HL Deb 04 February 1964 vol 255 cc69-140

5.54 p.m.

Further considered on Report (according to Order).

Clause 3 [Right of cancellation of certain hire-purchase and credit-sale transactions]:

LORD DRUMALBYN moved in subsection (5), after the first "which" to insert: either the owner or seller normally carries on a business or".

The noble Lord said: My Lords, this Amendment affects the definition of "appropriate trade premises", which now will read premises at which either the owner or seller normally carries on a business or goods of the description … are normally offered or exposed for sale". This is a point which was raised on the Committee stage and which I undertook to consider. At that time noble Lords drew attention to the fact that the cooling-off provisions referred to a wider range of agreements than the doorstep transactions at which they are aimed. For my part, I explained that I was well aware of this, but considered that the safeguard would work only if we kept it simple. I accepted the exclusion from the cooling-off provisions of agreements where a hirer or a buyer is a body corporate. Since the Committee stage I have considered whether there are other cases where the application of the cooling-off provisions would cause practical difficulty, and if so whether we can meet them. My conclusion is that there is a good case for treating agreements signed at the business premises of the finance house, as suggested, I think, by the noble Lord, Lord Shepherd, in the same way as agreements signed in the shop—that some practical difficulty might be caused if this were not done, and that it could be done without endangering at all the working of the safeguard.

What this Amendment does is simply to include the business premises of the owner or seller of the goods in the definition of "appropriate trade premises". On the Committee stage, the noble Lord, Lord Shepherd, suggested that we should exclude agreements signed at such places as the offices of a solicitor. I doubt whether such a provision would be of practical significance for ordinary consumers. Moreover, if it were so considered, there would be a case for doing the same for agreements signed at many other types of premises—banks, accountants' and architects' premises, and so forth. The definition would then become unduly complicated. We are told, particularly now that agreements made by bodies corporate are excluded, that the present Amendment does all that is necessary. I beg to move.

Amendment moved— Page 4, line 15, after ("which") insert the said words.—(Lord Drumalbyn.)

LORD SHEPHERD

My Lords, I am grateful to the noble Lord for responding to the points that we raised in Committee. But I wonder whether he will consider the drafting of his Amendment, and whether that drafting in fact meets the case that he has deployed this evening. The noble Lord has said that the purpose of his Amendment is to exclude from the cooling-off period those agreements that may be signed in a hire-purchase company's premises. My understanding is that at the stage when most of the hire-purchase agreements would be signed by a prospective hirer, the hire-purchase company will not have placed its contract with the dealer. Therefore, it cannot be said then that the hire-purchase company are the owner or seller: they have no rights; they have not purchased anything. Therefore, I would suggest that if the noble Lord would consider inserting the word "prospective" in front of "owner or seller" at least we should make clear in our minds, and perhaps in that of the courts later, what we intend, because unless the word is inserted I do not think we are anywhere further on in the Bill.

Here it describes "appropriate trade premises as those places in which goods are exposed for sale. This would be the owner or seller to whom the Government refer in their Amendment. It seems to me that the owner or seller in this Amendment could well not be the hire-purchase company. I hope that the noble Lord takes that point. It seems to me that this drafting needs to be looked at and revised. I am sorry that the Government have not seen fit to widen this area of business. We want to give the maximum protection that we can to prospective hirers, but at the same time we do not want to make business dealings too difficult. The noble Lord did not think that many ire-purchase agreements would be signed in a solicitor's office. It is true that we have removed from the Bill corporate bodies, but there are a sizable number of businesses carried on either by sole ownership or in partnership. I am thinking particularly of businesses which run hire-car services and which have obtained the cars under hire-purchase. Here they will enjoy the cooling-off period, if the Government cannot see their way to widen the scope of "appropriate trade premises." I will not press this particular point, because the Government have gone some way. I am sorry that they have not gone the full way, and I question whether the Amendment now set down meets the point which the noble Lord deployed. Perhaps he would look at it between now and the next stage.

LORD DRUMALBYN

My Lords, naturally I shall be willing to look at this, but I think that I shall be able to convince the noble Lord that it is all right. At the moment the definition covers goods of the description to which the document relates, or goods of a similar description … normally offered or exposed for sale in the course of a business carried on at those premises … That obviously will be the dealer, who may also be the owner. If the dealer and owner are separate, then if we want to cover the owner or seller we must have a separate definition for owner or seller". That is what is done, and "owner or seller" becomes a term of art by reason of the definition given in subsection (6), which shows that, as soon as the individual who is going to be the hirer appends his signature, the 'owner or seller', in relation to the relevant document, means the person who, at the time when the document is signed by the prospective hirer or buyer, is specified in the document as the person who is to let the goods on hire to him or to sell the goods to him … I think the point is all right from the point of view of definition. I shall certainly take note of what the noble Lord said about the wider and separate point about partnerships; we shall look at that. One wants a definition which is clear-cut and easy to understand.

LORD PEDDIE

My Lords, I welcome this Amendment in principle, but I seek explanation on one aspect. There are many cases where an owner or seller or agent has premises in which goods are exposed for sale. He may also have an office which is quite detached from the store or shop in which goods are exposed for sale. Do I take it that such premises, even though they may be devoted exclusively to office purposes, would be considered as coming within the range of this Amendment?

LORD DRUMALBYN

Yes, my Lords, if this were a question of an office at which the business of the owner or seller was normally carried on.

LORD PEDDIE

Even where nothing was exposed for sale?

LORD DRUMALBYN

The point about goods being exposed for sale is the second alternative. Where the document is signed in the premises of the dealer, then it is all right. Secondly, where it is signed in the premises of the finance house it is also all right, although there are no goods exposed for sale. So if the dealer also had a little office which he used solely for his financing purposes, that would also be all right.

LORD PEDDIE

Thank you.

On Question, Amendment agreed to.

LORD AIREDALE moved, in subsection (5), to leave out "normally" and insert "regularly". The noble Lord said: My Lords, this Amendment is a further attempt to bring the established trade shows and exhibitions, agricultural shows, and so on, within the definition of "appropriate trade premises", so that the cooling-off period will not apply in that case just as it does not apply to transactions which originate in the dealer's showroom. I think it is ironical that the cooling-off period, which was originally aimed at the high-pressure, door-to-door salesman should have hit, for instance, the Motor Show. I know that it has been said that on occasions visitors to these trade shows run away with themselves in their enthusiasm; on the other hand, such shows enable visitors to see the full range which an industry has to offer. They can choose the goods best suited to the purposes; from a wider range than is likely to be found in most dealers' showrooms. So that, on balance, I should have thought that the great exhibitions were to be likened much more to a dealer's showrooms than to the activities of the door-to-door salesman.

The Amendment on these lines which I moved in Committee had the support, to a large extent, of the noble Lord, Lord Peddie, who expressed approval of these established exhibitions though he pointed out that my Amendment was too widely drawn and would have given shelter to what the noble Lord referred to as "fly by night" traders. The Minister also took this view, and on reflection I appreciate that both noble Lords were quite right. I hope that the present Amendment, which is more narrowly drawn, will be satisfactory. It will have the effect of amending the definition of "appropriate trade premises" in this way. At present the definition uses the words: premises at which goods are normally offered for sale". With this Amendment the definition would be: premises at which goods are regularly offered for sale". I am hopeful that the word "regularly" will enable the courts to hold that exhibitions held regularly in one particular premises will come within the definition of "appropriate trade premises", notwithstanding that the exhibition may last for only a few days in the whole year. This definition would not be perfect. For instance, there are many well-established travelling shows and exhibitions—I think of the Game Fair—which would not be covered. On the other hand, I am no longer giving shelter to "fly by night" traders, because regularity is the very last quality which such people cultivate. I hope that the Minister will find the Amendment acceptable. I beg to move.

Amendment moved— Page 4, line 17, leave out ("normally") and insert ("regularly").—(Lord Airedale.)

LORD DRUMALBYN

My Lords, I congratulate the noble Lord on his pertinacity and the ingenious nature of his Amendment. Just as I was advised originally, as a matter of drafting, that the word "normally" would not cover trade fairs and exhibitions, I am advised that, as a matter of construction, there is at least doubt whether the word "regularly" has any definite meaning. Its introduction would therefore give rise to doubt whether particular agreements were or were not within the scope of the cooling-off provisions. We are anxious that there should not be that sort of doubt; we believe that that would be unsatisfactory. It is, in any case, a matter for argument whether the cooling-off provisions should or should not apply to agreements concluded at the trade fairs. Your Lordships will remember that my noble friend Lord Stonehaven raised this point on the Second Reading. I was not certain at that time whether or not he thought that such agreements should apply to trade fairs, and I discovered that he was strongly opposed to their applying. So there is, at any rate, a difference of opinion on this.

It is very difficult not to open the door much more widely than one intends to. The noble Lord quite agrees that we ought not to exclude from the cooling-off provisions "fly by night" activities. But I am not at all certain that it is not possible to "fly by night" regularly. I am not at all certain that it would not be possible to have a shop regularly open one day in a year, or in a month, or something of that kind. This just illustrates the difficulty that we are up against. In a case like this we should always have to ask: is anybody really going to be prejudiced by including exhibitions and trade fairs? The noble Lord talked about the Motor Show being hit by this, but is it really going to be hit? As a result of these provisions, how long a delay will there be in the delivery of a motor car to a person who orders? As I said, it is a matter for argument whether or not in this particular kind of case there should be a cooling-off period. Some people have held the view that the cooling-off provisions should extend much more widely than we have made them extend, but in this kind of case it is at least a matter for argument whether they should or should not extend to this.

What I do say is that this will give rise to uncertainty. The word "regularly" is itself not a precise word, and one cannot be certain that, as a matter of interpretation, it would include persons exhibiting at exhibitions, even though they did so regularly; and, certainly, might very well not do so if they were not doing so regularly. So for these reasons I think it would be wise for the House to maintain the provision as it is at present in the Bill.

LORD AIREDALE

My Lords, I am very much obliged to the Minister for his careful and considered reply. He reminded me of a former Lord Chancellor who said on one occasion of counsel who was appearing before him, that unfortunately counsel did not have a very strong case to argue and he was driven back to the ultimate virtue of persistence. I think that is what I was accused of just now. This is not a matter for which I am prepared to go to the stake, and I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

6.13 p.m.

VISCOUNT HANWORTH moved, after subsection (6), to insert: (7) This section shall not apply to any transaction in respect of which the antecedent negotiations are conducted wholly by post.

The noble Viscount said: My Lords, this is a straightforward Amendment which was moved in Committee. The effect is that the hirer or buyer will not have a cooling-off period in which he can cancel an agreement, if the antecedent negotiations are conducted by post. Clause 19 of the Bill, at the top of page 20, defines antecedent negotiations as meaning any negotiations or arrangements with the hirer or buyer whereby he was induced to make the agreement or which otherwise promoted the transaction to which the agreement relates". This definition is stringent, and there is therefore no reasonable possibility of the Amendment producing any weakness in the legal protection afforded by the Bill.

On principle, it seems quite unreasonable that a buyer or hirer should be allowed to change his mind when he has had as much time as he wants to consider whether or not to sign a document, and has been under no outside pressure. It would be far more logical for a protection to apply to a signature on trade premises, but for good reasons this has been specifically excluded from the Bill. From a practical point of view, there are grave objections to allowing a cancellation of postal transactions. In the first place, it will cause considerable delay. The cooling-off period of four days runs from the time the buyer receives a copy of the agreement signed by the seller. The seller must then wait for the four days cooling-off period to elapse, and allow time for possible cancellation to reach him through the post before he can safely despatch the goods. The delay which the four-day pause period imposes on any transaction can hardly be less than eight days, and may well be more. Although the pause period is a very necessary safeguard, in certain circumstances it makes it more difficult to be certain that a valid contract exists. For example, a letter of cancellation or the copy agreement may be lost in the post, or the customer may claim that the letter has been mislaid in the seller's office. For this reason it is a safeguard which should be applied only where it is absolutely necessary.

I would strongly rebut the Government's argument that this Amendment complicates the Bill. In fact, I think the reverse is true. It has been suggested that the majority of mail order transactions do not exceed £20. While this is true so far as numbers of orders are concerned, the annual turnover of items which are over £20 runs into millions of pounds and is very far from negligible. At the Committee stage the Minister objected to the Amendment on the ground of additional complication, and said that the Bill as it stood would not cause any serious inconvenience to the mail order trade. I think I have covered these points. A further objection may be the fear that some firms will ignore Clause 19 of the Bill, and will exert pressure on the customer through sales agents. It is always possible to take a risk and allow a customer to believe that a contract is irrevocable, but I do not believe that this Amendment will make this sort of thing any more likely. It has been pointed out that the onus of proof of illegal behaviour would lie with the customer, that he is the weaker party, and that this is undesirable. But I do not think this argument is a very strong one, because it probably applies to a large number of clauses in the Bill in any event. I hope that, unless the Minister can give some more conclusive reasons against this Amendment, he will have considered it very carefully. I beg to move.

Amendment moved— Page 4, line 40, at end insert the said subsection.—(Viscount Hanworth.)

LORD SHEPHERD

My Lords, I hope that the Government will not accept this Amendment. I have at various stages of this Bill tried to widen the area in which business could be conducted without the cooling-off period, but I have always been very careful not in any way to infringe the principle enshrined in the Bill, that any agreement that is signed in the home should be subject to the cooling-off period. The noble Lord obviously has in mind mail order houses. Those of which we know, and I will not mention them by name, have a considerable reputation which they deserve for the way in which they conduct their business. But the noble Lord will recognise that in the morning newspapers on Fridays and Saturdays there is a mass of advertising material for these small groups of peculiar companies, with names completely unknown to the general public.

As I see it, if the noble Viscount's Amendment were to be accepted, a person replying to such an advertisement and then entering into an agreement would not be subject to the cooling-off period. If all the negotiations were conducted by correspondence, the noble Viscount might have a case. But we well know that replies to that type of advertisement bring the high-pressure salesman. By and large, the high-pressure salesman does not move down the street going from house to house; he answers the replies to advertisements in the papers. I believe that, if the noble Viscount's Amendment were accepted, instead of it being clear to everyone, particularly to the householder, that under the Bill an agreement signed in his home enjoys the cooling-off period, the onus of proof would lie upon the housewife to prove that a salesman had intervened at one stage or another. It would be subject to dispute, but the onus of proof would lie clearly upon the housewife. I think this would move this particular clause, which we have all welcomed, away from giving the advantage to the housewife, and on that ground I would beg the Government not to accept this Amendment.

VISCOUNT HANWORTH

My Lords, I should just like to make one point. I did mention that I was aware that the burden of proof would lie on the housewife, but I also said that this applied to a very large number of clauses in the Bill. I do not think the noble Lord, Lord Shepherd, met that point.

