HL Deb 01 August 1928 vol 71 cc1552-83

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

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

On Question, Motion agreed to.

House in Committee accordingly:

[The EARL OF DONOUGHMORE in the Chair.]

THE LORD CHAIRMAN

This is a very long Bill, and if your Lordships approve I will take the unopposed clauses by groups. I think it will save time.

Clauses 1 to 7 agreed to.

Clause 8 [Transfer of shares or debentures not to be registered except on production of instrument of transfer]:

THE LORD CHANCELLOR (LORD HAILSHAM) moved, at the end of the clause, to insert as a new subsection:— (2) The production to a company of any document which is by law sufficient evidence of probate of the will, or letters of administration of the estate, of a deceased person having been granted to some person shall be accepted by the company, notwithstanding anything in its articles, as sufficient evidence of the grant.

The noble and learned Lord said: I beg to move the Amendment standing in my name to meet a point which has been raised by the Law Society and with which they think this Bill offers a favourable opportunity of dealing. Your Lordships are aware that when a shareholder dies the personal representative has, as a rule, the right either to transfer the shares of the deceased or to be registered as a member. There are certain companies which insist on the production of the actual probate before they will register the legal personal representative or recognise his title and refuse to be satisfied with an office copy, which is, of course, equally something which comes from official sources. The result of that is that where an estate consists of investments in a number of companies there is often very great delay, running into months before the personal representative can deal with the shares. The Amendment which we propose is that whatever is legal evidence of the grant of the probate shall be accepted as evidence by the company whose shares were owned by the deceased. I beg to move.

Amendment moved— Page 6, line 33, at end insert the said new subsection.—(The Lord Chancellor.)

On Question, Amendment agreed to.

Clause 8, as amended, agreed to.

Clauses 9 to 15 agreed to.

Clause 16 [Prohibition of provision of financial assistance by company for purchase of its own shares]:

The LORD CHANCELLOR moved, at the end of the clause, to insert as a new subsection:— (4) If a company acts in contravention of the provisions of this section it shall be liable to a fine not exceeding one hundred pounds, and every director, manager, secretary or other officer of the company who knowingly and wilfully authorises or permits the contravention shall be liable to the like penalty.

The noble and learned Lord said: I am moving to restore a subsection which was originally inserted in the Bill in your Lordships' House last year and was left out in another place. Clause 16 prohibits the provision of financial assistance by a company for the purchase of its own shares subject to certain provisos. In the Bill as it stands there is no penalty clause and the only sanction lies in the fact that a payment in contravention of the clause will be ultra vires and illegal. Representations have been made by some of your Lordships who were instrumental in moving the penalty clause on the last occasion and in response to their representations I have put down this Amendment.

Amendment moved— Page 11, line 18, at end insert the said new subsection.—(The Lord Chancellor.)

VISCOUNT BERTIE OF THAME

I am very grateful to the noble and learned Lord for re-inserting this provision which your Lordships were good enough to accept at my instance on the Committee stage last year. The noble and learned Lord is mistaken when he says that this clause was dropped in another place. In the Bill as it was introduced into the House of Commons, for some reason or for no reason, it was not included, but I am very glad that it is to be included now.

On Question, Amendment agreed to.

Clause 16, as amended, agreed to.

Clauses 17 to 21 agreed to.

Clause 22 [Amendment of s. 66 of Principal Act]:

THE LORD CHANCELLOR

My Amendment to this clause is purely drafting.

Amendment moved— Page 16, line 18, leave out ("right") and insert ("rights").—(The Lord Chancellor.)

On Question, Amendment agreed to.

Clause 22, as amended, agreed to.

Clauses 23 to 36 agreed to.

Clause 37:

Power to issue shares at a discount.

37.—(1) Subject as hereinafter provided, it shall be lawful for a company to issue shares in the company of a class already issued at a discount:

Provided that— (a) the issue of the shares at a discount must be authorised by resolution passed in general meeting of the company, and must be sanctioned by the Court;

LORD GREENWAY moved, in proviso (a) in subsection (1), to leave out "and must be sanctioned by the Court." The noble Lord said: I suggest, in reference to the Amendments standing in my name to this clause, that, if it would be in order, it would be convenient if they could be incorporated in one Motion, because they all deal with the new principle that has been introduced into the Bill since it left this House of requiring a company to obtain the sanction of the Court before making an issue of shares at a discount. The noble and learned Lord, the Lord Chancellor, in his speech on Monday, laid great stress on the strength and representative character of the Departmental Committee which sat in 1925 to consider and report what amendments were desirable to the Companies Acts, 1908–1917. I should like to ask him whether the new principle to which I have referred and which he says satisfied both points of view—that of those who desire an entire prohibition of the issue of shares at a discount and that of those who favour companies being given a free hand—was recommended by or has been referred to the members of that Committee.

In the very limited time that we have had in which to examine this Bill I have not been able to look up all the references, but it appears to me that this new and dangerous principle was given birth to hurriedly and with very little consideration at the eleventh day's sitting of the Committee in order to bring to an end a tedious and largely irrelevant discussion. Perhaps the noble and learned Lord who is responsible for the Bill in this House will be good enough to say whether I am right or wrong in my statement of how this new principle came into the Bill, because if I am wrong, and if it is clear that it was a recommendation of the Departmental Committee, I propose to withdraw my Amendments in order not to occupy your Lordships' time further, although it would be amazing to me to learn that any responsible body of lawyers, chartered accountants and business men can have evolved a provision so restrictive and dangerous in its application to honest business concerns, which, after all, constitute probably 99 per cent., or even more, of the companies that will be affected by this Bill. Perhaps I might ask for an answer to that question before I proceed with my Amendment.

THE LORD CHANCELLOR

I think probably it will be convenient if an Amendment is put before the House before I deal with it.

LORD GREENWAY

I quite agree. I will now proceed with my remarks in support of the Amendment. I should like to say in passing, however, that I am in the fullest possible sympathy with the desire to improve our company law in order to prevent as far as possible the gross swindles that are constantly being perpetrated on the innocent and unwary public by company promoters of a shady class and by what are known as share-pushers. But in our anxiety to push this Bill through, let us not accept too hastily measures such as this, which are likely to create even more serious evils in connection with perfectly legitimate and desirable operations. Clause 37, as it stands in the Bill now before us, would, in my opinion, be dangerous in the extreme, far more dangerous than the evils that we are seeking to cure, because it would probably mean the wrecking of many sound and promising undertakings, which in their early days may be short of capital, and because the object which the framers of the Bill presumably had in view when introducing the provision of a reference to the Court can, in my opinion, be just as well achieved by the proviso that I have put down on the Paper, as this still gives existing shareholders the first opportunity of acquiring any shares issued at a discount.

