HL Deb 24 April 1969 vol 301 cc553-604

3.13 p.m.

THE LORD CHANCELLOR (LORD GARDINER)

My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.

Moved, That the House do now resolve itself into Committee.—(The Lord Chancellor.)

On Question, Motion agreed to.

House in Committee accordingly.

[The LORD CHAMPION in the Chair.]

Clause 1 agreed to.

Clause 2 agreed to.

Clause 3 [Rent while tenancy continues by virtue of s. 24 of the Act of 1954]:

VISCOUNT COLVILLE OF CULROSS moved Amendment No. 1: Page 2, line 40, leave out from ("section") to ("subsection") in line 42.

The noble Viscount said: This Amendment relates to the question of the interim rent that is to be paid after a certain time while the court is deciding whether or not it is going to grant a new lease to the tenant who has applied for it, either by himself or in opposition to his landlord's attempt to get him out of the premises. The Law Commission Report on this matter dealt with this subject in paragraphs 22 to 26. They reject various methods of dealing with this matter and come down in favour of these words in paragraph 25: It is our view that any change in rent should operate only prospectively"— that is all right; that is what tae Bill says— and that the market rent should be only one of several factors, including the rent payable under the current tenancy, to be taken into account in arriving at what is a fair rent in the circumstances. In their draft Bill the Commission use the words "fair rent"; but this Bill, in subsection (1) of this clause, uses the words: a rent which it would be reasonable for the tenant to pay

At no time do the Law Commission explain why they consider that the rent under the old tenancy should be taken into account and I do not think that the noble and learned Lord the Lord Chancellor explained it in his explanation of the Bill on Second Reading. As I understand the position, it is thought right that the interim rent should be possibly below the final market rent that is to be fixed by the court, or by agreement if a new lease is agreed; and that, of course, is right, because the interim rent is probably a rent which is going to last only for a comparatively short time. Equally, however, the probabilities are that if a situation has arisen where there is dispute and the matter is going to the courts it is because the rent under the old tenancy (which goes on until an application of this sort is made to the court or the matter is agreed) is below what is now the market rent. One of the difficulties has always been—and this is recognised by the Law Commission—that it pays the tenant to hang on and to keep litigation going as long as possible, because he will then remain in the premises at a rent which is rather below the market rent.

One of the great merits of this Part of the Bill is that it contains some provisions that are to the benefit of the landlord and others that are to the benefit of the tenant. This balance seems to me to be a very proper one which we should at all times seek to maintain. However, I do not understand why the tenant is being given what in this case seems to me to be more than preferential treatment. There is no question that the interim rent would be fixed on the basis of a long-term rent at the current market value for some period of say, seven or fourteen years; because subsection (3) says that it should be based on a tenancy from year to year—and that would be, in all probability, a lower rent in any case, than the long-term one. During the interim period, therefore, the tenant will be getting from the court a rent lower than the one which would ultimately be fixed if a new tenancy were granted. This seems to me to be enough.

The difficulty about requiring the court to have regard to the rent payable under the terms of the tenancy—that is, the old tenancy—is that one does not know what regard the court is going to have to it and one does not know in what way the court is going to have regard. Such rent is almost inevitably lower than the current market value in the circumstances in which it will come before the court. What one would like to know—at any rate, if this matter is to remain in the Bill—is why the court should have this regard. Is it supposed to take into account special hardship for the tenant if he says that he cannot afford, during the interim period, to pay a higher rent than he has been paying before? He has of course the right to refuse to take the new tenancy on the terms which the court thinks fit if he finds the rent too high. It may be that this is what the noble and learned Lord has in mind. I think we need an explanation and, since there is this provision pegging the interim rent to a year-to-year basis rather than a long-term one, it seems to me that there is concession enough here. This Amendment would simplify the matter, would take out another matter of dispute on the interim rent valuation in the court and probably not do any harm to either side —which is what I wish to ensure. I beg to move.

THE LORD CHANCELLOR

I know the difficulties of the noble Viscount and I am not complaining in any way at all, but the Second Reading was on March 27 and all these Amendments were put down in the course of yesterday afternoon, though I think one Schedule appeared only this morning. While I am not complaining, I may say that I had to leave the very interesting debate in your Lordships' House yesterday to change and go to Windsor Castle, from which I got back at a quarter past one this morning; I have had a Cabinet meeting all the morning, and therefore if I am more incoherent than usual I hope that the Committee will understand.

I hope to be able to meet a number of the points which have been raised by the noble Viscount's Amendments, but not, I think, this one; though, as I understand it, he really wants only an explanation. The reference to current rent was deliberately inserted by the Law Commission with a view to lowering the level of the interim rent. It is designed to introduce a discretionary element which will make it easier for the court to fix an interim rent without recourse to expert evidence and so assist in reducing the expense of the proceedings. In so far as the interim rent will not usually be the full market rent it may also discourage applications which always add to the tasks of the court and the expense of the parties in cases where the difference between the current rent and the market rent is not very great.

Another reason for resisting the Amendment is that under Section 36(2) the tenant has a right to decline to accept a new tenancy where he cannot afford to pay the rent. He has no such right in respect of the interim rent fixed under the new clause, nor would it be possible to give it to him. As the noble Viscount rightly said, this is a clause which is intended to be in the landlord's interest and to the detriment of the tenant, I think absolutely rightly, because it was found—not, I think, in many cases but in some cases—that the tenant was spinning out the proceedings. Under the existing legislation the new rent under the new lease does not become payable until the court has decided the issue; decided that the tenant is entitled to a new lease and at what rent and on what terms the lease is entered into. The object of this clause is therefore to discourage tenants from spinning the matter out, by providing that the landlord can go to the court to ask for an interim rent to be paid. But it was never intended that this should be done upon valuers being called on both sides.

