§ 3.42 p.m.
§ House again in Committee.
§ On Question, Whether Clause 2 shall stand part of the Bill?
VISCOUNT COLVILLE OF CULROSSI wonder whether I might ask my noble friend Lord Craigton one point that arises out of paragraphs (h) and (i) of subsection (1) of Clause 2. These two paragraphs were put into the Bill in another place, and they deal with what happens to the residue of the intestate estate, after legal rights, or whatever it may be, have been taken out of it, if there are no relatives prior to grandparents; or even, indeed, no grandparents, but only some relative who is even more remote. May I say, in passing, that I strongly approve of the insertion of these two paragraphs, because I am sure it is right that, if it is possible to keep money or property in the family this should be done rather than allow it to go to the Crown as ultimus haeres. I am bound to say, however, that I am dubious whether the position of the person administering the intestate estate, if he is to invoke these two paragraphs, will be a fortunate or enviable one. I am not sure how he is supposed to discover who are the people who might be entitled. Your Lordships will see that entitlement can go back to an almost indefinite stage of antiquity, and there may be ancestors of a very great remoteness indeed who would be entitled to some portion of the estate under these two paragraphs.
I have been unable to find anything that will reassure the administrator of the estate that, if he administers and disposes 1063 of the property and the assets in accordance with what he thinks is the correct position, he will not subsequently find that somebody turns up from Australia, or some such remote place, and claims that he, too, should have had a share. Equally, if that is the fear in the mind of the person administering, it may be that he will take so long and spend so much money in trying to find the people who might conceivably have a right to a share that the estate will never be administered or shared out, and there will be nothing whatever left after the legal fees, and so on, have been paid.
In looking into this question, I was referred to Section 32 of the Trusts (Scotland) Act, 1921. I looked this up, and I should say in advance that when it talks about "a trustee", I think it also includes a trustee ex officio, an executor nominate, a tutor curator and a judicial factor. So I believe this includes the person who will administer the will—although I must apologise if, owing to my ignorance of Scottish law, have it wrong. But if it is on Section 32 that the administrator will rely, I think this is rather a broken reed, because all it provides is that the court may relieve him if he has committed some breach of trust, but has acted honestly and reasonably and ought fairly to be excused for the breach of trust. There is in Section 32 no guidance of any sort as to what steps he ought to take to pursue the people who may be entitled under this Bill. I cannot remember whether there is any precise provision under English law as to what he has to do, but I note that in Section 46 of the Administration of Estates Act, 1925 (which is the equivalent of Clause 2 of the present Bill), the line of succession does not go beyond that of the grandparent. Therefore, whether or not English law has made some provision for this special predicament does not, I think, matter, because we are adding a greater burden under Scots law.
I do not know whether my noble friend can answer this point now, but it seems to me to be a puzzle, and one which might be thought about further. It may be that there should be some provision in the Bill, or in the Schedule, setting out a middle procedure that the administrator should take—some advertising, some time limit, perhaps, within 1064 which he may be deemed to have satisfied himself properly that he has looked for all possible people to share in the estate. Or, alternatively, it may be that there is some method of dealing with it under the equivalent of the Rules of the Supreme Court—some rule laid down by the Court of Session which can say, as an outline at any rate, what will be considered proper execution by the administrator of his duty to look for these very remote relatives. I feel that, in one way or the other, something should be done. Otherwise, some administrator is going to have a most odious and sometimes invidious task, and a very worrying one; and I am afraid that he may be so long in doing it that the whole object of the exercise will be defeated in the end.
§ LORD CRAIGTONIn answer to my noble friend, I am advised that the executor is a trustee and has the protection of Section 32 of the Trusts (Scotland) Act, and that up to now this has been regarded as satisfactory. I will, however, look at what he has said.
VISCOUNT COLVILLE OF CULROSSI am grateful to my noble friend. Of course hitherto it has been satisfactory, because there has not been any paragraph (h) or (i), and it has not been necessary for the administrator to go anything remotely equivalent into the past and the obscurity of the remoteness of the relationship that he now has to do.
§ LORD CRAIGTONIt may be that my noble friend has not thought that this refers to moveables and not to the heritable property.
VISCOUNT COLVILLE OF CULROSSIt does not make any difference what the administrator has to share out. It may be a great sum of money or some very valuable assets; and it may be something that a remote relation will mind about very much indeed if he does not get a share.
LORD SALTOUNThe noble Lord, Lord Craigton, says that this refers only to moveables. But land has been made moveable.
§ LORD CRAIGTONWhat I meant to say was that the existing law refers only to moveables.
§ THE EARL OF PERTHI think this is an important point, and I understand my noble friend to say that he will look at it and try and help us on the Report stage.
§ LORD REIDI thought that the position—it is a moot point, it is true—was that at the moment the most remote cousin can come forward and claim moveables. So far as I know, there has never been any difficulty. At the moment, I think the position is that an executor nominate is a trustee, but a executor dative is not. Clause 20 of the Bill is making an executor dative a trustee and I should not have thought there was any need for rules or regulations because it depends on the size of the estate. Where the estate is large, one is constantly seeing advertisements—it may be in the Australian or American Press—for remote relatives. I am sure that I am right in saying that those who administer the ultimus haeres claims are careful to see that every step is taken to find relatives before the Crown takes the money.
§ LORD CRAIGTONI am grateful to the noble and learned Lord.
§ Clause 2 agreed to.
§ Clauses 3 to 7 agreed to.
§ Clause 8:
§ Legal rights of surviving spouse in connection with dwelling house on intestacy
§ (4) Where, apart from this subsection, paragraph (a) of subsection (1) of this section would have effect in relation to a dwelling house and—
- (a) the dwelling house forms part only of the subjects comprised in one tenancy or lease, or
- (b) the dwelling house forms the whole or part of a building or other premises which were used by the it testate for carrying on a trade, profession or occupation; and an interest in the whole building or premises is comprised in the intestate estate; and the value of that interest would be likely to be substantially diminished if the dwelling house were disposed of under subsection (1) of this section, or
- (i) if the intestate's interest in the dwelling house was that of an owner, a sum equal to the value of that interest,
- (ii) if the dwelling house forms, or is part of, the subjects comprised in a tenancy or lease under which the intestate was the tenant, a sum equal to the value of the interest of the tenant under a tenancy or lease of the dwelling house alone,
§ Provided that a surviving spouse shall not be entitled under this subsection to receive a sum greater than the value placed on the dwelling house to which this section applies, or, as the case may be, the subjects of which it is part, for the purpose of the distribution of the intestate estate.
§ LORD CRAIGTONAmendments Nos. 5, 6, 7, 8, 9 and 10 reflect the major points, and Amendments Nos. 5, 6 and 10 reflect three different solutions to the same problem. If the noble and learned Lord, Lord Reid, the noble Lord, Lord Saltoun, and other noble Lords, are agreeable, I suggest that on Amendment No. 5 we should have a general discussion on all the Amendments Nos. 5 to 10, and then the Lord Chairman would put each point separately to your Lordships.
§ 3.52 p.m.
§ LORD REID moved, in subsection (1)(a), after "interest" to insert:
§ "Provided that if that interest is more than a liferent and if there are surviving issue of the intestate the spouse shall only be entitled to a liferent in any case where the estate of the intestate exceeds £10,000".
§ The noble and learned Lord said: I shall address myself to this Amendment, which is No. 5 on the Order Paper, on the footing that your Lordships will accept the position that Clause 8 does not stand part but that the new clause, Amendment No. 9, is substituted for it. I certainly should have no objection to that being done. My objection is just as much—except on one small point—to the new Clause 8, which is set out on pages 2 and 3 of the Marshalled List, as it is to Clause 8 of the Bill.
§ This, I think, is really the most important point that arises under the Part of the Bill which deals with intestate succession. It has been said on a number of occasions, and rightly said, that one hopes that, as a result of the pub- 1067 licity attending the passage of this Bill, there will be fewer intestacies in Scotland in future than there are at present. But one cannot look forward to any rapid change of the situation, and one must note that at present more than one-third of those who die domiciled in Scotland die intestate, and accordingly the problem is a very large one.
§ It is interesting to note how the position of the widow has been improved as time goes on. I will not trouble your Lordships with details, but my objection is that this Bill carries the process much too far. Under the original Common Law, what the widow got, on intestacy, assuming there were children (I am only talking about the cases where there are children), was her terce and one-third of the moveables. I have no objection to the widow getting all that the Bill, as it stands, or with the new Clause 8, would give her if there are no children. What I submit to your Lordships is that where there are children the sharing out is wrong. The widow is going to get much too large a share in many cases, and the children are going to get much too little.
§ Originally she could never get more than one-third of any estate which fell into intestacy. That, of course, was not reasonable where the estate was very small, and various provisions have been passed from time to time by Parliament dealing with the widow's position in the case of small estates, so that she gets, in addition to her one-third of the moveables, a priority of a sum of money down if the estate is big enough to supply that sum. But under this Bill the widow's rights are magnified enormously. Before I come to that, may I make my position a little plainer? I do not object at all to the position where the estate is small—by that, I mean an estate, if you like, up to £10,000—because whether the estate is in the form of a house or other heritage, or securities, or anything else, it is only reasonable that the widow should come first and should get practically the whole lot. She has to maintain herself and she must maintain the children while they are under age. When they are over age they will have to maintain themselves, and that is not unreasonable.
I have no great concern with the very large estate of, say, £100,000, because then there is enough money to go round, 1068 and even if the share given to the widow in this Bill is perhaps a little large, in a way it really does not matter. But what does matter is the position of the widow vis-à-vis the children where the estate is, say, from £15,000 to £25,000. There must be a great many estates of that size left in Scotland to-day. Let us see what the widow is to get under an estate of that magnitude. She is to get the house, and she is to get up to a value of £15,000, if the new clause is adopted. It is perfectly possible for a man who is earning a good salary to leave no more than £25,000 in all, and yet to leave a house which to-day in the market might fetch £15,000. The value of house property has gone up enormously. He may have bought the house when it was worth a quarter of that sum, and it may be much his most valuable asset to-day. It does not matter even if the children are left penniless as a result of his having a very valuable house. The widow must get the house up to £15,000.
And that is by no means all she gets. She gets the furniture up to £5,000. It may be that the furniture will not be worth as much as that. She also gets £2,500 in cash, so she may quite easily get the whole of an estate of mean size, say, £15,000, £20,000 or even up to £25,000. I submit to your Lordships that that is wholly unreasonable, and that a widow ought not, on an intestacy, to walk away with practically the whole of an estate of that magnitude, leaving the children with nothing.
§ Not only is there that trouble: there are two others. In the first place, many families have a sentimental attachment to their family home, and I should have thought that it was wrong (unless the estate is small and, therefore, the widow must sell the house in order to live) if she is adequately provided for otherwise, that she should be allowed to sell the family home and put the price in her pocket, accountable to nobody.
§ There is another point. This will work extremely capriciously. One man lives in a house which he owns himself and which is worth £15,000 in the market. Another man, less farsighted, continues to live in a house for which he has a lease. There is no value in the lease, because we do not have long leases in Scotland as a general rule. 1069 Therefore, according to whether the intestate put his money into house property, into his own house or into securities—shares—it makes all the difference to the widow. If he put £15,000 of a modest estate into his dwelling-house she gets the lot. If he had a house on lease and put the £15,000 into shares the widow gets a third of it and no more. Why should there be that disparity, depending solely on whether the intestate put his money into his dwelling-house or into stocks and shares? It seems to me to be wholly illogical.
§ I have been looking around to see whether there is not some way of reducing, first the share of the widow vis-à-vis the children in the case of these moderate estates, and secondly the capricious result of the Bill if it is left in its present form, giving the widow so much more if the intestate happens to have owned his house than in the case where he happened to have a lease.
§ It seems to me the matter can be solved perfectly well by confining the right of the widow to a liferent. After all, the main reason why the house is given to the widow is in order that if possible she shall not be disturbed. Of course, there may not be enough money to go round, and then she has to be disturbed if she can no longer live in the house in which she lived with her late husband; but if there is enough money it is perfectly right that she should not be disturbed. Therefore she should have a liferent. But why should she have any more, except in a case where it is necessary to give her more so that she can have a fund of credit, because otherwise she is inadequately provided for? The problem does not seem to me to be unduly difficult.
