Lords Sitting of 21 January 1964

Preamble
The House met at half past two of the clock (Prayers having been read earlier by the Lord Bishop of Chester at the Judicial Sitting):
The LORD CHANCELLOR on the Woolsack.

THE LATE PRESIDENT KENNEDY: PRESIDENT JOHNSON'S LETTER
2.30 p.m.
THE LORD CHANCELLOR (LORD DILHORNE): My Lords, on November 25 last your Lordships' House agreed to a Motion that an humble Address be presented to Her Majesty expressing the deep sorrow with which the House had learned of the death of President Kennedy, and on the following day a Message from the Queen was read to your Lordships indicating that Her Majesty would convey to the President of the United States of America your message and your profound sympathy with Mrs. Kennedy and the late President's family and with the Government and people of the United States of America. Her Majesty The Queen has now received from the President of the United Slates of America a letter expressing thanks for Her Majesty's kindness in conveying to him the Addresses of both Houses.
The letter is as follows:
"Your Majesty:
"I am deeply grateful for Your Majesty's kindness in conveying to me the Addresses of both Houses of Parliament, and your reply, upon the occasion of the tragic death of President Kennedy. The warmth, sadness, and sympathy expressed in the messages are deeply moving. I shall transmit them to Mrs. Kennedy, to the family of our late President, and to our Congress.
"While the tragedy of President Kennedy's death remains with us, we take comfort from the deep and close ties which bind this country to the United Kingdom and the Commonwealth.
Sincerely,
LYNDON B. JOHNSON."

TRIBUTES TO THE LATE EARL OF LUCAN
2.36 p.m.
THE MINISTER WITHOUT PORTFOLIO (LORD CARRINGTON): My Lords, it was with a profound shock that I, and I am sure all of your Lordships, learnt the news this morning of the death of Lord Lucan. As your Lordships know, he had been, since 1954, the Chief Whip of the Labour Party in your Lordships' House, as indeed his father had been the Chief Whip of the Conservative Party in this House before him. It would not, perhaps, become me very well to speak of his great service to noble Lords opposite—they are in a far better position than I am to assess this—but what I can say, on behalf of all noble Lords who sit on this side of the House, is how very greatly we valued the way in which he carried out his duties, the spirit of reasonableness and compromise which he brought to the "usual channels", and the very great contribution that he made to the orderly and friendly working of your Lordships' House.
In so far as this House is concerned, that is his official recognition, but I do not think there is anybody in any quarter of the House who did not regard Lord Lucan as a personal friend. He was known to many of us before he came into this House, before he inherited, as a distinguished officer in the Coldstream Guards, and an officer who achieved the greatest ambition that any Regular soldier can have—that is, of commanding a battalion of his regiment.
My Lords, to all of us who had the privilege of knowing him, he was always exactly the same. He was quiet, unassuming, gentle and kind. But underneath this quietness there lay strong conviction and firm principle. He was for the under-privileged; and, if ever there was a question of a minority being bullied by a majority, he was there to speak for them. Noble Lords opposite are fortunate, if I may say so, to have such men in their ranks, and he will be greatly missed by everybody in this House. I know that it would be the wish of noble Lords who sit on this side of the House to send their deep sympathy to his wife and family in their sad and sudden bereavement.
EARL, ALEXANDER OF HILLS-BOROUGH: My Lords, I and all my colleagues on this side of the House are very much indebted to the noble Lord the Leader of the House for the kind manner in which he has referred to our departed friend, Pat Lucan. He was indeed a friend: the kind of friend before whom, as one writer has said, one could always fearlessly think aloud. I am grateful for what the noble Lord said about his relationships with the House at large. I do not think we could possibly have got a more quiet and friendly person to fill such a post—a post which, as every occupier of such a position must know, requires the holder to be a master of friendliness as well as of the basic principles of public relations. One could not have imagined anyone more fit for the post than he proved himself to be.
He entered upon his duties as Chief Whip in 1954 with a very difficult task to perform, for he was following on a Chief Whip who had a wider experience that any Labour Chief Whip had ever had in this House—a man who had been National Agent for the Labour Party, and a man who had been Chief Whip in this House for a quite long-lived Labour Government. Yet we can look back now at the record of the last more than eight years of service by Lord Lucan and say that he fulfilled the task to the highest satisfaction of all his colleagues in our Party, and that he did it in a manner which, as indicated by the noble Lord the Leader of the House, did not estrange him from the general membership of the House.
I am bound to say that I am inclined to speak my mind rather openly, and it was a very good thing sometimes to have Lord Lucan beside one, saying quietly, "Well, perhaps…", "Don't you think…", or "Perhaps it may be so; hadn't you better think of that again? "He had a wonderful manner for conveying what perhaps was a better spirit than I might otherwise have observed, and for that I am very grateful—deeply grateful—to him.
His career as a whole was properly distinguished. He fought bravely in the First War; he was injured, and was awarded the Military Cross. He served in South Africa as an A.D.C.—and what an A.D.C. he must have made!—to the Governor; and he always thereafter took
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a great interest in African affairs. As the noble Lord, Lord Carrington, has said (I put it in my own language), he was always for the underdog, and wherever it seemed to him that injustice was likely to obtain he was always against that injustice. He was a great person. I could speak for very much longer, but perhaps your Lordships will excuse me if I do not do so; I am feeling rather deeply about this sudden loss. I am glad to think that he passed, in the end, peaceably. He had been sleeping with his wife in their room until early this morning, when he suddenly felt ill, and asked her if she could get a doctor. She got a doctor within a few minutes, but, by the time they got back to the room, he had passed away, probably from a coronary infection. It was perhaps a brave and easy way to end such a valuable life of service to Parliament, to his country and, above all, to his friends, who will never forget him.
2.39 p.m.
LORD REA: My Lords, I hope the noble Lords to my left, of the official Opposition, will forgive me if, after that tribute from his Leader, I add a few words, on behalf of my noble friends on these Benches, about Lord Lucan. On these sad occasions, when we pay tribute and express our regret at the passing of one of our colleagues who has left us, it is of course inevitable that there is a margin, a degree, between merely official salutation and very personal sorrow. The convention in your Lordships' House permits us to record our tributes to a noble Lord who has held an official position in this Chamber, as Lord Lucan had done for the last ten or eleven years. But quite apart from his official position and his responsible duties which he carried out so meticulously, so modestly, so efficiently and pleasantly. there can be no regular, or semi-regular, attendant in this House who does not personally and sincerely mourn the loss of a friend and a good man—a good man who in the very political position of a Party Chief Whip nevertheless added honesty and integrity to political life.
He served his Party well in the ways in which we know; yet, such was his gentle nature, one saw him first as a kindly man, and only by thinking again would one remember that his chief rôle

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was a Party rôle, with all that that implies. Our grief, as I am sure all will agree, is genuine and deep, and our sympathy for his wife and family is heartfelt and sincere.

PROPOSED ABOLITION OF PREVENTIVE DETENTION
LORD STONHAM: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether they will now state their decision regarding the recommendation by the Sub-Committee of the Advisory Council on the Treatment of Offenders, that preventive detention should be abolished.]
THE MINISTER OF STATE, HOME OFFICE (LORD DERWENT): My Lords, the Advisory Council recommended the abolition of preventive detention and its replacement by a power to pass sentence of up to ten years' imprisonment on persistent offenders convicted of offences ordinarily punishable with imprisonment for five years or more. The issues involved are important and difficult. Persistent offending raises intractable social and penal problems, and the Government are deeply concerned to find ways of dealing with these which give the essential protection to society and are constructive in relation to the offenders themselves. The Advisory Council's recommendations, which would require legislation, have been receiving close consideration from this viewpoint, but my right honourable friend is not yet in a position to announce the Government's conclusions.
LORD STONHAM: My Lords, is the noble Lord aware that the Advisory Council's recommendation was made nearly twelve months ago; and, despite the "intractable nature", as he described it, of these problems, is this not an inordinately long time for the Home Secretary to take to decide about recommendations of his own distinguished sub-Committee? Is he further aware that in the meantime many men have been sentenced to long sentences of imprisonment for trivial offences, despite the practice direction by the Lord Chief Justice to the contrary which was made
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in 1962? Can he say, therefore, when a decision on the recommendation will be reached?
LORD DERWENT: My Lords, the first supplementary question was really: Why were the Government taking so long to make up their minds? It is because, as I have indicated, the problems raised by persistent offenders are of exceptional difficulty and the Government have thought it right to make the most thorough examination of the Advisory Council's proposals so as to be absolutely sure that any change is for the better. The Government cannot overlook the lesson that the abolition of preventive detention is being recommended only a comparatively few years after it was introduced in 1948.
The second question was, I think: Will the Government meanwhile take steps to see that preventive detention is no longer awarded?—that is what it came to—in view of what the Lord Chief Justice has said. As my predecessor the noble Earl, Lord Jellicoe, told the noble Lord in reply to a question on February 13, my right honourable friend has no authority to restrict the powers of the courts to impose preventive detention; and it would not be proper for him to seek to influence them in the exercise of their discretion. The third supplementary was: When shall we be able to make a statement? I cannot commit myself to a date. We are fully aware of the interest in this subject. We are pressing on with the study of it; but may I repeat what I said in answer to the first Question: we must be quite certain that anything we put in its place is better.
LORD STONHAM: My Lords, while thanking the noble Lord for that very full and helpful reply, may I remind him that in the practice direction the Lord Chief Justice advises his colleagues that in most of these cases a sentence of ordinary imprisonment appropriate to the particular crime committed should be the one awarded. Therefore I ask the noble Lord whether he is aware, for example, that last October a man who was sentenced to seven years' preventive detention for stealing £5 had been released only in July on completion of an eight years' preventive sentence.
SEVERAL NOBLE LORDS: Speech!
LORD STONHAM: Therefore I ask him what steps the Government can take, by consultation with the Law Officers or otherwise, to prevent the infliction of further sentences of this kind for trivial crimes when obviously the Lord Chief Justice, the Minister's sub-Committee and everyone else is utterly opposed to it.
LORD DERWENT: My Lords, I am quite aware of what the Lord Chief Justice has said. I would repeat that we are not in a position to seek to influence Her Majesty's Judges in any sentences they choose to impose.
THE EARL OF LONGFORD: My Lords, would the noble Lord allow me to submit respectfully that one of the arguments used is the kind of thing that shocks everyone interested in penal reform? Would he allow me to say that I hope it will never be said that 15 years is too short a time in which to study an experiment —
A NOBLE LORD: Order!
THE EARL OF LONGFORD: I will give way to the noble Lord.
LORD MORRISON OF LAMBETH: He thinks you are out of order.
THE EARL OF LONGFORD: The noble Lord, I am glad to say, has restrained himself. May I put it to the noble Lord, Lord Derwent, that it is a most shocking argument to say that 15 years is not enough to study an experiment. If that argument is used, 16 years would not be much better.
LORD DERWENT: My Lords I cannot see that that has anything to do with the original Question.
LORD STONHAM: My Lords, is the noble Lord aware—and I am sorry he was unable to answer my second supplementary—that most of the men sentenced to these terms of imprisonment are socially inadequate? Would he not agree that the Judge in the case I quoted in my earlier supplementary must also have been extremely inadequate?
LORD DERWENT: My Lords, the question of preventive detention and the method of sentencing is one that the noble Lord fully knows depends on past record. That argument has nothing to do with the Question on the Order Paper.

MINISTERS AND CIGARETTE SMOKING
2.50 p.m.
THE EARL OF ARRAN: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether, in view of the report by the United States Surgeon General, confirming that of the Royal College of Physicians, Her Majesty's Ministers will set an example to the country by announcing their intention to give up cigarette smoking.]
THE JOINT PARLIAMENTARY SECRETARY, MINISTRY OF HEALTH (LORD NEWTON): My Lords, to smoke or not to smoke is just as personal a matter for Ministers as it is for anybody else, but if it is of any interest to my noble friend, I do not mind admitting that I gave up smoking some years ago.
THE EARL OF ARRAN: My Lords, in regretting that reply, may I point out to Her Majesty's Ministers that by this sole act of self-sacrifice, publicly pronounced, they have it in their power, without over-statement, to save hundreds and perhaps thousands of human lives; and this being so, may I ask Her Majesty's Government with deep humility to reconsider this question?
LORD NEWTON: My Lords, I am not saying that it would not be an excellent thing if all Ministers decided to give up smoking cigarettes—it would. All I am saying is that it is a matter for personal decision by them. As to leadership, it may be that my noble friend could give a lead himself by seeking to persuade those newspapers with which he is associated to stop publishing cigarette advertisements.
THE EARL OF ARRAN: My Lords, may I assure Her Majesty's Government that I have done my best in this direction, and that I do not propose to relax my efforts. Would not Her Majesty's Government agree that, while no one will pay any attention to what I do or say, their example can have a deep effect?
LORD CONESFORD: My Lords, is it seriously suggested that Her Majesty's

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Ministers would have as much publicity as the noble Earl, Lord Arran?
BARONESS SUMMERSKILL: My Lords, while I am pleased to hear that the noble Lord, Lord Newton, is a reformed character (it is an indication that he understands the importance of this matter), may I ask him whether he will ask his right honourable friend the Minister of Health to consider this suggestion—that a warning issued by the Ministry of Health indicating the dangers to health should be inserted in every packet of cigarettes?
LORD NEWTON: My Lords, of course I will always consider any suggestion, but the Government's policy is to do everything they can to make the facts about smoking and ill-health available to people, so that they can draw their own conclusions. By "people", I mean those who smoke cigarettes, those who have not started but may be thinking about smoking, those who manufacture cigarettes and those who publish cigarette advertisements.
LORD STONHAM: My Lords, whilst entirely supporting what my noble friend Lady Summerskill has said about the importance of advertising the dangers of smoking, would the noble Lord not agree that this kind of inquiry into the personal habits of Ministers, or of anyone else, is quite unhealthy and may provoke inquiries about the dangers of the consumption of alcohol and almost anything else?
LORD REA: My Lords, would the noble Lord not agree that the Cabinet have joint responsibility for making any smokescreen the Government may wish to raise?
VISCOUNT ST. DAVIDS: My Lords, would the noble Lord not agree, in view of the nearness of the General Election, that the Government might be allowed to die in peace from cigarette smoking? The question might better be put to their successors on the Front Bench.
LORD NEWTON: My Lords, I was just about to express my gratitude for the friendly concern shown by your Lordships for the health of Her Majesty's Ministers. I thoroughly endorse it.
LORD MESTON: My Lords, is not the true answer that Ministers should be allowed to smoke and drink and do what they damn' well like?
THE EARL OF ARRAN: While delighting in the sprightly wit of the noble Lord, may I remind Her Majesty's Government that we are talking about death in its most odious form?
BARONESS SUMMERSKILL: My Lords, may I be allowed a supplementary question, because this is a very serious matter? Would not the noble Lord agree that the comparatively recent decision that the pharmaceutical industry should label their products in order to protect the health of the public has some analogy to what I have suggested?
LORD NEWTON: Possibly a trifle, my Lords.

ORDNANCE SURVEY HALF-INCH MAPS
EARL FORTESCUE: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether they have any progress to report in the production of half-inch Ordnance Survey Maps.]
EARL FERRERS: My Lords, there is little I can add to the reply given when the noble Earl raised this subject in December, 1961. The Government reluctantly decided that, with the resources available, it is not practicable to continue the production of the Ordnance Survey half-inch maps as a standard series covering the whole country. The production of maps at this scale is therefore to be limited to areas of particular interest, such as those of Greater London and of Snowdonia. Only five sheets in the original half-inch series have been published.
EARL FORTESCUE: My Lords, may I ask a supplementary question? Is the Minister aware that nothing of a smaller scale than one-inch can be regarded as anything like accurate, and that motorists are now drifting around the country depending solely on signposts?
EARL FERRERS: My Lords, I hasten to inform my noble friend that he is not quite accurate, because there are series published in a quarter-inch scale and also one-tenth of an inch scale.
LORD WILMOT OF SELMESTON: My Lords, may I take it from the noble Lord's Answer that the maps he has mentioned will be continued?
EARL FERRERS: Yes, my Lords; they will be continued. The point is that the half-inch maps have not found a great sale or a ready use and, therefore, they have been discontinued.
EARL FORTESCUE: My Lords, may I suggest that if it were a complete series it might be found that there was a great demand for it?
EARL FERRERS: My Lords, as my noble friend must be aware, the resources of the Ordnance Survey Department are limited. It has been considered that they would best be used by being employed on maps which are of more public use than on those which have a very limited value.

TANGANYIKA
EARL ALEXANDER OF HILLS-BOROUGH: My Lords, may I ask a Question, of which I have given the Government Private Notice? The Question is: "Whether Her Majesty's Government could make a statement on the present situation in Tanganyika?"
THE MINISTER OF STATE FOR COMMONWEALTH RELATIONS AND FOR THE COLONIES (THE DUKE OF DEVONSHIRE): My Lords, the noble Earl will have seen the statement made in another place yesterday by my right honourable friend, and noble Lords will have read in to-day's newspapers of the measures that have been taken, in case the need arises, to protect British lives. Since then, reports from Dar-es-Salaam have been more reassuring.
So far as the centre of the town and the main residential area are concerned, the night was quiet, with Field Force police patrols. We have heard within the last hour that everything is still quiet. Police are in control and the troops are back in barracks. There are, however, some reports of rioting and
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looting in two African and Arab suburbs, and it is possible that these were accompanied by casualties. This morning there was free movement in the centre of the town, both for pedestrians and for vehicles, and some shops were open.
The only new factor in what is still a very confused situation is that British officers of the Second Battalion of the Tanganyika Rifles at Tabora have been relieved of their posts. This, however, has apparently been done in an orderly manner, and arrangements are under way to fly them away. There is still no news of the whereabouts of President Nyerere, but it has been announced over the Dar-es-Salaam radio that he is to broadcast to the Tanganyika nation this evening.
EARL ALEXANDER OF HILLS-BOROUGH: My Lords, I am grateful to the noble Duke for giving the House this statement. I appreciate the arrangements that were made for securing, if required, the safety of British persons, and I hope that steps will continue to be taken to protect British interests in general. I should like to ask: is it not strange that our British Intelligence in East Africa should have been so ill-informed, in two separate cases now, within a comparatively few days? What is wrong here? Is the noble Duke able to tell us how it is that we are not given longer warning that this sort of thing was likely to happen? And is he aware that there are many people in this country who are very anxious about the situation of the President of Tanganyika during the last few days? Any further information which the Government could give us on this matter would be helpful.
THE DUKE OF DEVONSHIRE: My Lords, in reply to the noble Earl, I would say this for Intelligence. These countries are now independent countries, independent members of the Commonwealth, as individual and as separate as we are; and it is not as if we should know what is going on, as was the case when they were still part of our Colonial empire Whilst it is early days to understand exactly what has happened either in Zanzibar or in Tanganyika, I would say with some assurance that these events were as mach a surprise to the Governments of these territories as they were to ourselves. As

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to the point about President Nyerere, I share the noble Earl's anxiety as to the position of this most distinguished Commonwealth statesman, but I feel that I can add nothing more to what I said in my original Answer.
EARL ALEXANDER OF HILLS-BOROUGH: My Lords, may I ask the noble Duke whether our Intelligence stops operating when a country within the British Commonwealth takes independence? Surely we have good access to Intelligence even in countries that are not in the Commonwealth at all, which has to be relied upon. We continue to have our British representatives in office in certain posts in these places. Surely there must be some Intelligence coming through.
THE DUKE OF DEVONSHIRE: My Lords, I must confess that when it comes to questions of Intelligence I find myself on rather difficult ground. I have no doubt that Intelligence channels exist with various countries with which we have dealings. If there has been—and I emphasise the word "if"—a failure of Intelligence, no doubt it will be gone into in due course. But I would add that these are very new happenings. Certainly they have come as a surprise to us; but they have also come as a surprise to the Governments concerned. If the noble Earl wishes to put down a Question as to the efficacy of our Intelligence service in Commonwealth countries, I am sure it will be answered in due course.
LORD MORRISON OF LAMBETH: My Lords, these surprises are becoming a little frequent. I follow the noble Duke's answer vis-à-vis Tanganyika, who have had independence for round about two years—though even there the time is short—but in relation to Zanzibar, independence there has existed for some eleven days or a fortnight. Surely the British must have had some responsibility, and ought to have known—anyway, it was desirable that they should know—when they were in control of Zanzibar whether such an event as has taken place in Zanzibar was likely or not. While I can follow the noble Duke's attitude as regards Tanganyika, British responsibility vis-à-vis Zanzibar is quite clear, and I think he must answer why the British did not know that this coup d'êtat was going to take place.
THE DUKE OF DEVONSHIRE: My Lords, I am rather distressed that the noble Lord is not quite so Commonwealth-minded as I should have wished. Zanzibar has been independent for five weeks, not eleven days. I take the point that this coup in Zanzibar has come very soon after independence; but I have no doubt that had plans been under way for this coup while Britain was still responsible for Zanzibar's affairs, it would have been duly reported.
THE MARQUESS OF SALISBURY: My Lords, whatever may be true about the efficiency or non-efficiency of our Intelligence service, would the noble Duke not agree that these very disturbing events, occurring so close after each other in Zanzibar and Tanganyika, seem to indicate that they are not due to merely local troubles but are part of deep-laid conspiracy by the Eastern Powers, China and Russia, and, so we understand from Zanzibar, Cuba, as well, to disrupt the whole Continent of Africa and bring it gradually over from one side to the other: as we move out, the others move in? Will the noble Duke give an assurance that the Government will take this important factor into account in assessing their future policy to those few portions of Africa that still remain loyal to the West?
THE DUKE OF DEVONSHIRE: My Lords, I can give an assurance that events in East Africa will be duly weighed by Her Majesty's Government in considering their future policy. In answer to the first part of the question, I would say that it is still far too early to know what other, if any other, influences have been at work behind these two recent coups.
LORD STONHAM: My Lords, the noble Duke mentioned British officers who have been relieved of their command. Since, apparently, the elected Government of Tanganyika is not functioning, can he say by whom they were relieved of their command, and by what authority?
THE DUKE OF DEVONSHIRE: My Lords, late last night the Tanganyika Minister for Defence and External Affairs appointed a new Commander-in-Chief of the Tanganyika Army, a gentleman called Elsia Kavona. It is on his

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authority that officers of the Second Battalion have been relieved of their posts.
LORD BALFOUR OF INCHRYE: My Lords, according to Press reports, wives and children have had to leave all their worldly possessions behind on flying to Kenya from Tanganyika. Would Her Majesty's Government take steps to see that our representative in Dar-es-Salaam ensures, so far as possible, that the household goods, houses and personal effects of those who have been forced to fly are safeguarded by anybody who has responsibility for law and order?
THE DUKE OF DEVONSHIRE: Certainly, my Lords.

BUSINESS OF THE HOUSE
VISCOUNT GOSCHEN: My Lords, it may be for your Lordships' convenience if I explain the course of Business to-day. It is proposed that we should continue the Committee stage of the Hire-Purchase (No. 2) Bill until a suitable moment at about 5 o'clock. The House will then resume for the Second Reading of the Episcopal Church (Scotland) Bill. At the conclusion of the debate on that Bill the House will go back into Committee on the Hire-Purchase Bill, and will break for dinner between half-past seven and half-past eight. it is intended to adjourn the Committee at approximately 10 o'clock. Dinner will be available in the refreshment room this evening.