If a landlord thinks that a tenant is likely to delay the proceedings he can apply at once for an interim rent, probably before either of them has instructed valuers, and it was, and is intended that the court should take a rough and ready view. It sees what is the existing rent and what sort of figures are going to be argued upon as the market rent. If I say that it takes a "pot shot", that is perhaps putting it rather too colloquially; but it is intended that these should be simple proceedings. If, literally, the court could not look at the existing rent, it might fix a rent which was lower than the existing one. I do not see why it should not take the existing rent into account. It sees what the tenant is paying at the moment; it sees the areas of dispute over the market rent and fixes something between the two which it thinks would be reasonable as an interim rent. For those reasons I suggest to the Committee that the new subsection is properly drawn and is intended to achieve what the Law Commission say.

On page 27 of their Report the Law Commission say: The purpose of this sub-clause is to provide for a `fair' rent and to remove any incentive for the tenant to prolong the proceedings"— and so on. Then they say: The fact that regard must be had to the rent under the present tenancy and that the fair rent must be fixed as on a yearly tenancy may be expected to produce a lower figure than the full rent which will eventually be fixed for the new tenancy, if any. It is for the landlord to invoke this position if he thinks fit. Unless the present rent is substantially below the current rental value, it may not benefit him to do so. I hope, therefore, with that explanation, that the noble Viscount will be prepared to withdraw his Amendment.

VISCOUNT COLVILLE OF CULROSS

I am grateful to the noble and learned Lord and I think that the point he makes about the lack of necessity to call valuers at this stage is one of great importance. It is obviously sensible that you should not get into a large valuation dispute on this interim rent. The difficulties that arise on valuation on the fixing of the final rent are often formidable and go on for days, and one certainly does not want to have that on the interim basis.

I wonder, however, whether the court is having its attention drawn to all the things that are relevant to make its "pot shot" or rough and ready estimate. The old rent may have been fixed a very long time ago, or a substantial period ago, and one of the matters which would seem to me to be at any rate of interest to the court, when it is, seeking to fix a rent on a year-to-year basis for the interim period, is the valuation list; because unless that has got very much out of date it ought to have the rent fixed on a year to year basis on the statutory hypothesis for rating it is true, but at any rate it would be of some good. It would therefore be the very thing that the court would like to look at.

I do not know what the effect would be—whether in fact the valuation officers do fix a figure under the statutory hypothesis which is much lower than the market figure in some of these cases. However, it might be worth pursuing, because if one wanted to give the court a rough and ready reckoner it is perhaps as well to have something other than the old out-of-date rent, something much more up-to-date for it to look at. I would therefore commend the noble and learned Lord to consider that point and to see whether there is anything in it. Meanwhile, I think his explanation is otherwise satisfactory. Certainly regarding the purpose of this provision it is satisfactory to me. For the moment I should like to consider the matter and at this stage I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clause 3 agreed to.

Clause 4 [Termination of sub-tenancy by head landlord]:

3.28 p.m.

VISCOUNT COLVILLE OF CULROSS moved Amendment No. 2: Page 3, line 13, after ("section") insert ("or the tenant has requested a new tenancy under the next following section")

The noble Viscount said: This also is not a very large point. I apologise to the noble and learned Lord the Lord Chancellor for the lateness of these Amendments, but I myself have been receiving advice and that has not come in very quickly either. A new subsection is being added to Section 25 of the Act by Clause 4 of this Bill, and I would commend my Keeling Schedule to the Committee so that your Lordships can see the context of this matter. It cannot be seen from the Law Commission's Report because they do not, I think, print this particular section—yes, I see now that they do, but they do not print the next one. The position is that the landlord is being put into an immediate relationship with the sub-tenant of his tenant where he has given notice to his tenant to try to terminate the tenant's interest.

What will have happened is that the landlord has let the property, a business property, to a tenant, and very probably that tenant has sub-let part of it to a sub-tenant. In the normal course of events, as the law stands at the moment, the landlord is in no direct contractual relationship with the sub-tenant and so he can get at the position only through the tenant. He cannot serve the notice on the sub-tenant as well so that the whole matter may be dealt with at the same time. This is being put right by the new subsection (7) in Clause 4, but the converse position is not covered. Under the existing Act of 1954 the landlord can give notice to quit to the tenant; but the tenant can also, under Section 26, request a new tenancy from the landlord. It may not happen so often, but the possibility is there, and I think that it should be provided for.

That situation is not covered by the new subsection (7). If instead of the initiative coming from the landlord it comes from the tenant, and the tenant asks for the new tenancy, the landlord is still in the old position, which applies now in every case, whereby he cannot get into any direct relationship with the tenant's sub-tenant. The matter would have to go to court, as I understand it, simply as an application contested between the tenant and the landlord. If the landlord succeeded in resisting the tenant's request for a new tenancy, he would then have to start all over again with the sub-tenant. That is exactly what the new subsection (7) is intended to avoid where the landlord starts the process. I suggest to the noble and learned Lord that for the sake of neatness and good common sense it ought to be applied the other way round as well, so that there is a direct relationship at whichever end the matter starts. It is with that intention—although I am perfectly prepared to be told that I have not got the drafting right—that I put down this Amendment.