The drawbacks to the provision requiring the sanction of the Court are three: (1), expense which companies in their struggling days are ill able to afford; (2), publication to the whole world of their difficulties, which would lead to restricted credit and increased difficulty and cost in obtaining the finance required; and (3), probably the most serious of all, delay, which might mean the missing of favourable opportunities for obtaining the finance required, or possibly the complete closing down of many sound concerns. What is the need for this sanction of the Court? There is no such provision in connection with partnerships in private firms and, after all, shareholding in a public company is only partnership on an extended scale. The main difference, and the one in which shareholders chiefly require protection, is that, whereas when a would-be partner contemplates joining a private firm he has the opportunity of discussing and negotiating for himself the partnership terms, a shareholder in a public company has no such opportunity and has to rely on the directors for the performance of this duty.

What is the need for all this anxiety to prohibit the issue of shares at a discount? To judge from what has been said in this House and in another place there would appear to be a pretty prevalent idea that there is something immoral or dishonest in such issues. What is the foundation for this belief? Nothing at all. It is in the nature of all businesses that commercial undertakings have their good times and their bad times and that new undertakings of a perfectly sound character frequently have to be carried on for some years without profit or at a loss before they are firmly established, and that in the meantime no dividends, or small dividends only, are paid and the shares fall to a discount. Yet why should these concerns be restricted from raising fresh capital on more onerous terms than earlier issues if the capital is needed to bring the business to a successful stage, since this is to the interest of all concerned? This is frequently done in private partnerships. Why should it not also be permissible, without the restriction of having to apply to the Court, in the case of public companies?

I have one case in mind of a firm in which I am interested having many years ago needed a comparatively small amount of capital in order to tide over a temporary difficulty. To obtain this they had to admit a new partner on terms much more favourable than those pertaining to the original partners, with the result that the new partner has ever since been drawing an income out of all proportion to the amount of capital he supplied. The original partners have never for a moment begrudged him these disproportionate profits because they recognise that his small contribution saved them at a time of great need. This is an everyday occurrence in connection with private firms, and I merely mention it to illustrate my point. It is precisely the same with companies. When their shares are at a discount the original shareholders must make a sacrifice if further capital is required, unless they are prepared to put up the additional capital themselves, which, under the Amendment that I propose, they will have every opportunity of doing.

One other defect of the Bill to which I should like to draw attention is the omission to make any provision against the issue of debentures at an excessive discount, or on terms that are equivalent to an excessive discount. In this direction innocent and unwary shareholders need protection more even than in the issue of shares at a discount, because it is quite a common practice on the part of dishonest or "smart" directors, against whom we desire to legislate, to issue debentures to themselves and friends or to their friends on such onerous terms that the company is quite unable to meet its obligations and the mortgage is thereafter soon foreclosed by the debenture holders, who thus secure the undertaking at far below its intrinsic value, and the shareholders realise nothing. I know of one such case—a company whose undertaking would have been extremely difficult to sell independently—where 25 per cent. per annum was exacted for interest, apart from other considerations, and the debenture holders after a couple of years foreclosed, and eventually realised 100 per cent. more than the capital they provided plus the 25 per cent. per annum for interest whilst the shareholders got nothing. Do not shareholders require protection against this kind of thing as much as against the issue of shares at a discount? I have not put down any Amendment in this connection because the omission is such a palpable one that I feel sure the Government will see their way to rectifying it at the earliest possible moment without any further suggestion from me.

I think I have said enough to justify my Amendment and to show that the Bill in its present form is very incomplete and needs careful revision. I trust that your Lordships on both sides of the House will see your way to adopting my Amendment and to agreeing to the further revision which the Bill undoubtedly calls for regardless of the fact that this may mean its postponement to next Sessions. I may add that I have received this morning from a member of the other House a request to put forward several other Amendments which he had not an opportunity of bringing forward when the Bill was under discussion there. This letter arrived too late for me to deal with it to-day, but I mention the matter as it shows that a good deal of dissatisfaction prevails in the other House at the hurried manner in which the Bill was rushed through that Assembly, which is a further reason for not giving it the same treatment in this House. I beg to move.

Amendment moved— Page 31, lines 22 and 23, leave out ("and must be sanctioned by the Court").—(Lord Greenway.)

EARL RUSSELL

My Lords, companies have got on very well up to now without being able to issue shares at a discount, and it has been very strongly argued that there is no sound and honest reason why they should wish to issue shares at a discount. As the noble and learned Lord in charge of the Bill told you, there was a very big debate in another place on the subject, and ultimately a compromise was arrived at that permission should be given where there was a case which justified it and the Court was satisfied that the case justified it. The noble Lord now seeks to take away this protection, and I trust that your Lordships will not agree to his Amendment.

LORD HUNSDON OF HUNSDON

My noble friend behind me is very brave, because I know, as many of your Lordships know, what great opposition there is to issuing shares at a discount, and your Lordships may have observed that in an Amendment which follows I, in my timorous fashion, have suggested a compromise. There is no compromise about my noble friend, and I should like to support him, for the reason that I believe he is entirely right and also, I think, this question of the sanction of the Court requires a great deal more consideration, and I hope will receive a great deal of consideration after this Bill becomes operative. For that reason I shall discuss it at a little greater length than I otherwise should do. This clause says nothing at all about the discount at which shares should be issued, but throws the responsibility, which I suggest is a responsibility which Parliament ought to take, upon the Court, without giving the Court the slightest guidance or even suggesting any principle upon which the Court should act.

In the presence of noble and learned Lords it is rather impertinent for me to say so, but I should have thought that that was not a correct procedure. Then also, with regard to the Court, it is not as if these questions were referred to a single body, which always had a continuous policy. The question may be referred to Mr. Justice A. on one occasion, and to Mr. Justice B. on another. There may be two companies in exactly the same position. One goes before Mr. Justice A. and another before Mr. Justice B. Mr. Justice A., like myself, sees no reason why shares should not be issued at a discount, and when asked to sanction a discount of 20 per cent. he says "Certainly." The other company goes before Mr. Justice B., and Mr. Justice B., taking the opposite view, says "Certainly not," and turns the company down. The companies will have no security whatever as to what is going to happen. Then again Mr. Justice A., as I have said, has given permission to issue say at 80 per cent., and the directors, who by this Bill are all supposed to be very shady customers, if not rogues, go to the public and say: "This is a magnificent business, and moreover we have got the approval of Mr. Justice A., who is undoubtedly the first authority on financial and commercial matters in the world." You are making Mr. Justice A., or very nearly, a share-pusher. Is that a position in which you ought to put Judges of the High Court?

