Lords Sitting of 12 June 1958

Preamble
The House met at three of the clock, The LORD CHANCELLOR On the Woolsack.
Prayers

  FOREIGN INVESTORS AND UNITED KINGDOM TAXATION
  3.5 p.m.
  VISCOUNT MASSEREENE AND FERRARD: My Lords, I beg to ask the Question which stands in my name on the Order Paper.
  [The Question was as follows:
  To ask Her Majesty's Government whether they will consider reducing the income tax payable by foreign investors in the United Kingdom in view of the greatly increased flow of capital into British industry, particularly from dollar sources, which would result from such a policy.]
  THE MARQUESS OF LANSDOWNE: My Lords, my right honourable friend the Chancellor of the Exchequer is not in favour of a discriminatory tax relief of this nature. I assume that the intention of the special relief suggested by the noble Viscount is to encourage foreign investors to take up share capital in British companies. The United Kingdom, like many other countries engaged in international trade, adopts the general principle of taxing all income which arises within its borders, irrespective of the owner's residence, and of giving relief to its own residents for tax imposed by other countries on income arising in those countries. Consistently with this principle, the United Kingdom should grant no special relief to foreign investors in British industry. Some under-developed countries have experimented with what are termed, as your Lordships know, "pioneer industry concessions"—arrangements under which a limited holiday from taxation may be enjoyed by investors who put up money for new industries which it is desired to encourage. These tax reliefs are of doubtful justification, and apart from this, a preference in favour of foreign investors could not be adopted in a highly industrialised country like the United Kingdom.
  The law, however, does allow one advantage to foreign residents who invest
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  in one specialised class of British companies. The Finance Act, 1957, introduced a new category of taxpayer called an overseas trade corporation. This, as your Lordships know, is broadly a company which conducts all its trading operations overseas but hitherto paid tax here on the whole of its profits because it was "resident" here for tax purposes—that is to say, because its board of directors exercise the final control at meetings in this country. Following a recommendation by the Royal Commission on Taxation (the Radcliffe Commission), relief was granted to such companies by excusing them from income tax and profits tax on the profits of overseas trading, though not on income from investments, so long as those profits were retained in the business and not paid away as dividends. Income tax becomes recoverable when this exempt trading income is later distributed as a dividend. The tax is not charged on dividends out of such income going to any non-resident shareholder in the company. This benefit to foreign investors in United Kingdom companies which qualify as overseas trade corporations was part of the Royal Commission's scheme and involves no derogation from the general principle that I have stated. Its justification is that the overseas trade corporation scheme recognises that in reality the profits were earned outside the borders of this country, so that the United Kingdom should not tax a non-resident on a dividend representing the distribution of those overseas profits.
  VISCOUNT MASSEREENE AND FERRARD: My Lords, I thank the noble Marquess for his extremely comprehensive reply.

  TELEPHONE WAITING LIST
  LORD MACPHERSON OF DRUMOCHTER: My Lords, I beg to ask the Question which stands in my name on the Order Paper.
  [The Question was as follows:
  To ask Her Majesty's Government how many people in the United Kingdom are at present on the waiting list to have a telephone installed, and how many people approximately have been waiting for a telephone for more than one year.]
  LORD CHESHAM: My Lords, at April 30, 1958, there were 167,864 orders outstanding for telephone service; of these, about 80,000 were under inquiry or in course of being met. I regret that the number of applicants who have been waiting for more than one year is not readily available. Much detailed work, which I do not think would be justified, would be necessary to obtain this figure. During the past twelve months, 334,000 telephones have been connected.
  LORD MACPHERSON OF DRUMOCHTER: My Lords, while thanking the noble Lord for his reply, and view of the fact that for as long as most of your Lordships can remember this country has always been short of telephones, under successive Governments, may I ask him whether he can give an assurance that it is not the settled policy of the Post Office to keep people short of telephones?
  LORD CHESHAM: My Lords, I am only too happy to assure the noble Lord that the policy of the Post Office is nothing of the kind.
  LORD MACPHERSON OF DRUMOCHTER: My Lords, may I ask the noble Lord further why the Post Office cannot so organise its business, like the electric light and gas companies, that it can sell a telephone to everyone who wants one, even on hire purchase or deferred payment terms? Surely the noble Lord will admit that to-day a telephone is a "must" in every household.
  LORD CHESHAM: My Lords, whether a telephone is a "must" is a matter of opinion. All I can say is that it is the policy of the Post Office to keep people waiting for the minimum possible time and to provide them with telephones wherever they want them. In all fairness. I must add that the noble Lord's analogy of the speed with which one can get electricity installed, and so on, is scarcely a very hopeful one.
  VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, I should like to know something about the 167,000 outstanding applicants. Have they been waiting for a longer period than many of those of the 330,000 who have already been given telephones?
  LORD CHESHAM: My Lords, some people, in very remote places, where it
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  might require miles and miles of wire and not dozens or scores but hundreds of poles to provide one telephone, have been waiting for some time. The only figure I can give the noble Viscount to-day is that at the same date the number of people who had been waiting for more than three years was 12,000.

  LEGAL ADVICE SCHEME
  3.14 p.m.
  LORD MILNER OF LEEDS: My Lords, I beg to ask the Question which stands in my name on the Order Paper.
  [The Question was as follows:
  To ask Her Majesty's Government whether they have any statement to make concerning the introduction of a Legal Advice Scheme as provided by the Legal Aid and Advice Act. 1949.]
  THE LORD CHANCELLOR (VISCOUNT KILMUIR): My Lords, the Law Society have recently placed before me certain proposals for implementing Section 7 of the Legal Aid and Advice Act, 1949, and the Law Society of Scotland have informed my right honourable friend the Secretary of State for Scotland that they would be prepared to consider similar arrangements for implementing Section 7 of the Legal Aid (Scotland) Act, 1949. These proposals provide, in substance, for the giving of oral advice by solicitors in ordinary practice for a fee paid out of the Legal Aid Fund. It appears to us that a scheme of this kind would be more satisfactory in many respects than the employment of salaried legal advisers, and we are prepared to adopt it. If, as we hope, sufficient solicitors indicate their willingness to undertake this work, we intend to bring Section 7 of the two Acts into force towards the end of this financial year. My right honourable friend and I expect to follow that by bringing Section 5, the remaining section dealing with legal advice, into force later in the next financial year.
  LORD MILNER OF LEEDS: My Lords, I am grateful to the noble and learned Viscount for that Answer. This further progress towards completely implementing the Legal Aid and Advice Act, 1949, will be a great help to many people, and I am confident that solicitors will be only too happy to co-operate in making it a success.

  BUSINESS: PROPOSED NEW STANDING ORDER
  VISCOUNT STANSGATE: My Lords, I should like to ask the noble Earl the Leader of the House whether, in connection with the Motion that he has on the Order Paper for Monday, seeking approval of the proposed new Standing Order, he thinks that it would be possible to apply Standing Order No. 55 to the debate. That Standing Order is intended to facilitate debate and to assist generally the proceedings of the House.
  THE SECRETARY OF STATE FOR COMMONWEALTH RELATIONS
  (THE EARL OF HOME): My Lords, I am obliged to the noble Viscount for giving me this opportunity of saying how I suggest we should deal with this particular piece of Business. Like the noble viscount, I have been anxious to ensure that we avoid confusion and secure an orderly debate. I think, as he does, that it would be an advantage if we were to consider in Committee the Amendments tabled—I take it that that really is his suggestion. Therefore, after consultation with the learned Clerk of the Parliaments, I would suggest to your Lordships that as soon as the Business is called on Monday I should move the House into Committee. We shall then discuss the various Amendments proposed to the Order on the Paper, in the same way as we discuss Amendments tabled to a Bill. After the Committee has dealt with the Amendments the House will then resume, and the Standing Order will be before the House as it bas emerged from the Committee stage, on my own Motion that the House should approve the Order. I hope that that course will be convenient to the noble Viscount the Leader of the Opposition, and to the noble Lord. Lord Rea.
  May I further add that, in order to meet the convenience of noble and learned Lords who are engaged judicially on an important Scottish appeal case that afternoon, some of whom wish to take part in the debate, we propose to take the Standing Order at 4.15 p.m. on Monday afternoon. If the Business that stands before the Motion to approve the Standing Order has not been completed, it will be adjourned until after the Order has been dealt with; and if the earlier Business has been dealt with we shall adjourn during pleasure until 4.15 p.m.
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  I am glad to be able to meet the noble Viscount, and I am obliged to him for the suggestion.
  VISCOUNT STANSGATE: My Lords, I am grateful to the noble Earl for saying what he has done, because I am sure that this course will facilitate debate. I presume that when the House is in Committee Members will have the ordinary privilege of moving any Amendment that appears necessary without giving notice on the Paper?
  THE EARL OF HOME: Yes. Of course, I rely upon the noble Viscount to exercise restraint in the matter.
  VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, I am grateful to the Leader of the House for the statement he has made. He has asked whether the Leaders of the two sections of the Opposition will agree, and of course I heartily agree. I must congratulate my noble and gallant friend Lord Stansgate on having at last got a real concession out of the House, after his many efforts to get certain interpretations of Standing Orders: I think it is a marked success. Nevertheless, on a matter as controversial as this debate on Monday is likely to be, I think it is a gracious step on the part of the noble Earl the Leader of the House to meet the request, and I am happy to join with him in the course he proposes.
  LORD TERRINGTON: My Lords, in the absence of my noble Leader, Lord Rea, may I say, on behalf of noble Lords on these Benches, that we are pleased to agree with what the noble Earl the Leader of the House has said.
  THE MARQUESS OF SALISBURY: My Lords, arising out of what the Leader of the House has said, am I to understand that it is to become normal practice for Amendments to be moved on Committee stage without notice? I think that that would be a rather undesirable general development. After all, Peers wish to know what Amendments are going to be moved, and they may not be here if they have no notice of them. I quite see that a special case should be made in a particular instance for this to be done, but I think it would be undesirable for it to become the general practice.
  VISCOUNT STANSGATE: My Lords, it is not for me to answer the noble Marquess except to repudiate the suggestion that I asked for any general practice

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  of moving Amendments suddenly—nothing of the kind. I asked for the application of Standing Order No. 55, which sets out in the clearest way the great improvement of debate that would follow the adoption of this practice.
  THE EARL OF HOME: My Lords, I think that under the practice to which the noble Marquess referred—and I am glad he has done so—it is possible to move Amendments in this way, but it is deprecated.

  LICENSING OF BULLS AND BOARS BILL [H.L.]
  VISCOUNT STONEHAVEN: My Lords, I beg leave to introduce a Bill to vary the grounds for the refusal of licences under the Improvement of Live Stock (Licensing of Bulls) Act, 1931, for keeping bulls or boars for breeding purposes; and to move this Bill be now read a first time.
  Moved, That the Bill be now read 1a—(Viscount Stonehaven.)
  On Question, Bill read 1a, and to be printed.

  BUSINESS OF THE HOUSE
  THE EARL OF HOME: My Lords, I beg to move that Standing Order No. 34 be considered in order to its being dispensed with for the purpose of taking the Motion for the Second Reading of the Variation of Trusts Bill after the other Orders of the Day.
  Moved, That Standing Order No. 34 be considered in order to its being dispensed with for the purpose of taking the motion for the Second Reading of the Variation of Trusts Bill after the other Orders of the Day.—(The Earl of Home.)
  On Question, Motion agreed to, and ordered accordingly.

  PIER AND HARBOUR PROVISIONAL ORDER (MARGATE) BILL
  Read 2a (according to Order), and referred to the Committee on Unopposed Bills.

  MAINTENANCE ORDERS BILL
  3.22 p.m.
  Amendments reported (according to Order).
  Clause 4 [Variation of orders registered in magistrates' courts]:
  THE LORD CHANCELLOR THE LORD CHANCELLOR moved, in subsection (2) (a), after "order" to insert:
  "(other than jurisdiction in a case where a party to the order is not present in England when the application for variation is made)".
  The noble and learned Viscount said: My Lords, it may be convenient if your Lordships consider Amendments 1 and 2 together, because they deal with the same point. In general, a magistrates' court has no jurisdiction to hear a complaint where one of the parties resides outside England and Wales. In the High Court there is no such limitation and it is possible to deal with the situation by substituted service. Your Lordships will see that Clause 4 (2) (a) of the Bill enables a magistrates' court to exercise the same jurisdiction to vary any rate of payment specified in a High Court order registered under it which would otherwise be exercisable by the High Court. It was intended to enable magistrates' courts to apply the same principles as the High Court, and it is not intended to increase their jurisdiction with regard to these registered orders. A very different position arises, which I will deal with in a moment, with regard to attachment of earnings orders under a later part of the Bill. It is to safeguard this position that these Amendments are moved. I should draw your Lordships' attention to the fact that the second Amendment introduces a sub-paragraph (b), and it would be convenient, as a matter of arrangement of the Bill, if in line 25 after "court" there were inserted (a). I beg to move the first Amendment.
  Amendment moved—
  Page 4, line 39, after ("order ") insert the said words.—(The Lord Chancellor.)
  On Question, Amendment agreed to.
  THE LORD CHANCELLOR: My Lords, I have already described this Amendment to your Lordships. I beg to move.
  Amendment moved—
  Page 5, line 26, at end insert ("; or
  (b) at a time when a party to the order is not present in England").—(The Lord Chancellor.)
  On Question, Amendment agreed to.
  Clause 17 [Prohibition of committal more than once in respect of same arrears]:
  THE LORD CHANCELLOR: My Lords, this Amendment paves the way for the new clause with the side note "Powers of magistrates to review committals, etc." I beg to move.
  Amendment moved—
  Page 16, line 11, after ("warrant") insert ("(other than a warrant of which the issue is postponed under paragraph (ii) of subsection (5) of section (Powers of magistrates to review committals, etc.) of this Act)").—(The Lord Chancellor.)
  On Question, Amendment agreed to.
  THE LORD CHANCELLOR THE LORD CHANCELLOR moved, after Clause 17 to insert the following new clause:
  Powers of magistrates to review committals, etc.
  ".—(1) Where, for the purpose of enforcing a maintenance order, a magistrates' court has exercised its power under subsection (2) of section sixty-five of the Magistrates' Courts Act, 1952, or this section to postpone the issue of a warrant of commitment and under the terms of the postponement the warrant falls to be issued, then—

  (a) the warrant shall not be issued except in pursuance of subsection (2) or paragraph (a) of subsection (3) of this section; and

  (b) the clerk of the court shall give notice to the defendant stating that if the defendant considers there are grounds for not issuing the warrant he may make an application to the court in the prescribed manner requesting that the warrant shall not be issued and stating those grounds.