THE LORD CHANCELLOR

There is a point here which is already receiving the consideration of the Law Commission. Clause 4 is designed to enable a landlord who is terminating the business tenancy of his tenant at the same time to terminate a business sub-tenancy of part of the premises. The Amendment would enable him to do so not only where he has himself terminated the mesne landlord's tenancy but also where the mesne landlord's tenancy is coming to an end by effluxion of time but the mesne landlord has served a request for a renewal. In principle, it seems right that the landlord should be able to do so where he is intending in any event to bring the mesne landlord's tenancy to an end by countering the mesne landlord's request by a notice refusing him a fresh tenancy. At present he cannot do so because Section 26(4) of the 1954 Act prevents him from giving any notice to terminate the current tenancy after he has received a request for a new tenancy and Clause 4 does not help. The noble Viscount's Amendment, however, is too wide. It would operate even where the mesne tenant is certain to obtain a fresh tenancy, and could result in the head landlord being able to terminate a sub-tenancy and possibly negotiate the terms of a fresh lease with the sub-tenant at a time when the premises are let to and will continue to be let to the mesne landlord. The point is being sympathetically considered by the Law Commission. There are serious technical difficulties, but if a means can be found to meet this situation I would undertake to put down an Amendment at a later stage or in another place.

VISCOUNT COLVILLE OF CULROSS

No doubt the Committee will find that answer very satisfactory, but there is one thing I should like to say to the noble and learned Lord. We have here an opportunity to amend Part II of the Landlord and Tenant Act 1954. I do not suppose we shall get an opportunity again for quite a long time, and if we have a point that ought to be covered it is essential that it should be done in this Bill. It does not in the least matter whether it is done in this House or in another place so long as the bus is not missed and we do not find that there will have to be further amending legislation at some other time. I beg leave to withdraw my Amendment.

Amendment, by leave, withdrawn.

Clause 4 agreed to.

Clause 5 agreed to.

Clause 6 [Exclusion of provisions of Part II of the Act of 1954 by authorised agreement]:

3.33 p.m.

VISCOUNT COLVILLE OF CULROSS moved Amendment No. 3: Page 4, line 17, leave out ("and") and insert ("or").

The noble Viscount said: I beg to move Amendment No. 3. This may be a point which is so minor as to be almost nonexistent, but whereas most of the variations from the Law Commission's recommendations have been explained, this particular one has not; and in their drafting I do not think that they make quite the same provision. I should have thought that the new provision is in the alternative and not bound together and that in this case "or" is a more suitable word than "and". If the noble and learned Lord convinces me that "and" is right, I do not suppose that it will be the end of the world. But I thought that these might be circumstances which were not likely to occur at the same time and that one would want to divide them up rather than join them together.

THE LORD CHANCELLOR

This Amendment, of course, is entirely a point of drafting. My first impression was that the noble Viscount was right, but the draftsman has persuaded me that this is not so.

Perhaps I had better repeat what he said. It is apparently intended to emphasise that the powers of the court to authorise agreements under paragraphs (a) and (b) of the new subsection (4) of Section 38 are separate. The word "and" does not have the effect of requiring the court to exercise both powers, since it is a condition of the exercise of each power that it should be preceded by a joint application of the parties concerned. Insertion of the word "or" would suggest that the powers conferred by paragraphs (a) and (b) are alternative powers at the court's disposal on any application. In fact, in cases where the application is made under paragraph (a) the order must be made in accordance with that paragraph; and, if it is made under paragraph (b), the order must be made under that paragraph. The new subsection lists powers, and grammatically it is right to use "and". I do net suppose that the heavens will fall whatever happens but that is the advice I have received, which I feel I ought to accept.

VISCOUNT COLVILLE OF CULROSS

I beg leave to withdraw my Amendment.

Amendment, by leave, withdrawn.

On Question, Whether Clause 6 shall stand part of the Bill?

VISCOUNT COLVILLE OF CULROSS

I should like to take this opportunity, since the points I made on Second Reading were answered by the noble and learned Lord very fully and most courteously by letter, to deal with a point in Clause 6 which he made to me and which perhaps he would be so kind as to confirm. I asked what the functions of the court would be under this clause, since it appears that applications will be joint, both parties being in agreement, and on the face of it one would think that the court was simply being used to rubber stamp what had already been agreed. This is a rather disheartening thing for the court, and not perhaps a very useful function.

The noble and learned Lord told me that he thought the main function c f the court would be to ensure that the consent of the parties was genuine and had been arrived at freely. It might want to know what advice the parties had sought and received, and then to see that the terms of the agreement were prima facie in the interests of both of them. He pointed out, as the Law Commission do, that under the Housing Act 1961 there are similar cases in which the court has to look at and approve agreements. It might be of use to practitioners, and even to county court judges, if they knew what the Government had in mind in bringing forward this particular provision. I do not think it is very clear in the Law Commission Report, and if that indeed is what the noble and learned Lord thinks, it might be useful if he could confirm it now.

THE LORD CHANCELLOR

Yes: I am happy to confirm what I told the noble Viscount is the intended object of this clause, so that the Committee will know exactly what is in mind.

Clause 6 agreed to.

Clause 7 [Grant of new tenancy in some cases where section 30(1)(f) applies]:

VISCOUNT COLVILLE OF CULROSS moved Amendment No. 4: Page 4, line 44, after ("of") insert ("any part of").

The noble Viscount said: This is an obscure point, but again one which I raised on Second Reading and on which the noble and learned Lord was kind enough to answer me. It is clear from the Law Commission Report that they are seeking a medium course in relation to the sort of case where a landlord's objection to giving a new tenancy is on the ground of Section 30(1)(f) of the 1954 Act, where he says that he intends to demolish or reconstruct the premises or a substantial part of them, or to carry out substantial work on the holding, and could not reasonably do so without obtaining possession of the holding. The position has emerged in the courts that where a landlord wants to obtain possession of part of the holding only if he is to reconstruct that part, nevertheless the courts are not allowed to regrant to the tenant a new tenancy of part, allowing the landlord only to reconstruct the other part, even though both parties would not be averse to that course taking place if the powers were there. The clause in the Bill allows this to happen.

