HL Deb 17 March 1949 vol 161 cc477-88

3.45 p.m.

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

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

On Question, Motion agreed to.

House in Committee accordingly:

[The EARL OF DROGHEDA in the Chair]

Clause 1:

Provision for renewal of tenancies of shops

(3) Notwithstanding anything in the last foregoing subsection, the sheriff may, if in all the circumstances he thinks it reasonable to do so, dismiss any application under this section, and shall not determine that a tenancy shall be renewed, if he is satisfied—

LORD CLYDESMUIR moved, in subsection (3) after paragraph (e) to insert: (f) that the premises are reasonably required for the purpose of a scheme of redevelopment or reconstruction which will be carried out immediately after the determination of the tenancy and which cannot in the opinion of the sheriff be carried out whilst the tenant is in occupation of the premises, or The noble Lord said: On the Second Reading of this Bill I drew attention to two points in which the Government had departed from the recommendations of the Guthrie and Taylor Committees, on which this Bill is founded, and this Amendment arises on the first of these points. It is surely desirable to encourage improvements in property, and my fear is that the Bill as it now stands may discourage the landlord from striving to make such improvements. Possibly he suffers enough discouragement already under the Town and Country Planning Act, and this seems to be an added burden. I understand that the Secretary of State felt difficulty in incorporating this provision in the Bill, because it would be difficult to define reconstruction and redevelopment, and perhaps the noble Lord in his reply could deal with that point. It seems desirable that we should give every encouragement to the improvement of property, and that was also apparently the view of the Committees. I beg to move.

Amendment moved— Page 2, line 25, at end insert the said paragraph.—(Lord Clydesmuir.)

LORD MORRISON

It is true, as the noble Lord says, that his Amendment follows a recommendation of the Taylor and Guthrie Committees. The provision has been omitted from the Bill as it stands because the sheriff already has power to take all relevant factors into consideration and to decline a renewal of tenancy if greater hardship would be caused by granting renewal than by refusing it. Apart from the general objection—and I emphasise this—it seems to me to be wrong continually to say (as was said in another place, and as has been said in this House) that we have every confidence in the impartiality of the sheriff, and then, by drawing attention to all the relevant circumstances of the case, to try to restrict him and prevent him using his discretion. This Amendment is unacceptable because it would be extremely difficult to interpret. As the noble Lord himself has said, the Amendment does not attempt to define "redevelopment" or "reconstruction," and the vagueness of these terms might render the condition proposed open to abuse.

The noble Lord will recollect that, in his interesting Second Reading speech on this Bill, he pointed out that the public should not be misled by thinking that a large number of people were doing these wicked things in Scotland—that is to say, that only a small minority were taking advantage of their ownership of property to act unfairly towards small shopkeepers. The noble Lord may remember that my reply was that, if only everybody would play the game, we should not need so many Acts of Parliament passed, for many of our Acts of Parliament are concerned merely with a small number of people who are not prepared to act decently towards their fellows. Therefore, the terms "redevelopment" and "reconstruction" used by the noble Lord are, I fear, open to abuse by that small minority.

If the Amendment were accepted, it would be open to a landlord to say that he required a shop at present used as a chemist's in order to reconstruct it for use as an ice-cream shop, with a view to disposing of the premises at a profit later. In such cases, the Amendment would require the sheriff to refuse a renewal of tenancy and would take no account of hardship that would be inflicted on the tenant. It seems that the main object of the Bill would be endangered if under this Amendment, the landlord could evict a tenant in order to alter and sell the premises at a profit. The Amendment says that the premises must be "reasonably required," that the redevelopment or reconstruction must be carried out immediately after eviction, and that in the opinion of the sheriff, the alteration cannot be carried out while the tenant remains in occupation. But I suggest that each of these conditions might easily be evaded. For instance, the landlord could claim that his reason for requiring the premises was simply to alter them and that the alterations were so substantial as to be incapable of execution unless the premises were empty. That could easily be pleaded. In general, before he comes to a decision the sheriff will no doubt consider any bona fide reason which the owner may have for resuming occupation. During the Second Reading, the noble Lord expressed the greatest confidence in the wisdom of the sheriff's decisions. I suggest that the Amendment would impose unnecessary rigidity upon the sheriff. I hope that the noble Lord will agree to leave the sheriff unhampered in making a decision after he has given full weight to all the relevant circumstances.

