§ 7.16 p.m.
§ LORD STOW HILLMy Lords, I beg to move that this Report be now received.
§ Moved, That the Report be now received.—(Lord Stow Hill.)
§ On Question, Motion agreed to.
§ Clause 1 [Duty to build dwellings properly]:
§ LORD STOW HILLMy Lords, this is purely a drafting Amendment in order to bring that particular part of Clause 1 to which it relates into consonance with the earlier parts of that clause. I beg to move.
§
Amendment moved—
Page 2, line 27, leave out ("completion") and insert ("provision").—(Lord Stow Hill.)
§ On Question, Amendment agreed to.
§ Clause 2 [Cases excluded from the remedy under section 1]:
§
LORD STOW HILL moved Amendment No. 2:
Page 2, line 32, leave out ("erection") and insert ("provision").
§ The noble and learned Lord said: My Lords, I beg to move Amendment No. 2. When we were discussing this Bill on Committee it was pointed out by the noble Earl, Lord Kinnoull, that there was a difference in the wording of the opening part of Clause 2 which seemed not to accord with the wording of Clause 1. In answer, I offered the explanation that really the wording of Clause 2 covered protection of the kind that was given by the National House building Registration Council's scheme. On further reflection, it has occurred to those responsible for the Bill and to me that it would be desirable to widen that wording in Clause 2 in order to cover schemes which might be approved hereafter which might be outside the scope of the existing word "erection". The word "provision" is wider in scope and accords with the similar word used in Clause 1. I beg to move.
§ THE EARL OF KINNOULLMy Lords, may I shortly thank the noble and learned Lord for having looked at this point 490 again, and his advisers, and for proposing this Amendment.
§ On Question, Amendment agreed to.
§ 7.20 p.m.
§
THE EARL OF KINNOULL moved Amendment No. 3:
Page 3, line 33, at end insert:
("(7) Where an interest in a dwelling is compulsorily acquired—
§ The noble Earl said: My Lords, I beg to move Amendment No. 3 on the Marshalled List. The House may recall that the question of compulsory purchase order and the effect it would have on this Bill was raised in Committee. It was pointed out then that the procedure of a compulsory purchase order was unlike that of any other normal procedures of a contract of sale, particularly as you were faced with an unwilling vendor as against a willing vendor under normal circumstances. For that reason it was considered that the compulsory purchase order qualified as a special case. It was also argued that the character of the sale under compulsory purchase procedures was entirely different owing to the fact that the purchaser or acquiring body took over no liabilities from the vendor, particularly, as an example, restrictive covenants.
§ It was also suggested that possibly eight cases out of ten of compulsory purchase orders came usually for the demolition of a property for a road widening scheme or some other purpose. In this one is only dealing with a small minority of cases of houses being held by the acquiring authority after purchase and perhaps let on a temporary basis. Indeed, I believe the acquiring authority would have quite a job to establish and justify the use of a compulsory purchase order in those circumstances. So we are dealing under compulsory purchase orders in this Bill with a very few cases 491 —the special nature of the unwilling vendor. It was suggested in Committee that such vendors should be entitled to be excluded under Clause 2 of the Bill, along with certain other cases. The noble Lord, Lord Stow Hill, with his usual persuasion, expressed great sympathy with the Amendment then moved, but came down nevertheless against it after, he said, having followed the advice of his advisers. I understand that the primary reason why he came down against it was that he saw no reason why the general duty under Clause 1 should be an exception in the case of an acquiring body. After all, the house being built was built not only for the lifetime of the vendor but would be in use for subsequent purchasers.
§ The noble Lord also put forward the view that in cases of compulsory purchase the vendors receive full compensation from the acquiring body, which would possibly cover any cost of indemnity. On reflection I believe there are many good reasons to ask the noble Lord to reconsider this matter. In particular one has the example of the owner builder and the difficulty he may have in getting an insurance company to accept the indemnity insurance. In addition to that there seems to be no certainty that a district valuer will be able to evaluate with any accuracy the loss caused by the indemnity, but there is of course much greater certainty that the district valuer could judge the value of the house in its present condition.
§ My Lords, again I submit that the compulsory purchase order is a special procedure which only in limited cases deserves special attention. I have done my best, with the assistance of my advisers, to see that the Amendment is technically sound, but I appreciate that the noble Lord has not had long to examine it. Subsection (7)(a) contains a general exclusion of all vendors from claims under Clause 1 from acquiring bodies. However it is only from the acquiring bodies, and I believe the intention would be that any vendor would not subsequently be free of claims against tenants of the acquiring body or, for that matter, any new purchaser. Therefore it has only a limited scope.
492§ Under subsection (7)(b) full exclusion of liability would be granted to owner builders against the acquiring authority in any subsequent claims. The noble Lord thought that previous Amendments on the Committee stage went rather wide, and I certainly agree with that; but I hope he will accept that this Amendment has a limited scope and gets to the core of the problem as one sees it. I beg to move.
§ LORD DOUGLAS OF BARLOCHMy Lords, I should like to support this Amendment because I think it is justified. This is a Bill which makes an inroad upon the ancient principle of caveat emptor—and quite justifiably—because buying a house is a difficult transaction for somebody who is not highly skilled, and not all purchasers of houses have expert advice. But in the case where a property is acquired compulsorily by a public authority we all know that those authorities have very skilled advice and that they do not pay more than the property is actually worth in its existing condition. It would therefore, I submit, be highly unfair if, after the property had been acquired at a price which was perfectly satisfactory to the acquiring authority, there should then be a recourse against the vendor under this Bill. I am sure that was not really intended and I hope that my noble and learned friend will accept the Amendment.
§ 7.27 p.m.