LORD DRUMALBYN

My Lords, I would agree with the noble Lord, Lord Shepherd, that this would represent a breach of the principle that where a document is signed in the home then the cooling-off provisions should apply. Of course, if there could be any strong reason shown that prejudice would be caused to either party, one would be very willing to consider the case. I said this on the Committee stage, and I have received correspondence concerning this matter, but it has not been represented to us that there would be any prejudice arising. The noble Viscount, Lord Hanworth, speaks about delay, and considerable delay. I do not want to go over again what I said on the Committee stage, but I think it is worth saying that I would have expected a very large amount of mail order business to be covered by three categories: first, cash transactions; second, credit sales for less than £20, which are outside this; and, third, hire-purchase and credit-sale transactions where, in the nature of the goods, delivery is in any case not likely to be immediate. I should have thought that these categories covered most of the mail order business. So I must say that there has been no strong case of prejudice made out either to the hirer or to the mail order business in this regard.

However, I should like to add that it is true, I am told, that in certain cases agents or salesmen assist in the pushing of mail order business. The difficulty is that if one were to exclude all transactions in respect of which the antecedent negotiations are conducted wholly by post, then in that case the hirer would have no means of knowing at all that he or she had cancellation rights if a salesman or an agent intervened in transactions. The whole of this protection depends upon the information given of the cancellation rights; but in this case, if it were done in this way, there would be no means of knowing. I think this is important. Personally, I do not know the extent to which salesmen and agents, other housewives and so on, working on commission, intervene in these cases, but I must say that I do not think that any strong prejudice can arise from this. Therefore, with regret, I feel that we must adhere to our rejection of this Amendment.

VISCOUNT HANWORTH

My Lords, as the Minister has considered this matter very carefully, I would not want to press it further. I beg leave to withdraw.

Amendment, by leave, withdrawn.

Clause 4 [Information as to right of cancellation]:

LORD DRUMALBYN had given Notice of an Amendment to add to subsection (2): find as if, in paragraph (dd) of the said section 2(2) and in paragraph (cc) of the said section 3(2). sub-paragraph (i), and in subparagraph (ii) the words 'in a case not falling within the foregoing sub-paragraph', were omitted.

The noble Lord said: My Lords, I beg to move Amendment No. 15A. May I start by drawing attention to a typographical error? The first word to be inserted is not "find" but "and". That will probably make more sense of the Amendment. In formally moving this Amendment I should like to speak also to Amendment No. 33A. These two go together—indeed, No. 33A contains the substantial provisions.

When your Lordships were considering the Bill on Report on January 30 an Amendment was carried to Clause 3, page 3, line 29. Looking back over the discussion, I think it is fair to say that the main concern expressed by noble Lords was that a person who signed a document which was, or might become, a hire-purchase or credit-sale agreement should immediately have a copy of it to retain, regardless of his entitlement to receive a further copy at a later stage. The noble Lord, Lord Peddie, challenged me to say whether or not I accepted this principle, and when I said that I reserved my position he pressed his Amendment to a Division. But I think that was the main point; I do not think there is any dispute about that.

Although the Amendment under discussion referred to cases where the cooling-off provisions apply, a good deal of what was said would be equally valid in the ordinary case—where, for example, the hirer signs the document at a shop. Indeed, when the same Amendment was discussed during the Committee stage such cases were specifically mentioned—in particular, I think, by the noble Baroness, Lady Burton of Coventry, who has been good enough to apologise to me for not being present this evening. If noble Lords will forgive me for saying so, the Amendment as carried would be ineffective, since it provides that the hirer shall "retain" a copy of the document. The intention, of course, is that a copy should be given to him. This is a matter of drafting. It is therefore, in any case, necessary for there to be some redrafting. In accepting the principle, we have felt that it should be applied to all cases. We have therefore produced Amendments to do that. The intention, as your Lordships are aware, is to complete the Report stage to-day and to take Third Reading on Thursday; and, if we had tabled these Amendments for Third Reading, the result would have been that they would have appeared on the Order Paper for the first time on the day on which they were taken. I do not think the House would have considered that satisfactory, and I have therefore put them down for to-day, although in consequence Amendment No. 33A appears later in the Bill than it will when it is in its proper place. But my intention is not to ask your Lordships to decide on these Amendments to-day. If your Lordships please, I will explain briefly what they do and will then seek permission to withdraw them. I will then put the Amendments on the Paper again for the Third Reading.

Amendment No. 33A contains two subsections which deal in the same terms with hire-purchase agreements and with credit-sale agreements. It seems to us that there are three circumstances to be provided for. The first is, in effect, the case where the document is signed at a shop by all parties and the statutory copy is handed over there and then. In these cases no additional copies are necessary. Secondly, there are cases where what is handed to the hirer to sign is an offer which will become an agreement if accepted by the other party. In these cases we provide for him to be given a copy of what he has just signed, which I think is the intention the noble Lord, Lord Peddie, had in the case of cooling-off agreements. Thirdly, there is the possibility that the document may be sent through the post to the hirer. In these cases we provide that a copy must be enclosed. These three cases, then, are covered in sub-paragraphs (i), (ii) and (iii) of each subsection of the new clause. As in the case of other similar requirements in the 1938 Act, failure to comply with these provisions renders the agreement unenforceable, but the court has a power of dispensation to exercise where it considers that the hirer has not been prejudiced.

Amendment No. 15A, which we are now considering, makes clear that the first category of which I spoke—the case where the statutory copy is handed over at the time of signature—cannot arise where the right to a cooling-off period is applicable. Your Lordships will remember that in those cases a statutory copy must be sent through the post; so in a cooling-off case, even if the salesman is empowered to sign for the owner or seller, and the agreement is completed on the doorstep, one copy will be left with the hirer but the statutory copy will still have to go through the post drawing the hirer's attention to the cooling-off right and starting the time running within which he can still exercise it.

I said earlier that I thought the discussion on the Amendments carried on January 30 centred on the question of giving the hirer a copy of what he signs. The Amendment, in fact, went further, and required that that copy should contain the name and address of the person to whom cancellation may be delivered and to whom the goods may be returned. I suggest that this is a separate matter and should be looked at on its own merits. There are a number of Amendments down to the various provisions governing cooling-off right, and there are some respects in which these provisions might be improved, although we have not been able in the short interval since Committee stage to work out Amendments to meet them. I feel, however, that we must not lose sight of the main purpose of these provisions, which is to provide a simple way in which a person who has been browbeaten by a visiting salesman can later withdraw.

We were at pains, in drafting the Bill, to ensure that this right would be simple to exercise and easy to understand; that it should offer salesmen as few chances as possible of circumventing, and, in particular, that it should come to the hirer's notice, in terms that we shall prescribe at a time when the salesman is not there. I suggest that there is no difference of intention between us. It would be prejudicial to the hirer if part of the information, and the most vital part, were contained in the document handed to him by the salesman. The vital part is, first, whether he has the right, and secondly, the effect of his exercising that right.

I have not covered those aspects in the Amendments I have placed on the Order Paper which, if carried, would also involve the reversal of the Amendment carried on January 30. We are prepared to try to improve the cooling-off provisions, if we can; but I hope that when I offer to deal effectively with the point which I believe led the majority of your Lordships to vote as you did, it will be accepted that the question of notifying a hirer of how he can make a cancellation, and what to do if he does, will be dealt with in the context of the mechanism of the safeguards as a whole. I do not know whether your Lordships wish to discuss now the Amendments on the Order Paper or whether you would prefer to consider them between now and the next stage. I am in your Lordships' hands; but I will either withdraw now or, if your Lordships wish to comment on them, later. I beg to move.

Amendment moved— Page 5, line 15, at end insert ("and as if, in paragraph (dd) of the said section 2(2) and in paragraph (cc) of the said section 3(2), subparagraph (i), and in sub-paragraph (ii) the words in a case not falling within the foregoing sub-paragraph,' were omitted.").—(Lord Drumalbyn.)

LORD PEDDIE

My Lords, I appreciate the noble Lord's attempt to explain to the House the circumstances concerning the two Amendments appearing in his name, and particularly No. 33A. I appreciate, as I am sure the House will, the opportunity to defer the detailed discussion on these two Amendments until later when we have had full time to consider all the implications. I would at this stage make it quite clear that this House had no doubt at all about what it was voting on earlier when it voted on Amendment No. 12. While it is true that emphasis was given to the point regarding the leaving of a copy of the agreement, at the same time noble Lords clearly understood the other part of that Amendment, which related to the duty to give the particulars of the name and address of the person to whom cancellation might be delivered and to whom the goods might be returned. That is what we voted on. My first rapid glance at Amendment 33A does not seem to show there is any reference at all to the name and address of the person to whom the goods should be returned. However, I appreciate the offer to the House to discuss this question in more detail at a later date.

LORD SHEPHERD

My Lords, I agree with my noble friend that we should consider this point on Third Reading; but I am sure the House will recognise our difficulty. When we reach the Third Reading then, so far as we are concerned, we have come to the end of the road and there is nothing further we can do about it. The noble Lord said that we should make it clear to the prospective hirer what are his rights. We are all agreed on that. But I am sure the House will recognise that, having given the rights, we must find some way in which the prospective hirer can carry out and have the full effect of those rights. It seems to me that these words which we have drafted into the Bill, by the vote on Amendment No. 12, must be somewhere included in the agreement.

What I have in mind is this: that there may be hire purchase companies that take fourteen to twenty-one days before they return the requisite copy. Presumably, that copy would have details, in the case of the cooling-off period, of the person to whom cancellation can be made or the goods returned. But I should have thought that the prospective hirer would be in a very difficult position. He has been forced to retain the goods against his will, perhaps, for quite a long time; he may have been using them. He would be under considerable moral pressure to retain the goods and let the hire-purchase agreement go through merely because those goods have been left in his premises. I think we must make the position quite clear in the agreement that if the man wishes to effect cancellation he shall have the information to carry out that intention and to return the goods to the dealer or the owner. I beg the Government to consider this point favourably between now and the next stage.

LORD AIREDALE

My Lords, may I put forward a suggestion for a small drafting Amendment of Amendment No. 33A? Paragraph (i) which it is proposed to insert in Section 2(2) uses the expression "there and then". I doubt whether this is an expression known to the Statute Book so far. It seems to me to be a colloquial expression. Surely, the equivalent expression in Statute Law is "thereupon". I feel we should not unnecessarily extend the vocabulary of the Statute Book, and that we should stick to time-honoured expressions whose meaning is known to everybody.

BARONESS ELLIOT OF HARWOOD

My Lords, I should like to thank the Minister for having put down these two Amendments in order to meet the wishes of the House. Like noble Lords opposite, I have not had very long to look at them; they are complicated, but they seem to a considerable extent to fulfil the wishes of noble Lords when they voted last week. I hope it may be possible to do what the noble Lord, Lord Peddie, mentioned in his Amendment—namely, to provide that particulars of the name and address of the person to whom cancellation may be delivered and to whom the goods may be returned shall be included in some part of the arrangements. I think it is a necessary thing. Whether it should come into the actual Amendment or not is a matter of drafting, so long as the purpose is in the Bill. I would thank the Minister for acting so speedily in this matter.

LORD HAWKE

My Lords, I am not quite sure whether there is a time limit for the return of goods; but we must remember that the return of goods too large to go by post can now be an extremely difficult operation in some parts of the country, because there will no longer be a railway station to which one can go and send them by passenger or goods train. Sometimes it will mean a lengthy journey to the nearest centre and, owing to this, it is not always possible to return them in a short time.

LORD DRUMALBYN

My Lords, I should like to deal with the last point first. It gives me the opportunity to clear up a misunderstanding now. It cannot be said too often that there is no responsibility, no duty, on the hirer to return the goods. The normal course will be for the dealer to come and collect the goods. So, while my noble friend Lord Hawke may be on a good point about a time limit, it would not be a time limit for the hirer to return the goods, though there may be something to be said for a time limit within which the dealer should take the goods back.

I think it would be desirable that, when we part from this Bill in your Lordships' House, it should be in a respectable form; that is to say, it should not have any obvious flaws in it. One of the difficulties which, I am afraid, I could not get over is that, even if we thought it desirable to implement the second part of the Amendment that was carried into the Bill last Thursday— that is, that the copy agreement should contain particulars of the name and address of the people to whom goods may be returned—we are not in a position to prepare an Amendment in time; so that, if your Lordships agree, it is something we shall have to allow the other place to consider. There is no means of accepting the principle of this.

In Clause 6 we are going on to consider this very point, admittedly not with regard to the inclusion in the copy, but with regard to the whole complex of what happens if a contract is frustrated and things have to be put back as they were, and I do not think that we need spend more time on this now. With that short explanation, I hope that it will be your Lordships' pleasure that this Amendment should be withdrawn.

Amendment, by leave, withdrawn.

LORD DRUMALBYN

My Lords, during the Committee stage of the Bill, I promised the noble Lord, Lord Airedale, that we would look again at the powers to make regulations given to the Board of Trade under Clause 4 of the Bill, with the object of making sure that the powers were wide enough to enable the Board to prescribe that the copy of the agreement, which must be sent to the hirer or buyer, must draw attention to his rights and liabilities under Clause 6. This Amendment, and that to line 37, make sure that our powers will enable us to do this, if we think it desirable. I hope that this will satisfy the noble Lord and that, in the light of these Amendments, he will not feel it necessary to move his Amendment No. 32A.

Amendment moved— Page 5, line 23, after ("to") insert ("or consequential upon").—(Lord Drumalbyn.)

LORD AIREDALE

My Lords, I am very grateful to the Minister and I will give practical expression to my gratitude when we come to Amendment No. 32A by not moving it.

On Question, Amendment agreed to.

6.45 p.m.

LORD PEDDIE moved, in subsection (3,e), after "sent" where that word occurs the second time, to insert: and the name of the person to whom, and an address to which, the prospective hirer may deliver the goods under section 6 of the Hire Purchase Act 1963,".

The noble Lord said: My Lords, I may be in some difficulty in moving Amendments Nos. 17 and 19 together, because I am not certain whether the Minister has accepted the principle involved in these Amendments. I was hoping that I might be in a position to withdraw these two Amendments. Judging from what was said a few moments ago, it would appear that I cannot. If your Lordships will refer to Clause 4, you will see that it deals with information about the right of cancellation. As we have said repeatedly from this side of the House, in the fulfilment of cancellation, there is need for the hirer to receive the fullest possible information and the inclusion of the words in my Amendment makes it easier for the hirer, after he has exercised the right of cancellation, to know the name and address of the person to whom the goods should be returned. This is important, because the person to whom the goods may be sent is not necessarily the same person as the one from whom the hirer had acquired the goods.