It appears that two things happen here: that simply access and facilities are given, and that is all the landlord should reasonably want; or, alternatively, there is a specific provision whereby the tenant can be given a new tenancy in regard to part of the tenancy. The Law Commission equally have rejected another proposition, although I think that others may not agree with them on this. It appears that this is a slightly controversial matter. I think that I would agree with the Law Commission that where the property is going to be wholly reconstructed the tenant ought not to have an opportunity to come back at the end of the reconstruction period and get a tenancy of what will be, in effect, a completely new building. That is not intended to happen, as I understand it, either by the Law Commission or, since this is their drafting, in the Bill. Nevertheless, it seems to me that the wording of this clause is a little wide.

The noble and learned Lord invited me, if I was worried about it, to see what I could do by way of amendment, and he said that he would consider anything that I put down. I do not think it is the easiest point in the world, and I found it an extremely difficult thing to do. I would, if I may, put the point back to the noble and learned Lord in this way. It seems that I am not alone in thinking that an awkward tenant could say to the court under Section 31A (a) (this is the first paragraph in the inserted section in the 1954 Act) that he is perfectly prepared to give the landlord facilities which would, in effect, enable him to rebuild the whole of the building; he could retain possession in some notional form, by keeping some stores in the basement or something of that sort, and he would be able to present to the court a case on the facts which would allow to happen what the Law Commission and the Bill propose should not happen. He will be able to make a nuisance of himself in this way.

It may be that the courts would eventually hold that possession in this context would not be satisfied, if he simply had something in the basement, and that his scheme whereby access facilities would be granted for a reconstruction was not in the spirit of the Act. But I do foresee litigation, particularly if there is an awkward tenant who takes the view, contrary to mine, that the new Bill ought to have given him the right to have a rebuilt new building and a tenancy of it. There seems to be an opportunity here that might be taken by some people which could waste a great deal of time, because of the argument about what access, what facilities, how much of the premises would be retained by the tenant, whether the landlord could do this or that without getting possession of a passage or a staircase, and a tremendous amount of argument going up to the Court of Appeal on a point of law, and possibly coming to your Lordships' House later in an appellate capacity.

I suggest that this is a point, not where we differ in any way, but where a little more restrictive wording might be apposite, so as to make it quite clear that this paragraph is not intended to allow the tenant to get back by a side-wind into a substantially new building after it has been rebuilt. It is in order to ask once more whether those who are so much better at drafting than I am will look at it, to see whether they can do something about it, that I have put this Amendment down. I know it does not have the right effect, but it gives me the opportunity to raise the point, and I should be grateful if the noble and learned Lord would comment upon it. I beg to move.

THE LORD CHANCELLOR

I will certainly look at this again and discuss it with the noble Viscount, but I do not think this Amendment would achieve anything. Under paragraph (a) of the new Section 31A a landlord will not be able to obtain possession for purposes of reconstruction if a tenant agrees to make facilities for the work of reconstruction available and the landlord, given those facilities, could reasonably do the work without obtaining possession of the premises. The Amendment would alter this only to say that the landlord could reasonably carry out the work without obtaining possession of any part of the holding. In the context of the clause this Amendment does not seem to achieve any purpose. Section 30(1)(f) of the Act gives the landlord a right to possession where he cannot do the work without obtaining possession of the holding. For this purpose the holding is indivisible. If the landlord needs to take possession of any part of the premises in order to do his work, then he needs possession of "the holding". The addition of any part of the holding is therefore otiose. Where the landlord's requirements can be sufficiently met by possession of part of the holding the tenant's remedy lies under paragraph (b) of the new Section 31A, which enables him to seek a new tenancy of other parts of the holding of which the landlord does not require possession.

I thought the noble Viscount probably had in mind the point that he raised on Second Reading, but the Amendment would not achieve this objective. However, as I have said, I am quite prepared to consider the point further with him.

VISCOUNT COLVILLE OF CULROSS

As I said, I found this an extremly difficult point, but there are those who are more skilled than I am and who have considered it over a longer period. It may be that they will be able to think up something suitable. I am very grateful for the offer of the noble and learned Viscount. I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clause 7 agreed to.

Clause 8 agreed to.

Clause 9 [Saving for tenant temporarily out of occupation]:

On Question, Whether Clause 9 shall stand part of the Bill?

3.46 p.m.

VISCOUNT COLVILLE OF CULROSS

I should like to raise a point on Clause 9. This is another of the Second Reading subjects. The noble and learned Lord told me that he thought it might be; useful in a few cases, but probably would not be of very wide application. If I may respectfully say so, there is rather more wrong with it than that. The Law Commission on page 14 of their Report set out the problem, and they refer to the two cases of Caplan v. Caplan. At the beginning of paragraph 45 they say: We consider that the position should be clarified by specifying what is required to satisfy the condition of occupation. The point is that there has been some dispute about the position of the tenant when he is out of occupation of the premises of which he is seeking a new tenancy, either at the date when he originally makes the application to the county court or any other court, or some time after that, but before the court finally hears the case, or at the time when the court hears the case.