HIRE-PURCHASE (No. 2) BILL [H.L.]
3.8 p.m.
Order of the Day for the House to be again in Committee read.
Moved, That the House do now resolve itself into Committee.—(Lord Drumalbyn.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD MERTHYR in the Chair.]
Clause 3 [Right of cancellation of certain hire-purchase and credit-sale transactions]:
LORD SHEPHERD LORD SHEPHERD moved to add to subsection (1):
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"A copy of the Relevant Document shall be retained by the prospective hirer or buyer and it shall contain particulars of the name and address of the person to whom cancellation may be delivered, and to whom goods may be returned."
The noble Lord said: I beg to move the first Amendment on this day. It would appear to be an elementary requirement that, when a person has been called upon to sign an agreement or a contract, a copy of such agreement or contract should be left with the person who has put his signature to the document, but, in practice, I find that this is not the case. In all cases into which I have inquired, the hirer has signed two documents, the original agreement and a copy, and the dealer or salesman has retained both copies and has forwarded the same to the hire-purchase company.
I find that on the first Amendment of last Thursday I was arguing in error in regard to what I then thought was the necessity of a hire-purchase company to return to the prospective hirer what, in my view, would have been an agreement; that is, a document that had been signed by a hire-purchase company. But I now readily concede, having taken counsel's advice, that the case made by the Minister was correct—namely, that a hire-purchase company does not now need to return to the prospective hirer the requisite copy, as referred to in Clause 3, within what I thought was the seven-day period. In other words, they may return this document perhaps in two or three days' time, which is at present the usual time; but, following the need to investigate the position of the prospective hirer, it may well be that this copy will not be returned to the prospective hirer for perhaps seven or ten days, or even a good deal longer. Therefore, we shall have the position of the prospective hirer putting his signature to the first part of an agreement without any copy of the document which he has signed.
The purpose of Clause 3 is to give the hirer an opportunity to reconsider whether he wishes to go on with the agreement. This is to deal with the problem that Molony recognised of the high-pressure salesman. What good is there in giving a three-day or a four-day cooling-off period when the person who has to consider whether he wishes to proceed is not in possession of the

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document. The noble Lord frowns. In practice a person is not in possession of either the original or any copy of the document to which he has put his signature. I would ask the Minister whether he would consider what the hirer has signed.
First of all, from the principal Act he has the necessary warnings included in the agreement: first, that
"The Hirer may put an end to this Agreement by giving notice of termination in writing to any person who is entitled to collect or receive the hire-rent."
Clause 3 of the hire-purchase agreement in front of me, which I think is of great importance, says:
"If the goods have been damaged owing to the Hirer having failed to take reasonable care of them, the Owner may sue him for the amount of the damage…".
That is a very strong clause. There is another one which says that
"The Hirer should see whether this Agreement contains provisions allowing him to put an end to the Agreement on terms more favourable to him than those just mentioned."
The clauses I have quoted are for the benefit of the prospective hirer. But at the back of the document we have the term of the agreement which lays very clearly the responsibilities on the hirer. No. 2 says:
"The Hirer's acceptance of delivery of the goods shall be conclusive that he has examined the goods and found them to be complete and in good order and condition…".
In many cases a hirer is being called upon to sign a document without the goods ever being delivered to his premises. But this is what he is signing. There is also a provision—a very sensible provision—that the hirer should carry out insurance on the goods covered by the contract. There are many other provisions in this agreement of which the hirer should have knowledge, and we have already agreed that many of these terms take a good deal of reading before they can be understood.
If the Government say that the cooling-off period is to give the prospective hirer the opportunity to consider whether he wishes to go on with the agreement, obviously the hirer must be in possession of the facts of the agreement to which he has put his signature, and to which we are now giving, by Clause 3, the right of cancellation. Last Thursday, I thought my noble friend
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Lady Burton of Coventry made a considerable case in regard to a cooling-off period for all hire-purchase agreements, whether they had been signed in the home or not. I was not able to support her in the sense that I thought there was a considerable difference between a hire-purchase agreement signed in the home and that which had been signed in the shop, because in the case of the shop the person had entered willingly. But I concede that the person who may have signed an agreement in a shop may have undertaken the agreement owing to the insistence of the high-pressure salesman in the shop. It is recognised that an agreement is not binding upon prospective hirers until they have received the hire-purchase requisite copy. They have a period, therefore, to effect cancellation. I suggest to the Minister that if this Amendment is accepted there would be sufficient in the agreement for the hirer who signed in a shop to consider what he had signed and to take the necessary action. Of course, the Minister was right to say that this Amendment relates merely to the cooling-off period of those agreements that may have been signed in a home. But I would suggest to the Committee that, as there are so many clauses and so many provisions, and so much responsibility placed upon the hirer, if we say in Clause 3 that he should have a copy of the agreement, it would apply equally to the person who has signed an agreement in a shop. We are saying that a person should undertake an agreement having taken all the facts into due consideration.
We recognise that in most cases the hirer puts his signature to a document, perhaps not under pressure, but in a relatively short time. Certainly he rarely has time to sit down to read the very close-packed clauses and terms of an agreement. If he can take this document home and study it, I would suggest that he would be in a far better position to judge whether he should take the opportunity which exists under Clause 3 to decide whether to proceed. The Amendment therefore suggests that when a prospective hirer puts his signature to a hire-purchase agreement—that is, the first signature; and it is the hirers' signatures which will bind them, because it binds them if the hire-purchase company accept their proposals

815
—he should be in possession of a copy of the document to which he has put his signature.
The Amendment goes a stage further. We recognise that there are a number of people who may make use of Clause 3; that they have been put under pressure. They have signed an agreement, and they have had merchandise left in their home. We shall give them a cooling-off period. If the document is not returned to them for seven or ten days, how then, unless this Amendment is accepted, can the prospective hirer first of all affect cancellation for returned goods? The Government obviously believe that in every case the person who has negotiated the sale and the hire-purchase agreement is a local dealer. But in many cases the men employed in this house-to-house selling are not from a local dealer or a local shop: they are representatives, perhaps in the London area, of manufacturing and distributive organisations whose offices may be in Bradford, Manchester or Glasgow. If it is a local dealer, it is relatively easy for the person to effect cancellation and return the goods to the local dealer. But if it is merely a travelling representative, how then, unless he has this information which I require in my Amendment. can the hirer have the benefit of Clause 3?
I hope the Government will see the necessity of this Amendment. I believe the Minister is a pretty astute person, and I cannot see him putting his signature to a document without a copy being left with him. I do not believe there are many in your Lordships' House who would. I am quite sure that the noble and learned Earl, Lord Kilmuir, as a businessman or as an individual, would not put his signature without asking for a copy to be left with him. At present those who undertake hire-purchase agreements are not receiving a copy with their signature. I think it is right that they should, and I believe that a statutory requirement is necessary. Therefore I beg to move this Amendment.
Amendment moved—
Page 3, line 29, at end insert—
("A copy of the relevant document shall be retained by the prospective hirer or buyer and it shall contain particulars of the name and
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address of the person to whom cancellation may be delivered, and to whom goods may be returned.").—(Lord Shepherd.)
BARONESS ELLIOT OF HARWOOD: I rise to support the Amendment, which is the same in principle as one in my own name which follows, except that in my Amendment I propose that the customer should confirm rather than cancel. When a salesman and a householder agree to initiate a deal, Lord Shepherd's Amendment ensures that a copy of whatever document the householder signs is left in his hands. The noble Lord, Lord Shepherd, has pointed out very clearly how necessary this is. This copy will, I hope, bear all the necessary details of the proposed transaction which the principal Act requires to be shown on the actual document signed by the householder.
These details should include the cash price, the hire-purchase price, the amount and dates of all instalments, a description of the goods involved and the statutory statement of the customer's rights. Unless this first copy is left with him, under the present provisions seven days, or even more, may elapse before he receives the second copy from the owners, so that he is left during this period without any record of the proposal he may well have signed in haste. This first copy will furnish a reminder of all the facts and figures and will make it possible for the deal to be discussed during the insuing days until the second copy arrives from the finance company. It will also allow a comparison between the two copies, so that the possibility of mistakes or improper alterations to the first copy after signature can be ruled out. And, it is not unknown for a dealer to obtain the customer's signature to a blank form. This is, surely a recognised safeguard: one does not readily make onerous contracts and allow the other party who in this case may, and probably will, be a complete stranger, to walk off with the document. For these reasons it is not enough to say that a customer has his four days after receiving the second copy in which to make his decision. By the time he has his second copy he may have little recollection of the content of the original proposal that he gave to the dealer.
I believe that what I propose is a perfectly simple thing to do, since in almost all the trading deals that one has,

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either in shops or elsewhere, a carbon copy is taken and one is given a tear-off of whatever transaction one has taken at that particular time. Something as simple as that could cover this, although it would be perfectly possible to have a full copy of the hire-purchase agreement. In fact, I have provided myself to-day with no fewer than three different hire-purchase forms showing how they can be varied, and I think it would be in the interests of the consumer if a copy could be left with him in the first instance. Therefore, I support this Amendment.
LORD McNAIR: I also wish to support the noble Lord's Amendment. It seems to me most oppressive to deny to the hirer who has signed a hire-purchase agreement the right to receive a copy. If we want to make the cooling-off period a reality, the earlier it begins the better; and unless this Amendment is adopted a man will not be able to study the agreement he has signed until he has received a copy, which may be several days after he signs it. So that, from the point of view of making the cooling-off a reality, I am strongly of the opinion that the hirer ought to receive a copy at once.
Moreover, take the case of a man who goes home from his work and whose wife confesses to him that she has been bullied into buying a dishwasher or an encyclopædia, or something else which they cannot afford. She has nothing to show him; no evidence of the bargain that she has entered into. That again seems to me quite wrong. It is common legal practice, as the noble Lady has pointed out, that when an agreement is signed the two original documents are exchanged, or, if only one party has signed, that the other party has a copy. I sincerely hope that the noble Lord in charge of this Bill will realise the oppressiveness of the situation in which a man, often not very familiar with business transactions, does not receive a copy of the agreement at once.
3.27 p.m.
THE MINISTER OF STATE, BOARD OF TRADE, (LORD DRUMALBYN): I have been impressed with the arguments that have been put forward, but I should like to make some observations on them. In the first place, might I say to the
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noble and learned Lord, Lord McNair, to whose great knowledge and experience in this subject we must all bow, that in this case, as in other cases, when the agreement is signed both parties will have a copy. What we are discussing at the present time is whether or not when the offer to enter into a hire-purchase contract is made by the potential hirer, a copy should be left. The noble Lord, Lord Shepherd, says he is sure that I should keep a copy in such a case. But might I suggest this to the Committee? One of the purposes of this Bill, particularly in regard to subsection (2) of Clause 2, is to try to ensure that as far as possible hire-purchase contracts in general are read before the potential hirer signs. That is the object in putting the box there. It is agreed that when a salesman, to use a colloquial expression, is "breathing down your neck" in your own house, there may be less chance to read the document, less will to resist the salesman and hold him while the document is read.
But I thought that the noble Lord, Lord Shepherd, was slightly inclined again to lose sight of the fact that it is not until the agreement is received that the four days cooling-off period starts to run, and it is within those four days that the time to withdraw from the agreement arises. Before that, at any time up to the time the agreement is received, it is possible to withdraw from the offer. The question is in this case whether we should insist that a copy is left. We certainly do not prohibit the leaving of a copy. There is no question of denying a right to a copy if it is thought right by the finance house, in its own discretion, or the dealer, as the case may be, to leave a copy.
These, then, are the views offered. I think the point is that the Amendment seeks to anticipate the arrival of the statutory copy. It provides, in short, that a copy has to be left with the prospective hirer at the time when he signs. There may be no great harm in that, so far as it goes, but it will tend still further to deter the potential hirer from reading the document before he signs. He will say, "I make an offer and I can withdraw from the offer at any time I like. I can go on and read the document later." I think that, apart from

819
anything else, there are technical objections to the Amendment. I am bound to point these out because otherwise the noble Lord might wish me to accept the Amendment right away, which I could not possibly do. There are technical objections, because the person to whom the cancellation may be delivered is not necessarily the person to whom the goods may be returned. That is a point to which we shall come later on.
On the merits of the case, I feel, as I said before, that we have to be careful not to confuse the hirer in any way. We do not want him to have too many documents before him. And the essential safeguard for the hirer that we are trying to establish here is that, when the agreement has been made and the document has been sent to him through the post, he may then have an opportunity, a period of four days, in which to withdraw. It is perfectly true that if, in the meantime, a copy has been left with him, it will be possible for him to study it, talk it over with his household and so forth, so that, when the document actually arrives—and at that point he is told (he may not have known it before) the name of the person to whom he may send the cancellation—he may be in a better position to make up his mind. I should like to think about the matter a little further, but I feel that it is important, when we are giving a safeguard of this kind, that we concentrate on keeping it as simple as we can. If we heap up too many requirements we shall only detract from the benefit of the safeguard we are seeking to establish. But as I have said, I shall be glad to consider the arguments that have been raised, and perhaps on that understanding the noble Lord will withdraw the Amendment.
3.34 p.m.
LORD CHORLEY: Before my noble friend withdraws the Amendment, might I put in a word in support of what the noble and learned Lord, Lord McNair, said? In these discussions we have not often had the Minister on the fence; he has usually been well on the other side. Now that he is on the fence, I should like to push him off. The point is that the cooling-off period is pretty short, particularly for a group of people
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to whom I referred in my Second Reading speech, long-range lorry-drivers and other men who work away from home. If we can provide extra time during which family consultations can take place, that will be very much to the advantage of the family.
The noble Lord, Lord McNair, pointed out that a large number of these cases, particularly the difficult ones in which the cooling-off period is very important indeed, are cases where high-pressure salesmanship is exerted on the wife. She may have a very rough idea indeed of what has happened when the husband gets home and if he is due to go off to Scotland, or somewhere a long way off, there is not much opportunity to discover what the position is before the whole cooling-off period may have expired, because the signed contract may arrive after he has gone. It does not seem to me that it is complicating the situation to require that a copy should be left with the woman so that she can show her husband what it is and they can have a family conclave as to whether they should go on or whether, in all the circumstances, they cannot afford it and should use the cooling-off period to cancel. I hope that the noble Lord will feel able to accept the principle, though if he likes to redraft the Amendment, no doubt the noble Lord, Lord Shepherd, will be agreeable.
LORD SHEPHERD: It is always difficult to ask a Committee to press a point when the Minister, quite voluntarily in this case, has said that he will consider the points that have been made. I must ask the Minister this question: does he accept in principle that a person who has put his signature to an important agreement or offer is entitled to receive a copy of the document to which he has put his signature? I think we must establish that point clearly this afternoon. With regard to the other matters, whether the name of the person to whom cancellation should be made and the goods returned should be in the agreement, I agree that here there is a little difficulty—and we shall come to that later on in the Bill. But I think we must have it clearly established whether or not the Government accept the principle that where a person has put his signature to a document of considerable importance he should receive a copy.
LORD DRUMALBYN: One of the reasons why I wanted to consider this matter was because, as the noble Baroness, Lady Elliot of Harwood, said, one is not quite certain whether this is right or wrong; it happens. When a prospective customer has put his signature to an offer, the offer itself, the document itself, is at that time complete. The noble Lord may nevertheless say that, even if it is not complete, pro formâ, as it were, the normal terms of the contract might well be worth study. That is one point. All I am saying is that if the noble Lord is asking me whether it would be right that a copy should be retained if in all cases the document was complete, and if we were providing that the document should be complete in all cases before the offer was made, then I think that the answer would probably have to be, Yes. But those are not the circumstances we are considering. It is not always so. I should like to consider just how this would work out in practice. I do not see my way through the details, and I should like to reserve my position.
LORD SHEPHERD: Might I suggest to the Minister that if the document is not complete, there is even more reason the person should have a copy of the document to which he has put his signature? At least the prospective hirer will then be aware of what he has agreed to undertake, and of what has been inserted by the hire-purchase company in the meantime. I should have thought that what the noble Lord has said increases the importance of seeing that the hirer receives a copy.
LORD DOUGLAS OF BARLOCH: I can see a difficulty here: if the hirer is given a copy of the document at the time when he signs it, and it contains in it a notice with regard to his power of cancellation, he may be a little confused when he subsequently gets another copy which has been signed by the other party to the contract. As the noble Lord in charge of the Bill has indicated a disposition to consider this point. may I make for his consideration an alternative suggestion? That is that when the hirer signs a contract, which at that stage is quite correctly described as an offer until it has been accepted by the other party, he should be given a simple form of receipt saying:
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"We have received from you an offer to enter into a hire-purchase contract for such-and-such goods to such-and-such value.
"You will in due course receive a copy signed on behalf of the vendor, and you will have up till four days after receipt of that copy the opportunity of withdrawing your offer by sending a notification to such-and-such an address."
That is a quite clear and simple procedure which would save any confusion about two copies of a document being delivered to the hirer, one when he signs and one later, and would make his position perfectly clear to him.
LORD DRUMALBYN: I shall be perfectly willing to consider the further suggestions of the noble Lords, Lord Shepherd and Lord Douglas of Barloch. I hope, with those assurances, we can now pass on to the next Amendment.
LORD SHEPHERD: I will immediately respond, but may I just say to the noble Lord that the Amendment relates to Clause 3. This deals with the cooling-off period for an agreement signed in the home. If we establish a principle in regard to Clause 3, I believe the principle should relate to all hire-purchase contracts. Therefore, if the Minister accepts the principle, would he consider putting the necessary words in the right position of the Bill so as to deal with all hire-purchase agreements?
LORD DRUMALBYN: Yes, certainly I will further consider that, but of course without any commitment.
LORD SHEPHERD: I will withdraw the Amendment at this stage, but if the Government do not respond I shall have no alternative but to divide on Report.
Amendment, by leave, withdrawn.
3.42 p.m.
BARONESS ELLIOT OF HARWOOD BARONESS ELLIOT OF HARWOOD: moved to leave out subsections (2) and (3) and to insert:
"(2) A copy of the relevant document (in this Part of this Act referred to as 'the first copy') shall be served on the prospective hirer or buyer at the time he executes the relevant document.
(3A) The copy of the agreement (in this Part of the Act referred to as 'the second copy') specified in paragraph (d) in section 2(2) of the principal Act (which specifies that a copy of the agreement is delivered or sent to the hirer within seven days of the making of the agreement) shall bear a detachable form addressed to the owner or seller or any person

823
who (whether by virtue of this Act or other-wise) is the agent of the owner or seller for the purpose of receiving such a notice (in this Part of the Act referred to as 'the owner') containing a notice of confirmation (in this Part of the Act referred to as 'the notice of confirmation') which is at least as prominent as the rest of the contents of the detachable form, in terms of the prescribed Schedule number 7B to this Act.
(3B) Provided the prospective hirer or buyer detaches and signs the notice of confirmation, a transaction to which the relevant document relates shall only come into effect at the time of posting of the notice of confirmation by him to the addressee by recorded delivery or registered post at any time after he has received the second copy and before the end of the period of four days beginning with the day on which he receives the second copy.
(3C) It shall be implied as a condition precedent in any offer to enter into an agreement which is contained in, or implied by, the second copy, that any unconditional acceptance by the prospective hirer or buyer shall he unenforceable by the owner unless such an acceptance complies with the provisions set out in subsections (3B) and (3C) of this Section.
(3D) Expiry of the period of four days referred to in subsection (3B) of this section shall operate as a withdrawal of any offer to enter into an agreement contained in the relevant document made by the prospective hirer or buyer unless he has served a notice of confirmation in the manner and during the period prescribed in subsection (3B) of this Section.
(3E) An owner or a seller or any person who (whether by virtue of this Act or otherwise) is the agent of the owner or seller who fails to comply with any one or more of the requirements contained in Section 2(2)(b) and (2)(c) and Section 3(2)(b) (which prescribe the details of a hire purchase or credit sale agreement which require to be stated on the relevant document) of the principal Act as amended by Section 2(1)(b) of this Act, or fails to comply with any one or more of the requirements contained in Section 3(2) of this Act, stall be guilty of an offence under this Act, and shall be liable on conviction to a fine not exceeding fifty pounds. or to a term of imprisonment for any period not exceeding three months, or to both such fine and such imprisonment."
The noble Baroness said: The Amendment which stands in my name is one which I am anxious to put forward for discussion by the Committee, because it makes the onus of accepting a hire-purchase agreement one of confirmation rather than of cancellation—in other words, that the hirer should contract-in to buy rather than contract-out not to buy. Although rather long, that is the gist and purpose of the Amendment. I am not going to discuss
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subsection (2) because that is exactly the same as the Amendment put forward by the noble Lord, Lord Shepherd, in favour of which I have already spoken. The only difference between his Amendment and mine is that he wants the word "cancellation" and my desire is for "confirmation".
Going on to subsection (3A)—I should like to speak to the various subsections, (3A), (3B), (3C) and so on, I would point out that we know that the main purpose of the Bill is to give the customer a statutory right to cancel the deal during the cooling-off period as a safeguard against the worst abuses of doorstep sales and transactions. Against this method it has been argued that the customer may not bother to exercise his right of cancellation and so fail to contract out, and at the end of the cooling-off period, owing to the fact that he has not bothered to contract out, he will find himself bound by the agreement. It is no doubt true that there is a class of people who simply let things slide and will not bother to contract out. If this is so, they will be protected to a greater extent, for under this Amendment the failure of the customer to take any steps results in the agreement automatically lapsing at the end of the cooling-off period—that is to say, it will lapse because he has not contracted-in; he has not confirmed his sale. This would be the result of the method of contracting-in which I am suggesting.
The second copy of the agreement which is sent by the owners to the customer could have a detachable statutory notice of confirmation attached to it. This would take the form of my proposed Schedule 7B. If the customer really wishes to carry on with the deal he must take positive action; he must detach this notice personally, sign it and complete it and send it by registered post or recorded delivery to the owner, whose address must be shown on the notice. Only by this means can the agreement come into force. I think this is a more positive way of safeguarding the consumer. It reduces the temptation and opportunity for the dealer to obtain false confirmation for the deal when he first visits the customer.
The wording of the notice of confirmation should leave the customer in no doubt that he is finally committing

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himself to the agreement the terms of which are set out in the second copy of the agreement and of which it forms a part. Any deviation from this procedure will make the agreement void. I am afraid that by my proposal, as well as that under the Bill, it is not possible altogether to protect customers who are not alert to their own interests from the unscrupulous manoeuvres by tradesmen. For instance, the salesman may come back to the house at the end of the cooling-off period to make sure that the customer sends off the notice of confirmation. On the other hand, under the contracting-out procedure the salesman might equally visit the house again to make sure that people do not go back on their original intentions.
On the whole, I think that my proposal will give consumers better protection as well as encourage a more responsible attitude towards undertaking what may be heavy financial burdens; but as I say this is a point for debate. I am putting it forward because I think it would give more protection to the consumer, because he would have to exercise his own initiative and say, "I want the article," rather than find the article left with him because he has forgotten to say that he did not want it. I should welcome greatly the views of other noble Lords on this particular aspect of the clause. I beg to move.
Amendment moved —
Page 3, line 30, leave out subsections (2) and (3) and insert the said new subsections.—(Baroness Elliot of Harwood.)
3.48 p.m.
LORD PEDDIE: The suggestion put forward by the noble Baroness is certainly an interesting one, and one that at first glance gives the appearance of added protection to the consumer, but, in practice, I fee] that that added protection would be non-existent. This is a suggestion to substitute a contracting-in for a contracting-out, and the noble Baroness has, from my point of view, herself indicated the major weakness in this method—namely, that there would be no difficulty at all on the part of the owner or agent in returning to the home and, with added pressure, securing a completed detached form as an indication of contracting-in. Whilst there is the element of novelty in this suggestion, I think that on balance the method of
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contracting-out so far as humanly possible prevents any undue pressure from being put upon the hirer, whereas the suggestion of contracting-in creates an element of difficulty which I believe could conceivably have quite the opposite intention to that which the noble Baroness seeks to achieve.
LORD McNAIR: I wish to support the Amendment proposed by the noble Baroness. In my judgment, the underlying principle that ought to govern our thinking in dealing with this class of transaction has been well expressed by some medieval chronicler, when he described a certain class of case as a field in which there is "too great might on the one side and too great unmight on the other". It may very well be that in the higher echelons of hire-purchase when a man buys a car for £1,500 that maxim may not apply, but in the vast majority of cases with which we are concerned there is certainly too great might on the one side and too great "unmight" on the other.
Therefore, throughout the consideration of this Bill it is our duty to seek every possible means of protecting the hirer from the pressure which the skilful salesman can bring to bear. If I were in a situation where I had to choose between the alternatives of giving a notice of confirmation or a notice of cancellation I should most certainly feel that I had a greater protection, and a greater incentive to use my faculties in the solution of the matter, if it was necessary for me, before becoming bound, to say, "I accept". Therefore, I am strongly in sympathy with what the noble Lady has proposed.
LORD CHORLEY: I should like to support the noble Lady, as I was attracted by what she said in support of this in her speech on Second Reading. There is also a great deal in what was said by the noble and learned Lord, Lord McNair. What we are trying to do is to protect people from committing themselves financially as a result of high-pressure salesmanship. They are in many cases very anxious to have further household furnishings, and it may very well be that there is some slight difference of opinion between husband and wife on the matter. On the whole, in circumstances of this kind, it is not wise to push people over the

827
line and to encourage them to go on with commitments which may put great pressure on the household economy. Therefore, if we were to take a positive step in the direction of contracting-in, I think that it might just give that additional protection which is required.
I very much appreciate what was said by the noble Lady—and the point was taken up by my noble friend Lord Peddie—that when the salesman gets back into the house he may very well exert his abilities to bring about a contracting-in or to prevent cancellation. But once warned, twice shy!, and it may be easier to keep the man out when he calls on the second occasion, especially if the husband has left a rather strict admonition with his wife, "If that something' calls again, you just see that he doesn't get his foot into the house—otherwise there will be trouble when I get back!" I think that there may well be quite a number of cases in which a safeguard against this undoubted danger should exist. I feel that the noble Lady has made out a case, and I hope that the Minister will be able to accept it.
LORD DRUMALBYN: I should like to deal with the substance of these proposals, rather than the detail. I am sure that even if I were inclined to accept the principle, my noble friend Lady Elliot of Harwood will not expect me to accept the details of the drafting of these Amendments. She has herself highlighted the main point here, a point which has also been highlighted by the noble and learned Lords, Lord McNair and Lord Chorley. This is the point as to whether it is better to adhere to the relatively straightforward and easy procedure laid down in the Bill, under which the hirer can cancel the agreement by sending the written notice, not restricted to any statutory form of words, or whether it is better to give the hirer yet a further safeguard: that once the agreement has reached him, he is given the further right, and indeed the duty if he wants the agreement to stand at all to confirm it positively within four days.
The noble Lady herself has pointed out that during those four days the prospective hirer might again come under pressure from the salesman. I should have thought that in that case the
828
pressure would be very intense. Instead of the prospective hirer being given the right to withdraw from the contract, he will then be given the chance of confirming the contract, which will mean sending off the detachable form. There may then be great pressure from the salesmen, who may come along, stay there until the form has been signed, and himself take it away and post it. It is a matter of judgment as to where the might is going to be exercised. We think that what we have provided in the Bill is the better course.
There is another substantial point. The Amendment would create a criminal offence for failure to comply with the requirements about the statutory copy of the agreement. As the 1938 Act stands, failure to comply with these requirements is liable to render the agreement unenforceable. This is a more serious matter for the finance house than the question of what, to them, would be a relatively trivial fine. I realise that this is a matter of detail, but we do not like to increase the number of criminal offences more than is absolutely necessary. I think the main point is the one that the noble Lady has highlighted, and, on the whole, we feel that it is better the Bill should remain as it is.
BARONESS ELLIOT OF HARWOOD: I am grateful to the noble Lords who have supported me in my view. I am not going to press this matter. I wanted to bring it forward, because it has been strongly represented to me that a positive action on the part of the buyer would be a greater safeguard; although I recognise, as the Minister and the noble Lord, Lord Peddie, have said, that there are difficulties. However, I was anxious to put it forward and discuss the point with the Committee. I hope that the Government will think about this when they are considering what the next stage of the Bill should be.
I should like to say one further word about my subsection (3E) which I did not discuss in the first instance—that is the recommendation of the Molony Committee, contained in paragraph 527, that the dealer's failure to comply with the rules governing the possibility of cancellation during the cooling-off period should be a criminal offence. The reasons given by the Molony Committee