VISCOUNT ELIBANK

I wish to support this Amendment, or an Amendment having the same intent, because I noticed that at the commencement of his reply the noble Lord referred to the fact of hardship. There is hardship both ways. There is a hardship upon the tenant and there is a hardship upon the landlord; but, from what the noble Lord, Lord Morrison, said, the hardship to which he referred was that on the tenant; he omitted altogether to refer to the hardship on the owner. I cannot see how the sheriff would be limited in his direction if it were pointed out to him, not as a direction but as something of which he has to take note, and if he is informed in the Bill that he must take notice not only of the hardship on the tenant but also of the hardship on the owner. From what Lord Morrison has said, the sheriff has a direction as regards the hardship on the tenant, but no direction as regards the hardship on the owner. At the end of his speech, the noble Lord informed us that the sheriff would have to take all these facts into account, but he did not say so at the beginning of his speech. He said some thing quite different. I suggest to the noble Lord that my noble friend Lord Clydesmuir has made out a good case. I do not suppose for a moment that he will press this Amendment to-day, but I hope that the noble Lord, Lord Morrison, will find a phraseology which will express what my noble friend has asked for, and what I asked for, too, on the Second Reading debate.

LORD CLYDESMUIR

The noble Lord, Lord Morrison, has explained the point of view of the Government here. I cannot claim that I am entirely satisfied but, I recognise the difficulties which the Secretary of State would have over a mandatory provision. I shall be content to rest on the assurance that the noble Lord has given that the proposals for reconstruction would undoubtedly be relevant to place before the sheriff in a case like this, and I can trust only that, if the Bill passes as it now stands, it will not hold back reasonable improvement of property.

LORD MORRISON

Before the noble Lord withdraws his Amendment, may I reply that I appreciate perfectly that there are likely to be hardships both ways but, if the noble Lord will look at Clause 1 (3) (f) of the Bill, he will see that this is the instruction to the sheriff: that, having regard to all the circumstances of the case, greater hardship would be caused by determining that the tenancy shall be renewed than by refusing so to do. So that the sheriff is definitely called upon, and the Amendment that I was resisting would have said to the sheriff: "But you must take special priority for one particular reason, which is that the landlord wishes to bring about alterations to his premises." If it is left there, the sheriff has either the power to give the landlord possession, or to refuse the landlord possession. But the sheriff is required to take into consideration all the relevant circumstances of the case, from the point of view of hardship either to the owner or to the tenant.

Amendment, by leave, withdrawn.

LORD CLYDESMUIR moved, after subsection (3), to add as a new subsection: ( ) Without prejudice to the generality of the provisions of paragraph (f) of the last foregoing subsection the sheriff shall have particular regard where the landlord is an individual who has purchased the premises before the commencement of this Act to the circumstance that the premises are required for occupation by himself or by a son or daughter of his who is over eighteen years of age either for opening up a new business or extending an existing business by bum or by such son or daughter.

The noble Lord said: This Amendment differs from the last in this essential: the former was mandatory and this is not. The noble Lord's main objection to the last Amendment was that it would be mandatory for the sheriff to allow entry to the premises if the provisions of the clause were in order, and that that would be an impossible state of affairs for the Secretary of State to deal with. When this question was discussed in Committee in another place, it was pointed out that the proposal of the Guthrie Committee—which was that a landlord, if he required the premises for himself or his son or his daughter for the extension of his business, should obtain occupation—would to a large extent defeat the intention of the Bill, because an unscrupulous landlord might gain possession and then sell the premises again, and the "racket" which we are endeavouring to put down by this Bill would be continued. It was not pressed in another place, and I accept that view, but I have attempted to meet the Government's difficulty by proposing a direction to the sheriff to have particular regard to the case I have mentioned.

The hardship that would fall on an owner of property who was unable to resume possession for a reasonable extension of his business, was recognised in both the Committees which examined this problem in Scotland—the Taylor Committee and the Guthrie Committee. Perhaps there is no need for me to make that argument again, because both Committees (which were certainly not biased) made it one of their recommendations; and I should have thought that if the noble Lord has not the views on property that certain very advanced sections of his supporters may have, he would admit that there were some rights in ownership, and that there was fairness in a proposal which urged that the fact that a landlord reasonably desired to occupy his own property for the purpose of the expansion of his own business should be a major consideration. As the noble Lord admits, this Bill is designed to deal with an evil which has been abroad in certain parts of Scotland in the last year or so, but it is a relatively small number of owners of property who have stooped to the practices which we are endeavouring to eradicate here, and the vast majority of property owners have behaved and are behaving reasonably towards their tenants. I expect that is the same on both sides of the Border. Is it not then a proper thing to assume that if a landlord does require the property for the extension of his business, that should be an important consideration in the mind of the sheriff?

