HL Deb 27 June 1977 vol 384 cc950-9

5.41 p.m.

The LORD CHANCELLOR

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 NUGENT of GUILDFORD in the Chair.]

Clauses 1 to 3 agreed to.

Clause 4 [Application for apportionment]:

The LORD CHANCELLOR moved Amendment No. 1: Page 3, line 38, leave out subsection (4).

The noble and learned Lord said: In dealing with this Amendment it may be convenient for the Committee to discuss with it Amendments Nos. 2 to 10 which are linked with it. This is a technical matter arising from the Rentcharges Bill to which the House gave its approval on Second Reading. Under the provisions of Clause 4(1) and (4) of the Bill as they now stand, the owner of any land affected by a rentcharge which also affects land owned by other people can apply for an apportionment of his part of the rent-charge only if the rentcharge as a whole has already been equitably apportioned as between the other rent payers and himself. An equitable apportionment is defined in the Bill as any apportionment or exoneration of the rentcharge which is not binding on the rent owner. In effect, such an apportionment is a legally binding agreement between the rent payers under which they are required to pay specified contributions towards the total amount of the rent charge.

The fact that the apportionment is known as an equitable one does not mean that the amounts are equal. Indeed, often they are not. This is one of those traps into which one is likely to fall in this difficult field. The amount to be paid by a landowner under an equitable apportionment is usually found in the deeds of his property. It would be very rare for the deeds of a property not to show an apportioned amount to be paid by the property owner. Up to now the view has been taken that if such a case did arise, the Department of the Environment in administering the procedures under the Bill should not become involved in deciding the amount that ought to be paid by the various landowners concerned —and when we speak of landowners in this context we are speaking normally of the owners of the parcel of land on which their house is built. The Bill as it stands requires the draft order for an apportionment to be in line with the equitable arrangement. Indeed, hitherto it has been considered that in the absence of an equitable apportionment an intending applicant for an apportionment order ought first to make an equitable arrangement with his fellow rent payers as to the proportion of the rentcharge each of them should pay.

This view was the subject of a good deal of adverse criticism in another place, and indeed it has to be admitted that the likelihood of a landowner obtaining the agreement of others to pay a portion of the rentcharge which they have not hitherto been paying is very remote. In the absence of any such arrangement, the unfortunate landowner of his bit of the land who has been called upon by the rent owner to pay the whole of the rentcharge can take proceedings in the courts against his neighbours to get their contributions. From the point of view of the landowner concerned, an action of that kind is not a very attractive one. The expense he would incur would probably be out of proportion to the amount of the contributions which might be forthcoming from others, and, quite apart from this, action taken by him would not exactly encourage good neighbourly relations. The alternative is for the landowner to take no action, in which case he must continue to pay not only his own share of the rentcharge but what in effect ought to be the shares of the others, and he would have to do this for the remaining life of the rentcharge which could be anything up to 60 years bearing in mind curtailment in the present perpetuity provisions which are provided by Clause 3.

In all these circumstances, we think that although this sort of case may be rare, we ought nevertheless to provide for it and to amend the Bill to provide a procedure under which a rentpayer can apply for an apportionment even though an equitable apportionment does not exist. Under the Amendments, we propose that in cases where an application for an apportionment is made and an equitable apportionment does not exist, the Secretary of State will consider what the amount to be paid by the applicant should be and will include this in a draft order of apportionment.

The Bill currently provides for the draft order to be served only on the rentowner, but in the special cases covered by the Amendments copies of the draft order will also be served on all the owners of the land affected by the rentcharge. If he so wishes, the rentowner may in the usual way object to the order, and if the amount is £5 or less apply for it to be conditional upon redemption; but in the cases I have been describing, additionally an opportunity will be given to all the landowners concerned to make representations about the amount of the apportionment. When the Secretary of State has considered any objection or representations, he will decide whether to modify the draft order or to make it as it stands. When the order has been made, copies of it will be served on all the landowners concerned, who will, under the provisions of Clause 6, have the right, if they so wish, to appeal to the Lands Tribunal.

