§ Page 3, after Clause 3 insert the following new Clause:
§ "Provisions as to mortgages.
§ (1) Where an application is made by the mortgagee of a dwelling-house for leave to exercise in relation to the mortgage or the dwelling-house any of the rights or remedies mentioned in subsections (2) and (3) of Section one of the principal Act, and the mortgagor is a person serving in the armed forces of His Majesty or mainly dependent on a person so serving, the appropriate Court, unless it is satisfied that the mortgagor is able immediately to pay the debt or to perform the obligation in question or that his inability to do so does not arise by reason of circumstances directly or indirectly attributable to any war in which His Majesty may be engaged, may in its absolute discretion refuse leave for the exercise of that right or remedy or give leave therefor subject to such restrictions and conditions as the Court thinks proper.
§ (2) Where at the hearing of any such application as aforesaid the mortgagor is not present or is not represented he shall, unless the contrary is proved by the applicant, be deemed for the purposes of the foregoing subsection to be a person serving in the armed forces of His Majesty or mainly dependent on a person so serving.
§ (3) Rules made under the principal Act may provide that, in such cases and subject to such conditions as may be specified in the rules, the leave of the appropriate Court to appoint a receiver of the rents and profits of any mortgaged dwelling-house may be given on the ex-parte application of the mortgagee.
§ (4) For the avoidance of doubt it is hereby declared that subsection (1) of Section one of the Possession of Mortgaged Land (Emergency Provisions) Act, 1939 (which restricts the right of mortgagees to obtain possession of land mortgaged before the third day of September, nineteen hundred and thirty-nine) applies to any right to obtain possession conferred on the mortgagee by virtue of any attornment or other provision contained in the mortgage or in any agreement collateral thereto; and accordingly the said subsection shall have effect and be deemed always to have effect as if after the words 'obtain possession of the land' there were inserted the 825 words 'whether by virtue of his estate or interest as mortgagee or of any attornment or other provision contained in the mortgage or in any agreement collateral thereto.'")
§ Page 3, after Clause 3 insert the following new clause:
§ ("Restriction on delivery of goods.
§ (1) Subsection (3) of Section one of the principal Act (which prevents persons proceeding without the leave of the Court to execution on judgments and orders for the recovery of possession of land) shall have effect as if after tie words payment of money there were inserted the words 'or for the delivery of any property other than land by reason of a default in the payment of money.'
§ (2) Where the appropriate Court refuses leave under subsection (4) of Section one of the principal Act to take possession of goods let under a hire-purchase agreement or to execute any judgment or order for the delivery of such goods, or gives such leave, subject to restrictions and conditions, and the hirer, before possession is taken or the judgment or order is executed, pays the hire-purchase price, the owner's title to the goods shall, notwithstanding any failure to pay the hire-purchase price at the times required by the agreement, vest in the hirer.")
Clause 5, page 4, line 28, at end insert—
("'armed forces of His Majesty' does not include the Local Defence Volunteers; 'hire-purchase agreement,' 'hire-purchase price,' 'owner' and 'hirer' have the meanings respectively assigned to them by Section twenty-one of the Hire-Purchase Act, 1938.")
§ THE LORD CHANCELLOR
There are altogether three Amendments. They are rather technical, they are rather long, and I think your Lordships will feel that the best course for me to take is to state briefly the effect of the changes that have been made in another place. The first Amendment is a new clause which should be inserted between Clause 2 and what is now Clause 3 of the Bill, and it arises in this way. The Courts, under the Courts (Emergency Powers) Act of last year, have felt bound to authorise the enforcement of a judgment in respect of nonpayment of rent or instalments on a mortgage of a dwelling-house unless the debtor—the person who is being sued—actually appears in the litigation. If he does not appear, his absence has the effect of bringing about the judgment automatically. That is manifestly most undesirable. Suppose the tenant or mortgagor is a serving soldier and that is the reason why he has been unable to keep up his payments of rent or instalments on a mortgage. The very fact that he is a serving soldier may be the reason why he cannot appear or instruct anybody to put his case. The 826 situation is made still more serious when one remembers that the actual serving of the process on the debtor may in many cases be by a method which is called substituted service—that is to say, you do not actually find the man and serve him with the process, but, owing perhaps to the fact that the house has been deserted, you get leave to affix the notice on the house. Consequently, you may easily have cases in which a man would, if he were able to appear, give a good reason why he should not be turned out of his house, but the very fact that he is serving in the Army and has perhaps never heard of the proceedings results, or may result, in his losing his home.
The object of this first Amendment—and I have no doubt your Lordships will approve of it—is therefore to provide that:Where an application is made by the mortgagee of a dwelling-house for leave to exercise in relation to the mortgage or the dwelling-house any of the rights or remedies mentioned in subsections (2) and (3) of Section one of the principal Act, and the mortgagor is a person serving in the armed forces of His Majesty or mainly dependent on a person so serving,"—it may be his wife—the appropriate Court, unless it is satisfied that the mortgagor is able immediately to pay the debt or to perform the obligation in question or that his inability to do so does not arise by reason of circumstances directly or indirectly attributable to any war in which His Majesty may be engaged, may in its absolute discretion refuse leave for the exercise of that right or remedy or give leave therefor subject to such restrictions and conditions as the Court thinks proper.The result, as your Lordships see, will be that we shall no longer have the manifestly undesirable situation in which the fact that the mortgagor under a building society arrangement is not able to appear, and indeed in some cases has never heard of the process, will mean that he loses his house automatically. The remaining subsections are really a matter of machinery, and I doubt whether your Lordships will wish me to read them. I beg to move that the new clause which I have just described—"Provisions as to Mortgages"—which has come from another place, be added to the Bill.
Perhaps your Lordships will allow me now to state also what the second new clause provides, because I do not think we shall be in difference about it at all. It has been decided by the Court of Appeal that under the principal Act—the Courts (Emergency Powers) Act—it 827 is not possible, for example, in a hire-purchase agreement, merely because there has been a failure to pay instalments, for the company which is hiring the article out to go in and seize it. The principal Act will provide restraints upon that. But it has also been decided that there is no objection if, instead of going in to seize the property because the instalments have not been paid, the company takes legal proceedings in due form under the agreement, as a result of which it gets a judgment which it will be able to enforce as of right. There can be no justification for that difference. In cases where it is right to protect the hirer even though he has not been able to keep up the instalments, it really cannot make any difference, in common sense or justice, whether the proceedings which are taken against him are proceedings in the way of going to law, or are those which can be taken simply because in ordinary times the company letting out the article is entitled in default of payment to go in and seize it. This Amendment provides that neither in the one case nor in the other can a remedy be enforced without leave of the Court.
That is the second of the Amendments. The third is a very simple one, really hardly more than a definition consequential on the two clauses which I have already indicated. Lastly there is a definition of "armed forces of His Majesty," which is really necessary because, when we speak of protecting the armed forces of His Majesty, we are thinking of the soldier who, because he has joined up and is a serving soldier, is living away from home. The provision ought not to apply, for example, to a Local Defence Volunteer, who is presumably living at home. That is, therefore, a definition to put that matter right. I have ventured to put these matters together in this way, I hope not to the inconvenience of the House, because they are really things about which there cannot be two opinions, and I therefore take it that your Lordships will wish to agree with the Commons in the said Amendments. I beg to move.
§ Moved, That this House doth agree with the Commons in the said Amendments.—(The Lord Chancellor.)
§ On Question, Motion agreed to.