When this was discussed at Committee stage, the Minister, in objecting to the Amendment, said that there may not be a copy of the agreement in existence before the right is exercised. Now, of course, that argument no longer stands, because the House agreed to an Amendment whereby a copy of the agreement would be left with the hirer at the time of signing and this copy would include the name and address of the person to whom goods would be returned. Therefore, the House has already accepted the principle which is involved in this Amendment and in No. 19.

The second point which was made at Committee stage was that there was no obligation on the hirer to return goods to any particular place. Indeed, the noble Lord repeated that statement a few moments ago. I agree with that statement, but I would point out that in Clause 6(1) it is stated that the hirer may at his own expense redeliver the goods. Therefore, if the conditions are such as to justify the return of the goods, why in heaven's name refuse to allow the name and address of the person to whom the goods should be returned to be inserted so that the hirer may exercise the right given him in Clause 6(1)? There is a further Amendment dealing with this point. I hope that the Minister will accept these two Amendments, an act which I am sure will be welcomed by this House, because the principle involved here has already been decided by the House when it agreed to accept Clause 12. I beg to move.

Amendment moved— Page 5, line 27, after "sent" insert the said words.—(Lord Peddie.)

LORD DRUMALBYN

My Lords, first of all, may I say again, because I think it is particularly relevant to this Amendment, that when a hirer serves notice of cancellation under the cooling-off provisions he is thereby under no obligation to take action himself to return the goods. For this reason, there is no need, from his point of view, for a person to be nominated in the copy agreement. As I have said before, what we would normally expect is that the dealer who supplied the goods would collect them again from the house of the prospective hirer. This is provided for in Clause 6(1)(b). But we also felt that it was necessary to provide for the case where goods were left by the salesman and where the hirer's immediate and natural reaction was to take the goods straight back to the dealer.

The noble Lord, Lord Shepherd, pointed out that in some cases there would be no local dealer, but surely, in such cases, the hirer will simply keep the goods until they are collected, particularly in cases where it is too much trouble to pack up goods and return them. So to insert in the statutory copy of the agreement the name and address of the person to whom the goods may be returned could easily confuse the hirer. I would ask your Lordships to appreciate this.

There are two quite distinct cases to be considered. One is where the goods have been left by the salesman, and the other is where the salesman has simply taken an offer to acquire the goods on hire-purchase and the goods are to be delivered later. There is no point, surely, in specifying in the agreement the name of the person to whom the goods can be returned if the goods have not been delivered before the cooling-off period I elapses. In many cases the goods will not have been delivered before the copy of the agreement arrives, and to insert the name and address of the person to whom the goods can be returned could confuse him in one of two ways: either he might think that, even although he had not exercised his rights under the cooling-off provisions, he had the right to return the goods when they were delivered later on—and he would be wrong about that—or, if the goods had been delivered before he received a copy of the agreement and when he received the copy of the agreement he exercised his right to cancel within four days, he might feel obliged to return the goods at his own expense. By putting this in, it puts excessive emphasis on that point.

I would ask noble Lords to appreciate that this particular subsection is an important one, because it adds an additional paragraph to subsection (2) of Section 2 of the principal Act, which gives the circumstances in which the owner cannot enforce the agreement against the hirer. So it is a matter of great importance. It is going to make the thing unenforceable if he does not do it. Is it right to make it unenforceable in circumstances where it is not even applicable? As I pointed out, in many cases it would not be applicable. Therefore, I do not feel that this would be the right way to deal with it.

The noble Lord says that we have already carried into the Bill a provision dealing with this matter; but, as I pointed out when we were discussing that provision, there is no way of enforcing it at all. Here he is putting this into a slightly different provision—a provision that into the copy of the agreement when it is sent there should be this information—and he is making the whole agreement unenforceable if that is not done. That seems to me to be an extraordinarily extreme thing to do. After all, even if in inserting this information in the copy which is left, if it were desirable to enforce that, it would not by any means be necessary to enforce it by making the agreement itself unenforceable if that were not done. These things are not on a par at all, and I think it would be unwise for the Opposition to press this point, bearing in mind that they are pressing something which in many cases is not applicable.

LORD SHEPHERD

My Lords, the noble Lord has referred to "the Opposition": I hope he will think again on that word. This is not the Opposition speaking. This is not a Party matter. We are looking at this Bill united on all fronts in the interests of those who take part in hire-purchase transactions.

LORD DRUMALBYN

Would the noble Lord accept an amendment to that expression? I was thinking of noble Lords opposite rather than the Opposition.

LORD SHEPHERD

Quite. I hope my noble friend will press this Amendment, because I think it is of considerable importance. In Clause 6 it says: The prospective hirer may at his own expense deliver the goods to the dealer at any relevant premises. The reason why we feel that the prospective hirer, when he has cancelled his hire-purchase agreement, should be able to return the goods is, as I said on an earlier stage, the sort of advantage the hire-purchase company might have over him because the goods had been retained in his premises for some time. There is the other point: that the longer the goods remain in the hirer's home, the greater are the opportunities of damage to them. As we lay upon him in Clause 6(2) a responsibility to pay damages that may arise, it may well be that the hirer, in his own interests and also those of the owner, having decided that he is not going to proceed with the agreement, will say: "Please take the goods away"; and if they will not take the goods away, at least he can deliver them himself. If the Government do not accept this Amendment and the hirer has no knowledge as to whom he can return the goods, we shall be limiting the cooling-off period of four days. The noble Lord shakes his head, but that is the period.

LORD DRUMALBYN

We are now considering a different point. We are considering the copy of the agreement that is sent through the post, not the copy of the offer which is left in the first place with the hirer.

LORD SHEPHERD

But is it not a fact that the cooling-off period starts from the day on which the requisite copy is received by the hirer? That is my understanding of the cooling-off period. It may well be, as it now is, that the hirer may have 7, 10, 14 or 21 days before he receives the requisite copy, according to the time which the hire-purchase company may take in delivering the requisite copy. I should have thought we ought to make it possible for the hirer who decides to cancel the agreement to be able to operate and return the goods during that period, and he should not have to wait until he receives the copy with the information before he returns the goods. I feel that there is a strong case here. It is not, as I say, a Party matter. We are all acting, I am sure, in the interests of the hirer and the hire-purchase company. I believe that if this information is available to the hirer it will be for the benefit of the hirer and also of the hire-purchase company.

LORD AIREDALE

My Lords, I think the principle of this Amendment is well worth fighting for. There must be many classes of people who would much rather return the goods to the dealer if only they knew clearly where they should take the goods. There are people on night duty who do not want to be knocked up during the day by a dealer coming in to collect the goods. There are students and unmarried people who go out to work, from whose homes no dealer would be able to recover anything, because they are never at home during business hours. These people ought to have every opportunity to return the goods to the dealer, and should be clearly told where the dealer lives so that they may do so.

LORD CHAMPION

My Lords, while agreeing with my noble friends and with the noble Lord, Lord Airedale, on this matter, the last thing I want to see happen is the onus being placed on the hirer to return the goods, because that might raise a number of difficulties, such as that of packing, which was mentioned by the noble Lord. I think there is something in what my noble friends have said; but if we accept an Amendment of any sort, I hope we shall not place the onus on the hirer to return the goods.

LORD HAWKE

My Lords, I think it would be clear—admittedly I have had to read this clause once or twice—if we inserted at some stage of the Bill that the prospective hirer or buyer may return the goods, if he wishes, at his own expense; and paragraph (b) goes on to say that if he does not choose to do so the dealer has to pick them up. Surely the principle in general is a sound one. If you entered into a transaction and have regretted it, and the law allows you four days to decide whether you regret it or not, surely the sooner you are quit of the goods the better. I heartily support the idea that a man should know where to send the goods back should he exercise his right to cancel the contract.

7.0 p.m.

LORD DRUMALBYN

My Lords, by leave of the House, may I say just a word about this, because I want to clear up what I think is still a misapprehension here? We were talking on Thursday about the copy of the offer which is left originally with the hirer, and it was suggested that the name and address of the person to whom the goods could be returned should be included. I think that was the intention. I am not certain that the Amendment does that. Now the noble Lord talks about the delay before the requisite document may arrive. That does not arise on this Amendment; it arises on the Amendment we were talking about which has already gone into the Bill. On this Amendment, there are the four days for cooling off, and then it is for consideration whether or not after that the words that should be added to this clause should be put in and the place specified to which the hirer can return the goods, whether it is in the copy of the Agreement or not. That is the point at issue.

Noble Lords may be on quite a good point here: that there should be some time limit within which the goods should be collected. That is arguable, and is one of the points we are looking at. But it is not what the Amendment says here. In the normal way, it will be for the dealer to collect his goods. We have given the hirer the facility of returning them in order that he may be absolutely in order in returning the goods to the dealer, otherwise it might be considered that he had returned the goods to the wrong place, or something of that sort. The main purpose is, first of all, to let him take the goods back to the dealer if they are portable and easy to get rid of, and he wants to get rid of them, but also to ensure that he is in order in taking the goods back to this particular person. It is quite a different thing to insert into the agreement the name and address of the person to whom he can return the goods, because we feel it would be very misleading to him. In so many cases he will not at that stage—the operative stage when he receives the copy of the agreement—have the goods at all.

LORD PEDDIE

My Lords, I am quite sure that the majority of your Lordships will agree that the reply we have heard is quite unsatisfactory. The noble Lord opposite, in replying to the points which have been raised, has ranged well beyond Amendments Nos. 17 and 19, and much of what he had to say related to Amendment No. 21. The position is quite clear. The principle enunciated in these two Amendments has already been accepted by this House. In my opinion, it is wrong to argue that there would be extraordinary legal difficulties in implementing this Amendment. The noble Lord made reference to the fact that there is no obligation to return the goods. We know that, and that statement has no bearing at all on the arguments that are being advanced in support of these Amendments. The Amendment merely indicates that if the hirer wishes to return the goods he will have in his possession the name and address

of the person to whom they should be returned.

One can appreciate the importance of this Amendment, which I am quite sure the noble Lord opposite does not. There can be circumstances where the door-to-door salesman—against whom much of this Bill is directed—could be taking round with him equipment of some kind, maybe electrical equipment, which he leaves with the hirer. The noble Lord made a point about the hirer having a copy of the agreement, and later having a copy of the document which will date the time of the four-day cooling-off period, but it may be considered in the interests of the agent not to collect after cancellation, in order that he may be able to go back at some time and persuade or coerce that individual hirer into renewing the agreement. Therefore, the woman who is anxious to get rid of the goods needs the name of the person so that she can drop a short note and tell the person to collect them. The difficulties the noble Lord opposite mentioned are utterly beside the point. I would appeal to noble Lords to accept this Amendment, because they have already accepted it in principle in Amendment No. 12, which this House accepted. Therefore I have no alternative, in the interests of the Bill, but to press this Amendment.

7.8 p.m.

On Question, Whether the said Amendment (No. 17) shall be agreed to?

Their Lordships divided: Contents 33; Not-Contents 34.

CONTENTS
Airedale, L. Forster of Harraby, L. Ogmore, L.
Albemarle, E. Gaitskell, B. Peddie, L.
Alexander of Hillsborough, E. Gardiner, L. Raglan, L.
Attlee, E. Grenfell, L. Shepherd, L. [Teller.]
Auckland, L. Hanworth, V. Somers, L.
Burden, L. [Teller.] Hawke, L. Stonham, L.
Champion, L. Henderson, L. Strabolgi, L.
Colville of Culross, V. Hobson, L. Summerskill, B.
Crook, L. Lawson, L. Taylor, L.
Elliot of Harwood, B. McNair, L. Walston, L.
Ferrier, L. Milner of Leeds, L. Williamson, L.
NOT-CONTENTS
Ailwyn, L. Drumalbyn, L. Jellicoe, E.
Allerton, L. Dundee, E. Lansdowne, M.
Balerno, L. Effingham, E. Lothian, M.
Bessborough, E. Falkland, V. Mabane, L.
Blakenham, V. Ferrers, E. McCorquodale of Newton, L.
Bossom, L. Fortescue, E. Newton, L.
Conesford, L. Goschen, V. [Teller.] St. Aldwyn, E. [Teller.]
Coutanche, L. Greenway, L. St. Oswald, L.
Daventry, V. Hastings, L. Stonehaven, V.
Denham, L. Horsbrugh, B. Swinton, E.
Derwent, L. Iddesleigh, E. Teynham, L.
Dilhorne, L. (L. Chancellor.)

Resolved in the negative, and Amendment disagreed to accordingly.

LORD DRUMALBYN

My Lords, the next Amendment is consequential. I beg to move.

Amendment moved— Page 5, line 37, after ("to") insert ("or consequential upon").—(Lord Drumalbyn.)

On Question, Amendment agreed to.

Clause 6 [Rights and obligations on service of notice of cancellation]:

7.16 p.m.

LORD PEDDIE moved, after subsection (1)(a), to insert: (b) the prospective hirer or buyer may send a notice in writing to the owner or seller, or to the person specified in the requisite copy as being the person to whom the goods may be delivered, requesting such person to take delivery of the goods (subject to subsection (4) of this section and subsection (3) of the next following section) at the premises which, in the relevant document, are specified as the address of the prospective hirer or buyer;".

The noble Lord said: Paragraph (a) in this clause of the Bill refers to the fact that the hirer—we have already had some little discussion on this matter—may return the goods to the dealer at his own expense. Paragraph (b) says that if he does not deliver he shall be under an obligation, at the request of the dealer, to deliver the goods to him at premises specified as the address of the prospective buyer or hirer. In other words, the dealer can instruct the hirer from whom he intends to collect the goods. The new paragraph suggested in this Amendment deals with a circumstance that is not covered in the two paragraphs. There may be the circumstance—and, indeed, I have already referred to this when speaking on a previous Amendment—where the owner or the agent may not ask for the return of the goods and the hirer may not be able to deliver. This new paragraph asks for the right of the hirer to call upon the owner or seller to collect the goods. There are obvious benefits which could arise from this, benefits that we have already considered, to enable the hirer to indicate to an owner the need for those goods to be collected. I indicated at Committee stage the possibility of such a provision for a request being useful so far as possible litigation is concerned. The noble Lord opposite was not prepared to accept that suggestion, but now I am confident that I am right that in these circumstances there could be occasions when the possession of a copy of the letter requesting the collection of those goods that are deliberately left with the hirer could be an advantage to the hirer himself. I beg to move.

Amendment moved— Page 6, line 37, at end insert the said paragraph.—(Lord Peddie.)

