HL Deb 30 January 1996 vol 568 cc1439-44



35.—(1) This Chapter applies where the estate or interest held by the trustees is subject to a mortgage made, whether before or after the coming into force of Part I of this Schedule, for securing further advances. (2) In this Chapter—

  1. (a) "mortgage" includes a charge, and "mortgagee" shall be construed accordingly,
  2. (b) "mortgagee" includes any person deriving title under the mortgagee.

Further advance to require consent of both co-owners

36.—(1) The trustees shall not without the consent of the husband and wife borrow any money by way of further advance secured by the mortgage. (2) A person's consent is required by this paragraph, and shall for purposes of this paragraph be valid and binding, notwithstanding that person's minority. (3) This paragraph has effect subject to paragraph 19 of this Schedule. (4) It is hereby declared that no obligation to make a further advance shall be enforceable against the mortgagee so as to require him to make it without a person's consent required by this paragraph.

Avoidance of charge securing a further advance

37. If a further advance is made without a person's consent required by paragraph 36 above, the mortgage, so far as it secures that further advance, shall be of no effect if, and only if, before the making of the further advance—

  1. (a) notice in writing was served on the mortgagee or his agent by or on behalf of the person whose consent was required stating that that consent was required, or
  2. (b) that person's consent was required to the creation of the mortgage, and the mortgagee knew that that consent had been given.

Cases in which a further advance overreaches interest of husband or wife

38.—(1) The mortgage, so far as it secures a further advance, shall not overreach the interest of the husband or wife under the trusts if the further advance is paid or applied in contravention of section 27(2) of the Law of Property Act 1925 (capital money not to be paid to a single individual as trustee), and the mortgagee had, before the making of the advance, effective notice, as defined in paragraph 39 below, of that interest: Provided that if the husband or wife was the person to whom, or by whose direction, the further advance was paid or applied this sub-paragraph shall not apply to that person's interest under the trusts. (2) Except as provided by sub-paragraph (1) above the mortgage, so far as it secures a further advance, shall overreach the interests of the husband and wife under the trusts. (3) This paragraph has effect whether or not the interest of the husband or wife under the trusts can be or is registered or protected under the Land Charges Act 1972 or the Land Registration Act 1925.

Meaning of effective notice

39.—(1) For purposes of paragraph 36 above the mortgagee has effective notice in the circumstances specified in this paragraph. (2) The mortgagee has effective notice when notice in writing is served on him or his agent by or on behalf of the spouse stating that the relevant land. or the trustees' estate or interest, is subject to trusts. (3) The mortgagee has effective notice as from the time when the mortgage is made if the trusts arose before that time and—

  1. (a) the mortgage was made by two or more persons, or by a trust corporation known to the mortgagee to be acting as a trustee, or
  2. (b) the mortgage did not overreach the interest of the husband or wife under the trusts.
(4) Notice under sub-paragraph (3)(a) above is effective notice of the interests under the trusts of both the husband and the wife, and notice under sub-paragraph (2) or sub-paragraph (3)(b) above is effective notice of the interest of the spouse by or on behalf of whom the notice is served, or as the case may be of the spouse whose interest was not overreached.").

The noble and learned Lord said: Amendments Nos. 207, 208 and 209 were grouped with a paving amendment and, although they were not considered, they were open to debate. In those circumstances, I do not propose to move them.

[Amendment No. 207 not moved.]

[Amendments Nos. 208 and 209 not moved.]

Schedules 4 and 5 agreed to.

Schedule 6 [Amendments of Children Act 1989]:

Lord Meston moved Amendment No.209A: Page 57, line 35, at end insert— (" . After paragraph 11 of Schedule 2 to the Children Act 1989 there shall be inserted— . Every local authority shall take such steps as are reasonably practical and as may be necessary, to advise, assist and, where appropriate, befriend those families with dependent children which notify a Court that the marriage or relationship has broken down or is in danger of breaking down.".").

The noble Lord said: The noble Baroness, Lady Elles, asked me to express her regret that she cannot be here to move this amendment and has asked me to do so on her behalf. At present no steps are required to be taken by a local authority when marriages get into difficulty. A visit to a solicitor is often the first step, followed by divorce. There is a role for the churches and the counselling agencies but they are voluntary and need first to be approached by a party to the marriage. Parties may not know of their services. In the first instance, a local authority has a role to fill that gap. Its services should be activated after parties notify the court of the breakdown of their marriage - that is, when there is the initial statement of breakdown. Local authorities should make available their services to advise, assist and, where appropriate, to befriend those families with dependent children. The local authority may then assist those families to seek help from counselling agencies or the Church, which would keep costs to a reasonable level.