That is the general introduction to the Amendments, which I hope has been helpful, and, if it is convenient to the noble Baroness and to your Lordships to permit me to take this course, I will now deal briefly with each Amendment in turn. Amendment No. 1, which is to leave out subsection (4), removes the restrictive requirement that where a rentcharge affects land in more than one ownership an application for apportionment to the Secretary of State can be made only where there is already an equitable apportionment; that is to say, an apportionment of the rent payer's liability which is not binding on the rent owner.

Amendment No. 2 is consequential on that Amendment. Amendment No. 3 is consequential on Amendment No. 1. It is to leave out words which would preclude the Secretary of State from making an order apportioning an overriding rentcharge when no equitable apportionment already exists. Amendment No. 4 inserts new subsections (1A) and (1B), which set out the nature of the amount of the apportionment which must be specified in the Secretary of State's draft order. The substantive change made by the Amendment is contained in the new subsection (1A) (b), which deals with the case where there is no existing equitable apportionment. In such case it is for the Secretary of State to specify the amount which he considers appropriate.

Amendment No. 5 amends subsection (2) by providing that, in cases where there is no existing equitable apportionment, copies of the draft apportionment order are to be served on the applicant and on all the other rentpayers, in addition to the rent owner himself. All the rentpayers will thus have an opportunity to make representations about the apportioned amount which the Secretary of State proposes to attribute to the applicant's land. Amendment No. 6 is a drafting Amendment designed to make it clear that the right of a rent owner to object to a draft apportionment order arises after service of the draft order on him or his agent. Amendment No. 7 inserts a new subsection (3A) and a new subsection (3B), and provides that, in the case of an overriding rentcharge where there is no equitable apportionment the rentpayers, within a specified period, may make representations in writing about the amount of the apportionment specified in the Secretary of State's draft order.

Amendment No. 8, which substitutes a new subsection for subsection (5), makes consequential provisions requiring the Secretary of State, in the case of an overriding rentcharge where there is no equitable apportionment, to take into account representations made by the rent- payers. Amendment No. 9 is consequential on Amendment No. 8, and amends subsection (6) to insert appropriate references to the representations mentioned in Amendment No. 8. Finally, Amendment No. 10, which adds words to subsection (7), provides that, in the case of an overriding rentcharge where there is no equitable apportionment, copies of the apportionment order are to be served on the other rentpayers. I cannot claim that what I have said emerges, either to me or to your Lordships, with a blinding flash of clarity, but I fear it is the best that can do. I beg to move Amendment No. 1.

Baroness ELLES

We are very grateful to the noble and learned Lord for having shed what light he can on what is obviously a very murky subject. We on this side of the Committee certainly welcome these Amendments very much—I do not propose to deal with them in detail—as a vast improvement on the Bill as it stands, and we are particularly grateful that the Government took into account the arguments which were put forward in another place, and I think rather particularly forcibly by my honourable friend during the Committee stage there. As it stands, the Bill has the effect in subsection (4) of Clause 4 of making it impossible, where a rentcharge has not already been equitably apportioned and where the land is in more than one ownership, for anyone to apply for an apportionment.

It therefore seems that, if you are going to simplify procedures, that should be taken into account. In fact, as my honourable friend pointed out during the Committee stage in another place, when there has not already been any equitable apportionment would be just one of those sensible reasons for making an application. We therefore particularly welcome Amendment No. 1 and the consequential Amendments which follow. It is in fact also fair to say, I think, that it is precisely in cases of this kind where, even if there had been some kind of apportionment, it is very difficult to prove that there has been any agreement. So I reiterate that we welcome Amendments Nos. 1 to 10.