  (2) If no such application is received by the clerk of the court within the prescribed period, any justice of the peace acting for the same petty sessions area as the court may issue the warrant of commitment at any time after the expiration of that period; and if such an application is so received any such justice may, after considering the statements contained in the application—

  (a) if he is of opinion that the application should be further considered, refer it to the court;

  (b) if he is not of that opinion, issue the warrant forthwith;

  and when an application is referred to the court under this subsection, the clerk of the court shall give to the defendant and the person in whose favour the maintenance order
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  in question was made notice of the time and place appointed for the consideration of the application by the court.
  (3) On considering an application referred to it under the last foregoing subsection the court shall, unless in pursuance of subsection (6) of this section it remits the whole of the sum in respect of which the warrant could otherwise be issued, either—

  (a) issue the warrant; or

  (b) further postpone the issue thereof until such time and on such conditions, if any, as the court thinks just; or

  (c) if in consequence of any change in the circumstances of the defendant the court considers it appropriate so to do, order that the warrant shall not be issued in any event.

  (4) A defendant who is for the time being imprisoned or otherwise detained under a warrant of commitment issued by a magistrates' court for the purpose of enforcing a maintenance order, and who is not detained otherwise than for the enforcement of such an order, may make an application to the court in the prescribed manner requesting that the warrant shall be cancelled and stating the grounds of the application; and thereupon any justice of the peace acting for the same petty sessions area as the court may, after considering the statements contained in the application—

  (a) if he is of opinion that the application should be further considered, refer it to the court;

  (b) if he is not of that opinion, refuse the application;

  and when an application is referred to the court under this subsection, the clerk of the court shall give to the person in charge of the prison or other place in which the defendant is detained and the person in whose favour the maintenance order in question was made notice of the time and place appointed for the consideration of the application by the court.
  (5) On considering an application referred to it under the last foregoing subsection, the court shall, unless in pursuance of the next following subsection it remits the whole of the sum in respect of which the warrant was issued or such part thereof as remains to be paid, either—

  (a) refuse the application; or

  (b) if the court is satisfied that the defendant is unable to pay, or to make any payment or further payment towards, the sum aforesaid and if it is of opinion that in all the circumstances of the case the defendant ought not to continue to be detained under the warrant, order that the warrant shall cease to have effect when the person in charge of the prison or other place aforesaid is informed of the making of the order;

  and where the court makes an order under paragraph (b) of this subsection, it may if it thinks fit also—

  (i) fix a term of imprisonment in respect of the sum aforesaid or such part thereof as remains to be paid, being a term not exceeding so much of the term of the previous warrant as, after taking into account any

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  reduction thereof by virtue of the next following subsection, remained to be served at the date of the order; and

  (ii) postpone the issue of a warrant for the commitment of the defendant for that term until such time and on such conditions, if any, as the court thinks just.

  (6) On considering an application under this section in respect of a warrant or a postponed warrant, the court may, if the maintenance order in question is an affiliation order or an order enforceable as an affiliation order, remit the whole or any part of the sum due under the order and where the court remits the sum or part of the sum in respect of which the warrant was issued or the postponed warrant could have been issued, section sixty-seven of the Magistrates' Courts Act, 1952 (which provides that on payment of the sum for which imprisonment has been ordered by a magistrates' court the order shall cease to have effect and that on payment of part of that sum the period of detention shall be reduced proportionately) shall apply as if payment of that sum or part had been made as therein mentioned.
  (7) Where notice of the time and place appointed for the consideration of an application is required by this section to be given to the defendant or the person in whose favour the maintenance order in question was made and the defendant or, as the case may be, that person does not appear at that time and place, the court may proceed with the consideration of the application in his absence.
  (8) A notice required by this section to be given by the clerk of a magistrates' court to any person shall be deemed to be given to that person if it is sent by registered post addressed to him at his last known address, notwithstanding that the notice is returned as undelivered or is for any other reason not received by that person."
  The noble and learned Viscount said: My Lords, this Amendment is a somewhat lengthy new clause which I ask your Lordships to add to the Bill. The new clause, together with the consequential Amendments put down to Clause 17 and to the Title, is the outcome of careful consideration of the Amendment moved in Committee by the noble Lord, Lord Silkin, and also of the speech of my noble and learned friend Lord Merriman: I think it meets substantially the points which they had in mind. I do not want to go into the earlier history of this subject, because it has a history in another place and also here. I wish to make only one point, because I want the noble Lord, Lord Silkin, to understand the importance we attach to the arguments which be advanced.
  In another place the Opposition based their argument on cases where the warrant had been issued and where the man was
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  in prison. In such cases the court must have already decided that the man's wilful default justified imprisonment, and there can be no more than a very few cases in which a court would be justified in reversing the position when the man was in prison. As I say, I am not going into the matter in detail. There is an administrative procedure for dealing with certain of these cases. That is one point—as a matter of fact we have dealt with it. But in Committee in your Lordships' House the noble Lord, Lord Silkin, based his argument on a different type of case. As I understood him, he was more concerned with the case where the issue of a warrant had been postponed—that is, where the man was still at liberty—and in this type of case there is, if he will allow me to say so, force in the argument that at any rate the warrant should not he issued automatically.
  At present, once the man has failed to comply with the conditions of postponement, the warrant may be issued without anyone hearing the man's explanation of his failure. The man's circumstances may have significantly changed, as the noble Lord said in Committee, or the man might have failed, through no fault of his own, to comply with the conditions of postponement. This feature of the existing system was criticised by the Royal Commission on Marriage and Divorce, who recommended that the defaulter should be notified, before the issue of a suspended warrant, that unless he applied to the court within a specified time the warrant would be issued. The Government accept this recommendation, and the effect of this new clause will be to implement it.
  Subsections (1) to (3) of the clause contain the substantive provisions, which are that if the defaulter, having been notified that the warrant falls to be issued, applies within the prescribed period, and a justice of the peace is of opinion that the application should be further considered, the court may, as an alternative to immediate issue, further postpone the issue of the warrant or, cancel the warrant altogether, if changed circumstances make that course appropriate. If no application is received, the justice may issue the warrant. In short, these subsections not only deal with the main defect of the present system as recognised by the Royal Commission, but also provide, in an exceptional case, for the

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  complete cancellation of a suspended commitment.
  The new clause also provides for the discharge of a warrant of commitment that had been issued and executed. These are the warrants with which the Committee in another place were concerned and which were also the concern of my noble and learned friend Lord Merriman. My noble and learned friend will see that that position is dealt with also, because under subsection (4) the imprisoned defaulter is enabled to apply for the cancellation of the warrant. The application is at first considered by a single justice, and if he refers it to the court, the court may discharge or suspend the warrant. I did say on the last occasion that I thought that in a perfect world it would have been better to do this in a Magistrates' Courts Bill, but I received such broadsides from both noble Lords I have mentioned on that occasion that I have adopted the course of meeting them in the new clause before the House.
  There is just one point that I should like to make to my noble and learned friend the President of the Probate, Divorce and Admiralty Division. Lord Merriman suggested in Committee that a provision on the lines of the proposed Amendment could be embodied in Section 74 of the Magistrates' Court Act, 1952, which contains enforcement provisions special to affiliation orders and orders enforceable as affiliation orders. We considered that suggestion, but we felt that it was not possible to adopt it, since maintenance orders, as defined in the Bill, cover a slightly wider field than affiliation orders and orders enforceable as affiliation orders.
  There is only one other provision of the clause which, I should tell your Lordships, gave me very serious thought but which I felt ought to be in the clause. I refer to subsection (8), which provides for any notice sent under the new clause to be sent by registered post to the party at his last known address, and the notice will then be deemed to have been sent, notwithstanding that it is returned as undelivered or, for any other reason, is not received by the person to whom it is sent. In these proceedings for the suspension and cancellation of a warrant it is desirable that the application should be considered quickly and that any hearing should not be delayed by a need to prove service; and in the case of the
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  notice sent to the defaulter about a suspended commitment it is essential that he should not be able to prevent the issue of the warrant by the expedient of refusing a registered letter containing the notice or by merely changing his address.
  There are two safeguards. One is that if the notice was returned information would be given to the justice, and it would then be for him to exercise his discretion whether to issue the warrant forthwith or cause further inquiries to be made. Also, of course, there is, as I have informed the House, the provision in subsection (4) by which anyone who is in prison can apply for his discharge. In the ordinary way I should have hesitated over this but, as your Lordships in my profession will know, since the case of Beer v. Davies it is necessary that there should be such a provision. While the provision may be deemed restrictive, the whole object of this clause is one that is ameliorating and giving greater rights, and I think that, as we are giving greater rights which noble Lords desire, we are entitled to keep this safeguard against the possibility of the person whose troubles are being ameliorated abusing the position. I could not think of any better way of doing it, and I hope that your Lordships will take it that I have tried to meet noble Lords, with such skill as I have, and that I have met the substance of their point after the consideration I have given it. I beg to move.
  Amendment moved—
  After Clause 17, insert the said new clause. —(The Lord Chancellor.)
  3.35 p.m.
  LORD SILKIN: My Lords, I should like to thank the noble and learned Viscount for so carefully and conscientiously carrying out the undertaking which he gave on Committee that he would discuss my Amendment with the Home Secretary, without committing himself as to what would be the outcome. I am very pleased indeed that they have both seen their way to accept the principle of the Amendment which I then put down. Without going into the merits of the case once more, I am sure that the whole House will agree that if it is possible to keep out of prison people who would otherwise go there, it is desirable; and in this case the purpose of the Amendment and the purpose of this new clause is to keep out of prison people who ought

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  not to be there. Therefore there is nothing but good in this new clause.
  There were difficulties and I fully appreciate them. One was that this Amendment would be more appropriate in another Bill—either as part of another Bill or as an Amendment to an Act. But while appreciating that point, I thought it was even more important that we should not send one single person to prison who would otherwise not go—and I made that point very strongly. There were also difficulties of drafting. Noble Lords who have looked at this Amendment will appreciate that those difficulties were real and genuine. But with some experience of our Parliamentary draftsmen and their skill I had no doubt at all that even a difficult Amendment of this kind would not be beyond their powers, especially as they were assisted by the noble and learned Viscount. So I am most grateful for all the trouble that has been taken. I am quite sure that as the result of the introduction of this new clause this is a much better Bill.
  LORD MERRIMAN: My Lords, I, too, should like to express my thanks to the Lord Chancellor and to the Home Secretary for the consideration given to this matter, and I would add that I am completely content and satisfied that subsection (4) of this clause meets the point which I raised in Committee.
  THE LORD CHANCELLOR: My Lords, I think I can say one word of thanks to both noble Lords who have spoken. This is essentially the sort of point where it is extremely valuable to the administration of justice to get the views of Members of your Lordships' House with the varying experience which the two noble Lords have. I should like to express my personal gratitude not only for the care with which they developed the point but also for the way in which they have accepted the Amendment.
  On Question, Amendment agreed to.
  THE LORD CHANCELLOR THE LORD CHANCELLOR moved, after subsection (2), to insert:
  "(3) It is hereby declared that a magistrates' court has jurisdiction to hear a complaint by or against a person residing outside England for the discharge or variation of an attachment of earnings order made by a magistrates' court; and where such a complaint is made against a person residing outside England, then—
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  (a) if he resides in Scotland or Northern Ireland, section fifteen of the Maintenance Orders Act, 1950 (which relates to the service of process on persons residing in those countries) shall have effect in relation to the complaint as it has effect in relation to the proceedings therein mentioned; and

  (b) if the said person resides outside the United Kingdom and does not appear at the time and place appointed for the hearing of the complaint but it is proved to the satisfaction of the court, on oath or in such other manner as may be prescribed, that the complainant has taken such steps as may be prescribed to give to the said person notice of the complaint and of the time and place aforesaid, the court may, if it thinks it reasonable in all the circumstances to do so, proceed to hear and determine the complaint at the time and place appointed for he hearing or for any adjourned hearing in like manner as if the said person had then appeared."

  The noble and learned Viscount said: My Lords, this is the Amendment to which I made a passing reference in dealing with the first Amendment, and it arises from the fact that I mentioned that a magistrates' court has in general no jurisdiction to hear a complaint where one of the parties resides outside England and Wales. In dealing with orders for attachment of earnings one must clearly reconsider that position, because if this Amendment were not carried a wife might procure an order of attachment of her husband's earnings and then leave the country, and it would be impossible for the husband to have any alteration made in that order, despite violent changes of circumstances. I do not think that that is a position we should tolerate, and therefore I ask your Lordships to accept this Amendment. I beg to move.
  Amendment moved—
  Page 17, line 9, at end insert the said subsection.—(The Lord Chancellor.)
  On Question, Amendment agreed to.
  THE LORD CHANCELLOR: My Lords, Amendments 6, 7 and 8 are all consequential Amendments, and, with your Lordships' permission, I will move them en bloc.
  Amendments moved—
  Page 21, line 7, after ("Act") insert (", except paragraph (a) of subsection (3) of section nineteen")
  Page 21, line 8, after ("eighteen") insert ("the said paragraph (a),")
  In the Title
  Line 10, after ("1952") insert ("; to make provision for the review of committals to prison by magistrates' courts for failure to comply with maintenance orders;").—(The Lord Chancellor.)
  On Question, Amendments agreed to.

  AGRICULTURAL MARKETING BILL [H.L.]
  House in Committee (according to Order) on recommitment of the Bill: the Amendment made by the Joint Committee on Consolidation Bills agreed to.
  PREVENTION OF FRAUD (INVESTMENTS) BILL [H.L.]
  House in Committee (according to Order) on recommitment of the Bill: all reported without amendment.
  STATUTE LAW REVISION BILL [H.L.]
  House in Committee (according to Order) on recommitment of the Bill: Bill reported without amendment.