Clause 9, in its new Section 38A put into the 1954 Act, says that it is all right if the tenant is not in occupation between the time when he makes the application and the date when the court actually deals with the matter at the hearing. That is my understanding of it. But that is not the problem that the Law Commission set about solving. I do not think that anything in Clause 38A really helps. They go on to say this at the end of paragraph 45: We consider that the Act should specify what conditions must be satisfied in respect of occupation; and those conditions should be that the tenant is in occupation of the premises for the purpose of his business at the time of the order as well as at the time of the application, the intermediate period being irrelevant. That is, broadly speaking, what is put in the clause. The second case of Caplan v. Caplan came before Mr. Justice Cross, and I should like to tell your Lordships what he said about it. He said: Take this example. Suppose that a tenant in occupation for business purposes applies for a new tenancy. The landlords oppose the application and succeed in the court of first instance. The tenant then lodges notice of appeal but his solicitors tell him that the chances are not very rosy and it is extremely likely that the landlords will be upheld in their objection and he will at long last have to give up possession. It seems to me to be not unreasonable for a tenant in those circumstances to say: `Well, I must secure my way of retreat. I must make sure: I must preserve the good will of these premises, and I must give continuity of employment to my staff. I cannot risk staying on here and being suddenly turned out. I am going to take some other premises, to which I will transfer temporarily—possibly for ever, but possibly only temporarily—my staff and my stock.' I interject here to say that as I understand it that is precisely the position that this new clause is intended to provide for and allow to happen. I go on with the quotation: 'Those premises '"— that is the new ones— 'are admittedly not as nice as the ones from which I am being turned out. If I succeed, as I hope, in this appeal, I will go back. Of course, if I fail, I cannot go back and I must go on in the new premises.' I think that on those facts"— the facts are that the tenant went— I would be very loth to hold that the physical arrangement of occupation disentitled or deprived the tenant of his rights under the Act, and a fortiori I think that would be so if he left a quantity of stock on the premises. Mr. Justice Cross says that in those circumstances if the tenant actually went altogether, and even more so if he left his stock, in both cases with the intention of returning if he got the new tenancy from the Court of Appeal, then he would for the purposes of the old law, under the existing 1954 Act as it stands, still be in occupation. I do not think that the definition of "occupation" or "sufficient occupation" has been clarified for the purposes of this legislation.

If Mr. Justice Cross is right—and I have the greatest possible hesitation in suggesting anything to the contrary—then there is no need for this because the sort of situation that is being envisaged—where the tenant wants, to safeguard his business, to find a "bolt-hole", an alternative premises to which to go in case he loses his application in the county court or on appeal—is already covered. He does not lose his rights, and the courts have already said so. In those circumstances, and in the light of the fact that the noble and learned Lord himself said to me that he did not think this would be of very wide application, is it not merely going to complicate the issue? The law has been sorted out, at any rate in the court of first instance; and I should have thought that that decision of the Chancery Division was probably satisfactory and all that anybody sought to achieve in putting in Clause 9 of this Bill. I would therefore ask the noble and learned Lord to consider whether this cannot be left out altogether, because it does not do what the Law Commission suggested should be done.

THE LORD CHANCELLOR

With respect, I should have thought that it did. The Law Commission's Report was made after seeing the two Caplan cases and referring to them, and they then consider what the various alternatives are. They say: It is unreasonable, we think, to expect a business tenant to wait in effect until the last three months of his current tenancy before he looks for other premises, and unrealistic to suppose that he will necessarily find suitable accommodation in that time. On the other hand, if at the date of the hearing he has in reality moved his business to new premises, he should not be entitled to a new tenancy which in all probability he would assign immediately. We do not think, however, that it would be appropriate to introduce a subjective test in respect of the tenant's intentions in the event of a new tenancy being granted. Nor do we think it would be a satisfactory solution of the difficulty if, as has been suggested, the current tenancy were to be continued for six months instead of three months after final disposal of the application; for where there is no difficulty in finding new premises, the tenant would normally wish to move as soon as possible, and it would be onerous upon him if the tenancy were continued for another six months. Alternatively, it has been suggested, the court could be given power to extend the period in section 64; but we think it inadvisable to introduce into the provisions of the Act relating to time any element of uncertainty. We consider that the Act should specify what conditions must be satisfied in respect of occupation; and those conditions should be that the tenant is in occupation of the premises for the purpose of his business at the time of the order as well as at the time of the application, the intermediate period being irrelevant. That is precisely what the clause does. I do not know whether it will apply in many cases. One can see that it is not easy to provide the right solution which will achieve the right result in what may be a very wide variety of circumstances. I am certainly willing to consider it again. The clause really does exactly what the Law Commission recommend. Whether there should be some further definition of what "occupation" means is of course another matter, and certainly I am quite prepared to consider that.

VISCOUNT COLVILLE OF CULROSS

Before we leave this matter, may I make this suggestion to the noble and learned Lord? He read out this sentence: We do not think, however, that it would be appropriate to introduce a subjective test in respect of the tenant's intentions …". It is not a question of introducing it; it is here already. It is quite inherent, I think, in the judgment in the second Caplan v. Caplan case that the intention of the tenant to come back, whether or not he leaves his stock—the circumstances in which he thought he had better play safe and go to the other place, at any rate on a temporary basis—is exactly what is intended to go to the question of occupation. That is what the Law Commission say should not happen. Therefore it seems to me that, very far from making it more plain, we have a Report here which throws doubt upon the appropriateness of the subjective test, but simply uses in the new section of the Act the word "occupation", which must be defined, presumably, in the terms that the court has already decided "occupation" should be defined. Therefore, I think that confusion is going to be worse confounded, and. I should be very grateful if the noble and learned Lord would look at that point again.

Clause 9 agreed to.

3.55 p.m.

VISCOUNT COLVILLE OF CULROSS moved Amendment No. 5: After Clause 9 insert the following new clause:

Saving for members of a group of Companies for the purposes of section 30(2)

('. After subsection (3) of section 42 of the Act of 1954 there shall be inserted the following subsection:— (4) The transmission of the landlord's interest from one member of a group to another member shall not, for the purposes of subsection (2) of section 30 of this Act, be taken to be the purchase or creation of that interest."')