Now as to compromise. The noble and learned Lord has told us that this is a compromise. I have read the debates in the House of Commons, and I will tell you what sort of compromise it is. Sir Malcolm Macnaghten stated in the House of Commons, and Mr. Albery also, that they accepted this addition of the sanction of the Court because they knew that nobody would ever go for sanction to the Court, and therefore it was tantamount to saying you shall not issue shares at a discount. Therefore, all those opposed to issuing at a discount accepted the compromise for the same reason. If they are right, and I believe they are, because of the delay, uncertainty and expense of going to the Court, that is certainly a one-sided compromise. For those reasons I think that my noble friend is absolutely right in what he has proposed.

VISCOUNT BERTIE OF THAME

My Lords, in the case of preference shares the discount is limited, and in the case of debentures there is no such limit. They can be issued at one-half per cent. and so be repayable at 99½ per cent. premium, and there is no obligation on the people who issue debentures to go and get the leave of the Court. So I cannot see why you should require to have the leave of the Court in the case of preference shares.

THE LORD CHANCELLOR

The Amendment proposed by Lord Greenway is one which your Lordships will not be surprised to hear the Government cannot ask this House to accept. As your Lordships have been told, the clause, as it stands in the Bill, is the result of a compromise. It is not accurate to say that it is the result of a compromise hurriedly arrived at without due consideration. What happened was that there was a very long and controversial debate in Standing Committee in another place, in which there were two wholly opposing points of view submitted. There was, on the one side, that body of opinion which took the view urged by Lord Greenway and Lord Hunsdon, that it was only the company's affair, that it ought to be allowed to issue shares at whatever discount it chose, and that nobody ought to interfere to protect either the shareholders or the creditors. There was, on the other hand, a body of opinion, which I rather gather the noble Earl, Lord Russell, is inclined to favour, which regarded the issue of shares at a discount, involving as it necessarily does that the capital of the company ceases to be represented by assets, as an undesirable thing in itself, and therefore as one which ought not to be allowed.

Your Lordships appreciate that, except to the extent of paying a commission on issue, it is at present illegal, and always has been illegal, in this country to issue shares at a discount. It is therefore a new privilege for which the companies are asking. Those two views were put forward and debated, the matter was left by the Government to a free discussion, there was no Party influence brought to bear one way or the other; and, as the result of this long discussion, ultimately the Committee agreed that there must be two conditions laid down— (1), that the company by resolution should desire the issue of such shares; and (2), that the sanction of the Court must be obtained before the shares were issued. It was then left that a clause should be drafted which embodied those two principles. That clause was drafted, it is now Clause 37, and those two cardinal principles, which the Committee on both sides agreed upon as being reasonable and essential provisions, are now embodied in this clause. It is the second of these two essential safeguards—namely, the sanction of the Court—which your Lordships are now asked to cut out. Quite obviously if it were cut out it would destroy the whole compromise.

It is quite true, I believe, as Lord Hunsdon has told your Lordships, that some of those who opposed the issue of shares at a discount expressed themselves as satisfied because they thought that the Court would hardly ever grant its sanction. On the other hand, those who were in favour of the issue of shares at a discount equally accepted the compromise, because their view was that, since the Court would act reasonably, it would probably grant it wherever there was a reasonable case made out. On merits I submit that the proposal in the Bill as it now stands is an eminently reasonable and proper one. There is no true analogy between a partnership, in which the capital of the partners is engaged up to the hilt, and the joint stock company which gets by virtue of its incorporation from Parliament the privilege of limiting the liability of its shareholders. In the case of a partnership it matters not a whit to the public at what price the partners arrange to see that their capital is subscribed, because it is a matter of bargain between the partners themselves; in the case of a limited company that is not true. You have a company with an authorised and issued capital, let us say of £1,000,000, and the unwary person who is asked to deal with the company thinks that a company with a capital of that amount may be regarded as solvent for ordinary debts. If these words be omitted the company could issue its £1,000,000 capital for £1 or even ten shillings, and therefore the public would have no sort of protection at all. Similarly, if these words be omitted, the minority of the shareholders might easily find themselves placed in a position in which shares with preferential rights were issued at an enormous discount, and therefore the value of their own shares, which ranked behind the preference shares, would be absolutely destroyed. You might have an ordinary shareholder, for instance, who would find against his will a great block of preference shares created and issued at a discount of 1s. in the £. Again an obvious injustice, but one which requires protection.

As the Bill was introduced, there was an elaborate series of clauses to protect the issue of these shares. Those clauses have been swept away, and the sanction of the Court has been substituted. The proposal is now that the sanction of she Court shall be taken out, too, and that there shall be no protection. But, in fact, I submit to the House that the sanction of the Court is a much more reasonable and proper protection to put in, because, necessarily, if you settle the conditions by Act of Parliament, you impose a rigidity which may be very damaging to the particular company which cannot bring itself within the exact language of the limiting provisions; whereas when you go to the Court the Court has to consider all the circumstances, and allow the application on such terms as it thinks fit, to protect the interests both of the public and of the shareholders of the company. For these reasons I ask your Lordships not to disturb an agreement which was reached with great difficulty, and which in my respectful submission, does do substantial justice, does allow the issue of shares at a discount where it is proper that they should be so issued, but does protect the public and the shareholders against the abuse of the privilege by providing that the Court's sanction should be obtained in every case. I ask your Lordships to reject the Amendment.

On Question, Amendment negatived.

LORD HUNSDON OF HUNSDON moved to add to proviso (a) in subsection (1), "if members of the company, entitled to not less than one-tenth of the votes to which all the members of the company are together entitled oppose the resolution." The noble Lord said: This Amendment is a compromise. The noble and learned Lord, who is in favour of compromises, will, I hope, consider this suggestion. My suggestion is that if practically the whole of a company, that is to say, up to within 10 per cent. of the whole, think they want a thing, they should have it. If they do not, and if there is any dispute, then it should go to the Court. As a layman I should have thought that the functions of the Court were to settle disputes, and not to decide the financial policy of companies. By this Amendment if one-tenth of the members of a company oppose a resolution, then the company must go to the Court, and the Court must settle. In my opinion the company will never go to the Court if there is opposition, for the reasons I have given—the delay, uncertainty, and expense. But, if they do, it seems to me that the Court will then be exercising its proper functions. The reason why I call this Amendment a compromise is that if everybody agrees, then shares can be issued at a discount, and if there is any opposition nobody can issue shares at a discount. That seems to me a reasonable compromise. The noble and learned Lord spoke about the public being protected by this clause. Well, I do not really know what the public have to do with it; it is the shareholders' property, they are the shareholders' shares; why they should not sell them at a discount I do not know. I can understand any noble Lord saying the sanction of the Court must be obtained before you sell shares at a premium, that is to say, above what their apparent worth is, but why the public should not buy shares at less than their apparent value I really do not know.