829
are very convincing, and in our opinion, criminal sanctions should reinforce the confirmation procedure in the same way.
I do not think I need recapitulate the needs for this provision, which are set out fully in paragraph 527 of the Molony Committee's Report. The householder and the dealer are often alone in the house and, if any abuses occur over the making of an agreement, the householder has great difficulty in obtaining redress. This provision should provide a warning to than: small proportion of salesmen who indulge in sharp practice. The reputable salesmen will have nothing to fear from it; indeed, I think they will welcome it as a method of control over the weaker brethren of their trade. This is covered by subsection (3E) of my Amendment No. 12A, and I should like very much to know what the Minister thinks about this.
LORD DRUMALBYN: I thought I referred, briefly, to this point. I also mentioned it in the course of my speech on Second. Reading. But we did not think it was necessary to accept the Molony recommendation on this point for the reason I have stated: that by far the most important consideration to the finance house is whether or not the agreement they enter into is, from their point of view, going to be enforceable. I should have thought that they would be extremely hesitant about entering into an agreement which was not going to be enforceable—and indeed, would see no advantage in so doing. I appreciate that it might be difficult for the hirer to get out of such an agreement, but I do not think that is likely to be so. It would be for the owners—that is, the hire-purchase house—to bring an action for enforcement, and if they had not complied with the requirements they would not be able to enforce the transaction. I should have thought that was the really important sanction, much more important, as I have said, than a comparatively trivial fine.
BARONESS ELLIOT OF HARWOOD: I shall withdraw the Amendment.
Amendment, by leave, withdrawn.
LORD AIREDALE: The purpose of this Amendment is to make the cooling-off period available to the hire-purchase company, in those cases where new information comes into their possession
830
during that time relating to the customer's creditworthiness. I suppose the Minister will say that it is the business of the finance company to satisfy themselves as to the customer's creditworthiness before they enter into the transaction at all; and no doubt they do. But I think there must sometimes be cases where new information about the creditworthiness of the customer reaches the company shortly afterwards, which makes them regret having entered into the contract; and, certainly, it is to nobody's advantage that people should be encouraged to over-commit themselves in hire-purchase contracts. I feel that this Amendment will be a useful one, and I beg to move.
Amendment moved—
Page 3, line 38, at end insert—
("() At any such time as is mentioned in the last preceding subsection, the owner or seller, or any person who (whether by virtue of this Act or otherwise) is the agent of the owner or seller, may serve a notice of cancellation on the prospective hirer or buyer.").—(Lord Airedale.)
LORD PEDDIE: On the face of it this appears to be quite a reasonable Amendment, as it affords the owner, or seller, the reciprocal right to cancel a transaction during the same period as is given to the consumer. But in actual fact, unless my reading is wrong, the Amendment itself is unnecessary, because the owners are under no obligation to accept the customer's original offer; that is, the signed relevant document. As the noble Lord opposite confirmed in Committee recently, the seven days during which the copy of the agreement must be sent by the owner to the customer run only from the date of making the agreement—that is, the date when the owner decides to sign the hirer's offer. So, in effect, the owner has as long as he likes to make up his mind, and there seems to be little purpose in this Amendment.
LORD DRUMALBYN: For the reasons that the noble Lord, Lord Peddie, has given, I do not think that the Committee would wish to accept this Amendment. It would render unworkable the procedure that we have in mind, quite apart from its being unnecessary. Therefore I hope that the noble Lord, Lord Airedale, will agree to withdraw his Amendment.
LORD AIREDALE: I do not understand how this Amendment would make the procedure unworkable, but I shall have to accept that from the Minister. I do not propose to press this matter, and I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
4.6 p.m.
LORD SHEPHERD LORD SHEPHERD moved, in subsection (5) to omit all words from the first "means" down to "and", and to substitute:
"any business premises or office but shall not include any place of public refreshment or entertainment or any premises which are used, or adapted for use, wholly or in part as a private residence."
The noble Lord said: We are all in agreement with the provisions of Clause 3, which mean that there shall be a cooling-off period when a document is signed by the prospective hirer in any place that is other than appropriate trade premises. We all have in mind the harassed housewife at home, but I cannot help feeling that the description of "appropriate trade premises" in Clause 3(5) is far too narrow and, I must say, rather unrealistic. The subsection says:
"In this section 'appropriate trade premises', in relation to a document, means premises at which goods of the description to which the document relates, or goods of a similar description, are normally offered or exposed for sale in the course of a business carried on at those premises".
This means that if you were undertaking, perhaps, a substantial hire-purchase agreement, and in view of all the terms that may be in a document you were to go to your solicitor with a representative of the hire-purchase company, you would not be able to sign that document in his office. It would mean, if you were to enjoy the cooling-off period, that you would have to go from the solicitor's office to the particular premises where the goods were on sale or offer and then sign the document.
We were talking on Thursday last of cases where corporate bodies had undertaken hire-purchase agreements by signing in their own premises. The fact that we have excluded the corporate bodies does, of course, relieve them from the cooling-off period. But there may well be cases where individuals in business were signing these documents in their own premises. In fact, they could have
832
the cooling-off period because of the wording in the Bill. I suggest that the drafting of the Bill is too tight, and I seek by this Amendment to substitute the words:
"any…premises or office but shall not include any place of public refreshment or entertainment or any premises which are used or adapted for use, wholly or in part as a private residence."
In other words, the cooling-off period would apply to a place that is an office, perhaps even a hire-purchase company's office where many contracts are signed; but the Amendment would definitely exclude any documents that might be signed in a hotel, a public-house, or in what may be the office of a representative of a hire-purchase company, where his office may be part of his own home or residence. In essence, "appropriate trade premises" would be any business premises or office, and not the tight definition which is in the Bill relating to the trade and to the article that is being sold. I think this is a reasonable suggestion. I do not believe it will create any loopholes or weaken in any way the intention of Clause 3. I beg to move.
Amendment moved—
Page 4, line 15, leave out from ("means") to ("and") in line 18 and insert the said new words.—(Lord Shepherd.)
LORD CHORLEY: Unless the noble Lord, Lord Drumalbyn, is going to accept this Amendment, in which case I will sit down at once, I should like to say a word in support of my noble friend. It seems to me it is very important that one should not clog up the wheels of business too much in connection with the cooling-off business, and if we restrict it in the way in which it is restricted in the Bill at the present time I am afraid it may have that effect. My information is that very important hire-purchase agreements are in fact signed at the finance companies' offices very frequently, because the whole thing depends upon whether the finance company are going to "play", so to speak. I quite appreciate that, in the smaller type of case, there is a general authorisation and no particular difficulty arises, but it might well be that in a case of this kind, if the thing did break down because an agreement signed in a finance

833
company's office came within the mischief of this clause, it would break down in a way rather unfair to the dealer. I cannot myself see that this Amendment in any way weakens the position of the consumer, whom we are trying to protect in this Bill, and therefore, on the whole, it seems to me to be a very useful provision. I hope the Minister will be able to agree to it.
LORD DRUMALBYN: I appreciate that the definition of "appropriate trade premises" in subsection (5) is fairly narrow, and I am of course prepared to consider any cases where practical difficulty is foreseen. But I must repeat again—and I do so although there is the risk of boring your Lordships, but I think it is important—that, unless the cooling-off safeguard is simple and the circumstances in which it does and does not apply are quite clear cut, it will not serve its purpose and will cause trouble. The definition which this Amendment would substitute seems to go much wider than can be necessary to cure any practical difficulties, and it could lead to great uncertainty whether particular agreements were subject to cooling-off provisions or not. For example, I see no reason why it is necessary to provide for signature at a shop which does not sell the goods in question. I take the point with regard to the lawyer's premises. Then, the exception in the Amendment of public-houses conjures up visions, rather, of the recruiting sergeant side; and the exception of premises used in part as a private residence would, at best, result in anomalies through providing different provisions in cases where a shopkeeper lived over a shop and where he did not, and, at worst, could lead to a finance house discovering later on that it had not complied with the requirements of these clauses and that a particular agreement had been within the cooling-off provisions because the dealer himself or someone else also lived in part of the building. have vivid recollections (other Members of the Committee will no doubt also recollect) of the difficulty one had over betting shops in this connection.
Once again, I think this would give rise to uncertainty. I concede at once that the example that the noble Lord, Lord Chorley, has given is deserving of
834
attention—that is to say, the case where the hirer or buyer comes to the premises of the finance house and signs an agreement there. Had he gone to the shop of a dealer who provides his own finance, the cooling-off provisions would not have applied; but simply because the premises of a finance house do not come within the definition of "appropriate trade premises", they do. I see this point, and I think it should be possible to take agreements signed by a hirer at the premises of a finance house out of the sphere of the cooling-off provisions. I will certainly give further consideration to this matter, and I will also take note of the points which the noble Lord has raised regarding solicitors' premises. I should like to consider that. I do not think it is quite in the same category; but, at any rate, I am prepared to look at it again. All I would say is that I think this particular Amendment is rather too vague and probably goes further than would be desirable in all the circumstances.
LORD SHEPHERD: I will again respond to the Minister by withdrawing this Amendment. I think he has taken the point that the present definition is too restrictive. Like my noble friend, I feel that we must give the fullest protection to the consumer in the home, but we must not clog up business. The speed and efficiency of business is an essential factor in this country, and anything that is done unnecessarily to restrict business is bad for the country. At the same time, I agree we must not do anything to weaken the position of the harassed housewife; but I should have thought it possible, particularly as the noble Lord has a Parliamentary draftsman available, to find the appropriate words to meet the case. In those circumstances, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
4.17 p.m.
LORD AIREDALE LORD AIREDALE moved, in subsection (5), after "carried on" to insert "permanently or temporarily". The noble Lord said: This Amendment is an attempt to bring within the definition of "appropriate trade premises" paid shows and exhibitions, agricultural shows and things of that kind. I imagine that the Government would wish such

835
exhibitions to be within the definition of "appropriate trade premises". Certainly they should be if one is applying what I think is the correct test: whether the customer goes in search of the goods or whether the salesman goes in search of the customer. I very much doubt whether, under this definition of "appropriate trade premises" as given, many of these exhibitions would fall within it. As members of the Committee all know, the Motor Show and the Boat Show are held at Earl's Court, but only for very short periods in the year. On the strength of that, would the courts be likely to decide, using the words of this definition, that Earl's Court was premises at which cars and boats "are normally offered or exposed for sale"? I should have thought that was extremely doubtful.
This Amendment widens the definition slightly by inserting, after the words "carried on" the words "permanently or temporarily", and that would mean that these exhibitions, although extremely temporary in nature, could be brought within the scope of the definition of "appropriate trade premises" and taken out of those cases to which the cooling-off period applies. I believe it would be the Government's intention that the cooling-off period should not apply to transactions entered into at places of this sort, and I beg to move the Amendment.
Amendment moved—
Page 4, line 18, after ("on") insert ("permanently or temporarily").—(Lord Airedale.)
LORD DRUMALBYN: The noble Viscount, Lord Stonehaven, also raised this point on Second Reading, and I was able to get opinion on this matter whether the kind of case the noble Lord, Lord Airedale, has in mind would or would not be covered by the Bill. I am informed that the interpretation is that such exhibitions would not be within the definition of "appropriate trade premises" as the Bill now stands. Members of the Committee may think that no very great disadvantage may arise from this, in all the circumstances of the kind of trade that goes on at exhibitions. Sometimes it may even be thought that a cooling-off period might be desirable. But I think that the Amendment, as proposed, goes rather further than the noble Lord
836
thinks. Indeed, I think it would open the way to precisely the sort of evasion which we were at pains to prevent in the cooling-off provisions as they appear in the Bill; because as the clause stands the cooling-off provisions do not apply in the case of hire-purchase or credit-sales agreements signed at a place where the goods of a similar description to those comprised in the agreement are normally offered for sale in the course of a business carried on at those premises.
To allow this to be extended to premises where the business is only temporarily carried on would seem to allow anyone to set up in premises for a few days or even overnight, work round the area from door to door and take people from their houses to sign agreements in the shop, if it was a place where these goods were being dealt with only temporarily. The cooling-off provisions would not apply to those agreements; and after a few days the firm would move on somewhere else, having neatly got around the requirements of the cooling-off clauses. I am sure the noble Lord does not wish to facilitate this kind of activity; but I am afraid his Amendment, as drafted, would do it.
LORD PEDDIE: I hope the noble Lord, in any reconsideration of this Amendment, will keep strongly in mind the grave danger he commented upon in regard to "fly-by-night" traders who can take village halls and the like and evade the obligations under this Bill. I think there is little justification for the acceptance of this Amendment, because while one may accept the point of view that a long-standing exhibition might be considered appropriate premises, to open the door here would create very serious difficulties. I hope the Minister will keep those strongly in mind when giving consideration to the Amendment.
LORD AIREDALE: I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
LORD JESSEL: This Bill, quite rightly in regard to door-to-door sales, lays down that there should be a statutory cooling-off period so that persons who are rushed or bullied into signing contracts shall have the right to withdraw. Surely this is not necessary in respect of mail order business where negotiations have been carried out wholly by

837
post. Here, the hirer or buyer has ample time for reflection and discussion by the family. There is no element of pressure at all. This Amendment seeks merely to take mail order transactions out of the pause provisions which, if applied, would merely waste time and which, in my opinion, in this type of transaction are not necessary at all. It has been suggested to me that the word "antecedent" in respect of negotiations, which I have put in my Amendment, could be substituted by the word "entire"; and I confess that I was at first attracted by this idea. But I have now noticed that Clause 19(2) defines the meaning of "antecedent negotiations"; arid in view of this I think the wording of my Amendment is quite clear. It refers to all negotiations leading up to the signing of the hire-purchase agreement. I beg to move.
Amendment moved—
Page 4, line 40, at end insert—
("(7) This section shall not apply to any transaction in respect of which the antecedent negotiations are conducted wholly by post.") —(Lord Jessel.)
LORD DRUMALBYN: Once again I should like to emphasise that one wants to keep the provisions as simple as possible. I should be reluctant to allow any exemption unless it could be plainly shown that the provision was going to hamper business without in any way advancing the protection that should be given to the consumer. I realise that the provisions as a whole that are put for ward here mean that the transactions of many traders who do not use improper methods will come within the scope of Ore cooling-off provisions. Indeed, I made it clear on the Second Reading that this involves no imputations whatsoever. It seems to me that we should consider objections to this clause not on the grounds of status and prestige but on the grounds of real practical difficulty. In the case of the present Amendment I must say that I see little likelihood of the cooling-off provision seriously interfering in practice with mail order business. Admittedly some mail order firms take great pride in quick delivery of an order—delivery by return of post, where that order is accompanied by cash—but in the case of credit sales or hire-purchase transactions there can seldom be a question of delivery by
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return of post. The cooling-off period, where it applies, will often have elapsed before the goods will have been sent off. In any case, credit-sale agreements for less than £20 are excluded from these cooling-off provisions altogether.
I agree that this provision may frustrate a few mail transactions by allowing customers second thoughts, and may retard delivery a little. Against that, we have the need, as I said before, for a reliable and simple safeguard. I think that this is a very narrow point; but I feel the balance on the whole is to keep the provisions simple and clearcut unless a very strong case can be made out of damage to commerce and the need for protection of that commerce in a way not to affect the protection given to the consumer.
BARONESS BURTON OF COVENTRY: I wish the Minister would look again at this point. I have listened very carefully, and I think, if I remember correctly, that in some earlier debate on this matter I referred to mail order transactions and said it had been pointed out to me that as the Bill is at present drafted these would seem to be included in the pause period provisions. I wonder whether it was a mistake. I should have thought it was a mistake to have mail order transactions included in it. If I have understood the Minister correctly, it is possibly something that would not occur very often; but that does not seem to me any reason for leaving them still affected. I should have thought, as an ordinary consumer, that I should not really require a four-day pause to make up my mind about a mail order transaction. No pressure has been brought to bear on me at all. I should very much like to add my support to the noble Lord, Lord Jessel, and the noble Baroness, Lady Elliot of Harwood, because I think this is some thing that could be put right. The fact that the Minister said it would not occur very often does not seem to me to be a good answer.
The other point I should like to raise, because the Minister himself mentioned it, is that although possibly we are not dealing with this precise point I do not think, from the consumer's angle, that it is at all a good idea that the credit-sale figure has been advanced from £5 to £20. I was not aware of this until

839
I went through the Bill. It may not be in order to ask the Minister to comment on this, but it seems to me to be removing a great deal of the protection in a bracket where it is much needed. But my real point in rising is to ask the Minister whether he could not look at this point again, because, with respect, he has not advanced any reason for leaving it in, and I do not think that mail order transactions should be subject to this position.
BARONESS ELLIOT OF HARWOOD: I think that the noble Baroness has added an important point. This is a totally different type of sale. A person sees something in the newspaper or catalogue and writes for it. Nobody comes to the doorstep or tries to push a sale. The whole thing is done without any pressure, and the four-day period is put forward because we want to avoid salesmen's pressure, but this does not apply in this case and I would ask the Minister to look at this again.
LORD JESSEL: I must say that I am a little disappointed by the Minister's attitude to this Amendment. In view of the powerful support I have received from the noble Baronesses, who are both experts in this field, I hope that the Minister will think again about this. Meantime, I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
Clause 3, as amended, agreed to.
Clause 4:
Information as to right of cancellation
4.—
(3) If the agreement is a hire-purchase agreement, section 2(2) of the principal Act (as modified by the last preceding subsection) shall apply in relation to the agreement as if, at the end of paragraph (d), there were inserted the words" and
(e) the copy of the agreement sent to the hirer contains such a statement of the rights of the hirer under section 3 of the Hire-Purchase Act 1963, and of matters relating to the exercise of those rights, as may be prescribed by regulations made by the Board of Trade, including the name of a person to whom, and an address to which, notice of cancellation under that section may be sent, and that statement is so contained in such position, and in lettering of such size and colour, as may be so prescribed".
4.32 p.m.
LORD PEDDIE LORD PEDDIE moved, in subsection (3), in the proposed new paragraph (e), after "sent", where that word occurs a 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: This Amendment, and also No. 18, are necessary, in my opinion, to clarify the consumer's obligation after he has exercised his right to cancel an agreement. Although the right to cancel an agreement will exist even after the consumer signs a document at certain trade premises and he will normally know who the dealer is and where he carries on business, the provisions of Clauses 3 to 7 are clearly aimed at abuses of door-to-door salesmanship, and in such cases the consumer may not know who the owner is and where the relevant premises are, within the definitions contained in Clause 6(7).
It is to be noted that any address of a recipient of notice of cancellation must be specified in the copy of an agreement, but there is no obligation to give similar information regarding persons to whom the consumer should redeliver the goods. Whereas the consumer would always be protected, if he sent a notice of cancellation to the owner or seller, it would be extremely inconvenient or expensive to the consumer, and possibly to the owner or seller, if he decided to redeliver goods to the owner or seller, at his address, even if that were possible. It is felt that these Amendments would ensure that goods are delivered to the right person, so that the consumer will not be held liable for conversion by making an innocent misdelivery. I can see no serious objection to this Amendment, which gives a clearer indication of the responsibilities of the consumer and protects him under certain circum stances from unnecessary expense. I beg to move.
Amendment, moved—
Page 5, line 27, after ("sent") insert the said words.—(Lord Peddle.)
BARONESS ELLIOT OF HARWOOD: I should like to support this Amendment, which in my opinion will safe guard the consumer by giving more

841
accurate information, which is what we are searching for in all this. I hope that the Minister will accept the Amendment.
LORD DRUMALBYN: This is a simple point, but I should like to put these two points to the noble Lord. I would remind him that the right of cooling-off may be exercised at any time up to the end of the prescribed period, so that there need not be a concluded agreement in existence when the right is exercised. I think that he would agree with that. But even if there is one, the hirer may not yet have received his copy of the statutory agreement. This means in practice, does it not, that in certain circumstances the hirer may have already reached his decision and returned the goods? The kind of case we envisage where a hirer would return goods is when, after discovering an immediate defect, his natural instinct would be to take the goods straight off to the dealer. But there may not be a local dealer in every case and the hirer will possibly hang on to them for the time being.
The other point is that there is no obligation on the hirer to return goods to any place. The obligation on the hirer is simply to return the goods, and here Clause 6(1) comes in, to provide that a prospective hirer may, at his own expense, redeliver the goods. This is just to put him in order if he takes goods right back to the dealer, when he is not satisfied. But the normal case would surely be under paragraph (b), where the dealer will come and recover the goods from the house of the prospective hirer. So I think that this Amendment is really not necessary; indeed, it may tend to confuse the hirer.
LORD PEDDIE: I certainly cannot accept the suggestion that this Amendment is unnecessary. I think that it is very necessary. Although the noble Lord opposite has given some indication of the difficulties that may arise, acceptance of this Amendment would make much clearer to the hirer, if he wished to return goods, the exact location to which they should be returned. Frankly, this creates no difficulty for the owner or the hirer, but merely makes it possible, in the event of the return of goods, for the hirer to know specifically where those goods shall go. The particular place to which they shall be
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returned is not necessarily the office of the agent who has arranged for the signing of the document. Therefore, in spite of the technicalities that the Minister has detailed and which we shall probably be debating later, I hope that he will give further consideration to this point.
LORD DRUMALBYN: I am perfectly willing to give further consideration to anything, but I am not quite certain what it is that I am being asked to consider. I would say once again that there is no obligation on the hirer to return goods to the premises of the dealer or of anybody else. I appreciate that the noble Lord says in his Amendment
"…an address to which, the prospective hirer may deliver the goods…";
but I should have thought that, if an address were put in, there would be some implication that the hirer should take the goods there. That is not what we intended. The normal case will be, and should be, that the person who left the goods in the house of the hirer should come and get them. I really doubt whether this Amendment is necessary, but, as with all others, I am perfectly willing to look at it. However, by saying that, I do not by any means intend to indicate that we are necessarily committed to it.
LORD PEDDIE: I beg leave to with draw the Amendment.
Amendment, by leave, withdrawn.
Clause 4 agreed to.
Clause 5 agreed to.
Clause 6:
Rights and obligations on service of notice of cancellation
6.—(1) Where, at the time when a notice of cancellation is served, the prospective hirer or buyer is in possession of the goods to which the relevant document relates—

(a) the prospective hirer or buyer may at his own expense deliver the goods to the dealer at any relevant premises;

(b) if the prospective hirer or buyer does not deliver the goods in accordance with the preceding paragraph, he shall (subject to subsection (4) of this section and subsection (3) of the next following section) he under an obligation, at the request of the dealer, to deliver the goods to him at the premises which, in the relevant document, are specified as the address of the prospective hirer or buyer.

4.40 p.m.
LORD PEDDIE LORD PEDDIE moved, in subsection (1), after paragraph (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: This Amendment gives the hirer the opportunity to request the owner to recover his goods. I submit that this point is not covered as the Bill stands. Furthermore, if the hirer retained a copy of any such request that he made to the owner, it could conceivably help in any litigation where the owner might seek some advantage in leaving the goods and not seeking to collect them. I beg to move.
Amendment moved—
Page 6, line 37, at end insert the said subsection.—(Lord Peddie.)
LORD DRUMALBYN: This Amendment really gives a third choice. If I understand it correctly, it enables the hirer to send a notice requiring the goods to be collected. But I should have thought that when the agreement is cancelled it is up to the dealer to recollect the goods, as I have already said, if they have not been brought back by the hirer. This additional alternative by which the hirer could send a notice calling for the collection of the goods does not seem to me to be necessary. I do not see what the advantage is, and I did not quite understand the advantage, so far as litigation is concerned, as suggested by the noble Lord, Lord Peddie.
LORD PEDDIE: If he retained a copy of the request to collect the goods.
LORD DRUMALBYN: I still do not see what advantage this would give. Surely the dealer is going to collect his own goods if the agreement is frustrated; he is not going to leave them there. It seems to me rather extraordinary that circumstances could arise in which the hirer should have to call on the dealer to take his goods away. I must confess that I do not quite see the point of this Amendment, but if the
844
noble Lord would like to enlighten me, I should be glad to listen.
LORD SHEPHERD: I should like to make two points. First of all, the noble Lord keeps talking about "the dealer". He may recollect that in the earlier part of this Committee stage this afternoon I referred to those travelling salesmen and representatives who represent organisations outside the locality. if a cancellation is made after one of their sales the prospective hirer has two courses. First, he can deliver at his own expense—and I am thinking now of a particular refrigerator company who sell refrigerators and washing machines and supply direct from their own wholesale department, I believe in the North. I believe it is the custom for the representative to have a local store for the mere storage of goods, and he effects delivery. He is not a dealer, in the sense that we understand the term: not a local shop with its own organisation and administration. I should have thought it would be extremely difficult for a person to return a washing machine or refrigerator to that type of premises. It would, equally, be rather hard on the prospective hirer to deliver that piece of equipment to, say, Bradford, Manchester or Glasgow, many miles away from the locality. I suggest that we must take into account this type of business of the travelling representative.
What we are frightened about in regard to the existing paragraph (b) (which says that the dealer or owner may himself request delivery at the address of the prospective buyer) is that there may be circumstances in which the selling organisation, where a cancellation has been made, may refrain from taking delivery in the hope that they can send a representative round, say, the following week to persuade the potential hirer to change his mind. There may be a feeling in that organisation that if they can leave the goods in the premises it will be easier to persuade the prospective hirer to retain the goods and change his mind. I think it would be much better if my noble friend's Amendment were accepted, at least in principle, so that there are three ways in which the prospective hirer, having cancelled, can get rid of the goods: first, he can do it at his own expense; secondly, if the organisation is many miles away

845
and he cannot deliver the goods, he can call upon the seller, the owner, to come and take delivery; and thirdly, as in the Bill, he is under an obligation to deliver at the request of the owner. I hope I have helped the noble Lord in regard to the intentions of the Amendment. I think it is a valid point and a strong case.
LORD DRUMALBYN: I have listened to the noble Lords with great attention, and I think they have made an interesting case. I thought that, even supposing the hirer were to request the dealer or owner to take the goods away, that in itself would not prevent a salesman from coming along, if the goods were still in the house, and arguing that the hirer should think again, and if he had already given up the old agreement, should enter into a new one. I am not certain on those grounds (I should like to look at this again) that this kind of provision is necessary.
As to the point the noble Lord came back to, I think he will find the answer in subsection (7) of this clause, which defines "the dealer". The dealer may well be financing his own hire-purchase transactions, and in certain cases may be both dealer and owner; but for the purposes of the selling operations he is the dealer and is so defined in the Bill.
LORD PEDDIE: I thank the noble Lord for his promise of further consideration, but from his first comment I felt that he did not clearly understand the purpose of this Amendment. I hope he does now. I am certain that detailed examination of this Amendment will cause him to appreciate that it serves a useful purpose. I t deals with a circum stance not covered by paragraphs (a) and (b). That is the point of our contention. This Amendment fills a vacuum. Paragraph (a) deals with a circumstance where a hirer or buyer may at his own expense deliver the goods, and paragraph (b) says that if the prospective hirer or buyer does not deliver the goods, then at the request of the dealer they can be returned. Our Amendment deals with the case where possibly there is a circumstance where the dealer does not want the return of the goods: he is deliberately not collecting, and he is deliberately not requesting the return of the goods. This Amendment gives power on the part of the hirer to write
846
to the agent or dealer and demand that those goods be collected. That is all the Amendment means. It covers a set of circumstances which are not dealt with in paragraphs (a) and (b). In consequence of that, I hope the noble Lord opposite will accept this Amendment.
LORD DRUMALBYN: I do not think the noble Lord can really expect me at this stage to accept the Amendment, but I will certainly give it further consideration to see whether after further consideration there appears to he a need for it. If not, I will willingly explain why not.
LORD PEDDIE: In the light of that promise of further consideration, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
4.52 p.m.
LORD SHEPHERD LORD SHEPHERD 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: In moving this Amendment, may I speak also to Amendments Nos. 23 and 24? In Clause 6(b) the hirer is under an obligation, at the request of the dealer, to deliver the goods to him. The request of the dealer may be made by the mere appearance of the dealer or his representative at the door of the prospective hirer. We must recognise that many housewives, like their husbands, go to work and are away from their premises. There may be a case where a teenage daughter or son may be present. As I see it, it may be possible for the dealer to obtain entry into the premises through a teenage daughter or son and to take delivery of the merchandise.
We are making provisions in the Bill that, where a deposit has been made and goods may have been given in part exchange and a cancellation is made of a hire-purchase agreement, the deposit and the value of the goods traded-in must be returned. If there is a failure to do so, then the goods under the hire-purchase agreement will become a lien on the deposit or the traded-in article. The dealer, having obtained entry into the home, as I understand it, is then entitled to seize or to take delivery of the merchandise, and the householder,