  OPTICIANS BILL
  3.43 p.m.
  Order of the Day read for the Bill to be considered on Report.
  LORD AMHERST of HACKNEY: My Lords, on the Committee stage of this Bill I gave an undertaking to the noble Lord, Lord Lucas of Chilworth, that further consideration would be given to two Amendments he put down to Clauses 11 and 21, to see whether one could use a better word than "supervision". Since then we have done our best to do that, but have been unable to do so. I see that the noble Lord has not put down any further Amendment; and I therefore beg to move that this Report be now received.
  Moved, That the Report be now received.—(Lord Amherst of Hackney.)
  On Question, Motion agreed to: Bill reported without amendment.

  MATRIMONIAL PROCEEDINGS (CHILDREN) BILL
  3.47 p.m.
  Amendments reported (according to Order).
  Clause 4 [Power of Divorce Court to provide for custody of children in proceedings for maintenance]:
  LORD OGMORE LORD OGMORE had given Notice of two Amendments, the first being to substitute "subsection" for "section", where
  806
  that word appears a third time, and the second to add a new subsection to the clause. The noble Lord said: My Lords, the first Amendment is a paving "Amendment for the second, and with your Lordships' permission I ask that they be taken together. The object of the second Amendment is to enable the Divorce: Court, on an application under Section 23 of the Matrimonial Causes Act, 1950, to order maintenance to be paid direct to a child or to a third party for the child's benefit.
  Your Lordships may remember that during the Committee stage my noble friend Lord Latham pointed out that where, on an application under Section 23, a child is committed to the care of a local authority under the powers conferred by Clause 5 of the Bill, the Court would have no power to order payments to be made to the local authority for the child's maintenance. This is because Section 23 provides that, where a husband has wilfully neglected to provide reasonable maintenance for his wife or children, the Divorce Court may, on the application of the wife, order the husband to make to her such periodical payments as may be just, and the Court has no such power as it has under Section 26 of the Act of 1950 (which enables the Court to make provision for a child in proceedings for divorce, nullity of marriage or judicial separation) to order payments direct to the children or to a third party, even at the wife's request.
  The occasions on which the Court will decide, on an application made under Section 23, to commit a child to the care of a local authority will no doubt be comparatively rare. Nevertheless, it is desirable in such a case that the Count should be able to order the husband to make contributions direct to the local authority instead of through the wife. Moreover, even where a local authority is not concerned it is often convenient that the Court should be able to order payments under Section 23 to be made direct to the child or to a third party for the child's benefit, instead of to the wife, a power which the case of Logan v. Logan showed that the Court does not at present possess. This is achieved in the present Bill by the new subsection (2), which I am now moving and which will enable payments like those made to the wife herself under the existing Section 23 to be secured in proper cases.
  May I say that I am most grateful to my noble friend Lord Latham, who has done considerable service in bringing this matter before your Lordships' notice on Committee stage, so that we could deal with it here. I understand that the noble and learned Lord, Lord Merriman. President of the Probate, Divorce and Admiralty Division, proposes to say a word on another aspect of this Amendment, and, as always, we shall hear him with great interest and profit. I beg to move.
  Amendment moved—
  Page 3, line 32 leave out ("section") and insert ("subsection").—(Lord Ogmore.)
  LORD LATHAM: My Lords, I should like to express my appreciation of the way in which my noble friend Lord Ogmore and the Government have met the defect in the Bill as originally drafted with regard to payment to a local authority in respect of the maintenance of a child committed to their care. I think that the Amendment cures the manifest defect in the Bill and I am much obliged to all concerned. I am sure that local authorities will be equally obliged.
  LORD MERRIMAN: My Lords, I want to add to what the noble Lord, Lord Ogmore, has said already only that I welcome this Amendment from a point of view entirely unconnected with the London County Council or other local authority. In the Division over which I preside it is a common thing in ordinary divorce suits for orders to be made payable to the child. The point is that that avoids the artificial addition of that income, for example, to that of the mother in whose custody a child has been placed. It is not a case of tax evasion; it is an ordinary tax proposition which is perfectly well recognised by the Inland Revenue authorities. The case falls under Section 26, where the wording is that
  "the court may make such provision as appears just"
  and there is no limitation on the person to whom the payment should be made. The trouble is that in Section 23, with which we are dealing, the Court is empowered on the application of the wife only to order the husband to make to her such periodic payment; and it was recently decided—and inevitably decided—that there was no power under that
  808
  section to order the payment to be made to the child. This Amendment gets rid of that difficulty, among others, and I am grateful for it.
  THE LORD CHANCELLOR: My Lords, I want only to say in a sentence that I also welcome the Amendment on behalf of Her Majesty's Government. I think that this gap ought to be filled and that the Court ought to have this power. I am sure that your Lordships are grateful not only to the noble Lord, Lord Latham, for drawing our attention to this matter but also to the noble Lord, Lord Ogmore, for dealing with it so promptly.
  LORD OGMORE: My Lords, I am grateful to the noble and learned Viscount on the Woolsack, to the noble and learned Lord, Lord Merriman, and to my noble friend Lord Latham for the handsome way in which they have received this Amendment.
  On Question, Amendment agreed to.
  Amendment moved—
  Page 3, line 35, at end insert—
  "(2) In any case where the court would have power, on an application made under subsection (1) of the said section twenty-three, to order the husband to make to the wife periodical payments for the maintenance of any such child as is referred to in that subsection, the court may, if it thinks fit, order those payments to be made to the child, or to any other person for the benefit of the child, instead of to the wife; and the reference to the wife in subsection (2) of that section (which relates to security for maintenance) shall be construed accordingly."—(Lord Ogmore.)
  On Question, Amendment agreed to.

  DOMICILE BILL
  3.55 p.m.
  Order of the Day for the Second Reading read.
  LORD MESTON: My Lords, I beg to move the Second Reading of the Bill known as the Domicile Bill. I feel that we all appreciate the work that was done by the Private International Law Committee, under the chairmanship of Mr. Justice Wynn Parry, who investigated the subject of domicile and published a Report in 1954. From time to time I may refer to that Report.
  Let me get to the point at once. A person's domicile is the country in which he has his home and intends to live permanently. The law regards every person

  809
  as having a domicile, whether it be the "domicile of origin" which the law confers on him at his birth, or the "domicile of choice" which he may subsequently acquire. If a person, having acquired a domicile of choice, abandons it without acquiring a fresh one, the law regards his domicile of origin as having revived until a fresh domicile of choice is acquired, even though in fact he may never have returned to his domicile of origin.
  The present law suffers from two serious defects—namely, the excessive importance attached to the domicile of origin, and the difficulties involved in proof of intention to change a domicile. These defects may be illustrated by two cases which were ultimately decided by your Lordships' House, sitting in its judicial capacity. The first case, that of Winans v. Attorney General was decided in 1904. Mr. Winans was born in 1823 in the United States, where he was continually engaged in business until 1850. Between 1850 and 1859 he worked in Russia, where he married a British subject. In 1859 he was advised to winter in England on account of his health, and in 1860 he took a lease of a property in Brighton. From 1860 to 1870 his practice was to spend four months of the winter at Brighton and the remainder of the year in Russia. From 1870 to 1883 he spent more than half of every year in England, the remainder of his time being divided between Russia and Germany. In 1883 he ceased to visit Russia and for the next ten years divided his time between England, Scotland, and Germany. From 1893 until his death in 1897 he lived entirely in England.
  It appears that, in addition to the care of his health, Mr. Winans had two objects in life. The first was the construction in Baltimore of a fleet of vessels which would restore to the United States the carrying trade of the world; the second was to develop a large estate at Baltimore. He had lived in England for thirty-seven years because he was unable to obtain control of the Baltimore property, in England he led a secluded life, mixed little with English people and devoted the whole of his time to the care of his health and to the advancement of his schemes. It was held that Mr. Winans had never formed a fixed and settled purpose of abandoning his
  810
  American domicile and settling finally in England—that is to say, at the time of his death he still retained his domicile of origin.
  The other case is that of Ramsey v. Liverpool Infirmary, which was decided in 1930. In that case, George Bowie was born in Glasgow in 1845. He gave up his employment as a commercial traveller at the age of thirty-seven and did no further work during the rest of his life. He moved to Liverpool in 1892 where he lived on the bounty of his brother, at first in lodgings but subsequently in his brother's house on the latter's death in 1913, and he remained there until his own death in 1927. Thus Bowie had lived in England for the last thirty-six years of his life and during that time only twice left this country, and never returned to Scotland. During his life he said that he never wished to set foot in Glasgow again, and had arranged for his burial in Liverpool. Nevertheless, it was held that Bowie had not acquired a domicile of choice in England and that he must accordingly be regarded as having had a domicile in Scotland. May I, by way of improper comment, suggest that when a person is living in Liverpool, has lived in Liverpool for many years and has decided to be buried in Liverpool, one would think he had become a Liverpool man? They said "No", he was still a Glasgow man.
  Those two cases illustrate the difficulty involved in the proof of intention to change a domicile. This difficulty will be materially lessened if not substantially overcome, by this Bill. Clause 1 provides that
  "The rules set out in sections two to seven of this Act shall be applied in determining a person's domicile."
  Clause 2 provides:
  "Subject to sections five and six of this Act, a person's domicile is in the country in which he has his home and intends to live permanently."
  Your Lordships will observe that the word used is "home" and not "residence". Suppose, for example, that a person lives in England and intends to live permanently in Canada, but dies on the quayside at Halifax. In that case, it ought not to be held that he has abandoned his English domicile. Suppose that, instead of dying on the quayside, he takes a room in a hotel in Halifax and dies in that room on the first night, what then

  811
  is the position? If it be the fact that he intended to go the next day to Vancouver, it could hardly be said that at the time he died he had acquired Canadian domicile. Thirdly, notwithstanding the fact that he died on the first night in a room in Halifax, if it was his intention to live in various hotels in Halifax for the rest of his life it might well be said that he had acquired a Canadian domicile. It is purely a question of fact in each case, depending upon proof of a person's intention as to where he proposes to live permanently.
  Reverting once more to that difficulty, I should like to read Clause 3 of the Bill. Subsection (1) says:
  "Subject to the following provisions of this section, a person who has a home in a country is presumed to intend to live permanently in that country."
  That is the first presumption. The second presumption is in subsection (2):
  "If a person has a home in more than one country he is presumed, subject to the next following subsection, to intend to live permanently in that one of them with which he is most closely connected."
  The third presumption, subsection (3), is:
  "If a person lives in a country mainly because he works there and he has a wife or children whose home is in another country he is presumed to intend to live permanently in that other country."
  Perhaps I might explain in a few words exactly the value of those presumptions. At the present time one has affirmatively to prove what is a person's intention as to the country in which he proposes to spend the rest of his life; and if a person is dead, you can well imagine the difficulty his executors and advisers have in proving that intention. You and I, my Lords, do not walk about with a banner saying, "I intend to live in England for the rest of my life"; we do not even talk to our friends about the subject. What we do is to go on living in one country, and it must be clear to any person that that is probably the country in which we intend to live permanently.
  These three presumptions contained in Clause 3 of the Bill alter the burden of proof. If a person has his home in one country, the presumption is that he intends to live permanently in that country, and therefore that country is his domicile. It is true that that presumption can be rebutted by evidence to the contrary.
  812
  Clause 4 of the Bill excludes those presumptions in the following cases. It says that the presumptions to which I have referred
  "may be displaced by proof of a different intention".
  It goes on to say:
  "The presumption that a person intends to live permanently in any country is not raise

  (a) by his home in that country, if he is entitled to diplomatic immunity in that country or, being in the service of an international organisation or in the public service of that or any other country, he had no home in that country immediately before entering that service".

  Then there is another way in which the presumption can be displaced—namely, by paragraph (b), which says that the presumption is not raised
  "by his wife's or children's home in that country, if there is in force an order of a court by virtue of which the wife is not bound to cohabit with him or, as the case may be, if he is not entitled to the custody of the children."
  I may say that all these matters to which I have been referring so far relate to individuals and not to countries.
  I now pass on to something different—namely, the domicile of a married woman. This matter was carefully considered by the International Law Committee, and they came to the conclusion that, on balance, a married woman should not be able to acquire a separate domicile from her husband—subject to one exception. The Committee considered it reasonable that a married woman who has been separated from her husband by an order of a court of competent jurisdiction should be able to acquire a separate domicile. Accordingly Clause 5 of the Bill provides that:
  "The domicile of a married woman is that of her husband unless there is in force an order of a court by virtue of which she is not bound to cohabit with him."
  I should like to take this opportunity of inviting your Lordships to ventilate the question that a married woman should be enabled to acquire a separate domicile in the same way as an unmarried woman, without the limitations stated in this clause, or without any limitations whatsoever. Having extended that invitation to your Lordships, I may add that it is a subject on which we could talk for forty days and forty nights.
  I come now to Clause 6, which deals with the domicile of children. Clause 6 (1) lays down a clear and simple rule

