HL Deb 28 September 1944 vol 133 cc216-24

Order of the day for the House to be put into Committee read.

Moved, That the House do now resolve itself into Committee.—(The Lord Chancellor.)

On Question, Motion agreed to.

House in Committee accordingly:

[The LORD STANMORE in the Chair.]

Clause 1 agreed to.

Clause 2 [Powers of the court to settle moratorium debts and liabilities]:

THE LORD CHANCELLOR moved to add to subsection (3): In this subsection the expression 'principal sum' means the sum actually lent and does not include any unpaid interest required by the terms of the charge to be added to that sum and charged on the premises. The noble and learned Viscount said: This is the first of a number of Amendments on the Paper, and I do not think that there will be any controversy about any of them. It is most important to get this machinery exactly right. The text of the Bill has been examined afresh since the Second Reading, with the help of various expert interests, and I believe that when these Amendments are made we shall have got it into very good shape. The first Amendment is merely to explain that when we provide that the principal sum owing on a mortgage is not to be altered under this machinery, we do not include in the principal sum the interest which may have accumulated. As your Lordships know, it is quite common in mortgage documents to provide that unpaid interest shall be treated as added to the principal lent. While we want to be able to adjust the interest payments, we do not suggest that we can do the same with the capital. I beg to move.

Amendment moved— Page 2, line 40, at end insert the said words.—(The Lord Chancellor.)

On Question, Amendment agreed to.

THE LORD CHANCELLOR had given Notice of the following Amendment which he proposed to insert it the end of the clause: (9) Notwithstanding Section fifteen of the principal Act (which provides for the application of that Act to private companies only) an application under this section or the last foregoing section may be made by any body corporate, and the proviso to Section twenty of the principle Act (which provides for the exercise of jurisdiction, in a case where the debtor is a company, by the court or courts having jurisdiction to wind up the company) shall not apply to any application made under this section otherwise than in the course of adjustment proceedings.

The noble and learned Viscount said: This new subsection which we wish to add will make it possible for a company to take advantage of this legislation for wartime adjustment even though the company is not a private company. Hitherto we have limited it to private companies but there are public companies, though not necessarily very big ones, in localities which have suffered like individuals owing to the conditions which have prevailed. The object of this Amendment is simply to secure that any company, public or private, whatever be the amount of its capital, may take advantage of the scheme and make application to a County Court for adjustment under this clause. With the permission of the House I propose to move the Amendment in a slightly different form from the form on the Paper. The clause on the Paper begins: Notwithstanding Section fifteen of the principal Act (which provides for the application of that Act to private companies only). The words are inserted between brackets in accordance with the modern method of drafting, a great convenience too, in which you give a short description of the section to which you are referring. Well, the description is not accurate because Section fifteen of the principal Act does not apply to private companies only; the Act applies to individuals, who are much more important than companies. Therefore I propose to move the Amendment in an altered form so that the words in brackets will then read: (which in its application to companies provides for the application of that Act to private companies only).

Amendment moved—

Page 3, line 30, at end insert: ("(9) Notwithstanding Section fifteen of the principal Act (which in its application to companies provides for the application of that Act, to private con panes only) an application under this section or the last foregoing section may be made by any body corporate, and the proviso to Section twenty of the principal Act (which provides for the exercise of jurisdiction, in a case where the debtor is a company, by the court or courts having jurisdiction to wind up the company) shall not apply to any application made under this section otherwise than in the course of liabilities adjustment proceedings.").—(The Lord Chancellor.)

On Question, Amendment agreed to.

Clause 2, as amended, agreed to.

Clause 3 [Power to extend foregoing sections to additional areas]:

THE LORD CHANCELLOR

The Amendment to the clause is of an unusual sort because, notwithstanding all the care that is taken by draftsmen and Government printers, they have succeeded in printing in the Bill wrong words—an interesting but rare illustration. If you turn to the clause you will see that in line 43 we apparently propose to enact a very odd provision, because the context is about orders. Where the clause says that the evacuation period shall be deemed to have ended or to end "on a date specified in that area" it ought to be "specified in that order". I hope your Lordships will not feel that this is a very controversial Amendment.

Amendment moved— Page 3, line 43, leave out ("area") and insert ("order").—(The Lord Chancellor.)

On Question, Amendment agreed to.

Clause 3, as amended, agreed to.

Clause 4:

Amendment of Section 3 of principal Act.

4.—(r) The amendments specified in the following provisions of this section shall be made in subsections (1) and (6) of Section three of the principal Act (which relates to an application for the adjustment of a debtor's affairs), and accordingly the said subsections shall have effect as set out in the First Schedule to this Act.