The noble Viscount said: This is a point which I think bears short consideration. Your Lordships will see that in Section 42 of the Act of 1954—and again I would refer your Lordships to my invaluable Keeling Schedule, as I hope your Lordships will find it to be, where I set out that clause and there is no necessity to look at any other clause—there are various provisions dealing with groups of companies. Under subsection (2), where there is a tenancy of premises which is held by one member of a 3roup of companies, if the group is then re-organised arid the tenancy goes into the hands of another member of the group, that does not affect in any way the rights of the tenant under this particular protective set of provisions. In other words, they are really treated as the same tenant for the purposes of the 1954 Act, Part II.

The same does not apply if the landlord is a member of a group of companies. Although this may not by any means always have any great effect, it is relevant when one looks at Section 30(2), which says: The landlord shall not he entitled so oppose an application on the ground specified in paragraph (g)"— which is that he wants it for himself or partly for himself—if, briefly, he has acquired the property within the last live years. As I understand the situation, if there were a group of companies who owned properties which were let to business tenants, and the group of companies wished to re-organise themselves in a perfectly proper way, which had nothing whatever to do with this legislation, it could be that they would, for the sake of some internal efficiency or some matter of that sort, wish to transfer the freehold of these let business premises from one company to another; but if they did not get the protection with which my Amendment provides them they would, by doing that, I think, under subsection (2) of Section 30, deprive themselves of certain rights which they would otherwise have under Section 30(1)(g).

I can see no possible object in distinguishing between groups of companies as landlords and groups of companies as tenants for this purpose. It would seem to me to make for flexibility of business without in any way harming the interest of the tenant in trying to oppose an application to get him out on the ground that the landlord wished to occupy the premises for himself, if the group of companies were to be considered as one, both when it is landlord and when it is tenant. It is for that purpose that I put down this Amendment, which I hope will commend itself to the Committee as being pure common sense and doing no harm to anyone. I beg to move.

THE LORD CHANCELLOR

This is a perfectly good point, which had already been reported to the Law Commission and which they are in fact considering. I will not re-state the point because the noble Viscount has explained it with his usual clarity. It is simply a question of getting the Amendment right. I am told that in some respects his Amendment is defective, but if he will withdraw it I have no doubt that we can agree an Amendment for a later stage of the Bill.

VISCOUNT COLVILLE OF CULROSS

I am very much obliged to the noble and learned Lord. His reply is a surprise to me, and an agreeable one. In the meantime, I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clauses 10 to 12 agreed to.

VISCOUNT COLVILLE OF CULROSS moved Amendment No. 6: After Clause 12 insert the following new clause:

Amendment of Part II of Landlord and Tenant Act 1954

". In accordance with the provisions of this Part of this Act, Part II of the Landlord and Tenant Act 1954, as respects cases to which it applies as amended by this Part of tris Act, shall have effect as it is set out in Schedule (Part II of the Landlord and Tenant Act 1954 Reprinted with Amendments) to this Act with the Amendments made by the Agriculture Act 1958, the Finance Act 1959, the Rent Act 1968 and this Part of this Act (and the omission of repealed provisions)."

The noble Viscount said: This Amendment goes with a truly fabulous piece of printing which stands in my name as Amendment No. 11. It was a subject which was discussed on Second Reading, and I think I had certain support in the House for the view that, with the number of Amendments that are likely to be, or indeed will have been, made by this Bill to Part II of the Landlord and Tenant Act—and now we are promised two more —there would be something to be said for reprinting the whole of that Part of the Act as it is amended.

To this, certain objections have been taken because Part II is not entirely self-contained since some other Parts of that Act have to be read with it. If after this Bill is passed one wanted to look up to see what the law is going to be, or is, at that time, as I understand it would be necessary to refer to the Bill and the Law Commission's Report because that is the only place where the text is set out in full. One might want the Halsbury amended texts, because there have been those other Amendments in the Rent Act, in the Finance Act 1959 and in the Agriculture Act 1958—although that would probably be in the Law Commission Report. You would also want the old 1954 Act, because the Law Commission's Keeling Schedule reprints only those sections of the 1954 Act which have been amended. As I have already taken the opportunity to point out to the Committee, when one is considering this matter even in this House on this short Committee stage, one wants to refer to parts of the Act which are not printed anywhere except in my Schedule.

It is not only Members of this Committee who have been good enough to support me; I have had some support in a letter from the Law Society, who say that if it is reprinted in this way, with all the Amendments which have been made since 1954, it will be an advantage to practitioners as well. They are the people who will want to use this a great deal. But they are not by any means the only people, because as was said, I think, on the Second Reading debate, one of the great merits of the 1954 Act has been that it has worked so well that a lot of cases have never had to be disputed at all but have simply been settled between landlords and tenants, with the advice of their valuers on whatever the new rent ought to be. I do not believe that most businessmen are in possession of large quantities of up-to-date legal text books on the law of landlord and tenant; I do not believe they have the two volumes of Woodfall, or Mr. Justice Megarry's book. I do not think they usually line their bookshelves even with the annual Halsbury Statutes, let alone the "noter-up" in which the amended texts occur.

I should have thought that it really was the duty of Parliament, when we are making major Amendments to an extremely widely used piece of legislation, that rather than leave it to the admirable work of public enterprise, we should ourselves include a Schedule in the Bill so that from the moment it comes into force —before the text books come out but still useful thereafter—we have the whole text set out as amended. Then people can see what we are doing. Surely they will then say that Parliament is at least taking a little trouble to try to make the law comprehensible to the man in the street and available to him, without having to go into a library or purchase extremely expensive text books, to have explained to him in a form which he can understand it, the text alone, let alone what it means.