LORD DRUMALBYN

My Lords, the point that the noble Lord has made has some substance, in that it might be that for one reason or another the dealer left with the hirer for some considerable time the goods which he ought to have collected. It seems to me that that is very unlikely to happen. The dealer would, in those circumstances, almost be leaving the goods in order that they might be damaged before he collects them. As I said, it seems to me that it would be an extremely rare thing to happen. But the fact is that it may be required for the protection of the hirer that that should not be allowed to occur, because, obviously, the longer the goods stay there, the greater the likelihood is of damage. This factor is what we are looking at.

But I would submit, with great deference to the noble Lord, that the Amendment he has here would be totally inoperative. He says the prospective hirer may send a notice. Of course he may send a notice. That does not give him a right he has not got. He can send a notice at any time. If he does send a notice, what happens if the dealer does not comply with it? All these questions have to be considered, and they are not actually set forth in the Amendment. The Amendment does not even say that the owner or seller or person to whom the goods are delivered shall comply within a certain time. We are inclined to think that there is a problem here, but we are not certain that this is the right way to deal with it. We intend to deal with this in some way or another before the further stage.

LORD PEDDIE

My Lords, that would indicate that the noble Lord has accepted the principle and has paid us the compliment of agreeing that there is a valid point expressed in this Amendment. With that assurance, I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

7.22 p.m.

LORD PEDDIE moved, in subsection (1)(b), to leave out "request of the dealer" and insert: written request of the owner or seller or any person who is the agent of the owner or seller".

The noble Lord said: My Lords, if I may, I will deal with numbers 23, 24 and 25 together. These Amendments seek to delete reference to "dealer" and replace it with the term "owner or seller or any person who is the agent of the owner or seller", because we believe there is no precise definition of "dealer" in the Bill. It is true there is a definition in subsection (7) of Clause 6, but I am advised it is not precise enough. There is no doubt that under normal hire-purchase and credit sale conditions the dealer will not be the legal owner of the goods. Therefore, there is a possibility that Clause 6(2) may have the effect of the imposition of a dual obligation on the consumer for any damage to the goods, because it is true that according to Common Law principles only the owner or the person having a right of possession is treated as suffering loss by the fault or negligence of some other party. What is more, under this subsection the hirer could conceivably return the goods to the wrong person or even be misled by a person calling himself the dealer who has no legitimate claim. In those circumstances the hirer would be liable. Therefore in this Amendment we emphasise the importance of the written request. Amendment 25 merely states that this request should be in writing with an indication of the date and time. I beg to move.

Amendment moved— Page 7, line 1, leave out ("request of the dealer") and insert the said new words.—(Lord Peddie.)

LORD DRUMALBYN

The noble Lord has raised doubt about the definition of "dealer". We will certainly look at that, in view of the advice he has received, to see whether it is satisfactory or not. I should like to make this first point. The object of this clause is, where there is cancellation, to put things back exactly as they were; that is, the goods that came from the dealer go back to the dealer, the money advanced by the hirer goes back to the hirer, and so forth. The whole object of the clause is to put things back where they were. The noble Lord says the dealer will not necessarily be the legal owner of the goods. As to what happens to those goods, this is a matter to be unscrambled between the dealer and the owner. In some cases it might be the same person; but at any rate it is a matter to be settled there. The right thing, obviously, is for the goods to go back to the dealer. The finance house will not want to have a grand piano, for example, dumped in the middle of its premises. That is the object to be achieved, and we think this is the best way to achieve it.

The noble Lord says that there should be a written request, because otherwise the hirer could be misled. But, of course, a written request in itself would not be foolproof, and we doubt whether there is much reason for this. The probability is that the same person who delivered the goods in the first place will come along and pick them up again. Certainly that is a possibility, and in any case it will be the same firm that will be doing it. One cannot avoid fraud altogether, and I do not think the noble Lord's provision would avoid fraud or avoid misleading the consumer in every possible case. We think the written notice in all cases is quite unnecessary. I do not know whether I have dealt with all the points the noble Lord has raised. We do not consider this is a matter of very great importance, but we do think it should be quite clear that the person to whom the goods are returned is the dealer, and not the owner or seller or a person nominated by the owner or seller. The goods should be returned to the dealer, so as to put the transaction back as it was in the first place.

LORD SHEPHERD

My Lords, the noble Lords says that what we want to do is to put things back as they were before the hirer received the goods. But we may not at this early stage of the cancellation be able to effect that, because there may have been a deposit paid or even goods taken in part exchange. Later on in the Bill it says that the hirer, if he has not received the return of goods given in part exchange, or the deposit, should retain the goods under the agreement as a lien on the deposit or on his goods. I am rather worried about the case which I quoted in Committee stage of the possible dealer or owner coming at short notice, walking into the house and taking delivery of the goods. I am glad to see the noble and learned Lord the Lord Chancellor is present. My understanding is that if the dealer were able to obtain entry into the house he could then seize and recover the goods, and although the hirer would be able to protest he would not be able to refuse the dealer the right to take the goods, because he had obtained entry. If that is the case, it would seem to me that we want to put the hirer into the position that he receives at least a written notice to the effect that the goods are going to be recovered because of cancellation. That would give him an opportunity, if he has a deposit outstanding or has not had the part-exchange goods returned, to decide whether he should hand over the goods to the dealer.

THE LORD CHANCELLOR

My Lords, I should like to add a word or two to what has been said about this Amendment. I must say I am attracted by the idea that one should retain the word "dealer", and I will give my reasons quite shortly. I know the word "dealer" is not defined, but the hirer will know perfectly well, I imagine, in the vast majority of cases, the person with whom he or she has been dealing. In relation to hire-purchase transactions a change of ownership may happen when possibly the hirer knows nothing about it at all, and if you take out the word "dealer" and put in the words proposed "owner or seller", then it seems to me you may be creating difficulty for the hirer because she may not know who under the hire-purchase transaction is the real seller or owner at any particular moment. Nor, indeed, is it the case that the dealer is necessarily an agent of the owner or seller. Therefore I should have thought that from a practical point of view there was considerable advantage in leaving the word "dealer" where it stands.

With regard to the point the noble Lord made about a case I have not heard raised before—of the dealer coming into the house, demanding the goods and taking them away with him—I should not have thought that that was a likely event. But if we insert the provision that a written request is required in all cases, then it means the dealer going round and calling at the house, possibly to inquire as to the attitude of the hirer, and finding from having a conversation with the hirer that the contract is not going to be carried on, and he will be prohibited then and there from saying, "Please can I collect the goods?" and taking them, because the hirer could say, "No, you cannot do that. You have come perhaps three or four miles, but you have not given me a written request to deliver up these goods to you. Therefore you had better go down the road and write it out on the back of an envelope, and you can come back and give it to me."

I am sure that my noble friend will again consider this point in regard to the written request; but so far as the word "dealer", as opposed to the words "owner or seller", is concerned, I should have thought there was real advantage in keeping the word "dealer" although I agree that perhaps it does not have the same precision as the words "owner or seller".

LORD SHEPHERD

My Lords, could the noble and learned Lord help me on this matter of law? Do you lose the lien on the goods if they leave your possession? If the goods get into the hands of the dealer, have you lost the lien? This is most important, because we are making provision here that the hirer shall have a lien on the goods until the deposit has been repaid or the goods which were put up in part exchange are returned.

THE LORD CHANCELLOR

I think it is right to say that you must have the goods in your possession in order to be able to exercise a lien upon them. This particular Amendment is not really dealing with that point, but with the form of the request made for the return, and by whom that request should be made.

7.33 p.m.

LORD CHORLEY

My Lords, may I just say a word on one or two points? If the Minister had practised in the county courts, as I did for many years, I do not think he would have attached the little importance that he has done to having written evidence of these matters. It is astonishing how easy it is to have a complete conflict of opinion as to what happened orally, especially when the dispute concerns a contract between a housewife and a hire-purchase salesman. They may give diametrically opposed accounts of what has happened. If the thing is in writing, then it is not a question of having to judge who is telling the truth—not because people necessarily wish to commit perjury, but because their memories are so inaccurate. I should have thought that anybody who had had much practical experience of administering the law would have been all in favour of trying to get something in the nature of a written account rather than to rely on oral testimony. It seems to me that the noble Lord's answer smacks of the bureaucrat sitting in his office, without any knowledge of what actually goes on in courts.

I think the noble Lord, Lord Shepherd, with Lord Peddie, made another good point when they said that it is easy in this sort of circumstance for the goods to be delivered to somebody who has no claim to them. The hire-pressure salesman is not necessarily the dealer, but he may well turn up and persuade the housewife, or a young daughter or son, or somebody who is there, to hand over possession of a dishwasher or sewing machine, or whatever it is. The noble and learned Lord on the Woolsack knows perfectly well that if you hand over personal property to somebody who has no right to it, that is the tort of conversion and you can be made to pay damages for it. It seems to me that this is a real danger here. The time of the courts is continually occupied with dealing with such problems in which people have, quite honestly and genuinely, handed over goods to somebody who was not entitled to them. This is an attempt to protect the hirer, and I am sorry indeed that the Government seem to be so "sticky" about acceding to it, because on both counts, the count of the written request and that of protecting against mistaken delivery, there is a strong point to be made.

LORD AIREDALE

My Lords, I agree with every single word that the noble Lord, Lord Chorley, has said. Surely the necessity for the dealer's request to be in writing is a most wise precaution, because otherwise the way is open for any fraudulent person, upon hearing that goods are due to be returned to a dealer, to ring up the hirer and say, "I am sending for the goods at eleven o'clock to-morrow morning". Thereby he may gain entry and get away with the goods. However, if the request from the dealer must be in writing, the fraudulent person has at least got to get hold of the dealer's headed notepaper, and that would probably be a sufficient obstacle to him.

The noble and learned Lord the Lord Chancellor took the point that it might sometimes be inconvenient because the hirer might stand upon his rights and refuse to hand over the goods to a dealer whom he knew and trusted, simply upon the ground that the dealer had not by then furnished the request in writing. I can only say that I do not think that that would happen in practice. If the hirer knew and trusted and recognised the dealer, he would be most unlikely to take the point, "You have not given me notice in writing. You must go down the road and write it out and come back again." I just do not believe that would happen.

VISCOUNT STONEHAVEN

My Lords, I find it difficult to see why a dealer should not do what many people do—namely, walk about with a duplicate book in his pocket. I always find, when giving instructions, that writing them in a duplicate book is a good method, and I should have thought that that would be quite a practical solution to a dealer who wanted to take away somebody's washing machine. At least he would give what amounts to a receipt for it.

LORD DRUMALBYN

My Lords, if I may sneak again on this point, I have been impressed by the arguments that have been put forward. I think that perhaps I was rather misled by the fact that these three Amendments were being taken together. I do not think there is a great deal of merit in the Amendment of the noble Lord, Lord Chorley, No. 25, but I think that a firm sending out a porter or a lorry-driver to collect goods would probably give him written instructions anyhow, and he could hand over those written instructions as credentials. I do not see that there is any particular reason why this should not be accepted in principle, from the point of view of the written request. But on the question whether it should be "owner or seller" or "the agent of the owner or seller", I can only, with respect, agree with the noble and learned Lord the Lord Chancellor, that we should stick to the word "dealer" as it is, and we will make provision for written requests in the Bill. I do not know whether it would be possible to do this in two days' time, but at all events we will carry this into effect.

LORD PEDDIE

My Lords, I appreciate the noble Lord's acceptance of our suggestion of a written request. I did not entirely agree with his argument with regard to "dealer", but, having heard the case he has advanced, and with his assurances, I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

7.40 p.m.

LORD DRUMALBYN

My Lords, I now move that the further consideration of the Bill on Report be adjourned during pleasure until 8.40 o'clock.

Moved, That the House do now adjourn during pleasure.—(Lord Drumalbyn.)

On Question, Motion agreed to, and House adjourned during pleasure accordingly.

8.40 p.m.

House resumed.

LORD CHORLEY moved, after subsection (1), to insert: (2) At the time when the goods are delivered in accordance with paragraph (a), (b), or (c) of the preceding subsection the owner or seller shall deliver, or cause to be delivered, to the prospective hirer or buyer a document acknowledging the receipt of the goods together with a statement of defects, if any, apparent upon visual examination of the goods.

The noble Lord said: My Lords, the point of this Amendment is to enable the hirer to get a statement with regard to any defects there may be. Obviously, this may often happen, and it seems that in a Bill which is designed to protect the interests of the hirer there should be some provision of this kind giving him protection of this sort. The question whether there is something the matter with the goods is often a difficult problem for a judge in a county court—or nowadays a judge in the High Court—to deal with. It is a common provision in commercial transactions, as the noble and learned Lord on the Woolsack will know, for example in connection with sea shipments where a bill of lading has to be delivered, for such statement to show whether or not the goods being loaded on to the ship are in good order and condition. This is of the greatest advantage to courts when faced with this problem, and it appears reasonable that there should be a similar sort of provision in order to protect the interests of hirer or purchaser under a credit sale agreement.

Amendment moved— Page 7, line 4, at end insert the new subsection.—(Lord Chorley.)

LORD PEDDIE

My Lords, common sense dictates that the owner or seller should give a receipt for goods, together with a statement of defects. I seem to remember the noble Lord opposite agreeing in Committee that the proposal itself was most sensible. He went on to say that it was entirely in accordance with good business practice, but presumably felt it undesirable to write such good business practice into the Bill. He also went on to suggest that, up to a point, people should be relied upon to protect themselves. If we accepted the logical outcome of that, there would be little need for a Hire-Purchase Bill.

I remember, too, that an objection was made that it would be ineffectual to put this requirement into the Bill unless in some way we made it a criminal offence not to give a receipt. But I suggest that there should be no legal difficulty in that respect. In fact, all this Amendment does is to establish a code of conduct, and, so far as I am aware, it is quite possible to establish such a code without necessarily introducing the idea of some penal offence. Here there are circumstances where a receipt and an indication of damage are important, because of the nature of the transaction. One can understand goods being returned under conditions where there is not likely to be a great degree of good will between the owner, on the one hand, and the hirer, on the other. In those circumstances it seems particularly obvious that a receipt should be given.

LORD DRUMALBYN

My Lords, I have listened with great interest to the two noble Lords who have moved this Amendment, and I note that what they really want here is a code of conduct rather than a statutory provision. But I doubt very much whether it is right to use the Statute Book for this kind of exhortation, as it were—because it would not amount to anything more than that—unless we make it a criminal offence, or attach some other sanction to the failure to give a receipt. I think a receipt is perfectly good business practice, but there are positive dangers in what is provided in this particular Amendment, because not only has a receipt to be given, but also a statement of the defects. Again, one may say that this is quite a reasonable provision, but a hirer pretending he had returned goods would say that the dealer refused to give him a receipt to start with; and, as I said before, a dealer pretending goods had not been returned would say that the hirer had been given a receipt and was concealing it.