(2) For sub-paragraph (b) of subsection (1) of the said section three there shall be substituted the following paragraph: (b) is in such a position that, if he were required to pay his accrued debts and to meet, as they fall due, any such future liabilities as aforesaid, he would not have sufficient resources to enable him to preserve or recover his business or other means of livelihood; and paragraph (ii) of the said subsection (which allows creditors whose debts are affected by the Defence (Evacuated Areas) Regulations, 1940, to commence liabilities adjustment proceedings) shall be omitted; and for the words "the Courts (Emergency Powers) Act, 1939," there shall he substituted the words "the Courts (Emergency Powers) Act, 1943"

THE LORD CHANCELLOR moved to substitute "former" for "other" in paragraph (b) in subsection (2). The noble and learned Viscount said: As the Bill is drawn, the assistance which it will give to people who are put in great financial difficulty owing to war circumstances is too restricted because the consideration has to be what it would be right to do to help a man to get back to the business which he had before. But there may be cases where the individual, though needing the help of the Bill, really cannot hope to get back to that business. He may have established a different one and it may even be that he has become too old to carry on the business but, none the less, needs to keep a little nest egg for himself and his family. Those considerations ought not to be excluded. The effect of this Amendment is to make sure that the adjustment officer and the County Court judge, if they think it is right to do so, may take that into consideration.

Amendment moved— Page 4, line 9, leave out ("other") and insert ("former").—(The Lord Chancellor.)

On Question, Amendment agreed to.

THE LORD CHANCELLOR moved to add to paragraph (b) in subsection (2) the words "or otherwise to make reasonable provision for the future maintenance of himself and his family". The noble and learned Viscount said: This is the same point as the last.

Amendment moved— Page 4, line 9, at end insert the said words.—(The Lord Chancellor.)

On Question, Amendment agreed to.

Clause 4, as amended, agreed to.

Clauses 5 and 6 agreed to.

Clause 7:

Amendment of principal Act in relation to mortgages.

(5) Where any person has mortgaged any property as security for the performance of any obligation by the debtor, the court may by order direct, subject to such conditions as it thinks fit to impose, that the mortgaged property shall be treated for the purposes of Part I of the principal Act as if it were the property of the debtor, and accordingly the protection order shall extend to proceedings and remedies against that property and the powers of the court under the said Part I may be exercised in relation to the property.

THE LORD CHANCELLOR moved, in subsection (5), to leave out all words after "that," where that word first occurs, and insert: the protection order shall extend to proceedings and remedies against that property, and may by order provide for the remission or reduction of the interest charged or chargeable on the property in respect of any period before or after the making of the order, in like manner and subject to like conditions as in the case of mortgage interest payable by the debtor, and make such consequential amendments and adjustments of the instrument creating the mortgage as the court considers necessary; and, on the making of an order of discharge, the court may direct that any order made under this subsection shall continue in force for such further period as the court thinks fit.

The noble and learned Viscount said: This Amendment is technical. It would take perhaps a little time to explain it in detail and I do not think the House would expect me to do that. It is enough to say that subsection (5) is intended to make provision for what is called a "third party security" a very common incident in mortgages and the like, where the mortgage is not given by the debtor, but is given by a third person. As we have drawn the Bill, it really would not work. This is purely for the purpose of securing that the thing is in proper order for that purpose. The result will be that you will get the scheme of the Bill under this clause applied to protect property from being sold up and it may be to reduce the rate of interest, even though you are dealing with a third party security.

Amendment moved— Page 7, line 49, leave out from ("that") to the end of the subsection and insert the said words.—(The Lord Chancellor.)

On Question, Amendment agreed to.

Clause 7, as amended, agreed to.

Clauses 8 to 11 agreed to.

THE LORD CHANCELLOR moved, after Clause 11, to insert the following clause:

Power to compromise claims.

"12. The court may approve any compromise or arrangement, whether made by the debtor or by the liabilities adjustment officer or other person responsible for administering the liabilities adjustment order, with respect to any claim capable of resulting in a provable debt or any claim affecting any property of the debtor, but no such compromise or arrangement made while the liabilities adjustment order is in force as respects that debt or property shall he valid without the approval of the court."

The noble and learned Viscount said: This is a very simple clause. There appears to he some doubt whether a County Court Judge can confirm an arrangement which has been arrived at by compromise. No doubt he can sit there and deal out what he thinks is justice when the parties disagree, but there seems to be some doubt whether the Act enables him to approve an arrangement—if he does approve it—if it is come to by compromise. But compromise is better than litigation. Therefore we wish to make it clear that he can confirm an arrangement arrived at by compromise.

Amendment moved— After Clause 11 insert the said new clause.—(The Lord Chancellor.)

On Question, Amendment agreed to.

Clauses 12 to 14 agreed to.

Clause [Registration of protection order]:

THE LORD CHANCELLOR moved to leave out Clause 15 and insert the following clause:

Registration of protection orders and liabilities adjustment orders.

"15.—(1) A protection order or liabilities adjustment order which provides for the appointment of a receiver of any land of the debtor or charges any such land or vests any such land in a trustee may be registered in the register of writs and orders affecting land kept at His Majesty's Land Registry under Section one of the Land Charges Act, 1925, and accordingly that Act shall have effect as if such orders were included among the writs and orders mentioned in subsection (1) of Section six of the said Act, and Section twenty-three of the said Act (which excludes writs .and orders affecting registered land) shall not apply to any such orders.