Here it is printed, and I hope that the Committee will consider it a good thing to put it into the Bill. My introductory clause is drawn from this source and from that. It may or may not be the right way to introduce a Keeling Schedule, but I hope that it will serve its purpose. I would very much commend to the Committee this method of dealing with the matter, particularly in view of the fact that the noble and learned Lord the Lord Chancellor is about to do the same for his Amendment which is next on the Marshalled List. I beg to move.

THE LORD CHANCELLOR

This is frankly a point which I should have liked to have more time to consider, because as the noble Viscount's Schedule consists of about 18 pages, naturally it took the printers some time to produce and it was not available until this morning. I have been in Cabinet all the morning and then at certain other meetings which started at 1.45 p.m., so I have not had much time to think about it. I am reluctant to oppose any Keeling Schedule because I am a great Keeling Schedule enthusiast. However. I think I must report what I am told about this.

It is, of course, very long, and the relevant sections of the 1954 Act are already set out with the amendments recommended by the Law Commission in Appendix 2 to their Report. It is true that a few further alterations have been made to their recommendations but Members of the House should have no difficulty in taking account of this. The only justification for the Schedule would therefore be to assist the professsions after the Bill is enacted. But Lord Colville's Schedule is likely to do more harm than good. Part II of the 1954 Act is not self-contained, and of course it is only Part II which he is setting out in the Keeling Schedule. The provisions governing chains of landlords of business premises, which are important to an understanding of Clause 4 of the Bill, and even more so of the noble Viscount's proposed Amendment No, 2, are in the Schedule 6.

The provisions concerning jurisdiction and particularly those relating to interim continuation of tenancies are in Part IV. Without the latter the scope and effect of Clause 3 is hardly intelligible. Provisions for compensation for possession obtained by misrepresentation, numerous special provisions concerning the rights of Government Departments as landlords or tenants and some definitions of terms used in Part II all appear in Part IV. It would be doing the profession a disservice if, through the reprinting oil. Part II as amended, any members were misled into believing that the Schedule contained all the law relevant to business tenancies. The wording of the Amendment, which says that Part II of the Act as respects the cases to which it applies shall have effect as set out in the Schedule, is particularly prone to mislead in this way. It would not even be satisfactory to schedule Parts II and IV of the 1954 Act because Part IV also contains many provisions concerning Part I and ought not to be divorced from that Part.

It is also questionable whether as a matter of general policy large parts of, or whole Acts, should be scheduled to amending legislation. The publication of amended Acts is best done by way of consolidating Acts. It is a matter for speculation how far the professions rely on the texts of Statutes in a complex field like business tenancies where no reliable conclusions can be drawn without reference to case law interpretations. Probably practitioners rely far more on text books. The scheduling of amended Acts in Keeling Schedules would also set an ominous precedent. The actual volume of Statutes last year already reached an all time record in both size and cost (over 2,500 pages, costing £11 10s. 0d.). It is at least arguable that many purchasers of the Statutes who may not be particularly concerned with the 1954 Act would prefer legislation confined to essentials.

Perhaps the noble Viscount will take all that into account. As I have said, I have had little time to think about it. I have always conceived that the primary purpose of a Keeling Schedule is to help the legislators because then, instead of having to look backwards and forwards in existing Acts to see exactly what has been left out and what has been put in, they have only to look at the Schedule where they see that the things that have been put in appear in bold type and the position is plain.

In drafting a Keeling Schedule, I have never yet persuaded the draftsmen—and I have never really understood why—to put in italics what has been left out. They take strong exception to that, although I think it would be an improvement. Its main purpose is to make it easier for Members of Parliament so that they do not have to look backwards and forwards between the three existing Acts and the present Bill in order to see exactly what the effect is of leaving out certain words and putting in others. In a sense we hardly need that here because of the Report of the Law Commission and because of the Schedule already contained in the Law Commission's Report; although when it comes to the rewriting of Section 84 in the Amendment which I am coming to, it seemed to me that a Keeling Schedule would be of assistance. As I have said, I am somewhat reluctant to oppose any Keeling Schedule, but I daresay the noble Viscount would like to consider the points to which I have referred. I should like further time to think about it myself, if he would withdraw his Amendment now.

VISCOUNT COLVILLE OF CULROSS

Of course I do not want to rush the noble and learned Lord in any way, and I will concede that there is something in what he says about increasing the size of the Statute Book. On the whole I do not think my Party have been responsible for that over the last year or so, but nevertheless perhaps it is better to argue about that on another occasion. Where I think the noble and learned Lord, with the greatest respect to him, is quite wrong is in saying that Keeling Schedules are of use only, or mainly, to legislators.

During the last Session the Town and Country Planning Act was widely amended, and among the things that were done was a wide amendment of the purchase notice procedure, which is highly technical and exceedingly difficult to follow. A certain amount of rewriting was done, and I followed it when I was dealing with the Bill on Third Reading in this House. Since then I have had to consider this professionally. I think it has now come out, but for quite a long time there was no source in which the ordinary practitioner who had to advise clients could find a proper reprint of this material. It just was not available. One had the new Act, which was not at that stage even annotated, and then one had to put it together in one's encyclopedia or reference book, with the bits of the old Act, and one scratched this out and put other bits in for reference, and added little bits on slips of paper, which were stuck on and flapped over the top. By the time all this was done and one had put it all in the wrong place and covered oneself with glue one was much further in the dark than one was in the first place. If you have a Keeling Schedule you do not have any of that. The Bill is passed into law; there printed with it is the law as it now stands.

