HL Deb 12 July 1938 vol 110 cc720-8

Order of the Day for receiving the Report of Amendments read.

LORD ARNOLD

My Lords, in moving that the Report be now received I should like to explain why I come to be moving the Motion. As your Lordships are aware, the Bill has been in charge of the noble Lord, Lord Amulree. He has this afternoon at this time an engagement of the greatest importance, which all your Lordships will agree he must keep, and, in the circumstances, I undertook, with the permission of your Lordships, if he should not be back in time, to take charge of the Bill. I would add that the Bill has been reached this afternoon at rather an earlier hour than was anticipated when business was arranged last week.

Moved, That the Report of Amendments be now received.—(Lord Arnold.)

On Question, Motion agreed to, and Amendments reported accordingly.

Clause 4:

Right of hirer to determine hire-purchase agreement.

(3) A hirer who has determined a hire-purchase agreement ender this section may deliver the goods to any person entitled or authorised to receive the sums payable under the agreement, and such a delivery shall be deemed to be a delivery to the owner.

LORD SALTOUN moved to leave out subsection (3). The noble Lord said: My Lords, this is a point which I raised by means of a manuscript Amendment in Committee. I do not want to take up your Lordships' time with the arguments that I used then, and will simply say this. A great many of the more reputable and better-placed owners—your Lordships will realise that the word "owner" is applied to the person who sells, and the hirer is the man who buys—have made arrangements with local banks to receive deposits against the purchase of various goods by hirers. Under this clause as it stands it would be possible for a hirer to give notice to terminate his agreement and to place a whole suite of bedroom furniture in the bank at the disposal of the bank. Of course that is an impossible position and if this clause remains as it is, I am very much afraid that the hire-purchase business will be closed to all the better sort of trade and will fall into the hands of those disreputable traders who can afford to disregard an Act of Parliament because they have other holds on their customers. I beg to move.

Amendment moved— Page 5, line 5, leave out subsection (3).—(Lord Saltoun.)

LORD AMULREE

My Lords, this clause has good points and bad points, as the noble Lord has indicated. The matter has been very carefully considered by those who are responsible for this Bill, and they have agreed that the subsection should be deleted.

On Question, Amendment agreed to.

Clause 6 [Duty of owners and sellers to supply documents and information]:

LORD AMULREE

My Lords, the object of the Amendment to this clause is to make the wording of the clause correspond with the words used in Clause 7. I beg to move.

Amendment moved— Page 6, line 16, leave out ("notice") and insert ("request").—(Lord Amulree.)

On Question, Amendment agreed to.

Clause 8:

Conditions and warranties to be implied in hire-purchase agreements.

8.—(1) In every hire-purchase agreement there shall be— (d) an implied condition that the goods shall be of merchantable quality, provided that if the hirer has examined the goods or a sample thereof, there shall be no implied condition as regards defects which the examination ought to have revealed.

LORD DARCY (DE KNAYTH) had the following Amendment on the Paper—to leave out paragraph (d) and insert: (d) except where the goods are let as second hand goods, and the note or memorandum of the agreement made in pursuance of Section two of this Act contains a statement to the effect, an implied condition that the goods should be of merchantable quality, so, however, that no such condition shall be implied by virtue of this paragraph as regards defects of which the owner could not reasonably have been aware at the time when the agreement was made, or, if the hirer has examined the goods or a sample thereof, as regards defects of which the examination ought to have revealed.

The noble Lord said: My Lords. I feel that I ought to apologise to your Lordships in the first place for the fact that there are three printers' errors in this Amendment. In the last line but one on the first page of the Amendment Paper the word "the," before "effect," should be "that"; in the last line of all on the first page "should," after "goods," should be "shall," and in the last line but one of the Amendment the word "of," after "defects," should be deleted altogether. I need not trouble your Lordships very long in dealing with this Amendment. On a previous occasion my noble friends Lord Waleran and Lord Sandhurst raised certain practical objections to the paragraph that I am seeking to delete and to reproduce with qualifications. At that time my noble friends were much impressed by certain difficulties that the paragraph involved, and I myself was much enamoured by the paragraph as it stood, but we have come to the conclusion that there was a middle course, and I understand that my noble friend Lord Amulree has decided that what is now suggested is a reasonable way of meeting the difficulty.

I would point out that you cannot give the same protection to the purchaser of second-hand goods which may be sold as nearly new or nearly worn out as you can in respect of goods that are definitely new. There is also this difficulty. Supposing you are dealing in the case of new goods, particularly goods of a mechanical nature, with a trader who buys goods of a reputable make from a reputable trader and proceeds to sell them again under a hire-purchase agreement without knowing or being reasonably able to know that there was any defect in them; it seems wrong that he should be held liable against defects for which he has no moral responsibility. By this Amendment the person who deals with a "dud" line of goods is completely put out of business and that is the desire not only of myself and my noble friend Lord Waleran but also, I think of the noble Lord, Lord Amulree. I beg to move.