§ What are the difficulties? The first difficulty seems to be that it would make considerable complications if we had thousands of liferents of houses in Scotland as a result of the adoption of what I have ventured to suggest in this Amendment. If the interest is more than a liferent—that is to say, if the deceased owned the house, and, secondly, if there are surviving issue (because I am not concerned with the case where there are no children)—then the widow shall be entitled to a liferent only in a case where the estate of the intestate 1070 exceeds £10,000. I do not mind if that is made into £15,000, if it is going to make it any easier. That would mean that only a comparatively small number of cases would be affected.
§ In the course of the Second Reading debate we were told, if my memory is correct, that there were, on the average, 32 cases of an intestacy where the deceased left more than £25,000. If I come down to, say, £15,000 or £10,000 there may perhaps be 100 cases a year. Let us suppose there are. There would not be anything like as many in which this Amendment would operate, because in a great many of those 100 cases the man does not own his house and the point does not arise. However, let us suppose there are 100 cases a year in which the adoption of this Amendment would mean that the widow takes only a liferent. Are there any practical difficulties involved? There seem to me to be none.
§ After all, if there is an estate in the region of £10,000, £15,000 or £20,000, it must be administered with the assistance of a solicitor; and if there are, as there will be in the cases with which I am dealing, children, the solicitor knows who the children are or, if one of the children has predeceased, who the grandchildren are. There is no difficulty in finding the ultimate beneficiaries, and according to Scots' law there is no difficulty about constituting a Common Law liferent. After all, terce has been a liferent for centuries, and although people do not like it much it has worked perfectly well where it had to. Therefore there would be no difficulty at all in there being a liferent in these comparatively few cases. The widow is put on the Register of Sasines as having the liferent—she has a registered title—and the children as fiars. They have a registered title to the fiar of the land, subject only to the widow's liferent, and if they are of full age they can dispose of that just as she can dispose of her liferent. Nothing is tied up at all.
§ From the practical point of view, I cannot see why there is any difficulty about adopting this proposal, and if there is not a practical difficulty then it seems to me that they will operate much more justly. I should have thought that in the kind of estate that I have in mind normally it would be a fair thing 1071 that the widow should get about half and that the children should get about half, and if this is acceptable to your Lordships that would be, in many cases, roughly the result. But I do not think it is right that the widow should get nearly all and the children practically nothing, nor do I think it is right that giving the widow the fee of the house should produce such a capricious disparity between the estate in which the intestate's house is the main element and the estate where there is no ownership of a house and which consists of shares or other securities.
§ 4.8 p.m.
§ LORD GUESTI should like to add my support to the Amendment which has been moved by my noble and learned friend Lord Reid. I will not rehearse the arguments which I used on Second Reading in favour of the suggestion that it was preferable that the widow, in certain circumstances, should receive only a liferent of the dwelling-house, since these have been fully developed by my noble and learned friend. I want just to say one or two things. In the first place, it seems to me that the noble Lord whose name appears in front of the new Clause 8, Lord Craigton, has to some extent met, in principle at any rate, what we are striving for in our Amendment, because he has agreed that, in certain cases of intestacy, where the value of the interest in the house is more than a certain sum, namely, £15,000, the house should not go to the widow. In such a case she will get only the £15,000. That seems to be conceding that in certain cases it is not right that the widow should get the whole benefit of the dwelling-house in fee.
I suggest to your Lordships that the limitation of the surviving spouse's right to the liferent, in cases where the estate exceeds £10,000, as proposed in our Amendment to the new clause, meets the problem more happily than the new subsection (1), because your Lordships will observe that by preserving the liferent to the widow it means that the dwelling-house is kept in the family and, upon her death, will descend, as my noble and learned friend has said, to the children or the intestate heirs in fee. The second thing is that if the new 1072 Clause 8 is adopted it will mean that where the value of the dwelling-house exceeds £15,000 it will in any case have to be sold—because the widow is to receive only £15,000—and that, again, means splitting up the dwelling-house. It seems to me for your Lordships' consideration whether the proposal of a liferent does not preserve the balance better between the children and the widow than any suggestions made in the new Clause 8.
In conclusion, I would refer again to the way in which this proposal came to be adopted in another place, in case it is suggested that that is one reason why your Lordships should not alter the clause. As I understand it, the suggestion was made that men usually want to keep their wives right, and upon that suggestion the clause came in as "the dwelling-house to go to the wife in fee". I suggest that, in estates of the value with which we are dealing—namely, where the estate exceeds £10,000—the normal rule, so far as my experience goes, is that the widow does not get the dwelling-house outright. The normal rule in wills is that the widow gets the liferent of the house and the fee goes to the children. Accordingly, I would suggest that this question of liferent has never been thoroughly investigated, and I should like to support the Amendment.
§ THE EARL OF PERTHThere is little I can add to what my noble and learned friends have said on this point. What the noble Lord, Lord Craigton, has done helps a little, but it does not go far enough, and I think the Amendment which is put forward in our names meets the case very much better. Let us recall once again the one case where it is perfectly possible to imagine that the wife will get the house, valued at £15,000; the furnishings, at £5,000—that is, £20,000—and then the £2,500 cash, practically before the children come in at all. I cannot imagine that that is what any husband would wish: that, in an estate of £20,000 or £25,000, the wife would get everything and the children virtually nothing.
VISCOUNT COLVILLE OF CULROSSBefore my noble friend answers this particular Amendment to the new clause, as we are considering it on the basis of virtually all the amendments of Clause 1073 8 together, I should be grateful if the noble Lord, Lord Craigton, would bear these two points in mind. First of all, his proposed new clause sets the figure of £15,000 as being the maximum for the widow's share in the house: either she gets the value of the house, up to £15,000; or, if the house is more valuable that £15,000, she gets £15,000. One of the difficulties about setting down a figure of that nature in any legislation, particularly in legislation which I hope will not have to be reconsidered for an extremely long time, is that the value of money changes very fast and in a quite unpredictable way. Although £15,000 may seem to be rather on the high side to-day, before very long (particularly if Her Majesty's Government's projects for making Scotland prosperous succeed), it may be a small sum. Then the whole of the balance will need to be redressed all over again.
I seem to remember that when the idea of a liferent was first put forward one of my noble friend's arguments against it was this difficulty of administering large quantities of small statutory trusts to which my noble and learned friend Lord Reid refers; and it was said that it was because of the same difficulty that, under the Bill, the old rights of terce and courtesy were abolished. I do not think the abolition of the latter was something which was ever recommended by the Mackintosh Report. If I am wrong in that, I do not remember having seen any reasons for the recommendation. Before we go any further and discuss whether or not the liferent idea may be practicable, upon the lines suggested by my noble and learned friend Lord Reid, could my noble friend tell us what were the difficulties which were found in administering terce and courtesy? Why did this become such a burden that it is now necessary to abolish it in this Bill altogether? I do not believe that this has ever been brought out into the open before, and if there were, in fact, as the noble and learned Lord said, virtually no difficulties, then I cannot see why the same should not apply to this proposal. If that is so, I shall strongly support it.
§ 4.16 p.m.
LORD SALTOUNI do not know whether I can answer the question of 1074 my noble friend Lord Colville of Culross about the terce. The reason for the abolition of terce, given me by every member of the Law Society whom I have asked about it, is that they personally find it an absolute nuisance. I do not know whether that is the reason. I should like to support very warmly the proposal of my noble and learned friend Lord Reid. One has to remember a great many things. In the first place, a widow is not necessarily a wife who has for a long time borne her husband's temper and his children. She may be his second, third or even fourth wife—we are getting much more liberal in our views these days—and it may very well be that she does not deserve perhaps quite the same consideration. The picture put in front of us is always of a beautiful domestic scene, but pictures are as were sometimes painted by Picasso, which are just as real.
As a matter of fact, there is a very important point to consider which the Government do not seem to have considered, and I therefore put it forward. It is that to-day the owners of quite small properties all over Scotland have been deeply impressed with the difficulty of handing on their property to a son to carry on. They have given a very great deal of thought to it, and one of the things that have been done in a great many cases is to transfer to the wife the house of her own so that she shall not be left without such a house on the death of her husband. This Bill takes absolutely no account of that possibility, which is quite a common one in Scotland; and if you look around you will find it in a great many places. The wife who has a house of her own may very well elect to take as a property the house which is given her by this Bill.
Another point is that intestacy to-day must be on the increase because far more people are being killed in dramatic motor and air accidents, and one may very well find property descending to a minor who cannot make a will, and if he dies there is an intestacy at once. This is likely to continue, and I rather imagine that it is what the Government want to continue, because if we read Clause 30 of this Bill we see that it produces that kind of intestacy artificially, as it were.
1075 Another point is this question of the furniture in the ordinary case, which just shows what we have been saying all along, that there is an enormous difference in Scotland between the town and the country. There are a large number of quite humble families who have a great many treasures which are not frightfully valuable in the art market but which are very much valued by the family and have some historical importance. I know, for instance, of five or six collections of pictures, very ancient pictures, belonging to quite humble families, and a great many other things. I am not talking about things like the fairy flag at Dunvegan or the crusaders coconut at Belhaven's Keep.
I think it is going to produce a great sense of wrong and hardship if we allow the widow to carry these things out of the family, and marry again, and either scatter them in the sale room or hand them on to a complete stranger to whom this particular association has no value. You are doing a very great wrong to people who have a right to look to you for protection and consideration; they are Her Majesty's subjects. We should never forget that this Bill is taking a great deal of property away from one set of people and giving it to another. If I have a contingent interest in any property, that is property in itself; if I have a contingent interest in a reversion and the law takes it away and gives it to somebody else, it is taking property away from me. That is what this Bill is doing on a very large scale. Therefore, it is incumbent upon Her Majesty's Government to scrutinise the cases we bring forward with the greatest care to see that every possible case is met, and for that reason I have made these observations and I support the noble and learned Lord, Lord Reid.
§ LORD SILKINIt requires some courage for someone who is not a Scotsman to take part in this Bill, and I would not have done so but for the speeches to which I have just listened. I must say I am horrified at the sort of conception of the relationship between husband and wife which those speeches have shown. I suppose it is what we might expect from a Chamber which consists at the moment wholly of men. If we had had half of this Chamber composed of women, I do not suppose we would have 1076 heard these speeches, or, if we had they would not have got very far.
The fact is that a husband can leave a will if he wants to. We are dealing only with intestacy. In the case of intestacy what are the rights? Surely, the wife should be put in the position of the husband; she should stand in the shoes of the husband. If there are children, hers is the responsibility for looking after the children. We have no reason to assume she will not, and I think the normal thing is that the wife is much more likely to be wanting to take care of the children than the husband in similar circumstances, and she should be given the wherewithal to do it. I would not have thought the Amendment the noble Lord is about to move is too generous in that respect. I think it simply gives the wife better facilities for looking after the children, if they need looking after, than does the Amendment we are discussing.
It seems to me that the whole tone of this discussion is that the wife is a person against whom one needs protection, who is a woman who is going to get hold of the estate and immediately marry an unscrupulous person who will deprive her and the children of the benefit of what she gets. I think we have no right to make these assumptions. The wife is an equal partner and when the husband dies she is the person, it seems to me, naturally to inherit the estate, at least in the limited way in which it is put in the Amendment about to be moved. I hope the noble Lord will stand firm and not give way to the immense pressure being put upon him by all sorts of people, and will ask the Committee to approve his own Amendment.
THE DUKE OF ATHOLLI should like to support the noble and learned Lords, Lord Reid and Lord Guest, but I am somewhat muddled about how to do so. There seem to be so many Amendments down for this particular clause that, while I agree entirely with the arguments, I am not quite sure when to say "Content", or "Not Content". Perhaps either one of the noble and learned Lords, or my noble friend, could enlighten me.
In the case of the larger estate, £20,000 and over, in my experience one of the main considerations of someone who makes a will is that he wishes so far 1077 as possible to keep the estate intact and not to let it go in death duties to the Treasury. One of the ways of doing this is by passing it to the children rather than to the wife or giving it to the wife for life as liferent. I cannot, therefore, see what objection the noble Lord, Lord Silkin, has to the noble and learned Lord's idea that the wife should get the house as liferent, and it should then go to the children. This would seem to me to have the great advantage that she would have security for her life and, at the same time, the same generation of one family would not pay two lots of death duty. In these days death duty amounts to a substantial sum of money even on £20,000 or £30,000. I hope, therefore, that my noble friend will consider these Amendments very favourably, and that he will tell us how to vote so that we can carry them if the Government are not prepared to accept the general principle lying behind them.