I entirely accept that if there is something wrong with my reference to the cases to which this Part of the 1954 Act, as amended by this Part of the Bill, in the substantive clause, applies, that can be changed. I took that from one of the noble and learned Lord's own Acts passed in 1966, but perhaps it is not suitable here. It is not simply for Members of this House and another place, or indeed for the practitioners, that this is brought in: it is introduced for members of the public who want to see this up to date. You only want two books, the 1954 Act (because there has not been much change to the rest of that) and my Keeling Schedule, and you have then got it all together. It would require a lot of to-ing and fro-ing and fitting the clauses of this Bill into the 1954 Act otherwise to get any clear picture.

I hope that the noble and learned Lord will take this back and add the power of his eloquence to what has been said already, in the hope that perhaps after we have left out one set of parentheses and two little figures which were photographed from the Law Commission's Report which I did not mean to be included here, it will be possible to have this in the Bill. Is that an information which the noble and learned Lord wishes to pursue at this stage?

THE LORD CHANCELLOR

There may be a case for an extra-statutory publication. if the 1954 Act is amended when the Bill has been passed, it can be considered for discussion with the Stationery Office.

LORD WILBERFORCE

May I add one small point to what the noble Viscount said, as one who supported the Keeling Amendment on Second Reading? I think one has also to take into account who has benefited by this type of schedule, and it is the courts, and particularly the county courts. When one is faced with a question of construction one cannot face a judge with a textbook. It greatly helps those who have to construe these not very simple enactments if all they have to do is turn up a consolidated document like this.

Of course there is some validity in the point that Part II is not self-contained and one has to look out for other references, definitions or clauses in the rest of the Act, but it is a very minor technical problem which can easily be met, as the noble and learned Lord has met it in relation to Section 84, by saying that it takes effect subject to any other enactments or anything else in this Act which has to do with the matter. To say that is not to diminish in any way the usefulness of a self-contained Part II. You take out the 1954 volume of the Statutes and look at the other parts of the Act so far as they bear on the matter. I hope the noble and learned Lord will look at it again.

THE LORD CHANCELLOR

I will certainly.

VISCOUNT COLVILLE OF CULROSS

At the risk, therefore, of having to ask the printer to print this Amendment again for the Report stage, I temporarily beg leave to withdraw it.

Amendment, by leave, withdrawn.

Clauses 13 to 21 agreed to.

Clause 22 [Compensation in certain cases for loss due to undisclosed lane charges]:

VISCOUNT COLVILLE OF CULROSS moved Amendment No. 7: Page 11, line 28, after ("charge") insert ("and had previously searched in the relevant register or index in respect of the relevant table").

The noble and learned Viscount said: On account of the execrable nature of my handwriting, the last word in this Amendment should not be "table" so much as "title", but I do not think it very much matters, because I merely wanted an opportunity to invoke from the noble and learned Lord the Lord Chancellor an explanation of the point I made about this matter. It is, of course, a different subject altogether. It relates to compensation for those who find, among other things, that because the search for a root of title is now to be statutorily shorter, there may be some charge on the land they buy of which they did not know anything and could not reasonably be expected to know anything, because, also, it was not under the right name in the register. That relates to the way in which the registers are drawn up. not by reference to the land concerned but by reference to the name of the person who put the charge down.

I raised the point that if one was going to get compensation one must have carried out a proper search. It was only an invitation to people to be slovenly in relation to conveyancing if they were to get compensation for something that turned up which they should have found but did not because they did not take the trouble. The noble Lord says that the matter is dealt with by the provisions of Clause 22(i)(c), but I thought it was so important that it ought to be explained for the benefit of practitioners and others who might come across it and might like to consider it while the Bill was before Parliament. I therefore put down an Amendment to give the noble and learned Lord a chance to explain it in public as he has done to me in private. I beg to move.

THE LORD CHANCELLOR

This matter is already covered and the Amendment is unnecessary. As the clause stands, no claim can be made in respect of a charge registered against an estate owner who is a party to any transaction or otherwise connected with any event appearing in the title documents (subsection (1)(c)). It follows that a land charge which would be discovered on a search against the name of any such estate owner cannot in any event give rise to a claim under the clause. It is therefore immaterial whether such a charge has or has not in fact been discovered. The clause gives compensation only in respect of charges which such a search would not reveal. But a purchaser wishing to search the register would not have the means to know about the names of any other persons. He could search the register only by reference to the names appearing from the relevant title documents. There is no reason, therefore, to think that an express obligation to search the register of the kind suggested by the Amendment would lead to the discovery of any land charge in respect of which claim can be made under the clause. If for some extraneous reasons the purchaser in fact has knowledge of the existence of other estate owners (against whom he could search), then he is likely to have knowledge also of the transaction in which they were concerned and accordingly be disqualified from claiming in respect of that transaction by his actual knowledge under subsection (1)(b). The Amendment would add nothing of value to what is already in the clause.

There is also a serious technical objection to the Amendment. The clause applies to compulsory acquisitions by whatever procedure (subsection (9)(c)). Some of these, like acquisitions by a general vesting declaration under the Land Commission Act, take place without any investigation of title. This is clearly contemplated by subsection (10)(b) which refers to the title which a purchaser would hypothetically have been entitled to require. An obligation to investigate title and make searches would make it impossible for acquiring authorities using these expedited acquisition processes ever to make a claim. I hope that with that explanation the noble Viscount will be content.

VISCOUNT COLVILLE OF CULROSS

Yes. I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clause 22 agreed to.

Clauses 23 and 24 agreed to.

4.19 p.m.

THE LORD CHANCELLOR moved Amendment No. 8:

After Clause 24 insert the following new clause:

    cc580-600
  1. PART IV RESTRICTIVE COVENANTS 8,100 words
    2. cc600-4
  2. SCHEDULE 1,611 words