Amendment moved— Page 31, line 23, after ("court") insert the said words.—(Lord Hunsdon of Hunsdon.)

THE LORD CHANCELLOR

My Lords, for the reasons which I have already given I cannot accept this proposal. Lord Hunsdon was ingenious enough to suggest that I like compromises. When you have made a compromise I like sticking to it, and I do not think it is a fair description of a compromise when it is a matter of a further concession after you have already arrived at an agreement. The noble Lord said that the public are not concerned. That has never been the view which Parliament has taken. The public are concerned with regard to companies, because companies are incor- porated with certain protection in order to deal with the public, and it has always been the case that where, for instance, a company wishes to reduce although all the shareholders in the company may desire so to do, they have to go to the Court and get leave from the Court to make the reduction, because the Court has to be satisfied that adequate protection is given to the public, with whom the company is proposing to deal. It is not the same where shares are to be issued at a premium. In that case the result is that you are getting into the company's coffers more than the equivalent value represented by the nominal amount of the shares, and, therefore, the creditor gets not twenty shillings in the pound, but something more than twenty shillings in the pound available to meet his debts. Where shares are issued at a discount it follows ex hypothesi that you are creating and issuing capital which is not represented by assets, and it is desired that this shall only be done with due publicity and when the Court is satisfied that it can be done without risk to the public interest. I hope that your Lordships will not accept this Amendment any more than the last one, and for the reasons that I have already given.

On Question, Amendment negatived.

Clause 37 agreed to.

Clause 38:

Amendment of s. 89 of principal Act.

38. Section eighty-nine of the principal Act shall be amended as follows:—

(a) There shall be inserted at the end of subsection (1) of Section eighty-nine of the principal Act the words— (c) Not in any case in excess of ten per cent. of the price at which the shares are issued; and provided that the number of shares which persons have agreed for a commission to subscribe absolutely is disclosed in the manner provided in this subsection.

(b) In paragraph (b) of subsection (1) after the word "filed" there shall be inserted the words "before the payment of the commission";

VISCOUNT BERTIE OF THAME moved, before paragraph (a), to insert "in paragraph (b) of subsection (1) after the word 'filed' there shall be inserted the words 'before the payment of the commission.'" The noble Viscount said: The object of this drafting Amendment is to put the horse before the cart, instead of the cart before the horse as is at present the case in this clause. The clause provides, in (a), that Section 89 of the principal Act shall be amended by the insertion at the end of subsection (1) of a paragraph (c). Then, paragraph (b) provides that after the word "filed" there shall be inserted the words "before the payment of the commission." Surely, that is putting the cart before the horse. I hope this Amendment will be accepted because it makes a better sequence.

Amendment moved— Page 32, line 19, at end insert the said words.—(Viscount Bertie of Thame.)

THE LORD CHANCELLOR

My noble friend Lord Bertie told your Lordships that this was a drafting Amendment, but in the view of those who are advising me, it is not really necessary. Its sole effect is to make the clause deal with paragraph (b) of subsection (1) of Clause 89 before going on to paragraph (c). As I think your Lordships know, and certainly as is the fact, this Bill is not ever going to come into operation until there has been consolidation. It has been thought that the convenient way of dealing with any alteration in order would be when the consolidation takes place, and when this Bill is incorporated with the existing company law. I would suggest, therefore, to my noble friend that the matter having been raised and having had the attention of those responsible, he should leave it in order to be dealt with as a consolidation point.

VISCOUNT BERTIE OF THAME

I am always rather reminded regarding Parliamentary draftsmen of a nurse in charge of a child. The nurse can slap it as much as she likes, but immediately any one else comes along and tries to punish the child the nurse says "No." But I will not press the Amendment.

Amendment, by leave, withdrawn.

Clause 38 agreed to.

Clause 39 agreed to.

Clause 40 [Form of balance sheet]:

THE LORD CHANCELLOR

The next Amendment deals with one of those slaps to which my noble friend has just referred. It is a purely drafting Amendment, and I beg to move.

Amendment moved— Page 35, line 34, after ("company") insert ("and").—(The Lord Chancellor.)

On Question, Amendment agreed to.

Clause 40, as amended, agreed to.

Clauses 41 to 46 agreed to.

Clause 47 [Amendment of s. 104 of principal Act]:

EARL GREY

I should like to ask a question about the meaning of Clause 47. Section 104 of the principal Act, which gives power to re-issue redeemed debentures in certain cases, was introduced into the principal Act to protect the position of innocent debenture holders who had suffered by the decision in the cases of Routledge and Tasker, and I have no doubt this clause achieves the same result as Section 104 was intended to achieve; but I am afraid I cannot quite follow it. Under the principal Act, it was incumbent upon the company to declare if it was going to re-issue debentures, but as now drawn the company is entitled to re-issue debentures unless, by passing a resolution to that effect, or by some other act, it has manifested its intention that the same shall be cancelled. I do not quite see how an intending purchaser of the debentures is to satisfy himself that the company has not manifested its intention that the debentures shall be cancelled. I suppose that subsection (2), which makes it incumbent upon the company to show in its balance sheet the authorised capital, would, by deduction, serve to show what unissued debentures there are. But if we are really legislating to prevent fraud in this matter, it hardly seems to me that we are making it any more difficult for fraudulent directors to obtain their ends.

Supposing the debentures were re-issued and, after some convenient time, the company went into liquidation, the rather vague words "or by some other act manifested its intention" could be made use of and it might be claimed that the debentures had been wrongly issued. In that event I suppose the purchaser or holder of the debentures would rely upon the words occurring in the substituted subsection (1): on such a re-issue the person entitled to the debentures shall have, and shall be deemed always to have had, the same priorities as if the debentures had never been redeemed. Is it clear that the words "such a re-issue" would apply to an irregular issue, or would they apply only to a re-issue in accordance with the provisions of this subsection? If they do not apply to an irregular issue, it seems to me that the purchaser of the debentures would have lost his protection. I should have thought that it might have been possible to devise some words which would make it clear to the purchaser as to where he had to look to satisfy himself that the company had manifested its intention to cancel.