LORD HAWKEOur colleagues from over the Border are at some disadvantage to-day because the usual channels seem to have put the Bill down for an unfortunate day from their point of view. Therefore, I feel that they should receive the benefit of any unusual support that they might expect. Therefore, those of us who are Scottish by the half blood or the quarter blood should rally round to the rescue of those who are Scottish by the full blood, and I number myself among those. I believe I am entitled to wear the kilt, though as I eschew draught I would not dream of doing so. Moreover, I am tempted to hasten to the rescue—subject to any arguments I may hear from my noble friend Lord Craigton—because of the remarks of the noble Lord, Lord Silkin, which I thought were quite unnatural and divorced from the normal practice of a man who provides a life interest for his wife and property for his children, in this country at all events.
§ LORD SHEPHERDMay I add a word in support of my noble friend Lord Silkin? I am married to a Scot and I have often wondered why a Scot married an Englishman, but, quite frankly, after listening to some of the speeches to-day I am beginning to understand why. I may be wrong, but the impression I have had is that in Scotland the wife is regarded as a chattel. My understanding 1078 of marriage—and it is very similar to that of my noble friend—is that the wife is, in fact, the partner of the husband; they take on a form of partnership.
If we relate this, shall we say, to figures of wealth, is it not a fact in the case of the home that the wife plays a very important part in the growth of the house and the home? Much that goes on within the home is due to the saving that the wife has made. It is true that when the man dies, unless he has made special provision earlier on, such as putting the house in the name of the wife, that property becomes the husband's, but the wife has made a considerable contribution to it. I would have thought that when the husband dies and has not made the necessary provision, the wife's position should be recognised. I believe that we should support the Government's Amendment.
My only query is in regard to the £15,000. I think it was the noble Viscount, Lord Colville of Culross, who drew attention to the changing values. I would use the argument that the figure that is being put in there must, in a few years' time, be right and satisfactory to the wife who has been a partner in the marriage and has made a contribution to the value of the property. I appreciate the difficulty of the Government, and I believe that the figure that the Government have put their finger to is about right.
I think it was the noble and learned Lord, Lord Reid, who drew attention to the difference in outlook in regard to the value of the house and perhaps the value of shares. I think there is this to be said. In the case of the house the wife has perhaps made the greatest contribution to its value—she has been a partner in it; in regard to the value of shares she may be said not to have taken part. Equally, the value of the shares that the partner has acquired may be due to the wife's partnership in life. I would think that the Committee should accept the Government's Amendment. It does not go so far as some of our friends in another place would like, but I believe that it strikes about the right balance between the two opposing views.
§ LORD STRATHCLYDEIf I may intervene for one moment, I should like to say to the noble Lord who has just 1079 sat down that he should keep in mind that this refers to the surviving spouse, and not only to a widow. We want to safeguard the interests of other spouses. That is done perfectly adequately, and is being done to-day, as the noble and learned Lord, Lord Guest, has said, by the great majority of Scotsmen in providing a liferent interest for their wives.
§ 4.32 p.m.
§ LORD CRAIGTONThe noble Duke asked me to tell him how to vote; but I must leave that to him. In regard to when to vote, there will be an opportunity first of all to vote on the Amendment of the noble and learned Lord, Lord Reid, and then on the Amendment of the noble Lord, Lord Saltoun, and then, for those who after I have spoken prefer the Government Amendment—that is, Amendment No. 9—we shall vote on that Amendment; so each Amendment will be voted upon separately.
I think that you would wish me first of all to make the case for the Government Amendment, and then to make suitable comments on the Amendments put forward by my noble and learned friend and my noble friend. This new clause that we are putting forward, and the consequential Amendment No. 13, implement the undertaking that I gave on Second Reading, and meet some of the points that your Lordships made during that debate. I will refer to these points; I will not refer to the drafting improvements that have been made on the old Clause 8. First, in place of the historic house of which the surviving spouse of the intestate was to have the whole value in lieu, and in place of giving all other houses, irrespective of size and value, to the surviving spouse, the limit value of £15,000 was set. As the noble Viscount (I think it was) said, the value of £15,000 seems rather high. One must remember that virtually all intestacies are under £10,000 heritable property and therefore, while the £15,000 is not to-day a realistic figure, it will allow for considerable increases in value if that takes place over the years.
The effect of this is that the surviving spouse cannot in any circumstances claim more than £15,000 in respect of a dwelling-house. Under our Amendment, if the value of the house is less than £15,000, then she gets the house; 1080 but if it is a house which is part of a farm or other business she gets the value in lieu. If the value of the house, whether historic or not, is more than £15,000 she gets £15,000 and no more. She has no legal right to the ownership or the occupation of the house. This meets the rare case of the larger estate which falls into intestacy.
Your Lordships will remember the facts. In the whole of Scotland in the year 1961 there were 27,000 estates that passed through the sheriff courts. Of these, 9,670 (there is 36 per cent.) were intestate. Of these 9,670, only 32 were, in gross value, more than £25,000 and only 5 included heritable property exceeding £10,000 in value. The £15,000 limit therefore safeguards adequately the one case in every 2,000 where a safeguard is required; while the passing of the small house to the widow—it does normally pass to the widow—under Clause 8, gives effect, in relation to the other 1,999 small estates, to the wishes to-day of the small house owner who does make a will. In providing for intestacy we can do no more and no less than provide for the intestate leaving the sort of will that we are advised he would have made had he had the wisdom or the opportunity.
My noble and learned friend Lord Guest said that in his experience a man who makes a will leaves a house in liferent. All I can tell him, as a result of any inquiries I have been able to make, is that is sometimes true in the cases where the total estate is £40,000 or £50,000, one with which we are not concerned in trying to copy what the public would like to do. But my advice is that, with a property valued at under £10,000, heritable properties of under £10,000, men leave their houses to their wives.
Several speakers pointed out on Second Reading that these provisions left too little for the children where the estate was of a moderate size. That was a fair point. As the noble and learned Lord, Lord Guest, said, the limit of £15,000 to a great extent meets that point. This new clause in another way—a way which not one of the opponents of the policy of the Bill has mentioned—again substantially meets this criticism.
1081 Here I must say how grateful I am to my noble friend Lord Colville of Culross for the help and advice he has given in regard to this next matter. Under the new clause the house is no longer free of estate duty, as it was under Clause 8. The spouse who receives it will now have to pay the duty, no doubt out of her jus relictae and the £25,000 moveables under Clause 9. This is a just provision. In the small estate there will be little or no death duty in any case, and little or no legitim for the children. But in the gross estate—I take the value at say £20,000—with a house value of £5,000, the difference in legitim is £500. The children's legitim increases from £6,334 to £6,833—a small percentage. But if the house is valued at £10,000 the difference is £1,000, from £3,000 to £4,000, a one-third increase. So under this arrangement, where there is a moderately large estate the higher the proportion of the estate represented by the house that goes to the widow, the higher is the proportionate increase in legitim going to the children.
Your Lordships will appreciate that, under the law as it stands—and it is not altered by this Bill—the amount of legitim going to the children is directly proportionate to the value of the moveable part of the estate, and no legitim has even been, or is under this Bill, payable from the value of that heritable property. This proposal that the house should no longer be free of duty has therefore little effect where the child, as in my example, gets £6,800 instead of £6,300. It is a fair sum in any case, because the house was a moderate one representing one-quarter of the gross estate. But it has considerable effect where the child gets £4,000 instead of £3,000, because the house was a larger one, representing half the gross estate. From the drafting point of view, by omitting any reference to death duty we have achieved this, and we allow the normal rule regarding the incidence of duty to apply.
Finally, doubts were raised about whether the provision included a farm. This is put beyond doubt by substituting the word "subjects" for "buildings or other premises". For the reasons I have given, I feel that this clause meets the unspoken wishes in relation to wife and children of the intestate owner of 1082 the larger estate that seldom falls into intestacy; of the medium-sized estate, whether with a high or low proportion of moveables (of which only comparatively few fall into intestacy); and of the vast majority of the owners of the smallest estates where the rate of intestacy is 36 per cent.
What am I to say of the Amendment of the noble and learned Lord, Lord Reid? If I feel rather strongly about this I hope your Lordships will forgive me. We know that estates that fall into intestacy are virtually all under the £25,000 gross and the £10,000 heritable mark. We know that under the law at present the widow of the intestate can find herself thrown out on the street. All our information shows that the majority of men with small estates who make wills leave their house to the wife absolutely. Lord Reid's Amendment says in effect: "Never mind what you probably would have done with your under-£10,000 house. We say that if you leave a gross estate, not heritable property, worth more than £10,000 your wife is to get only a liferent of it; it shall not be hers absolutely." At £10,000 gross estate, the starting point is, how much is the house worth? Possibly £5,000. The noble Lord, Lord Reid, thinks that this is probably so in only a few hundred cases. I put it to you that out of those 7,600 cases of a £10,000 gross estate there are going to be many more £5,000 houses than he thinks. We know that the house which his Amendment will affect starts at £5,000, and we know, too, that in intestate cases it is hardly ever worth more than £10,000. So this Amendment says to the intestate: if you own a house valued £5,000 to £10,000 your wife cannot have it as you would wish, because you are one of the class who fail to do the normal thing which is to leave it to her by will.
What reasoning is behind this arbitrary decision which bears no relation to the wishes of the majority class of intestate for whom we must provide? To give the children more? To increase their share of the estate? They are already entitled to legitim. What do the children get in any case? We have already increased their share of legal rights which depend so much on the proportion represented by the move- 1083 ables in the intestate estate, which is normally under £25,000 gross. By making the house now bear the death duty we have increased the legitim in every case. The less the children would get the more proportionately is the increase. So the children are already getting more. And how much more again are the children going to get by this Amendment than they would under the Bill as we have now amended it? The value of the little house worth £5,000 or £10,000, less the death duty on it, less any bonds on it, restricted by the liferent on it until the mother dies. Under this Amendment the children may still be getting thousands of pounds through legitim. The Amendment does not care. The widow is not to have the house if, irrespective of its value, [...] forms part of a gross intestate estate of over £10,000. I doubt whether that is what the average child would want. I am sure it is not what the average husband would want.
This seems to me, in all sincerity, an unfortunate and arbitrary proposal. Those whose thoughts and words have so far created this Bill have considered it simpler and more in accord with what the intestate might have done to give the widow £15,000 maximum, rather than to burden properties with a liferent and all the administration that goes with it. Lord Reid said that people did not like terce very much. A most experienced solicitor commending this Bill the other day said: "You have got rid of liferents, terce and courtesy." Do not let us go back.
We are anxious, too, and I think it would be in accordance with your Lordships' wishes, not to put too much burden on the big house, the historic house. In the rare case of intestacy here a liferent might be a far heavier and more restrictive burden than £15,000 cash. If this Amendment had said, "value of the house" in place of "estate of the intestate", I could have understood it; though for the reasons given I would have advised your Lordships to reject it. But I do not understand why one widow should be denied full ownership of the house because it represents £6,000 out of an £11,000 gross estate, and another should be given the house because it represents £6,000 out of a £9,000 gross estate.
1084 Lord Saltoun's Amendment goes even further. Whatever the size of the gross estate, whatever the value of the house, whether it be £15,000 or £50,000, whether or not there are children, the widow is not to have full ownership of the house. As I have said, I am not sure whether this would meet the wishes of the intestate owner of the large property, but I am convinced by all the evidence I can get, and by the complete lack of evidence—except what the noble Lord, Lord Guest, has adduced—to the contrary, that the owner of the small property who makes a will does in fact leave the house to the widow absolutely and not in life-rent.
LORD HAWKEThis is where there is a conflict of evidence or opinion. The Scottish noble Lords on this side of the House say that the natural thing is for the man to leave a life interest to his wife and the remainder to his children. My noble friend the Minister says that every evidence he has heard is precisely to the contrary. He at the Scottish Office can produce the evidence. Presumably, he could say that of those people who died leaving wills last year in estates of this nature so many thousands left their wives their house outright, and so many left their wives life interest. He obviously cannot do it to-night unless he has the figures with him, but surely by Report stage he ought to be able to tell us precisely where the evidence lies, and then we shall be quite satisfied—at least I shall.
§ LORD CRAIGTONWe have not been able, and it would be a vast task, to get out that information. I have made all the inquiries I can, both personally and through the Department. The answer is that your Lordships are right and I am right. With the estate starting at something around £40,000 or £42,000, the owner making a will leaves the house to his wife in liferent. But we are dealing with the small estates which are intestate, and I am convinced, by everything I have learned, that that type of man, who never leaves more than £25,000 and never more than property valued at most at £10,000, if he makes a will leaves the house to his wife. It is our duty to enact what the normal person of moderate means would normally do, and that, I maintain, is in Clause 8 as it stands.