There is just one point I should like to raise, not to make any difficulties but just to make a comment. The noble and learned Lord referred to Amendment No. 4, the new subsection (1A)(b), and said that it is for the Secretary of State to insert in the draft order an amount of apportionment which he considers appropriate. Could the noble and learned Lord perhaps say who would be making that assessment as to the value? Would it in fact be the district valuer, or would it be the Department? As I understand it from the discussions which took place in another place, the problem is that there is some feeling that the district valuer will take anything up to 12 months to do this kind of job, that it is rather a lengthy job to undertake. If it is to be the district valuer, which I understand it might be, is there any way to see that this time-lag is reduced specifically? Because it would seem that, if you are going to try to apply for an equitable apportionment, you want to get the thing done as quickly as possible, and I think one should like to feel that the Department, under the guidance of the Secretary, would be able to demand an urgent procedure in this case. That is the only other point I wish to raise; and, again, I say we are grateful to the noble and learned Lord, both for his introduction and for the fact that the Government have seen fit to bring in these Amendments.

Lord FLETCHER

Perhaps I, too, may say how grateful I am to the noble and learned Lord the Lord Chancellor for having put down these Amendments, which he discussed with me. I agree entirely with what the noble Baroness has said: I think they provide very considerable improvements to the Bill. As she will remember, those of us who discussed the matter on Second Reading were anxious to make sure that the procedure for dealing with apportionments was made as simple and expeditious as possible, because one of the great objects of this part of the Bill was to remove some of the technical difficulties which exist under the present arrangements for apportionments, which lead to what we regard as unnecessary expense, not only on the part of the payers of rentcharges but also on the part of those who receive rentcharges. I am sure, therefore, that the whole Committee will welcome the steps which have been taken to ensure that those people who enjoy these rentcharges—and there are some people who do—should in future be able to procure apportionment in the simplest possible form.

The LORD CHANCELLOR

I am most grateful to the noble Baroness, Lady Elles, for her welcome to this Amendment. If I may say so, I am also grateful that the sponsor of this Bill arrived in the nick of time. I was beginning to wonder whether he was abandoning the by no means sinking ship, and I welcome him most warmly back to the task to which he so willingly and enthusiastically lent himself. The question raised by the noble Baroness, Lady Elles, was who was to do the work in relation to the valuation. It will, in fact, be the district valuer. I take the point that she has made that it ought not to take too long a time. The information I have is that 12 months is, indeed, a highly pessimistic figure and that it will take nothing like that amount of time. I will certainly draw the attention of the Secretary of State to the importance of there being no undue delay so that those concerned can be rid of this tiresome situation as soon as is reasonably practicable.

On Question, Amendment agreed to.

The LORD CHANCELLOR moved Amendment No. 2: Page 4, line 2, at end insert ("(if any)").

On Question, Amendment agreed to.

Clause 4, as amended, agreed to.

Clause 5 [Apportionment]:

The LORD CHANCELLOR moved Amendments Nos. 3 to 10:

Page 4, line 28, leave out from ("rentcharge") to end of line 30.

Page 4, line 30, at end insert— ("(1A) If the application is made under section 4(1) above, the amount specified in the draft order as being that part of the rentcharge apportioned to the applicant's land shall be—

  1. (a) the amount specified in the application as the amount equitably apportioned to that land; or
  2. (b) where no amount has been equitably apportioned to that land, such amount as the Secretary of State considers appropriate.
(1B) If the application is made uder section 4(2) above, the amounts specified in the draft order as apportioned between the parts of the applicant's land specified in the application shall be those proposed in the application.")

Page 4, line 33, at end insert ("and, in a case falling within subsection (1A)(b) above, on such persons as appear to him to be the owners of the land affected by the rentcharge")

Page 4, line 34, leave out from beginning to ("under") and insert— ("(3) After service of a draft order on the rent owner or his agent.")

Page 5, line 5, leave out from beginning to end of line 6 and insert— ("(3A) Where a draft order is served under subsection (2) above on a person who is the owner of any land affected by the rentcharge, that person may, before the expiry of the period of 21 days beginning with the date on which the draft order is served (or such longer period, not exceeding the period of 42 days beginning with that date, as the Secretary of State may in a particular case allow), make representations to the Secretary of State concerning the apportionment specified in the draft order. (3B) Any objection, application or representations under subsection (3) or (3A) above shall be made in writing.")