I would also like to ask a question about subsection (1). The original subsection expressly excluded from re-issue debentures which had been amortised in accordance with a proper scheme. I do not know why that express provision is omitted in this case. To a layman it seems rather as if it would be possible to redeem debentures in accordance with a regular scheme and, subsequently, to re-issue them, giving to the re-issued debentures the same priority as the original debentures had, in accordance with the last words of the subsection. I am sure that cannot be the intention. I cannot quite see the object in changing such definite expressions as "expressly otherwise provide" which occur in Section 104 of the principal Act, for much less definite words such as "whether express or implied" which occur in this clause. I hope the noble and learned Lord will be able to show me that I am wrong.

THE LORD CHANCELLOR

I am anxious to meet any difficulty which occurs to any one of your Lordships. I hope my noble friend will not think I am unreasonable when I say I think I ought to have had some sort of intimation that a question of this kind was going to be raised. No hint has ever been given to me that a question as to the precise effect of Clause 47, or indeed that any question upon Clause 47, was going to be brought up in your Lordships' House, and, quite frankly, I have not had the opportunity to ascertain the precise answer to the question which has been put. If I might venture—always a dangerous thing for a lawyer to do—to try to answer the second question which the noble Lord put, as to what is to prevent a company when, pursuant to the promise on which debentures are issued, it has redeemed some of those debentures, from re-issuing the debentures on the same terms and subject to the same priorities as the original issue, I would say the answer is that it has made a contract and will not do it. It has by an act manifested its intention that the debentures shall be cancelled, and indeed has done so by resolution, because the terms on which debentures are originally issued would no doubt be incorporated in the resolution. There would therefore be no possible danger, where a company had issued debentures on certain specific terms which involved a part of the issue being redeemed year by year, that it could thereafter proceed to re-issue those debentures which have been redeemed and cancelled and treat them as if they were valid.

With regard to the other point, as to how the innocent purchaser of a debenture is to find out whether the company has power, I am afraid, under the existing law, he has a difficulty in finding it out, and it may be he is still under some such difficulty, although I do not speak confidently without having had an opportunity for consideration. But the effect of this is to prevent the difficulty which has, in fact and in practice, arisen in consequence of the Courts having held that the fact of the debentures having been redeemed in certain cases effects their cancellation, although nobody realised they were cancelled, so that when there was a reissue the debenture was valueless because there was no power to issue. It is to prevent that and to ensure that there shall not be a cancellation effected unless the company has indicated its intention to cancel, as I understand it, that this clause has been embodied in this Bill. I am afraid I cannot go further than that at the moment because, as I have said, I have had no opportunity of looking into it. I will endeavour to find out if there is any further answer that I can give and let the noble Earl know.

EARL GREY

I should have liked to give the noble and learned Lord ample notice and I should also have liked more time myself to study this matter, but I am afraid we are given such a very short time to look at Bills that it is not always possible to do what the noble and learned Lord has suggested.

THE LORD CHANCELLOR

This particular clause was in the 1927 Bill; it is not an alteration.

Clause 47 agreed to.

Clauses 48 to 78 agreed to.

Clause 79 [Accounts to contain particulars as to loans to directors etc.]:

VISCOUNT BERTIE OF THAME had on the Paper an Amendment in paragraph (c) of subsection (1), after "emoluments," to insert "and the monetary value of any other valuable consideration given to or." The noble Viscount said: As many of your Lordships know the amount paid means cash, and valuable considerations of any other kind, such as a gift of shares or a gift of goods, are not covered by these words. I understand that my noble and learned friend the Lord Chancellor has words which cover the subject much better both on this clause and on Clause 82, and as I am never jealous of the words of my own drafting, and it is simply a matter of principle with which I am concerned, I am willing to give way to the noble and learned Lord. I do not move this Amendment.

Clause 79 agreed to.

Clause 80 [Statement as to remuneration of directors to be furnished to shareholders]:

THE LORD CHANCELLOR

It is a purely drafting Amendment that I beg to move.

Amendment moved— Page 77, line 20, leave out ("passing of such resolution") and insert ("receipt of the demand)."—(The Lord Chancellor.) On Question, Amendment agreed to.

THE LORD CHANCELLOR moved at the end of the clause to insert the following subsection:— In this section and in the last preceding section of this Act the expression 'emoluments' includes fees, percentages and other payments made or consideration given directly or indirectly to a director as such, and the money value of any allowances or perquisites belonging to his office.

The noble and learned Lord said: I am asking your Lordships to insert this subsection here in order to meet the point mentioned by my noble friend Lord Bertie of Thame, who pointed out that in Clause 79 the word "emoluments" occurred and that "emoluments" would only include cash payments. There is a reference to emoluments in that place and also in Clause 80, and we have thought therefore that the convenient way of meeting my noble friend's point would be by inserting this as subsection (4) of Clause 80. By this subsection we define emoluments as covering any form of valuable consideration and that, I think, meets the point which my noble friend indicated to your Lordships.

Amendment moved— Page 78, line 18, insert the said new subsection.—(The Lord Chancellor.)

LORD PARMOOR

I wish to ask the noble and learned Lord whether the words "in the last preceding section" cover the case?

THE LORD CHANCELLOR

Yes.

On Question, Amendment agreed to.

Clause 80, as amended, agreed to.

Clause 81 agreed to.

Clause 82:

Declaration of law as to payments received by directors for loss of office or on retirement.

(3) If any such director fails to take reasonable steps as aforesaid, or if any person who has been required by any such director to include the said particulars in or send them with any such notice fails so to do, he shall be liable to a fine not exceeding twenty-five pounds, and if the requirements of the last foregoing subsection are not complied with in relation to any such payment, any sum received by the director on account of the payment shall be deemed to have been received by him in trust for any persons who have sold their shares as a result of the offer made.

(4) If in connection with any such transfer as aforesaid the price to be paid to any director of the company whose office is to be abolished or who is to retire from office for any shares in a company held by him is in excess of the price which could at the time have been obtained by other holders of the like shares the excess shall, for the purposes of this section, be deemed to have been a payment made to him by way of compensation for loss of office or as consideration for or in connection with his retirement from office.

VISCOUNT BERTIE OF THAME had given Notice to move in subsection (1), after made ["made to any director"] to insert "or other valuable consideration to be given." The noble Viscount said: This is the same point as that which I raised a few minutes ago and again I understand that my noble and learned friend the Lord Chancellor has better words than mine. Therefore I do not move this Amendment.