  813
  that a child's domicile is "that of the person entitled to his custody". Clause 6 (2) provides that the domicile of a child in the custody of an authority shall be the country whose law governs the constitution of that authority. This applies to children in the custody of foreign authorities as well as to United Kingdom authorities. As your Lordships know, in England there are three categories of children who may by Statute be in the custody of an authority. First of all, an order may be made committing a child to the care of a fit person. Secondly, an order may be made committing a child to an approved school; and thirdly, a local authority may in certain circumstances assume parental rights over a child by passing the required resolution.
  Clause 7 deals with the duration of a person's domicile. When a new one is acquired the old one is extinguished and cannot be revived. This abolishes the old rule about the revival of the domicile of origin. Clause 8 is the Interpretation Clause. Clause 9 repeals the Domicile Act. 1861 (which is a dead letter in any event), and Clause 10 preserves the court's jurisdiction to entertain divorce proceedings notwithstanding that only one of the parties may be domiciled in this country. That provision may become very necessary if there are any circumstances whatsoever in which a married woman can obtain a separate domicile from that of her husband. Clause 11 of the Bill safeguards the position of certain pensioners of the former Indian Services. Under the Pensions (India, Pakistan and Burma) Act, 1955, as amended by the Pensions (Increase) Act, 1956, increases of pension may be granted to members of the former Indian Services who:
  "in the opinion of the Secretary of State were at the date when the service began domiciled outside Asia."
  A number of such persons have been granted increases of pension, and applications for increase will be made in the future from time to time as these people reach retiring age. It would clearly be wrong for the Bill to disturb the principles applied by the Secretary of State in determining this question, and Clause 11 deals with that point.
  I observe that I forgot to refer to Clause 6 (3) of the Bill which requires careful attention—I hope your Lordships will explain to me what it means. Where a person entitled to the custody of a child
  814
  changes domicile, or the custody of a child passes to a different person whose domicile is not the same as the child's, if that person does not intend the child to live in the country in which he himself is domiciled, the child's domicile will not change automatically. I am sure that that is clear in your Lordships' understanding, and I doubt the necessity of any explanation. That, my Lords, is the Bill. I am not going to suggest that it is either very simple or entirely free from controversy. It does not try to solve finally any problems whatsoever. What it does is to try to clarify and simplify many of the rules relating to the ascertainment of domicile, and in that modest view of the matter I have no hesitation at this late hour in commending it to your Lordships. I beg to move that the Bill be now read a second time.
  Moved, That the Bill be now read 2a.—(Lord Meston.)
  4.15 p.m.
  LORD MILNER OF LEEDS: My Lords, I am sure that all your Lordships are grateful to the noble Lord, Lord Meston, for the very detailed information he has given on this Bill. I am sorry that I cannot relate to your Lordships further life histories of the kind he has described. There is no question that the matter of domicile is of very great importance to the individual. English law determines matters very largely, if not wholly, by the test of domicile. On the Continent, however, nationality, and not domicile, is usually the basis of jurisdiction. As I understand it, the Bill introduced by the noble Lord seeks to bring these two conceptions—those of domicile, in this country, and that of nationality, on the Continent and elsewhere—more closely together. One advantage of that, as I understand it, is that it would enable Her Majesty's Government, subject to a statement in regard to the construction of one of the Articles, to sign a draft Convention on the subject which has been approved by the Conference on Private International Law held at the Hague as long ago as October, 1951. That would obviously be a very desirable result. The Bill has the further advantage of clarifying, and in some minor respects altering, the present law of domicile in this country and will be a most useful measure to which lawyers can refer.
  There is just one matter to which the noble Lord referred, and which I should

  815
  like to emphasise. I am not at all happy about the provisions in the Bill whereby a married woman is unable to obtain a separate domicile in exactly the same way as an unmarried woman. Furthermore, as the noble Lord explained, while a woman who is separated from her husband by an order of the court can claim a separate domicile, that advantage is not ordinarily given to a married woman. It appears to me very desirable that the law on this point should take account of the altered status of married women in these modern days. In fact, that status was taken into account, and has already been recognised, by the British Nationality Act, 1948, under which a married woman does not necessarily acquire her husband's nationality upon marriage. It does not appear that the disadvantages of having the law the same in regard to domicile as in regard to nationality would be great, and in my view it is very desirable that legislation should move with the times in these matters affecting the status of a married woman. Subject, as I hope, to further consideration on that point, we on this side approve the Second Reading of this Bill.
  4.17 p.m.
  LORD DENNING: My Lords, this Bill deals with a very specialised part of the law but it affects individuals mightily in two situations: first, if they want a divorce, and secondly, when they die and leave money or goods behind them; because if they want a divorce they must go to the court in the country where they are domiciled. That is the only court to which they can go for a divorce under English law. Then when they die and leave property behind, that property devolves according to the law of the place where they are domiciled, and they are taxed according to the place where they are domiciled; so the domicile of the individual is of great importance in English law.
  Now we have become far too technical. Domicile means only a person's permanent home, and these technicalities are largely swept away by this Bill—and a very good thing it will be when it is passed into law. But there is one technicality which this Bill still retains: that a married woman, by English law, takes the domicile of her husband, not only when she is living with him in one home
  816
  —that is plain enough—but even when she is living separate and apart from him, in a country perhaps thousands of miles away. Wherever he wanders, if she stays here she takes his domicile by law.
  Domicile is different from nationality. Nationality is, of course, the political status of a person. An English woman now remains an English woman when she marries any person in a foreign country, but her domicile goes with her husband wherever he may be; and that is preserved by this Bill. This is an outworn relic of a bygone age. It was the law of this country for several hundred years that husband and wife are one and the husband is that one. Let me give your Lordships a few illustrations of the old law. If a husband beat his wife, his wife could not sue him because in law they were one, and it would simply be a case of the husband sueing himself. So English law said that the husband had a right to beat his wife; and, as Blackstone said, the English people were very fond of this ancient privilege. It was allowed by the law so long as he did not use a stick bigger than his thumb. Also, because the husband and wife were one, all the property of the wife on marriage belonged to the husband. If she had a wedding present of a writing desk or a pair of candlesticks, they belonged to the husband. If she went to work her earnings belonged to the husband because of the rule of English law that husband and wife were one.
  During the last 100 years all this has been swept away. The husband may no longer beat his wife, or he will find himself in the matrimonial court or the divorce court. He can no longer take her property. They are equal in the eye of the law, partners in the eye of the law. Since 1948 the wife can have her own separate nationality. But there is just one relic remains: that the wife must take her husband's domicile. Other countries have swept it away. In the United States a married woman can have her own separate domicile. Throughout the Continent of Europe and in places like New Zealand she can have her own domicile. But not in England, even by this Bill.
  May I just give some illustrations to show how this outworn relic operates. Only a little while ago an Englishwoman married a Russian Jew at the Holborn

  817
  Register Office, and they had a child. Shortly afterwards the husband disappeared, went away goodness knows where—no one knew. The Englishwoman stayed here another twenty years till she died. She left her money away to third persons, to the man with whom she was living, giving to the crippled child, the one child of the marriage, nothing. That child applied to the court under the Inheritance Provisions Act for some part of the mother's estate. It was held that the law had no power to give it because the mother, although she had lived in this country all her life and the husband had gone away nearly twenty years before, was not proved to be domiciled in England. Her domicile was in some unknown country where the husband was. So the crippled child got nothing.
  Or take another case, where a Scotswoman in Aberdeen married a chief petty officer of the Navy, lived in Aberdeen with him for fifteen years and had four children. Then he went off to Australia. He lived in Australia another twenty years; the Scotswoman lived in Aberdeen with her children. In Australia the husband committed bigamy, had two more children, and never corresponded with the woman in Aberdeen. Nevertheless, twenty years later when the Scotswoman died in Aberdeen, her domicile was held to be Australia because her husband was there, and her property devolved according to Australian law; duty was payable by Australian law and not by English or Scottish law.
  My Lords, does not that show that a married woman ought to have a separate domicile of her own? That is only in the field of succession. It is even more a crying inequity in the field of divorce. Take the case of an Englishwoman, for instance, who marries a man from another country—let us say an American. He has American domicile, so automatically her domicile is America. According to our English law she cannot get a divorce in England because her domicile is not here. She has to follow her husband to the United States, find out in which of the forty-eight States he is domiciled and bring her proceedings in the court of that State of the United States. There has been some mitigation of that by legislation; if she has had three years' residence here she may now bring her proceedings here, but that is
  818
  unsatisfactory because other countries do not always recognise it.
  That is on the wife's side. Take the case where an Englishman marries an American wife. The Englishman's domicile is England, and according to English law the wife's domicile is England. They separate; the wife is in America and the husband in England. The wife, because American law allows her to have her separate domicile, can bring divorce proceedings in America, get a decree in America and be divorced and re-marry in America. English law will not recognise that divorce. If the husband re-marries he is guilty of bigamy. In England he is married; in America he is not married. That still remains the law to this day.
  Having given those illustrations, I ask whether it is not right, as the Commission under my noble and learned friend Lord Morton of Henryton recommended unanimously, that at all events for the purposes of divorce a married woman should be allowed to have her own separate domicile, as in the United States and all other countries. But why stop at divorce? I have given illustrations from the law of succession. Surely the time has now come when this barbarous relic should be abolished. Indeed, this Bill allows the wife to have her separate domicile if she is separated by an order of the court. In the ordinary way, when the wife went to the magistrates in the old days for a maintenance order they used to put in a separation order by rubber stamp. During the last twenty years or thereabouts, owing to court decisions they hardly ever put it in. It is a matter of chance. It is very rare. Why should domicile depend on the chance whether she has got a separation order by the court? Is not the fact that they are living separate and apart sufficient to enable her to have her separate domicile? In these days, after these 100 years in which a married woman has now achieved equal property rights with her husband and is regarded by the law in nearly every respect as a partner with her husband, I would ask this House in due course, if the opportunity arises, to cut away this last shackle of the wife's servitude.
  4.28 p.m.
  THE LORD CHANCELLOR: My Lords, I should like to join in welcoming this Bill on behalf of Her Majesty's Government and also to express our gratitude

  819
  to the noble Lord, Lord Meston, for introducing it. I agree with my noble and learned friend Lord Denning, that although the subject matter may give the Bill the appearance of being the concern of lawyers alone, its provisions, if they become law, will affect the lives of ordinary people in a variety of ways. For this reason I think it is a useful and not unimportant measure of law reform. Again I thank Lord Meston, and remind your Lordships that later in the afternoon he will be rendering another service to the cause of law reform.
  Your Lordships have heard that this Bill is based on the proposals of the Private International Law Committee. I think your Lordships would like me to pay a tribute to the Standing Committee which was set up, under the chairmanship of Mr. Justice Wynn Parry, by the noble and learned Viscount, my predecessor, in 1952. It has since done a great deal of most valuable work in advising the Government on a number of questions, which have been, for the most part, of very considerable difficulty. It is the sad fact that generally the work of this Committee receives even less than the very moderate publicity which is given to that of the Law Reform Committee, and I am therefore especially glad to be able to take this opportunity of giving public expression to the Government's gratitude to the Committee.
  There is another point which the noble Lord, Lord Milner of Leeds, had in mind, and which I should like also to underline as a reason for welcoming the Bill—namely, that it will make legislative provision which which will clear the way for the Government to ratify, subject to a minor reservation, the Convention to Regulate Conflicts between the Law of the Nationality and the Law of the Domicile, which was approved by The Hague International Law Conference in October, 1951. The Hague Conference, of which this country is a member, performs a most useful task, but, as all lawyers will readily believe, an extremely difficult one. It attempts to introduce some harmony into the most divergent legal systems in the member States, and, of course, the greatest of these divergencies is between the Common Law system, which is our own, and the Continental systems of law. For this reason
  820
  it has unfortunately not been possible for this country to adhere to many of the International Conventions prepared by the Conference in the past. It is all the more gratifying, therefore, that there is now a good prospect that we shall be placed in a position to adhere at not too distant a date to this Convention, which is calculated to simplify the task of the courts and all who give legal advice on a peculiarly difficult legal question.
  At this stage I do not wish to make more than two brief remarks about the provisions of the Bill itself. As the noble Lord, Lord Meston, has indicated, the Bill as it stands makes no special provision for Northern Ireland. I am informed that the Government of Northern Ireland wish the Bill to apply, and I shall put down an Amendment for that purpose on the Committee stage.
  I now come to the point on which we have just heard so eloquent a speech from my noble and learned friend Lord Denning—that is, Clause 5 of the Bill, which raises the controversial question of the dependent domicile of married women. I am sure that my noble and learned friend—and indeed, before him, Dr. Cheshire's writings, which are so authoritative on all questions of Private International Law, speak for many people—when he says that the dependence of a married woman on her husband's domicile represents
  "the last surviving relic in English law of the married woman's subjection to her husband"—
  I quote Dr. Cheshire, but I think my noble and learned friend almost ipsissimis verbis agrees. This is a most important question, and my mind is by no means closed on it. It is essentially the sort of question, like the one I mentioned earlier this afternoon, on which this House is so well equipped to give a view, because this House can speak with the great weight of your Lordships' Judicial as well as your Legislative experience.
  I hope that we shall consider the question fully on the Committee stage; and as an aperitif to that, and only going so far, I should like to place on record the quotation from paragraph 17 of the Report which has troubled me on this point. It is at the middle of page 9, at sub-paragraph (1) of paragraph 17. After dealing with the question of the

  821
  British Nationality Act the members of the Committee go on to say:
  "It is also true that in the great majority of cases the practical results of allowing a marred woman to acquire a separate domicile would not be very great, for in any event her domicile would normally be the same as her husband's by virtue of the rules which we propose in Article 2 of the Code. Nevertheless, quite apart from considerations of social policy, we think it desirable that the doctrine of the unity of domicile of husband and wife should be maintained so as to avoid the many complications which in practice follow from the solution which we are considering."
  It is the next sentence on which I feel, with all sincerity, that I need the help particularly of my noble and learned friend Lord Denning. That sentence says:
  "We do not think that the experience of the United States has been such as to encourage us to recommend its adoption in this country."
  The noble and learned Lord knows just as well as I do the series of cases and the litigation which the members of the Committee had in mind, and he will find them conveniently discussed in a recent article which I am sure he has read. I Should be most grateful, however, if, on the Committee stage, my noble and learned friend would deal with that point made by the Private International Law Committee and give your Lordships his view on the defects of the provisions concerning separate domicile in the United States. I must confess that I thought the Committee had a good deal on their side on the question of these complications. But, as I say, my mind is not closed on that. I thought that it would be convenient if I told my noble and learned friend what had had some effect on me, so that I might have the advantage of hearing his views on it at a later stage in the progress of the Bill. I think that would be most helpful.
  The remaining words in the paragraph are not so important, because the paragraph goes on to say:
  "Nor is the fact that in most European countries a married woman can acquire a separate domicile of much relevance in this connection in view of the much smaller importance which the conception of domicile has in the legal systems of those countries."
  That is true and has some effect, but to my mind is not so important either way as the preceding sentences which I have read. Therefore I hope that I may ask my noble friends in this House to consider this point and perhaps give us the benefit of their views at a later stage of
  822
  the Bill. It is an important point and, as I say, I approach it at the moment with an open mind, in the hope that I shall hear a number of important speeches from my Judicial colleagues. Having mentioned those points, I think that we ought to conclude by again expressing our gratitude to the noble Lord, Lord Meston, for the trouble he has taken in putting this Bill before the House.
  4.39 p.m.
  LORD MESTON: My Lords, I should like to thank the noble and learned Viscount the Lord Chancellor for the kind words which he has said, and I should also like to thank all the other noble Lords for what they have said in support of the Bill. I need hardly remind your Lordships that it does not apply merely to matrimonial matters; it applies also to the making of wills and the distribution of property—in fact it applies in all matters. I was particularly interested in what the noble and learned Lord, Lord Denning, said about the subject of a wife's domicile, and, without wishing to take any sides, I hope that a certain Amendment may be moved by a certain person at a later date. Having made those observations, I thank your Lordships for the support you have given the Bill.
  On Question, Bill read 2a, and committed to a Committee of the Whole House.

