§ Provisions as to Charges.
§ (2) Where the landlord obtaining the charge is not an absolute owner of the holding for his own benefit, no instalment 765 or interest shall be made payable after time when the improvement or goodwill in respect whereof compensation is paid will, in the opinion of the Minister, have become exhausted.
§ (4) The sum charged shall be a charge on the holding, or the part therof charged, for the landlord's interest therein and for all interests therein subsequent to that of the landlord; but so that, in any case where the landlord's interest is an interest in a leasehold, the charge shall not extend beyond that leasehold interest.
VISCOUNT BERTIE OF THAME moved to leave out paragraph (2). The noble Viscount said: On the Second Reading the Lord Chancellor said the Bill referred to unexhaused improvements only. That word does not actually appear in the Bill, and it seems to me to be almost a vicious thing to introduce into the Bill, by implication in paragraph (2), such words as these. I never heard of goodwill becoming exhausted, and I do not know when it does. Again, paragraph (6) says:—
Where a charge may be made under this Schedule for compensation due under an award, the tribunal making the award shall, at the request and cost of the person entitled to obtain the charge, certify the amount to be charged and the term for which the charge may properly be made, having regard to the time at which each improvement or the goodwill in respect of which compensation is awarded is to be deemed to be exhausted.
I must confess that I do not understand these provisions, and I beg leave to move to omit them.
Page 25, leave out lines 19 to 23.—(Viscount Bertie of Thame.)
§ THE LORD CHANCELLOR
I am asked to explain the meaning of the Schedule. It seems to me to be very clear. A landlord has to pay to the tenant as compensation for an improvement the value of that improvement to the landlord at the end of the term. The value of the improvement may have become partly exhausted by wear and tear and depreciation, and the landlord only pays, in ordinary and indeed legal language, the unexhausted part of the value of the improvement. This Schedule deals with quite another matter. The words deal with a limited owner, such as a tenant for life. Where a limited owner has paid compensation for an improvement it ought not to fall entirely upon him. His successors ought to bear some part of the cost of paying the compensation, 766 and so the Schedule, following well-known precedents, gives him a right to obtain a charge on the holding. It ought, however, not to be a perpetual charge, but it ought to be paid off by the time that the improvement becomes exhausted. That is the meaning of these words.
§ VISCOUNT BERTIE OF THAME
I am much obliged to the Lord Chancellor for his explanation, and I do not press the Amendment.
§ Amendment, by leave, withdrawn.
§ THE LORD CHANCELLOR moved, in paragraph (4), to leave out "all interests therein subsequent to that of the landlord" and insert "interests in the reversion immediately expectant on the termination of the lease." The noble and learned Viscount said: This Amendment is necessary in consequence of some changes in the law effected by the Law of Property Act, 1925.
Page 25, line 32, leave out ("all interests therein subsequent to that of the landlord") and insert ("interests in the reversion immediately expectant on the termination of the lease").—(The Lord Chancellor.)
§ First Schedule, as amended, agreed to.
§ Remaining Schedule agreed to.