LORD HUNSDON OF HUNSDON had given Notice to move, after "person" in subsection (3), to insert "responsible for sending such notice." The noble Lord said: The Lord Chancellor has a better Amendment than this, which will produce the same result, and therefore I do not move my Amendment.

THE LORD CHANCELLOR moved, in subsection (3), after "if any person who has been," to insert "properly." The noble and learned Lord said: The point is one which I am indebted to my noble friend Lord Hunsdon for calling attention to. Obviously it is not intended that someone in the street who has been required to do something which he is under no obligation to do shall be penalised for not doing it. Therefore we propose to put in the word "properly," so that it will only be someone who has been properly required to give this information and who fails to do it who will be liable to penalty.

Amendment moved— Page 79, line 33, after ("been") insert ("properly").—(The Lord Chancellor.)

On Question, Amendment agreed to.

LORD HUNSDON OF HUNSDON moved, in subsection (3), to leave out "he" ["he shall be liable"] and insert "such person." The noble Lord said: I was doubtful when I read the clause whether the word "he" meant such person or director. I think the Amendment will make it clear if the noble and learned Lord will accept it.

Amendment moved— Page 79, line 36, leave out ("he") and insert ("such person").—(Lord Hunsdon of Hunsdon.)

THE LORD CHANCELLOR

We intend the word "he" to cover both the director and the other person who fails to send out the particulars, because we think that if a director fails to do so there is no reason why he should be exempted from penalty. For that reason we would rather preserve the word "he."

LORD HUNSDON OF HUNSDON

May I suggest that a director loses all compensation if the notice is not given? I thought, therefore, it could not possibly refer to a director because that would be sufficient punishment for him.

THE LORD CHANCELLOR

We thought that if a director deliberately omitted to give the particulars which were required there was no reason why he should not be subject to a penalty. The amount of the penalty, of course, would be at the discretion of the Court, with a maximum stated here of £25.

On Question, Amendment negatived.

THE LORD CHANCELLOR moved, in subsection (4), to leave out "the excess" and to insert "or any valuable consideration is given to any such director the excess or the money value of the consideration as the case may be." The noble and learned Lord said: If this Amendment is accepted the subsection will then read—I think I had better read the whole subsection because it is a little difficult:— If in connection with any such transfer as aforesaid the price to be paid to any director of the company whose office is to be abolished or who is to retire from office for any shares in a company held by him is in excess of the price which could at the time have been obtained by other holders of the like shares— this is where the alteration comes in— or any valuable consideration is given to any such director the excess or the money value of the consideration as the case may be— and then the subsection goes on— shall, for the purposes of this section, be deemed to have been a payment made to him by way of compensation for loss of office or as consideration for or in connection with his retirement from office. Amendment moved— Page 80, line 6, leave out ("the excess") and insert the said new words.—(The Lord Chancellor.)

On Question, Amendment agreed to.

Clause 82, as amended, agreed to.

Clauses 83 to 91 agreed to.

Clause 92:

Restrictions on offering of shares for subscription or sale.

Provided that the provisions of this subsection shall not apply— (a) where the shares to which the offer relates are shares which are quoted on, or in respect of which permission to deal has been granted by, any recognised stock exchange in Great Britain and the offer contains a statement that the shares are so quoted or that such permission has been granted or

(3) The written statement aforesaid shall not contain any matter other than the particulars required by this section to be included therein, and if printed shall not be printed in type less large or less legible than any type in which the offer or any document sent in connection therewith is printed.

(8) If any person is convicted of having made an offer in contravention of the provisions of this section, the court before which he is convicted may order that any contract made as a result of the offer shall be void, and, where it makes any such order, may give such consequential directions as it thinks proper for the repayment of any money or the retransfer of any shares.

Where the court makes an order under this section (whether with or without consequential directions) an appeal against the order and the consequential directions, if any, shall lie to the High Court.

THE LORD CHANCELLOR moved, in proviso (a) in subsection (2), to leave out "contains a statement that the shares are so quoted or that such permission has been granted," and insert "so states and specifies the stock exchange." The noble and learned Lord said: In Clause 92 there is an exemption provision, proviso (a), in which the offerer is exempted from the provisions of the clause where the shares to which the offer relates are shares which are quoted on, or in respect of which permission to deal has been granted by, any recognised stock exchange in Great Britain and the offer contains a statement, in the words of the clause, "that the shares are so quoted or that such permission has been granted." It has been brought to the attention of the Government that in subsection 4 (h) the statement is to tell the person to whom the shares are offered what is the stock exchange on which they are quoted. There seems no reason for differentiating between the two cases, and therefore we propose this Amendment to bring them into line.

Amendment moved— Page 87, line 3, leave out from ("offer") to ("or") in line 5, and insert ("so states and specifies the stock exchange").—(The Lord Chancellor.)

On Question, Amendment agreed to.

THE LORD CHANCELLOR moved, in subsection (3), to leave out all words after "and" and insert "shall not be in characters less large or less legible than any characters used in the offer or in any document sent therewith." The noble and learned Lord said: This Amendment is intended to meet the point that there might be an evasion of the words in the clause as it stands by limiting it only to printing in type. In order to ensure that evasion shall not take place we propose to substitute the words I move.

Amendment moved— Page 87, line 16, leave out from ("and") to end of line 19, and insert ("shall not be in characters less large or less legible than any characters used in the offer or in any document sent therewith").—(The Lord Chancellor.)

On Question, Amendment agreed to.

THE LORD CHANCELLOR moved, in subsection (8), to leave out "section" and insert "subsection." The noble and learned Lord said: The effect of this Amendment is to confine the provisions of the second paragraph of the subsection, which give a right of appeal to the High Court, to orders made under subsection (8). As the Bill stands an appeal to the High Court would lie not only where an order was made under subsection (8), but where a person was convicted under subsection (5). That was not the intention and it is in order to make that clear that I move this Amendment.

Amendment moved— Page 89, line 18, leave out ("section") and insert ("subsection").—(The Lord Chancellor.)

On Question, Amendment agreed to.

Clause 92, as amended, agreed to.

Clause 93 [Provisions with respect to prospectuses of foreign companies inviting subscriptions for shares or offering shares for sale]:

THE LORD CHANCELLOR

My Amendment to this clause is purely drafting.

Amendment moved— Page 91, line 6, leave out from ("formed") to ("and") in line 11.—(The Lord Chancellor.)

On Question, Amendment agreed to.

Clause 93, as amended, agreed to.