It is my duty also to meet as far as possible, without injury to the unspoken 1085 wish of the intestate, the wishes of your Lordships who are critical of these provisions. This we have done, and done substantially, especially around the £20,000 gross estate, by no longer making the house free of death duty to the widow, and by the £15,000 limit. This is not Government policy. This is not a Party or national policy, with all those implications. This is a policy for human life and happiness. Their lives are now in our hands, and I ask your Lordships to reject the other Amendments and to accept mine.
LORD SALTOUNAs the noble Lord has strayed into my garden and away from that of the noble Lord, Lord Reid, I would rather take it on my own Amendment and give way to Lord Reid.
§ LORD CRAIGTONWhat we had hoped was that we should have a general debate on all the various Amendments; that is what the proposal before the Committee was. I thought the noble Lord, Lord Saltoun, was speaking to his Amendment in supporting Lord Reid. If your Lordships have no objection, I think there is nothing wrong whatever on the motion that Lord Reid's Amendment be moved, that Lord Saltoun should speak to his Amendment.
LORD SALTOUNI will say what I have to say now. My trouble is that I forget what I want to say as soon as I get on my feet. The principle about which I wanted to ask the noble Lord, Lord Craigton, is this. As I read his Amendment No. 9, he has left out entirely anything about the historic house. You have got to go to the sheriff anyway over various things, for values. What about the historic house which was referred to in the original Clause 8?
§ LORD CRAIGTONI can answer that point right away. It was found so difficult to define an historic house that we are limiting it to the £15,000, which means both an historic house and any other sort of house.
LORD SALTOUNAs the noble Lord's clause reads, does it amount to this: that the heirs, by putting down £15,000, can purchase the house from the widow?
§ LORD CRAIGTONNo. The £15,000 is all the widow gets. The most she can get is £15,000, even if the house is worth more than that.
§ LORD CRAIGTONSubject to the next Amendments.
LORD SALTOUNIf you look through Scotland, you will find a great many historic houses, and you find them on the roads. There are a large number of historic houses which, alas ! have gone, and they cannot have been worth £15,000, or anything like that sum. There are, scattered through the countryside in Scotland, a very large number of houses which probably would never be worth £15,000, but which are very greatly valued by the family. If the property is transferred absolutely to the wife she can sell it; or she may marry again and die intestate, leaving the property to her spouse. In this way there can be a complete change of descent, right away from the family. That possibility is safeguarded by the Amendment of the noble and learned Lord, Lord Reid, under which the widow gets all she wants. She gets the house for her life, and the family gets it in reversion. I cannot understand why Her Majesty's Government wish to dispossess families from their old homes like getting winkles out of a shell, and I really do not understand the motive behind it. I shall certainly support the Amendment of my noble and learned friend Lord Reid, and I hope he will press it.
§ LORD REIDMight I just say a few words? With regard to what the noble Lord, Lord Silkin, said, I think that nowadays, at least, the situation in the normal case, where a man dies at a normal age, is that his family are grown up and have probably reached the stage when they have to find their own way in life. The problem is not how to divide the estate between the widow and young children. The problem is: shall the widow get the lot and leave the children with nothing, or shall the estate be reasonably divided between them? We are all agreed that, where the estate is under £10,000, the widow normally gets the lot. Practically speaking, she does; because if you add up the furniture, the £2,500, any house there is and legal rights, there is practically nothing left for the children in an estate of under £10,000—and nor should there be. But I am not concerned with the estate under £10,000; neither is my Amendment. If 1087 There is a house there, by all means let the widow have it. Because, whether it is house or shares, I think she ought to have it, not because it is a house to live in but because she requires, in some shape or other, money on which to live.
Where we are in dispute is in cases where the value of the estate is more than £10,000. The noble Lord, Lord Craigton, says that in such a case a testator will always leave the house to his widow: but does he do that if the result is practically to exhaust the whole estate? I ventured on Second Reading to instance a £20,000 estate, and I ventured to show that, even if the house is worth only £5,000, the children are still going to get a very small share and the widow a very large share, because she gets the furniture, the £2,500 and the legal rights, in addition to the house. Is it really to be said that the average testator, with a £20,000 estate, gives practically nothing to his children if he happens to be a house-owner but gives quite a lot to his children if he does not happen to be a house-owner?
§ LORD CRAIGTONWould the noble and learned Lord address his mind to the point where he refers to "the average testator, with a £20,000 estate"? The average intestate must be well below £20,000, because there are virtually none over £25,000. What worries me about his proposition is that a £10,000 estate is the average in intestacy cases, but he is basing his arguments on an average estate of £20,000.
§ LORD REIDI do not mind the noble Lord's increasing the figure from £10,000 to £15,000, if that will help the Government; and I am sure my noble friends also would not object. But what we are concerned about is that while, so far as the vast majority of intestates are concerned, the widow should have preferential treatment—whether it is in the shape of a house, shares or anything else; and without question she should have the house—when we come to the next grade of estate, there is proper provision for the children. I should have thought that the average testator who leaves a medium-sized estate—£15,000, £20,000 or £25,000—gives his 1088 children a substantial share of it, but the result of this Bill, if the intestate has left a house of any real value, will be that the children will get virtually nothing. I should have thought that the average testator who leaves an estate of that magnitude does not give the children more or less according to whether he is or is not the owner of his dwelling-house.
The Bill says that you must assume that the average testator who owns a dwelling-house is going to give the widow that dwelling-house, but that if he does not own the dwelling-house he is going to give the widow nothing to make up for the fact that she does not get the dwelling-house. I should have understood the Government saying, "Well, let us give the value of the house to the widow, and if there is no house then she is to get some corresponding benefit". But that is not the position. The position is that if the man does not own the house the widow is left out in the cold and gets nothing at all except the other rights—that is, furniture, £2,500 and legal rights. It is the fact that the husband owns the house that makes all the difference. The widow is to be so much better off if the man owns the house than if he does not. I do not understand it, and I do not see that the noble Lord, Lord Craigton, has said anything to justify that disparity.
§ LORD CRAIGTONAll I have said to justify that disparity is that this is what the average owner of a small house does, and that it is our duty to enact this. The noble and learned Lord said that, with the average testator leaving £15,000, £20,000 or £25,000, the children get virtually nothing. But I gave your Lordships two examples where, by legitim alone, the children on a £20,000 estate get £6,800 by legitim or £4,000, according to the proportion of the gross estate represented by the heritable property. The noble and learned Lord, Lord Reid, is really not right in that respect.
§ 5.0 p.m.
§ On Question, Whether the Amendment (No. 5) shall be agreed to?
§ Their Lordships divided: Contents 29; Not-Contents, 54.
1089| CONTENTS | ||
| Alexander of Tunis, E. | Guest, L. [Teller.] | Polwarth, L. |
| Atholl, D. | Hawke, L. | Reid, L. [Teller.] |
| Balfour of Inchrye, L. | Inchyra, L. | Rowallan, L. |
| Brocket, L. | Kilmarnock, L. | Saltoun, L. |
| Burton, L. | Kilmuir, E. | Sinclair, L. |
| Colville of Culross, V. | McCorquodale of Newton, L. | Sinclair of Cleeve, L. |
| Cromartie, E. | Merrivale, L. | Somers, L. |
| Dundonald, E. | Meston, L. | Strange of Knokin, B. |
| Ebbisham, L. | Napier and Ettrick, L. | Strathclyde, L. |
| Falkland, V. | Perth, E. |
| NOT-CONTENTS | ||
| Ailwyn, L. | Falmouth, V. | Monsell, V. |
| Alexander of Hillsborough, E. | Ferrers, E. | Morrison, L. |
| Amherst of Hackney, L. | Gardiner, L. | Robertson of Oakridge, L. |
| Ampthill, L. | Goschen, V. [Teller.] | Rusholme, L. |
| Auckland, L. | Gosford, E. | Russell of Liverpool, L. |
| Bessborough, E. | Grenfell, L. | St. Aldwyn, E. [Teller] |
| Bossom, L. | Hastings, L. | St. Just, L. |
| Boston, L. | Hobson, L. | St. Oswald, L. |
| Carrington, L. | Howard of Glossop, L. | Sandford, L |
| Champion, L. | Lansdowne, M. | Sandys, L. |
| Chesham, L. | Latham, L. | Shepherd, L. |
| Clwyd, L. | Lawson, L. | Silkin, L. |
| Craigton, L. | Lindgren, L. | Strang, L. |
| Crook, L. | Long, V. | Stratheden and Campbell, L. |
| Daventry, V. | Longford, E. | Summerskill, B. |
| Denham, L. | Lothian, M. | Swinton, E. |
| Douglas of Barloch, L. | Mabane, L. | Tweedsmuir, L. |
| Effingham, E. | Margesson, V. | Williams of Barnburgh, L. |
§ Resolved in the negative, and Amendment disagreed to accordingly.
§ LORD CRAIGTONI beg to move.
§ Amendment moved—
§ Legal rights of surviving spouse, on intestacy, in dwelling house and furniture.
§ (".—(1) Where a person dies intestate leaving a spouse, and the intestate estate includes a relevant interest in a dwelling house to which this section applies, the surviving spouse shall be entitled to receive out of the intestate estate—
- (a) where the value of the relevant interest does not exceed £15,000—
- (i) if subsection (2) of this section does not apply, the relevant interest;
- (ii) if the said subsection (2) applies, a sum equal to the value of the relevant interest;
- (b) in any other care, the sum of £15,000:
§ Provided that, if the intestate estate comprises a relevant interest in two or more dwelling houses to which this section applies, this subsection shall have effect only in relation to such one of them as the surviving spouse may elect for the purposes of this subsection within six months of the date of death of the intestate.
§ (2) This subsection shall apply for the purposes of paragraph (a) of the foregoing subsection if—
- (a) the dwelling house forms part only of the subjects comprised in one tenancy or lease under which the intestate was the tenant; or
- (b) the dwelling house forms the whole or part of subjects an interest in which is comprised in the intestate estate and which were used by the intestate for carrying on a trade. profession or occupation, and the value of the estate as a whole would be likely to be substantially diminished if the dwelling house were disposed of otherwise than with the assets of the trade, profession or occupation.
§ (3) Where a person dies intestate leaving a spouse, and the intestate estate includes the furniture and plenishings of a dwelling house to which this section applies (whether or not the dwelling house is comprised in the intestate estate), the surviving spouse shall be entitled to receive out of the intestate estate—
- (a) where the value of the furniture and plenishings does not exceed £5,000, the whole thereof;
- (b) in any other case, such part of the furniture and plenishings, to a value not exceeding £5,000, as may be chosen by the surviving spouse:
§ Provided that, if the intestate estate comprises the furniture and plenishings of two or more such dwelling houses, this subsection shall have effect only in relation to the furniture and plenishings of such one of them as the surviving spouse may elect for the purposes of this subsection within six months of the date of death of the intestate.
§ (4) This section applies, in the case of any intestate, to any dwelling house in which the surviving spouse of the intestate was ordinarily resident at the date of death of the intestate.
§ (5) Where any question arises as to the value of any furniture or plenishings, or of any interest in a dwelling house, for the purposes 1091 of any provision of this section the question shall be determined by arbitration by a single arbiter appointed, in default of agreement, by the sheriff of the county in which the intestate was domiciled at the date of his death or, if that county is uncertain or the intestate was domiciled furth of Scotland, the sheriff of the Lothians and Peebles at Edinburgh.
§ (6) In this section—
- (a) "dwelling house" includes a part of a building occupied (at the date of death of the intestate) as a separate dwelling; and any reference to a dwelling house shall be construed as including any garden or portion of ground attached to, and usually occupied with, the dwelling house or otherwise required for the amenity or convenience of the dwelling house;
- (b) "furniture and plenishings" includes garden effects, domestic animals, plate, plated articles, linen, china, glass, books, pictures, prints, articles of household use and consumable stores; but does not include any article or animal used at the date of death of the intestate for business purposes, or money or securities for money;
- (c) "relevant interest", in relation to a dwelling house, means the interest therein of an owner, or the interest therein of a tenant, subject in either case to any heritable debt secured over the interest; and for the purposes of this definition "tenant" means a tenancy or lease (whether of the dwelling house alone or of the dwelling house together with other subjects) which is not a tenancy to which the Rent and Mortgage Interest Restrictions Acts 1920 to 1939 apply."—(Lord Craigton.)
§ 5.8 p.m.