But the real difficulty in this Amendment is in the statement of defects. There is a real possibility of a disagreement between the hirer and the person to whom the goods have been returned. They might disagree as to whether or not the defects were caused by the hirer, or as to whether or not they were the result of failure to take reasonable care; and they might also disagree on how much the actual damage amounted to. These, surely, are matters which must be decided by the courts and by the normal legal processes, if they arise. I should not have thought that simply to put down in an Act of Parliament that the normal business practice should be followed, without making it mandatory in any way to follow that business practice, was a particularly desirable procedure. I entirely agree that this is good practice, but there are plenty of things that are good in the world which are not made mandatory by law.

LORD PEDDIE

My Lords, I am encouraged by the fact that the Minister has indicated that this is good practice, and I should think it was good practice on our part to seek, as far as possible, to incorporate in the Bill all things that are good practice. I am not quite clear whether or not the noble Lord opposite is accepting this Amendment in principle. Apparently he is not keen on accepting the provision regarding the statement of defects, because of the possibility of disagreement. Surely, if there is a possibility of disagreement—and I endorse that there is that possibility—it is in consequence of the condition of the goods. If the noble Lord opposite is using as an argument against this Amendment the fact that there will be considerable disagreement on the question of the estimate of damage, surely that, in itself, is a justification for acceptance of the Amendment.

THE LORD CHANCELLOR

My Lords, I should just like to say a word upon this Amendment, although I cannot claim much longer acquaintance with it than the noble Lord, Lord Chorley. I would ask the noble Lord, Lord Peddie, to consider again the position with regard to the requirement that there should be a statement of defects, because I must say that I can see that requirement operating to the disadvantage of the hirer. As I understand it, there is no criminal sanction or any other sanction to require the dealer to give this statement of defect, and if the hirer thinks it is in, it may well operate as something in the nature of a trap to him.

Take the case where the hirer has damaged goods—I am not concerned, and the Amendment is not concerned, with what has been the cause of the damage, but damage which is apparent upon a visual examination of the goods—and where the hirer says to the dealer who has come to collect the goods, "Please give me a statement admitting that there are these defects". No doubt a very honest businessman would do so; but there are other cases. What happens if the man refuses? He cannot be compelled to give a statement; and then, when the matter goes to court, he is able to say, "I saw the goods; I was asked for a statement; there were no defects and I therefore did not give it. The defects must have arisen thereafter; the goods were perfectly all right". The fact that a hirer had not obtained a statement of defects, although he might have asked for it, might well operate to his prejudice in subsequent court proceedings. I would therefore suggest to the noble Lord, in all seriousness, that if there is going to be a dispute on the question of whether or not the goods were returned in a damaged state (and, as the noble Lord, Lord Chorley, has said, disputes on questions of fact do arise in a county court, and the judge has to make up his mind who is telling the truth), then the absence or presence of a statement of defect is a complicating factor and might, in a number of cases, operate to the disadvantage of the hirer.

May I give another instance? Suppose the hirer says that the goods have defects, but not knowing the Bill as well as the noble Lord, Lord Peddie, does omits to ask for a statement of defects. Eventually, she might be asked in court by counsel for the dealer, "You say these goods were damaged. Did you ask for a statement of defects?" If her answer is "No", it might well prejudice her. Therefore I would suggest to the noble Lord, in all seriousness, that, although I fully appreciate that his object is to try to avoid unnecessary disputes in the courts—an object with which I sympathise—it would be much better not to press this Amendment, so far as it relates to statements of defects, because I can see that in many cases it might operate to the disadvantage of the hirer.

LORD PEDDIE

I am glad the noble and learned Lord who sits on the Woolsack is in sympathy with the object that lies behind this Amendment, but in arguing the case against myself I think he poses a situation that is hardly likely to arise. He indicates a situation where the hirer is asking the owner who is collecting the goods to make a statement of defects. That is not likely to arise. It is more than likely that you could have, in normal circumstances, an owner collecting goods, taking them away and then, later on, declaring that there are defects in the goods that he has collected. I suggest that this Amendment would indicate that, if there are any defects which are observed by the owner when he collects the goods, it should then be his responsibility to indicate, at that point, what those defects are, rather than to leave it until a later date, when there will be disputation, when there will be court proceedings, probably over the declaration by the owner that there were defects in the commodities which were not declared at the time the goods were collected. Far be it from me to cross swords on matters of law with the noble and learned Lord who sits on the Woolsack, but I would argue in terms of logic and in terms of common-sense. There would be considerable advantage in a person giving a receipt and, at the same time, an indication of defects, if defects there should be. However, I gather from the observations that have been made that the point which lies behind the Amendment has been taken, and I beg leave to withdraw it.

Amendment, by leave, withdrawn.

LORD GREENWAY

My Lords, may I ask why the Opposition have all these Amendments down? They are not moving them—

LORD AIREDALE

My Lords, may I interrupt the noble Lord to suggest that the noble Lord, Lord Chorley, be empowered to move his Amendment?

LORD CHORLEY

My Lords, I am trying to move the Amendment that stands in my name. I do not think the noble Lord, Lord Greenway, observed that I was on my feet. This is an Amendment to Clause 9(5) which is concerned with the position of the parties at Common Law, not under the obligations imposed by this Bill. The Amendment is to add to subsection (5): It shall, however, be lawful for the Owner or the Seller to require the hirer or buyer to deliver or post any notice rescinding the agreement (not being a notice of cancellation) to the Owner or Seller at a specified address provided that—

  1. (a) the Statutory copy of the agreement shall have already been sent to the hirer or buyer;
  2. (b) both this requirement by the Owner or Seller and the address to which the notice rescinding the agreement must be delivered or posted shall be clearly stated on both the hire-purchase or credit-sale agreement and the statutory copy thereof;
  3. (c) the Owner or Seller shall not have previously authorised any other person who conducted antecedent negotiations to collect and receive instalments on behalf of the Owner or Seller."
There may be in connection with the transaction accusations of misrepresentation and matters of that kind in connection with the goods which are the subject matter of the hire-purchase contract; and it is very important that the finance company, the owner of the goods, who is in law selling them, should know of these. As the Bill stands they merely have to be brought to the notice of the dealer, who no doubt is the person actually responsible for them. But there are two important considerations which unfortunately I was not able to bring to the notice of the Minister at the time this matter was before the House in Committee because I did not arrive here in time.

But in the first place it may well be, and I think it very likely, that a dealer who is being backed financially by a finance company will be very loth to bring the fact that accusations of misrepresentation and, quite possibly, fraud are being made against him to the notice of the finance company, which nevertheless in law will be responsible for him. Obviously it might very seriously upset the relationship between the two; and, not only from the point of view of the finance company but from the point of view of the hirer, it may be very important at an early stage that the person legally responsible, the finance company, and the hirer should be brought into contact with each other so they may reach some solution for the dispute and will know where they stand if the matter has to be brought before a court of law. Therefore it seems proper that the owner, the finance company, should have the right provided by this proposal to have the matter brought to its attention.

However, there is also the possibility, which I understand arises not infrequently in this sort of transaction, that the finance company and the dealer may part company after a short time. The finance company may find that the dealer is not behaving in the sort of way which appeals to them, or it may be that the dealer does not like the finance company and prefers to deal with some other company.

The type of complaint which is envisaged in this Amendment may occur months, or even years, after the actual transaction is entered into. I am told that a very common type of complaint is of the dish-washing machines, many of which are sold by hire-purchase, where the electric machine is thoroughly inferior but may work quite well for the first months. By the time the fraud which is involved in the installation of an unsatisfactory electrical machine of this kind has become evident to the hirer, the finance company and the dealer may have parted company. In these circumstances, it is essential that the complaint should be made to the finance company, not to the dealer, who at this point may not be competent to handle the complaint. Therefore it is important that the facilities provided for the hirer in this clause may be at his disposal. I hope that I have been able to bring to the Minister's attention arguments of which he has not been previously aware, and that he will agree that this is an important matter and a useful provision in the interests of the hirer. I beg to move.

Amendment moved— Page 9, line 44, at end insert the said subsection.—(Lord Chorley.)

LORD DRUMALBYN

My Lords, this appears to me to be a provision which would allow the owner or seller to prevent the hirer or buyer from serving the notice of cancellation under Section 3 of the Act, as provided in Clause 9(5), on the dealer, and to insist that the notice rescinding the agreement should be supplied to the owner or seller. It is difficult to see the circumstances in which this might apply. I should have thought that if notice of rescission was going to be submitted to the dealer, it would be submitted before the owner or seller got to know that notice of rescission was going to be submitted. I do not see how the owner could anticipate this. The noble Lord talks about the right of rescission arising late in the contract. I am not learned in the law, but I have been given to understand that it would be only early in the life of the agreement that the right of rescission could be exercised at all. Therefore it seems to me unlikely that this particular difficulty will occur. I will certainly study what the noble Lord has said, but from what I have understood of his argument I am not inclined to advise the House to accept the Amendment.

LORD CHORLEY

My Lords, I beg leave to withdraw my Amendment.

Amendment, by leave, withdrawn.

9.5 p.m.

LORD PEDDIE moved, after Clause 11, to insert the following new Clause:

Notice of arrears or default

".—(1) Where goods have been let under a hire-purchase agreement to which the principal Act applies and the hirer has made default in the payment of any sum due there-under the owner shall not enforce any right to recover possession of the goods from the hirer unless he has served a notice (in this Act referred to as a 'notice of arrears') on the hirer by registered post at his last known address requiring payment of the sum so due and default has been made in payment of such sum or part thereof for at least 7 days after such service.

(2) Every notice of arrears shall contain or be accompanied by a document in the terms prescribed in Schedule (Notice to be included in or to accompany a notice of arrears) to this Act."

The noble Lord said: My Lords, this Amendment deals with notice of arrears or default. Its purpose is quite simple: it is merely to ensure that a notice of arrears is sent to the hirer. I know it can be said—and I will accept it as an argument in favour of my case—that it is common practice that notices of arrears are, in fact, sent by reputable companies. Therefore, because it can be established and accepted that reputable companies do this, we feel that it would be an advantage that it should be incorporated in the Bill and that there should be no enforcement of possession unless that notice is given. On the Committee stage, many illustrations were given, which I need not repeat to-night, of cases where it is in the interests of the hirer (or, probably, of his next of kin) that a notice be given, because a situation may have arisen due to circumstances outside the control of the hirer, and particularly the dependant. Therefore, before the owner can move in and establish repossession of the goods we urge that a notice of arrears should be required to be sent.

We go on to make mention, in subsection (2) of the Amendment, that the owner's notice must be accompanied by a form, in the style shown in our new Schedule I(1)(a), by which, if the customer dies, a personal representative is given the right to purchase the goods or take over the agreement. This, as your Lordships will appreciate, deals with a situation where a failure to pay instalments by reason of death allows the owner to repossess, and it applies where less than one-third of the hire-purchase price has been paid. I would remind noble Lords that, under the Bill as it stands, in the event of death it is possible, if less than one-third of the price has been paid, for the goods to be repossessed by the owner. This, I may say, is not covered completely by the provision in Clause 12, which prevents the owner from ending the agreement because of death. We welcome that clause, but we feel that this Amendment gives added protection to dependants and is one which will strengthen the Bill. I beg to move.

Amendment moved— After Clause 13, insert the said new clause.—(Lord Peddie.)

LORD SHEPHERD

My Lords, I should like to support my noble friend, and I will do so as briefly as I can. I would ask the House to consider the position of what we call the prospective hirer. In the vast majority of cases he sets out with the object of buying the article, and he adopts a hire-purchase basis because this is the only way in which he can obtain the long-term credit. Hire-purchase has been adopted by companies so that they at least retain the title to the goods until the last instalment is paid.

As I said on Committee stage, in the event of the husband, say, meeting with an accident, or becoming sick and perhaps being in hospital under drugs, he may be the only person in the family who will have knowledge that the article is under hire-purchase; or the wife may know that the article is under hire-purchase, but may not be aware of the company to whom the sum is due. She may well be without, not only the knowledge of the company to whom the sum is due, but the date on which it is due. If this Amendment is accepted it will not involve in any way the more reputable firms who, as I said on Committee stage, issue a notice of default perhaps three or four times. This Amendment is aimed at those companies who may indulge in what we call a "snatch back"; those companies who, because of default for a matter of hours, may be able to recover the goods. As I said, the wife may have no knowledge of the sum that is due. If this Amendment is accepted, she would receive by registered post—and then, of course, there would be no argument as to whether a notice had been given or not—notice to the effect that a sum was due, and she would then be able to make the payment.

I should have thought that this would be a great advance in hire-purchase security to the hirer. I do not think it would involve the reputable companies, who comprise the vast majority in this business, in any difficulty, because they give this notice. They give it as a matter of right. This is aimed at one or two companies who have indulged in "snatch back". If this Amendment is accepted, it would deal with that problem, and I think it would be a considerable advance in hire-purchase legislation.

LORD CHORLEY

My Lords, I should like to say a word in support of this Amendment. One of the worst grievances of the large section of the community who obtain their goods on hire-purchase is the quite ruthless application of the "snatch back", as it is colloquially called, over a wide range of these transactions. I am told by friends and colleagues who work in poor men's lawyers institutions and places of that kind that they are continually confronted with this type of case. It is quite true, as the noble Lord, Lord Shepherd, said, that the best hire-purchase finance companies give notice and give some latitude, but that is certainly not typical of them all. It was one of the results of Miss Wilkinson's Bill that the "snatch back" was to some extent curbed, but far from completely. I have myself a little later on an Amendment to restrain the snatch back as is done in Scotland, but I will not deal with that now.

This is a comparatively mild Amendment—indeed, very mild—and I should have thought that the Government could hardly resist it. What is there to be said against giving a small locus pœnitentiœ, to use a common legal phrase, of a short period of time in which the matter can be put right? We are dealing here in hundreds of pounds. After £600 is paid off a £2,000 motor car, there can be a snatch back without any notice or anything else if this Amendment is not accepted. It is a completely ruthless exercise of dominance in the commercial world. I think strong words are necessary on an occasion like this, and I hope the Minister will see his way to accept this Amendment.

LORD DRUMALBYN

My Lords, in this case I do not think we need argue about ends at all. I think we are in agreement on the objective, and I am prepared straight away to accept that there should be some statutory notice given for repossession. I must express my regret to the House that it has not been possible to work out an Amendment before this stage, but this is a complicated matter and we have had many other matters to deal with. I am quite certain that the effect of this Amendment would not be in accordance with the wishes of noble Lords who have moved it. For one thing, it would not prevent the owner from terminating the agreement before he gave the notice. The agreement might be terminated. I think that what noble Lords opposite want is the continuance of the agreement, and the present drafting of the Amendment would be a very grave defect to this end. For that reason we could not accept the Amendment because it would not do what we both want done.