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having permitted the person into his house, cannot prevent the goods from being seized or recovered. I understand that the only way in which you can prevent seizure or recovery is to prevent the person from entering your premises. I suggest that it would be quite wrong, particularly as we are giving a power of lien on these goods, that a dealer should be in a position to obtain entry into the premises and take delivery of the merchandise without the approval of the prospective hirer. The prospective hirer may not be the wife or the husband. It may well he somebody different from the person who is in the house and who permits the dealer to obtain entry.
To get round this problem I have suggested that the request from the dealer should be in writing and that the document should indicate the date and time on which the delivery will be taken. I hope the Government will consider this a valid point, particularly in regard to the lien upon the merchandise for the deposit or the traded in article. I beg to move.
Amendment moved—
Page 7, line 1, leave out ("request of the dealer") and insert the said new words.—(Lord Shepherd.)
LORD CHORLEY: I should like to add a word to what the noble Lord, Lord Shepherd, has said. One of the difficulties in the way of this clause and other clauses is the problem of the definition of the word "dealer". Unfortunately, I came in in the middle of the last Amendment, and I must apologise to the Minister. I heard him say that the word "dealer" is defined or, at any rate, explained in subsection (7). That, of course, is true up to a point. But if he will allow me to say so, it is far from clear. If your Lordships look at the interpretation clause which appears later in the Bill, you will find that the draftsman has shirked altogether, so far as I can see, any attempt to give a definition of the word "dealer". This is very unfortunate. It is a vague expression which no doubt a layman may feel he understands, but it may easily be that when it comes before a court of law it will give rise to great difficulties. That is why we wish to substitute "owner or seller or
848
any person who is the agent of the owner or seller" for the word "dealer".
There is a point which does not arise so much here as perhaps under the preceding Amendment, which the Minister said he would look at again. It is that if a mistake is made by the hirer in regard to this matter in making a wrong return through being misled by some misconception of "dealer", then he is guilty of a tort of conversion, which may land him in a court with an order to pay damages. That makes it very important indeed that some effort should be made to get rid of this vague expression "dealer" which, I am sure, the Minister or his legal advisers will agree is tiresome and maybe misleading, and to substitute something a little clearer from the legal point of view. That is one aspect of the matter to which I hope the Minister and his advisers will devote careful attention.
LORD DRUMALBYN: I had thought that the definition of "dealer" in subsection (7) served the purpose. I think one would need a rather long periphrasis if every time one was dealing with a person who does the negotiations one had to refer to him in some other terms. "Dealer" seems quite a convenient shorthand for it.
On the other point the noble Lord raised, the question of the case where there may be a lien on the goods because within the ten days the value of the deposit—that is, the amount of the trade-in, whatever it is—has not been returned, I should like to consider, if I may, what the effect is there without that consideration which the noble Lord raised. I should not myself have thought that there was a very great deal in this point. It is a matter of judgment, of course, where the balance of advantage lies. If you allow the owner or seller to prescribe the date and time, it may cause somebody a whole day's work in order to deliver the goods. There is a disadvantage there.
Secondly, there is the point whether the owner or seller is the right person to be concerned here. We believe it is the dealer, because the dealer, as I have already explained, in certain circum stances may also be the owner or seller if he is financing his own transaction. In any case, where he is not the same person, what happens to the goods when

849
they are to be returned as between the owner and the dealer is a matter between them. It has nothing to do with the transaction and cannot affect the hire-purchase transaction as such. Normally the owner is not in the slightest bit interested in the goods if the hire-purchase transaction does not go through, and it is a matter as between him and the dealer. I am informed that this is norm ally a matter which is settled in advance by agreement between the dealer and the finance house. Therefore we think the dealer is the right person to mention here and not the owner or seller. But, as to the point on the lien, I should like to look into that if the noble Lord will withdraw these Amendments.
LORD SHEPHERD: Again I respond. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
LORD DRUMALBYN: I think it might be a convenient time for us to make way for the next Business of the House. I beg to move that the House be now resumed.
Moved, That the House do now resume.—(Lord Drumalbyn.)
Motion agreed to, and House resumed accordingly.

DEFENCE (TRANSFER OF FUNCTIONS) BILL
Brought from the Commons; read 1a, and to be printed.

EPISCOPAL CHURCH (SCOTLAND) BILL [H.L.]
5.3 p.m.
Order of the Day for the Second Reading read.
LORD POLWARTH: My Lords, the change proposed by this Bill is so comparatively small that it may seem rather like taking a sledge-hammer to crack a nut. But the present position is established by an Act of Parliament, so a further Act is required for its alteration.
First, I think it would be helpful if I were to remind your Lordships of the history and position of the Scottish Episcopal Church. Though the established Church North of the Border is, of course, the Church of Scotland, the
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Episcopal Church is in full Communion with the Church of England and is an independent and self-governing Province of the world-wide Anglican Church. In the year 1690, because the Scottish bishops were not prepared to recognise William of Orange as King, the Episcopal Church was virtually outlawed, its adherents were persecuted, and its order and traditions were carried on only through great faith and courage on the part of its members. For example, in 1746 no fewer than 46 Episcopal churches and chapels were burnt by the order of a personage who is commonly known North of the Border as "Butcher" Cumberland. Such was the position for a century, till the death of the Young Pretender in 1788, after which the Episcopal Church felt able to pay allegiance to the House of Hanover. Not all had, however, been darkness during that century. In 1786 the leaders of the Episcopal Church in the North American Colonies came to England seeking to have a bishop ordained. Owing to the relations then prevailing, they found this to be impossible, so they came North; and thus the first bishop of the Episcopal Church of North America was ordained in an upper room in Aberdeen.
However, in 1792 the penal laws against the Church were repealed, though a number of disabilities remained. For instance, no clergyman of the Episcopal Church might officiate in England. The Episcopal Church (Scotland) Act, 1864, exactly 100 years ago, went further to remove the remaining disabilities, and provided, among other things, that a minister of the Episcopal Church might officiate in England not more than once in three months without receiving formal approval from the bishop of the English diocese concerned. That is the legal position to-day, and that is the position which this Bill seeks to amend, and for the reason which I shall now explain.
As many of your Lordships are aware, the Church of England has been revising its canons for some fifteen years and desires shortly to seek the Royal Assent to a number of revised canons that are being promulgated. One of these seeks to regularise and extend the number of occasions on which a minister may officiate in a place of worship other than the one to which he is licensed by the Archbishop concerned.

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The present position, governed by two nineteenth-century judgments, permits such ministrations on exceptional occasions, which I understand has until now been interpreted in England as meaning not more than one Sunday in three months; in other words, the same as is allowed by the Episcopal Church (Scotland) Act, 1864. What is now desired, and is proposed in the new canon of the Church of England, is that such ministrations should be allowed for a period of not more than seven days within three months. This canon would apply to clergymen ordained by a bishop of any Province of the Anglican Communion, but it would, of course, contravene Section 6 of the Act of 1864, which I have already mentioned. Clause I of my Bill, therefore, seeks to repeal that section of the 1864 Act and to put ministers of the Episcopal Church on the same ground as those of all other Provinces of the Anglican Communion so far as officiating in England is concerned.
My Lords, I do not think I need argue the merits of this proposal at length. There may, of course, be some who hold that Scotsmen are already quite sufficiently prone to airing their views in England, and that any further licence to do so should be resisted. But I believe that, on the whole, it will be agreed that in this day and age any opportunity to hear new voices and new views should be welcomed, whether in the Church or any other sphere of life, and I cannot think that in this matter your Lordships would wish the Scottish clergy to be at a disadvantage compared with their brethren from the Episcopal Churches of North America, Africa, Australia or anywhere else in the world. This measure, if agreed to, will not, I venture to think, result in an invasion of English pulpits by the hordes from the North. It has the support of the Church of England and the bishops of the Episcopal Church of Scotland; and the Scottish Office, I understand, have no objection to raise. So I commend the Bill to your Lordships in the hope and belief that you will give it a Second Reading. I beg to move.
Moved, that the Bill be now read a, —(Lord Polwarth.)
5.9 p.m.
THE LORD BISHOP OF CHESTER: My Lords, the noble Lord, Lord Polwarth, has so adequately covered the ground which is represented in his Bill that there is little for me to add. However, it falls to me to express, on behalf of the Church of England, its welcome to the provisions in this Bill, and, so far as I am entitled to do on behalf of those of us who sit on these Benches, to say how glad we are that this Bill is being introduced and to express our gratitude to the noble Lord, Lord Polwarth.
This Bill sounds an echo from a bygone age and tells us of this quaint disability which is a relic of political tensions and religious struggles which are now forgotten and past. Nevertheless, I think your Lordships will agree that it is undesirable that these things should continue in this day and age. It had at one time been thought`-that this disability was something which had come back from times nearer to our own and represented some of the struggles of the last century which had arisen as a result of the Tractarian movement. But as the noble Lord, Lord Polwarth, has pointed out, that is not the case. The reasons for this Bill go back far beyond that period to the days when the Hanoverians had come to the Throne and the Episcopal Church was suspect for its Jacobite tendencies, and therefore the Episcopalians of Scotland were subjected to very severe penal disabilities, both under an Act of the Parliament of Scotland and under two Acts of the Parliament of the United Kingdom.
By 1792 it was recognised that the clergy of the Church of Scotland were
"well attached to his Majesty's person, family and Government",
and therefore the process of removing the disabilities began. It was first of all done in an Act of 1792, and then an Act of 1864 removed further disabilities. But this one small disability still remains, that whereas any other clergyman of the Anglican Communion may in each quarter act in the Church of England for one week without the permission of the bishop, a clergyman of the Episcopal Church of Scotland may thus act for only one day in the quarter.
We in the Church of England are revising our canons and we wish to place the clergy of the Episcopal Church of

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Scotland on the same footing as any other Anglican clergyman coming into England and wishing so to act. We feel therefore that this disability should be sent to that limbo where all outworn political struggles and religious tensions should be consigned. We hope that this House will agree to place the clergy of the Episcopal Church of Scotland on an equal level with their fellow clergy of the Anglican Communion, and we hope therefore that this Bill may become law.
LORD CROOK: My Lords, I think I should be detaining your Lordships unduly if I kept you for more than two minutes after the most excellent way in which the noble Lord, Lord Polwarth, presented this Bill to us and explained the political and religious background of facts, and the way in which he has been supported by the right reverend Prelate, with whom it has been a pleasure for some of us to work in connection with the reform of the canons. Therefore, for this reason, and because I am a member of the Ecclesiastic Committee appointed by your Lordships, I wanted to rise as one from these Benches to say how good it is to see this long overdue reform brought before us. I hope this Bill will not only get its Second Reading now but speed its way to Royal Assent.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

HIRE-PURCHASE (No. 2) BILL [H.L.]
5.15 p.m.
House again in Committee.
LORD CHAMPION: I am in some little difficulty about the next Amendment, No. 23, because I am sure my noble friend did not expect the House to be again in Committee in such a short time. My noble friend, Lord Peddie, said to me, "Hold on", and I looked at the list of speakers and said "Forty minutes"; the debate on the previous Bill has in fact taken about fifteen. I understand the noble Lord in charge of the Bill did in fact reply to Amendments Nos. 22 and 23 at the same time, and if that is so I think my noble friend did not propose to move No. 23.
LORD SHEPHERD LORD SHEPHERD moved, after sub section (1), to insert:
"(2) At the time when the goods are de livered 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."
The noble Lord said: In moving this Amendment may I speak also to Nos. 26, 27, 28 and 29. The Bill requires that when a notice of cancellation has been served the goods should be delivered in accordance with the previous paragraph, and that in the event of damage the hirer will be liable for damages to the dealer. There is no detail in the Bill as to a requirement on the dealer when he takes delivery of the goods to issue a receipt. It is the practice, of course, that when you take delivery of goods from any where a receipt is given by the person receiving the goods. But in later Amendments I am trying to deal with the problems that may arise where damage is alleged to have occurred. It may well be that the goods have left the home in perfectly good order, but in the transit from the home to the dealer's store they may be damaged, and perhaps it may be due to negligent driving of the driver. We may therefore find a dispute between the dealer who receives the goods in his warehouse or premises and the customer.
I should have thought therefore, particularly when one considers there may be a feeling of vindictiveness between the dealer and the prospective hire-purchaser because he has cancelled the agreement, that it would be right when the goods are received back by the dealer or his representative a receipt should be given. I think that is quite clear, and I do not suppose the noble Lord would dispute with me in principle that the receipt should also indicate whether from a visual examination of the goods there are any defects or otherwise. I hope the Minister will agree—I know he will agree —that in the terms of the hire-purchase agreement the person who has signed a document on which goods have been delivered has custody; he in fact signs that he has received the goods in complete order, and therefore there cannot be any dispute as to the state of the goods when they are delivered to his premises. In those conditions I should have thought it necessary that the dealer himself

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should give a receipt and statement of defects, if any, when he takes the goods back.
Amendments Nos. 27, 28 and 29 deal with the position which may arise—I am thinking very much of electrical goods —when from the outward appearance the merchandise is in order, but when the goods are back in the dealer's premises and are perhaps put into use a defect appears. I know of many cases of serious dispute between the prospective hirer and the dealer, and it is difficult to find out who in fact is responsible for the defect.
My suggestion in Amendment No. 28 is that where damage or a defect has arisen for which the dealer may have a claim upon the prospective hirer, if there is no agreement between the prospective hirer and the dealer then the services of a certified valuer or surveyor —I am not sure whether the word "valuer" in the Amendment is correct; it should perhaps be "surveyor" —or at least an independent person with some experience of the item, should be called upon to certify as to the defects. This would mean that the evidence of a third party would be available if ever the dispute came to court; but I believe that if this procedure were adopted many cases which in fact go to court now would not go to court because a third party has intervened and has certified one way or the other, it may be to the benefit of the hirer or it may be to the benefit of the dealer. At least at this early stage of the collection of the goods by the dealer from the hirer there is clearly established the state of the goods. With those words, I beg to move the Amendment.
Amendment moved—
Page 7, line 4, at end insert the said subsection.—(Lord Shepherd.)
THE CHAIRMAN OF COMMITTEES (LORD MERTHYR): Would the noble Lord formally move Amendment No. 26 as an Amendment to this Amendment?
LORD SHEPHERD: I beg to move.
Amendment to Amendment moved—
At end insert—
("together with a statement of defects, if any, apparent upon visual examination of the goods").—(Lord Shepherd.)
5.23 p.m.
LORD DRUMALBYN: We are here discussing a series of Amendments. Perhaps the best thing for me to do would be to give the views that we have on them. The difficulty about prescribing a receipt is simply this: that the proposal itself, though most sensible and entirely in accordance with what one would consider good business practice, would not be effective legally because there is no indication as to what would happen if a receipt were not given. I do not think it is desirable that we should prescribe in minute detail in a Bill what, after all, is, in the normal way, good business practice. People must be relied upon, at any rate up to a point, to protect themselves. Here, as I say, it would be ineffectual to put this in the Bill unless one also were to make it a criminal offence, or something of that kind, not to give a receipt, which seems a rather odd procedure.
Secondly—perhaps I might take this apart—if there were a receipt, obviously it would be a good thing to have a statement of the defects on visual examination, provided it was an agreed statement. Here, again, one may be up against some body who is accustomed to doing this kind of business and who is dealing with a housewife who is not, and I am not quite certain how the balance there would lie. By making it an agreed statement the housewife might be committing her self to something that, on reflection, she would later regret.
Then there is the point which the noble Lord mentioned, that, even with care, it may be that when the goods get back to the dealer's premises a defect which is not visual appears. The question then is how that should be evaluated. Again, the procedure which he is suggesting here seems rather more similar to arbitration than anything else, and I should have thought that the qualified valuer could deal only with the state of the goods as he sees them at that time, which, as I have already said, is not necessarily the same state as when they left the hirer's house.
So I think there are difficulties in all these suggestions. On the whole, while I would agree that many of them constitute the way in which an ordinary prudent person would act, I feel that it would be unwise to prescribe them in an Act of Parliament. I am bound to

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say that, rather than complicate the Bill in this way, this is perhaps some thing on which both of us might think a little more before the next stage of the Bill. I hope that the noble Lord will share my view that in these matters simplicity is a good thing, and while one wants to give the necessary protection to the consumer I do not think one needs to load the consumer with every possible kind of protection. I think that the consumer must be presumed to be an ordinary prudent person in matters of this kind, at any rate where the consumer, the housewife, is normally accustomed to taking delivery of goods and, indeed, of handing back goods. I do not think we should go out of our way in this particular provision to quite the extent the noble Lord is suggesting.
LORD SHEPHERD: I recognise some of the difficulties that the noble Lord has put forward in regard to accepting this Amendment, but I think the noble Lord would agree with me on this. I come back to this particular provision in an agreement that is in front of me:
"The hirer's acceptance of the goods shall be conclusive proof that he has examined the goods and has found them to be complete and in good order and condition, and in every way satisfactory to him."
This clearly puts to the hirer the fact that by accepting the goods he is satisfied that he has got perfect goods. Then he decides to cancel. There may be a vindictive type of representative who has not only lost a contract for his firm but, as an individual, has lost commission. It may be quite a sizeable figure, and one can imagine the feelings of that individual salesman. He may feel that at least he can get something out of this hirer by alleging that the goods he has brought back are not as good as when they were delivered to him, and that whatever is wrong is due to the hirer's neglect.
In the Bill we say that he shall be liable for damages. I should not think that it would complicate the Bill or would make the position of the hirer more difficult if we were to include in the Bill the broad words that a receipt shall be given for the goods and a statement as to whether tile goods are satisfactory, as they were in fact when they were delivered perhaps three, four or five days before. If we have a case where the hirer himself has signed what
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is known in the trade as a clean bill, I should have thought he was entitled to receive a similar clean bill if the goods were all right, clearly establishing that they were all right when they left his premises. If there were defects then there should be some statement at an early stage by the dealer or the owner as to what such defects were.
There may be cases—I do not know —where perhaps three or four weeks later the dealer alleges that the goods which have been returned are defective and wants to take the man to court for the damages. We should try to avoid that position. I should not have thought that the principle behind my form of words would have complicated the Bill to any great extent, and I believe that it would provide a necessary protection for the hirer. As with nearly every other Amendment, the noble Lord says he is prepared to consider the matter again. I hope it is a genuine offer, and not one, as it is so often in Committee stage, of riding off the point made, and that he may be able to find the right sort of words at the next stage of the Bill. In those circumstances, I beg leave to withdraw the Amendment.
Amendment to Amendment, by leave, withdrawn.
Amendment, by leave, withdrawn.
5.31 p.m.
LORD AIREDALE LORD AIREDALE moved to add to the clause:
"(8) The Board of Trade may by regulations provide that the relevant document shall set forth so much of the contents of this section as may be specified in the regulations; and the regulations may include provision as to the size and colour of the lettering to be used."
The noble Lord said: The Molony Committee reported that they had discovered that some hirers are uncertain what they are expected to do with goods when a hire-purchase contract is terminated. Clause 6 sets out quite clearly and briefly precisely what the hirer is to do having regard to the goods when the contract is terminated. All would be serene if only one could be sure that all the hirers would read what was contained in Clause 6 of the Bill, but one knows from experience that some of them will not. Therefore this Amendment empowers the Board of Trade to require that the salient features of Clause 6 shall be legibly included in the

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hire-purchase document for the benefit of the hirer, to enable him to know exactly the position in relation to return of goods if the contract is terminated. I beg to move.
Amendment moved—
Page 8, line 10. at end insert the said subsection.—(Lord Airedale.)
LORD DRUMALBYN: This Amendment provides for the inclusion of the contents of Clause 6 in the document which the hirer signs. This would show what the hirer's liability would be if he cancelled the agreement, and, in particular, his liability for failure to take reasonable care of the goods. But it would not show the hirer that he had a right to cancel the agreement, or how he could exercise that right. It may be that the noble Lord is thinking of the copy of the agreement which is sent to the hirer and from the receipt of which the cooling-off period begins to run. "The relevant document" is defined in Clause 3(1). I think the noble Lord probably meant the copy of the agreement which the hirer is to receive. Subsections (3) and (4) of Clause 4 empower the Board of Trade to prescribe that this must contain a statement of the cooling-off rights of the hirer (or buyer) under Clause 3 and of matters relating to the exercise of those rights.
I should have thought that this enabled us to prescribe enough to make the hirer aware of his rights. Again, if we were to prescribe too much to be shown prominently, that would defeat the object. This Amendment raises rather a matter of balance—what is needed to make certain that we do not defeat our object. However, if the noble Lord feels strongly about this, we are prepared to have another look at the powers under subsection (4) and I hope that, with that, he will not wish to press his Amendment. I do not know whether he feels strongly on this point. I do not think there is a great deal to be gained by including the details of the liabilities and rights under Clause 6, but, as I say, we are prepared to look at it again if the noble Lord wishes it.
LORD AIREDALE: I am much obliged to the Minister for saying that. I feel strongly that paragraphs (a) and
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(b) of subsection (1) of this clause ought to be brought specifically to the attention of the hirer, in one way or another, in every case. Whether or not it is best done in the way I am attempting to do it, by giving the Board of Trade these enabling powers, I do not know; but I think that it ought to be done in some way, and I am grateful to the Minister for undertaking to look further into this matter. Therefore, I hope that a suitable way can be found of bringing to the hirer's attention these two paragraphs. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 6 agreed to.
Clause 7 agreed to.
Clause 8 [Dealer to be agent of owner or seller in respect of certain representations]:
LORD PEDDIE LORD PEDDIE moved in subsection (1), after "that other person" to insert:
"or any such representations made by the hirer or buyer to that other person".
The noble Lord said: I will speak to Amendments Nos. 35 and 36 together, as the one is consequential to the other. This is a simple Amendment, with the purpose of making the dealer liable to the owner for representations made by him to the customer as though they had also been made to the owner. This gives the, owner a remedy against the dealer who is now deemed by Clause 8(1) to be the owner's agent. I feel that this is an equitable arrangement and it is an extension of the dealer's liability for misrepresentation to the owner as well as to the hirer. We think that the operation of this Amendment would reduce still further the risk of misrepresentation. That is the primary purpose of these two Amendments. I beg to move.
Amendment moved—
Page 9, line 12, after ("person") insert the said words.—(Lord Peddie.)
LORD DRUMALBYN: I confess that I am somewhat perplexed by the way in which the noble Lord has moved this Amendment. As I read the two Amendments, they refer to representations made by the hirer or buyer, not by the dealer to the owner. I am at a loss to understand what kind of representations the noble Lord had in mind. I did not

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understand him to refer to any representations made by the hirer or buyer. I wonder just what he has in mind on this.
LORD PEDDIE: The purpose in mind here is to make the dealer liable to the owner for any representations made by him to the customer concerned. I take it that this Amendment covers that point.
LORD DRUMALBYN: With respect, I do not think the words would cover that point. The words seem to cover representations made by the hirer or buyer to that other person, that other person being presumably the dealer.
On Question, Amendment negatived.
5.40 p.m.
BARONESS BURTON OF COVENTRY BARONESS BURTON OF COVENTRY moved to add to the clause:
"(3) Notwithstanding the provisions of subsection (1) of this section, any representation to which such subsection applies shall be deemed additionally to be a separate representation in like terms made by such other person to the owner or seller".
The noble Baroness said: This Amendment is much simpler than the" true measure of damage" principle, and I need not detain the Committee long, but I think it is important. As your Lordships will be aware, Clause 8 provides that any representations made by a dealer shall be made by him as agent of the owner or seller. Thus the finance house is bound by any representation, or of course by any misrepresentation, made by the dealer. I am hoping that the Minister will agree that it seems only right in these circumstances to make the dealer responsible also to the owner in respect of these representations, so that, while the owner is responsible to the customer, the dealer is without doubt responsible to the owner. I do not think that at the moment this is the case, and I wish to submit to the Committee that I think it would be quite wrong to enable a dealer to make whatever wild statements he may wish, secure in the knowledge that the customer had no redress against him since he was merely the agent of the owner, and that the owner had no redress because the statements were not made to him.
The Amendment I am now proposing to Clause 8, page 9, line 17, in no way reduces the protection given to the consumer. But I think it enables the finance
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houses to bring home any misstatements to the person who made them, and that I would submit is what we really wish to bring about. In fact I cannot see that this Amendment does other than provide simple justice. I should have thought it did not need any argument, and I hope the Government will think it right either to accept the Amendment or, if they cannot accept it as it stands, at least to accept the principle. Quite honestly, I can see no argument against the principle. I think it seems fair, it seems common sense, and I know at least the Minister will agree that, if we are to make real progress on this very complicated subject of hire-purchase legislation, what is done must appear to everyone, to the general public and to expert alike, to be common sense and to be fair. I beg to move.
Amendment moved—
Page 9, line 17, at end insert the said subsection.—(Baroness Burton of Coventry.)
LORD DRUMALBYN: I quite realise that if finance houses are to be liable because of misrepresentations made by dealers, and, in particular, if they find hire-purchase agreements rescinded by hirers on these grounds, they want to be certain of parallel remedies against the dealer. But for two reasons—one tech—nically legal—I do not think this Amendment would have the desired result. First of all, an innocent misrepresentation which had induced the hirer to enter into an agreement would give him a right to rescission of the agreement. But the finance house, even if this Amendment were passed, would in practice not have been aware of the representations about the goods that the dealer had made, so that those representations would not have induced the finance house to buy the goods from the dealer, and would not give rise in those circumstances to the right of rescission in regard to that innocent misrepresentation. This is a technical point.
Secondly, it does not follow that, because a hirer can rescind a hire-purchase agreement on grounds of misrepresentation, a finance house could rescind the contract of sale between the dealer and the finance house. There is considerable doubt in law whether an agreement which has been completed—as the contract of sale will have been—can be

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rescinded on such grounds. However, the reality here is that the rights between the dealer and the finance house can readily be covered, and will almost invariably be covered, by means of an agreement between the finance house and the dealer, regulating their rights and their obligations arising out of hire-purchase transactions which the dealer negotiates. In practice there are already agreements of this kind and I see no reason why, if finance houses wish, they should not cover this matter in agreements which will regulate their relations with dealers after the Bill has come into force. So I do not see any reason to regulate these matters in the Bill. This Bill being essentially a Bill for the protection of the consumer, we do not want to do injustice in any way, but this is a matter that can be covered by agreement between the dealer and the finance house.
BARONESS BURTON OF COVENTRY: May I just ask the Minister whether he has been saying—and I am grateful to him for his reply—that he really feels that this matter of representation or misrepresentation by the dealer really and truly can he covered by arrangement or agreement between the finance house and the dealer; that there is no question that the dealer will be able to get away with a wrong misrepresentation whichever way it is made?
LORD DRUMALBYN: That is the advice that I have been given. I am told that is so.
BARONESS BURTON OF COVENTRY: Then I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 8 agreed to.
Clause 9 [Dealer to be agent of owner or seller for receiving certain notices]:
LORD PEDDIE: In the unavoidable absence of my noble friend Lord Chorley, he has asked me formally to move this Amendment.
Amendment moved—
Page 9, line 44, at end insert—
("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—
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(a) the Statutory copy of the agreement shall have already been sent to the hirer or buyer;

(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;

(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").—(Lord Peddie.)