§ LORD STOW HILLMy Lords, as the sponsor of this Bill I should like, if I may, to express my personal gratitude to the noble Earl for having given such a great deal of thought to this particular aspect of the Bill. When we were discussing it in Committee, as he has reminded us, there was obviously a considerable amount of sympathy for the purpose behind the Amendment that he then put down. I shared that sympathy, and I know that the noble and learned Lord who sits on the Woolsack equally shared it. As the noble Earl has reminded us, when I was answering his case on that Amendment I submitted that perhaps it went rather too wide and indicated that in my view the argument on the whole was weightier against the Amendment than in favour of it. But I intimated that view with some hesitation and I think it was the general desire of the Committee 493 that we should revert to the matter on Report.
The noble Earl has now tabled a different Amendment, indicating a different approach, and his present Amendment, as he has pointed out, is much narrower in scope. I saw it for the first time this morning and have been studying it since, and it is possible that I have missed some of the implications of this rather complicated Amendment. If I have, I hope your Lordships will feel that it will not be unreasonable for me to revert to it on Third Reading. As it is, however, giving it the best consideration that I can, I feel that the advice I ought to offer to the House is most certainly to accept it. Therefore I give that advice to your Lordships. Once again I should like to express my personal gratitude to the noble Earl for all the trouble he has taken to get this part of the Bill right.
§ THE LORD CHANCELLORMy Lords, before anything more is said perhaps I ought to make plain where the Government stand on this Amendment. As the House will remember, I intervened at the Committee stage to indicate that a question of policy was involved and that my noble friend Lord Kinnoull should perhaps be given another chance to think this subject out. What excited my sympathy on that occasion was not merely the thinness of the House (which I am afraid has been to some extent repeated on this occasion) but also the fact that this Bill, which carries with it full Government support—and I have always expressed my gratitude to the noble Lord, Lord Stow Hill, for becoming its godfather—is an important Bill from the point of view of consumer protection. But the object is to protect the individual consumer of this kind of service, rather than to protect acquiring local authorities who acquire property by compulsory purchase. The first part of the Amendment would undoubtedly achieve the object of protecting the consumer fully without extending the protection to the local authority, and therefore it struck me that it would achieve an excellent purpose if it was within the desire of the House to pass an Amendment of this kind. I cannot give him full Government support, because it would take a great deal longer than I have been able to have to have the necessary consultations, but if it is the will of the House to 494 pass an Amendment of this kind, I certainly do not wish to express any hostility to it. I would rather play the part of the honest broker (which I attempted to play at the Committee stage) and leave it at that. And in view of the advice given to the House by the noble Lord, Lord Stow Hill, and his noble friend who spoke immediately before him, it may be that the House will wish to accept this Amendment, although as I have said the Government must remain entirely neutral upon it.
§ THE EARL OF KINNOULLMy Lords, may I thank the noble and learned Lord for his words of guidance? I also thank the noble Lord, Lord Douglas of Barloch, for his support. May I finally thank the noble Lord, Lord Stow Hill, for his qualified acceptance? I fully understand that he may wish to have a further look at the wording.
§ On Question, Amendment agreed to.
§ Clause 6 [Supplement]:
§
LORD STOW HILL moved Amendment No. 4:
Page 5, line 42, leave out from ("provision") to end of line 43 and insert—
("(3) Any tern) of an agreement which purports to exclude or restrict, or has the effect of excluding or restricting, the operation of any of the provisions of this Act, or any liability arising by virtue of any such provision, shall be void.")
§ The noble Lord said: My Lords, I beg to move this Amendment, which also deals with a matter that was raised by the noble Earl, Lord Kinnoull, at the Committee stage of this Bill. He pointed out, in an argument which I thought, if I may say so, was very effective, that the provision against contracting out which now finds its place in Clause 6 of the Bill was perhaps not completely effective. He indicated that in his view its operation might be circumvented by an indemnity being taken from the person to whom the duty was owed. I then invited the Committee not to accept the noble Earl's Amendment, and my reason for doing so was that I felt it would be a pity if indemnity in general were made unlawful. I had in mind, for example, the kind of situation in which a builder gave an indemnity to a sub-contractor. An indemnity of that sort, I felt, could hardly be said to be against public policy or 495 against the spirit of the Bill. Equally, insurance companies, after all, provide indemnity and it might interfere with the free taking out of policies to deal with this sort of risk. But I did indicate that it would be my intention to give further careful thought to the point that the noble Earl had raised, and I, together with those who advised me, have done so. I hope that we have now come forward with a new Amendment which achieves the objective that I believe the whole Committee would have desired to achieve and which the noble Earl had in mind.
§ My Lords, what this Amendment does is to introduce wording to the effect that there must be no agreement which has the effect of excluding the operation of any of the provisions of the Bill. Those words are far wider in scope, so I would submit to this House, than the words which at present appear in the Bill, and after giving it the best consideration that I and those who advise me have been able to give it we have come to the view that it would be interpreted by learned judges—although of course we cannot bind them in any way—in such a way as to prevent any of the sort of devices that the noble Earl had in mind and which might be resorted to in order to frustrate the operation of the Bill. That is the object of this Amendment. I hope that it is a satisfactory one and that it may commend itself to your Lordships. I beg to move.
§ THE EARL OF KINNOULLMy Lords, I would just briefly thank the noble Lord for his kind reference to myself, and also for looking at this matter again and for producing this Amendment, which I fully support. I am most grateful to the noble Lord.
§ On Question, Amendment agreed to.
EARL FERRERSMy Lords, I beg to move that the House do adjourn during pleasure until fifteen minutes before eight o'clock.
§ [The Sitting was suspended at 7.35 p.m. and resumed at 7.45 p.m.]