§ VISCOUNT COLVILLE OF CULROSS moved, as an Amendment to the Amendment, in paragraph (b) of subsection (6), at end to insert "or any heirloom". The noble Viscount said: I beg to move this Amendment to the proposed new clause which stands in the name of my noble friend Lord Craigton, and in doing so may I start by saying that I appreciate the point my noble friend made when speaking on the general matter about the estate duty. It was not apposite at the stage when we were discussing the noble and learned Lord's Amendment to talk about this, because if the liferent had been accepted there would have been no question of estate duty, in any event, except possibly on the plenishings. All the same, I appreciate what the noble Lord has done and I should not wish it to be thought that I do not. But there is still one gap in the provisions of the noble Lord's clause, and that is that no provision is made for the type of moveable to which my noble friend Lord Saltoun referred—the article which is not 1092 necessarily very valuable in itself; not the picture which would in itself raise the limit of plenishings over the £5,000 mark, but the small article with family associations, which has been handed down from father to son or, it may be, has quite recently come into the family possession but is regarded very much as part of the family history and greatly valued by the members of the family themselves.
§ There are two Amendments in the names of my noble friends and myself which have the effect of preventing such articles from automatically becoming part of the widow's portion, or of the widowed husband's portion—because, of course, this clause works both ways [...] and it would be wrong for your Lordships to forget that. If these Amendments are accepted, the heirloom will still go into the residue of the estate, and it will then be possible for the family to work out whether, after all, the widow (or the widower) should have it or whether it should go to the children or to somebody else. But I think, and I hope that your Lordships will agree with me, that where there is an article of this sort, there should be some consultation within the family, some chance of choosing who is to be the ultimate recipient of the object, rather than have it laid down, as I am afraid it is under the clause at the moment, that it is to go automatically to the widow (or the widower) without any more ado. I hope that this small Amendment, which will probably not affect many cases, but will have value where it does come into effect, will be acceptable to your Lordships and may be inserted in the new clause of my noble friend Lord Craigton. I beg to move.
§
Amendment to Amendment moved—
In sub-paragraph (b) of subsection (6) of the proposed new clause, at end insert (" or any heirloom").—(Viscount Colville of Culross.)
§ LORD CRAIGTONWe have studied this Amendment most carefully and think it an excellent idea. I am very grateful to the noble Lords for putting it forward and ask your Lordships to accept this and the next Amendment.
LORD SALTOUNMay I thank the noble Lord for accepting this Amendment, because it meets a good deal of what I said before.
§ On Question, Amendment to Amendment agreed to.
§
Amendment to Amendment moved—
After sub-paragraph (b) of subsection (6) of the proposed new clause, to insert:
("( ) "heirloom", in relation to an intestate estate, means any article which has associations with the intestate's family of such nature and extent that it ought to pass to some member of that family other that the surviving spouse of the intestate").—(Viscount Colville of Culross.)
§ On Question, Amendment to Amendment agreed to.
§ Amendment, as amended, agreed to.
§ Clause 9 [Legal right of surviving spouse to provision on intestacy]:
§ LORD CRAIGTONThis Amendment is consequential on the new Clause 8. I beg to move.
§
Amendment moved—
Page 7, line 25, leave out from ("any") to first ("he") in line 28, and insert ("dwelling house to which the last foregoing section applies or of any furniture and plenishings of any such dwelling house").—(Lord Craigton.)
§ On Question, Amendment agreed to.
§ Clause 9, as amended, agreed to.
§ Clause 10 [Provisions as to other legal rights]:
§ 5.15 p.m.
§
LORD REID moved to add to subsection (2):
"Provided that any sum paid in satisfaction of a claim under section 9(1)(a) shall be deducted from the sum which would otherwise be payable in respect of a claim to jus relicti or jus relictae".
§ The noble Lord said: Your Lordships are already aware that, under the Bill as it stands, the widow gets, where there are children, first, the house; second, the furniture; third, £2,500 in cash and fourth, a one-third part of any residue there may be of moveables. I will not go over all the ground again, but in the case of quite substantial estates that often leaves the widow with the lion's share and the children with very little.
§ I venture to suggest that the position might be put a little nearer equality by diminishing the widow's share of legal rights. What would happen, if this Amendment is accepted, would be this. 1094 Let me suppose that £9,000 was left, after the widow's preferential claims had been satisfied—that is to say, she has the house, if there is one, the furniture and £2,500, the death duties have been paid and there is left a net £9,000. At present, in addition to the items I have mentioned, she gets a further £3,000 and the children get only £6,000 between them. I venture to suggest that it would be proper, in calculating the widow's share of legal rights, to make allowance for the fact that she already has £2,500 in cash, so that, under my Amendment, the £2,500 would be taken from the £3,000 which she would get, as at present, under her legal rights, and she would get only £500 additional to the £2,500 which she has already got under Clause 9(1)(a). The result would be that in a case of this sort the children's share would go up from £6,000 to £8,500—in other words, from something like one-third to something like one-half. Of course, with a larger estate the change would make proportionately less difference. I venture to think that if the house provision is to stand, as it does, and the plenishings provision is to stand (there is no objection to that; and certainly no one objects to the £2,500 in cash), my Amendment would be one way of redressing the balance, to some extent. I beg to move.
§
Amendment moved—
Page 8, line 20, at end insert the said new proviso.—(Lord Reid.)
§ LORD CRAIGTONIt is a Mackintosh recommendation that the widow with issue, instead of, as at present, getting nothing at all, should get something. Mackintosh recommended £1,000, which was increased to £2,500 in another place. The noble and learned Lord's Amendment provides that the widow with issue will get no benefit at all from the priority provisions of Clause 9, if her jus relicti is over £2,500. Is this fair to the majority of intestate cases? The noble and learned Lord gave an example of the widow whose rights dropped from £3,000 to £500. I have two other examples, which are not so damaging to the widow as that. In one, the value of the moveables is £5,000, and in that case the widow's share drops from £3,333 to £2,500—that is, by 25 per cent. The other example is of an estate 1095 of £10,000, where the widow's share of moveables is reduced from £5,000 to £2,500—a 50 per cent. reduction.
I think that the noble and learned Lord had in mind that his suggested reduction was a sort of quid pro quo for the house. If there is a house, surely the widow needs the money to run it; and she will need money to pay death duties and any debts secured on the house. But there is not by any means always a house. A large number of Scots with small estates live in corporation houses. In such cases, are we to reduce by these substantial amounts the rights that a widow would have under the Bill, as recommended by Mackintosh? By charging death duties on the house, I maintain that we have struck at possible unfairness in the right place and in the right way. I suggest that this Amendment would place an unnecessary further burden on the spouse who gets a house. It really is (and I believe that on reflection the noble and learned Lord will agree with me) an unwarranted removal of a right conferred by this Bill on many more spouses who have no house to gain. For that reason, particularly, because of the burden that it would impose on the spouse who does not get a house, I am afraid that I cannot ask your Lordships to accept the Amendment.
§ LORD REIDI am sorry that my noble friend has not been able to accept this Amendment. I agree that he has gone some way to meet the point by his provision with regard to death duties, and this, therefore, makes the point less urgent. Of course, this would not affect the small estate, because there would be nothing left after the widow's preferential rights were met: it would affect only the intermediate estate. However, if that is the feeling of the Government, I certainly will not press this Amendment, and I do not think my noble friends would either. Therefore, I beg leave to withdraw it.
§ Amendment, by leave, withdrawn.
§ Clause 10 agreed to.
§ Clause 11 [Representation in, and division of, legitim]:
§ 5.22 p.m.
§
LORD SALTOUN moved to leave out subsection (3) and insert:
1096
(3) Where any person is entitled to claim legitim out of the estate of a deceased person by virtue of subsection (1) of this section or otherwise, he shall be under a duty to collate any advances made by the deceased to him, and the proportion appropriate to him of the advances so made to any person through whom he derives such entitlement, and for the purposes of calculating the legitim fund all such advances must be added back to the net moveable estate of the deceased.
§ The noble Lord said: I cannot help feeling that perhaps this Amendment is one of the most important in the Bill. Your Lordships will remember that on Second Reading I produced a good many cases—and I could have multiplied them greatly—of owner-occupier farmers whose families have been in their properties for many generations, and who, in all probability, if Clause 12 is carried as it stands, under the Common Law of Scotland would be unable to carry on with their farms and would have to put them on the market to be sold. I said—and I have been confirmed in my view since—that that would not only be against the public opinion of the countryside, but also be against the opinion and feeling of the younger children of these people.
§ When the noble Lord, Lord Craigton, came to reply to me on this point I do not think he had the point very clearly in his head, if he will not mind my saying so, because he simply quoted the statistics of intestacy, which have absolutely nothing to do with it. I am glad that the noble Lord, Lord Craigton, has implicitly guaranteed the statistics of intestacy in the future. I should like to say, here and now, that I very much distrust the wisdom of Parliament in making Public General Acts which are based upon statistics, because statistics are always liable to change. I remember a friend of mine who said that statistics were like—well, never mind, what they are like, but they conceal all that is most important. I think that this is the case. The proposition that I have to make to your Lordships now is that under Clause 12, if you accept it, you are going to say that no ante-nuptial contract shall take away from younger children the right to legitim.
§ LORD CRAIGTONMay I intervene? The noble Lord is speaking to the previous Amendment, No. 15, about the method of calculation.
LORD SALTOUNThat is exactly what I am doing. I am on Clause 11, 1097 and in Clause 12, if you accept the Bill as it stands, you will invalidate any ante-nuptial contract which takes away from younger children the right to legitim. I want to put this case to your Lordships, and I can do it most clearly by giving figures. Let us suppose a farm of about 90 to 100 acres, valued in the market at perhaps £9,000, and the stocking and moveable estate of the farmer, including his bank account, amounts to another £9,000. That is practically what the figures of agriculture are in Scotland at the present moment. He has already provided for his wife, and the moveable estate amounts to £9,000. The legitim fund will therefore amount to £3,000, being one-third of the moveable estate. I hope the noble Lord, Lord Craigton, is following, and that if he fails to he will interrupt me.
Suppose that the farmer has four children. To one he wants to leave the farm, and the other three he has already made provision for: he has started them in life, and advanced to one £1,500, to another £1,000 and to the other £500—at any rate, he has given advances of a total up to about £3,000. As the law stands at present, and as the law will stand if we leave Clauses 11 and 12 and do not amend them, the children who have the advantage, the three children, will have a claim on the legitim. They will have that £3,000 to divide, and they will have to bring into the reckoning as against each other the advances that their father has made to them to start them in life. But they will not have to bring these advances into the calculation as against the estate as a whole. Therefore, the three children will be quarrelling over the £3,000; they will have to bring into the reckoning against each other another £3,000; but the effect of the burden will be that the farm cannot carry on and will be forced into the market.
As I explained, with a long experience of agriculture—and every noble Lord here will agree with me—no farm of that kind can bear an unremunerative debt of that amount of the working capital. The proposition I have to put before your Lordships is that, in addition to bringing the advances into calculation as between each other, the children should have to bring the advances into the estate as a whole and calculate them against the estate. The 1098 way that would work out is that the moveable estate is £9,000; there have been £3,000 advances, and those will be added to the moveable estate in ascertaining the legitim fund. The legitim fund of the estate will be £4,000, of which £3,000 will already have been distributed, and therefore the estate will on the debt suffer a loss of only £1,000 of its workable capital and will be able to carry on. If you increase the figures and go up, you will find that it makes quite a small difference to a large estate, but with a small estate it makes just that difference towards forcing the farm into the market or not doing so.
There is a point that we have to consider about this. Both the owner and all his children (I am speaking with some knowledge) are very much concerned with the position of the family if the farm has been in the family for a long time. If this Amendment is not accepted by your Lordships, and the Bill is left as it stands, you will put a big obstacle in the way of a man who wishes to start his younger children in life as they attain maturity. He will feel that the best way in which he can provide for the farm carrying on in the family will be to withold the capital which they need to start them off, put it in the bank and keep it there, in order to meet the claims that will be made for legitim on his death. In that way the younger children will be prejudiced rather than assisted, unless we amend the Bill in the way I suggest.
After all, is it not just that children who are started in the world by advances from their father, and by his influence, should, when his estate comes to be divided, be fully accountable, not only as between each other, but to the estate? It is a perfectly fair thing to ask. I would ask the noble Lord, Lord Craigton, to consider this carefully. If he will undertake to consider it, I will not press the Amendment; but if he is going to reject it, I am going to press it. I do not mind if I am the only person who goes into the Lobby. It is such an important principle that I think it ought to be stated in your Lordships' Committee, and voted on. I beg to move.