LORD DRUMALBYN: In that case, it seems that I shall have to explain what the Amendment means. Clause 9(5) of the Bill provides that the dealer is to be agent of the finance company for the purpose of receiving a notice from the hirer or buyer rescinding a hire-purchase or credit-sale agreement where the right to rescind arises at Common Law—that is to say, not from Clause 3—for example, as a result of innocent misrepresentation and not under the cooling-off provisions of the Bill. The Amendment would allow the finance company to require such a notice of rescission to be sent to it at a specified address and not to the dealer. This requirement is to be exercisable only if the statutory copy of the agreement has been sent to the hirer, if the requirement and the specified address were clearly stated on the agreement and on the statutory copy, and if the finance company has not authorised the dealer to receive instalments on its behalf.
The reason for providing that the dealer is to be the agent of the finance company for the purpose of receiving the notices mentioned in the clause, is to ensure so far as possible that the hirer is not confused as to the way in which he may exercise this right to bring the agreement to an end. The hirer may well have been in communication only with the dealer; if, for instance, he had been induced by a misrepresentation of the dealer to enter into the agreement and wished to rescind it, he would most probably inform the dealer. So it seems to me right that if he does so he should achieve his object. Under the Agreement he would be able to give such a notice to the dealer before the statutory copy of the agreement had been sent to him, but thereafter he would, if required to do so, have to send it to an

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address specified in the copy of the agreement. I think that this added complication would detract from the benefits conferred by the clause, and I am bound to say that I prefer the simpler provisions in the Bill.
LORD PEDDIE: I would accept the explanation given by the noble Lord opposite. I can only hope that my noble friend would do likewise. I have no hesitation in asking leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 9 agreed to.
Clause 10 agreed to.
Clause 11 [Implied conditions in hire-purchase by reference to sample or by description]:
5.51 p.m.
LORD SHEPHERD LORD SHEPHERD moved, in subsection (1)(a), to leave out "in quality". The noble Lord said: I move this Amendment, I must admit, with not a great deal of hope that the Government will be able to accept it, because the implications are that an amendment to the Sale of Goods Act would be necessary. The Bill states that there is an implied condition
"that the bulk will correspond with the sample in quality".
In other words, we are restricting or limiting to quality the question of whether the bulk supplied corresponds with the sample offered. I have in mind what I think is a very wrong practice, where large organisations—I will not say all, but maybe one or two; I know of one in particular—purchase goods of British origin, knitwear in particular, from, say, a Nottingham company (knitwear of a particular style, a particular colour and of particular yarns), and place an order for, perhaps, 1,000-odd dozen. The article sells well, they know it will sell well, and they then place an order for, perhaps, 5,000 or 10,000 dozen of the identical article, the same being equal in quality, with Hong Kong or, perhaps, Japan, or Italy, in order to obtain a cheaper price.
Now it may be the case that the article is equal in quality in its early stages, but one well knows that materials that are made in different countries have different lasting properties. May I speak from my own experience in
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regard to knitwear manufactured in Hong Kong? I know of their difficulties as regards water shortage. Often, they have to use water that contains chlorine, and this certainly weakens the fastness of the colour that is used in the yarns. Therefore, it is possible, under the Sale of Goods Act, and it will be under this Bill, for an organisation to start a sales promotion and get it going on a perfectly good article manufactured in this country, and then, to reap the real benefits of their production, for them to go to an overseas market, or perhaps somewhere in this country, even, where the manufacture is not so good. In that case, the article may well come within the definition and be equal in quality, but its lasting qualities are quite different.
The purpose of putting this Amendment down was to draw the Government's attention particularly to the words "in quality", because they limit the implied condition, which I think we all wish to see, that the bulk will correspond with the sample on which the sale has been made. I should like the words "in quality" to be removed, so laying a clear onus upon those in business who make a sale to ensure that the article supplied is as the sample, and is not covered by this existing limitation. I beg to move.
Amendment moved—
Page 11, line 13, leave out ("in quality") —(Lord Shepherd.)
BARONESS ELLIOT OF HARWOOD: I should like to support this Amendment. I have listened to the noble Lord, Lord Shepherd, and I think there is a great deal in what he has said. I wondered whether he was thinking about goods that had been, as it were, copied; and I was also wondering whether it might not also apply to goods which had been ordered in this country, made abroad and sent in. I am thinking, for instance, of somebody ordering a television set or some piece of equipment, and then receiving one which may be of the same quality but which may be of a different, earlier date, or which may be in some way different from the one which was actually chosen. I think that that would be most unfortunate; and if this Amendment will make it impossible for any of this kind of substitution to be carried

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out, then I hope very much that the Minister will accept it. What I should like to see in the Bill is a provision making it impossible for people to deliver an order which, although in appearance perhaps the same, is different from that which was actually ordered by the customer. In fact, they should be required to supply exactly the same goods as the sample on which those goods were ordered. I support this Amendment.
LORD PEDDIE: I hope that the Minister will find it in his heart to accept this very useful Amendment. Here is an interesting case where an additional two words "in quality", actually restrict the intention of this clause, because the reference to quality would seem to indicate that in its interpretation quality is to be the sole matter for consideration. There could conceivably be circumstances in which the bulk would correspond in quality and yet where there could be sent an article entirely different from the sample. The suggestion has been made to me that you could have the case of, say, a television set which was the same in quality but which was a different model: it could even be an earlier model. The factor of quality would be satisfied, but it would not suit the customer. The simple effect of this Amendment would be to require that the goods supplied be exactly the same as the sample. That is the purpose of the Amendment, and I would suggest that it is quite easy to accomplish. I support my noble friend.
LORD DRUMALBYN: I am afraid that, as I think the noble Lord, Lord Shepherd, anticipated, this is an Amendment which I must resist. All we are seeking to do in this clause is to implement paragraph 452 of the Molony Committee Report, and to bring the hire-purchase law into line with Section 15 of the Sale of Goods Act, 1893. As he anticipated—and he will find many references in the Molony Report to this —it would be quite inappropriate if, in a Hire-Purchase Bill, we started to legislate on sale-of-goods matters in advance of the further examination that is to take place of the whole sphere of the Sale of Goods Act and the Merchandise Marks Act. So I hope that the noble Lord will not press me on this
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matter. The subsection follows the wording of the corresponding provision in the Sale of Goods Act, and I do not see any reason to provide differently in respect of hire-purchase agreements. I do not want to argue the merits of this particularly, but even from the little that has been said in the course of this debate I think some idea of the complications involved does emerge—as to what is identical and what is different; in what respects it is different; how far it is description; how far it is quality, and the like. I feel we should not really get into that kind of field in a debate on this Amendment.
LORD SHEPHERD: I agree that it is difficult to compare like with like, but the noble Lord is, in fact, supporting this description at least for assistance in deciding like for like in regard to quality. I recognise the argument that we should not be ahead of any new move on sale-of-goods legislation. But I should have thought that we are not likely to see another Hire-Purchase Bill for many years. We might eventually find that the Sale of Goods Act has been amended and the Hire-Purchase Act out of date and not in conformity with it. Could the noble Lord say whether, if Amendment were made in the Sale of Goods Act, it would be possible to amend the Hire-Purchase Act within the same Bill?
LORD DRUMALBYN: It would.
LORD SHEPHERD: That knowledge is of some assistance. I hope that the Government will take note of the views that have been expressed and will bear them in mind when they prepare the next Bill dealing with the sale of goods. In the circumstances I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
Clause 11 agreed to.
6.2 p.m.
LORD SHEPHERD LORD SHEPHERD moved, after Clause 11 to insert the following new clause
Notice of arrears or default
"11A.—(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

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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 (1A) to this Act."
The noble Lord said: I beg to move Amendment No. 40, and, if I may, I will speak also to Amendment No. 49. Although No. 40 can stand on its own, it would need to be passed if the Government felt that Amendment 49 could be accepted. At present, if there is a default by the hirer on a hire-purchase agreement when more than one-third of the hire-purchase price has been paid, the goods cannot be recovered without court action. But where the amount paid is less than one-third, a default in payment of merely one day, or perhaps, in law, of even one hour, or non-compliance with a particular term of the contract—and there are many of them—would give the owner and seller the right to recover immediately the goods covered by the agreement.
At the moment hire-purchase companies are not required by Statute to give a warning notice to the defaulting party. They have merely to recover the goods. The hirer has no chance of recovering the money paid, and, of course, under the Statute he may have to pay further sums to cover those items which are required by law. I think this is rather harsh. There may be many cases where default occurs through sudden sickness: perhaps where a person goes to hospital, or where he is already in hospital and is under sedatives and is quite unable to communicate with, perhaps, his wife in order that a payment could be made. Where you are dealing with reputable hire-purchase companies you find that they always give at least three or four notices of default before they take over the goods. My Amendment is aimed at that small number of hire-purchase companies who have brought the whole industry into disrepute. It lays down that no hire-purchase or finance company may recover the merchandise under the agreement when there is default, and less than one-third of the price has been paid, without giving the hirer notice by post that a default has occurred and that there would be seven days in which the
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hirer could make a payment to the hire-purchase company.
I would ask the Committee to remember that sickness may strike very quickly, and it may well be that the wife or husband may have no knowledge of the name and address of the hire-purchase company, or even of the fact that a payment is due on a particular day. If my Amendment were accepted, there would be no hardship upon those responsible and reputable hire-purchase companies who already do what I am suggesting in this Amendment; but it would give the relative in the home an indication that a hire-purchase payment is due and would allow the necessary payment to be made.
It is necessary for this Amendment to be passed if the Committee is to consider Amendment 49. Noble Lords in all parts of the Committee welcome Clauses 12 and 13—these are the clauses dealing with the deceased hirer. What happens now is that under the hire-purchase agreement, if the hirer dies there are provisions by which the hire-purchase company can recover the goods. Clause 12 of this Bill, in particular, makes such provisions void; but the position may arise that a person who is the hirer under an agreement dies before one-third has been paid. If there is a default, then the hire-purchase company has the right to recover. Death strikes very quickly. It may well be that both husband and wife are involved in an accident, that the husband is killed and the wife injured. In the circumstances the wife may be quite unable to make a payment under the agreement. Or the wife may be out of the country and so unable to take the necessary action.
I would stress that it may also be that the wife has no knowledge that the article—perhaps a motor car—was under a hire-purchase agreement. Even if she knows this, she may not know the name of the company, or the person to whom payment should be made; or she may not know the amount payable and the date of payment. She may be in complete ignorance. At the same time she may be suffering from considerable shock. Consider the case of a person who dies, say, on the last day of February; and where a hire-purchase payment is due on the 2nd March. It may well be that the person would not

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be able, apart from the matters I have dealt with, to make payment. Moreover, the wife may find herself in this position: that, because of the death of her husband, the estate is tied-up and the bank account frozen, so that she may not be able to lay her hands upon the money to make the payment, even if she knows that a payment is due.
The Government themselves recognise this position in Clause 13, where they give the courts power to delay action so that a personal representative may obtain letters of administration. The purpose of this Amendment, and of No. 76, is to ensure that where death takes place, the owner will have served on him a notice of default—there is a specimen in Amendment No. 76—in which the personal representative would inform the hire-purchase company that the hirer had died and that he was the personal representative. My Amendment then goes on to say that 28 days would be given for the person to be able to make payment of what is due, and that the owner or seller would not be able to recover the goods within that period. I think that 28 days is not too long for letters of administration to be made and a wife to find the money to make payments to the hire-purchase company.
We welcome Clauses 12 and 13, but when one thinks of the value of a hire-purchase agreement covering a car, perhaps worth £2,000, of which one-third is nearly £700 and of which £600 might have been paid, it seems to me that we should try to protect people, even though only a few are involved, from the consequences of the death of the hirer. I hope that the Government will accept the principle behind this Amendment. I beg to move.
Amendment moved—
After Clause 11, insert the said new clause.—(Lord Shepherd.)
LORD DRUMALBYN: I congratulate the noble Lord on the way he has moved this complicated Amendment and made his intention clear. The main protection that is given by the Hire-Purchase Acts is the fact that the owner cannot repossess goods without a court order after one-third of the hire-purchase price has been paid. So I would say that the first subsection of the noble Lord's Amendment is really related to further
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protection to be given over and above the protection already given under the 1938 Act.
As I said earlier, the main purpose of the Bill is contained in Clause 1, which extends the protection given under the 1938 Act, and deals with the cooling-off provisions. Of course, there is no reason why we should not improve the protection under the 1938 Act, if that seems a good thing to do, but I think that we want to be pretty certain that the improvement is as clearly defined as existing safeguards, or we may be blurring the whole issue. In any case, I think that under the extension of protection that is given, a great deal of the bad habits that exist at the present time will disappear.
What the noble Lord is after is to deal with the period before one-third of the hire-purchase payments have been made. I think that there would be some practical merit in the Amendment if the owner could terminate the agreement for a trivial breach by the hirer and, in addition to recovering the goods, could get a lot of money back. In other words, if he could operate an early "snatch back", coupled with the contractual obligation to pay half the hire-purchase price, he would get the goods and what amounts to a contractual penalty. I referred to this possibility when considering the Amendment moved by the noble Lord, Lord Meston, last week, but now that the Bill provides that the provisions of the 1938 Act will apply, I doubt whether it would be in the practical interests of the owner to terminate an agreement and repossess the goods without giving notice to the hirer and allowing him an opportunity to pay the arrears.
In the ordinary way, in the case of default a finance house would only have the right to repossess, plus the instalments to date. In the case of default, the agreement would be terminated and the finance house could not claim the benefit of contract and extra payment as well. So we are merely concerned with the question of repossession. I think what we should bear in mind is that the finance houses are in business to finance hire-purchase. They are not interested in repossession and will not repossess unless they really believe that the hirer is not going to pay and fulfil

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his obligations. In that case they may repossess.
Then we come to the question: would it be right to provide by Statute that there should be a notice given? I am bound to say that I have some sympathy with the intention behind the first part of the noble Lord's Amendment, and I am certainly willing to give it further consideration, though again I must say without commitment; but to make the provision effective, it would probably have to go a good deal wider than the mere question of repossession.
LORD SHEPHERD: I am grateful for the intimation that the noble Lord has made, but want to put just this point. The noble Lord spoke of the trade custom of hire-purchase companies. This Bill is not aimed at the responsible hire-purchase company, but at the few companies who bring the whole business into disrepute. Whilst the noble Lord may say that this may not be necessary, I think that there are certain small sections of the trade where it is necessary, and it will give far greater protection, if the Minister can accept this point.
LORD DRUMALBYN: The noble Lord will appreciate that we did not have long to consider these Amendments, which give rise to complicated implications, and if the noble Lord would allow us, I would rather leave the matter there for the time being. But I think I should go on to say that the second subsection of his Amendment and the statutory notice set out in Amendment No. 76 are a different matter. They seem to me to be not only unnecessary in the light of Clauses 12 and 13, but also confusing, since they would appear to give a hirer's estate less favourable treatment than is already provided as the result of Clauses 12 and 13. I do not know whether this was intended. I am not certain how far the noble Lord was linking subsection (2) of Amendment No. 40 with the subsequent Amendments. Obviously they are linked merely by the wording of the Schedule.
LORD SHEPHERD: May I explain that I started off with Amendment No. 49 in mind, and in order to make it practical we found we had Amendment No. 40. So subsection (2) is linked closely with No. 49.
LORD DRUMALBYN: I take that point. The principle on which Clauses 12 and 13 are devised is that the successor of the deceased hirer should have as good a right as, but no better right than, the deceased hirer. The difficulty of the second clause the noble Lord moved is that it would give the deceased hirer's successor a better right than the deceased hirer, and as against that it would not propose any parallel safeguard for the owner. As we consider the further Amendments put down, I think this point will be clearer, and it may be that we ought to leave it to the discussion of the Amendments to Clause 13. Clause 13, I may say, is by far the most difficult clause in the Bill. If the noble Lord would agree to withdraw this Amendment, and not move the other Amendment when we come to it, I feel that the best thing is for us to consider later the interesting point he has raised about not repossessing before the one-third of the total hire-purchase payments have been made.
LORD SHEPHERD: I readily accept that and, in the circumstances, beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 12 agreed to.
Clause 13 [Recovery of possession of goods after death of hirer]:
VISCOUNT HANWORTH: The effect of this Amendment is that the protection afforded by Clause 13 of the Bill to the deceased hirer would not apply if prior to his death the hirer had improperly parted with the possession of the goods. and the hire-purchase company would not be prohibited from recovering the goods from a person who had stolen them from the hirer before his death. As the matter stands, the hire-purchase company could be liable to repay the deceased's personal representatives all monies paid by the hirer even when the goods have been stolen or wrongfully sold before the hirer's death. I beg to move.
Amendment moved—
Page 12, line 9, after first ("to") insert ("and in possession of the goods the subject of").—(Viscount Hanworth.)
LORD DRUMALBYN: This is a simple Amendment, but, as I think the noble Viscount probably realises, it is by no means easy to effect. I think it might

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be for the convenience of the Committee if, before I deal with the Amendment, I say a few general words about the purpose of Clause 13, in order to put it into perspective. Clause 12 does what the Molony Committee recommended; that is to say, it makes void a provision in a hire-purchase agreement under which the death of the hirer terminates the agreement. In the general run of cases this will do all that is necessary. The hirer's personal representative then succeeds to his rights, which includes the protection the 1938 Act gave to the hirer during his lifetime. But there is the possibility of there being no personal representative, most probably because there is no will. Clause 13 has the effect of continuing for the benefit of the deceased hirer's estate the statutory protection in these cases, and also in cases where there is a personal representative but the goods are not in his possession.
The broad effect of the clause is that if the finance house could not have recovered the goods except by action during the hirer's lifetime, then it cannot do so after his death. But the clause does not envisage that anyone other than the estate should be entitled to take over the hirer's rights. All it does is to allow time for the personal representative to be constituted and defend an action for repossession in the normal way. This clause will cover, in particular, the case where the estate is small and there is no will. In such a case, the widow, for example, would not in the ordinary way go through the formality of taking out letters of administration.
I now come to the Amendment. I quite understand what it is intended to safeguard against; that is, the case where the hirer has during his lifetime improperly disposed of the goods. But I cannot accept the Amendment, because I think in attempting to cover a remote and much less frequent contingency it could prevent the clause from doing its work in a substantial number of practical cases. The implication of the Amendment is that the hirer would not have been entitled to the protection of Section 11 of the 1938 Act if he had not been in possession of the goods
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at the time of his death. But it is not as simple as that.
There are a variety of meanings which could be ascribed in the context to the word "possession". To pose just one example, can we be sure that a hirer who died in hospital was in possession of his car which for safe custody had been entrusted to his friend? Unless the provision is clear-cut, I fear it will not protect the hirer's estate as we wish. In the practical cases where there is default and the finance house wish to seek repossession, the clause enables them to do so. If they are worried, they can apply for an immediate order under subsection (3) of Section 12 of the 1938 Act giving directions as to the custody of the goods.
The noble Viscount has said that the goods might have been stolen before the hirer died. But I doubt whether that is really of practical significance. If the goods are stolen, the real problem is to find them. It has been argued that the protection which the clause gives to a person in possession should not extend to the estate. No distinction can be drawn in the situation we are dealing with here between different categories of people in possession. But, in the end, what can be protected is the estate. The clause seeks to protect the estate and does not, as I have said already, seek to give a greater degree of protection to the estate than the hirer enjoyed during his life. I hope that the noble Viscount will withdraw the Amendment, because I think the case he has in mind is an extremely infrequent one which would normally be dealt with in other ways. If we tried to exclude the particular case he has in mind, I am afraid we should find that we were excluding other cases where we want to give protection.
VISCOUNT HANWORTH: Am I to gather that the noble Lord does not think it possible to produce a redrafted Amendment which would in effect accomplish what I am endeavouring to do?
LORD DRUMALBYN: I am advised that it really is not necessary to do so. If for any reason the hirer was not in possession before he himself died, because he had disposed of the goods unlawfully, then the finance house would, in any case, have a right to proceed against the hirer, and that right would continue against the hirer's estate. So

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far as the recovery of the goods is concerned, they would be able to proceed in recovery in exactly the same way as they would be able to proceed if the hirer had not died. As I have said, the clause does not give any greater right to the estate than the hirer himself enjoys.
VISCOUNT HANWORTH: In the circumstances, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
6.30 p.m.
LORD DRUMALBYN LORD DRUMALBYN had given Notice of four Amendments to subsection (1), the first being, in paragraph (b), after "made" to insert "against the deceased hirer". The noble Lord said: I think it would be convenient to take these four technical Amendments together. As I said, Clause 13 is designed to continue, for the benefit of a deceased hirer's estate, the statutory protection against repossession of the goods by the owner after one-third of the hire-purchase price has been paid. It prohibits an owner from recovering the goods, after the hirer's death, from the person in possession, except by a court order, and makes provision for the personal representative of the deceased hirer to intervene in the action. This prohibition does not extend to cases where the court made an order, during the hirer's lifetime, requiring him to deliver the goods immediately to the owner; if the court had come to the conclusion that while the hirer was alive he should no longer continue in possession of the goods, his estate should not be put in a better position.
With the clause in its present form, even if the court made an order against the person in possession, the protection afforded by the clause would continue for the benefit of any other person who may subsequently come into possession of the goods. This is not satisfactory, since the clause is intended only to act as a stopgap between the death of the hirer and the giving of an opportunity for the personal representative to intervene. Once the court has made an order in respect of the goods after the hirer's death, the clause should cease to have effect. The Amendments to subsection (1) of Clause 13 have been drafted to achieve this result. I beg to move.
Amendment moved—
Page 12, line 18, after ("made") insert ("against the deceased hirer").—(Lord Drumalbyn.)
On Question, Amendment agreed to.
LORD DRUMALBYN: I beg to move.
Amendment moved—
Page 12, line 20, leave out ("and").—(Lord Drumalbyn.)
On Question, Amendment agreed to.
LORD DRUMALBYN: I beg to move
Amendment moved—
Page 12, line 22, after ("made") insert ("against the deceased hirer").—(Lord Drumalbyn.)
On Question, Amendment agreed to.
LORD DRUMALBYN: I beg to move.
Amendment moved—
Page 12, line 24, at end insert ("and
(d) no order under section 12(4) or section 13(4)(c) of the principal Act has (whether in pursuance of this section or otherwise) been made in respect of the goods against any person since the death of the deceased hirer").—(Lord Drumalbyn.)
On Question, Amendment agreed to.
LORD DRUMALBYN: Subsection (7) deals with the case where, before the hirer's death, the court has made an order under Section 12(4)(b) of the 1938 Act. This is an order for the redelivery of the goods to the owner, the operation of which is postponed so long as conditions on payments or other matters laid down by the court are fulfilled. Any proceedings by the owner after the hirer's death to recover the goods from the person in possession are to be brought in the same action in which that order was made.
Subsection (7) in its present form does not make it clear how this right is to be asserted, and the Amendment sets out how this is to be done. It might have been thought that in order to bring the subsequent proceedings after the death of the hirer in the same action it was necessary to revive the action against a new defendant. But as judgment can be enforced by the issue of a warrant to seize the goods wherever they may be, all the owner requires to do is to apply for the issue of a warrant for the delivery of the goods. The Amendment makes clear that this is the action the

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owner should take, and it makes provision to enable the court to adjourn any application for such a warrant to enable the personal representatives of the deceased hirer to intervene. I beg to move.
Amendment moved—
Page 13, line 31, leave out subsection (7) and insert—
("(7) Where the circumstances specified in subsection (1) of this section exist, in a case where an order for the specific delivery of the goods has been made under section 12(4)(b) of the principal Act in an action against the deceased hirer, then, notwithstanding anything in subsection (2) of this section, any right of the owner to recover possession of the goods from the person in possession shall be enforceable in that action (and not in an action against that person) and shall be so enforceable by an application for the issue of a warrant of delivery; and the court may adjourn any such application in the like circumstances, and for the like purposes, as in accordance with paragraphs (a) and (b)of subsection (5) of this section the court could adjourn an action.").—(Lord Drumalbyn.)
On Question, Amendment agreed to.
LORD DRUMALBYN: This is another technical Amendment. Section 17 of the 1938 Act provides that, so long as the owner is unable to recover his goods by reason of the statutory restriction in Section 11 (that is, after one-third of the hire-purchase price has been paid), he cannot, as an alternative, bring an action for damages for conversion on the ground that the hirer has refused to deliver up the goods. It is necessary to ensure that there is a similar ban on such an action by the owner against the person in possession where his refusal to deliver up the goods is justified by the restriction in Clause 13. This Amendment introducing a new subsection (8) achieves this. I beg to move.
Amendment moved—
Page 13, line 38, at end insert—
("(8) If, at any time when section 11(1) of the principal Act has effect in accordance with subsection (2) of this section, the person in possession refuses to give up possession of the goods to the owner, the person in possession shall not, by reason only of the refusal, be liable to the owner for conversion of the goods.")—(Lord Drumalbyn.)
On Question, Amendment agreed to.
Clause 13, as amended, agreed to.
6.38 p.m.
BARONESS BURTON OF COVENTRY BARONESS BURTON OF COVENTRY moved, after Clause 13 to insert the following new clause:
Extension of powers of Court
". Section 12 of the principal Act (which relates to the powers of the court in certain actions by owners to recover possession of the goods) shall have effect as if there were inserted at the end of subsection (4) the following—
'or
(d) where the agreement relates to a motor vehicle, make an Order for the delivery of the vehicle to the owner and on the application of the owner give judgment for such sum as the court shall think proper having regard to the total of the monies paid by the hirer or guarantor and the trade value of the vehicle at that date.'"
The noble Baroness said: While your Lordships did not think it right to accept the true measure of damage as suitable for application as a general rule, I hope that you will not reject this Amendment out of hand for that reason without considering it further. The purpose of the present proposal is simple. It is to enable the court, on the hearing of an action for re-possession under the one-third rule at the request of the owner, and as an alternative to their other powers, to make an order on a true measure of damage basis. In other words, if the court is satisfied that it would be just to make an order returning the goods to the owner at the same time making an order for payment on a true measure of damage basis, they are to have that power.
This, of course, as the Committee will see, is a purely permissive power. The court is in no way bound to make such an order. Whether they do or not is entirely at their discretion. I do not propose to weary the Committee by repeating what I still consider the very strong arguments in favour of a true measure of damage clause, but I would merely stress that the Law Society, the industry itself, and the Consumer Council all supported such a clause, while the Committee on Consumer Protection endorsed it in principle and in theory, although fearing that it would lead to dispute.
It seemed to me the other night that this objection is in part at least the view of the Government, but I would submit that, in the circumstances envisaged by this Amendment, that objection must surely fall to the ground, since the value of the goods will not be in dispute in the sense that the Committee on Consumer Protection used the word.