I have not pressed the point that Lord Guthrie would have insisted on—namely, that this should be a mandatory provision—but instead have proposed only that the sheriff should be enjoined to consider this circumstance. The noble Lord may reply that it is unwise to fetter the sheriff in his examination of the problem. But there have been precedents before, such as in the Rent Restrictions Acts and elsewhere, where similar directions have been given. I submit to your Lordships that this is an important factor which might well be brought specially to the notice of the sheriff. Clause I contains a proviso which would appear to give some protection to the owner of the property, and perhaps the noble Lord in his reply could elaborate that—I refer to subsection (3) of Clause 1, which recites: Notwithstanding anything in the last foregoing subsection, the sheriff may, if in all the circumstances he thinks it reasonable to do so, dismiss any application. The noble Lord will, no doubt, seek to convince me that under that safeguard the interest of the landlord who requires occupation for the purpose I have mentioned is cared for. Perhaps he will succeed in convincing me that that is so. I beg to move.

Amendment moved— Page 2, line 28, at end insert the said subsection.—(Lord Clydesmuir.)

LORD MORRISON

I am sorry I am unable to accept this Amendment, and it is not because I personally have any prejudices against ownership of property. My ambition since my early days was to be the owner of my own house, and I am glad I have been able to achieve that ambition. Being the owner of a house, I do not think that anybody is more entitled to live in it than the owner of a house. He is the person most likely to take an interest in it, because it is his own. Therefore I have no prejudices in that direction. But when you suggest that in a case like this, where the sheriff has to decide, he shall take special cognizance of the fact that the landlord is asking for possession of the property for his son or daughter, that, to use a Scottish expression, is "a different kettle of fish." After all, only the other day we had a debate in this House in which noble Lords opposite most eloquently expressed concern at the rough time that the little shopkeeper is having. In taking into consideration the relative hardships, the sheriff is asked to have regard to the hardships that will accrue to the owner and his family if possession is not granted.

He is also asked to take into consideration the hardships which may accrue to the tenant. The tenant may be a person who has throughout his lifetime built up a business in that shop. What is he going to do, and what hardship would be caused if he were to be turned out? The hardship of the tenant might be extreme. He might lose his entire livelihood and the results of a lifetime of effort in building up the business. The hardship to the landlord, if he fails to evict the tenant, might in many cases (I do not say in all) merely be that he would be unable to effect an extension of an already substantial business, or to secure by taking in a neighbouring shop an improvement in his existing accommodation. I do not say there would not be cases in which the landlord would have the stronger and the greater case of hardship, but the Government's decision is that this is a matter which the sheriff ought to be allowed to decide. We have all expressed our confidence that the sheriff will be absolutely fair, and I am perfectly sure that noble Lords in all parts of the House will agree that there will be varying circumstances in every case. There will be a variety of circumstances which will be almost entirely different in every case. That is why we prefer to give a free hand to the sheriff to decide upon all the circumstances of the case.

Under Clause 1 (3) of the Bill, the sheriff is empowered to dismiss an application for an extension of tenancy if, in all the circumstances, he thinks it reasonable to do so; and, in exercising this discretion, there is no doubt that he will take account of the reasons for which a landlord wishes to recover possession of the premises. Further, the sheriff is expressly required to refuse to extend a tenancy if he is satisfied that, having regard to all the circumstances of the case, greater hardship would be caused by determining that the tenancy shall be renewed than by refusing to do so. The relative measure of hardship to landlord and tenant is, therefore, left to the impartial assessment of the court, and the sheriff can be relied upon to see that justice is done. As I see this Amendment, it is intended, to some extent, at any rate, to load the dice against the tenant, and we prefer to allow the sheriff to make his decision entirely freely. This was accepted as a fair settlement by the Scottish Grand Committee in the House of Commons, and by that House itself in passing the Bill.

May I add that it is not in dispute that a court may have regard, and there is no doubt that under the Bill as it stands it will have regard to it, to the circumstance of the landlord being the individual who wishes to take over for himself or for a son or daughter a shop he brought before the commencement of the Act? There is no doubt that that is a very important matter. But the sheriff will also be required to take into consideration many other circumstances, equally important, to which the court must have regard—for example, the loss of the tenant's livelihood—and to single out for special mention one circumstance affecting a small number of landlords would seem to imply that the court must give greater weight to that circumstance than to others not less important. For those reasons, I hope that the noble Lord will be prepared to do as the Government wish to do—leave this matter to the unfettered decision of the sheriff.

LORD POLWARTH

There is one point to which the noble Lord has referred and to which I wish to draw attention, and that concerns the question of giving, directions to the sheriff. He has said that the sheriff is assumed to be reasonable and that he will take all the circumstances into account. I have no doubt that that is the case, but I want to draw attention to the precedent of the Agriculture (Scotland) Act which we passed last year. Unfortunately, I have not a copy of the Act before me, so anything that I say about it now is said with a measure of caution. But I do believe it is the case that, under that Act, if a landlord lets his farm and inserts in the lease a provision that at the end of the lease he will wish to resume it for occupation, either by himself or a member of his family, the fact that that is in the lease has to be taken into consideration when any question arises of whether or not the landlord is to be allowed to take possession of the farm. As I say, I have not the Act before me so I would not attempt to quote it word by word; but I think the case is as I have stated. The only difference between it and this Bill in this connection, I believe, is that an appeal under the Agriculture Act is not to the sheriff but to the Secretary of State. The only inference I can draw from that is that while we must assume that the sheriff is a reasonable man who will take all circumstances into consideration, we are not to assume that the Secretary of State is equally reasonable.

