§ Order of the Day for the Second Reading read.
§ LORD HANWORTH
My Lords, the Bill to which I am going to ask your Lordships to give a Second Reading this afternoon is a very small Bill indeed, which has already passed all its stages in another place. It is a one-clause Bill, and it is a Bill which deals with a matter by reference to the Law of Property Act, 1925. But, if ever there was a case when legislation by reference was justified, I think it is this case, because no one of your Lordships would lightly undertake the re-casting and re-passing of the Law of Property Act, which contains 209 clauses and 7 schedules. I am not asking your Lordships by this Bill to make an alteration in the law: what I am asking you to do is to prevent continuance of an unfortunate mistake which occurred in the passing of the Act of 1925.
More than thirty years ago—to be precise, in the year 1892—an Act was passed, the Conveyancing and Law of Property Act, which by one clause gave relief in circumstances which I am sure would have the approval of your Lordships. We are familiar with leases which are made by a landlord to a tenant, and we are familiar with sub-leases created by the tenant, sometimes in succession from one to another. We are familiar also with the rights under which the lease which is granted by the landlord is subject to a for feiture, and if that forfeiture is enforced the rights which have been obtained by the sub-lessee from the tenant or by further sub-lessees are lost, and the whole lease comes to an end.
The rights of sub-lessees were protected by the clause to which I have referred—Section 4 of the Conveyancing and Law of Property Act, 1892. When the Law of Property Act was passed in 1925 it was intended to preserve that right. As a matter merely of consolidation, the clause which found its place as 742 Section 4 of the Act of 1892 was reproduced as Section 146 of the Law of Property Act, 1925. There are some subsections to that section, and one of the subsections provides that Section 146 shall not apply to certain particular leases, and it is provided by Section 10 that there shall lie outside the provisions of Section 146 leases of agricultural or pastoral land, of mines or minerals, of houses intended to be used as public-houses, and of houses let as furnished houses. Unfortunately, as drafted and, indeed, as passed, that section, which omitted from Section 146 those particular leases, was made to cover the whole of the benefits of Section 146; the result being that the relief given to sub-lessees, by Section 4 of the Act of 1892, is now lost and cannot be made use of in the case of those four categories of leases to which I have referred.
The matter may be of considerable importance. We are familiar with the fact that in the case of some companies who are engaged in carrying out enterprises under leases, mortgages of their leaseholds are made, debentures are secured on leaseholds and by means of sub-leases. Should the company go into liquidation, equally as in the case of a lessee becoming bankrupt, the security would be lost unless there was a power given to secure the rights of the sub-lessee upon the occurrence of the misfortune which has overtaken the lessee. It is plain that Parliament never intended to withdraw that right which was given under the Act of 1892; because, as I have pointed out, it still finds its place in a subsection of Section 146 and relief can still be obtained in a number of leases. There is no reason why that relief should not be extended once more to all leases, and the little Bill which I now bring before your Lordships is intended to put right the slip which unfortunately occurred and which has been discovered recently. If no amendment takes place it may be that some serious difficulty will occur in the cases to which I have referred.
I am only asking your Lordships to give the Bill a Second Reading now, and I would make but two further comments. I have dealt with the question of the fact that this Bill deals by reference with the Act of 1925. I wish to add that a suggestion has been made in some 743 quarters that it might be possible to make this little Bill retrospective. That, of course, would be a matter for Committee; but I should like to say at once that I have considered that point, not without some experience of endeavouring to make Acts retrospective, and I think it would be an unfortunate course to adopt. One can never predicate what sort of right has grown up in the meantime, and it is by no means easy to find words which carry out the intention of making a small Act retrospective and at the same time safeguard the interests of 744 those who may have entered into contracts and leases upon faith of the law as it stands. I do not think your Lordships will require me to say more in support of my Motion, and I beg now to move that the Bill be read a second time.
§ Moved, That the Bill be now read 2a.—(Lord Hanworth).
§ On Question, Bill read 2a, and committed to a Committee of the Whole House.
§ House adjourned at five minutes past five o'clock.