Clauses 94 to 109 agreed to.

Clause 110 [Application to Scotland of certain provisions]:

THE LORD CHANCELLOR moved, after subsection (4), to insert as a new subsection: (5) Subsection (8) of section ninety-two of this Act shall not apply to Scotland.

The noble and learned Lord said: This is a Scottish Amendment. Subsection (8) of Clause 92, with which we have been dealing just now, enables a Court, on conviction of a person having made an offer in contravention of the section, to order that any contract made as a result of the offer shall be void. Under an Amendment made in another place an appeal from such order to the High Court is made competent. In the case of Scottish companies that is a wholly inapplicable provision, because a Scottish criminal court has no civil jurisdiction and there would be all sorts of difficulties if provision were made for an appeal to the Scottish civil courts from a court of criminal jurisdiction there. Therefore we propose that the subsection shall not apply to Scotland.

Amendment moved— Page 98, line 12, at end insert the said new subsection.—(The Lord Chancellor.)

On Question, Amendment agreed to.

Clause 110, as amended, agreed to.

Clauses 111 to 117 agreed to.

Clause 118:

Short title, construction, repeal and commencement.

(4) Section ninety of this Act shall come into operation on the passing of this Act and the other provisions of this Act shall come into operation on the appointed day, and the appointed day shall be such day as His Majesty may by Order in Council appoint, and different days may be appointed for different purposes and for different provisions of this Act:

Provided that the appointed day for the purposes of the repeal of any particular enactment shall not be earlier than the day fixed as the appointed day for the coming into operation of the corresponding provisions of this Act.

LORD HUNSDON OF HUNSDON moved to leave out subsection (4) and to insert: (4) Section ninety-two of this Act shall come into operation on the passing of this Act, but the other provisions shall not come into operation until a Resolution in that behalf has been passed by both Houses of Parliament.

The noble Lord said: I regard this Amendment as a very important one, and I think that the noble and learned Lord will agree at all events with the motives that have prompted me to propose it. I have two reasons for moving this Amend- ment. The first is that, as your Lordships have not had sufficient time to revise this Bill, you should at all events be able to keep a hold on it until it is revised or until you are convinced that no revision is necessary. The Amendment was therefore framed to some extent as a protest against the condition of affairs in this House at the end of every Session, but after the answer which my noble friend the Leader of the House gave to the question that I put to him earlier in the evening that reason disappears entirely, because that matter will be gone into, no doubt, by a Select Committee, and I hope that we shall have some alleviation. The fact remains, however, that this Bill does, in my judgment, require revision Your Lordships see the number of Amendments and new clauses that were passed by the House of Commons last week, and the number of Amendments that are required and accepted by your Lordships, even up to the last moment. It is only reasonable to suppose that, if we sat another day or two, we should find yet more Amendments necessary.

I should like to put before your Lordships one or two reasons why I say that this Bill requires amendment. I called attention last Session to the extraordinary disparity between the penalties that are imposed for various offences. I should like to repeat something of what I said on that occasion. Under Clause 39 directors and officials of a company are liable to a fine not exceeding £200 if a copy of the balance sheet is not sent to all persons entitled to receive it not less than seven days before the date of the general meeting. That seems to be a perfectly unreasonable fine for what may be called a technical offence. We come to another purely technical offence in Clause 43, which says that, if a company has a property subject to a mortgage created previous to the passing of the Act and does not within six months after the commencement of the Act send particulars thereof to the Registrar of Companies, everybody connected with the company is liable to a fine of £50 a day while the default continues. That is to say, for a purely technical offence the secretary of the company amongst others is liable to be fined at the rate of £18,250 a year.

I do not suppose the expression "ridiculous" ought to be used in this House, but really a penalty like that for a purely technical offence does seem to merit that description. I know that, as a matter of fact, several people were engaged in drafting this Bill before it came to your Lordships' House, and I can only imagine that one of them fixed the penalty at £20 and then another, who I cannot help feeling must have been the Registrar of Companies himself, said: "If anyone does not send me particulars of a mortgage for my files"—which will never be looked at from one year's end to another—"let him be fined £18,250 a year." I say that somebody ought to go through this Bill and arrange these penalties in some sort of system.

I am not going to trouble your Lordships with any further statements or arguments of my own, but I should like to add one word from those who are far abler and more experienced in these matters than I am. I have seen a letter—I am not authorised to give the name; there has been no time to ask for permission; there is no time for anything—from one of the most eminent company lawyers in the City of London to a brother solicitor. He urges most strongly the necessity for delay before this Bill passes into law, and he adds to his fellow solicitor:— However, it is an ill-wind that blows nobody any good. It will not do us any harm— that is, the solicitors. There is one other letter that I should like to mention to your Lordships. I have received a letter from the Secretary of the Law Society, and he says that it is certainly the opinion of some members of his council, and probably of the whole body, that with regard to a Bill of this nature, involving so much technical detail which very materially affects the business life of the community, a full opportunity should be given for studying the Bill in the form in which it is proposed that it should pass into law. I might remind your Lordships that not only does the Bill affect the business life of the community but the business life of the community is now almost entirely carried on by means of limited companies. I beg to move.

Amendment moved— Page 100, line 7, leave out subsection (4) and insert the said new subsection.—(Lord Hunsdon of Hunsdon.)

EARL RUSSELL

The Amendment which the noble Lord has moved refers to subsection (4) of the last clause of the Bill, and I should like to call your Lordships attention to that clause. It says:— (4) Section ninety of this Act shall come into operation on the passing of this Act and the other provisions of this Act shall come into operation on the appointed day, and the appointed day shall be such day as His Majesty may by Order in Council appoint, and different days may be appointed for different purposes and for different provisions of this Act. That is the most remarkable date that I have ever seen on which a Bill is to come into operation. Little bits are to come into operation on some days and other little bits on other days, and apparently even different purposes are to have different days. I hope that the noble and learned Lord will see some way of amending that clause before this Bill leaves the House. I have seen provisions that there shall be an appointed day for Part I or Part II, or something of that sort, but under this Bill there can apparently be 100 appointed days for all sorts of different purposes. That is a very undesirable provision.

THE LORD CHANCELLOR

With regard to the remarks of the noble Earl who has just spoken, he seemed to think that it was unusual to find, in a Bill which consists of a number of different provisions bearing on matters of varying importance, that different days are appointed. It is far from unusual. I did not know that he was going to raise this point and have not had time to look for precedents, but I can give him one out of my head at once—the Government of Ireland Act, 1920, where the appointed day, I remember, varied in just the same way. I think I could find a very large number of other precedents. The point is that there are some clauses with regard to which there is urgent need of bringing the law into operation at once—the share-pushing clause is one obvious instance—whereas others, and the bulk of them, may await a more mature date.

