HL Deb 08 July 1975 vol 362 cc725-8

3.14 p.m.

Report of Amendments received.

Clause 1 [Local land charges]:

The LORD CHANCELLOR moved Amendment No. 1: Page 1, line 10, after ("local authority") insert ("water authority or new town development corporation")

The noble and learned Lord said: My Lords, this Amendment provides that financial charges acquired by water authorities or New Town Development Corporations through the exercise of their functions under the Public Health Acts are to be local land charges. Clause 1(1)(a) of the Bill reproduces the existing law whereby financial charges acquired by local authorities under the Public Health Acts are local land charges. But certain sewerage functions of local authorities under these Acts have been transferred to water authorities and to New Town Development Corporations. It is plainly desirable that these Public Health Acts charges, which could previously be imposed only by local authorities, and can now be imposed only by water authorities or New Town Development Corporations, should remain local land charges so that they are registrable and brought to the notice of intending purchasers. The Amendment achieves this result. My Lords, I beg to move.

On Question, Amendment agreed to.

The LORD CHANCELLOR moved Amendment No. 2: Page 1, line 13, after ("acquired") insert ("by a local authority").

The noble and learned Lord said: My Lords, in relation to this and the other Amendments of a very technical character which I am moving today, I should like to thank the Law Society for its interest. This second Amendment, which is to preserve the substance of the existing law, ensures that financial local land charges acquired under Statutes similar to the Public Health Acts, or the Highways Act 1971, are confined to charges acquired by local authorities and do not extend to a wide variety of charges which are, or may become, capable of being acquired by unspecified bodies or persons. My Lords, I beg to move.

On Question, Amendment agreed to.

Clause 10 [Compensation for non-registration or defective official search certificate]:

The LORD CHANCELLOR moved Amendment No. 3: Page 7, line 7, after ("shall") insert ("(subject to section 11(1) below)").

The noble and learned Lord said: My Lords, this Amendment, which is for clarification—in so far as clarification is possible in this highly technical field of conveyancing—points out that the right of a purchaser to compensation under Clause 10 is qualified by the special provisions of Clause 11(1), where the interest is mortgaged. Under Clause 10, a purchaser who suffers loss from an undisclosed local land charge is entitled to compensation, but under Clause 11(1) where the purchaser's interest is mortgaged the mortgagee may make the claim in respect of the mortgagor's interest and cannot claim in respect of his own interest. The provision in Clause 10 that a purchaser is entitled to compensation is, therefore, qualified by the special provisions of Clause 11(1). My Lords, I beg to move.

On Question, Amendment agreed to.

The LORD CHANCELLOR moved Amendment No. 4: Page 7, line 26, after ("lessee") insert ("or mortgagee").

The noble and learned Lord said: My Lords, this Amendment ensures that a mortgagee can qualify for the payment of compensation for loss resulting from an unregistered or undisclosed land charge. Clause 10 entitles a purchaser to compensation in these circumstances. The Amendment provides that in this context a purchaser includes a mortgagee. The Amendment is particularly directed to the case where the mortgage is taken out after a purchase and not for the purpose of financing it. In such a case the mortgagee will make his own search, and if a local land charge is undisclosed on that search the mortgagee may subsequently suffer loss as a result of the diminution of his own interest. He will then bring his claim within Clause 10. In the usual case where the mortgage is associated with the purchase, the search is made by the mortgagor and any loss resulting from an undisclosed charge will affect his interest. In these circumstances the mortgagee, although a purchaser, will only be able to make a claim under Clause 11 in right of the mortgagor's interest. My Lords, I beg to move.

On Question, Amendment agreed to.

3.20 p.m.

The Lord Chancellor moved Amendments Nos. 5 and 6:

Page 7, line 31, after ("acquisition,") insert ("other than a qualified liability contract,") Page 7, line 37, at end insert ("and for the purposes of subparagraph (i) above, a qualified liability contract is a contract containing a term making the liability of the purchaser dependent upon, or avoidable by reference to, the outcome of a search for local land charges affecting the land to be purchased.")

The noble and learned Lord said: My Lords, with the leave of the House I should like to move Amendments Nos. 5 and 6 together. These Amendments enable compensation to be claimed under Clause 10 where a contract is expressed to be conditional upon the outcome of a local search. Clause 10 gives the purchaser the right to compensation for loss resulting from an undisclosed local land charge, provided that he had a search of the register made before contract, or, if there was no contract, before he acquired his interest. But a search before contract is an inappropriate requirement where the contract is itself conditional on the result of the search. The first Amendment accordingly excludes these conditional contracts from subsection (3)(b)(i); so that where such a contract is made the relevant time before which the search must be made is the time specified in subsection (3)(b)(ii); that is to say, when the interest was acquired. The second Amendment defines a qualified liability contract in the words which your Lordships will see in the terms of the Amendment. My Lords, I beg to move.

On Question, Amendments agreed to.

Clause 11 [Mortgages, trusts for sale and settled land.]:

The LORD CHANCELLOR moved Amendments Nos. 7 and 8:

Page 9, line 3, leave out ("an interest") and insert ("there appear to be grounds for a claim under section 10 above in respect of an interest that") line 4, leave out ("a claim may be made under section 10 above") and insert ("the claim may be made")

The noble and learned Lord said: My Lords, with the leave of the House I should like to move Amendment No. 8 together with Amendment No. 7. These Amendments are purely for clarification. They make it clear that the right of a mortgagee under the clause to claim compensation in respect of the purchaser's interest arises at the time when the loss is discovered; that is to say, when the previously undisclosed charge is revealed by enforcement of the charge or otherwise. My Lords, I beg to move.

On Question, Amendments agreed to.