Amendment moved—

Page 7, line 32, leave out paragraph (d) and insert: ("(d) except where the goods are let as second hand goods, and the note or memorandum of the agreement made in pursuance of Section two of this Act contains a statement to that effect, an implied condition that the goods shall be of merchantable quality, so, however, that no such condition shall be implied by virtue of this paragraph as regards defects of which the owner could not reasonably have been aware at the time when the agreement was made, or, if the hirer has examined the goods or a sample thereof, as regards defects which the examination ought to have revealed.").—(Lord Darcy (de Knayth).)

LORD AMULREE

My Lords, the Amendment which has been moved by my noble friend meets a difficulty which was pointed out in Committee and I agree that the paragraph should be amended in this way.

LORD DARCY (DE KNAYTH)

I should like to express my personal thanks for the great courtesy which the noble Lord has shown me and for the great trouble which I know he has taken in the matter.

THE EARL OF IDDESLEIGH

My Lords, the noble Lord, Lord Darcy, has taken the unusual course of apologising for a printer's error. If it is in fact a printer's error it is not a matter for apology on the part of the noble Lord, but it is a matter which calls for the attention of the firm of printers employed. I. should like my noble friend to make it clear whether it was in fact a printer's error or an error in the manuscript handed to the printers. There have been a number of occasions recently on which, to the very great inconvenience of your Lordships, alterations have been made in the papers that have been handed in. The legislation with which we are called upon to deal is complicated enough in any circumstances and I do not feel that I am in any way wasting the time of your Lordships' House in calling attention to the number of occasions on which these so-called printer's errors have occurred.

LORD DARCY (DE KNAYTH)

My Lords, I am not entitled to reply to the noble Earl, but perhaps your Lordships will allow me to say that to the best of my knowledge and belief this is a case of a printer's error. I will make further inquiries so as to set the noble Earl's mind at rest.

THE LORD CHANCELLOR (LORD MAUGHAM)

My Lords, this Amendment is of considerable importance and may affect quite a large number of people in the country if this Bill becomes law. I think it right that I should say that having considered it, although I am not satisfied that the paragraph proposed is a perfect one, I am of the opinion that it ought to be accepted by your Lordships. It is clear that the old plan of making the condition of merchantable quality apply to all goods was one which was unworkable. As your Lordships know very well, a number of things are supplied under hire-purchase agreements which are of a second-hand character. People sometimes buy, for a very small sum, motor cars of some antiquity, which will not go at all, in the hope that with the assistance of a little wire and some ingenuity they can make them run for perhaps a year or two. It would be quite impossible in a case like that to apply the doctrine that the owner was selling goods on hire-purchase with an implied condition that the goods should be of merchantable quality, because in truth everybody knew they were not. Accordingly that condition has been altered to except the case of second-hand goods.

Then there is another matter for consideration, and that is whether such a condition should apply in such cases as were mentioned by the noble Lord, Lord Darcy, where the owner could not reasonably have been aware at the time the agreement was made that there was some defect. On the whole it has been thought fair to deal with that also in the proposed new paragraph. Whether the formula used is perfect is a matter on which I would express no opinion. Indeed, it is possible that in another place it may be found that some alteration of these words will save, what everybody desires to save, troublesome litigation to ascertain whether in fact the owner could or could not reasonably have been aware of defects in the goods in question. On the whole, at the present time, this paragraph is the best that anybody here has been able to devise—I say, with humility, including myself—and accordingly I think your Lordships ought to accept the Amendment.

VISCOUNT BERTIE OF THAME

My Lords, I see no reason why this House should riot make arty necessary alteration on Third Reading. Your Lordships'. House prides itself on putting Bills into perfect condition and I see no reason for leaving it to another place.

THE LORD CHANCELLOR

My Lords, the difficulty is not one of drafting so much as of indicating what is precisely meant by the statement that the owner could not reasonably have been aware of the defect at the time when the agreement was made. It involves all sorts of considerations which vary with every class of goods you can imagine. If the sale is the sale of a cow there might be unsoundness of which the owner might be aware and others not be aware. In the case of a machine there might have to be quite a different test of defects of which the owner might reasonably become aware. I am not suggesting that a better paragraph can be found. I am only saying that it is possible that a better one can be found. If anyone can find a better formula than this at a later stage no one would be better pleased than myself.

On Question, Amendment agreed to.