With regard to the remarks of my noble friend Lord Hunsdon, I think I told your Lordships quite candidly when I moved the Second Reading that I personally very much regretted that there had not been a further opportunity of discussing this Bill in all its details in this House, and the only plea in mitiga- tion that I ventured to put before your Lordships was that in fact this was a Bill which was originally passed by your Lordships' House last Session and was introduced into the other House in the form in which it left your Lordships, and that therefore what we are really engaged upon is the consideration of Commons Amendments to a Lords Bill. The Commons were, in fact, engaged as a revising chamber on this occasion to deal with legislation which your Lordships had already passed and which you had very exhaustively considered. In the other place there was a very full and careful revision. The Law Society, one of the bodies to which Lord Hunsdon referred, not only assisted in discussions on the Bill in this House but assisted actively and had their own representatives in another place who took a keen interest in the revision of the Bill and the consideration of its various clauses, and a number of their suggestions have been adopted and incorporated in the Bill. I should be surprised to be informed that the Law Society were not satisfied with the reception that their Amendments have had at the hands of the Government. I do not want to put it higher than that.

The Amendment which my noble friend suggests is one which would be unprecedented. There is no precedent for a Bill being brought into operation only by a Resolution of both Houses. Of course it is quite common, where there is an Order in Council, for a particular clause or the exercise of a particular power to be subject to a Resolution of both Houses, but so far as my researches have gone, and so far as those advising me have been able to ascertain, there is no precedent for the proposal which my noble friend makes. It would really not, in my submission, effect the object which he has in view. What he desires is that there may be an opportunity given to the House to revise various clauses in the Bill. If the Bill had to take effect upon a Resolution of both Houses this House would be in exactly the same position as, for instance, it is under the Enabling Act with regard to Church matters. It would either have to refuse or give its consent to the Bill coming into operation, and therefore have to reject or take it as it stood. There would be no opportunity for revision.

I think, however, I can do something to meet the difficulty which the noble Lord feels. The Government believe that they have, as a result of careful study of the provisions of the measure, both in this House and in the other place, met and safeguarded the main points, and indeed I think almost all the points, raised by a large number of associations of professional bodies who have been consulted with regard to the passage of the Bill. They recognise, as the Secretary of the Law Society seems to have said, that it is eminently desirable that those who have to deal with company matters should have a full opportunity of considering the changes which this Bill incorporates before it becomes law. They have always intended that this Bill, which is an amending Bill, shall be consolidated with the existing company legislation, which is mainly contained in the Companies Act, 1908. My right hon. friend the President of the Board of Trade told the House of Commons in moving the Second Reading that consolidation was contemplated. I am quite prepared, on behalf of the Government, to assure the House that apart from one section, which is being brought into operation directly,—the section with regard to share pushing—there shall be no attempt to bring the Bill as a whole into operation until consolidating legislation has been passed through both Houses of Parliament and has become law.

I can assure your Lordships that this certainly will not take place this year, and almost certainly I cannot hope that it will take place before May of next year. That involves, first, that there will be a Consolidating Act, and secondly, that there must be much delay before the Bill becomes operative. There will, therefore, be ample opportunity for everybody affected to consider the provisions of the Bill and to make any suggestions which require to be made. We believe that it will not be found that this Bill is as defective as Lord Hunsdon seems to apprehend, but if, as a result of these representations, it should appear to the Government that there were lacunæ or inconsistencies which require to be put right, then, of course, it will be necessary to introduce amending legislation. I hope, and believe, that it will not be necessary, but at any rate I can assure your Lordships that there will be ample opportunity given for considering the Bill, and that an Order in Council shall not be made and the Bill shall not become law until consolidating legislation has been passed. I hope that with this assurance the noble Lord will rest content, and will not press his Amendment.

LORD PARMOOR

I should like to say how thoroughly I agree with the suggestion which has been made, which appears to me entirely to meet the difficulties—I appreciate them—mentioned by Lord Hunsdon. I do not think that the noble Lord's Amendment would have been effective in any way, and I agree with what the Lord Chancellor said, that it would be quite novel. I do not believe that any such procedure could be found in any existing Legislature. I think that, as the Bill now stands, for particular proposals to come into operation at different times, although not without precedent, would be particularly unfortunate in a measure of this kind, without consolidating legislation such as is suggested. That would give the safeguard which I think Lord Hunsdon desires, and I feel sure that the proposal made by the Lord Chancellor will in a most effective way meet the difficulty.

EARL RUSSELL

I wish to ask the noble and learned Lord one question. He speaks of a Consolidation Bill, but is it not the rule that under a Consolidation Bill you can make no alteration in Bills, except perhaps drafting? A Consolidation Bill involves no opportunity of amendment.

THE LORD CHANCELLOR

I should have explained that it will be consolidation and nothing else, but the actual preparation of it will bring to light any amendments which may be required, and inconsistencies if they exist. The time occupied—between now and May next, I anticipate it will be—will give ample time for representations to be made, and if it turns out that amendment is necessary the Government will consider the matter and will no doubt be prepared to make the amendment required.

LORD HUNSDON OF HUNSDON

May I say that I am extremely grateful to the noble and learned Lord for the way in which he has met not only my views but the views of people of very much more experience and ability than myself. In his speech the noble and learned Lord said he would be very much surprised if the Law Society were not satisfied with the reception which their Amendments had received at the hands of the Government. I cannot speak for the Law Society, but I should think that they are more than satisfied, as we all are, with the extraordinary courtesy and consideration which the noble and learned Lord has shown to us in all these matters, and with the number of Amendments which he has accepted. I would only like to remark that in my Amendment I said "Section 92." In the Bill it says "Section 90." That was the number of the clause in the House of Lords Bill, and not the number in the present Bill.

THE MARQUESS OF SALISBURY

It can be put right.

LORD JESSEL

Before parting with the Amendment I should like to say, as I urged the same point as Lord Hunsdon, how grateful I am to the Lord Chancellor for the way in which he has met the opposition. I would also like to congratulate Lord Hunsdon upon his consistency in fighting for his point.

Amendment, by leave, withdrawn.

Amendment moved— Page 100, line 7, leave out ("ninety") and insert ("ninety-two").—(The Lord Chancellor.)

On Question, Amendment agreed to.

Clause 118, as amended, agreed to.

First Schedule agreed to.

Second Schedule: