§ 6.13 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.
§ Clause 3 [Acquisition of new domicile]:
§ On Question, Whether Clause 3 shall stand part of the Bill?
§ LORD CHORLEY
I think this is a convenient opportunity to discuss a matter which has already received some consideration from your Lordships on the Second Reading of this Bill. Unfortunately, I was not then able to be present. It is a matter which has given rise to much discussion, both on Second Reading and outside your Lordships' House. I am concerned with the dropping of the provision contained in the earlier Bill, by which a person who makes his home in a country is presumed to intend to live permanently in that country, and which, from the point of view of the practical administration of the law, established an important presumption; one which, as my noble and learned friend Lord Denning pointed out, had been the unanimous recommendation of the valuable Committee which sat for a long time discussing these problems of private international law.
I do not think there can be much doubt that this proposal was a valuable one and that, as my noble friend Lord Silkin said, it was alarming that a unanimous proposal of that kind should have been dropped—I will not say "so easily dropped"—on grounds which appear to many of us to be unsatisfactory. I should have liked to put down an Amendment at this stage to reintroduce this presumption.
THE EARL OF HOME
I hope that the noble Lord and the Committee will forgive me for interrupting his remarks, but I now hear the Prime Minister is to make a statement on Cyprus at seven o'clock, and I flunk that your Lordships would probably wish to hear it.
§ LORD CHORLEY
I was saying that I had wished to put down an Amendment to test the feeling of your Lordships about whether it would not be feasible to bring back this presumption, but the noble Lord, Lord Meston, has moved with such speed that he has caught me out and I was not prepared with such an Amendment. I should like to express the hope that when the Bill gets to another place such an Amendment will be put down, so that there will be a chance of voting upon it.
I think that my noble and learned friend Lord Denning put the case as concisely and forcibly as it could be put, when he said on Second Reading [OFFICIAL REPORT, Vol. 214 (No. 38), col. 251]:An expert Committee on domicile was appointed and they reported unanimously in favour of a reform in the law, putting the burden the other way from what it is now.…Then, owing, it is said, to other business interests, from abroad, the recommendations of that Committee were thrown over—I repeat, owing to representations of those business interests. I would not myself say that the cause of law reform is to be rejected on the pressure of other business interests.That, in effect, is what is happening, and the noble and learned Viscount who sits on the Woolsack made it perfectly clear that the inclusion of this presumption would have led to an obvious improvement in the practical working of the law.
The last thing I would claim to be is an expert on the problems of private international law, but I have many friends who are very experienced in the practice or in the theoretical questions of this law. Some are editors of the leading textbook, Dicey, the name of which will be familiar to noble Lords acquainted with these matters, and they are very upset that it has been thought expedient to put aside what, in their view, is a most valuable improvement in the law in favour of what appears to be completely imaginary fears on the part of a number of foreign businessmen. If these fears were well grounded, there might be something to be said for sacrificing a valuable improvement in our 426 law; but in my view it would have to be a very strong business interest on the part of foreign businessmen which would make it expedient for us to sacrifice an improvement of this kind.
When this matter was raised by the noble Lord, Lord Hawke, in July of last year, as a result of some conversations which he had had with business men, the view which he put forward was completely and successfully refuted, I thought, by the noble and learned Viscount the Lord Chancellor. I happened to be in the House then, and I have since taken the opportunity of refreshing my memory. I think that the noble and learned Lord, Lord Morton of Henryton, who also took part, was equally unconvinced that there was any substantial point in the argument advanced by the noble Lord, Lord Hawke.
It is a fear on the part of these business men which is not a reality, and one of my friends, who perhaps has as good a practice in London as anybody else in matters of this sort, has drawn my attention to the fact that almost every business man who comes to this country to take up a business career enters into an arrangement with the income tax authorities in this country which makes it quite clear that he is not becoming domiciled here. He will therefore have come under the provision in the earlier Bill which said that this presumption can be rebutted. It appears that we are sacrificing a valuable improvement in our law simply to satisfy groundless fears on the part of these business men. I suggest that that is an altogether wrong attitude to take up, and I hope that when this Bill gets to another place this point will be put right.
THE LORD ARCHBISHOP OF CANTERBURY
I have no detailed knowledge of this Bill, but I have taken advice and I can give the result of that advice from the point of view of Ecclesiastical Law. What I am advised is that under the former draft there were many serious objections to the Bill from the ecclesiastical point of view, but I am assured that, as now revised, there are no longer any objections. Therefore, I should be sorry if any departure were made from the text as it now stands.
I am glad that the noble Lord, Lord Chorley, has mentioned 427 this matter, so that we can discuss it once and for all. The previous Bill provided that a person's domicile was in the country in which he has his home and intends to live permanently. Then the Bill went on to say that the person who has a home in that country is presumed to intend to live permanently in that country. That presumption caused a good deal of anxiety in the minds of a number of business men who had come here from abroad or who proposed to come here from abroad. I tried on a previous occasion to allay those anxieties by drawing a distinction between a house and a home. For example, a business man might come here from abroad and live in a house in this country for fifteen or even twenty years, yet all the time he would have his home in some other country thousands of miles away. At all events, that agitation, if I may so call it, was such that it was thought advisable to give into it and to re-draft the Bill so as to establish the existing law, subject to some amendment.
On the previous occasion I said that the only friend I had was St. Paul, who said that in such cases "it is not expedient" to do certain things. However, I am glad that, on this occasion, in addition to St. Paul, I have the support of the most reverend Primate; and I think I also have the support of the noble and learned Viscount the Lord Chancellor. With these three great people in support of dropping the earlier Bill and reintroducing the Bill in its present form, I venture to think that we are probably doing the correct thing.