LORD DARCY (DE KNAYTH) moved to insert: (4) Nothing in this section shall prejudice the operation of any other enactment, or rule of law, whereby any condition or warranty is to be implied in any hire-purchase agreement. The noble Lord said: My Lords, this Amendment is really consequential and is meant to have limited operation so that it shall extend no further than I have already indicated to your Lordships.

Amendment moved— Page 8, line 8, at end insert the said new subsection.—(Lord Darcy (de Knayth).)

On Question, Amendment agreed to.

Clause 16 [Provisions as to bankruptcy of hirer and distress on hirer's premises]:

LORD AMULREE

My Lords, there is a drafting Amendment to this clause. I beg to move.

Amendment moved— Page 13, line 37, leave out ("that") and insert ("the").—(Lord Amulree.)

On Question, Amendment agreed to.

Clause 18 [Provision for the exercise by inferior courts other than County Courts of the jurisdiction conferred by this Act]:

LORD AMULREE

My Lords, this again is a drafting Amendment; these words are inserted to make the paragraph clear. I beg to move.

Amendment moved— Page 14, line 6, after ("force") insert ("with respect to any inferior court").—(Lord Amulree.)

On Question, Amendment agreed to.

Clause 20 [Application of Act to existing agreements]:

LORD AMULREE

My Lords, the first Amendment here is purely drafting.

Amendment moved— Page 15, line 19, leave out ("and").—(Lord Amulree.)

On Question, Amendment agreed to.

LORD AMULREE

My Lords, the next two Amendments are introduced to give effect to alterations made to the Bill during the Committee stage. They are purely formal, and I beg to move.

Amendments moved— Page 15, line 20, after ("section") insert ("ten"). Page 15, line 20, after ("twelve") insert ("thirteen, fourteen").—(Lord Amulree.)

On Question, Amendments agreed to.

LORD AMULREE moved the end of subsection (1): (d) subsection (1) of Section sixteen of this Act, so far as it relates to orders made after the commencement of this Act, and subsection (2) of the said section so far as it relates to agreements determined or actions commenced, as the case may be, after the commencement of this Act, and (e) Section seventeen of this Act, so far as it relates to a refusal to give up possession of goods after the commencement of this Act. The noble Lord said: My Lords, the object of this Amendment is to make clear that Clause 16, as applied to determined agreements, should also apply to this paragraph, having regard to the provisions of Clauses 11 and 12.

Amendment moved— Page 15, line 22, at end insert the said paragraphs.—(Lord Amulree.)

On Question, Amendment agreed to.

Clause 21:

Interpretation.

21.—(1)In this Act unless the context otherwise requires the following expressions have the meanings hereby assigned to them, that is to say—

"Hire-purchase agreement" means an agreement for the bailment of goods under which the bailee may buy the goods or under which the bailor's property in the goods will or may pass to the bailee, and where by virtue of two or more agreements, none of which by itself constitutes a hire-purchase agreement, there is a bailment of goods and either the bailee may buy the goods, or the bailor's property therein will or may pass to the bailee, the agreements shall be treated for the purposes of this Act as a single agreement made at the time when the last of the agreements was made;

LORD AMULREE moved, in the definition of "Hire-purchase agreement," to leave out the word "bailor's" in both places where that word appears. The noble Lord said: My Lords, when an agreement is entered into the ownership of the goods may not be fully the bailor's property, but he may contract to acquire the full ownership of the goods in time to transfer it to the hirer. The omission of the word "bailor's" makes this clear.

Amendments moved— Page 16, line 14, leave out ("bailor's"), Page 16, line 19, leave out ("bailor's").—(Lord Amulree.)

On Question, Amendments agreed to.

LORD AMULREE

My Lords, the other Amendments are due to the insertion of the various clauses which were put into the Bill during the Committee stage; this is merely renumbering.

Amendments moved— Page 17, line 23, leave out ("ten") and leave out ("and") Page 17, line 24, after ("twelve") insert ("thirteen, fourteen and fifteen").—(Lord Amulree.)

On Question, Amendments agreed to.

Schedule [Notice to be included in note or memorandum of hire-purchase agreement]:

LORD SALTOUN

My Lords, the Amendment in my name is consequential on Amendments already approved by your Lordships.

Amendment moved— Page 18, leave out from ("then") in line 9 to ("pay") in line 10.—(Lord Saltoun.)

On Question, Amendment agreed to.

THE PRESIDENT OF THE BOARD OF EDUCATION (EARL STANHOPE)

My Lords, by leave of the House I should like to say that I have examined the manuscript of the Amendments which were proposed to Clause 8. They were quite clearly written. It is not a printer's error; it appears in the manuscript itself.