§
Amendment moved—
Page 9, line 8, leave out subsection (3) and insert the said new subsection.—(Lord Saltoun.)
§ LORD CRAIGTONI do not know whether the present method of calculation is better or worse than the noble Lord's proposal, but I do know that the existing rule of law of collation among children has been established under Common Law for hundreds of years, that Mackintosh made no recommendation for a change, nor have any legal societies done so. The proposal is that any advance to one of the children should notionally be added back to the whole estate rather than to the legitim fund before legitim is calculated. The effect would be to reduce the children's legitim, to increase the wife's jus relictae and the share of anyone else entitled under Clause 2. Much of the criticism of this Bill is that children are not getting enough and the wife too much. I should think, for that reason alone, we should not accept this Amendment, the effect of which is, as I have said, to reduce the children's legitim and increase the wife's share of the jus relictae. I hope that when the noble Lord realises that this is the effect of his Amendment, and that it is a longstanding point of view, he will see his way not to press it.
LORD SALTOUNI may not have got the right answer, but it is an answer, and it is dealing with a subject which is vital. People feel very strongly about this. I do not feel that I can withdraw my Amendment, and I must ask the noble Lord to go further than he has, if I am to do so.
§ THE EARL OF PERTHMay I ask the noble Lord, Lord Saltoun—as this is a very difficult point to understand by just listening to it—whether he would allow us all to study carefully what he has said and what my noble friend has said, and to raise the matter on Report stage? We should then all feel more able—I speak personally—to judge which side is right.
LORD SALTOUNThe situation is this. In most cases there will not be a question of jus relictœ because in most cases these men make ante-nuptial settlements. When a man has been for twenty generations in a place he has a lawyer and he takes some trouble about it. Clause 12 overrides all that, and says that this ante-nuptial contract would be of no effect so far as regards the 1100 children. In circumstances which are most common and which I envisage, what the noble Lord, Lord Craigton, says about the wife's jus relictœ will simply not operate at all. What I am trying to get is the power to enable these humble people who have hereditary estates, just as much as any of the great landowners of Scotland, to pass their estates on to their children, as they have done in the past. If the noble Lord wants, as I understand his Department does, to bring land into the market—and I know perfectly well that there are eager buyers for farming land—then I suggest that that should be taken from larger estates and not from these humble people, for whom, as they are my neighbours and friends, I feel bound to do something. It is a case I am bound to represent.
VISCOUNT COLVILLE OF CULROSSI wonder whether my noble friend Lord Craigton will be able to look at this point again, because the outcome of this Amendment has a great bearing upon what happens to Clause 12, which at the moment, of course, your Lordships do not know. It seems to me that what my noble friend is suggesting is that if Clause 12 stands as it is, or with the small Amendment in the name of my noble friend Lord Craigton, there will be no possibility of fulfilling, by any other means than legitim pure and simple, the requirement that the children shall have the share they have always had under Scots law. If it is incapable of being done by ante-nuptial settlement as heretofore, I think my noble friend is suggesting that it should be possible to make provision during the life of the child which will satisfy once and for all the claim he would have under the estate, and that he should not have two bites of the cherry. If it were possible to do that by the suggestion my noble friend makes under Clause 11, it might be that the provision in Clause 12 relating to ante-nuptial settlements would not be nearly so harmful as I believe it is under the Bill. Therefore, this whole matter, the two concurrent points under Clauses 11 and 12, should be considered further before any decision is made at this stage on either one of them.
§ LORD CRAIGTONOf course it is our duty to consider all the possibilities, but the noble Lord, Lord Saltoun, 1101 although he builds his point on an agricultural case, is in fact referring to the calculation of legitim for all purposes in a way different from that which has been the law for hundreds of years. The noble Viscount said that he did not see why we should not. I agree, but it is something which should not be done lightly. If the noble Lord feels that he can withdraw this Amendment at this stage we will look at it again. In saying that, I should not like your Lordships to feel that we will take one course or another. My unthrtaking is to look at it. We wish to do only what is right for the people of Scotland.
LORD SALTOUNThe noble Lord said that this has been the law of Scotland for hundreds of years. It has. It has been part of that law of Scotland which the noble Lord, Lord Craigton, is now engaged in tearing up and flinging in the faces of people of Scotland. For hundreds of years it has been the custom for people who were unable to make full provision for legitim for their younger children, and did not see any prospect of being able to do so, to make ante-nuptial contracts which limited the provisions for the younger child. As I pointed out to your Lordships on Second Reading, the courts have always had power, and power which they have used, to interfere if they thought the provision was insufficient or improper. In this Bill, the noble Lord, Lord Craigton, is asking your Lordships to take away that protection from the poorer people and is putting nothing in its place.
The fact that the legitim provisions have been the law for hundreds of years is only half the story. If the noble Lord looks at the actual state of things as they are, he will find that what I say is perfectly correct, and that these humble people made ante-nuptial contracts which limited the provision for their wives and limited the provision for their younger children. I want your Lordships to remember that an ante-nuptial contract is a contract entered into with the full consent of your wife. She knows perfectly well what she is doing, and it is a thing we have all had to do for ourselves. If I do not press the Amendment to-day, I will press it at some stage. While I ask the noble Lord to consider this, if he puts me in that position he should give the same 1102 facilities that I have at the moment. I admit that it is a big change in the law, and that is a good argument for recommitting the Bill on the next stage. Having made that remark at the request of the noble Lord and my noble friend Lord Perth, I will for the moment withdraw the Amendment.
§ Amendment, by leave, withdrawn.
§ Clause 11 agreed to.
§ Clause 12 [Legitim not to be discharged by ante-nuptial marriage contract]:
§ 5.38 p.m.
§ LORD CRAIGTONThis is an Amendment which I promised to put down when I replied on Second Reading. It removes the retrospective element in Clause 12. A number of noble Lords, both in debate on Second Reading and in other ways, have objected to this. I beg to move.
§
Amendment moved—
Page 9, line 24, leave out from ("marriage") to end of line 27 and insert ("made after")—(Lord Craigton.)
§ On Question, Amendment agreed to.
§ 5.40 p.m.
§
THE EARL OF PERTH moved to leave out all words after "party unless" to the end of the clause, and to insert:
the contract contains a provision in favour of the child or issue, and either
(2) Any order made by the Court under the foregoing subsection may contain such conditions as the Court thinks just, and without prejudice, that generality may contain a condition that there shall be made out of the estate of the deceased party, in favour of the child or issue, such further provision (in addition to that contained in the contract) as may be specified in the order; so however that the effect of such further provision and the provision contained in the contract, taken together, shall not be more favourable to the child or issue than the right of the child or issue to legitim would be if the order were not made.
(3) In considering whether to make or refuse to make an order under this section, and what conditions (if any) to include therein, the Court may have regard to the funds available, or likely to be available, to the child or issue from all sources, as well as to such other factors, if any, as the Court considers material.
§ The noble Earl said: First of all, I think that at Second Reading the noble Lord, Lord Craigton, said he was going to bring in an Amendment to take out the retrospective nature of this clause. He has done it, and for that I think we ought to say, "Thank you very much". There are one or two things which are good. We have had the retrospective measure taken out, we have had the removal of the problem of estate duties, and we have also been helped in regard to heirlooms. I am very grateful for these three important things. I hope the noble Lord, Lord Craigton, will still be in this generous mood and will consider this Amendment very carefully.
§ The point of the Amendment is this. Even if ante-nuptial contracts are rare things to-day, all the same I see no good reason why they should be prohibited as long as they do not act harshly. Mackintosh in the Report said that we should do away with the ante-nuptial contracts because they worked most unfairly on individuals, and there was a particular case, the Galloway Trustees of 1943, in which there is no doubt that a child was very harshly treated when he went to the Courts. To that extent I have every sympathy with the Mackintosh recommendation, but only to that extent—namely, that it should not be possible for an ante-nuptial contract to act harshly on the children; but having gone that far, I hope that this Amendment will be accepted.
§ We are asking that ante-nuptial contracts should be allowed, but there is an important proviso. It is that if an interested party decides that he has been dealt with harshly and that he is not getting what he thinks he is entitled to, even if it is not a full share of the legitim he can ask the Courts to judge. This is a practice which prevails to some extent in England to-day. I think it was introduced in 1952. If Lord Mackintosh had known of this provision in the English law he might have recommended that something similar should be done; but of course he did not know of it. I hope that what we are proposing will be acceptable to the Government. It is that the individual has the liberty to make an ante-nuptial contract, but if in fact its working is harsh on an interested party the latter can appeal to the Courts for 1104 whatever ruling may be right. That may not be full legitim but it would be something which was near to it, or which was right in the judgment of those called upon to make the judgment.
§
Amendment moved—
Page 9, line 32, leave out from ("unless") to end of line 34 and insert the said new words.—(The Earl of Perth.)
VISCOUNT COLVILLE OF CULROSSI support my noble friend Lord Perth in this Amendment and I hope your Lordships will do the same. There has been a great distinction between English and Scots law on the matter of what a testator may do with his property by means of his will. In England until very recently he has been able to do more or less what he wanted, whereas in Scotland there have always been carved out of whatever property he might leave the legal rights which go to the wife, or to the husband if it is the wife who has died, and to the children of the marriage.
In England there was introduced, I think originally in 1938, and amended in 1952, a provision whereby the Courts had power to alter the provisions of the will in defiance of what the testator had provided, and to make the proper amount over to a wife or a husband, as the case may be, or to the children who had been badly done by under the terms of a will. It was the other way round in Scotland. There was a device—I believe it was admittedly a device—whereby the ante-nuptial contract could provide that a child or a wife were given less under legal rights than they would be if they had had the benefit of the full legal rights on the death of the person concerned.
In both cases it seems to me that the medium course is probably a good one. I would not for a moment quarrel with the English practice of making a just provision for the wife or children, and I hope your Lordships would not disagree that there should be occasions when a testator in Scotland could get round the total rigidity of the law on this question of legal rights. The noble Earl, Lord Perth, has given the sort of instance which might occur, but surely so long as there is no hardship—and on this I fully agree with both my noble friend and Lord Mackintosh in his Report—there should be some method 1105 by which a flexible approach to the splitting up of a testator's property could be achieved.
I believe this Amendment does it for Scotland. It follows very much the same course as is now set out in the Inheritance (Family Provisions) Act, 1938, as amended in 1952. In fact, that Act only applies to a husband or wife, infant son, or a son or daughter who is by means of some mental or physical disability incapable of maintaining himself or herself, whereas the amendment in this Bill applies to all children. I would emphasise that there is no necessity to deal with a wife or husband because there is no reason why the ante-nuptial contract should not regulate the amount that the husband or wife will receive by way of legal right.
As the Bill stands there are three courses. The provision in the ante-nuptial contract can be accepted by the child or it can be refused by him, in which case he can claim his full legal rights, or if he is an accommodating person he can come down somewhere in between. There may be cases where the child is not accommodating and yet where, on an impartial view, it is wrong that the child should have the full legal rights which might destroy an estate or mean that a farm would have to be sold; or, as the noble Lord, Lord Saltoun, said before, the child may have had a large provision in his lifetime which may have upset the balance in some way.
If this Amendment were accepted it would give the Courts the power to see that he had what was proper in all the circumstances of the case, up to the amount he could have had if he had chosen the legal rights. I believe this introduces a degree of flexibility into the old rule, and by it there would be maintained some freedom for the Scotsman to deal as he thinks fit with the way the property is split up between his children.
LORD SALTOUNThis Amendment goes some way towards meeting my last Amendment. I do not like it so much, and for a moment I will say something about the whole thing. It would be perfectly easy for any father to do exactly what I want to be legalised and put into the Bill, if he made his advances to his children by way of loans. 1106 The objection to that, of course, is that although the money has in practice been given to the children many years earlier, none the less it has to pay death duties. Apart from that objection, it is perfectly competent for any of the people for whom I was speaking to make the loan and have it acknowledged by their children when they start in life, and to carry that loan in their estate, and in due course it will be reckoned among the moveables and the division of legitim will be made exactly as I said to your Lordships. I should far prefer that, but if the Government are going to give this, it may be a way out, though I do not like it so much as my own way.
§ 5.50 p.m.