§ 6.25 p.m.
§ THE LORD CHANCELLOR (VISCOUNT KILMUIR)
I rise to speak only out of courtesy to the noble Lord, Lord Chorley, because he has voiced his opinion and I think I ought to deal with it, but I am glad to have the support of the most reverend Primate for quite another reason from that which Lord Chorley and I have in mind. I would first deal shortly with the legal position, as I see it. The change in the Bill may be put in legal shorthand—and I put it in that way for the benefit of the noble Lord, Lord Chorley: that it now follows the majority in the case of Winans v. The Attorney-General instead of the minority. I said, as the noble Lord men- 428 tioned and as, indeed, I mentioned, if he will look at my speech on the Second Reading of this Bill, that when the last Bill was before your Lordships I did not think it would affect the ordinary case of a business man from overseas—and for this purpose it is immaterial whether he comes from the Commonwealth, from the United States or from anywhere else—who came here to do a job, such as, for example, that of manager of the British branch of an overseas company or even an interconnected company, because I thought that in those cases it would be perfectly clear that the man intended to go back to the country from which he had come and there would be no question of a domicile of choice.
But, of course, there is the other case like that of Mr. Winans—and as the noble Lord, Lord Chorley, has been reading the debates he will have seen the summary of Mr. Winans' position which my noble and learned friend Lord Denning gave on the last occasion. The situation is that on the rather peculiar facts of the Winans case, the tax position—and, as Lord Chorley knows, that applies to both income and death duties, and the effect of the change of domicile would be that the whole of the overseas income would have to be taken into account, and on death duties the whole of the estate, including the estate situated overseas—has been taken by those who have come from overseas to be based on that case; that has been the practical rule on which they have operated. They were assured (like the noble Lord, Lord Chorley, I do not want to quote names, because it is unfortunate that the names of academic lawyers should be quoted in the House when they are not here, but he will take it from me that they were advised by an academic lawyer of the highest standing) that they would be in grave difficulties and, to put it in American language, they would be buying a lawsuit.
I have explained my position again—I think it has been consistent throughout—that I do not think it would affect a large number of them. There is the minor class of case, like that of Mr. Winans, which would be affected by substituting, as the last Bill did, the view of the minority in that case for the view of the majority. I found that I was in this position: that whether I am right or wrong—and I not 429 unnaturally think I am right—there was his great uncertainty and disquiet among people from overseas.
As I said on Second Reading, I do not like postponing an improvement of the law for economic conditions; but it is one of the hard paths which we have to tread at this time. It is a matter of opinion, and if the noble Lord, Lord Chorley, thinks that I have been weak in the matter, I take his criticism with no resentment. On a careful consideration of it, I felt that in the special circumstances of the moment it would be better to have a postponement of this change, and that is why I supported the alteration in the Bill. The only thing that I can claim—and I am sure the noble Lord, Lord Chorley, with his fairness of mind will allow me—is that I have been entirely frank with the House about the matter and have never sought to disguise the position. I would only ask him to consider it.
He himself has taken a distinguished part in a Government in the new conditions with which we are faced in this country. We have each taken our part from different angles in that most intractable of problems—trying to govern a country with rich traditions which has become poorer from the standpoint of international assessment. It is important, in my view, that capital investment should not be discouraged at the moment, even by fears which I do not share. All I ask the noble Lord to do is to consider that point of view. I have not the least objection, to its being ventilated anywhere, but I know the noble Lord will do me the honour of considering my point of view, even if ultimately he maintains his disagreement.
§ LORD CHORLEY
I am exceedingly grateful to the noble and learned Viscount for the great courtesy and frankness with which he has dealt with my objection to what has happened. Might I say that I am certainly not opposed to enterprising businessmen coming here, and I entirely agree that we should encourage them, within limits, of course, which we cannot go into in this debate. What worries me is that the noble and learned Viscount himself is obviously convinced that this apprehension on their part is groundless. 430 They have been convinced by somebody that they would be buying a lawsuit if this Bill went through. But surely the lawsuit they would be buying is the lawsuit which has arisen from Winans case, which the clause in the earlier Bill was designed to prevent.
§ THE LORD CHANCELLOR
I want to be fair to them, because they have taken immense trouble to represent their view to me and I do not want to put it unfairly. They say that since 1907, for fifty years, Winans case has governed the law. They know where they are, and they feel that if that portion of the law were changed they would be in doubt. Whether they are justified or not, the fact that they are in doubt alone might be sufficient to prevent their coming. I perhaps did not make that clear, but that is their view, and that is what I have to face.
§ LORD CHORLEY
I am glad to know that they think that Winans case has settled the law so clearly that there is no difficulty about it. The noble and learned Lord, Lord Denning, pointed out that difficulties do arise under Winans case, and I am voicing the view of people who practise in this domain of law. I do not pretend to be an expert at all. They tell me that Winans case gives rise to great difficulties, and that was also the view of the Wynn-Parry Committee. It was in order to get over those difficulties that this presumption was put into the earlier Bill. Obviously, it would be absurd to take up your Lordships' time with a rather technical discussion of this kind. I should like to say that I am grateful to the noble and learned Viscount for the cogent and courteous way in which he has explained the position, and I do not propose to carry it any further.
§ Clause 3 agreed to.
§ Remaining clauses agreed to.
§ House resumed.
THE EARL OF HOME
My Lords, perhaps it would be convenient if the House adjourned until five minutes past seven, when I hope to make a statement on Cyprus.
§ House adjourned during pleasure.
§ House resumed.