COURTS (EMERGENCY POWERS) AMENDMENT BILL. [H.L.] (Hansard, 7 July 1942)

§ THE LORD CHANCELLOR (VISCOUNT SIMON)

My Lords, this is a small Bill which aims at remedying a defect in the Courts (Emergency Powers) Acts which has been revealed by judicial decision. Your Lordships will remember that the Courts (Emergency Powers) Act, the 694 principal Act, was carried at the very beginning of the war. Its object was not to relieve people from their obligations, but to prevent creditors from proceeding to execution on a judgment for debt which had been obtained by them or from recovering possession of property which had been let, or mortgaged, without the leave of the Court. The scheme is that the Court considers the matter on the application of the creditor. It takes into account the extent to which the debtor's inability to pay the debt is affected by war circumstances, and if the Court considers that the debtor's inability to pay is due to the war then the Court has a discretion to protect him by refusing to the creditor leave to execute his judgment or recover the property. To give a very simple illustration: where a soldier has been called up and has suffered, it may be, a serious reduction in his financial resources, the Court can protect his home, in which his wife and children may be living, by-refusing to allow the landlord to recover possession where the rent has not been kept up. That is a discretionary power, and the Court usually requires at least some payment to be made by the debtor.

The principle of our Acts in this respect is well known, and beyond question has produced a great deal of public advantage. It has protected many people from most serious practical injustices. Now, though we have already amended the Act twice—once in 1940 and once in 1941, I believe—there has appeared a little gap, as there always does in these cases as the result of the infinite variety of considerations that arise. It has been decided that under the Courts (Emergency Powers) Acts as they stand at present there is a class of persons who ought to have protection, but to whom the Acts as they stand do not give protection. If a person buys a house with the help of a mortgage, say from a building society, and then, as may easily happen, if he sells the house, subject to the mortgage, to somebody else, this latter person cannot under our present law get protection under the Courts (Emergency Powers) Acts if he finds himself unable, through war circumstances, to keep up the mortgage instalments. It is due to the wording of Section I, subsection (4) of the principal Act. The result is that the assignee of an original mortgagor is not a person legally liable to pay the debt or perform the mortgage obligation, and is therefore not a person to whom this 695 protection can at present be given. Everyone will agree that that is a gap which ought to be filled, and the first provision of this little Bill is to produce this result.

There is one other thing which the Bill does. Clause 2 makes a small alteration of a very practical kind. The scheme of the Acts as they stand is of this kind: A mortgagee who wishes to exercise his right to recover possession of the mortgaged property—which of course he can only do if he gets leave of the Court—may first of all institute proceedings for the recovery of the property, and go right to the point when he would get an order entitling him to recover. The mortgagor may have no answer to the claim for possession in the legal sense, and the only issue really is whether the Court will not at the last stage exercise its discretion in his favour in the way I have described. If proceedings can be instituted and carried on without leave, and if it is possible to go so far as to get judgment, then the real issue, if, when all that has been done, the individual is going to be protected, arises to be decided unnecessarily late. It has been thought better, therefore, to assimilate the procedure on application for the recovery of possession to that which is already in force in the case of applications by mortgagees to foreclose, and to prevent the mortgagee from instituting proceedings for the recovery of possession of the land without first obtaining the leave of the Court. That is for the purpose of avoiding unnecessary costs and expenses and anxiety, and what will fall to be decided in the first place is whether, in the circumstances of the war, the debtor ought to be protected; and, if that can be decided early in the proceedings, it will be better for all concerned.

These changes are not, of course, of fundamental importance, but they affect a number of cases, and I am sure that your Lordships will agree that, in dealing with this subject, it is most important that we should be careful to cover all the cases which ought to be covered, so as to give proper protection where protection is needed. I beg to move.