Page 5, line 11 leave out subsection (5) and insert— ("(5) The Secretary of State shall consider any objection duly made under subsection (3) above and any representations duly made under subsection (3A) above and, if he is satisfied that the draft order should be modified—

  1. (a) in the case of an objection, in order to preserve for the rent owner sufficient security for each apportioned part of the rentcharge, or
  2. (b) to take account of any such representations,
he shall make such modifications in the draft order as appear to him to be appropriate.")

Page 5, line 18, leave out paragraphs (a) and (b) and insert—

  1. ("(a) the relevant period has expired without any objection or representation having been duly made, or
  2. (b) an objection has, or any representations have, been duly made and the objection has, or, as the case may be, all the representations have, been considered by the Secretary of State,")

Page 5, line 35, at end insert ("and, in a case falling within subsection (1A)(b) above, on those other persons on whom copies of the draft order were served under subsection (2) above.")

On Question, Amendments agreed to.

Clause 5, as amended, agreed to.

Clause 6 [Appeal]:

The LORD CHANCELLOR moved Amendment No. 11:

Page 5, line 40, leave out subsection (1) and insert— ("(1) Where the applicant or the rent owner or, in a case falling within section 5(1A)(b) above, any other person who is the owner of any land affected by the rentcharge, is aggrieved by the terms of an apportionment order, he may appeal to the Lands Tribunal.")

The noble and learned Lord said: The effect of Amendment No. 11 is twofold. First, it extends the right of appeal against an apportionment order made by the Secretary of State under Clause 5; secondly, it removes the time limit in subsection (1) of the clause for the making of an appeal and, by this means, leaves the time limit already contained in the Lands Tribunal Rules 1975 to operate on appeals under the clause.

Subsection (1) of the clause, in its present form, gives the applicant for apportionment and the rent owner the right to appeal against an apportionment order made by the Secretary of State under Clause 5. Under Clause 5, as amended, such an apportionment order may concern the applicant's fellow rentpayers as much as the applicant himself and the rent owner. Therefore, it seems desirable that, where the fellow rentpayers are affected, they, too, should be given the right of appeal against such an order. This is what the Amendment would achieve. Then, as I have said, the time limit of 28 days is already contained in the Lands Tribunal Rules of 1975 to operate on appeals under the clause. I beg to move.

Baroness ELLES

Once again, we thank the noble and learned Lord for proposing this Amendment. We think it a reasonable, logical step to take. It will certainly improve the procedures with regard to the redemption of rentcharges and the application of apportionment. It seems logical that a rentpayer who may be affected by an application should be informed. We, therefore, support this Amendment.

On Question, Amendment agreed to.

Clause 6, as amended, agreed to.

Remaining clauses agreed to.

Schedule 1 agreed to.

Schedule 2 [Repeals]:

The DEPUTY CHAIRMAN of COMMITTEES

There is a correction to Amendment No. 12, to which I should call the Committee's attention. It should read" Page 16, line 27 ", not line 25".

The LORD CHANCELLOR moved Amendment No. 12 (as corrected):

Page 16, line 27, leave out the entry in the third column and insert— ("In section 9, in subsections (1)(b) and (1A)(e), the words "and other rents". In section 11(1) the words from"or other" to "Act 1925". In Schedule 1, in paragraph 7(1)(c), the words "or other rents", in paragraph 7(2) the words "or other rent" and "or rent", and paragraph 8.")

The noble and learned Lord said: This group of Amendments in Amendment No. 12 comprises minor repeals which are consequential upon the provisions already made in the Bill in relation to the Leasehold Reform Act 1967. I beg to move.

On Question, Amendment agreed to.

Schedule 2, as amended, agreed to.

House resumed: Bill reported with the Amendments.