous that this part of the Bill gives a benefit to people who carry on a trade or business but declares that for the purpose of improvements of premises in which that trade or business is carried on, premises in which a profession is carried on— shall be deemed to be premises used for carrying on a trade or business. The form in which this is expressed is rather a reflection on those who carry on a profession, but nobody quite knows what a profession is. Nevertheless, this provision has a practical object, and I should like it to be as clear as possible.

I do not think anyone can define a profession for the purposes of the Bill. At any rate the Bill does not attempt a definition. Whether it is a professor of deportment, a professor of dancing, a professor of music, or a professor of occult science, of course is a thing which no doubt the tribunal would be faced with; but so far as I know the principal premises in which persons can be properly carrying on a profession and do carry on professions otherwise than in offices are those which I propose to mention at the end of the clause, so as to clear the matter up. The proviso will then read: Provided that so far as this Part of this Act relates to improvements premises used for carrying on the profession of a qualified physician, surgeon, solicitor, notary public or architect shall be deemed to be premises used for carrying on a trade or business. I think there is a practice by which in the country solicitors and notaries and architects carry on their profession, a genuine profession, in the house in which they live, and of course physicians and surgeons constantly do so. It appears to me that if those persons, if duly quail- fied, were declared to be the professional men for whose protection this subsection was introduced, it would prevent claims and sometimes expensive and perhaps doubtful discussions before the tribunal as to the persons whom the clause was really intended to benefit.

Amendment moved— Page 16, line 14, leave out ("a") and insert ("the").—(Viscount Sumner.)

VISCOUNT BERTIE OF THAME

Can the noble Viscount tell me why he has omitted dentists?

VISCOUNT SUMNER

Because I did not think of it.

VISCOUNT BURNHAM

I venture to think that it would be very unwise to adopt a narrowing and restrictive Amendment of this sort. Expressio unius est exclusio alterius. It means that all these multifarious professions which have a genuine goodwill attaching to the premises in which the profession is carried on and in which improvements are made, for the purpose of carrying on the profession, will be left out of the Bill. In the East End of London, which I know well, there are many doctors who have consulting rooms which are really in the nature of shop premises. At some time they have actually been shops, and have been added to and made more convenient for the practice of the profession. Dentists are in exactly the same category, and it would be most unwise, without further consideration, to state that some kinds of professions or some professional callings come under this heading and adopt words of this sort, which once adopted would limit the right to compensation to the particular classes specified in the Bill.

VISCOUNT SUMNER

I accept "dentist" but I entirely reject "specialist."

LORD DANESFORT

My noble and learned friend has pointed out with unanswerable clearness that the word "profession" is a very vague one. There is no definition of it in the Bill and it would be extremely undesirable that a man who wants to claim compensation for improvements should have to go through an expensive law suit to see whether he was carrying on a profession within the meaning of the Bill. I do urge the noble and learned Viscount to accept this Amendment and, if before Report stage there appear to be any other legitimate professions which ought to be inserted in this clause, it would be possible to include them.

LORD JESSEL

I was rather convinced by what the noble Viscount said in moving the Amendment, but I am not sure I am not rather disturbed by the speech of the noble Lord who spoke last. It would be very difficult to limit the classes. In London you see the advertisements of dancing mistresses in the papers. That is a profession and the improvements of their rooms are of great moment to them. How are you going to omit them if you admit dentists? You have also left out veterinary surgeons. It is a very difficult thing to have a whole category of people put in and to run the risk of omitting somebody who ought to be in. It would be better to leave it alone and not to create another class of privileged person instead of leaving people to fight it out.

THE LORD CHANCELLOR

I have listened to the discussion, but, with great deference to the noble and learned Viscount, I think it would be better not to try and insert a list of these professions. Already we have had suggested the dentist, the teacher of dancing, the veterinary surgeon, the bone setter, and I may add the engineer who has just as much right as the architect, and the surveyor. If we went on thinking, we would find some other categories that ought to be added. Of course the barrister does not want compensation. He never has time or money to improve his chambers. The same, though I am not quite sure, might apply to a journalist or a publisher. If we go on we would find people who would complain they are left out. I think it better to leave in the word "profession."

VISCOUNT SUMNER

It is obvious I cannot press this and, if for the first time in the course of this long and dreary discussion some jocularity has been introduced, I have some reward. I say quite seriously that your Lordships are deliberately opening a door to a large amount of ridiculous litigation by persons who are entitled to say: "We are as good professional people as solicitors or architects or dentists." The matter will be litigated, the whole sentiment of this Act is in favour of the claimant, and you will find that persons are getting compensation for their improvements that are people who were never contemplated by those who framed the Bill. In withdrawing the Amendment I have a claim for unexhausted improvements.

Amendment, by leave, withdrawn.

Clause 16, as amended, agreed to.

THE EARL OF MIDLETON

We are not anxious to obstruct the business, but I think we have made considerable progress, and it has been a pretty severe strain on all concerned. I appeal to the Government not to proceed further now, and I beg to move the adjournment.

Moved, That the Committee do now adjourn.—(The Earl of Midleton.)

EARL BEAUCHAMP

We have come back here after dinner, and have only sat two hours and a quarter since. The noble and learned Viscount in charge of the Bill has also been exceedingly generous in the way in which he has postponed points until the Report stage, so it is quite evident that the Report stage will be a very long one. We have finished 30 out of the 35 pages of Amendments, and I cannot think that the last five pages of the Amendments will take very much longer. I hope that the Government will resist the suggestion of the noble Earl.

THE MARQUESS OF SALISBURY

My Lords, I am lost in admiration of the robustness of the noble Earl. No doubt he would like to stop until the small hours of the morning, but I am sure that the Government will be well advised to study the convenience of your Lordships. We have certainly not been badly treated to-night. My noble friends who have not quite agreed with some of the provisions of the Bill have yet shown a very accommodating spirit, and the result has been that the business of your Lordships' House has progressed very rapidly. I think in the circumstances we may reasonably go to bed, and the Government will not resist the Motion.

THE MARQUESS OF SALISBURY

My Lords, in moving the adjournment of the House, until 11 o'clock to-morrow, may I say that this Bill will, of course, be the first Order to-morrow. There is other Government business as well, but this Bill will be put down first.

EARL BEAUCHAMP

The usual custom is to meet at 12 o'clock on Fridays, and the result of adjourning at this unnecessarily early hour is that we are asked to come back again at 11 o'clock instead of 12. Those accustomed to the old traditions of the House have probably made arrangements for to-morrow morning—many of us have—but in consequence of this early adjournment we find that our engagements are all altered by this unusual meeting of the House early to-morrow morning.

THE MARQUESS OF SALISBURY

The usual practice of the House is that the Government should adhere to the promises which they have made, and on behalf of the Government three or four days ago I said that we should meet at 11 o'clock to-morrow. It would never do for me to vary it, because many noble Lords would come here at 11 o'clock.

On Question, Motion agreed to, and House adjourned accordingly until 11 o'clock to-morrow.

House adjourned at twenty minutes before twelve o'clock.

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