  DIVORCE (INSANITY AND DESERTION) BILL [H.L.]
  4.40 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 Meston.)
  On Question, Motion agreed to.
  House in Committee accordingly.
  [The LORD MERTHYR in the Chair.]
  Clauses 1 and 2 agreed to.
  LORD MESTON LORD MESTON moved, after Clause 2 to insert the following new clause:
  Divorce for desertion notwithstanding separation agreement
  3. For the purposes of paragraph (b) of subsection (1) of section one of the Matrimonial Causes Act, 1950 (which provides that a petition for divorce may be presented to the High Court on the ground that the respondent has deserted the petitioner without cause for a

  823
  period of a least three years immediately preceding the presentation of the petition), any agreement between the petitioner and the respondent to live separate and apart, whether or not made in writing, shall be disregarded if the agreement was entered into before the first day of January, nineteen hundred and thirty-eight, and either—

  (a) at the time when the agreement was made the respondent had deserted the petitioner without cause; or

  (b) the court is satisfied that the circumstances in which the agreement was made and the parties proceeded to live separate and apart were such as, but for the agreement, to amount to desertion of the petitioner by the respondent without cause."

  The noble Lord said: Where a husband and wife separated before January 1, 1938, in circumstances amounting to desertion on the part of one of them, the fact that before that date they entered into an agreement to live apart should not be allowed to prevent the deserted spouse from obtaining a divorce on the grounds of desertion. Desertion was made a ground of divorce under the Matrimonial Causes Act, 1937, which came into operation on January 1, 1938. Before desertion became a ground for divorce under the Matrimonial Causes Act, 1937, a number of separation agreements were concluded between spouses in circumstances in which one spouse was in fact a deserter and the other spouse merely acquiesced in something which he or she was unable to alter. The result was to deprive the deserted spouse of any subsequent right to seek divorce on the grounds of desertion, since—and this is the important point—desertion cannot exist in law where there has been separation by consent, unless the separation agreement has been repudiated by both parties. I may say, in a few words, that this Amendment is entirely non-controversial. It will affect only a few people. Nevertheless, it may remove certain hardships which exist at the present time.
  Amendment moved—
  After Clause 2 insert the said new clause.—(Lord Meston.)
  THE LORD CHANCELLOR: The noble Lord, Lord Meston, has introduced this new clause with his customary clarity, and I need add little to what he has said. I think that certainly two of the noble Lords opposite me would agree that every solicitor knows the effect of inserting a non-cohabitation clause in an
  824
  agreement between husband and wife. Such a clause prevents either party from alleging that the other is guilty of desertion while the agreement remains in force. Although this result is just in the case of agreements made on or after January 1, 1938, when desertion first became a ground for divorce, it may operate harshly in the case of an agreement made before that date, when the parties could not possibly have known the consequences of their acts in the light of subsequent legislation. The husband may have been on the point of deserting his wife when the agreement was entered into, or may have already left her, so that the wife's entry into the agreement was merely acquiesced in in a state of affairs she did not desire but had no opportunity of preventing. After two decades there ought not to be many cases in which a spouse is still prevented by such an agreement from obtaining a decree, and I am glad that this gap in the law will be filled. So, as I say, I welcome the Amendment.
  On Question, Amendment agreed to.
  4.46 p.m.
  LORD DENNING LORD DENNING moved, after Clause 2 to insert the following new clause:
  Power of court to find cruelty notwithstanding insanity
  "3. For the purposes of any petition of action for divorce or judicial separation the court may hold that the respondent has treated the petitioner with cruelty or, as the case may be, that the defender has been guilty of cruelty towards the pursuer, notwithstanding that a disease of the mind prevented his acts from amounting to cruelty, if the evidence before the court is such that the court would have so held apart from the disease."
  The noble Lord said: This Amendment is designed to put into effect a unanimous recommendation of the Commission presided over by my noble and learned friend Lord Morton of Henryton. He is unable to be here to-day, but he has asked me to say he still remains of the same opinion, that it would be a good thing to have an Amendment of this kind. If it is to be put into any Bill it should be in this Bill dealing with insanity and divorce. It deals with the question of cruelty, and I can best illustrate it by expressing the fact that a mental disease operates insidiously, unrecognized, progressively until there is some catastrophe when it becomes apparent to everyone. In the earlier time, the husband may well have been guilty of cruelty and have wrecked

  825
  the marriage. Is the wife, because he is afterwards found to be insane, not to have a remedy in divorce?
  Let me give an illustration from a typical case. A husband becomes morose and irritable, and then makes unfounded complaints of his wife's association with other men. Later he comes to blows and strikes her. In one particular case he attempted to strangle the wife, and three weeks later he killed the child. He was arrested, taken to the Old Bailey, but was found there to be unfit to plead and of unsound mind. In the earlier time the marriage had been wrecked and the wife was treated with cruelty, but because he is not guilty by the criminal law, and not responsible for his actions, she cannot get a divorce, because in this respect the divorce law applies the same tests as the criminal law. In fact, I suggest that the divorce law ought to be on the same footing as the civil law, not the criminal law.
  Take an ordinary civil case, by way, of illustration—there was one such case not long ago. A guest at a large hotel in Brighton complained against the manager, and hit the manager a very injurious blow and then decamped. Two or three days later he was discovered at Southampton, and was afterwards found to be schizophrenic. The manager brought an action for damages in the civil court. The defence was put up that the man was of unsound mind, but the manager got his remedy in damages in the civil court. No one knew that the man was of unsound mind at the time. It is not like the criminal law, under which you want to punish a man for his wrongdoing. This is a case of giving a remedy for an intolerable situation. If a wife cannot live safely with her husband, is she to wait five years while he is incarcerated? He may be curable. Is she to be debarred because the official solicitor feels that he has got to raise the point, because he must take the defences open to him? The Royal Commission considered all this and unanimously recommended that a disease of the mind should not be a defence in the case of cruelty; and that is what this Amendment is designed to effect. I beg to move.
  Amendment moved—
  After Clause 2, insert the said new clause.—(Lord Denning.)
  4.50 p.m.
  LORD MERRIMAN: My Lords, I want to apologise for intervening again this afternoon, but this is an important point from the point of view of the court. I think I can best help your Lordships by trying to point out clearly that the authority of the courts up to now supports the view opposite to that which has just been indicated by the noble and learned Lord, Lord Denning. May I say, to start with, that although we have already passed the clause in the Bill in connection with desertion, this raises a different question. In connection with desertion, it is assumed in Clause 2 that the offence of desertion has already been committed, and the sole question is whether it can be continued without interruption for the statutory period in spite of the intervention of insanity. In this case, however, the question is whether the offence of treating with cruelty can occur at all if the acts complained of are committed at a time and in circumstances when what are known as the M'Naghten Rules in criminal law apply.
  Let me tell your Lordships shortly what are the Rules—they have already been indicated in passing by the noble and learned Lord, Lord Denning. If a man can prove (if the onus is on him to prove it) that at the time when the act complained of was committed, by a defect of the reason, owing to a disease of the mind, he either did not know what he was doing or did not know that it was wrong, then he comes under the M'Naghten Rules. May I give the simplest sort of illustration which would arise in the courts in matrimonial cases? If a man hitting his wife over the head with a hammer is under the insane delusion that he is driving nails into the wall to hang a picture, he does not know the nature and quality of his act. He does not know what he is doing because he is insane. Again, if he does know that he was hitting his wife on the head with a hammer but thought that he had been commanded to do so by some celestial visitor who had ordained that that particular act should be committed (as has happened in cases which I can remember), he would come under the second limb of the Rules and would not know that what he was doing was wrong.

  827
  The Court of Appeal, after some hesitation, recently held in three cases that that rule applies to the question: has the aggressor treated the victim with cruelty? It is perfectly true that in the first of these cases the noble and learned Lord, Lord Denning, delivered a very powerful judgment on the lines of the speech that he has just delivered to your Lordships. His question is whether the dominant principle in connection with matrimonial suits is that what matters is the protection of the victim or the guilt of the aggressor. I am not going to elaborate this point in detail, but although the matter has never come before your Lordships' House it is now plainly established by the Court of Appeal in the three cases to which I have referred that if the aggressor can bring himself within the M'Naghten Rules, that applies as a defence to a charge of cruelty just as it would to a criminal charge.
  I do not think it is necessary to give your Lordships the details of all these cases. It has been suggested that this was a new matter and that the old authorities were the other way, but there is nothing new about this. If your Lordships will allow me, I am going to read a short passage from a judgment made on this very topic by Lord Penzance in the early days of the Matrimonial Causes Act. He said:
  "… It was faintly, and with great care not to be too explicit, argued that madness would be no answer, even if pleaded and cases were cited, to which I have since referred. With danger to the wife in view, the Court does not hold its hand to inquire into motives and causes. The sources of the husband's conduct are, for the most part, immaterial. Thus, have no doubt that cruelty does not cease to be a cause of suit if it proceeded from violent and disorderly affections '."
  I pause there for one moment to say that that particular phrase was used by the great Lord Stowell and was brought by the noble and learned Lord, Lord Denning, into the judgment to which I have referred, in the case in which he was in a minority of one. It was thought to be a reference to insanity. In fact, as it turns out, Lord Stowell was talking of spiteful jealousy and not of insanity at all.
  Lord Penzance concluded with other phrases that had been used, such as
  "… want of moral control or eccentricity"
  828
  and
  " from a liability to become excited in controversy."
  Then he said this:
  "… but madness, dementia, positive disease of the mind, this is quite another matter. An insane man is likely enough to be dangerous to his wife's personal safety, but the remedy lies in the restraint of the husband, not the release of the wife."
  It may be a harsh doctrine but it is the doctrine which has prevailed—and I say this dogmatically, if your Lordships will allow me to be dogmatic—throughout the whole administration of this law since the Matrimonial Causes Act.
  There is one other point, and I hope that it will not be regarded as a cheap debating point. I put it forward because in my opinion it summarises the whole situation. It has been said, and the noble and learned Lord, Lord Denning, has been one of those chiefly responsible for imposing the test, that cruelty must be aimed at the victim. Whether it is a test of universal application is for the moment neither here nor there. Plainly it is the sort of test which would apply very strongly, at any rate to physical violence, even if it does not apply with the same universality to what we call mental cruelty. However that may be, if that is the test of cruelty, as Lord Somervell of Harrow said in one of the cases to which I have referred:
  "How can an insane man 'aim' his acts at his spouse, it being agreed that it is necessary for the acts to be 'aimed'?"
  That, as I understand it, is the position which has prevailed throughout. I do not want to take sides in this matter, and if there were a Division I should not vote. I say that for this reason, amongst others: that not only am I anxious in every way to support the recommendations of the Royal Commission but I discussed this matter yesterday with all the Judges of my Division whom I could see, and there was a remarkable division of opinion about the expediency of this new clause. I do not think it is becoming for me to take sides in the matter, and that is why I have confined my remarks to pointing out to your Lordships how drastic a change this would be. But let me add, as I have said before, that if Parliament ordains the change, Her Majesty's Judges who are trusted with this jurisdiction will carry out that change with all loyalty.
  5.1 p.m.
  LORD SILKIN: My Lords, there are obviously two schools of thought on this question. The one school of thought takes the view that there must be no divorce unless there is a guilty party, and a party who is by reason of that very fact conscious of his guilt; the other is that where a marriage has broken down it should be made easier—that is the general trend of events—for the parties to have a divorce. That was the issue which confronted the Royal Commission, and they appreciated and considered both points of view. In a great many matters the Royal Commission were unfortunately divided, but on this particular issue they were united. I should like to read to your Lordships the paragraph in which they finally expressed their view—namely, paragraph 256 of the Report of the Royal Commission on Marriage and Divorce. They say:
  "Whichever course is adopted, there will be some hardship."
  They then set out both conceptions of divorce. They go on to say:
  "On the one hand, where the wife, say, is still fearful of further injury were married life to be resumed, and all affection for her husband had been destroyed by the cruelty suffered, ought the remedy of an immediate divorce to be denied to her? On the other hand, where acts thought cruel have been done by a man who is insane, ought he to be penalised by an immediate divorce without any waiting period to allow for the possibility of his recovering from the mental illness which alone has been responsible for the cruelty complained of? In our view, preference should be given to the interests of the injured spouse."
  I think that most people would agree that where there is this conflict the preference should be given to the interests of the injured spouse. I would say this to the noble and learned Lord, Lord Merriman—and I also do not want to make a cheap debating point. He gave as an example the case of a man who is driving a nail into his wife's head and does not know what he is doing. But she knows; she is very conscious of what is happening, and has every reason to fear that this might happen again.
  There is another point on this question. Insanity is to-day becoming much more difficult to define. Previously the question of insanity depended upon certification, but to-day the issue is much more blurred and a person can be insane without certification—he may be under
  830
  treatment. But I do not want to make that point. I do, however, want to make this point. The noble and learned Lord, Lord Merriman, says that this would be a breach of the conception of the law as at present: that a person must have committed an offence of which he is conscious. I would remind him that to-day it is a ground for divorce that a person has been insane for five years and is incurable. That person has certainly committed no matrimonial offence. Yet the law is that on the ground of insanity alone a person can petition successfully for divorce. Therefore, this breach has already occurred.
  LORD MERRIMAN: It is, of course, insanity for five years, and incurable. There is, too, this point: that if you add this, it would very often be an excuse for shortening the period of insanity.
  LORD SILKIN: Conceivably so. But the basis of the law of insanity now, as I understand it, is not that a person who is insane has committed some offence—he cannot help it; he is insane—but that the marriage has broken down irretrievably. In my view, a marriage where a person has been guilty of cruelty and is insane has equally irretrievably broken down. At any rate, it is at the option of the injured party to petition or not. If it is a wife, she is under no obligation to petition for divorce. But if she really believes the marriage has become hopeless, I should myself not wish to deprive her of that opportunity. I hope, therefore, realising that there is a conflict, though not in the minds of the Royal Commission, that the Government will come down on the side of relieving the person whose mind is very much in a state of distress and who feels that the marriage has broken down. I strongly support the Amendment moved by the noble and learned Lord, Lord Denning.
  THE LORD CHANCELLOR: The noble Lord, Lord Silkin, asked that I should express a view immediately, but I hope that, on reflection, he will think that this is a suitable case where one ought to give the matter more thought, in view of the speeches that have been made to-day, and particularly in view of what my noble and learned friend Lord Merriman said about the division of opinion among the Judges of the Division of the High Court over which he presides. I think that in those circumstances any Government

  831
  ought to reconsider the matter. I agree with the noble Lord, Lord Silkin, that it does raise a most acute divergence.
  To illustrate what is felt, on the one hand, I would remind your Lordships of the words of Lord Justice Hodson in one of the cases to which my noble and learned friend Lord Merriman referred. The learned Lord Justice said:
  "The word 'cruel' carries with it implications of guilt which can no more be imputed to such a person "—
  that is, a person who is insane—
  "than to a sleepwalker."
  On the other hand, as everyone has mentioned, we have the unanimous conclusion of the Royal Commission. It was interesting (and the noble Lord, Lord Silkin, with his usual fairness, quoted the point) that the Commission recognised that, whatever course was adopted, there is bound to be hardship. On the one hand, it may be regarded as unfair that someone who is not responsible for his actions should be penalised by the other party getting a decree without the waiting period for insanity which Parliament has very properly provided for in regard to that ground of divorce. On the other hand, if the marriage has broken down because the wife, for example, is apprehensive of further injury if her married life were to be resumed, and her affection for her husband has been destroyed by the cruelty of which she has complained, ought the remedy of immediate divorce to be denied her? That is the question.
  There are two points on which I should like to have further reflection. The first is that made by the noble Lord, Lord Silkin, which drew an intervention of great materiality from my noble and learned friend Lord Merriman. That is—if I may put it in a sentence: has not the very existence of the ground of insanity breached the law that there must be a matrimonial offence and really put us into the territory where the test is an intolerable situation? I believe that that is a very difficult point, and as I myself have pointed out (and it has been pointed out before), divorce on the ground of insanity has the safeguards which are in all our minds.
  Then, however, there is the other point, which particularly relates to what has been said by my noble and learned friend Lord Denning, because, as has already
  832
  been mentioned, the noble and learned Lord himself has on a number of occasions, in his judicial capacity, made the point that the cruelty that is complained of must be aimed at the petitioner. But if the harm done to the petitioner is the only test where the respondent is insane, could it not be said that the same test should apply where insanity did not come into the matter at all? I believe that that is more than a debating point. At any rate, it has given me some worry because of the view of my noble and learned friend as to that element in cruelty.
  I am very grateful to my noble and learned friend Lord Denning for initiating this discussion and to all noble Lords who have contributed to it. I make no apology for asking for further time in which to consider this matter. The very excellence of the speeches that have been made to-day makes it right that not only I myself but my colleagues in the Government should have the chance of considering a very difficult moral and social problem. Therefore, if the noble Lord, Lord Meston, agrees, I would ask my noble and learned friend Lord Denning to withdraw his Amendment to-day on my undertaking to consider it. That leaves him entirely free, of course, to bring the matter forward on the Report stage.
  LORD DENNING: I thank the noble and learned Viscount for what he says. On his assurance I beg leave to withdraw my Amendment.
  LORD SILKIN: May I ask whether we shall have another opportunity of considering this matter before the Report stage? I wonder if the noble and learned Viscount, with his usual courtesy, would give us an opportunity of having a word about that?
  THE LORD CHANCELLOR: I should be only too delighted. I believe that would be very helpful. I shall be glad to consider that and to consider whether some of my noble and learned friends could help us. In any case, I will of course get in touch with the noble Lord, Lord Silkin, before I come to any conclusion.
  Amendment, by leave, withdrawn.
  Clause 3 agreed to.
  In the Title:
  LORD MESTON: I beg to move the Amendment standing in my name. It is consequential on the new clause which your Lordships were good enough to accept.
  Amendment moved—
  In the Title, line 5, at end insert ("and to enable a petition for divorce to be presented or the ground of desertion notwithstanding any separation agreement entered into before desertion became a ground for divorce in English law.")—(Lord Meston.)
  On Question, Amendment agreed to.
  House resumed.

  VARIATION OF TRUSTS BILL
  5.17 p.m.
  Order of the Day for the Second Reading read.
  LORD CONESFORD: My Lords, the purpose of this Bill is to carry out the recommendation of the Sixth Report of the Law Reform Committee. That Committee under the chairmanship of Lord Justice Jenkins reported in November of last year on the matter which my noble and learned friend the Lord Chancellor had referred to them. They had been invited to consider whether any alteration was desirable in the powers of the Court to sanction a variation in the trusts of a settlement in the interests of beneficiaries under disability and unborn persons, with particular reference to the decision in Chapman v. Chapman [l954] A.C. 429.
  The Report of the Law Reform Committee states the case for reform so clearly and convincingly that those who have read it will certainly not require further argument from me. I believe I shall best meet the wishes of the House if I indicate briefly the anomalies which the Bill seeks to remedy and the effect of its clauses.
  All noble Lords, whether lawyers or laymen, recognise that it is sometimes necessary to vary the provisions of a trust to the advantage of all concerned, if a trust designed to preserve the settled properly is not to have precisely the opposite effect. If all the beneficiaries are adults they can of course make such arrangements as they choose, but nearly always some beneficiaries are infants and other potential beneficiaries are unborn or unascertained. In that event,
  834
  the only way in which the trust can be varied is to ask the court to sanction on behalf of infants and such beneficiaries a rearrangement of the provisions of the settlement which would be for their benefit as well as for the benefit of the adults, and to which, if they were well advised, they would agree if they could.
  Applications of this nature to the Court have become fairly common and variations of trust have frequently been sanctioned by the Chancery Division of the High Court. But, in 1934, the House of Lords decided in Chapman v. Chapman that the Chancery Division had no inherent jurisdiction to sanction such variations of trust. It is the purpose and effect of this Bill to confer the necessary powers upon the Court, for the state of the law revealed by that decision was clearly anomalous and unjust. In some cases the Court could give relief; in others, equally deserving, it could not.
  Let me give examples of cases in which the Court, even without this Bill, can vary the trust. I will give three examples. If the trust affects land, the Court possesses wide powers under Section 64 of the Settled Land Act, 1925, and Section 57 of the Trustee Act, 1925. Secondly, in cases in which the rights of the beneficiaries are in dispute, the Court can be asked to sanction a compromise. My third example is this: the Divorce Court has power to vary a marriage settlement under Section 25 of the Matrimonial Causes Act, 1950. In order to show how anomalous and illogical the resulting state of the law is I do not think I can do better than to quote a few sentences from paragraphs 12, 13 and 14 of the Law Reform Committee's Report. I quote first the beginning of paragraph 12.
  "The position therefore, to-day is that so far as the terms of the settlement in question are ambiguous or so far as it comprises land, whether settled or held on trust for sale, or the proceeds of sale of land held on trust for sale, the Court will probably be able to approve on behalf of infant or potential beneficiaries a variation of the trusts which is agreed to by the adult beneficiaries and which can be shown to be for the advantage of the infant or potential beneficiaries; but that, on the other hand, if the terms of the settlement in question are free from ambiguity and the settlement consists entirely of personalty (not being proceeds of land held on trust for sale) the Court will have no power to approve a variation of the trusts, however desirable it

  835
  may be in the interests of the infant and potential beneficiaries that they should be varied."
  I go on to paragraph 13:
  "We think it is clear that the present situation is unsatisfactory. It cannot be right that the question whether the Court can sanction changes in trusts on behalf of infants or potential beneficiaries should depend on the entirely irrelevant considerations upon which it depends to-day. In our view the only satisfactory solution of the problem is to give the Court the unlimited jurisdiction to sanction such changes which it in fact exercised in the years immediately preceding the decision in Chapman v. Chapman."
  Then I pass to paragraph 14, which I propose to read in full, because it is the simplest statement of the case for this Bill.
  "Nor is the matter simply one of logic. Justice alone, in our view, demands that the Court should have an unlimited jurisdiction. In the case of lunatics the Court of Protection has jurisdiction to sanction any disposition of the patient's property which the Court considers that the patient, if of sound mind and well advised, would make himself, including dispositions designed to lessen fiscal burdens … Similarly, if a husband and wife are divorced, the Divorce Court can sanction variations in their marriage settlement which are designed to prevent the trust fund being diminished by taxes or death duties … Why should an infant whose parents are happily married be in a worse position than a lunatic, or an infant whose parents are divorced? Why should an infant who is interested in land be better off than one who is interested in personalty? Why should it not be possible to arrange the affairs of all infants to their best advantage? Why should anyone be prevented from arranging his affairs to his best advantage by reason of some potential beneficiary who (if he ever acquires an interest) would be equally benefited by the arrangement?"
  My Lords, that is the case for this Bill.
  If I may now turn to the clauses, the important operative clause is Clause 1, and subsection (1) of Clause 1 enables the Court to assent to any variation or revocation of trusts or to any alteration of the administrative powers of the trustees which the Court considers would be for the benefit of (a) any beneficiary who is incapable of assenting by reason of infancy or other incapacity; (b) any person who may become entitled to an interest if he fulfils a specified requirement at a future date—but not a person in whose case the requirement would be fulfilled if the determining event had happened at the date of the application to the court; and (c) any unborn beneficiary.
  836
  The general principle of the Bill is that the Court should have power to assent to a variation on behalf of persons who are incapable of doing so for themselves, but that persons of full age and capacity should be left to exercise their own discretion. Thus, as regards unascertainable persons, the effect of the Bill is that so far as possible the powers of the Court should be invoked only where the person concerned is not sui juris and able to assent on his own behalf. A person may be unascertainable because he cannot be traced, or because the disposition is made in favour of persons of a specified description or class and the identity of such persons can be established only on the happening of an event which has not yet occurred. The Bill does not enable the Court to interfere in the case of persons whose identity is established but who cannot be traced. In the case of persons whose identity cannot be established, paragraph (b) of subsection (1) in effect provides that persons of the specified description or class who are sui juris and would take if the determining event had happened at the time of the application to vary must agree to the variation, but that the Court can act on behalf of any other persons.
  Subsection (2) of Clause 1 deals with the case of property held on what are known as protective trusts. Under an arrangement of this kind the principal beneficiary is entitled to the property until he charges or alienates or otherwise deals with his interest in such a way as to cause a forfeiture of it, in which event the trustees are directed to hold the property on trust for the maintenance or support of the principal beneficiary and of a number of other persons specified in the trust instrument, who commonly include very comprehensive classes whom the creator of the trust has no practical intention of benefiting. The Law Reform Committee recommended that the Court, in considering whether the proposed variation of trusts is for the benefit of any beneficiary, ought not to be required to have regard to the interest of persons entitled under a discretionary trust which has not yet come into operation. It is for this that provision is made by subsection (2) of the clause.
  My Lords, I could explain the remaining subsections, but I think that they are all reasonably clear and that the House

  837
  will forgive me, unless anybody wishes to raise a point, if I do not deal with the remaining subsections of Clause 1. I ought to mention, so as not to be accused of concealing anything from the House, that a frequent ground on which it will be sought to vary the trusts is to avoid or diminish tax liability. Should it be thought in any quarter that there is anything improper about that, I would draw the attention of the House to what is said in paragraph 16 of the Law Reform Committee's Report—namely:
  "We would add that, as far as concerns those cases where the object of a variation is to lessen the impact of taxes or death duties, we can see no valid reason why the Court should not be able to do on behalf of persons who are not sui juris or are not ascertained what the law allows to be done by persons who are sui furls."
  I think that puts the case in a nutshell. The paragraph goes on to quote relevant observations of the late noble and learned Earl, Lord Jowitt, and the more recent remarks of the Royal Commission on Taxation of Profits and Income. I mention this matter only because tax avoidance is certainly one of the important reasons why these questions of variation frequently come before the Court. I thought it right to mention it to the House.
  It only remains for me to say that in another place this Bill was welcomed from both sides of the House; it was supported on behalf of Her Majesty's Government by my right honourable and learned friend the Solicitor General, and it was brought in because my learned friend Mr. Crowder had good fortune in the ballot for Private Members' Bills. He holds the position of Parliamentary Private Secretary to the Attorney General. Perhaps there is some appropriateness in my introducing it in this House, because for some years I served in that post when my noble and learned friend Lord Somervell of Harrow was Attorney General. But, like Mr. Crowder, I venture with the greatest hesitation into the field of Chancery and Equity. It is not the branch of the law in which I practised. On the rare occasions on which I went into Chancery Courts it was with the greatest trepidation—trepidation by no means diminished on one occasion when I found that my opponent was Lord Cohen. But I feel less fear than I might otherwise this
  838
  afternoon for two reasons: the first is that my noble and learned friends the Law Lords have all indicated to me that they support the Second Reading of this measure; and the second reason is that if they do put difficult questions, whatever they suspect, they will never discover that I do not know the answers, because the answers will be given, with his usual skill and courtesy, by my noble and learned friend upon the Woolsack. My Lords, I beg to move that this Bill be now read a second time.
  Moved, That the Bill be now read 2a.—(Lord Conesford.)
  5.34 p.m.
  LORD MILNER OF LEEDS: My Lords, the noble Lord, Lord Conesford, has dealt with his subject in such detail that I do not think it necessary for me to traverse all that he has said. The matters dealt with in the Bill are certainly somewhat technical, but, in my view, the main object can be stated in a few words. That object is to make it clear that the courts of law have a general power to vary trusts, arising either before or after the passing of the Bill, affecting infants or other persons under some legal incapacity, if the court is satisfied that such variation is to the benefit of the infant or other person.
  As the noble Lord, Lord Conesford, has told your Lordships, this Bill arises from the decision of your Lordships' House in the case of Chapman v. Chapman which decided that the courts had not the general powers which this Bill seeks to provide. Whereas, having regard to the Bill which is before your Lordships, and which I have no doubt will be approved, there is now no necessity to argue the question whether that decision of the Law Lords was right or wrong, I hope that I shall not he thought to be presumptuous, as a member of the lower branch of the profession, and in the presence of Law Lords who may perhaps contribute to our debate, if I tell your Lordships that as I understand it the general view, even in legal circles, prior to the decision in Chapman v. Chapman, was that the Court had the power to vary trusts on behalf of persons under disability, and that in fact orders have been made for, I believe, approaching 300 years in many such cases—usually, let me say, in Chambers—hence the fact that

  839
  they have not been subject to the publicity and the recorded reports and precedents which a hearing in open court would have provided. Moreover, in many special cases undoubtedly the Court has jurisdiction, and has exercised that jurisdiction, to settle the disposition of a property, or property concerned in a divorce suit, and probably also has jurisdiction over infants where matters of land are concerned and are in dispute.
  It is therefore a little difficult to understand why there is not a similar jurisdiction in the case of infants having an interest in personality, however desirable the proposed variation might have been in the interests of the infant. As was said in one of the judgments (I believe that of the noble and learned Lord, Lord Denning), it would appear that the Chancery Court, which is the natural and the legal protector of infants, would become their enemies if the judgment in Chapman v. Chapman were to prevail. In any event, the present position is clearly unsatisfactory. The interests of simple justice make an alteration necessary, and the present Bill puts the matter beyond peradventure. Opinions are still divided, I gather, as to whether applications to vary trusts should in future be heard in open court or should continue to be heard in Chambers. But I think the majority view nowadays would be in favour of a hearing in open court. If I am not imposing on the noble and learned Viscount on the Woolsack, I would ask him whether he could indicate whether, in the event of this Bill being passed, it would be proposed to alter the Rules of Court so that applications to vary are heard in open court rather than in Chambers, unless in special circumstances the Judge orders otherwise. My Lords, I support the Bill.
  5.39 p.m.
  VISCOUNT SIMONDS: My Lords, I rise to support this Bill. As I have spent a large part of my working life in the Chancery Division of the High Court of Justice, and was privileged at one time to be the senior Judge in that Division, your Lordships might think it somewhat improper if I did not say a word either in support of or in opposition to this Bill. What I say is in support. First, I should like to congratulate my
  840
  noble friend Lord Conesford on the nimble way in which he has pursued his path through the intricacies of Chancery law: I am sure that if he had held to that path he would indeed have been a formidable advocate, and I do not know to what eminence he might have risen.
  I do not propose to follow the noble Lord, Lord Milner of Leeds. I do not think it is presumptuous of him in the least to challenge the validity of the decision of this House in Chapman v. Chapman. I would only remind him that it was first of all the decision of the experienced Judge in the Chancery Division who decided that there was no jurisdiction; then the decision of two out of three members of the Court of Appeal, and (though I say it with the greatest hesitation in the presence of the third of them), they were the two Judges who had been brought up in the Chancery Division and had, I suppose, an unrivalled experience. The matter then came before this House. Three of the learned Lords who took part had had unrivalled experience in equity matters; the fourth was a most able Judge, Lord Asquith of Bishopstone; and the fifth was Lord Oaksey, who agreed but doubted. In the face of that, I think we will not argue whether the decision of the House was right or wrong. At any rate, it is the law unless it is altered by this Bill.
  I do not propose to say very much about the Bill. There are one or two features of it which I do not much like. Although I recognise the validity of the argument about the so-called "dead hand", I do not much like the idea that, while the settlor, whose money it is you are dealing with, is alive, the disposition he has made should be altered by the Court without his consent. But the matter was considered by the Committee, a very good Committee who came to the opposite conclusion; and I am content to submit to their decision. But there is one matter of great importance.
  As the noble Lord has said—he speaks, I suppose, from hearsay, as I do—it is undoubted that this question has assumed great importance in these days, owing to the desire of beneficiaries to obtain the sanction of the court to what are called "tax avoidance schemes". I think there is nothing more important in the law than that, so far as the difficulties of language

  841
  and the infinite complexities of human affairs admit, there should be certainty in the law. It is an ideal impossible of attainment; but so far as we can attain it, we should strive to do so. I am very sure that there is grave danger, unless it is made clear upon the face of the Bill, I hat the law will be uncertain in the administration of this particular branch of justice; for I am sure that one Judge will refuse an application which another Judge will grant, where it is based simply upon the desire to avoid tax.
  Let me read what a great lawyer said in regard to this—he was speaking of people who promote this sort of scheme:
  "There is no doubt, of course, that they are within their legal rights, but that is no reason why their efforts, or those of the professional gentlemen who assist them in the matter, should be regarded as a commendable exercise of ingenuity or as a discharge of the duties of good citizenship. On the contrary, one result of such methods, if they succeed, is of course to increase pro tanto the load of tax on the shoulders of the great body of good citizens who do not desire, or do not know how, to adopt these manœuvres."
  That is a point of view which is tenable; it is a point of view which is widely held; it is a point of view which may influence the mind of the learned Judge who is invited to exercise the jurisdiction of Flier Majesty's court. I think it must appear obvious to all your Lordships that one Judge may take one view upon this, and another may take another. If so, and it your Lordships think that it is a proper exercise of the jurisdiction of Her Majesty's courts—if you think it should be invoked in order to permit or sanction tax avoidance schemes—then I beg that it should be made clear upon the face of the Bill.
  That, obviously, is not a matter upon which I can invite the noble Lord who introduced the Bill to say anything, but I can invite the Lord Chancellor, who is not only a member of the Government but also the titular head of the Chancery Division and there is a Court, called "The Lord Chancellor's Court", which awaits his occupation, if he thinks fit, in the Law Courts in the Strand. I can, therefore, ask the Lord Chancellor to say unequivocally whether he is in favour of this jurisdiction being exercised when the purpose of the scheme is wholly, or mainly (because there may be some fringe), to avoid tax.
  I would go further, because it does not follow that the Judges in the Chancery
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  Division will read what is in Hansard, and I would suggest that he should consider that it should be made quite clear on the face of the Bill, by appropriate words, whether or not it is to be an objection to the jurisdiction that the main or only purpose of the action is to avoid tax. If we think it should be, lot us say so. because I am convinced that justice will not be meted out if it is not made clear, with the result that one Judge will say one thing and another will say another. That is something contrary to the rule of law. That is one point, and I am sure that the Lord Chancellor will deal with it unequivocally, and I hope he will also say that he will make it clear upon the face of the Bill, by an appropriate Amendment in Committee.
  The other point about this Bill that exercises my mind—it is a rather more difficult problem, a more complicated problem—is this. In these days one of the things that exercises alike the minds of trustees and of beneficiaries (perhaps more of beneficiaries), is the question of the investment of trust funds. Let me remind your Lordships of two sentences, if I may, on what the position is to-day. In a trust instrument, whether a will or settlement inter virus, if there is no provision in regard to the investment of trust funds the law itself provides the range of investment by the Trustee Act of 1925. It has always been so. The Legislature itself has provided for the investment of trust funds. Of course that does not apply in every case. In many, indeed most, trust instruments there is a provision as to the investment of trust funds. Sometimes it baldly follows the Trustee Act: in others, it is a little wider; in others wider still; and in others, as wide as it can be made. But there is a vast number of trust funds, a great number of trust instruments, in which there is not that width of investment which the trustees, and sometimes the beneficiaries, demand.
  What is to be done? I think it is not quite clear what the present law is. I am not quite clear how far Section 57 of the Trustee Act goes in regard to something which is now very widely demanded, the substitution of a wide investment clause authorising investment in what are, horribly, called "equities". I am not sure how far that is justified by the law as it stands. But it is clear that, under the terms of this Bill as it stands,

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  it will be open to trustees, and beneficiaries, to apply to the court for a wide investment clause to be substituted for a narrow investment clause. That prospect causes me great apprehension. Not only will there be a flood of applications, but the courts will again be put into precisely the same difficulties. The Judge in the Chancery Division is not an expert in investment. How is he to know what is the proper scope of investment? How is he to decide between on the one hand, trusts where the trustees are perhaps a trust company or the branch of a hank, expert in investment, and, on the other hand. individuals who may or may not be wise and careful in investment? He is given a quite impossible task.
  Not only that. Just as one Judge will give one answer and another Judge another in regard to the point I have mentioned, the same thing will apply to investment. It is not right that this should be left to the Courts to determine. I can quite see that in particular cases, as happens now, it may be desirable that a particular investment should be retained—where, for example, trust funds are in an old family business—or funds invested in a particular way. In such cases a particular transaction can be, and often is, sanctioned. But I am dealing with the much larger question of the substitution of one range of investment for another. It is not right that this matter should be dealt with by this Bill. It should be dealt with as investment in the past has been dealt with, by the Legislature. If it is desired that trust funds should find a wider scope of investment, that should be dealt with by an amendment of the Trustee Act. That is the other matter which I wished to throw into the pool and invite the noble and learned Viscount the Lord Chancellor to consider. It seems to me to be of great importance.
  There is one other point in this connection. There must be tens of millions of pounds in regard to which such applications may, and probably will be, made, do not forget that the noble Lord to whose words on economics we always listened with the greatest respect, said, referring to a kindred matter, that it would be a breach of trust for a trustee to invest in a trustee investment. That is a little cynical and paradoxical, but it shows the
  844
  attitude which more and more is being held towards investment trust funds. I would only add (I am afraid that I am taking too long, but it is a not unimportant subject) that while this Bill deals—as I believe it is meant to deal, though its language is not very clear and perhaps the noble and learned Viscount will elucidate this—only with private trusts, it will surely be followed by a similar suggestion in regard to the investment of charity funds; and so the volume of money which will fly from fixed interest-bearing securities to so-called equities will grow larger and larger. That is a matter of which I should have thought Her Majesty's Government, and in particular the Treasury, would take some notice.
  There is one other thing that I want to say. I must recall to your Lordships' memory that on more than one occasion what is called a Personal Bill—a Bill in respect of which individuals have sought some rearrangement of their properties, which they could not do without an Act of Parliament—has come before this House; and the Personal Bills Committee, I think with the general approval of Parliament, have thrown out the Bill as the simple purpose of it appeared to be tax avoidance. Your Lordships may take a different view from that of the Personal Bills Committee, but that is a matter which I would invite the noble and learned Viscount to take into consideration. That is all I would say, because I am not going to argue with the noble Lord, Lord Milner of Leeds, about the point he raised. These are the two suggestions I throw into the pool: that we should make it abundantly clear that the tax avoidance scheme is not to be rejected by the Court because it is a tax avoidance scheme, and that we should invite the consideration of Her Majesty's Government to the large question of whether the investment of trust funds should not be the subject of an amendment of the Trustee Act rather than of a flow of applications to a Court which is not really the proper Court to deal with a matter of this kind.
  5.56 p.m.
  LORD COHEN: My Lords, I was a party to the judgment in Chapman v. Chapman and on that occasion I agreed with my noble and learned friend Lord Simonds in the conclusion, but not with the whole of the reasons, and I find myself in somewhat the same position

  845
  to-day. I entirely agree with him in commending this Bill, but while I have not reached the final conclusion I am not sure that I share his views on the two points with which he has asked the noble and learned Viscount the Lord Chancellor to deal. First, as to tax avoidance, my recollection is that the observations of the noble and learned Lord to which he called attention were delivered in a case dealing with something different from the main point which my noble friend Lord Conesford has in mind. As I read this Bill, it is directed, so far as tax avoidance is concerned, primarily to this sort of point: A and B being adults, one being entitled for life and the other for the remainder, they can put an end to a trust and divide the money and nobody would suggest that that was an improper thing to do; but if A or B is an infant, then that becomes impossible. I do not believe that the noble and learned Lord to whom my noble friend Lord Simonds referred would have expressed any disapproval of that type of scheme. If my noble and learned friend will forgive me, I do not propose to follow the matter further for the moment, but I propose to think it over again and see if an Amendment may be necessary to deal with it.
  VISCOUNT SIMONDS: My Lords, my noble and learned friend cannot be so innocent as to suppose that this is the only form of tax avoidance scheme. There are schemes of the most intricate character dealing with the avoidance of income tax and estate duty.
  LORD COHEN: My Lords, I have not suggested that this is the only form of tax avoidance scheme, but, in my experience, it is the most common form of scheme which, before Chapman v. Chapman, it was thought could be dealt with under the ordinary Chancery jurisdiction in Chambers. I have no objection to the insertion of this clause in the Bill; but I did not want it to be thought, and I am sure that my noble friend Lord Conesford does not want it to be thought, that this Bill is intended to legalise the sort of schemes which the noble and learned Viscount referred to in the passage cited.
  The other question is with regard to the investment clause. As my noble friend said, it is very desirable that that should be dealt with on a generally uniform
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  basis, and I think that this Bill is necessary because up till now Judges have taken different views about their powers under Section 57. Some have considered that it justified investment in equities while others have thought that they have no power, at any rate unless a general compromise is involved, to do so. I agree that it is desirable to put this matter beyond doubt, as the Bill does. I do not feel that this is a power which would be embarrassing to Chancery Judges to exercise. Obviously they are not themselves experts, but they never act in these cases (and I have had some experience—as a litigant, not as a Judge) without advice from bankers, stockbrokers and others, and the Court requires full evidence to satisfy itself that this is desirable. Incidentally, the Court usually makes it a condition that not more than a certain proportion of the funds should be invested in equities. I do not myself regard it as a dangerous power to give to the Chancery Division, and I do not think that if my noble and learned friend were back in the Chancery Division he would have any great difficulty in exercising it. That is all I want to say on that point.
  The other point he raised was as to the position of settlors who were still alive and found their settlements being varied in order to comply with these powers. This, I think, is covered by the recommendation to be found in the Report of the Committee: that a settlor should be entitled to be heard on application under the Act. There is no provision to that effect in the Bill, but I think the reason is (the noble Lord will correct me if I am wrong) that that is the sort of thing that is dealt with by alteration in the Rules and not by a provision in the Bill.
  LORD CONESFORD: Yes.
  LORD COHEN: I am glad to hear that the noble Lord agrees with me. Those are the three points on which I desired to say something. At this hour I do not propose to raise one or two other points I had intended to raise, because they are really drafting Amendments about which I have told my noble friend Lord Conesford and which may lead me to put down one or two minor Amendments on the Committee stage. I should like to conclude by expressing complete agreement with my noble and learned friend and supporting the Bill.
  6.11 p.m.
  LORD DENNING: My Lords, this would appear a very technical matter, but might I tell your Lordships of the Chapman case itself? Sir Robert and Lady Chapman were very well known people in the North and had done a lot of public service.
  LORD MILNER OF LEEDS: He was a Member of the Commons.
  LORD DENNING: They made, I think, three separate settlements of £80,000 on behalf of their grandchildren. The solicitor put in the settlements a provision that the trustees could arrange the maintenance for those grandchildren in their discretion; that is to say, they could give some grandchildren, if the parents were needy, more than others, and vary it up and down. After those settlements were made the legal advisers and the accountants advised Sir Robert and Lady Chapman: "If the settlements are in that form the estate will have to pay estate duties of £30,000 when you. Sir Robert and Lady Chapman, die. On the other hand, if the trustees have to treat each grandchild alike, so that each grandchild takes the same as the other, all well and good, and there will not be any estate duties at all." So Sir Robert and Lady Chapman said: "Our solicitor seems to have made a mistake. Please get it varied."
  They were advised: "As long as people are of full age they can agree among themselves, but these grandchildren are only eight or nine years old, and there may be other grandchildren unborn coming along. You must get the sanction of the Court to this, because the Court of Chancery are the protectors of infants, and they can give sanction for the infants when it is for their benefit." So application was made to the Court by Sir Robert and Lady Chapman, applying for consent of the Court of Chancery. According to the practice for twenty or thirty years, there was good hope of its going through; but in fact some Judges of the Chancery Division took one view and some took another view, and eventually it did not go through. It astonished the Lincoln's Inn and the profession, and as a result this Bill is before the House.
  I would suggest to your Lordships that it is an excellent thing, and no one really could condemn Sir Robert and Lady Chapman or say that there was any wrongful tax avoidance in what was suggested.
  848
  But I should like to endorse what the noble Lord, Lord Milner of Leeds, indicated. A lot of the trouble was due to the fact that these applications were made in Chambers; they were never reported and people did not know what the Courts were doing or what their jurisdiction was. If they had been reported over the twenty years, people could have seen what the jurisdiction was. This is not the only case. Another instance that occurs to me is that people do not know how Judges will act when they want a divorce in the first three years of marriage. The Judge has a discretion as to that; it is never reported, but is in Chambers, and people have no guide as to how the Judges will act.
  As my noble and learned friend Lord Simonds has mentioned, if this Bill is passed you will find one Judge deciding one way and another Judge deciding another. All the more reason, therefore, why there should be proceedings in open court or some statement of principle to guide the profession about it. For myself, I should always come down on the side of publicity for judicial proceedings as one of the surest safeguards of the rule of law. It should never be left aside, except where necessary for the sake of doing justice. In every other case it is of cardinal importance to our liberties that every court of justice should be open to every subject of the Queen. I support the Bill.
  6.18 p.m.
  LORD DOUGLAS OF BARLOCH: My Lords, the noble and learned Viscount, Lord Simonds, has touched upon the two most important matters which arise out of this Bill. I personally do not feel particularly shocked at the idea of the Court being invoked to alter the positions of trusts so as to reduce the liability to taxation. A great many of us who follow the profession of law are engaged day to day in advising people how to manage their affairs so as to produce that result. I think it ought to be remembered that there are quite a number of trusts in existence which were created before the incidence of taxation became what it is to-day, and indeed, before many provisions affecting the incidence of taxation were in existence, and by the accident of time alone the settlors were unable to provide for events which settlors of the present day can provide for. There is, therefore, a certain element of inequity in that,