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The parties in the circumstances in which this Amendment is to apply are by definition already before the court, which, after hearing evidence as to value, will come to such decision as it thinks just on the basis of that evidence. I know, of course, it may be that the court's valuation will not always turn out to be entirely accurate when the goods come to be sold, but I think nobody would deny that surely the courts can be relied upon to assess the measure of damage with sufficient accuracy, just as they do in connection with many other types of claim. I hope that in this Amendment, as the rule as to true measure of damage is to be applied only in a court of law, the Committee will at least be able to accept this modified provision. I believe that this Amendment will enable much of the injustice, which I fear will otherwise arise from the lack of a general true measure of damage, to be overcome. I would stress once more that this is a purely permissive power I am seeking. It enables the court to grant justice if, in particular circumstances, the court thinks that an order on these lines will provide justice. I beg to move.
Amendment moved—
After Clause 13 insert the said new Clause.—(Baroness Burton of Coventry.)
LORD DRUMALBYN: I gather from what the noble Lady has said that she intends this to be an alternative remedy to the remedies which already exist and that it is not intended to be in substitution for Clause 15. Do I understand the noble Lady correctly?
BARONESS BURTON OF COVENTRY: If I might answer that, I think the answer is "Yes"; but what I was hoping to make clear to the Minister was that I was seeking an extension of the powers of the court and I was asking that that power should be purely permissive, to be used only if the court. wished.
LORD DRUMALBYN: The noble Lady herself recognised that this would make it necessary for the court to value the car or whatever might be concerned at the time when the action was brought and, of course, before the goods had been sold. I appreciate that the noble Lady is not treating this as part of the
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previous Amendments she has moved and that she would regard this at least as a concession towards the "true measure of damage" principle. But the fact is that it is very similar in scope, and I do not feel it would be right to traverse all the arguments that I have advanced at an earlier stage on this Amendment, which really has a very similar effect, the only difference being that it does not bring into account, as it were, the actual amount that is received when the vehicle or the goods are sold. This is the only real difference, and it seems to me that the noble Lady is really advancing the same proposition here in a different guise. It does not seem that it is compatible with the general protection that is given under the Acts, and, for the reasons I gave earlier, I feel bound to resist this Amendment.
BARONESS BURTON OF COVENTRY: I really am puzzled by the attitude which is taken up by the Government on this matter and which was taken up previously by two of my noble friends on my own Front Bench. I have no desire to traverse that Amendment over again, but I am truly mystified as to why the principle of a true measure of damage is to be rejected by such eminent voices, because I do not agree with them. It seems to me that a true measure of damage is pure equity and I stated last time that I was concerned with the principle and not with any actual wording.
Earlier this afternoon the Minister, when he was replying to some other Amendments—and I took down his actual words so I think I am quoting him correctly—said: "As with all other Amendments, I am perfectly willing to consider them." It seems that every time I or anybody else raises the question of a true measure of damage, it is the one thing that the Minister is not prepared to consider in any way whatsoever. Could the noble Lord tell me why he is not prepared to consider the general principle of a true measure of damage, even though he would not be committing himself any more than he would be committing himself on any other Amendment we have been considering?
LORD DRUMALBYN: The short and simple answer is that we committed this matter to the consideration of the Committee on Consumer Protection. They

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examined it for a very long time indeed, much longer than this House can possibily examine this matter, and their recommendation was quite clear: that while in theory a true measure of damage might seem more equitable, in practice it would give rise to considerable dispute and difficulty. In addition, I adduced the arguments of the protection of the consumer at the earlier stages of the arguments why we thought the right course was to ensure that the consumer should know as quickly as possible where he stood under the agreement. It is for these reasons that we have felt bound to stick by the Molony recommendations on this subject, recommendations which we support for the reasons that I gave at some considerable length on the last occasion.
BARONESS BURTON OF COVENTRY: I do not want to labour this matter, but, of course, Molony is very convenient.I am sure the Minister would never—at least, I hope he would not—accept the Molony viewpoint on guarantees. While I am not intending to invoke the question of guarantees now, I would point out that the Molony Committee could not have stated better than it did the reason why the present system of guarantees was completely wrong. Having gone through them all, it merely meekly said in effect: "We cannot do anything about it so we leave it as it is." I, for one, certainly do not accept that because Molony has said something, it is thus sacrosanct. On this question of a true measure of damage, I thought Molony just ran away from it. They said that it is equitable, it is right in theory but that they think it would lead to disputes. If the Minister is going to sit down under a reason like that, then, with respect, I think he is not as good a Minister as I thought he was. As I can get no support on this matter, for the moment I ask your Lordships' permission to withdraw the Amendment.
Amendment, by leave, withdrawn.
LORD SHEPHERD: Would it be convenient for the Minister if I moved this Amendment formally? I have already spoken to it on a previous Amendment with which I thought it was linked. I wonder whether the noble Lord can reply. I beg to move.
Amendment moved—
After Clause 13, insert the following new clause—
Notice to representative of deceased hirer
(". Without prejudice to the operation of section 13 of this Act, where goods have been let under a hire-purchase agreement to which the principal Act applies and the following circumstances exist, that is to say—

(a) a notice of arrears has been served in accordance with section (11A) of this Act at any time before or after the death of a person, who immediately before his death was the hirer in relation to that agreement (in this section referred to as the deceased hirer');

(b)the goods are in the possession of a person who is a personal representative of, or a person (in this section referred to as 'an interested person') having an interest in the estate of, the deceased hirer, any interested person may, within the time prescribed for compliance with the notice of arrears, serve upon the owner a notice in the terms prescribed in Schedule (1A) to this Act; and if the owner recovers possession of the goods within 28 days of the service of such notice, a personal representative of the deceased hirer shall (without prejudice to any other right exercisable by him as the hirer in relation to the hire-purchase agreement) be entitled to recover from the owner, in an action for money had and received, all such sums as are mentioned in paragraph (a)of subsection (2) of section 11 of the principal Act.")—(Lord Shepherd.)

LORD DRUMALBYN: I am bound to say that I thought I had replied on this question. The central point here is the difficulty, as I said, in giving the successors to the deceased hirer a greater estate, if I can put it that way, than the hirer himself had before he died. I do not think it would be right to give the estate greater rights than the hirer himself enjoyed during his life. While I recognise the point of view here, it is a fairly extreme and uncommon case. Here, again, I feel almost bound to recur to the kind of point we were debating on the last Amendment. We have at the moment these very clear-cut remedies and very clear-cut safeguards and it seems unwise to erode them and to depart from them, particularly in one direction only, in what is perhaps the most difficult part of the whole Bill. I certainly would not exclude the possibility of thinking on this again. I should like to make it quite clear that I am by no means optimistic that we should reach any other conclusion than we have reached on this occasion, but here again it is a matter which we have not had a lot of time to consider and, as with all

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these other points, we wish to consider whether we can in any way improve the Bill between now and Report stage.
I would only say, if I can make a general point, that the time between the Committee stage and Report stage is fairly short and it may well be that we shall not have reached final conclusions on all the various points that the noble Lord has put by the Report stage, so I hope he will not castigate us too greatly if we have not done so. But I am saying that these points are the sort that we will consider.
LORD SHEPHERD: Is it a fact that the Amendment calls for this 28-day period as an increased right? I recognise that it is an increased right to that extent, and that extent only, but the Government themselves are changing. In the past, the death of the hirer was sufficient reason for the goods to be recovered, but the Government have accepted the view of Molony that the death of the hirer should not be the cause of family goods being recovered by a hire-purchase company. The noble Lord, however, says that this should apply only where more than one-third has been paid. It would seem to me, considering the justice of the case, a rather arbitrary figure on which to rest one's argument. hope the noble Lord will consider this point sympathetically. The Government Bill is there to protect the family property that may be in jeopardy because of the death of either husband or wife. If justice and protection is necessary for those who fortunately have paid more than one-third, I should have thought there was justification for having it for those who have paid less than one-third.
LORD DRUMALBYN: May I make this point? The practical situation here will normally be that a relatively small proportion of the total purchase price will have been paid. Very likely it is the breadwinner of the family who will have died. In those circumstances in many cases the successor, the widow or whoever it may be, will be only too ready to surrender the goods, knowing the source of income has dried up and she will riot be able to continue. The kind of case the noble Lord has in mind must be a relatively rare one, where there is difficulty in settling the
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estate, where the widow may be upset and all the rest of it and where subsequently she decides she would like to and can continue with the payments. That is probably a pretty rare case, and the question is whether we are going to alter the whole structure of the hire-purchase protection merely in order to meet this special case. That is what I have in mind. This is why I say I am not particularly optimistic in this particular case, and I am not really certain whether the cases are really so hard as the noble Lord seems to think at the present time.
LORD SHEPHERD: It is not only the question of the state the wife is in; she may have no knowledge that the car or property is under a hire-purchase agreement. However, I am sure the noble Lord will look at this matter sympathetically, and therefore I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 14 agreed to.
Clause 15 [Money claim after order for specific delivery]:
6.52 p.m.
LORD SHACKLETON LORD SHACKLETON moved, in subsection (2)(a), after "brought", to insert:
"or would have accrued due under the hire-purchase agreement, before the owner has recovered possession of all the goods, if the hiring under the agreement had not been terminated".
The noble Lord said: This is a rather technical and I think important point in terms of fairness to all concerned. As the Bill stands and as Clause 15 stands at present, a hire-purchase company might terminate a hiring under hire-purchase agreement for a motor car and apply to the court for an order for repossession, and the court will probably make an order suspended for as long as the hirer pays the hire-purchase company so much a month. Judging by past experience, it is unlikely that any monthly payment order made by the court will be anything like the monthly rental which is provided under the terms of the hire-purchase agreement. The position might then be that the hirer would make payments under this court order for the period, and then cease altogether. Where-upon the hire-purchase company has to go back to the court for leave to repossess the car.
I may misunderstand this, but this; is an exploratory Amendment. In any case, even if it does not have to go back, the situation may be worse in some ways, because the maximum amount of the claim is governed by what was the position at the date of the original application to the court months earlier, and no regard is taken of the additional use the hirer may have had from the vehicle or any depreciation which follows. This Amendment is intended to provide—and I suggest it is no more than reasonable—that where such a suspended order has been made the courts should take account of the position not at the date when the original order was made but at the date when the goods are eventually recovered. The point is that they would have been recovered at an earlier date if it had not been for the intervention of the suspended order, and this is to take into account the loss to the owner during that period. I beg to move.
Amendment moved—
Page 15, line 28, after ("brought") insert the said words.—(Lord Shackleton.)
LORD DRUMALBYN: I realise that the noble Lord, Lord Shackleton, is concerned with the depreciation that may have occurred in the state of the vehicle since the action was brought. I also realise that the period may be of some duration if a postponed order has been made and it is only after a time that the hirer fails to keep up the payments required by the order. I think it is important to recognise that the protection afforded by the Act depends to a very large extent on the ability of the court to make a postponed order. We must therefore look very carefully at any suggestion that the terms of the 1938 Act should be, so to speak, stiffened up against the hirer. If they were stiffened up it might tend to deter the hirer from seeking such a postponed order. Will this Amendment do that?
We are considering a case where a hirer has paid at least one-third of the hire-purchase price and has then been unable to keep up his payment under the hire-purchase agreement. The court, having considered all the relevant facts—including, of course, and in particular, the means of the hirer—makes a postponed order. Under the postponed order the hirer will be entitled to continue in
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possession of the goods, no doubt on payment of smaller amounts than those under the agreement and with instalments spread over a longer period. In this case the hirer will not even have kept up the smaller payments, and the owner then automatically retakes possession without going back to the court; he does not need a further application to the court. Under the clause in its present form the owner can then claim any instalment in arrear when the action was brought and any further amount for which the agreement provides to bring the payments up to not more than one-half of the hire-purchase price, the court being entitled to take into account payments made under the postponed order.
Under the Amendment, however, the owner would be able to recover all amounts which would have become payable under the agreement right up to the time he recovers the goods, if the agreement had not been terminated—again, of course, taking into account payments made under the postponed order. This would mean that at the very moment the hirer was unable even to keep up the smaller payments the owner could proceed against him for the larger payments. It would mean that each time he made one of his smaller payments under the order he would have a potential liability to pay the difference between that and the larger payment under the agreement if eventually for any reason he found he was not able to keep up the smaller instalments. I should have thought it is just possible that you might run up against an unscrupulous hirer—there are no doubt unscrupulous hirers in these matters—but that such people were very much in a minority. We are, after all, really considering what is one of the central safeguards. The majority of hirers undoubtedly set out with the intention of carrying through to the end their agreements. If they cannot do so and an order under Section 12(4)(b) has to be made, then they will certainly do their best to fulfil this.
The real question is whether, if they fail to do so, the original contract should be reinstated. I really think that if we were to do this we should be going back on one of the major protections in the Bill, which, after all, bases itself on the supposition that in this contract it is the hirer who has to be protected

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much more than the finance house. I hope that after what I have said the noble Lord will withdraw his Amendment, because what is now being proposed is quite definitely a stiffening up of the 1938 Act in a way in which certainly we had not contemplated, and in a way which was not contemplated by the Committee on Consumer Protection. I would agree that from the point of view of the finance houses it would look fair; but, on the other hand, this is a matter of consumer protection, and I think we should adhere to the protection that is provided in the 1938 Act.
LORD SHACKLETON: This is a most astonishing argument, to point to the fact that there are some unscrupulous hirers as well as unscrupulous owners, and to say we do not therefore bother about them, and that the answer is that the great majority are scrupulous. We are legislating against the unscrupulous on either side. I quite agree with the intention, and that we support the Bill principally because it gives protection to the consumer. I really do not see why the noble Lord should suggest that one should revert to the original contract. Unless I am completely wrong, the original contract still runs. It may be not so important with smaller amounts, but with a large amount the actual value, particularly in the case of a motor car, after a further six months may be enormously reduced.
Obviously, I am not going to press this to-night, but the argument of the noble Lord seems to be on a par with the argument that he has consistently used to my noble friend Lady Burton of Coventry, that it is too difficult. He says it might seem fairer. My argument is that it would be fairer, not that it might seem fairer. Is there no provision by which protection could be obtained in this way? I would ask the noble Lord to consider this. I should think that the effect of this clause, if there is no redress, will be to encourage the courts to make much stiffer orders for repayments in order to guard against this particular matter. But the argument may work the other way, and I would ask that further consideration be given to this.
I cannot recollect the Molony Committee Report well enough to know how far that Committee examined this par-
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ticular point. I do not know whether any noble Lord can inform us on this. But this seems to me to be one of those small, but not unimportant, points on which there is a measure of unnecessary inequity. Obviously, I was wrong—and looking at the clause I thought quite probably I was wrong—in saying that owners had to go to the court again. Is the noble Lord not prepared at this stage to give any undertaking? He has not been too forthcoming; none the less, I would ask him to think again. Unless any other noble Lords wish to support my arguments, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 15 agreed to.
Clause 16:
Provisions as to guarantees and indemnities
16.—(1) A contract of guarantee relating to a hire-purchase agreement to which the principal Act applies, or relating to a credit-sale agreement to which the principal Act applies under which the total purchase price exceeds£20, and any security given by a guarantor in respect of money payable under such a contract, shall (subject to the next following subsection) not be enforceable unless, within seven days of the making of the contract of guarantee, there is delivered or sent to the guarantor—

(a)a copy of the hire-purchase agreement or credit-sale agreement, and

(b)a copy of a note or memorandum of the contract of guarantee, being a note or memorandum signed by the guarantor or by a person authorised by him to sign it on his behalf.

7.5 p.m.
LORD PEDDIE: My noble friend Lord Chorley has asked me to express his apologies to the Committee for his unavoidable absence, and has requested me formally to move Amendment No. 15 which stands in his name. I am assured that this makes for a closer definition of terms. I beg to move.
Amendment moved—
Page 16, line 12, leave out from first ("of") to ("there") in line 13 and insert ("the making of the hire-purchase or credit-sale agreement to which the contract of guarantee refers").—(Lord Peddie.)
LORD DRUMALBYN: I was rather hoping that the noble Lord, Lord Peddie, would not move this Amendment, because it covers much the same ground as the following Amendment. I

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thought it more appropriate that we should discuss the point on the following Amendment, because in point of fact this Amendment does not go quite far enough; it does not quite cover the ground, and I could not accept it.
LORD PEDDIE: I agree, and beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
BARONESS BURTON OF COVENTRY BARONESS BURTON OF COVENTRY moved, in subsection (1), after the second "guarantee", to insert:
"or the making of the hire-purchase agreement or credit sale agreement whichever shall be the later".
The noble Baroness said: As your Lordships know, the Bill provides that, for the protection of a person standing as surety for the payment of another's debt, copies of the agreement of guarantee and of the principal contract—that is, either of hire-purchase or of credit sale—shall be sent to the guarantor within seven days of the making of the contract of guarantee. With that principle I entirely agree. I am quite sure that guarantors should have this information, but I feel that a considerable technical difficulty may well arise as the clause is now worded, and the Amendment I am putting forward seeks to ensure that this is overcome.
I have asked various people about this and I believe that, as we laymen think happens so often, lawyers really do differ on the interpretation of the wording, and they differ here as to the precise point at which the contract of guarantee is made, and therefore as to the date from which the seven days is to run. I want to know: is the guarantee made when the guarantor signs the agreement form, or when the owner accepts the hire-purchase or credit-sale agreement itself, and thus carries out his part of the bargain? This really is the point at issue. I do not know what your Lordships feel about this, but I know that if I were to sign a guarantee to-day I should certainly imagine, whatever the lawyers may say, that I have made a binding contract as from to-day. I have some reason to believe that the intention of the clause is to make the seven days run from the day on which the principal contract—that is, the hire-purchase or credit-sale contract—is made. I think it is quite right that
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this should happen, but I am not quite sure that it will.
I should just like to make this point. I am sure the Committee will appreciate that if the seven days is to run from the date of the guarantor's signature, then in many cases the finance house will not even have received the documents by the time the copy is due. On that ground alone, I think the provision is impracticable. If, however, the meaning is that the agreement is made only when the principal contract is signed, and therefore the seven days runs from that date, then I think no problem arises. I should like to suggest to the Minister that it would surely seem best that the clause should say so with no ambiguity. I think also, of course, that we have to make provision for the case where the guarantee post-dates the agreement, as could happen, although rarely, when the seven days in any case will have to run from the date of the guarantor's signature, as to which in these circumstances no problem arises. My Amendment would cover this point quite adequately. I know that it is unwise to be unduly hopeful, but, as a number of well-qualified persons take a different view from the Government as to what this clause means, perhaps we can have this set down quite definitely. My Amendment does not take away any protection but ensures a workable provision free from doubt. I hope that the Government will accept the Amendment so that what is intended to be done is quite clearly set out. I beg to move.
Amendment moved—
Page 16, line 13, after ("guarantee") insert the said words.—(Baroness Burton of Coventry.)
LORD DRUMALBYN: The noble Lady has asked me from what date the guarantee will normally run. I am advised that the guarantor guarantees the performance of the obligations of the hirer in return for the finance house entering into the hire-purchase contract. In legal terminology, the making of the hire-purchase agreement is the consideration for entering into the contract of guarantee, so that in those terms the clause as drafted is perfectly all right. It also would cover the point which the noble Lady also mentioned, where the guarantee is given subsequently to the

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contract's being entered into in these terms. It may be that a guarantee may be given in consideration of, say, a finance house not proceeding with repossession. The consideration then is the hire-purchase company's refraining from action. In that case the date of the guarantee would be subsequent to the date of the contract. But, as the noble Lady has said, the Amendment which she is proposing will make the matter quite clear and put it beyond doubt. Therefore, I have pleasure in accepting the Amendment.
On Question, Amendment agreed to.
LORD PEDDIE LORD PEDDIE moved, in subsection (1)(b), to leave out "a note or memorandum of". The noble Lord said: To save the time of the Committee, I propose to speak to Amendments Nos. 53, 54 and 55. There will be no difficulty in understanding, and I should hope in accepting, these Amendments, for if the hirer or buyer is to be entitled to a copy of the agreement, then the guarantor (who undertakes these obligations on behalf of the hirer or buyer) should also be entitled to a copy of the agreement and not merely a note or memorandum thereof. The purpose of the first two Amendments is to achieve just that.
In support of Amendment No. 55, I would point out that it has been, and still is, the policy of the Hire-Purchase Acts to require the hirer or buyer to sign contractual documents personally and not to accept signatures per procurationem. Therefore this policy should be extended to guarantors who require protection against dishonest hirers—and there can, of course, be dishonest hirers, people who falsely assert that a friend or relative has agreed to act as guarantor and authorise them to sign the contract of guarantee. It is felt that these three Amendments effect a substantial improvement, and I hope that they can be accepted by the Minister.
Amendment moved—
Page 16, line 17, leave out ("a note or memorandum of").—(Lord Peddie.)
LORD DRUMALBYN: It may appear that where we are substituting the agreement itself, or a copy of the agreement, for a note or memorandum in the earlier case, we shall do so also in the case of a guarantee. But the position is that under the general law a guarantee, to be
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enforceable, has to be evidenced in writing by means of a note or memorandum of it, and that note or memorandum has to be signed by the guarantor or by someone authorised by him to sign it on his behalf. The words of the clause as at present drafted simply reflect the legal position. Although it is usual for contracts of guarantee to be in writing and signed by the guarantor, this is not necessary. I am told that the present legal position does not appear to have given rise to any particular difficulty. In those circumstances, I hope that the noble Lord will feel there is no practical reason for altering the position as it is under the general law in relation to the particular type of guarantee with which the clause deals. This is essentially a lawyer's point; I do not think that it is a practical point.
LORD PEDDIE: I agree that it is a lawyer's point but, frankly, I am very dissatisfied with the reply that has been given. If I understand the reply aright, the law of guarantee makes it impossible to accept this Amendment. Is that so?
LORD DRUMALBYN: No. It is simply that there does not seem any good reason for imposing a different system of guarantee from that which applies under the general law of guarantee. In the normal way there is virtually no difference between the memorandum or note and the contract. I am told that in many cases, under the main provisions which provide at the present time for a note or memorandum of the contract, it is in fact a copy of the agreement which is supplied. I assure the noble Lord that there is very little in this matter.
LORD DOUGLAS OF BARLOCH: I accept the view which the Minister has put forward that a contract of guarantee must be evidenced by a note or memorandum in writing; that it cannot be done merely as an oral contract. However, I think that the phraseology used here is certainly a little misleading. It says:
"a copy of a note or memorandum of the contract of guarantee"
which implies that the note or memorandum is something different from the contract of guarantee. I cannot see why, if the noble Lord is so desirous of using

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the words "note or memorandum", it should not then read "a copy of a note or memorandum of guarantee". Why duplicate the thing? Surely the guarantee is a contract; there cannot be any doubt about that. Surely, therefore, it is sufficient to state the thing once and not to state it twice, for this leads to the impression (and I am not sure that it is not a correct impression) that one is talking about two totally different things.
LORD DRUMALBYN: I will, of course, take note of what the noble Lord, who is a lawyer, has said on this matter, and have a look at the point when considering the Bill.
Amendment, by leave, withdrawn.
LORD PEDDIE: On the first occasion when I spoke on these three Amendments I made comments with regard to No. 55. I would take the opportunity of reiterating the point that I made on that occasion in consequence of what I consider to be the quite unsatisfactory answer I received from the noble Lord opposite. There seemed to be a clear indication of the impossibility of achieving the desired result, the acceptance of this Amendment. All we are asking for in Amendment No. 55 is that we apply to the guarantor the same right as is applied to a hirer or a buyer, and ensure that a contract will be signed by the guarantor and not by someone else on his behalf. I think the contention here is a valid one: that the Bill should give greater protection both to the guarantor and to the hirer. Therefore I was particularly disappointed at the inability of the Minister to accept this Amendment. I beg to move.
Amendment moved—
Page 16, line 19, leave out from ("guarantor") to end of line 20.—(Lord Peddle.)
LORD DRUMALBYN: The plain fact —and I cannot say more to the noble Lord on this point than this—is that this is something which, so far as I know, has not given rise to any difficulty in the past, and there does not seem to be any real reason why we should alter the general law in this particular case.
LORD PEDDIE: I certainly cannot accept the suggestion that there has been no difficulty in the past. If someone else can sign on behalf of a guarantor,
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and the guarantor can be held responsible although he probably has not given his permission for that guarantee to be extended, that is surely a circumstance with which we should deal if the opportunity presents itself. Whilst I have no evidence to the contrary, I very much doubt that there have been no difficulties in the past arising out of this. However, in view of the circumstances, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
LORD DRUMALBYN: It will be convenient, if the House is agreeable, to consider these three technical Amendments together. Under Section 6(1) of the 1938 Act, the hirer or buyer under the protection of the Acts has certain rights to obtain documents. The purpose of Clause 16(3) is to give the guarantor of a hire-purchase or credit-sale agreement under the Acts similar rights to obtain documents. At present that is not quite what the subsection does, and these Amendments secure that it will. The first would apply to all hire-purchase and credit-sale agreements however large. Amendment 56 limits it to agreements to which the principal Act applies—that is, to those not exceeding£2,000. Secondly, the rights given to a guarantor do not fully reflect those which a buyer already had in the case of a credit sale not exceeding £5, raised now by the Bill to £20. Under the Act of 1938, if there is a note or memorandum of the agreement the hirer is entitled to receive a copy of it. Amendments 58 and 59 bring the rights of the guarantor into line with the rights of the hirer in this respect. I beg to move.
Amendment moved—
Page 16, line 28, leave out ("or credit-sale agreement") and insert ("to which the principal Act applies or to a credit-sale agreement to which that Act applies").—(Lord Drumalbyn.)
On Question, Amendment agreed to.
LORD CHORLEY: I must apologise to the Committee for not having been in my place when earlier Amendments in my name were called. Unfortunately, I had duties elsewhere which I had to attend to. This is a very simple proposal, which really arises out of the fact that the modern week-end deprives us, in effect, of two out of four days in relation to these matters. The result