§ LORD CRAIGTONThe law of Scotland, as the noble Viscount said, provides that a person can choose between his legitim and any testamentary provision in his favour; or, as the noble Viscount said, he may come down in between. Furthermore, it is a fundamental principle of the law of Scotland that a child has a right of legitim, and that this right is not subject to any variation by a court and is irrespective of whether or not the child has otherwise been adequately provided for or any will made. The noble Earl's Amendment, so ably moved, seeks to breach this fundamental principle in one comparatively rare case only—and my noble friend himself said that it was rare—that of an ante-nuptial contract. In this case only, a child may not choose between his legal rights and what his parents, before they were married and he was born, decided he should have: the court may decide for him. If we accept this Amendment we should be denying to certain children yet unborn the rights to which all other Scottish children, born and yet unborn, are entitled, the right of choice, the right to an affixed proportion of the state. It is with regret that I must ask your Lordships to reject this Amendment, if my noble friend feels that he must press it, but I hope that, on reflection, he will feel able to withdraw it.
§ LORD REIDIt seems to me that the real problem here is advances. I do not think I would support my noble friend further than to say something on his behalf in that respect. Of course, if you 1107 are taking away the right of a parent to discharge legal rights in an ante-nuptial marriage contract, then you are making it difficult for the parent who wants to set up his child in life and still has to pay out legal rights, because he cannot have that set off against the legal right. My noble and learned friend has already said that he would look at this matter in connection with Lord Saltoun's Amendment, and I should have thought that it is in that direction that perhaps one might look for some accommodation.
VISCOUNT COLVILLE OF CULROSSBefore my noble friend replies I wonder whether he would consider this point. As I said, when the provision I have quoted was introduced by Parliament in 1938 for England, this was a fundamental breach of the right that an Englishman had always had, to provide as he thought fit for various people under his will. So far as I know, the ante-nuptial contract is an extremely longstanding Scottish custom. It has been a matter which has grown up under the Common Law of Scotland, and it has never previously been the subject of legislation. It does not seem to me that there is any greater infringement of the fundamentals of the Scottish law to provide, as this Amendment does, than there was to English law by doing as Parliament did in 1938.
If my noble friend is going to make it as difficult as this—admittedly he has said that he will look at it again—by being fairly unencouraging on the Clause 11 point of my noble friend Lord Saltoun, and to give a flat refusal on this, I should have thought, very reasonable Amendment to Clause 12, it does not seem to me that he is making life very much easier for the parents. I would remind him that he said that this was a very small corner. This is not the only way it can be done, it is true; but it is a way which is being built into Scottish law, and I felt that it would be a very grave error to remove this freedom from the testator without any further thought. I hope that he will give this point, as my noble and learned friend Lord Reid suggested, further very careful consideration before he decides to reject the Amendment altogether.
§ LORD CRAIGTONI have listened with great care to what your Lordships have said, and I am grateful to the noble and learned Lord for perhaps showing us a way out. This is a very complicated Bill, and we do our best to arrive at what is the right advice to give to your Lordships. This is a difference of opinion about what is the right advice but I can assure your Lordships that, provided it is not taken that I am giving any assurance of acceptance, I am only too willing to have another look at this matter before Report.
§ THE EARL OF PERTHI thank the noble Lord for that undertaking, recognising that it is not a promise to accept exactly what we have said. On that basis, I am prepared to withdraw the Amendment.
§ Amendment, by leave, withdrawn.
§ Clause 12, as amended, agreed to.
§ Clauses 13 and 14 agreed to.
§ Clause 15 [Provisions as to transfer of heritage]:
§ LORD CRAIGTONWith your Lordships approval, I will discuss this Amendment with Amendments Nos. 31, 32 and 33, which are consequential. Under Clause 15 confirmation of an executor now becomes a linked title to heritage property. Normally, particulars of the whole estate will be included in the confirmation, but under an Act of Sederunt of 1933 the Court of Session provided that on articles a sheriff clerk may issue a certificate of confirmation in respect of one item of inventory and that such a certificate is as valid in relation to the item as to the full confirmation itself. These Amendments make it quite clear that the short conveyance docket prescribed by Schedule 1 can be as valid for a certificate of confirmation as for the full confirmation. I beg to move.
§
Amendment moved—
Page 11, line 4, after ("confirmation") insert ("(or where a certificate of confirmation relating to the property has been issued in pursuance of any Act of Sederunt, on the certificate)").—(Lord Craigton.)
LORD SALTOUNI should like to ask the noble Lord, Lord Craigton, whether he considered the point brought before him at an earlier stage of this Bill, about an heir who succeeds to superiority of feu duties. I think I 1109 asked him (though I cannot remember on what occasion) whether an executor deriving his title under this Bill and by the procedure of this Bill would have power to irritate a feu for non-payment of feu duty. An heir cannot do it unless he has been properly served heir in the Sheriff Court. I have had experience of that, and I know I want to be quite sure that the provision of this Bill will not interfere with that very necessary right that a superior may have.
§ LORD CRAIGTONI understand, and I hope I am right, that the answer is, Yes.
§ On Question, Amendment agreed to.
§ Clause 15, as amended, agreed to.
§ Clause 16 and 17 agreed to.
§ Clause 18. [Provisions as to entails and special destinations]:
§ 5.59 p.m.
§
VISCOUNT COLVILLE OF CULROSS moved after subsection (2), to insert:
(3) No testamentary disposition taking effect after the expiration of one year from the commencement of this Act shall operate so as to evacuate a special destination unless it contains a specific reference to such special destination and a declared intention on the part of the testator to evacuate it.
§ The noble Viscount said: This is a small point, but I think it might be worth consideration by my noble friend Lord Craigton in a clause that deals, among other things, with special destinations. As I understand a "special destination" it is a clause in a will by which a man may leave property, for example, to his eldest son and thereafter to his eldest son's heirs, male or at law, or whatever it may be, and, unless by some change which is affected by the will of one of the people in that line of succession, the property continues to devolve in accordance with the original testator's will.
§ As the law stands at the moment, any of the people in that chain of succession can at any time change the line of devolution whenever they wish simply by making a will to the contrary effect. There is no suggestion in my Amendment that they should cease to be able to do so. But the difficulty is that at the present time, as the law stands, they can change the chain of devolution without realising they are doing it, because if they make any contrary provision in 1110 their will for the particular property concerned that automatically breaks the special destination and thereafter it is of no effect.
§ I think that in some cases these special destinations are very valuable. I think, for instance, they take property out of the intestacy, because there would then be no will which makes a provision to the contrary and it would go in accordance with the original provision of the testator who started it. I do not think my Amendment would affect that. I think these are valuable pieces of machinery for a testator to have at his disposal. I therefore propose in my Amendment that one of the people subsidiary to him in the chain of descent of special destination should not be able, by mistake or inadvertence or without realising he is doing it, to break that special destination; that he should be able to do it only if he realises what he is doing, if he refers to the special destination he is breaking and makes it quite clear it is his express intention to break it. I believe that this would be some protection for these special destinations, because it would require the person into whose hands the property had for the time being come to think seriously about whether or not at that time the special destination was continuing to be a good one, and to think in general about the whole of the succession of the property that he had for the time being in his hands. I think it would be stimulating for him to think about this, to see whether it contains wisdom in his day as when it started. I beg to move this Amendment, which would, I believe, have that effect.
§
Amendment moved—
Page 13, line 44, at end insert the said subsection.—(Viscount Colville of Culross.)
§ LORD CRAIGTONMy noble friend has explained with great clarity his reasons for putting down this new subsection, and my only reason for not advising acceptance of the Amendment now is that it seems to have some retrospective effect. There could be a case of a will already made which had not as yet full effect, but it could not be changed during the year's grace because the testator was already dead. I may be wrong. If my noble friend will withdraw the Amendment and if he is content that the new provisions should 1111 be applicable only after the commencement of the Act, I will gladly arrange for the redrafting.
VISCOUNT COLVILLE OF CULROSSI am much obliged to my noble friend. I am afraid I have taken my wording from the beginning of Clause 13, which seemed to have what I hoped was a similar harmless effect. I am grateful for my noble friend's assurance, and I beg leave to withdraw the Amendment.
§ Amendment, by leave, withdrawn.
§ LORD CRAIGTONThis is a drafting Amendment. I beg to move.
§
Amendment moved—
Page 14, line 1, leave out ("the").—Lord Craigton.)
§ On Question, Amendment agreed to.
§ Clause 18, as amended, agreed to.
§ Clause 19 [Estate duty]:
§ LORD CRAIGTONWith the Committee's permission, I will discuss Amendments 21, 22 and 23 together. As this subsection stands an executor would be liable for estate duty where, for example, there is a definition of property under a bill which does not need even for a short time to be vested in the executor. This would not be right and it is not our intention, and the Amendments therefore make the necessary correction. The deletion of subsection (8) is consequential. I beg to move.
§
Amendment moved—
Page 14, line 11, leave out ("in respect of heritable property").—(Lord Craigton.)
§ On Question, Amendment agreed to.
§ LORD CRAIGTONI beg to move Amendment No. 22.
§
Amendment moved—
Page 14, leave out lines 13 and 14, and insert ("in respect of heritable property which vests in such executor").—(Lord Craigton.)
§ On Question, Amendment agreed to.
§ LORD CRAIGTONI beg to move Amendment No. 23.
§
Amendment moved—
Page 15, line 1, leave out subsection (8).—(Lord Craigton.)
§ On Question, Amendment agreed to.
§ Clause 19, as amended, agreed to.
§ Clauses 20 to 28 agreed to.
1112§ Clause 29 [Right of tenant to bequeath interest under lease]:
§ On Question, Whether Clause 29 shall stand part of the Bill?
THE DUKE OF ATHOLLI wonder whether my noble friend could enlighten me as to exactly what Clause 29 means. It seems to me, having just read it through, that it means that any condition which one puts in a lease could be invalidated even if someone has made a bequest of the lease to someone else. The only ones excluded are those that apply to crofters' holdings and agricultural holdings, which I imagine excludes all agricultural leases. Presumably the Agricultural Holdings Act, 1949, also includes the revision in 1956, or whenever it was. Perhaps my noble friend could enlighten me about this clause.
§ LORD CRAIGTONI will do my best. Urban leases have no implied exclusion of assignation. The noble Duke understands that. Under subsection (2) the tenants of agricultural holdings have powers already to bequeath. This deals, therefore, on the whole, with where there is an implied prohibition, and it deals mostly with rural leases, fishings, shootings and minerals. And in that it is simply where there is not an express exclusion of assignation, where whoever makes the will does not make express exclusion. Then it is not express, and in the particular leases to which Clause 29 refers there is an implied exclusion. I hope it will be satisfactory to my noble friend if I say that I will write to him on this point, or would he wish me to speak further?
THE DUKE OF ATHOLLIt will certainly be satisfactory if my noble friend will write to me about this.
§ Clause 29 agreed to.
§ Clause 30:
§ Presumption of survivorship in respect of claims to property
§ 30. Where two persons have died in circumstances indicating that they died simultaneously or rendering it uncertain which, if either, of them survived the other, then, for all purposes affecting title or succession to property or claims for legal rights out of property—
- (a) where the persons were husband and wife, it shall be presumed that neither survived the other; and
- (b) in any other case, it shall be presumed that the younger person survived the elder.
§ LORD CRAIGTONIf I may make a suggestion, these next Amendments are variations on the same point; that is to say, Nos. 24, 25, 26, 27 and 28. Perhaps it would be convenient to your Lordships to discuss them all together, and then they can be moved separately if your Lordships wish.
§
VISCOUNT COLVILLE OF CULROSS moved to omit paragraphs (a) and (b) and to insert instead:
it shall be presumed that neither survived the other".
§ The noble Viscount said: I was proposing to suggest the same thing. At any rate so far as three of them are concerned, I hope I can explain to your Lordships what is the point troubling me and, I think, my noble and learned friend Lord Reid as well. There has hitherto in the law of Scotland been no presumption where two people die together, or indeed apart but in circumstances where it is impossible to say who died first, that one died before the other. It has therefore hitherto been a matter of proof, if anything turned on the question whether one died before the other, for the person who claimed it was as he wished it to be; he must make the case to the Courts to their satisfaction.
§ Before 1925 it was the same in England, and in both countries I believe there has been a long history of difficulty that has arisen out of this particular rule of law, because in some cases it has proved quite impossible to find who was entitled to property under a selection of wills involved in such a case. Indeed, there was one case in Scotland in the middle of the war where, as a result of bomb damage in Glasgow, the whole of the estate went to the Crown because it was impossible to decide which of a mother and father and their two children, if any, survived at all in the disaster.