Nor would subsection (2) give as good protection as there is already in the Bill, because the obligation is only to send along with notice of the arrears a document in terms prescribed in the Schedule, and all that that does is either to make an offer or to undertake to acquire the liabilities of the hirer under the hire-purchase agreement. If the agreement had already been terminated, of course the second item in that would be of no effect whatsoever. I hope, therefore, the mover of the Amendment will agree to withdraw it on an undertaking that we will try to put something which will give effect to what he has in mind into the Bill in another place.

LORD PEDDIE

My Lords, I thank the noble Lord for those remarks and I am indeed willing to withdraw the Amendment in the light of the assurances he has given that this matter will be dealt with and that there is an acceptance of the objectives that we seek. I agree that there are drafting difficulties, and with the assurance on the part of the noble Lord opposite that he will deal with them I have pleasure in withdrawing the Amendment.

Amendment, by leave, withdrawn.

Clause 17 [Conditional sale agreements]:

LORD DRUMALBYN

My Lords, this is a consequential Amendment which will enable provisions for conditional sales agreements which are brought within the ambit of the Act and made exactly equivalent to hire-purchase agreements to be put in the same conditions so far as the application of them to bodies corporate is concerned; that is to say, bodies corporate are excluded from the working of the Act in so far as conditional sales agreements are concerned. I beg to move.

Amendment moved—

Page 18, line 23, at end insert— ("Provided that any such reference shall not include a conditional sale agreement which is made by a body corporate (whether incorporated in the United Kingdom or elsewhere) as the buyer of the goods to which the agreement relates.")—(Lord Drumalbyn.)

On Question, Amendment agreed to.

LORD CHORLEY moved, after Clause 17, to insert the following new clause:

Amendment of section 11 of the principal Act

". Subsection (1) of section 11 of the principal Act shall be amended to read as follows:

Where goods have been let under a hire-purchase agreement the owner shall not enforce any right to recover possession of the goods from the hirer otherwise than by action.'"

The noble and learned Lord said: My Lords, this is the Amendment to which I referred a moment or two ago. The object is to prevent the finance company from recovering possession without first of all going to a court and obtaining an order; in other words, to prevent a straight "snatch-back", to control the "snatch-back" by means of court proceedings. From the beginning, as I understand it, this has in fact been the law in Scotland, and it has worked perfectly well. In Scotland a finance company cannot make a snatch-back without going to a court and satisfying the court that the hirer has failed to observe the agreement punctually, and if the court, in all the circumstances, feels that this is a proper case for allowing the resumption of the possession, then it makes the order.

This perhaps has not worked a great grievance in this country up to the present time, or not as much as one might have expected, because, of course, the value of the goods has been comparatively small; but now that the figure is up to £2,000 the "snatch-backs" are going to become very serious indeed, As I said a moment ago, when a matter of £500 or £600 has been paid on a motor car and then there is failure to pay and there is immediate "snatch-back", it is going to be the cause of a great deal of trouble and undoubtedly bitterness and great grievances, and in a short time Bills will be produced in Parliament and a lot of time wasted. We might as well do it now.

The only argument I can see against this is that it is suggested it would lead to flooding of the courts, and if Scottish experience showed that that were so it would be a strong argument against it. I have done my best to find out what has been the experience in Scotland, and so far as I can discover there has not been any flooding of the Scottish courts in this way. There is no reason to suppose in this country it would be different. Therefore, what on the face of it appears to be a strong, practical argument would not turn out in that way at all. I hope your Lordships will agree that in the new circumstances with the £2,000 figure it is right that there should be court control over resumption of possession in this way, and I hope the Minister will accept this Amendment. I beg to move.

Amendment moved— After Clause 17, insert the said new clause.—(Lord Chorley.)

LORD DRUMALBYN

My Lords, I am not really clear what the noble Lord expects to happen as a result of his Amendment. I rather think that he imagines the effect of his Amendment would be that, if application had to be made to the court each time, then the powers of the court under subsection (4) of Section 12 of the Act would operate; that is, for example, the power to make an order and postpone the operation of the order even where one-third of the purchase price had not been paid. That, I am advised, is not the case. I think he is mainly concerned with cases where one-third of the purchase price has not been paid and therefore where in the normal way repossession can take place without application to the court. In such a case surely the court would have no option but to give possession.

So the only effect of this Amendment would be to force the owner to wait for the period before the case came to court before he could repossess; in other words, allow the hirer to continue to use and possess the goods for that amount of time after he would normally be allowed to. So far as I can see, that is the only purpose the Amendment could achieve. I think this is a pretty drastic change in the law and it is one that was certainly not contemplated by the Molony Committee. I know of no great demand for it, and I think it would be rather disproportionate, especially where the hirer had paid a very small amount of the total hire-purchase price. I really think the House would be ill-advised to accept this Amendment and I ask your Lordships to reject it.

LORD CHORLEY

My Lords, the noble Lord has not dealt with what happened in Scotland at all. I think the fact that Scotland will in fact be deprived of this quite useful protection is a matter which might be of interest to Scottish Peers. Quite apart from that, it is, of course, quite true that the effect would be to give the hirer a period in which he could turn round and perhaps make arrangements to resume payment of the instalments, and in that way he could possibly not lose the advantage of all the instalments which he had been paying earlier on. Anyone who has had the advantage of working in courts will know perfectly well that in a situation of this kind a wise judge can bring a good deal of pressure to bear upon the parties, and frequently with the assistance of the judge, who will call into his room counsel who are engaged in the case, a quite reasonable compromise solution can be worked out which will in fact have the result of protecting the hirer, who, under the new arrangements, will now pay £400 or £500 and get nothing for it.

The noble Lord does not really seem to have faced up to the grievous position which this Bill is going to initiate if there is not some sort of protection. If the noble Lord will not help me, I cannot carry this any further and must ask leave to withdraw it; but the matter will be obvious in the eyes of the public because it will deprive the man in the street of a good deal of protection.

Amendment, by leave, withdrawn.

9.27 p.m.

LORD DOUGLAS OF BARLOCH moved, after Clause 17 to insert the following new clause:

County Court jurisdiction.

. Section 39 of the County Courts Act 1959 (which prescribes the general jurisdiction of County Courts in actions of contract and tort) shall have effect in relation to hire-purchase agreements and credit-sale agreements to which the principal Act applies and conditional sale agreements to which section 17 of this Act applies as if for the reference to £400 there were substituted a reference to £2,000 or such larger sum as may from time to time be specified in any Order in Council made under section 1(3) of this Act."

The noble Lord said: My Lords, I beg to move that Amendment No. 41 be agreed to. I moved this Amendment upon the Committee stage of the Bill, and the noble Lord, Lord Drumalbyn said that he would consider this matter. I have no indication of what the result of his consideration may be, so I think I had better state the case once more, unless I understand that he is going to accept it, in which case I will not weary the House with it.

As the Bill stands at the present moment, jurisdiction with regard to hire-purchase and credit-sale agreements is vested in the county court up to the sum of £400, which is the normal limit of jurisdiction. Jurisdiction is also vested in the county court where proceedings are taken to recover a vehicle. Other cases where the amount involved is over £400 will be dealt with in the High Court. Therefore, there will be two separate jurisdictions dealing with matters relating to hire-purchase. I think this is intrinsically undesirable, and in any event there are good reasons why the county court should be the tribunal to deal with questions of this kind. It is already the tribunal because of the limitation as to the hire-purchase and credit-sale agreements which are subject to statutory control. County court judges already have experience of dealing with these cases, and I believe that they deal with them in an extremely satisfactory way.

It is a fundamental principle with regard to this Bill, as the noble Lord, Lord Drumalbyn, said in an earlier discussion upon some other Amendment, that the whole purpose of this legislation is to protect the hirer because of his comparative weakness and his lack of knowledge. That is a good reason why the county courts should deal with these matters: because the procedure there, unlike that in the High Court, is relatively simple and the general public have some idea of what it is.

I am sure that those of us who are accustomed to the practice of law have all had experience of writs being issued in the High Court and served upon people who are not very well off and are inexperienced in business transactions. They do not realise what has happened. They think that they will receive a summons to attend the court, and that nothing will be done until they receive an intimation as to the date of the hearing—which of course is the normal practice in the county courts. The practice in the High Court, of course, is entirely different, and although it is true that a writ of summons in the High Court has upon it information that if one wants to defend proceedings one can write to obtain a form, fill it up and send it in, many people who receive documents of that kind fail to understand them and thus do not get the protection to which they are entitled. I know there is a procedure whereby, when judgment has been signed in default, it is possible in certain cases to have a judgment set aside and the matter reopened. But the normal practice in such cases is that the applicant has to pay the costs of the application. The whole thing is far too complicated, far too strange and difficult for the great majority of people who enter into—and who will in the future enter into—hirepurchase transactions which are within the scope of the statutory protection.

The noble Lord in charge of the Bill, when I moved this Amendment on the last occasion, gave a perfectly clear statement of what the law is at the present moment, with which I do not disagree at all; but he put forward no argument against this Amendment, and he promised that he would give it consideration. Therefore, I hope that it will be accepted. My Lords, I beg to move.

Amendment moved— After Clause 17, insert the said new clause.—(Lord Douglas of Barloch.)

LORD DRUMALBYN

My Lords, the noble Lord, Lord Douglas or Barloch, said that if I could accept the Amendment he would not continue with his speech. I would willingly have done so had we been able to complete our consideration. As I said before, we have considerable sympathy with this point, and I am confident that we shall be able to go some way, at any rate, to meet the purpose of his Amendment. But I am afraid that I am bound to say that we have not yet completed consideration of this matter and shall not be able to do so before this Bill passes through this House. I am very much obliged to him for the way in which he moved his Amendment to-day, and I hope that with the assurances I have given he will agree to withdraw his Amendment.

LORD AIREDALE

My Lords, I was interested in this matter, as I think was the noble Lord, Lord Peddie, and we both raised it during the Second Reading debate. I have to confess that I stopped following this trail on the strength of what the Minister said in his reply to that debate —[OFFICIAL REPORT, Vol. 253 (No. 15) col. 1193.] He said that if the noble Lord, Lord Peddie looks at Sections 11 and 12 of the principal Act he will find that these cases are cases which are to be taken in county courts; and that, I am informed, covers the cases that will emerge, despite the increase in the limit, just as much as the cases below the normal limit for county courts. I have heard matters expressed more clearly, but I took that, and still read it, as indicating that the Minister was at any rate on that occasion entirely in sympathy with the principle of this Amendment. I certainly hope that this is so.

THE LORD CHANCELLOR

My Lords, perhaps I had better say a word on this because I am primarily responsible for county courts. I have listened to what my noble friend has said in answer to the noble Lord, Lord Douglas of Barloch. I myself would say that I certainly think more consideration ought to be given to this question before any firm commitment about enlarging county court jurisdiction to this extent is entered upon. The whole question of raising the limits of county court jurisdiction is a matter which has to be under consideration, and this would be only one part of that particular problem. In relation to that problem, as indeed to this, one has to consider and bear in mind the heavy burden of work which now falls upon the county courts. One really does not want to overload the county courts with work. But I am grateful to the noble Lord, Lord Douglas of Barloch, for the tribute he paid to the way in which the work is done in the county courts, although I cannot join with him in his reflections upon High Court procedure.

LORD DOUGLAS OF BARLOCH

My Lords, I am obliged to the noble and learned Lord the Lord Chancellor for some of what he has said. However, he is perhaps not so well acquainted with some sides of High Court procedure as I am, as he happens to be a barrister and not a solicitor. Therefore I am not going to withdraw what I said about it. I have the highest respect for procedure in the High Court of Justice, but I do not consider that it is appropriate to this particular kind of business. I want to submit, with all respect, that this is not a matter which should be deferred to some future consideration of what are generally the limits of jurisdiction in the county court. That would probably defeat the whole object and purpose of this Amendment, which is to help a class of litigant who is inexperienced and deserves to be protected by having both a tribunal which is accustomed to dealing with matters of this kind, and a tribunal in which, by and large, the costs are smaller and the expenses of litigation are less. These are all matters which deserve very serious consideration indeed.

I want to make just one further point. It is perfectly true that, if this Amendment were accepted, it would raise the jurisdiction of the county court in this particular class of case above its normal limit. But there is not necessarily anything anomalous or unusual in giving to the county court an exclusive jurisdiction in some particular kind of matter. Upon the Committee stage I referred by way of example to something which now, of course, is obsolete, and that is that under the Workmen's Compensation Acts the county court was the tribunal and it mattered not what was the amount involved; it was the sole and only tribunal. I submit that that ought to be so in the present case.

I want to point out that I am not averse to the Minister's having more time to consider this, but this matter was raised long before it was raised by means of an Amendment here. Representation was made by the Law Society for this Amendment to be made to the Bill, and a recent memorandum was presented in support of that. I feel strengthened in my conviction that this is a proper Amendment, in that it has been supported by the Law Society whose members have a great deal of experience in the practical operation of these matters. But I will, in view of what has been said—

LORD SHEPHERD

My Lords, before the noble Lord withdraws his Amendment, I wonder whether the Government could give any indication of whether they can give us a reply on Thursday, because this is quite a change from the understanding of this House in regard to court procedure. The noble Lord the Minister—I think he was quoted by my noble friend Lord Airedale—made it quite clear that the county courts will have jurisdiction, and it was for that reason that we did not press the previous Amendment. I think the noble and learned Lord the Lord Chancellor would agree that there is not only the question of the hire-purchase companies themselves requiring to go to court, whether it be the county court or the High Court, but it may well be that it is a hirer who has to go to court for redress. In view of the uplifting of the amounts which are covered by the Bill, we may well find that a hirer, in order to take action, has to go to the High Court. If that is the case, taking into account the charges involved and the time, I think it would be very undesirable; and, before this Bill leaves us and goes to another place, I hope the Government will be in a position to make a statement on this very important matter.

LORD DRUMALBYN

My Lords, if I may speak again, may I say that what I was trying to talk about—and I agree that, on the point made by the noble Lord, Lord Airedale, I was not as clear as I should have been on the Second Reading of the Bill—was whether, because of the extension from £400 to £2,000 in cases of repossession under Section 12 (that is, those where one-third of the price has been paid, and this is what I was thinking about), those cases would come under the county court or not. The information I gave to the House, based on the advice I was given, was that they would automatically come under it, because as Section 12 of the Act is drafted these are matters for the county court. What the noble Lord, Lord Douglas of Barloch, was talking about first of all were cases where one-third had not been paid, and which are not subject to Section 12 of the Act. So that is one type of case. Then there are the cases of contract, tort, damages and the like, separate from them, which also arise. I am sorry I cannot go further than I have gone today, but the matter has not yet been fully cleared, and I should be grateful to your Lordships if you would leave it open for the time being. I will do my best to be able to say something about this on Third Reacting, but I should not like to make a promise.