LORD MORRISON

I am in the same position as the noble Lord, in that I am unable to recall all the circumstances of the Agriculture Act. I would point out that the sheriff would naturally take into account the consideration to which the noble Lord has drawn attention. The other point which I would like to bring to the noble Lord's notice—and it seems to me a reasonable point—is that this matter has given rise to a very acute position in Scotland. A Committee were appointed, and they have considered and reported to the effect that the circumstances were not very serious but that if there were an alarming increase in the trouble they would become serious. In a period of a few months, if I am correctly informed, there has been an alarming increase, and members of all political Parties have made strong representations to the Government to take special steps to endeavour to get this Bill on the Statute Book as quickly as possible. What I fear is that if we at this stage insert an Amendment of this kind in the Bill, the effect would be that while we close one door (and that is the intention of the Bill) we shall at the same time be opening another. I will not say that this has happened in Scotland, but I know that it has happened in England, and I fear that what has happened here may happen in Scotland if safeguards are not speedily provided.

There have been cases in which county court judges generally have decided that, if a landlord wanted possession of his own house, since it was his own house he ought to have it if possible. Orders for possession have been made when the landlord has pleaded that he needs the house for a son or a daughter about to be married. A short time after the order has been made, in a number of instances, the property has been put up for sale at a much higher price than was put upon it before, and in those circumstances the court has not been able to do anything. This sort of thing has become almost a scandal, and I am glad to say that county court judges are now taking much greater precautions to see that applications for possession are genuine. In the case of Scotland, perhaps this evil has not been so great, but undoubtedly there are people about of the "get-rich-quick" type who try to make money by these methods in as short a space of time as possible. These, of course, are but a few among the multitude of honest and decent landlords and tenants.

All that is desired and is provided for in this Bill is that the case shall be presented fairly and properly to the sheriff so that he will be able to make up his mind on all the facts as to the party on which the greater hardship is likely to fall and as to whom the tenancy should be given. I ask the noble Lord to consider whether it is worth while taking the risk that, while closing a door on a scandal which has caused a great deal of distress to many innocent people in Scotland (by reason of the attempts of unscrupulous people to make a great deal of money), we may well at the same time be opening another door. The result of such action might necessitate the introduction of another emergency measure before a further twelve months have passed.

LORD CLYDESMUIR

I welcome the noble Lord's frank avowal, as a property owner himself, that he has no prejudice against property owners. He has also stated, quite categorically, that the circumstances which I mentioned would be for the consideration of the sheriff, both in relation to paragraph (f), in regard to hardship, and also to the first lines of subsection (3)—all the circumstances concerned in the case. Frankly, I think it would not have been unreasonable to press this Amendment. The noble Lord, Lord Morrison, has rested his arguments for the Bill on the importance of the Committee's Report, but has disregarded some of its important provisions, of which this is one. When it was pointed out that a mandatory clause would be embarrassing, I changed my ground, and proposed a direction to take the circumstances into account. I do not think that such a direction would have been embarrassing.

The noble Lord speaks of something which he has seen in England—I cannot, of course, say what he has seen there—and he seems concerned as to what would happen in Scotland if such a provision as this were included in the Bill. For my own part, I think that a hard-headed Scottish sheriff would not fall into any such trap. I think this would have been a proper condition to apply, but we are united in both Houses in wishing to facilitate the passage of this Bill. If we vote on this and insert the Amendment, and there should be disagreement subsequently in another place, the result would undoubtedly be delay, and this would make it difficult to start the new arrangement speedily. In my opening speech on the Second Reading I agreed to do my best to see this measure on the Statute Book by the May term. Therefore, I will not press my Amendment and, with the assurance which the noble Lord has given, I beg leave to withdraw it.

LORD MORRISON

I am much obliged to the noble Lord.

Amendment, by leave, withdrawn.

Clause 1 agreed to.

Clause 2 agreed to.

Clause 3 [Citation, extent, interpretation and duration]:

LORD MORRISON

This is a drafting Amendment designed to ensure that the terms of the Bill will apply to a shop within the meaning of the Shops Acts of 1912, 1934 and 1936. I beg to move.

Amendment moved.

Page 3, line 20, leave out subsection (2) and insert— ("(2) In this Act the expression 'shop' includes any shop within the meaning of the Shops Acts, 1912 to 1936, or any of those Acts.")—(Lord Morrison.)

On Question, Amendment agreed to.

Remaining clause, as amended, agreed to.

House resumed.