  849
  As to the other point, I sympathise with the view of the noble and learned Viscount, Lord Simonds, that there is a case for enacting a new Trustee Act which would give much wider powers of investment, and that would quite properly have effect for the future after the Act had been passed. But so far as trusts already created are concerned, I should not favour the passage of an Act which simply allowed the trustees to invest to the widest possible extent, because investment involves the wisdom and discretion of the trustees, and it does not follow that every settlor has provided that there shall be trustees of a settlement who have got the wisdom and discretion to exercise such a power wisely. Those cases, as this Bill provides, ought to be judged by the Court of Chancery upon their individual merits. I therefore venture, with all respect to the noble Viscount, to support the Bill as it stands.
  6.20 p.m.
  THE LORD CHANCELLOR: My Lords, your Lordships must be thinking at this stage in the afternoon that one of the most horrifying features of a "lawyers' holiday" such as we have to-day enjoyed is the fact that it has involved nearly a dozen speeches from myself. For that I apologise profoundly; but on reflection your Lordships may also consider that it has been my duty, if your sorrow, that I should enter into these discussions. Certainly in regard to this Bill which has been unanimously approved, I would not have trespassed further upon your Lordships' time were it not that my noble and learned friend Lord Simonds, who stated his point of view, if he will allow me to say so, with great moderation, charm and force, has asked me to deal with certain points, and, as your Lordships know, I should never refuse a request from him.
  The noble and learned Viscount has asked me especially in regard to the attitudes to be adopted by the courts on applications under the Bill, when it becomes law, where one of the purposes of the application is to reduce the tax liability of the beneficiaries concerned. This was, of course, one of the matters which was canvassed when the Bill was before another place, but it was also fully considered by the Law Reform Committee in their Sixth Report to which this Bill seeks to give effect. I am sure that my noble and learned friend has
  850
  already considered the arguments set out in paragraphs 15 and 16 of the Report. As is well known to all of us lawyers, though some of the lay Members of your Lordships' House may not be aware of it, the members of this Committee included Lord Justice Jenkins, Lord Justice Parker, Lord Justice Pearce, Mr. Justice Donovan, Mr. Justice Diplock; in the academic sphere, Professor Goodhart, Sir David Hughes Parry, Professor Wade and many other notable names. They considered this point specifically.
  But, lest the weight of the utterances of my noble and learned friend should give it too much prominence. I should like to remind your Lordships that the Committee went on in paragraph 17 to say:
  "It must also be borne in mind that the present state of the law causes real hardship to beneficiaries under settlements in cases where the question of relief from taxation either does not arise at all or is a minor consideration. Nor does the problem arise only in cases where the property settlement is of large value. There are many cases of settlements involving quite small sums in which it would be beneficial to all the beneficiaries to be enabled to spend capital but they are unable to obtain leave of the Court to do so, with the result that parents have an income insufficient for the needs of themselves and their children, and the children are unable to be given education and training such as would enable them in the future to provide for their own needs."
  I believe it is important that we should keep that matter in proportion, but that does not mean that I am going to avoid dealing with the point that has been put to me. The underlying object of the Bill and its very raison d'être is to put beneficiaries who are infants or under some form of disability in the same position, as nearly as may be, as beneficiaries who are of full age and capacity. That is the main object of the Bill, and it is not primarily designed to allow infant beneficiaries to obtain the Court's approval of tax avoidance schemes. I do not deny, however, that the Court may be asked to approve of a scheme which will result in less tax being paid if it considers it to be for the benefit of the infant beneficiaries.
  As I understood my noble and learned friend, he said that it was wrong that Judges of the Chancery Division should be put in this position; and he also contended that it was unsatisfactory that the result should depend upon the chance of the views of the various Judges. The answer to this objection, in my view, is

  851
  that which is given by the Law Reform Committee, who said that they could see no valid reason why the Court should not be able to do on behalf of persons who are not ascertained what the law allows to be done by persons who are sui juris. My noble and learned friend has reminded your Lordships of the views of the late Lord Simon on the undesirability of Parliament legislating in such a way as to enable those who can afford to do so to seek ways and means of avoiding the tax to which they would otherwise be subject. My noble and learned friend, Lord Cohen, has rightly said that that statement was made in an entirely different context. But surely the short answer is that it is far more undesirable that in seeking the right solution to a problem of this kind, Parliament should perpetuate injustices as between one taxpayer and another because of some rigid theory that nothing should be done which might conceivably injure the Revenue.
  In the debates in your Lordships' House on the Bill which became the Married Women (Restraint upon Anticipation) Act, 1949, Lord Simon was answered by Lord Jowitt when that late noble and learned Earl said [OFFICIAL REPORT, Vol. 164, col. 184]:
  "It is to my mind an absolutely novel doctrine that you must crib, cabin and confine the taxpayer to a certain state of circumstances in order that the Revenue may extract more money out of him. It cannot be right."
  That was what the noble and learned Earl, Lord Jowitt, said, speaking with all the responsibility of holding my office in a Labour Government. Whatever may have been the politics of the noble and learned Earl, they are views with which I profoundly agree.
  I would also remind your Lordships of the words used by the Royal Commission on Taxation of Profits and Income, a Commission presided over by my noble and learned friend Lord Radcliffe, which are quoted by the Law Reform Committee in their Report. The Commission said:
  "The treatment of tax avoidance in the United Kingdom would present much less difficulty if it were possible to assert as a matter of general principle that a man owes a duty not to alter the disposition of his affairs so as to reduce his existing liability to tax or, alternatively, for the purpose or for the main purpose or partly for the purpose of bringing this result about. But there is no
  852
  such general principle, and we are satisfied that it neither could nor ought to be introduced."
  With these matters in mind I do not believe that the Courts will feel the difficulties envisaged by my noble and learned friend Lord Simonds in dealing with the applications he has in mind. I respectfully adopt the view which my noble and learned friend Lord Cohen adumbrated, although he wished to give the matter further thought.
  VISCOUNT SIMONDS: My Lords, may I intervene again for one moment? The noble and learned Viscount does not need to convince me; I am not against these schemes. I am only anxious that there should be certainty. I venture to ask the noble and learned Viscount whether, if I put down an Amendment to the effect that it shall not be an objection to the exercise of the jurisdiction of the Court that the main purpose of the proposal is tax avoidance I shall have the support of Her Majesty's Government. To make the matter quite clear, would the noble and learned Viscount answer that point?
  THE LORD CHANCELLOR: My Lords, I will give the answer when I see the Amendment, but I am making clear my views. I am afraid that I am far too old a ministerial hand to commit myself to accepting an Amendment until I have seen it on paper and have seen the context of the Bill in which it is made. My noble and learned friend is perfectly right to throw his fish but I am rather an old salmon to take that bait. I want to make it quite clear what my view is. I do not think I have left that in any doubt.
  I was proceeding to deal with the other point which the noble and learned Viscount raised. Of course it is true that one Judge may form a view of a particular application which would not be shared by another Judge. But, of course, that is no new thing; it is a matter of constant occurrence whenever judicial discretion is involved; and long may it continue! A system of law in which judicial discretion is going to be confined and will not result in differences may be admirable on the Continent of Europe, but it is completely out of accord with the traditions of English justice and English legal development; therefore that is something which one has to put up with, and indeed welcome. I

  853
  see no reason why that should militate against the justice which is done by this Bill.
  My noble and learned friend then went on to the much wider question of whether the only way in which a testator's or settlor's word should be affected in this connection is by enlarging the list of trustee securities. That is, in putting the perfectly reasonable case that the settlor or testator is saying, "I make this settlement according to my wishes and subject only to alterations in the Statute Law, not to views that may be formed by a Judge in the Court." With the very greatest respect—and I know the sincerity with which my noble and learned friend holds these views—I again think they are too rigid. I am not going into all the possibilities, but I have done my best to consider them, and I have found many changes in circumstances where I think it is far nearer approximation to justice that the matter should go to the Court rather than wait for legislation.
  The other point which my noble and learned friend raised was with regard to Personal. Bills, I have not checked my recollection on this point, but it is that the Personal Bills Committee laid down in the case of a Personal Bill promoted by one Member of your Lordships' House (I am not sure which name of two is the correct one, and therefore I do not want to quote it) a principle which dealt with that position and which has since been used as a working principle by all parties concerned with Personal Bills. I am quite sure that there is that effective principle, and I am sure that my noble and learned friend will remember it. It is an Earldom beginning with "S", but I should not like to charge my memory to say which at this time. It is a well-known principle and has been applied and used to deal with the difficulty he mentions.
  The noble Lord, Lord Milner of Leeds, raised the question of publicity, and my noble and learned friend Lord Denning also raised that point. It may well be desirable, as was suggested not only by them but in another place, that a due measure of publicity should be afforded to the decisions of the Court in cases arising under the Bill so that the legal profession and the public at large should
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  know the lines on which cases are being decided. I put this point to the noble Lord, Lord Milner of Leeds, and I ask him to consider it. In cases of this kind one has to strike a balance between the advantages of full publicity, on the one hand, and the harm that can easily be done, on the other, by the' disclosure of full details of a family nature in individual cases. I discussed this point with some of my colleagues in the Chancery Division and they said that it was a serious point. I entirely agree. I am satisfied that the consideration of publicity is one which the Judges of the Chancery Division have very much in mind, and that they will take steps to ensure that a proper measure of publicity is afforded to their decisions. I should like (and I hope that the noble Lord, Lord Milner of Leeds, will agree with me in this), to give these plans an opportunity of working out, and if there is any dissatisfaction I will willingly consider the matter again. But my brethren are well seized of the matter: they appreciate the problem and will try to get the best and fairest solution.
  My Lords, the overwhelming justification for this Bill is, to my mind, the fact that it remedies a clear injustice. At the present time beneficiaries of full age can agree among themselves to re-write the trusts of a settlement to their mutual advantage. But as my noble and learned friend Lord Conesford pointed out, the existing position is made even more unsatisfactory by the fact that in certain fields the Court itself already has a limited jurisdiction to intervene on behalf of beneficiaries under disability, and, as he says, it can do so in cases of land; it can do so in cases of lunacy; the Court of Protection can sanction any disposition, and the Divorce Court has already power to vary the marriage settlements of parties to divorce proceedings. Nothing that has been said—not even the powerful words of my noble and learned friend Lord Simonds—has answered the simple question of the Law Reform Committee:
  "Why should an infant whose parents are happily married be in a worse position than a lunatic or an infant whose parents are divorced? Why should an infant who is interested in land be better off than one who is interested in personalty? Why should it not be possible to arrange the affairs of all infants to their best advantage?"

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  No one can give any answer to that question. I believe that if Lord Eldon himself were to re-visit your Lordships' House he could give no other answer than that the present position is so glaring an injustice that it must be remedied. That is why I commend this Bill to your Lordships' House.
  LORD CONESFORD: My Lords, I rise only to thank most sincerely all those who have taken part in this debate.
  On Question, Bill read 2a, and committed to a Committee of the Whole House.
  House adjourned at half past six o'clock.