COAL (CONCURRENT LEASES) BILL, [H.L.] (Hansard, 19 May 1942)

§ THE LORD CHANCELLOR (VISCOUNT SIMON)

My Lords, this is a small Bill which has been rendered necessary by a recent decision of the Courts which showed that there has accidentally been left a gap in the provisions of the Coal Act, 1938, which ought to be filled up. Your Lordships will recall that the policy and intention of the Coal Act, 1938, were to get rid of the private ownership of royalties and, in return for compensation, to place that ownership, together with the development of the nation's coal, in the hands of the Coal Commission. Royalties were vested in the Commission whether they belonged to a freeholder or to a leaseholder; hence Section 5 (2) of the Coal Act provided that the property vested included "interests arising under a coalmining lease in coal which is subdemised by a lease derived out of that lease." Perhaps it will be convenient to give an 1024 illustration, using the letters of the alphabet. If A is a freeholder and B is a lessee, and C, who is actually working the coal, is an inferior lessee from B, then the words which I have just quoted were intended to secure the vesting of B's interest as well as A's interest in the Coal Commission, and that is the result in all ordinary cases; in the ordinary case, that is, of a lease granted by A to B and a sublease granted by B in favour of C which is carved out of B's lease.

However, a curious and quite abnormal case has arisen in the Courts, where A first of all leases the coal for so many years to C—that is, to the person who is actually working the coal, or to the company working it—and then A grants a lease of his interest—that is, A's interest—subject, of course, to C's lease, to B for a longer period of years. That is a most unusual combination, but it has happened; and, when it happens, in such a case C's lease is not "derived out of" B's lease, and the Courts have so decided. Consequently the the language of the Coal Act permits the royalties paid by C to be received by B, and those royalties do not directly vest in the Commission. That is quite contrary to the general scheme and purpose of the Act, and indeed constitutes what the lawyers call a casus omissus from its principal provisions. The obvious policy of Parliament was for the Commission to acquire B's interest in such a case, just as it acquires the lease in coal which is sub-demised in the ordinary case to the party engaged in working it. The sole object of this little Bill is to correct that accidental slip.

I will only add, so that there may be no misunderstanding, that, when this Bill becomes law, while under the Bill B's interests will be transferred to the Commission, B will become entitled to claim compensation for the loss of his interest in the same way as in the ordinary case of an intermediate interest. I do not know whether I shall be too sanguine if I imagine that I have made this Bill entirely comprehensible to all your Lordships, but no doubt those interested will in due course consult the Report, and I trust that they, will find that A, B and C are the right letters to use for so elementary a proposition. I beg to move that the Bill be read a second time.

§ LORD GAINFORD

My Lords, the Mining Association of Great Britain have looked into this matter, and desire that whole-hearted support should be given to the passage of this Bill through all its stages. It is a reasonable Bill, and its purpose has been well explained by the noble and learned Viscount. Perhaps I may say that the usual practice in connexion with an expiring lease is to renew it, where there is still coal underground, to the firm which has been working the coal. On the particular occasion to which the noble and learned Viscount has referred, a firm acquired the reversion of that coal by getting a hundred years' lease—a most unusual period. They would thereby acquire a big interest in the amount of compensation out of the globular sum which has been arranged by the State to be given to royalty owners. The effect of the present law, unless it is altered, would be that the firm would get an unusual amount in the way of interest by acquiring a lease of one hundred years, and by doing another firm out of its property under the Act of 1938. On equitable grounds, therefore, it is right that, as there is only a global sum to be distributed among royalty owners, this Bill should be passed. On the whole I think that it is a very good Bill, and I hope that it will pass through all its stages without any difficulty.