LORD DOUGLAS OF BARLOCH

My Lords, I do not want to detain the House. I ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

9.42 p.m.

LORD MCNAIR moved, after Clause 19, to insert the following new clause:

Size of type of prescribed document

". All agreements, statements, notices and other documents required or prescribed by this Act or the principal Act shall either be typewritten clearly and legibly or be printed in type of a size not less than the type known as ten point Times."

The noble and learned Lord said: My Lords, I am moving this Amendment subject to the deletion of the last word, "Times". I have already spoken twice on the subject dealt with in this Amendment, and I do not propose, at this hour of the night, to repeat my arguments. But, for the sake of the record, and in order to convince your Lordships that this is not a capricious Amendment but is designed to remove a substantial defect, I wish to convey to the House an expression of judicial opinion upon the practice of printing so many hire-purchase agreements in a type that makes it practically impossible for the hirer to react them.

I refer to the case entitled Lowe v. Lombank, Limited, which was decided in the year 1961 by a strong Court of Appeal consisting of two present Members of your Lordships' House—the noble and learned Lords, Lord Goddard and Lord Upjohn—and Mr. Justice Diplock, now Lord Justice Diplock. It was the case of the purchase of a motor car by means of hire-purchase by a widow, aged 65. Lord Justice Diplock, in delivering the judgment of the Court, which was concurred in by his two colleagues, referred twice to the character of the print in the hire-purchase agreement. He said that: under modern conditions many transactions, particularly of hire-purchase, are entered into by ignorant persons whose only choice is either not to enter into the transaction at all or to enter into it on the terms of a standard agreement, drafted by the hire-purchase company, and containing numerous clauses printed in miniscule characters which the hirers do not in fact read, and if they did, would be incapable of understanding.

The Court of Appeal, in giving judgment in favour of the widow for damages for breach of statutory conditions stated in the Act of 1938, rejected the contentions of the motor dealer in these words. This was again said by Lord Justice Diplock: We reach this conclusion without reluctance, for Clause 9(ii)"— of the agreement— is clearly an attempt, which only the size of the print in which it is set out prevents one calling it blatant, to evade the provisions of Section 8(2) and 8(3) of the Hire Purchase Act, 1938. I think there is a good deal of sympathy in many quarters in this House for the view that something ought to be done to ensure that the hire purchaser should at any rate have a decent chance of being able to read an agreement before he enters into it. I beg to move.

Amendment moved—

After Clause 19 insert the said new clause.—(Lord McNair.)

9.44 p.m.

LORD DRUMALBYN

My Lords, no one for one instant would ever accuse the noble Lord of moving a capricious Amendment; and I would immediately say that I think there is a very great deal of force in the purpose of this Amendment. At the same time I would just say that I am advised by the experts that the size of the print alone is not enough. Noble Lords themselves will quickly realise that if Hansard were printed right across the width of this Box in the same print as it now is, it would be completely illegible. The length of the line is important; the colour of the paper and the type used is important. The clarity of the type face is important; and I am actually told that there are some 9-point types bigger than 10-point Times. All these things are important. Having said all that, though I do not think the actual wording of this Amendment should be accepted, I would willingly accept the principle of the Amendment; although I am inclined to think that it would be better to do this by regulation rather than by inserting an actual provision in the Bill. But certainly we will do something about this and put it into the Bill at the next stage.

LORD MCNAIR

My Lords, I am very grateful to the Minister. I should like to know whether I am right in thinking that on Thursday of this week we shall be able to put an Amendment in the Bill before we vote upon it at Third Reading.

LORD DRUMALBYN

My Lords, I should not like to give an undertaking on that. In any case, it would mean it would have to be a starred Amendment that would appear on the Order Paper only that day. But if the noble Lord will agree to accept such an Amendment—if it is possible to put it down—I will certainly see whether it can be done.

LORD AIREDALE

My Lords, was not this Amendment put down at the Committee stage of the Bill? Surely the Government have had time already to put down their Amendment to cover it. I think the Minister said that something would be done by the time the Bill reached another place. Surely, when noble Lords have raised matters about which they are concerned, it is due to them that these matters should be dealt with before the Bill leaves this House.

LORD DRUMALBYN

My Lords, if I may speak again, we would willingly have done this, had it been possible, and had the number of Amendments of this type put down been smaller. The more Amendments put down, the more difficult it is to get the drafting done before Report stage; and, as the noble Lord is well aware, taking the Bill a little earlier on Report stage than we otherwise expected to do has made it more difficult for us.

LORD CROOK

My Lords, I have some sympathy with the Government on this matter, strange as it may seem. The relation of type size to the width between lines and width of column, the quality of paper used, and so on, are difficult subjects, as those of us who have edited papers over many years, as I have done, know. I am sure that the Minister is right. We cannot put this in an Act. As the noble Lord has indicated, it is proposed to provide regulations to deal with type faces. I do not think it matters whether it is 10-point or 9-point on 10 body or 8-point on 10, so long as we get it clear.

LORD DRUMALBYN

My Lords, I have indicated what we proposed to do. I expect we shall do this by regulation rather than by putting it into the Bill.

LORD MCNAIR

My Lords, I understand that the Minister accepts the principle underlying this, and, for my part, I do not mind whether it is done in the Act or by empowering the Board of Trade to make regulations. What I do ask for is an assurance that, if the Minister is not able on Thursday to put down the necessary Amendment, he will at any rate see to it that such an Amendment is introduced into the Bill by the Government in another place.

LORD DRUMALBYN

Yes, my Lords, I certainly give that assurance. In this case, it would be difficult for noble Lords to see the Amendment be-for it comes back here again, but obviously, in due course, they will see the Amendment.

LORD MCNAIR

I am agreeable.

On Question, Amendment negatived.

Clause 21 [Extension to Scotland of provisions of Part 1]:

LORD DRUMALBYN

My Lords, as your Lordships are aware, the purpose of Part II of the Bill is to bring the law of Scotland into line with that of England and Wales. This Amendment to the Scottish provisions of the Bill corresponds to the Amendment, which I moved during the Report stage last Thursday, to insert a new clause exempting from the Acts agreements under which the hirer or buyer is a corporate body. I beg to move.

Amendment moved— Page 22, line 2, after ("sections") insert ("section (Exclusion of bodies corporate)").—(Lord Drumalbyn.)

On Question, Amendment agreed to.

LORD DRUMALBYN

My Lords, perhaps it may be convenient if I take Amendments Nos. 41C and 41D together. The purpose of these two Amendments is to bring Clause 21(g) more closely into line with Clause 16(1), as amended. The first Amendment limits the application of the clause, so far as credit-sale agreements are concerned, to those exceeding £20. The second Amendment corresponds to that which was moved by the noble Baroness, Lady Burton of Coventry, and which I accepted. I beg to move.

Amendment moved— Page 23, line 11, leave out from first ("agreement") to ("and") in line 12 and insert ("to which the Act of 1938 applies or relating to a credit-sole agreement to which that Act applies under which the total purchase price exceeds £20").—(Lord Drumalbyn.)

On Question, Amendment agreed to.

LORD DRUMALBYN

My Lords, I beg to move this Amendment.

Amendment moved— Page 23, line 17, at end insert ("or the making of the hire-purchase agreement or credit-sale agreement whichever is the later").—(Lord Drumalbyn.)

On Question, Amendment agreed to.

LORD SHEPHERD had given notice to move to leave out Clause 22. The noble Lord said: My Lords, on Committee stage I sought to delete Part III from the Bill and I think I mounted a fairly formidable case, or, at least, one sufficient for the Government to reconsider their case. I understand that the Government are not yet able to make a statement or to deal with some of the suggestions that are being made by those interested in car finance. In those circumstances, I do not propose to move this Amendment or Nos. 44 to 47 inclusive, but to leave it to the other place to deal with the matter.

Clause 23 [Protection for purchaser from apparent owner]:

9.57 p.m.

LORD PEDDIE moved, in subsection (5), after "pledge" to insert: and any contract whereby the purchaser undertakes to execute repairs or improvements to the vehicle". The noble Lord said: My Lords, this Amendment would extend the protection of Clause 23 to motor-vehicle repairers who complete work in quite good faith but find themselves in circumstances where they cannot enforce the usual lien against the owner largely because the hire-purchase agreement has been determined other than automatically or by notice before the hirer delivers the vehicle for repair.

On Committee stage, the noble Lord in charge of the Bill said that the protection which I wished to confer upon repairers by this Amendment already exists in law, but I am advised that this is not so. I should like the noble Lord to elaborate on the point he made on Committee stage. As I understand it, if the hire-purchase agreement had been determined by the owner, the authority to have the repairs carried out would have been lost. But the repairer need not be aware of the determination of the agreement. This is a point that I felt was not adequately answered by the noble Lord on Committee stage, although he indicated that he would be prepared to reconsider the matter. In moving this Amendment I shall be appreciative of any information he can give the House as a result of his further examination. I beg to move.

Amendment moved— Page 27, line 7, after ("pledge") insert the said words.—(Lord Peddie.)

LORD CHORLEY

My Lords, I should like to support this Amendment. It may be that this is not a convenient place to fit this matter into the Bill and that it is not altogether reasonable to limit it to motor vehicles. But there is a substantial point here. I think the noble Lord who is in charge of the Bill said that if he could be persuaded that there was any real legal doubt on this point he would, in effect, agree that protection ought to be given to the repairer. I hope that his legal advisers have looked at this matter, because not only am I satisfied that there is a point here, but I have consulted both a barrister with much experience of this type of work and a solicitor who is possibly as conversant with it as anybody in London, and I have also consulted what I think most people regard as being the most up-to-date and authoritative textbook on the subject, namely, that of Mr. Goode on Hire-Purchase and Practice; and everybody agrees that there is a real question here.

If I may explain it shortly, the point is that against the owner of a car, a washing-up machine, or whatever it may be, who takes it into the repairer's to be repaired, the repairer has what lawyers call a lien that is, a right to hold on to the article in question until he gets paid for the work that he has done. But, of course, if the article does not belong to the man who lodged it there, but to somebody else—the man has perhaps stolen it, or something of that kind—then the repairer has no right to retain it against the true owner. In the ordinary hire-purchase cases—and the noble Lord is quite right on this from the legal point of view—the hirer has the implied authority, and sometimes the express authority, of the owner to carry out the necessary repairs; that is, to take it to a garage, or whatever it may be, to get the repairs done. In that case, the garage owner or the other repairer obviously has a lien. But the case which involves difficulty is the case where the garage proprietor has no reason at all to know that there is a hire-purchase agreement.

Cases like Albemarle Supply Co. v. Hind, which is the leading case (and no doubt one on which the noble Lord's advisers were relying) do not apply in a case where the repairer has no knowledge whatever that there is a hire-purchase agreement. In the case which the noble Lord, Lord Peddie, made, where there is no longer a hire-purchase agreement, because it has been cancelled but the man retains possession of the motor car or the washing-up machine, and takes it to be repaired, the repairer thinks, "Here is a man who owns a car" and takes it in and repairs it. In those circumstances, Mr. Goode says (and all the other lawyers think the same) that it is very doubtful whether the repairer has a lien. If the noble Lord agrees that this matter is even in real doubt, then I gather from what he said on the last occasion, that somewhere in this Bill a protection to the repairer ought to be inserted. If the noble Lord thinks that this is the wrong place, or even if they are the wrong words, I hope he will nevertheless agree with me that this is a matter which ought to be put right in this Bill, and that, if it is not done here, he will undertake to do so in another place.

LORD DRUMALBYN

My Lords, the two noble Lords who have spoken to this Amendment have said in the nicest possible way that they think I was wrong in what I said on the Committee stage. I think to some extent I did mislead the House, and for that I tender my apologies. I am glad to have this opportunity to make my position clear as regards this Amendment. But it does not follow that the Amendment itself should be accepted. I am told that in the ordinary case, when a vehicle subject to a hire-purchase agreement is taken in for repair, the repairer can exercise a lien as against the legal owner should the cost of the repairs not be met. So the law already protects the repairer in the great majority of cases.

The noble Lord, Lord Peddie, has made it clear that he is concerned with the position of the repairer who cannot exercise a lien because the hire-purchase agreement has been determined, for some reason or another (I think this is the point), before the hirer handed over the vehicle for repair. The protection afforded by Clause 2 operates only if, at the time when the vehicle is disposed of to the purchaser, the registration hook is improperly in the hands of the hirer. A purchaser for the purposes of the clause is a person to whom the vehicle is disposed of by way of sale or hire-purchase, or by way of bill of sale or pledge. All these are cases where the title to the goods passes, or may pass, immediately or at some future date, to the purchaser, and therefore the registration hook, though not a document of title, is very relevant to this type of transaction, since it, too, will or may pass to the purchaser. If the hirer is improperly in possession of it, a purchaser may well be misled into thinking that the vehicle is free from any hire-purchase commitment, and that the hirer is in a position to pass title to it.

But I do not think that the disposal of possession of a vehicle to a garage owner for repair is in the same category at all. The garage owner, at most, will be able to retain possession of the vehicle pending the payment of his charges and, generally speaking, his lien does not carry with it any right to sell the vehicle. I doubt very much whether garage owners would, in, fact, ever demand production of the registration book before carrying out repairs to a vehicle. It is not normally the practice for registration books to be carried in vehicles in this country. In fact, the registration book itself carries a warning against carrying it in the vehicle. Therefore, even if a garage owner were prepared to ask for the registration book, a person who lived at some distance would have a perfectly good excuse for not producing it. I think the clause should be confined to those types of disposition where the purchaser might be expected to see or to obtain the registration book, and might, therefore, be misled into improper possession of it by the hirer. The noble Lord said that in that case somewhere or another there should be in the Bill protection for the garage owner, and he has invited me to look at this again.

LORD CHORLEY

My Lords, may I interrupt the Minister for a moment? I am suggesting that this Amendment goes really wider than motor vehicles. No doubt I am responsible for the Amendment as it stands, but there are all sorts of other things which have to go to repairers to be repaired, and the problem of the lien exists right through. What I was suggesting was that the Minister should give up an undertaking to look at the whole subject again, not just on the basis of motor vehicles.

LORD DRUMALBYN

My Lords, I shall be very willing to look at it again. The noble Lord will not expect me to give any commitment before I have looked at it, but I shall be glad to look at it, and I hope with that assurance the noble Lord will withdraw the Amendment.

