HL Deb 02 April 1981 vol 419 cc328-9

4.50 p.m.

Lord Lyell rose to move, That the draft order laid before the House on 4th March be approved.

The noble Lord said: My Lords, the amendment order for which I seek the approval of the House will make it no longer necessary for the mortgagor to submit and sign a notification of discharge before the Civil Aviation Authority enters a discharge of a mortgage in the Register of Aircraft Mortgages which is maintained by the authority.

The Register of Aircraft Mortgages was set up under the Mortgaging of Aircraft Order 1972. This order was made under Section 16 of the Civil Aviation Act 1968. This amendment is a relatively minor one and it is being proposed at the suggestion of the Civil Aviation Authority following representations to the authority by aircraft mortgagees who have encountered problems of varying kinds.

Because it was thought that the mortgagor would be the person principally interested in the discharge of the mortgage, Article 9 of the 1972 order requires him to submit and sign the notification of discharge. In practice this has caused problems, especially in cases where the mortgagor has ceased to have an interest in the aircraft by the time the mortgage has been discharged. In a number of cases, for example, the mortgagor has defaulted, the mortgagee has exercised his right of sale and the mortgagor has refused to sign the discharge notice, so that the aircraft has continued to be shown on the mortgage register as the subject of a mortgage. In another case a mortgagor before going abroad asked a dealer to sell his aircraft and to use the proceeds to pay off the mortgage. This the dealer did, but the mortgagor could not be found to sign the discharge of mortgage. Accordingly, the buyer had great difficulty in reselling the aircraft.

The Civil Aviation Authority sees no reason why it should have the signature of the mortgagor before entering a discharge of a mortgage in the register. What is important is that the authority should have the confirmation of the mortgagee and appropriate supporting documentation to show that the mortgage has indeed been discharged. The proposed amendment provides for this.

As I have said, the Civil Aviation Authority has received a number of representations from mortgagees who have encountered these problems and they have suggested that the Mortgaging of Aircraft Order 1972 should be amended. The authority has undertaken that if the amendment order is approved, a leaflet drawing attention to it will be sent out with all notifications which the authority makes under Articles 7 and 8 of the order. Notifications under Article 7 go to interested parties to tell them that a mortgage has been entered on the register. Notifications under Article 8 go to interested parties to tell them that a particular entry in the register has been amended.

Finally, I should add that the Joint Committee on Statutory Instruments has considered the order and the only comment that the committee has made is that in Article 1 the date for coming into operation has been left blank, contrary to paragraph 1 of Statutory Instrument Circular (81)1. I apologise to your Lordships, and to Members of another place, for this error. The date to be inserted in Article 1 should of course be the same date as is shown at the top of the order: that is, 1st May, 1981.

Given that slight error and the remarks which I have made in presenting the amendment order to your Lordships, which have of necessity been a little longer than I would have wished because it is a detailed matter, I beg to move.

Moved, That the draft order laid before the House on 4th March be approved.—(Lord Lyell.)

Lord Strabolgi

My Lords, we are grateful to the noble Lord, Lord Lyell, for explaining the purpose of this order. It certainly opens up a whole new world. The kind of situation which the noble Lord has described is, sadly, one which is all too familiar in the housing market, as we found last summer when we discussed the Housing Act. It is certainly a revelation to me to find that there are not only absentee landlords but absentee owners of aircraft whom, apparently, it is impossible to find because they have disappeared to some kind of "offshore situation", which is the euphemism used for these kinds of owners.

We shall not make any difficulties over passing the order. I am sorry that it is defective in one way, the date not having been inserted. However, this defect will no doubt be remedied. I should like to ask the noble Lord two questions. First, has the order been passed by another place? Secondly, how many cases of this kind have there been every year which have given rise to this order? I do not expect the noble Lord to tell me exactly, but I should be grateful if he could let me know the average number of cases which have been encountered.

Lord Lyell

My Lords, we are very grateful to the noble Lord, Lord Strabolgi, for his kind remarks and for forgiving the clerical error regarding the date when the amendment order will come into operation. The noble Lord asked me two questions. I am informed by my noble friend the Minister that this order has been passed by another place. The second question which the noble Lord, Lord Strabolgi, asked me was one which I had intended to inquire into. I understand that the number of cases which have occurred over the last few years have averaged between five and 10. If, therefore, we say that they can be counted on the fingers of two hands I think we shall be reasonably accurate. Perhaps, however, I may inquire into the precise number of cases which have occurred and write to the noble Lord.

On Question, Motion agreed to.