(2) As soon as practicable after any such protection order or adjustment order as aforesaid has been registered under the Land Charges Act, 1925, the registrar shall enter an inhibition against the title of the debtor to any registered land appearing to be affected, and thereafter (without prejudice to dealings with or in right of any estate or interest having priority ever the estate or interest of the debtor) no dealing affecting the said registered lard shall, unless the court so directs, be entered on the register until the inhibition is vacated as to the land affected.

Any such inhibition shall be vacated when the protection order or the liabilities adjustment order, so far as it provides for the appointment of a receiver of the land or charges or vests the land, ceases to have effect.

(3) No fee shall be charged for the registration of any order or inhibition under this section."

The noble and learned Viscount said: This is merely an order that the provisions of the Bill may be suitably fitted to the provisions that already exist about the register in the Land Registry and matters of that sort. It is undoubtedly in a better form, and those particularly concerned—the office which deals with these matters and the associations concerned—are quite satisfied that this is the best way to express the clause.

Amendment moved— Page 10, leave out Clause 15 and insert the said new clause.—(The Lord Chancellor.)

On Question, Amendment agreed to.

Clause 16 agreed to.

Clause 17 [Proving of reduced debts]:

THE LORD CHANCELLOR

The next Amendment is merely to make plain the intention of the Legislature.

Amendment moved— Page 11, line 15, after ("reduced") insert ("from the debtor").—(The Lord Chancellor.)

On Question, Amendment agreed to.

THE LORD CHANCELLOR

The next Amendment is also to explain what we mean.

Amendment moved—

Page 11, line 16, at end add ("or, in the case of a secured debt, by enforcing the security").—(The Lord Chancellor.)

On Question, Amendment agreed to.

Clause 17, as amended, agreed to.

Remaining clauses agreed to.

First Schedule:

THE LORD CHANCELLOR

These are purely consequential Amendments and I beg to move.

Amendments moved—

Page 12, line 15, leave out ("other") and insert ("former").

Page 12, line 15, at end insert ("or otherwise to make reasonable provision for the future maintenance of himself and his family").—(The Lord Chancellor.)

On Question, Amendments agreed to.

First Schedule, as amended, agreed to.

Second Schedule:

THE LORD CHANCELLOR

The object of the first Amendment is to enable the Court to charge the debtor's property in favour of the liabilities adjustment officer for the benefit of the creditors instead of charging it in favour of the creditors direct. That is often the more convenient course. I understand it has been already followed, but it is of doubtful legality unless we authorize it.

Amendment moved— Page 15, line 29 at end insert ("In paragraph (b) of subsection (3) for the word 'creditors' there shall be substituted the words 'liabilities adjustment officer for the benefit of the creditors'").—(The Lord Chancellor.)

On Question, Amendment agreed to.

THE LORD CHANCELLOR

The next Amendment is consequential.

Amendment moved— Page 15, line 55, at end insert ("and shall be subject to any compromise or arrangement approved by the Court").—(The Lord Chancellor.)

On Question, Amendment agreed to.

THE LORD CHANCELLOR

The object of the next Amendment is to enable the adjustment officer to apply to the Court to make an order of discharge where the debtor who is qualified to obtain such an order fails to make the application, otherwise the adjustment proceedings are not properly disposed of.

Amendment moved— Page 16, line 27, at end insert ("after the words 'on his application' there shall be inserted the words 'or on the application of the liabilities adjustment officer' and for the word 'he' there shall be substituted the words 'the debtor'").—(The Lord Chancellor.)

On Question, Amendment agreed to.

THE LORD CHANCELLOR

The next Amendment is consequential on the Amendment to Clause 4.

Amendment moved— Page 16, leave out line 35 and insert ("to make reasonable provision for the future maintenance of themselves and their families").—(The Lord Chancellor.)

On Question, Amendment agreed to.

THE LORD CHANCELLOR

The next Amendment merely changes a singular into a plural because there are now going to be two paragraphs instead of one.

Amendment moved— Page 76, line 46, leave out ("paragraph") and insert ("paragraphs").—(The Lord Chancellor.)

On Question, Amendment agreed to.

THE LORD CHANCELLOR

This is the last Amendment. In view of what I have said we must have two paragraphs.

Amendment moved—

Page 16, line 49, at end insert: ("(g) may provide for the investment of any money paid into court in the course of liabilities adjustment proceedings ").—(The Lord Chancellor.)

On Question, Amendment agreed to.

Second Schedule, as amended, agreed to.

THE LORD CHANCELLOR

I have it in command from His Majesty to acquaint the House that His Majesty, having been informed of the contents of the Liabilities (War-time Adjustment) Bill, has been pleased to give his consent as far as His Majesty's interests are concerned, on behalf of the Crown and the Duchy of Cornwall, that the House may proceed therein as they think fit.

Then Standing Order No. XXXIX having been suspended, Amendments reported; Bill read 3ª; Privilege Amendments made; Bill passed, and sent to the Commons.