§ There was a presumption introduced in English law by means of Section 184 of the Law of Property Act, 1925, which said that in those circumstances, where it is uncertain which of two people died together or whether they did die simultaneously (as the court subsequently interpreted this section) then there was to be a presumption that the younger survived the elder. Clause 30 of this 1114 Bill makes a nearly similar presumption for Scotland. It provides the same thing, except where the two people who have died together are husband and wife, and in their case the presumption is that neither survived the other.
§ There are two difficulties which arise out of this. One is the difficulty of estate duty, and the other is a case which I think might arise, of an artificially inflated intestacy in the case of the younger of the two. I will deal with these in turn, and the three Amendments that stand in my name are alternative means, I hope, of dealing with these points. So far as Amendments Nos. 24 and 28 are concerned, I think that they may be unnecessary, because they are primarily intended to deal with the estate duty point, and I believe I am right in saying—I hope my noble friend Lord Craigton will correct me if I am not—that Section 29 of the Finance Act, 1958, provides that, despite such a presumption that the younger person survived the elder, where there is a case of the type we are now discussing there shall not be double payment of death duty. If that is so, I think that that particular point is covered; nevertheless, I have put down the Amendment in case it is not.
§ Amendment No. 27, which is in my name, deals with the other point, and perhaps the only way I can explain it to your Lordships is by means of an example. I will try to explain it as clearly as I can by that means. Suppose there is a family which consists of a husband and wife and one son who is the only child. The husband and the wife both have brothers and sisters who are the uncles and aunts of the child. One of the uncles and aunts has a son; he is therefore the first cousin of the child. The father, the mother and the child die together in a disaster—an aeroplane crash, a car smash or something of that nature. The father has left his property to his son but, whom failing, to the son's cousin, the nephew of the father.
§ In those circumstances, as the law stands now, as there is no presumption that the son survived the father, his cousin would take under the will. But, by means of this presumption that is in the clause now, supposing that the son is intestate, instead of the cousin taking 1115 it, as was quite clearly the intention of the father, it will, by means of Clause 2, be split up, under the young son's intestacy, among all his uncles and aunts, and the cousin will get only the due proportion that will come to him through the uncle who is his father, or the aunt who is his mother.
§ I feel that this must be wrong. I feel that the presumption may be useful for the purposes of settling disputes where it is not clear who is to have the property. But where there is a situation whereby a testator has quite clearly provided for a succession of people to come into the property, and if the first should fail then it should go to another person, then it is quite wrong that this should be artificially upset by means of a presumption, and, moreover, upset to such a degree that the whole of the young son's estate falls into intestacy and the whole property which is artificially inherited from his father descends in the intestacy rather than in the way which was quite clearly intended.
§ I do not believe that any of the people who would receive the property from the son in those circumstances would be aggrieved if there were no intestacy and the property went, as it was clearly intended to go, under the testator's will. Although this is a most complicated provision, I hope that the Amendment I have put down in Amendment No. 27 will save this particular situation. I do not think it would save any other, but this, at least, I believe to be an advantage.
§ May I finish by saying to your Lordships that it may be pointed out that this is not a provision which occurs in Section 184 of the Law of Property Act for England and Wales. But no more does paragraph (a) of the clause as it is now drafted. It is a clear presumption right through in English law that the younger survives the elder, and there is no special exception for husbands and wives. If the law has been brought up to date to show a more sensible or wise approach in Scotland because the passage of time has shown defects in the English provision, I think there should be no reason why we should not make a further small improvement of the sort that is now provided at any rate 1116 in one of my Amendments. I beg to move Amendment No. 24.
§
Amendment moved—
Page 20, leave out lines 26 to 29 and insert the said new words.—(Viscount Colville of Culross.)
§ 6.17 p.m.
§ LORD REIDI add only one word because I think my noble friend Lord Colville of Culross has covered the whole ground. There are the two points—one about death duty and the other about who is to succeed. The simple case is where the testator himself and one of his beneficiaries die in the same calamity, and the problem, assuming the beneficiary to be younger than the testator is, does the property which was destined to the beneficiary X, whom failing to Y, still alive, go to X, and then to X's representatives whom the testator never chose, or does X, having failed to survive the testator, drop out and the property go direct from the testator to Y? I should have thought that the proper drafting ought to ensure that the property goes direct from the testator to Y and that X drops out, even if he is younger than the testator was. I am not at all clear that that is what the Bill does.
§ LORD CRAIGTONDoes the noble Lord, Lord Saltoun, wish to speak on his Amendment?
§ LORD CRAIGTONThe Amendment proposed by my noble and learned friend, as I think he probably knows, runs counter to the recommendations made by the Law Reform Committee on which Clause 20 is based, and to the law in force for the last forty years in England and Wales which, so far as we know, has worked well. For those reasons, I would ask your Lordships not to accept the Amendment standing in the name of the noble and learned Lord, Lord Reid and of my noble friend Lord Colville of Culross. On the second point of the noble and learned Lord, I would ask permission to look at that again, as I find this an extremely complicated clause. I now understand from my noble friend Lord Colville of Culross that the noble Viscount would consider not pressing the point if I could give an 1117 assurance, which I can, that in these circumstances double estate duty is already avoided by Section 29 of the Finance Act, 1958. I understand, further, that on that assurance my noble friend would not press the second of his Amendments standing in his name alone.
This leaves the first of my noble friend's Amendments, the one dealing with intestacy. This is a useful provision, but it appears to us—I say only "appears"—to be incomplete, in that it seems to say what shall not happen to the estate but not what shall happen. So if my noble friend will withdraw that Amendment I will undertake before the next stage to look at it to see whether any addition or redrafting is necessary.
LORD SALTOUNThere is one thing I should like to say to the noble Lord, Lord Craigton. All through the passage of this Bill the Government have said to everybody who has had any objection, "The answer is plain: make a will." Here in Clause 30, as it stands at present, the Government are going out of their way to produce an artificial intestacy. What is the use of making a will if a thing like that can happen? It is said that it is the law in England; but if it is a bad law why should we have a bad law put on us in Scotland just because they have it in England? Why not let us make the best law, and the English law will soon be in line with ours? The noble Lord has promised to look at this point again, so there will be no necessity for me to move my Amendment. Nevertheless, I hope that the Government will consider this matter carefully, before the next stage. If they decide to stick to the wording in the Bill, would they publicly say that they were mistaken in telling us in every case that we should get out of trouble by making a will?
§ LORD CRAIGTONI must answer the noble Lord. I think that I have said once in the whole debate that the answer is to make a will. We are trying to deal throughout the Bill with intestate succession, and I have been most careful not to make the obviously foolish remark on a Bill of this nature that: "The answer to everything is to make a will". We are dealing with people who do not make wills.
VISCOUNT COLVILLE OF CULROSSI am grateful to my noble friend, first of all for giving the assurance about the estate duty point, which I am sure is a great relief to your Lordships; and, secondly, for undertaking to redraft my amateur efforts in Amendment No. 27. I consider this is very satisfactory indeed. I am grateful to him for what he has said, and I beg leave to withdraw the first Amendment.
§ Amendment, by leave, withdrawn.
§ Clause 30 agreed to.
§ Clauses 31 to 34 agreed to.
§ Clause 35 [Interpretation]:
§ 6.23 p.m.
§
THE EARL OF PERTH, moved to leave out the definition of "legal rights." The noble Earl said: This Amendment is an attempt to clear up a situation that otherwise might lead to considerable confusion. Clause 35 is an interpretation of various expressions in the Act. One of the interpretations is that "legal rights" as it is written here means
"jus relicti, jus relictae, legitim and the rights conferred by sections 8 and 9 of this Act".
As I understand it, in ordinary speaking "legal rights" does not mean that at all. I am worried that if we have this laid down as the meaning of "legal rights" in this Bill (and we know it may arise in many cases; there are 10,000 cases of intestacy in a year), one is slowly going to develop a practice by which confusion will arise. That confusion may lead to something worse; namely, that the present interpretation will supersede the old one, with all the dangers that involves with regard to heritables, moveables and so forth. Although I have not had time to read through the whole Bill and count how many times the phrase "legal rights" appears, I would ask, so that there should be no confusion, that we should avoid this interpretation and where the words "legal rights" occur that we should just add in the full two sentences. That is the reason for this Amendment.
§ Amendment moved—
§ Page 22, leave out lines 8 and 9.—(The Earl of Perth.)
VISCOUNT COLVILLE OF CULROSSI need say only a brief word on this point. The provisions of Clause 8, as it now stands as amended, and Clause 9 1119 apply only in cases of intestacy. "Legal rights" is a phrase understood in Scotland and applicable heretofore in the cases of all deaths and any testamentary dispositions or intestacy that follows upon them. If a definition of "legal rights" for the purposes of this Bill includes things which come into consideration only in cases of intestacy, the time may soon come when widows will expect, even where there is a will, that the house will become theirs—as it now will under Clause 8—and will be very disappointed if that is not so. This may sound far-fetched, but "legal rights" is an old term well-understood in Scotland; and, unless it is necessary to tinker with it, it should not be changed in the way this clause proposes to change it. Therefore, I hope that my noble friend Lord Craigton may be able to leave out this part of the interpretation, unless there is some reason in the drafting of the Bill that makes this completely impossible.
§ LORD CRAIGTONEven for the rather theoretical reasons given by my noble friend Lord Perth, I am all for taking out of a Bill words that are not necessary. I agree with him that we should delete this definition unless it is essential to retain it. As to the question of whether or not it is essential in this context, this is for the draftsman to say. Clearly, if one is going to repeat the phrase throughout the Bill every time the phrase "legal rights" is used, it might not be essential to retain this definition. But I am told that, for good drafting, it is essential to retain it, and that there are several references to "legal rights" which require this definition for their proper interpretation. These are in Clauses 15(2), 16(2), 25(1) and Clause 30; and there may be others. I hope that my noble friend will feel able to withdraw his Amendment. I see the point of it, but I am not sure whether it is sufficiently strong a point to justify what might be considerable amendment to the Bill if the definition of "legal rights" were left out, as he suggests.
§ THE EARL OF PERTHDo I understand my noble friend to say that he will have a look at it again to see whether it involves considerable changes, and that, if not, we may have 1120 hope that what we are proposing would be accepted on Report stage?
§ LORD CRAIGTONYes. The points he has raised are points of substance. I will look at this to see whether it will spoil the Bill too much if we were to give way on his points.
VISCOUNT COLVILLE OF CULROSSBefore my noble friend Lord Perth withdraws the Amendment, I would ask whether it is necessary to say anything more in the Bill than "legal rights and the rights conferred by Sections 8 and 9" wherever it occurs in the Bill itself, rather than to put this definition in the Interpretation Clause.
§ LORD CRAIGTONI note what my noble friend has said.
§ THE EARL OF PERTHOn that basis, I am happy to withdraw the Amendment.
§ Amendment, by leave, withdrawn.
§ LORD CRAIGTONThis is a drafting Amendment. The present wording defines the deceased's estate as that on which he has tested, or might have tested; but it has been argued that the deceased cannot test on property which may be claimed in respect of legal rights. The estate as here defined should include the legal rights, and the new form of words puts this right.
§
Amendment moved—
Page 22, line 27, leave out from ("moveable") to ("and") in line 29, and insert ("belonging to the deceased at the time of his death or over which the deceased had a power of appointment").—(Lord Craigton.)
§ On Question, Amendment agreed to.
§ Clause 35, as amended, agreed to.
§ Clauses 36 and 37 agreed to.
§ Schedule 1 [Form of Docket]:
§ 6.30 p.m.
§ LORD CRAIGTONThis Amendment is consequential. It was discussed with Amendment No. 18. I beg to move.
§
Amendment moved—
Page 25, line 4, after ("confirmation") insert ("(or certificate of confirmation)").—(Lord Craigton.)
§ On Question, Amendment agreed to.
§ LORD CRAIGTONI beg to move.
§
Amendment moved—
Page 25, line 6, leave out ("in the") and insert ("certificate of")—(Lord Craigton.)
§ On Question, Amendment agreed to.
1121§ LORD CRAIGTONI beg to move.
§
Amendment moved—
Page 25, line 16, after ("or") insert ("certificate or").—(Lord Craigton.)
§ On Question Amendment agreed to.
§ Schedule 1, as amended, agreed to.
§ Schedule 2 agreed to.
§ Schedule 3 [Enactments Repealed]:
§ LORD CRAIGTONThis Amendment is to correct an error. I beg to move.
§
Amendment moved—
Page 29, [cave out lines 29 to 32.—(Lord Craigton.)
§ On Question, Amendment agreed to.
§ Schedule 3, as amended, agreed to.
§ House resumed.
§ Bill reported with Amendments.