LANDLORD AND TENANT (WAR DAMAGE) BILL. (Hansard, 1 September 1939)

§ THE LORD CHANCELLOR
My Lords, in moving that this Bill be read a second time I would like to give your Lordships a slight indication of the reasons for the measure, which is a new matter. The position is this. In most cases, or at least in many cases, as your Lordships know, a tenant gives an absolute covenant to repair, and his liability under existing law is to repair notwithstanding the fact that the premises are destroyed by some event not within the contemplation of either party—for instance, if the house is struck by lightning or if it be bombed by an enemy power. In either event the tenant will still have to repair. In the last War there were two circumstances which it is thought differentiated that case from the present one. In the first place the risk of damage by enemy action was comparatively small as compared with what may be results of war at the present time. Secondly, in the last War, when the risk became at all serious the Government instituted, as your Lordships will remember, some insurance against war damage, and I think I am right in saying it was a profitable transaction.
On the present occasion not only is there danger that there may be quite a large amount of damage to property by enemy action but further it is a fact that it is virtually impossible to insure against it. The insurance companies have asserted that they are not prepared to be associated with any scheme for insurance against war risk, for the reason that it is quite impossible at the present time to indicate how much risk, computed in money, the losses may amount to. Accordingly the insurance companies will not do it, and the Government for the same reason have not found it feasible to promote any general scheme of insurance of this character. The result is that at present if a number of bombs drop on a 938 large city, and a great number of leasehold properties are destroyed, many tenants will be ruined and quite a large number will be unable to comply with their legal obligations. You have also to remember that in time of war, and even after war is over for a certain time, the cost of doing repairs is very much more than the cost in peace time. Having these points in mind, some time ago, a Committee was set up by His Majesty's Government, and it made a Report.
The Committee went into the whole matter with remarkable care, and the result of their Report is embodied in this Bill. The view they took—and I think your Lordships will agree that it was the right view—was that in a case where loss occasioned by war damage is one which neither party can be deemed to have anticipated that should not come within the scope of the agreement between the two parties. Since the basis on which the covenantor entered into an obligation to repair has fundamentally altered, it was thought that, subject to certain provisions which have been carefully thought out by the Committee, the obligation to comply with the covenant to repair, so far as it arose from war damage, ought to be a thing from which the tenant should be relieved. That is, in effect, done by Clause I (1) of the Bill. Then there are a number of complex provisions, dealing with all sorts of circumstances which the Committee foresee might arise. For example, there is a possibility when war damage occurs that the covenant to repair as regards other damages, having regard to the extent of the war damage, is impracticable. Or again, it may be of no substantial advantage to the person entitled to benefit from the obligation, that is to say, in general, the landlord. There the obligation to repair damage other than war damage is suspended until the war damage is made good.
There are a large number of supplementary provisions included in the Bill. Then it is necessary to provide for responsibilities as between mortgagor and mortgagee, and there the mortgagor is in general treated as a person who, notwithstanding the covenant, is not liable to make good the war damage. It is also necessary to provide for cases where there are ground leases, and you will find that dealt with on special terms in a special manner. There are provisions for 939 cases in which it is right that there should be a scheme of election, to retain or disclaim the lease in cases where the premises are rendered unfit by reason of war damage, and suspension of rent while the premises are unfit. In practically every case where there is any dispute as to whether the premises are so unfit or not—indeed in every case—there is a right to apply to the Courts to determine on which side the truth lies, with the plaintiff or the lessee.
Then there are also provisions for the case of multiple leases—for example, blocks of flats. There the solution adopted by the Bill, following the provisions of the Report, is that disclaimer should be allowed only when, having regard to all the circumstances, it is in the opinion of the Court fair and equitable. I have mentioned the case of ground rents. There is the somewhat unusual case of restricted covenants. It may happen that a house which has been destroyed by a bomb is subject to a restricted covenant, and the question may arise, when it is rebuilt, whether the restricted covenant should apply. That is dealt with by Clause 18. I should mention that there is an important provision in Clause 19. Clause 17 provides that nothing in the second Part of the Act is to apply to an agricultural lease or a mining lease, but by Clause 19 provision is made in the case of an agricultural or mining lease that where buildings or works comprised in the lease are unfit by reason of war damage the Court may, on the application of the tenant, either determine the lease or modify the terms thereof, whether by reducing the rent payable thereunder or otherwise, according as appears just having regard to all the circumstances of the case.' In both these cases—the cases of agricultural and mining leases—it has been thought necessary to exclude them from the operation of the general scheme of disclaimer on the ground that the buildings as a rule form quite a minor part of the premises included in the whole.
As I have said, it is a complex measure. It has been subjected to the very closest consideration, and, if I may say so with humility, I have been through it more than once and have endeavoured in some respects to amend it. On the whole, your Lordships can be satisfied it is a reasonable attempt to deal with the great difficulty 940 and great hardship which would arise in some of these cases if there were no such measure, and I now invite your Lordships to read the Bill a second time. Perhaps I may add, with regard to measures of this kind, that the Government will keep an eye on the position, and if it is necessary to amend them there will be no difficulty in introducing an amended scheme. I beg to move.

§ THE LORD CHANCELLOR
My Lords, I have it in command from His Majesty to signify to the House that His Majesty, having been informed of the purport of the Landlord and Tenant (War Damage) Bill, gives his consent, as far as His Majesty's interest is concerned, that the House may do therein as they shall think fit. I beg to move that the Bill be read a third time.

§ EARL STANHOPE
My Lords, I beg to move, That it is the opinion of this House that it is essentially necessary for the public security that the Bills this day brought from the House of Commons intituled Housing (Emergency Powers) Bill, Essential Buildings and Plant (Repair of War Damage) Bill, and Compensation (Defence) Bill, should forthwith be proceeded in with all possible despatch and that notwithstanding Standing Orders Nos. LIV and XXXIX the Lord Chancellor ought 941 forthwith to put the question upon every stage of the said Bills in which this House should think it necessary for the public security to proceed therein.