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really, is that unless we work on the basis of working days we shall, in effect, only have two days. In order to make quite clear that Saturdays are included in this, they have been expressly included in this Amendment. From the point of view of the practical working of this scheme, I think this is a very desirable, if not a very necessary, Amendment to the Bill. I hope the Minister will agree with it. I do not think there is any need to explain it at greater length. I therefore beg to move.
Amendment moved—
Page 16, line 31, leave out ("four days") and insert ("four working days excluding Saturdays").—(Lord Chorley.)
LORD DRUMALBYN: The clause says:
"… any person entitled to enforce the contract of guarantee against the guarantor shall, within four days after he has received a request in writing from the guarantor … supply to the guarantor a copy of the hire-purchase agreement or credit-sale agreement …"
The noble Lord wants to leave out "four days" and insert "four working days excluding Saturdays". There really is no practical need for this change. The provision in the clause as it stands repeats the provision in Section 6(1) of the 1938 Act, which again has caused no trouble. The point is that, if the owner or seller does not supply the guarantor with a copy of the hire-purchase or credit-sale agreement, and a copy of the note or memorandum of the contract of guarantee, together with a statement of the financial details set out in paragraphs (a) to (c) of Section 6(1) of the 1938 Act, he is liable to the sanctions set out in Clause 16(4) of the Bill.
As the noble Lord says, the four days could include days on which the office of the owner or seller is closed but does this really matter in practice? If, due to this fact, the documents have not been supplied within the four days, the owner or seller would equally not be able to enforce the contract of guarantee on those days. He can supply the documents when the office reopens and then he will be in a position to enforce the agreement. As to the second sanction, then of course he has a whole month in which to supply the documents. So nobody is any the worse off simply because the four days may include non-working days as well as
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working days. I do not think there is any practical point that arises here.
LORD CHORLEY: This is a very good example of the sort of answer which comes from a Government Department where people are not practised in these matters. My information, which comes from finance companies who are engaged in this business, is that this does in fact give rise to difficulty, and that is the reason why I put the Amendment down. To those looking at it in the Board of Trade, it may appear that this is not so, but my information is that it does give rise to difficulty for people who are operating this business from the finance companies' angle. If it had not been for that fact, I would not have put down the Amendment. But if the noble Lord says that he will not accept it, I do not propose to divide the House and I beg leave to withdraw the Amendment.
LORD DRUMALBYN: I shall be very glad if the noble Lord will let me have examples and instances of where difficulty has arisen. Of course, if the noble Lord will do that, we will willingly look at them.
LORD CHORLEY: I am grateful to the noble Lord for that statement.
LORD PEDDIE: May I ask whether there is some virtue in using the words "clear days", as against "four days" or "three days"? Is there not some virtue in adopting the idea of clear days, so that the person involved knows more precisely the period of time involved?
LORD DRUMALBYN: I should have thought that was so. That is why we have "four days", rather than "four working days".
LORD PEDDIE: "Four days", not "four clear days".
LORD DRUMALBYN: If you say "four working days", it is not exactly clear what you mean. At any rate, we would have to look at the drafting if we were to make a change in this.
Amendment, by leave, withdrawn.
LORD DRUMALBYN: I beg to move Amendment No. 58.
Amendment moved—
Page 16, line 34, leave out from ("guarantor") to end of line 39 and insert ("the documents specified in the next following subsection.
(4) The documents referred to in the last preceding subsection are:—

(a) a copy of the hire-purchase agreement or credit-sale agreement or, in the case of a credit-sale agreement under which the total purchase price does not exceed £20, a copy of any note or memorandum of the agreement; and

(b) a copy of a note or memorandum of the contract of guarantee; and

(c) a statement signed by, or by the agent of, the person to whom the request in writing referred to in the last preceding subsection is made, showing the matters specified in paragraphs (a) to (c) of section 6(1) of the principal Act (which relates to information required to be given to the hirer or buyer).").—(Lord Drumalbyn.)

On Question, Amendment agreed to.
LORD DRUMALBYN: I beg to move this Amendment.
Amendment moved—
Page 16, line 41, leave out ("the last preceding subsection") and insert ("subsection (3) of this section").—(Lord Drumalbyn.)
On Question, Amendment agreed to.
Clause 16, as amended, agreed to.
[The Sitting was suspended at twenty-nine minutes before eight o'clock and resumed at half past eight o'clock.]
Clause 17 agreed to.
LORD DOUGLAS OF BARLOCH 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: On behalf of the noble Viscount, Lord Brentford, I beg to move the Amendment standing in his name. This is a very simple Amendment, the purpose of which is to confer upon the county courts jurisdiction to deal with proceedings arising out of hire-purchase agreements or credit-
900
sales agreements which are subject to statutory control. If this Amendment is not passed the county courts will have jurisdiction in cases up to £400 and also jurisdiction in all cases arising under Section 12 of the principal Act relating to recovery of the goods which are subject to the contract. I know that if this Amendment is approved it will mean an extension of the power of the county courts beyond their normal limit. There are good precedents for such a course, however, and in this particular field the county courts have hitherto had jurisdiction with regard to actions relating to hire-purchase contracts. The county court judges have experience of dealing with them; the county court is a more economic tribunal than the High Court; it is a more speedy tribunal, and it would therefore be very much to the advantage of hirers that all disputes with regard to contracts should be decided in the county court.
I have said that there are precedents for giving an extended jurisdiction to the county court. One case which comes to my mind (it does not exist now, of course) was with regard to workmen's compensation, where the county court had unlimited jurisdiction no matter what the amount of the claim. That jurisdiction was given for very good reasons: it affected people, many of them not in an affluent position, and enabled them to have their cases decided speedily and economically. Exactly the same arguments apply in this case. I should say that this matter has been considered by the Law Society, whose members have great experience of dealing with matters of this kind, and they are strongly in favour of making this Amendment to the Bill. I hope, therefore, that the Minister will consider it and that it will meet with the approval of the Committee. I beg to move.
Amendment moved—
After Clause 17, insert the said new clause.—(Lord Douglas of Barloch.)
LORD DRUMALBYN: During the course of the Second Reading debate I indicated that the cases to which Sections 11 and 12 of the 1938 Act would apply would come before the county courts notwithstanding they might exceed the normal jurisdiction of such courts. These are cases where the action is for the recovery of goods after

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one-third of the hire-purchase price has been paid. If the noble Lord will look at Section 12(1) of the 1938 Act, he will see that in these cases action must be brought in the county court, and the jurisdiction of that court will be automatically extended, I am advised, to cover such cases. Where the Act does not require the action to be brought in the county court, the ordinary limits of jurisdiction of that court will, as the Bill is now drafted, apply. There will therefore be a number of actions which may arise in connection with hire-purchase agreements not exceeding £2,000 which cannot be brought in the county court—and I appreciate, of course, that the purpose of the Amendment is to deal with such cases.
The position will be similar in relation to conditional sale agreements, since the Bill applies the 1938 Act to these agreements in the same way as the Act applies to hire-purchase agreements. As respects credit-sale agreements, the ordinary limits of the county court's jurisdiction will apply, since there is nothing in the 1938 Act which compels a seller to bring action in the county court. In the case of these credit-sale agreements, there is, of course, no question of the recovery of goods. I think that this is a matter which requires to be further considered and I hope that on my undertaking to do this between now and the Report stage of the Bill the noble Lord will agree to withdraw this Amendment.
LORD SHEPHERD: Before my noble friend responds to that invitation, may I ask the Minister whether he is aware that most county courts to-day deal with cases of hire-purchase recovery quickly—I think within five or six weeks? But I should think that the increase in the scope of the Bill from £300 to £2,000 would increase the amount of litigation that would come before these courts. Perhaps the noble Lord would undertake to discuss the matter with his noble and learned friend the Lord Chancellor, to see whether in certain cases there could not be an increase in the number of judges, and particularly in the number of bailiffs. I am told that there is a shortage of bailiffs to meet the duties imposed on them through the courts. I believe that it would be right for those who are responsible for the
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courts to anticipate the increased work. In no circumstances should we wish to see the reasonable period of from five to six weeks extended, to the disadvantage of both hirers and hire-purchase companies.
LORD DRUMALBYN: There was the fear that this would throw a good deal of extra work on the county courts, but to some extent, of course, it can cut both ways. Once an exact procedure is prescribed, then presumably cases will not take so long as when cases are outside the Act. The Lord Chancellor's Department were consulted on this point, and they considered that if there was an extra load, it would not be in any way crippling to the county courts. They believed that the courts can absorb whatever extra load would come about as the result of these Amendments of the principal Act.
LORD DOUGLAS OF BARLOCH: My noble friend has raised a perfectly fair point with regard to the administration which could, of course, arise in whatever court these cases were taken. I have no doubt that the Lord Chancellor will provide a sufficient number of judges, whether they are in one court or another. In view of what the noble Lord has said about giving consideration to this Amendment—and I think he has approached it in quite a sympathetic fashion—I am happy to ask leave to withdraw it.
Amendment, by leave withdrawn.
Clause 18 agreed to.
8.41 p.m.
BARONESS BURTON OF COVENTRY BARONESS BURTON OF COVENTRY moved, after Clause 18 to insert the following new clause—
Amendment of section 4 of Law of
Distress (Amendment) Act 1908
Subsection (1) of section 4 of the Law of Distress (Amendment) Act 1908 shall be amended to read as follows:—
"to goods belonging to the husband or wife of the tenant whose rent is in arrears nor to goods comprised in any Bill of Sale or settlement made by such tenant nor to goods in the possession, order or disposition of such tenant by the consent and permission of the true owner under such circumstances that such tenant is the reputed owner thereof unless such goods are in such possession, order or disposition solely by reason of their being or having been comprised in a bona fide hire or hire-purchase agreement made between any other person (as defined by subsection

903
(c) of section 1 of this Act) and such tenant, nor to any livestock to which section 29 of the Agricultural Holdings Act 1908 applies;"
The noble Baroness said: Many people interested in this problem of hire-purchase reform and legislation have criticised the Government for some time past for not bringing forward comprehensive legislation to deal fundamentally with these issues. I am quite sure the Committee will be in agreement with me when I say that many of us feel that only a Government having departmental assistance behind them can deal with these difficult problems. Some of us, inside this House and outside, are not quite sure how deeply the Government intend to delve into these matters to-day; nor are we quite sure how much time the Government feel they have to deal with all these details.
Having said that, I should like to express my appreciation of the fact that we have this Bill to consider. Nevertheless, in spite of the fact that the Minister surprised me rather pleasantly by accepting a recent Amendment of mine—for which I was unable to thank him, as we moved on to the next business—I am not at all sure that it is not the intention of the Government to stick to their brief. It seems to me that, whatever the arguments adduced on various matters, we are given the reply that the Minister has brought with him. I hope I am being unjust in saying that, but that is how it seems to me. I hope I am wrong, and that it is the intention of the Government to be as comprehensive as possible. As I am still living in that hope, I want to move this Amendment, because it concerns a matter that has needed attention for a good many years. The explanation must be somewhat technical, but it will not be long, and I feel, as a layman, that it is a longstanding grievance that we might well get rid of at this stage, if the Minister were able to help us. I stress that, because I do not believe that words which were used in 1908 were intended to have the effect which they did. I refer to certain words used in the Law of Distress (Amendment) Act, 1908, to which my Amendment refers.
The Committee will recall that while at Common Law the right of distress was not confined to the tenant's goods but
904
extended to all goods on the premises, this strict rule has been eased over the years so as to provide, as seems only equitable, that one man's goods should not be seized to pay another man's debts. The object of the Act of 1908 was not, therefore, it seems to me, to extend the rights of landlords, but rather to diminish them by protecting goods which were not the property of the tenant. I believe that if we examine the wording of Section 4 of the Act it becomes evident that the intention of that section was not to strike at hire-purchase agreements, as they are usually understood, but rather to strike at fictitious and, as I would call them, improper arrangements into which a tenant might enter for the purpose of removing what were in truth his own goods from any attempt by the landlord to seize them.
The Minister, of course, will remember that the wording in the Act relates to
"goods comprised in any bill of sale, hire-purchase agreement or settlement made by such tenant."
I would draw to the Minister's attention the comments made by the learned author of the Law of Hire Purchase, when he said:
"… the effect of an ordinary grammatical construction of the above-quoted words would appear to be that they do not except from the protection of the Act goods let to a tenant, but their object is to protect a landlord from being defrauded by a tenant making a fictitious hire-purchase agreement in respect of his own goods …"
The author, Mr. Earengey, went on to quote the case of In re Watson, in 1890. The only other case that I would bring before the Committee, very briefly, is Rodgers v. Martin, when Lord Alverstone said—and I would quote again, because this obviously carries much more weight than my comments:
"… the only reasonable meaning of that subsection is that goods are not to get the benefit of Section 1 if they are goods as to which the tenant himself has made an arrangement, by which he has sought to secure, for his own goods, the protection intended by the Act to be given to the goods of other persons only."
I hope your Lordships will agree, especially having regard to the class of instruments with which hire-purchase is bracketed in the section, that the intention of the legislation has not in fact been achieved. It is interesting to note

905
in this connection that goods on simple hire are not excepted from the protection given by the Act, which, it is submitted, gives added weight to the contention here maintained.
My submission is this. It seems to me that in this day and age no landlord should, or would, assume that because a tenant has goods on his premises they must in the normal way belong to him and therefore the landlord will be safe in allowing arrears of rent to accumulate. There is, of course, a very different and, I think, even more forcible argument. The Bill which we are now considering seeks to protect hirers by preventing the true owner from seizing the goods, once one-third of the price has been paid, without reference to the court, but I believe, that the effect of the Act of 1908 is that the landlord, who has no interest in the goods at all, can seize them at any time without reference to the courts whatsoever. If it is right that the hirer should be protected against seizure by the true owner, how much more should he be protected against the intervention of a third party? This seems to me to be a matter of consumer protection.
I will not weary the Committee with further details, but I believe that the Amendment which I am now putting to the Committee will, by an amendment of section 4 of the Act of 1908, adequately protect both the hirer and the owner against the seizure of goods by a landlord. This protection to goods that are the subject of an ordinary hire-purchase agreement (as opposed to any fictitious arrangement masquerading as such) is, I believe, in accordance with equity and entirely desirable for the protection of those principally concerned. I hope very much that the Minister will feel that this is an opportunity to rectify a longstanding error. I beg to move.
Amendment moved—
After Clause 18 insert the said new clause.—(Baroness Burton of Coventry.)
LORD DRUMALBYN: I appreciate that the purpose of the noble Baroness's Amendment is to bring goods subject to hire-purchase agreements within the limited protection which the Law of Distress (Amendment) Act, 1908, already affords to certain goods of third parties in the possession of tenants against distress by landlords for rent. I am bound to
906
say that I think the noble Lady has made a very strong plea in this regard, but may I first of all submit one or two considerations?
Goods the subject of a hire-purchase agreement may be excluded from the protection of the Act of 1908 for either or both of two reasons: first, by being goods, as the noble Lady made clear, "comprised in a hire-purchase agreement" they are specifically excluded as such by Section 4 of that Act; secondly, they may be excluded as being goods in the reputed ownership of the tenant. This second exclusion is a general one and not confined to cases where the owner's consent to the tenant's possession is derived from a hire-purchase agreement.
So far as the specific exclusion of hire-purchase goods is concerned, there is usually a clause in the agreement, I am informed, for its automatic termination on distress being threatened. Obviously, it cannot always be operative, but where such a clause does operate the goods cease to be comprised in the agreement and the specific exclusion in Section 4 of the Act of goods so comprised is avoided. I doubt in this respect whether the Amendment would have any practical effect. The Amendment, however, goes further than this and seeks to confine the general exclusion of goods in the reputed ownership of the tenant to cases where the owner's consent to the tenant's possession does not arise from a bona fide hire-purchase agreement.
The question really is whether goods on hire-purchase can be treated differently from other goods in the reputed ownership of the tenant. If it is right to exclude from the protection of the 1908 Act goods in the reputed ownership of the tenant, why should goods on hire-purchase be put on a different footing from other goods in that category, goods lent and so forth? It may be that a case could be made out for ceasing to exclude from the protection of the Act all kinds of goods in the tenant's reputed ownership, but the question we have to consider now is whether such a fundamental change ought to be made piecemeal in legislation dealing primarily with hire-purchase. I know that the noble Lady will say that here is a good opportunity,

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and she has undoubtedly made a strong case, but we feel that it would be necessary to consider the 1908 Act as a whole and to take into account the views which might also be expressed by the landlords in this matter.
We do not think we ought to deal with this matter piecemeal. This is the other side of the coin to the noble Lady's case, which we quite understand, that here we are legislating about hire-purchase and here is a chance to make the alteration which would appear to do greater justice. I think this is her view. All I can say, just as I said at an earlier stage when we considered the Sale of Goods Act that we ought to consider the Act as a whole and not piecemeal, is that here, with hire-purchase, I think the same considerations really apply to the question of distress.
BARONESS BURTON OF COVENTRY: In thanking the noble Lord for that very pleasant answer, which really did not get me a lot further, I am sure he will agree that it always seems to noble Lords, if they have made out a good case for something which should then be done, that they are then informed that "we cannot deal with something piecemeal". I think we are dealing piecemeal with hire-purchase at the present moment. I think it is "Heads I lose, tails the Minister wins". But he has listened patiently to my arguments, and possibly the next Government will deal with the amendment to the Law of Distress (Amendment) Act, 1908. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 19 agreed to.
LORD McNAIR LORD McNAIR moved, after Clause 19, to insert the following new clause:
Size of type of prescribed documents
". 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: I think we should all agree that it is of the first importance that a hirer should know exactly the bargain into which he enters. At present one of the obstacles which prevent that is that many or most of these hire-purchase agreements are printed in very small letters. Whatever
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may be the reason, I believe that to be a fact. It may be that the reason is that in the course of years hire-purchase agreements have become larger and larger in view of their complexity and the necessity of dealing with new points that arise from decisions of the courts. Whatever may be the reason, it is undoubtedly the fact that as a result of this very small lettering hirers are not encouraged to read these agreements and understand them. I feel sure that many who make the attempt give it up as a bad job when they realise the kind of print they have to tackle. This defect has been dealt with in Australia. Most or all of the Australian States have legislated for this purpose. My clause here is based very closely on the Victoria Hire-Purchase Act, 1959; but most or all of the Australian States have something similar.
In regard to the precise wording of the clause, I have copied the expression which occurs in the Australian legislation—namely, type known as "ten-point Times". I understand that expression also has a meaning in this country. If your Lordships want an idea of what it means, it can be easily ascertained by looking at Whitaker's Almanack under the title "Weights and Measures". There you will find a specimen of what is known as ten-point, though the word Times is not used. If your Lordships are prepared to accept this Amendment—I sincerely hope the Minister will encourage you to do so—I feel sure that if he consults the Government printers he will be able to produce a much closer definition of ten-point Times than those words themselves, which I have copied from the Australian Statute. I beg to move.
Amendment moved—
After Clause 19, insert the said new clause.—(Lord McNair.)
LORD CHORLEY: May I add a word in support of the noble and learned Lord? I am moved to do so by the entry of my noble friend Lord Shackleton, who only the other day was adjuring us to bring more science into our legislation, among other things. This Australian Act to which the noble and learned Lord has referred is, in effect, a uniform Act relating to this problem of hire-purchase which has been adopted, I think, in all the Australian States of

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the Commonwealth, and it has been a good deal written about in the legal periodicals in this country over the last year or two. If Lord Shackleton's views about bringing science to bear upon legislation had been appreciated in the Board of Trade in the way I suggest they ought to have been, undoubtedly the experiences in the Commonwealth would have been more apparent in this Bill, but so far as I can see they have been disregarded completely.
This is a provision which I believe has worked most successfully in Australia. It is another way of handling a problem which my noble friends and I were concerned about on the first day of the Committee stage of this Bill, when we did not get much change out of the Minister, although in his usual charming way he said that he would look at our proposals. If he could undertake that the Board of Trade would use the extended powers which we want to confer upon them to deal with this matter, on the lines of the noble and learned Lord's Amendment, that would no doubt meet the case; but, undoubtedly, here is a really valuable provision which might be of great use to all the consumers whom the Government and we on these Benches wish to protect by this legislation.
LORD DRUMALBYN: I mean no disrespect to the noble and learned Lord when I point out that this is a starred Amendment and that we have not really had any opportunity to consider it in detail; nor was I aware that he had culled these exact words, as I understood him to say, from Australian legislation. There is, of course, a considerable advantage in prescribing that whatever type face is used should be legible and should be large enough to be readable, although there is the contrary difficulty that you may need so much bulk that you might hide in the bulk of paper involved. There are certain minor points which we should like to look at in this proposal, and we are also a little doubtful about how we would enforce such a provision. But, having said that, I shall be glad to look at this Amendment between now and the Report stage.
LORD LATHAM: Would the noble Lord be fortified in that resolve if I reminded him of, or drew his attention to, the fact that as far back as 1909
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the then Member of Parliament for King's Lynn, Mr. Gibson Bowles, raised the question of the small type for conditions in insurance policies?
LORD McNAIR: I am greatly obliged to the Minister in charge of the Bill for promising to look into this matter. I realise that it is only within the last 24 hours that the Amendment has been put down, and I could hardly expect him to do more. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 20 [Extension of principal Act to Scotland]:
LORD DRUMALBYN: This is a drafting Amendment. I beg to move.
Amendment moved—
Page 20, line 17, leave out ("19(6)") and insert ("19(7)").—(Lord Drumalbvn.)
On Question, Amendment agreed to.
Clause 20, as amended, agreed to.
Clause 21 [Extension to Scotland of provisions of Part I]:
9.4 p.m.
LORD DRUMALBYN: This Amendment looks rather formidable, but it is in fact an Amendment consequential upon the earlier Amendment No. 46 to Clause 13(7), and it is concerned solely with the application of Clause 13(7) to Scotland. I beg to move.
Amendment moved—
Page 21, line 15, at end insert—
("(v) in subsection (7), for the words 'by an application for the issue of a warrant of delivery' there shall be substituted the words 'by an application for the grant of a warrant to officers of court to search such premises in the occupation of that person as may be specified in the warrant and to take possession of the goods or any of them which may be found in such premises'; and at the end of the said subsection there shall be added the words 'Any warrant granted in pursuance of an application under this subsection shall be deemed to include authority to open, if need be, shut and lock-fast places for the purpose of carrying the warrant into lawful execution'.").—(Lord Drumalbyn.)
On Question, Amendment agreed to.
LORD DRUMALBYN: Clause 13 gives a person in possession of goods to which a hire-purchase agreement applies the protection against repossession which the hirer would have had, had he

911
lived. Section 17 of the 1938 Act protects a hirer who refuses to give up possession from an action for conversion and subsection (8) of Clause 13 does the same for a person in possession after his death. But it is unnecessary to extend this subsection to Scotland, since in Scotland the civil wrong known in England as "conversion" does not exist as such. There are remedies available in Scotland to an owner of goods who suffers loss when a person wrongfully detains the owner's goods. None of these remedies would, however, be available against a person who properly relies on the protection of Clause 13 of the Bill and it is, therefore, unnecessary in relation to Scotland to provide any additional protection. I beg to move.
Amendment moved—
Page 21, line 15, at end insert—
("(vi) subsection (8) shall be omitted;").—(Lord Drumalbyn.)
On Question, Amendment agreed to.
LORD DRUMALBYN: This Amendment is consequential upon Amendment 58 which amended Clause 16.
Amendment moved—
Page 21, line 33, leave out ("(3)") and insert ("(4)(b)").—(Lord Drumalbyn.)
On Question, Amendment agreed to.
Clause 21, as amended, agreed to.
Clause 22 [Special provisions as to registration and licensing]:
9.13 p.m.
LORD SHEPHERD LORD SHEPHERD moved to leave out Clause 22. The noble Lord said: I beg to move Amendment No. 65, which is linked with other Amendments which in effect delete Part III from the Bill. If I may, I should also like to speak to Amendments 65A and 67A, both of which are starred. First of all, I would apologise to the Minister for putting down these Amendments at such a very late stage, but there was difficulty in getting agreement to the proposals which in a few moments I shall put before the Committee. Secondly, I would say another word of apology. We have been making such wonderful progress that I feel rather reluctant in having to make what may be a somewhat lengthy speech, but, as the Committee will appreciate, Part III of the Bill is of very consider-
912
able importance not only to hire-purchase companies but also to the motor trade.
Part III basically sets out to prevent hardship to the innocent purchaser of a motor car which is the subject of a hire-purchase agreement that has not been discharged. At present if a person were to buy a motor car with an undischarged hire-purchase agreement against it and the vehicle were traced, the hire-purchase company could recover the vehicle. The result is that the buyer would have lost all the cash he may have paid to the defrauding hirer. If we cannot find an alternative to Part III, then I myself would give reluctant support to it. I believe the Government have chosen here to use a steam-hammer to crack a peanut.
I ask the Committee to consider the problem, for I do not feel that the Government themselves are fully aware of its size. I have been fortunate in obtaining information from hire-purchase companies, and I should like to give it in detail as I think it is of considerable importance both to the Committee and to the Government. At present there are approximately 4 million motor cars which are under hire-purchase agreement. It is difficult to get the exact figures, but if we take the year 1963 there were 1,410,296 transactions in motor cars and vehicles of all types. According to the hire-purchase information I have, in only 700 cases had fraud taken place;in other words, one case in 2,000 transactions. If one takes the average amount outstanding on those agreements—and I have been given a figure of £200—we are considering an overall figure of £140,000. I would ask the Committee to remember that, because later on I wish to give an indication of the possible cost to the hire-purchase companies, and of course, indirectly, that will be upon the hirers.
I should not wish to disregard the cost to the buyer of a vehicle under a hire-purchase agreement—in many cases it can take most of his savings—but my case against the Government's proposals is in four parts. First, there is the security of ownership, and I maintain that, in fact, there may be a considerable increase of fraud, particularly during the next three years. Secondly, I think there will be an increased cost, not only

