HIRE-PURCHASE (No. 2) BILL [H.L.] (Hansard, 21 January 1964)

HL Deb 21 January 1964 vol 254 cc811-49 811

§ 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 moved to add to subsection (1): 812 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 813 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 814 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 816 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, 817 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 818 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 820 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.

821

§ 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: 822 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: 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 824 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 825 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 826 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.

831

§ 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 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 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 838 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".

840

§ 4.32 p.m.

§ 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 842 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.

843

§ 4.40 p.m.

§ 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 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, 847 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.