LORD PEDDIE

My Lords, I appreciate the frank way in which the noble Lord opposite has dealt with this matter, and I am sure that no Member of this House would believe that there was any intention to mislead the House at this stage. In view of his assurance that he is willing to look again at this question, I have pleasure in withdrawing the Amendment.

Amendment, by leave, withdrawn.

LORD DRUMALBYN moved, after Clause 26, to insert the following new clause:

Extension of advertisements to which Advertisements (Hire-Purchase) Act 1957 applies

". In section 1 of the Advertisements (Hire-Purchase) Act 1957 (which provides that that Act applies to any advertisement which includes one or more of the elements mentioned in subsection (2) of that section) at the end of subsection (2) there shall be inserted the following paragraphs:—

and at the end of that section there shall be added the following subsection:—

'(4) For the purposes of this Act—

  1. (a) a fraction stated in an advertisement shall be taken to be represented therein as mentioned in subsection (2)(d) of this section if it is stated in the advertisement in such a way that it could reasonably be understood to be so represented;
  2. (b) a sum indicated in an advertisement (whatever the words used) as being the total amount which, on a hire-purchase or credit sale of any goods, would be payable by the hirer or buyer shall be taken to be stated therein as the hire-purchase price or total purchase price of the goods.'"

The noble Lord said: My Lords, there are five Amendments in my name to Part IV of the Bill, Nos. 48, 49, 51 and 52, and it may be helpful if I take them together and explain what they are designed to do. As I explained on the Second Reading, Part IV of the Bill amends the Advertisements (Hire-Purchase) Act, 1957, to deal with two matters to which the Molony Committee have drawn attention. The first was that the 1957 Act requires that advertisements which contain details of payment shall give a variety of information but does not require the advertisements to do the arithmetic and state the hire-purchase price or total purchase price. The second point was that advertisements could quote hire-purchase charges as a rate of interest in ways which might lead the customer to think the rate was lower than it really was.

The provisions of Part IV of the Bill deal with both these points. So far, so good. But, since the Second Reading, we have been considering this part of the Bill to see whether it can be improved, particularly bearing in mind certain points which the noble Baroness, Lady Burton of Coventry, then made. The Amendments which stand in my name are the result. They are, I think it is fair to say, the follow-up of the changes which Part IV is already introducing into the 1957 Act; and this is what they do.

First, there is the new clause after Clause 26. As the Act now stands, the inclusion in an advertisement of the hire-purchase price or of a rate of interest would not in itself bring the advertisement within the scope of the Act. We think that it should. May I suggest two examples? An advertisement which says that particular goods were available on hire-purchase at "only 5 per cent." could be quite as misleading as one which also included more detailed information about the hire-purchase terms, the deposit or the instalments. Again, an advertisement which said, "Cash price £60, hire-purchase price £65" could seem very attractive to anyone who assumed he would have a couple of years in which to pay, but would look very different if it also said that the duration of the agreement would be only a couple of months. Section 1(2) of the 1957 Act sets out the "elements" which, if included in an advertisement, bring it within the scope of the Act. The new clause adds two more elements, thus bringing within the Act any advertisement which indicates a rate of interest, or the hire-purchase price or total purchase price. The second change is introduced by the Amendment to Clause 27, page 28, line 38. This deals with the following point. Although as a result of Clause 27 of the Bill an advertisement which contains details of payment will now be required to state the hire-purchase price, an advertisement which stated only the hire-purchase price would not be required to give the other essential information. What this Amendment does is to bring any advertisement which contains hire-purchase price or total purchase price into the category of advertisements, which contain details of payments. Such advertisements are required by the Act to give full details of the terms. The Amendments to Clause 28 are consequential. I beg to move.

Amendment moved— After Clause 26, insert the said new clause.—(Lord Drumalbyn.)

On Question, Amendment agreed to.

VISCOUNT HANWORTH

My Lords, we have increased the financial level to which the Hire-Purchase Act applies from £5 to £20, but there is still the £5 limit applying to provisions of the Advertisement (Hire-Purchase) Act. This Amendment brings the latter into line, which on the face of it would seem a logical step. I beg to move.

Amendment moved—

After Clause 26, insert the following new clause:

Extension of advertisements to which the Advertisements (Hire-Purchase) Act 1757 does not apply

(". Section 1 of the Advertisement (Hire-Purchase) Act 1957 (which provides that that Act does not apply to an advertisement within the provisions of subsection (3) of that section) shall have effect as if in subsection (3)(b) thereof for the words ("five pounds") there were substituted the words ("twenty pounds.")".—(Viscount Hanworth.)

LORD DRUMALBYN

My Lords, what this Amendment would do would be to exclude advertisements for such things as suits of clothes and transistor radio sets and the rest. It seems to me that, where these goods are being disposed of on hire-purchase, the reader of the advertisement is entitled to the kind of protection the Advertisement (Hire-Purchase) Act is designed to give, and I do not think it would be either right or logical to exclude these. There is no reason why there should not be parallelism here between the credit-sale arrangements and the Advertisement (Hire-Purchase) Act.

VISCOUNT HANWORTH

My Lords, I am not wholly convinced by the Minister's argument, but I do not wish to press the Amendment and I beg leave to withdraw it.

Amendment, by leave, withdrawn.

Clause 27 [Information to be included in advertisements]:

LORD DRUMALBYN

My Lords, I beg to move the next Amendment.

Amendment moved—

Page 28, line 38, at end insert— ("(4) At the end of subsection (4) of that section (which defines an advertisement which contains details of payments) there shall be added the words 'or if it states a sum as the hire-purchase price or total purchase price of those goods'.").—(Lord Drumalbyn.)

On Question, Amendment agreed to.

VISCOUNT HANWORTH moved to add to the clause: (4) Notwithstanding the foregoing provisions of this section, where separate items of goods are offered for sale in one catalogue and such catalogue indicates the cash price of each item of goods thereby offered for sale, the fact that there is included in or appended to such catalogue a general statement to the effect that the goods thereby offered for sale may be purchased by hire-purchase or credit sale and giving information as to the terms on which the goods may be so purchased, shall not be construed as requiring the information specified in paragraph (g) of subsection (2) of the said section 2 as amended by this section to be given in respect of each item of goods in such catalogue.

The noble Viscount said: My Lords, this is rather a peculiar Amendment since it is intended to assure the legality of a practice which has been in operation for many years. Under the terms of Section 2 of the Advertisement (Hire-Purchase) Act, 1937, advertisements of goods which can be bought by hire-purchase or credit-sale must give certain specified information about the terms. With the new addition included in Section 27 of the Bill which we are now discussing there are in all seven separate headings under which information is specified. These include, for example, the total number of instalments and the length of the period for which each instalment is payable.

Mail order catalogues contain a large number of items and show the cash price of each. Separately, however, from the advertisement for the specified goods there is often information on how they may be obtained on hire-purchase or credit-sale, and full particulars required by the Act are of course included. There appears to be some doubt as to whether from a strictly legal point of view each of the items in the catalogue should have the full price and hire-purchase and credit terms set out against each item. This of course is quite impracticable. I could paint a sorry picture of bodies corporate spending sleepless nights and rising in the morning with an anxiety to open their post, fearing that it contains a writ. But, in all seriousness, I would suggest that the Government could logically oppose this Amendment only on one or two grounds. They could say that they can clarify the legal position and consider the Amendment unnecessary, or they can propose to introduce a better Amendment at a later stage. I beg to move.

Amendment moved— Page 28, line 38, at end insert the said subsection.—(Viscount Hanworth.)

10.15 p.m.

LORD DRUMALBYN

My Lords, I can quite understand that those who produce catalogues which give the cash prices of a large number of articles do not want to find themselves having to give a lot of additional information in each case simply because, somewhere in the catalogue, there is a general statement of the hire-purchase or credit-sale terms that are available. But what is not clear is why this point arises particularly out of the new requirement, imposed by Clause 27, that an advertisement which, in the terms of the 1957 Act, contains details of payments must state the hire-purchase or total purchase price. This is not clear, and I think that the noble Viscount skirted around this a little in moving the Amendment.

It seems to me that the point must arise equally in relation to the other information which the Act already requires to be stated in these cases—that is, the amount of any deposit, the amount of the instalments and the total number of instalments and the period in respect of which each instalment is payable. This must arise equally on those. In this particular Amendment that has been moved the total purchase price—

VISCOUNT HANWORTH

Will the noble Lord excuse me for interrupting? I made this point quite specifically. I said that there were already six items which had to be included, and that this made only the seventh. I also pointed out that for a number of years the firms have possibly been breaking the law, and I raised this Amendment at this time only to try to regularise the position. I think that most of the argument of the Minister has been directed to trying to prove that I have suddenly brought this up because of this Bill. I have not done that at all. I thought I had explained why.

LORD DRUMALBYN

I see. What the noble Lord is anxious to do is to put a practice which was doubtfully in order completely in order.

VISCOUNT HANWORTH

That is precisely so.

LORD DRUMALBYN

I am advised that there should be no difficulty—on the contrary, in fact—about mail order companies complying with the law by adjusting the information they give. It may be rather more complicated. The table at the end of their book may be more complicated, but I am advised that it should be possible for them to bring their practice into line with the law, rather than the law into line with their practice.

VISCOUNT HANWORTH

I am sorry, but the thing is completely impracticable. If you look at a catalogue like this, containing some thousands of items, it simply is not practicable to put in the complete terms for which each item can be sold under hire-purchase or credit-sale terms. It would need about six or eight inches. If they are to carry on under this arrangement it is simply not practicable. I think the Minister should look at this most seriously.

LORD DRUMALBYN

If I may speak again, I am perfectly prepared to look at it again. I was not suggesting that alongside each single item this information should be set out separately. What I was suggesting was that it would possibly be within the law to make out a table at the end that would enable people to calculate this information in a way which would comply with the Act.

On Question, Amendment negatived.

Clause 28 [Information as to rate of interest or charge]:

LORD DRUMALBYN

My Lords, I beg to move.

Amendment moved— Page 29, line 4, leave out from ("contains") to ("shall") in line 8 and insert ("a fraction represented as mentioned in section 1(2)(d) of this Act").—(Lord Drumalbyn.)

On Question, Amendment agreed to.

LORD DRUMALBYN

My Lords, I beg to move.

Amendment moved— Page 29, line 16, leave out ("stated") and insert ("represented").—(Lord Drumalbyn.)

On Question, Amendment agreed to.

LORD DRUMALBYN

My Lords, I beg to move.

Amendment moved— Page 29, line 27, leave out subsection (3).—(Lord Drumalbyn.)

On Question, Amendment agreed to.

Schedule 1 [Application of enactments to conditional sale agreements]:

LORD PEDDIE moved to leave out paragraph 8. The noble Lord said: My Lords, this is a probing Amendment. The 1938 Act deals with two types of agreement, namely hire-purchase and credit-sale agreements, and a third type is introduced in this Bill, namely a conditional sale agreement as defined in Clause 17. Parts I and II of Schedule 1 give further information about these agreements. Paragraph 8 of Part II of the First Schedule states that A conditional sale agreement shall be treated as not being a contract of sale for the purposes of sections 12 to 15 of the Sale of Goods Act 1893 (which imply certain conditions and warranties in contracts of sale). Section 8 of the principal Act sets out the implied conditions and warranties in hire-purchase agreements; and in regard to credit-sale agreements similar conditions and warranties are provided in Sections 12 to 15 of the 1893 Act. But it would appear that so far as conditional sale agreements are concerned no provision is made for implied conditions and warranties.

The purpose of this Amendment is to ask why this is so. It is quite certain that the general public will not appreciate the difference between a hire-purchase agreement and a conditional sale agreement, and on the face of it—I may be wrong—it looks as though they may be deprived of certain rights. Nothing appears to have been said about this important change in the law, and my purpose in moving the deletion of paragraph 8 of Part II is in order that an opportunity might be given to the Minister to clarify the position. My Lords, I beg to move.

Amendment moved— Page 3, line 14, leave out paragraph 8.—(Lord Peddie.)

LORD DRUMALBYN

My Lords, as the law stands at present, a buyer under a conditional sale agreement will get the benefit under the Sale of Goods Act of certain implied conditions and warranties relating to the seller's title to the goods, to merchantable quality, to fitness of the goods for particular purposes, to the correspondence of the goods with any description or sample and to other matters; but these implied terms may be excluded if the agreement says so under the Sale of Goods Act. Since, by Clause 17 of the Bill, conditional sale agreements not exceeding £2,000 are henceforth to be treated in the same way as hire-purchase agreements, the buyer under such a conditional sale agreement will receive the same protection as though he were a hirer under a hire-purchase agreement, and so will get the benefit of the conditions and warranties to be implied in hi re-purchase agreements to which the 1938 Act applies.

Since these implied terms are generally more favourable to the buyer than those in the Sale of Goods Act, and since there are important limitations on the extent and manner in which they can be excluded in the agreement, the conditions and warranties implied by the Sale of Goods Act are no longer required for the protection of a buyer under a conditional sale agreement not exceeding £2,000. Paragraph 8 makes it clear that such a buyer is to have the greater protection of the Hire-Purchase Acts. If the Amendment were accepted, it would not be clear which of the statutory provisions relating to implied terms was to apply to conditional sale agreements within the scope of the Hire-Purchase Acts.

The noble Lord asks me why we have made these changes in regard to conditional sale agreements. The reason is quite simple: that it might have occurred to some owners or sellers that they could get round the hire-purchase provisions by having conditional sale agreements instead. For that reason, the conditional sale agreements are brought exactly into line with the hire-purchase agreements for the purposes of these Acts. I hope that this is a sufficient answer for the noble Lord. This is purely in order to prevent the evasion of the hire-purchase provisions.

LORD PEDDIE

My Lords, with that explanation, which at least to my mind clarifies the position, I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Schedule 2 [Extension of Hire-Purchase Act, 1938, to Scotland]:

LORD DRUMALBYN

My Lords, this Amendment is consequential upon the Amendment to Clause 1(1) of the Bill, which is required in view of the new clause exempting from the Acts agreements under which the hirer or buyer is a corporate body. I beg to move.

Amendment moved— Page 37, line 14, after ("shall") insert ("(except as provided by section (Exclusion of bodies corporate) of the Hire-Purchase Act, 1964").—(Lord Drumalbyn.)

On Question, Amendment agreed to.

Schedule 4 [Enactments amended]:

LORD DRUMALBYN

My Lords, this is consequential on Clause 1. I beg to move.

Amendment moved—

Page 51, line 4, column 2, at beginning insert— ("In section 1, after the word 'shall', in the first place where it occurs, there shall be inserted the words '(except as provided by section (Exclusion of bodies corporate) of the Hire-Purchase Act 1964)'").—(Lord Drumalbyn.)

On Question, Amendment agreed to.

House adjourned at twenty-seven minutes past ten o'clock.