913
to the finance houses but to the motor trade itself, and all this is eventually passed on to the individual hirers. Thirdly, I believe that the method adopted by the Government will be very restrictive throughout the motor trade. Fourthly, although this is not quite so important, I think the Bill will increase the difficulties of those persons who take cars under hire-purchase.
Let us take, first of all, the question of security of ownership. The log book, with which we are all familiar, has never been regarded as a title to the vehicle; it is merely a record of registration and licence. But I suggest that Part transforms the log book from this mere record of registration into a title to the car. The fact that you have a log book in your possession will clearly show that you are the owner of the car. I believe that the Ministry of Transport —the Ministry which has framed Part III—themselves recognise that, following the Bill, the log book will be regarded as a security instrument. They themselves therefore acknowledge that they are transforming the importance of the log book.
Part III requires the finance houses to store and keep the log books. This is obviously going to involve hire-purchase companies in many problems. First, there is the question of the storage, the space. I do not think this will be very difficult. It will be expensive, but it can be done. But since the log book becomes a security instrument and a very valuable document—far more valuable than it is to-day—it is obvious that the hire-purchase companies will have to adopt, first of all, methods of storage which are proof against fire. They will also have to make sure that these log books are secure from theft. I believe that if Part III goes through, hire-purchase companies will need to have many of their staff bonded as a security against theft. I visualise the hire-purchase companies having considerable difficulty in checking whether there have been thefts of log books. I am told that, in practice, a hirer's file is not brought forth—is not even looked at—during the period of the agreement, so long as payments are being made. Obviously, if the log book is going to be stored and is of such value, the hire-purchase companies will have to adopt
914
very stringent arrangements for its protection.
The noble Lord, Lord Drumalbyn, suggested on Second Reading that what was being imposed was not disproportionate in cost or labour. I have been given a figure—it may not be all that accurate, but it is a reasonable indication—which indicates that the initial costs and the annual cost for the first year may well be in the region of £700,000. This is a very sizeable figure to impose upon this industry, unless, of course, it is the only way in which this can be done. But before proceeding I should like to ask the noble Lord: what is the real position of the log book? It has no seal; it has no watermark; it is printed on a piece of cardboard the type of which varies from district to district. In fact, I was told the other day of a very well-known hire-purchase company that wished to develop a new form of log book. The managing director, to help him in the deployment of his argument, had a log book slightly amended and then had it printed. I am told that, except for the amendments, the printed log book was identical in all respects to those which are being issued by the licensing authorities. Is it the Government's intention to find some way in which the trade and individuals can identify what is a genuine log book—something like the watermark that we put on our sterling notes? With the possibility of a tremendous concentration of log books in one or two areas, the possibility of theft or robbery will be greater—and once those log books are in circulation I think there will be some very dire effects on the trade.
I have dealt with that one side in regard to security of ownership. The motor trade is one in which speed is an essential factor. If I wish to sell my car in order to buy a new one, the quicker it can be done the better; and the dealer who buys my car, particularly if he is giving me a pretty reasonable discount on it, must be in a position to effect a sale as quickly as possible. Most dealers, in fact, try to adopt a sort of back-to-back arrangement: when they take a car in they have a possible buyer in view. The provisions of Part III do not, I believe, seriously affect the sale of new cars: I think they come in when we get into the secondhand car market.
This, as I see it, is what will take place. If a customer whose vehicle is subject to an undischarged hire-purchase or conditional-sale agreement wishes to part-exchange it for another vehicle, he will hand over the registration card and ask the dealer to settle the amount due to the finance company. The procedure will then be as follows. The dealer will send his cheque in settlement to the finance company concerned, unless the dealer is known to them. They will wait until the cheque has been cleared before sending the registration book to the licensing authority with the required instruction to send it to the dealer. In the meantime, as is the custom, the dealer will have to send any unexpired fund tax back to the licensing authority in order to obtain a refund.
At this point the dealer will be in possession of the traded-in vehicle but cannot expect to be in possession of the registration book for at least a further seven to ten days; in other words, the hire-purchase company will not release the log book until they have seen the money. Here is another difficulty: anyone who has either bought or endeavoured to sell a second-hand car knows that the sight of the log book is an essential factor in the sale. If the dealer finds a customer for the vehicle yet cannot produce the log book, whether a customer wishes to acquire the vehicle for cash or under a hire-purchase agreement, the dealer will be unable to tax the vehicle until he receives the registration book. There are many other aspects in which difficulty will arise, but in view of the time, I will not deploy arguments on those this evening.
I think that my noble friend Lord Shackleton raised the problem of a person who has a hire-purchase car and wishes to proceed overseas. Under present arrangements if you wish to take your car overseas you go to the Automobile Association or to the Royal Automobile Club and get a carnet; but the R.A.C. and A.A. will know that the general provisions under a hire-purchase agreement prohibit you from taking your car overseas without the permission of the hire-purchase company. Obviously, therefore, the R.A.C. and A.A. will not issue a carnet until they have written agreement from the hire-purchase company concerned.
916
Therefore one can see a vast number of letters going backwards and forwards at summer time in order that hirers may take their cars overseas. That, if I may say so, deals with the case against Part III.
There is a suggestion—and I hope the Government will feel it is a good one—to deal with this matter. It will, I believe, provide the protection that we need for the person who, quite innocently, buys a car which is under a hire-purchase agreement. These proposals are set out in Amendments Nos. 65A and 67A. Amendment 65A says that the Board of Trade may make regulations to provide that those companies who undertake hire-purchase agreements shall notify the Board of Trade to that effect, and that the Board of Trade may thereafter require the finance companies, within fourteen days of the end of each quarter, to furnish a statement of the number of vehicles that have been let under hire-purchase agreements. The purpose of this is to establish the amount of levy that should be paid to the idemnity fund that is to be set up and controlled by the Board of Trade.
I will keep closely to my notes at this point, because I do not wish to get these proposals wrongly. What is proposed is this. Every finance company would be obliged to become a member of an idemnity organisation and to enter into appropriate covenants with it and with other finance companies who would be members of that association. Each finance company which is a member would certify quarterly to this organisation the number of transactions that it had entered into during the preceding quarter and a levy would be collected from each company. I have already indicated the approximate value of the vehicles involved in fraud—about £140,000. If there were a levy of half-a-crown per transaction, the fund would have an annual income of £170,000 and there would be ample funds to deal with the whole matter. If we were to raise £170,000 by a half-crown levy, this is very much lower than the cost that might arise as a result of Part III of the Bill—namely, about £700,000.
In the event of a hirer's conversion by fraud of a vehicle let under a hire-purchase agreement, the company would trace the vehicle in the ordinary way as

917
at present. Having traced the vehicle and having been satisfied that the purchaser had bought it in good faith, and without detriment to the finance company's interest, the finance company would explain to the purchaser that his case was covered by an indemnity fund, and that unless he preferred to surrender the car and take steps himself to bring the vendor to book, the finance company's claim would be met by the fund, provided that he was willing to sign a written statement of the circumstances in which he acquired the vehicle and to testify in any civil or criminal proceedings which might subsequently be taken against the person responsible for the fraud.
In the event of an innocent party's agreement to do this, the hire-purchase company would be prevented from recovering the vehicle from the innocent buyer. Subsequently, the hire-purchase company would proceed, exactly as they do to-day, against the hirer for fraud, in either the civil or the criminal court. If it were not possible to obtain a settlement from the hirer, then the finance company would obtain the sum involved from the indemnity organisation.
That is the scheme proposed, which I believe (I speak subject to correction) has the support of the major hire-purchase companies in the motor trade. The noble Lord knows me well enough now to know I am not likely to be taken in by the hire-purchase companies' case. I listened to it with a considerable amount of sympathy, but with suspicion in the first instance, but I must say that I came away convinced that the proposals would meet the point the noble Lord gave to us on Second Reading, which would be likely to throw sand into the speedy working of the motor trade and for which we should look for an alternative.
I think that this proposal, which has emanated from the hire-purchase companies, is worthy of consideration. First, the position of the hirer who commits fraud is no different from what it is to-day. Secondly, the position of the innocent buyer will be that which the Government wish to see, and with which we all agree. If he has innocently bought a car he should not suffer by it. Thirdly, the hire-purchase companies
918
themselves recognise this problem and within their own finances are prepared to provide the indemnity fund. What seems to me most important is that they themselves are willing that the Board of Trade should set up the regulations for this indemnity fund; and I believe that with some persuasion they would be prepared to agree to the Board of Trade looking into this particular field a good deal more thoroughly than they have in the past and exerting a greater control over those hire-purchase companies which, as I said earlier, have brought the trade into disrepute.
I apologise to your Lordships for having spoken at length, but I wished to get this case in Hansard, for the consideration of not only the noble Lord opposite but also those wonderful servants in his office who have to be convinced, just as we have to convince the Minister. I beg to move.
Amendment moved—
Leave out Clause 22.—(Lord Shepherd.)
9.32 p.m.
LORD DRUMALBYN: I am sure I speak for all noble Lords when I say how grateful we are to the noble Lord, Lord Shepherd, for having explained this matter so fully and set out so many of the considerations that have led to his putting down the series of Amendments to leave out these clauses, and secondly, and more recently, the clauses which he would propose to substitute. The noble Lord was good enough to say that he would hardly expect us today to do more than say that we would consider these new clauses, and, indeed, that is what I propose to do. The noble Lord has, as he said, got into Hansard a full explanation of the way in which he thinks these clauses will work, and we shall have to go through them to see whether they will work in that way and whether there are any snags.
Of course, as is well known, we ourselves considered a number of different alternatives when we went into this matter and heard evidence from the various bodies concerned. One can make no complaint that at that time the finance houses had not thought up this particular scheme, although it might have been more helpful if they had. We have adopted the alternative which we thought was the simplest and surest. On

919
the face of it, the one outstanding difference between the clauses which the noble Lord has down and those in the Bill lies in the treatment of the innocent purchaser, because although he says, probably quite truly, that the position of the innocent purchaser in the end will be the same as under the Bill, the legal position will not be quite the same. The Bill gives the innocent purchaser an absolute title to the car, whereas under the noble Lord's scheme it is conditional upon the innocent purchaser's satisfying private persons, the finance houses, and we are not certain how this would work out in practice. We should obviously have to give this matter more careful consideration than has been possible in this short time.
I think I am right in saying that the earlier ideas of the finance houses, and, indeed, the scheme which the noble Lord mentioned to me informally at an earlier stage, did not really involve legislation or the Board of Trade coming into the matter at all. I think further consideration by the noble Lord and by the finance houses has shown them that we should certainly have to come into it to some extent, and I am not certain that we should not have to come in to a greater extent than the scheme as at present expounded would suggest.
I do not know whether noble Lords would wish me to say how the scheme proposed in the Bill would work, but I will willingly do so if noble Lords wish it. I think it is fairly plain sailing. In view of the situation in which we find ourselves, namely, that the noble Lord has suggested the deletion of all the various clauses dealing with vehicle ownership, and dealt with the log book and the position of the innocent purchaser, I think the best thing would be, if noble Lords agree, that I should agree to consider the noble Lord's new clauses, and that in the meantime we should proceed with the Bill as drafted, because the noble Lord has said that if no better scheme can be devised he would be prepared—and I agree that only then—to accept the clauses in the Bill. With that brief intervention, I wonder whether we could perhaps—unless other noble Lords wish to intervene—adopt this procedure, at any rate, at this stage.
LORD GREENWAY: The noble Lord has been discussing cars on h.p. He probably has not thought of the 2 million people who own boats on h.p. He has not mentioned one word of that. The other thing I want to say is this—and I may be out of order. We have wives here, and my wife said to me, "For God's sake! don't waffle."
LORD PEDDIE: I will take that advice. I will take the noble Lord up on the point that he made, when he offered to explain how the question of special provisions would operate under the Bill.
LORD GREENWAY: It is an h.p. Bill.
LORD PEDDIE: The point which interests me, and creates a measure of doubt in my mind as to how this would operate in practice, is this. On some operative date the Board of Trade would introduce regulations which would make the document a title to ownership. But prior to the introduction of the regulation by the Board of Trade there would be many of these documents already in the possession of people who had purchased cars under hire-purchase. The result would be that people would be governed by regulations of the Board of Trade and would have this registration card or whatever it is called, but there would be a considerable number of people who would have the log book or registration book prior to the operation of the regulation. I cannot see how that circumstance would be dealt with. I mentioned this point on Second Reading and, quite seriously, I should like to know how one would get over that difficulty. I welcome provisions of this character which deal with circumstances such as those with which this clause deals, but I am still not clear in my mind how it would operate. If the noble Lord opposite would do something to help me in that direction I should be obliged.
LORD DRUMALBYN: First, may I reply briefly to the point raised by the noble Lord, Lord Greenway? The reason why we have not been talking about boats is because this Part of the Bill deals only with the licensing of mechanically propelled vehicles on conditional sale, but I will take note of what he has said.
LORD GREENWAY: That applies to craft as well.
LORD DRUMALBYN: I should like to look into that point. I do not think the legislation concerning it is exactly the same.
On the points that the noble Lord, Lord Peddie, raises, I do not think it is true to say that in any legal sense the proposals here would in any way change the position of the log book in regard to title to ownership. The noble Lord, Lord Shepherd, suggests that it will come to be regarded as a title to ownership. This is a point which is very difficult to deal with within the framework of this particular scheme. It is true, of course, that the licensing card would be issued instead of the log book, and it would be very unwise for any intending purchaser to contemplate buying a car unless the log book were available: but it is not the same thing as saying that it becomes in any way an instrument of ownership or of title. I think one must counter that right away; one would not want that impression to get abroad.
On the second point, that of the three-year gap, this, I am afraid, is bound to be inherent in the scheme. Indeed, the new scheme could not come into effect at the earliest until the Bill as a whole came into operation, and the date of operation of the regulations to be made might even be two or three months later than that; I do not know. Then, of course, there would at that moment be literally a backlog of a large number of hire-purchase cases, some of them extending with instalments over three years, which would not have been subject to this procedure at all. It would only be from the start of the scheme that the licensing cards would be issued in lieu of the log books. This, undoubtedly is one of the disadvantages of the scheme. On the other hand, we have to start somewhere and under this scheme this is the only way one can start.
We thought very carefully as to whether one could in some way or another call in all the registration books; if we could discriminate between registration books relating to hire-purchase transactions and other registration books, and call in all the registration books relating to hire-
922
purchase transactions and retain them. Quite obviously, anybody who was thinking of defrauding would say that he had lost his registration book and could not send it. One would have difficulties of this sort, and we were not able to see any way to deal with this matter. One has to admit that this is one of the disadvantages of the scheme and, in this respect, I would concede that the scheme which the noble Lord, Lord Shepherd, has put forward has advantages. I do not know how quickly it could be brought into effect, but obviously it would have an advantage in that respect. I am not saying it has advantages in all respects. I hope that I have met the points raised by the noble Lord, Lord Peddle. If there are any others I shall be glad to try to deal with them.
LORD PEDDIE: I am glad that the noble Lord opposite has conceded that there are serious disadvantages in the scheme outlined in the Bill itself. While no one on this side has indicated that the log book itself would be a title to ownership, there is not the slightest shadow of doubt that it would come to be recognised as such. Indeed, that idea is inherent in these proposals. It is perfectly obvious that the Minister himself is not clear, nor could he be clear, on precisely the method which would be adopted to deal with the terrific backlog, as he described it, of people who had taken out hire-purchase agreements and possessed a log book and those who, at the same time, would have under the regulations, instead of a log book, a registration card.
An innocent purchaser of a motor car could be presented with the log book; it would be looked upon as being a title but there would be no title at all. That purchaser would be caused to think in such a manner because of legislation of this character. Therefore, although I welcome the effort on the part of the Government to achieve these objectives, I think it has been indicated quite clearly before the Committee to-night that there are very serious disadvantages in the proposals contained in this Bill.
LORD SHEPHERD: I thank the noble Lord, and, if I may say so, also the Committee for patiently listening to me,

923
and I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 22 agreed to.
Clause 23 [Protection for purchaser from apparent owner]:
9.46 p.m.
LORD PEDDIE: I will not detain the Committee long on this Amendment. The purpose of this Amendment is to extend the protection of Clause 23 to repairers of motor vehicles who act in good faith but in circumstances where they cannot enforce their usual lien against the owner, for example because the hire-purchase agreement has been determined automatically or by notice before the hirer delivers the vehicles for repair. I beg to move.
Amendment moved—
Page 25, line 7, after ("pledge") insert—("and any contract whereby the purchaser undertakes to execute repairs or improvements to the vehicle").—(Lord Peddie.)
LORD DRUMALBYN: So far as the intention of this Amendment is concerned, I think one can best see its effect by considering the position of the garage owner who repairs a vehicle not subject to hire-purchase. Could we just look at this point first. In such a case, subject to the normal conduct of his business, the garage owner, as the noble Lord mentioned in passing, has a right to detain the vehicle until the cost of repairs has been met by the owner. The Amendment envisages that in any case of a vehicle subject to hire-purchase this right is ineffective, because the person who commissioned the repair is not the legal owner; and since the owner has the right, in certain circumstances, to repossess the vehicle, the garage owner can be left with an unfulfilled claim for repairs.
We are advised that the law already protects the garage owner adequately in such circumstances. Provided that the hirer's possession of the vehicle is lawful, the garage owner has in law an implied authority on behalf of the true owner to carry out all reasonable repairs
924
to the vehicle to keep it in running order. And because of this authority the repairer can exercise a lien on the vehicle which will prevail against the legal owner. The extension of the definition in Clause 23(5) of "disposition" in the way proposed in the Amendment is therefore unnecessary; the protection which the noble Lord wishes to confer upon repairers already exists in law. Indeed, it exists to a wider extent than the protection which the Amendment seeks to give, because as the law stands it operates in all cases of vehicles subject to hire-purchase and other such agreements, whereas the Amendment would operate only in the case of a vehicle on hire-purchase for which the registration book had been improperly released.
LORD CHORLEY: I hope the noble Lord will ask his legal advisers to look at this point again, because I should have thought there was quite a strong argument in favour of the view that if the hire-purchase agreement had been determined by the owner any implied authority would have been revoked; and I think it is very doubtful indeed whether the legal advice that the noble Lord has received is correct. It is rather an off-the-cuff opinion, but it was the one on which we based this Amendment, and I think there is a good deal to be said for it.
LORD DRUMALBYN: By all means, I shall be glad to have a look at one lawyer's opinion as against another's. We will certainly look at this again. As I say, this is the advice I have received, but I shall be glad to look at the point again.
LORD CHORLEY: The Minister would agree that if by any chance his legal advice was wrong there is a real grievance on the part of the garage owner, and if there is any doubt about this the garage owner ought to have protection.
LORD DRUMALBYN: Yes, I perfectly agree with this; but in the advice that was given to me it was not indicated to me that there was any doubt about it at all. However, in view of what the noble Lord has said, I will certainly look at it again.
LORD PEDDIE: I thank the noble Lord for the explanation and for the assurance he has given. I am glad of the intervention of my noble friend who drew attention to an important point in regard to the determination of the agreement, and as to the effect on the garage proprietor who has undertaken expense and then the agreement is determined. I do not think that was adequately dealt with by the Minister. However, in view of the explanation and assurances, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 23 agreed to.
Clauses 24 to 27 agreed to.
Clause 28 [Information as to rate of interest or charge]:
9.53 p.m.
BARONESS BURTON OF COVENTRY BARONESS BURTON OF COVENTRY moved, in subsection (1), in the proposed new Section 2A(1)(c), to leave out "formula" and insert "rule". The noble Baroness said: If it would be for the convenience of the Committee, I would seek permission here to speak to Amendments Nos. 72, 73, 74, 75 and 77. I think that will save considerable time. In our Second Reading debate I seem to remember that nobody except the Minister (and I am not sure even about him) seemed happy or confident about the method of calculation suggested by the Government for working out the true rate of interest to declare in advertisements. I should like to make it perfectly clear that my Amendment is merely an attempt to have the present suggested special method looked at again. Being no mathematician, I hope that I shall not have any searching questions directed to me at this hour of the evening; but if the general consensus of opinion in the Committee is not in favour of my proposal, then I should hope that we might see whether something better can be worked out. I am quite sure that each one of us who spoke on this point in our earlier debate felt that this calculation really was too difficult for us.
The Bill provides that the rate of interest or charge, where this is to be shown in an advertisement, shall be calculated by a special method. Cer-
926
tainly I, and I think the rest of the noble Lords who spoke before on this point, am in favour of the principle; but the method proposed in the Bill is, unhappily, by means of a formula which I think is exceedingly complicated and cumbersome, and it was attacked by almost every speaker in the Second Reading debate. I remember that the Minister found that the formula enabled the trader "readily to calculate" the charge, but I think we all felt that the Minister's mathematical ability was certainly above the average—and certainly above our own in this respect. The formula is set out in Schedule 3, and I suggest that it has only to be examined for the difficulties to be plainly evident. I am sure we shall all agree that where failure to comply with the law will result in the commission of an offence, as is the case here, the requirements of the law should be set out as clearly as possible.
I suggest that the Amendments proposed to Schedule 3 (and the minor Amendments to Clause 28, page 27, at lines 20, 22 and 28 are consequential on the alteration of the formula) achieve considerable simplification with an error. I will say at once that this error is in all cases on the high side. To take an example, a flat rate of 10 per cent. on a one-year contract paid monthly would show a "true rate" of 17·9 per cent. as the Bill is printed, or of 18 per cent. if the rule set out in the Amendment were followed. I would grant to the Minister that as the period grows longer the difference grows greater, and I think that the Government may well say that this error in the longer periods is unacceptable. If that is the case, and if the formula used in the Bill were accurate, I would accept it.
But, in passing, I would say that the multiplier which I have used for these longer periods here was based on the formula given in the District Bank Review for June 1956. I am informed that this is quite widely accepted. I think that the Minister will agree that there are a number of different formulæ all of which purport to give the "true rate of interest", but they all give widely differing answers. The figures I have chosen emphasise the point I am making, that in this field where the "exactly right" answer is apparently incapable

927
of calculation and where the "roughly right" answer can vary so much, it is ridiculous, especially in a mere advertisement, to provide the complications appearing in this Bill.
I hope very much that the Government will think it right to make a fresh start and to look again at this difficulty. I would emphasise the point once more that I am not necessarily asking the Government to accept the solution which I put forward, but suggest that the solution which they have put forward really does not provide a sensible answer. I beg to move.
Amendment moved—
Page 27, line 20, leave out ("formula") and insert ("rule").—(Baroness Burton of Coventry.)
LORD DRUMALBYN: Clause 28 of the Bill relates to advertisements which indicate that the credit terms offered represent a specified rate of interest or charge, and the object of the clause is to prevent the potential consumer from being given misleading information about the cost of credit. That being so, it is clear that the tolerance of error in such a case cannot be very great. The effect of the clause is that if a rate is stated in an advertisement to which the Advertisements (Hire Purchase) Act, 1957, applies, it must be expressed as an annual rate and must be calculated on the basis of the amount of the cash price less any deposit which remains outstanding after each instalment is paid. The clause specifies that the rate must not be less than that produced by the formula set out in Schedule 3, to which the noble Lady has referred. I think, therefore (I believe neither of us is a mathematician), that one has to be guided in this matter by the experts; and one has to consider the effects of the rival formulæ here, if I may put it in that way.
The effect of the noble Baroness's Amendment would be to replace the formula given in the Schedule by a different formula, which the noble Lady's Amendment describes as a "rule". In using this "rule" one has to select a multiplying factor which differs according to the length of the agreement. I mention that only because there is the possibility of error in the
928
choice of the multiplying factor—I do not exaggerate that. But assuming that the right factor is selected, how accurate is the "rule"? My Department has calculated some examples. I certainly do not intend at this time of the night to give your Lordships all the details, but I must report that our conclusion is that the results given by this "rule" result in too wide a margin of inaccuracy. The rate obtained by using the rule is often as much as 3 per cent. in error. To quote just one example, in a supposed case where the instalments were to be paid weekly over one year, the true rate was just under 21 per cent., yet the "rule" gave it as 18 per cent. In most cases the rate given by the "rule" is too low and would mislead the consumer to that extent, though there are a few cases where the rate given is too high. For that reason, bearing in mind that the whole purpose of the clause is to give the consumer a fairly close idea of what the rate is, I do not think that it would be right to accept the Amendment.
Perhaps I may add some more general remarks on this point. There were several different formulæ which we could have included in the Schedule. In choosing we had to consider both accuracy and simplicity. The formula chosen—and, as I said before, I was too rusty in mathematics to be able to follow how it was arrived at—is, I am sure, fair to all concerned. It gives a very close approximation to the true rate. The possible margin of error, I am told, is 0·1 per cent. either way on the annual rate, so that if 15 per cent. were the annual rate it might be shown as between 14·9 per cent. and 15·1 per cent., and I should have thought that was adequate for the present purpose.
Of course, it would have been possible to obtain rather more accuracy with a still more complicated formula, but considering what has been said about the formula, perhaps this will do. I myself do not think that we need be frightened of the formula. I am quite certain that anyone in business has to work out many more complicated sums than this. After all, one is given a clear indication of what the symbols stand for and one merely fills in the symbols with the amounts concerned. You do simple subtraction sums and then a little multiplication and division.

929
I think it would be easy to exaggerate the complication of this particular formula. Nobody is suggesting that everybody should know how it is arrived at. The fact is that it gives a fairly close approximation of the true rate, and I think it would be well to accept it.
BARONESS BURTON OF COVENTRY: Obviously, I have no wish to delay the Committee. I think that much of what the Minister has said is correct. However, I was concerned not with the margin of error, but with whether people would understand the formula. I still think they will not. I hope I am wrong and that the Minister is right. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 28 agreed to.
Remaining clauses and Schedules agreed to.
THE CHAIRMAN OF COMMITTEES: I beg to move that the House do now resume.
Moved, That the House do now resume.—(Lord Merthyr.)
LORD SHEPHERD: On this Motion, may I say to the noble Lord, Lord Drumalbyn—I believe this is the first Bill in this place he has been in charge of—how grateful we on this side are for the way in which he has conducted his part of it? I think he will agree it has been a constructive debate, and I hope we shall see some results of it at the next stage.
LORD DRUMALBYN: I am most grateful to the noble Lord. For my part, I should like to say from our side how much we appreciate the co-operation we have had in getting the Committee stage through, I think rather more quickly than we expected to. I should also like to say how much we appreciate the helpfulness of the Lord Chairman in this regard.
VISCOUNT GOSCHEN: My Lords, under Standing Order No. 16, I propose that the noble Viscount, Lord Bridgeman, do now sit Speaker.
Moved accordingly, and, on Question, agreed to.
House resumed, The VISCOUNT BRIDGEMAN on the Woolsack.
Bill reported with Amendments.