I know that the noble Baroness was particularly anxious that in the divorce process the voice of the child should be heard and that the child should have someone to speak to and, where appropriate, to assist him or her. That is the purpose of the amendment. It strikes me that the amendment meets a need which, to some extent, used to be met by the old Section 41 of the Matrimonial Causes Act 1973. Since the amendment of that section of the Children Act 1989, the usefulness of Section 41 has diminished considerably. It is on that basis that, on behalf of the noble Baroness, I beg to move.

The Lord Chancellor

The court's power in Section 16 of the Children Act to make a family assistance order in any family proceedings has certain similarities to the amendment. That order can apply to specific members of the family or to the family as a whole, and can he made whether or not any other order is made in relation to the child. It is a short-term order designed to provide the expert help of a probation officer or local authority officer to promote co-operation within the family or to assist it to cope with problems arising during what may be a difficult period of transition following divorce or separation.

However, that involvement will clearly not be necessary or appropriate in every case, and the Act therefore provides that before making an order the court must he satisfied that the circumstances are exceptional and that the consent of every person named in the order other than the child is obtained.

The proposed amendment would be in addition to the court's power to make a family assistance order. Local authorities would be required to become involved whenever the court was notified of the breakdown or impending breakdown of a relationship, and to decide themselves what steps it was reasonably practical and necessary to take. I consider that, as at present, decisions of that nature are best exercised by the courts in the light of all the circumstances of the individual case, which is essentially the power under Section 16.

In addition, the amendment is unclear on whom the onus to notify the local authority would rest. It appears that an obligation would be placed upon the court to keep a record of notices received and to pass them to the local authority. Also, it does not require the consent to the referral of all the parties involved. The latter is essential, as, if there is opposition to the involvement of an outside agency from within the family, then that involvement is unlikely to be successful in resolving the difficulties that may exist. The principle of the Children Act is that only where intervention in family life is necessary is it right for a local authority, for example, to become involved.

The Government are committed to providing help to support services to families where the need arises to help them resolve areas of conflict and to protect the welfare of the children involved. However, I believe that families should not be subject to the intervention of outside agencies unless it is clear that that is genuinely necessary. In the great majority of cases, it is likely that local authority intervention of the type proposed by the amendment would not be appropriate, and thus substantial time and resources would be wasted in unnecessary investigations which could well have the effect of exacerbating tensions within the family.

I understand well my noble friend's concerns, so well expressed on her behalf by the noble Lord, Lord Meston, but I believe that Section 16 of the Children Act strikes the appropriate balance between those concerns and the need to preserve the autonomy of families generally when considering intervention by outside agencies. Therefore I hope that my noble friend and the noble Lord will see that it is better to address those concerns within the powers existing under Section 16 to which I have referred.

Lord Meston

The amendment was designed, as I understand it, to provide a practical method of notification of local authorities. It has to be said that even the exceptional circumstances which would normally provide for a family assistance order can he overlooked under the existing process. Perhaps the way to cater for the needs which the amendment seeks to meet would he for the Government to consider breathing some fresh life into Section 41 of the Matrimonial Causes Act 1973. That is something that may have to be looked at later. I am sure that the noble Baroness would wish me to reserve her position. On that basis, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Schedule 6 agreed to.

Schedule 7 [Transfer of certain tenancies on divorce etc. or on separation of cohabitants]:

The Lord Chancellor moved Amendment No. 210: Page 58, line 45, leave out ("respective").

The noble and learned Lord said: I spoke to this amendment with Amendment No. 186. I beg to move.

On Question, amendment agreed to.

Schedule 7, as amended, agreed to.

Schedule 8 [Minor and Consequential Amendments]:

Lord Meston moved Amendment No. 211: Page 62, line 44, leave out ("months") and insert ("weeks").

The noble Lord said: The schedule reproduces Section 1(5) of the Matrimonial Causes Act which provides that the time between the decree nisi and the decree absolute in a nullity suit should be six months unless a shorter period is fixed. Since 1972 the period has actually been six weeks and it seems absurd to re-enact a period of six months. On that basis, I beg to move.

The Lord Chancellor

I am happy to consider this amendment. However, there is a question as to whether if one does this the power of the High Court to shorten the period further should be preserved. It may be that at this juncture the thing to do is to fix the period in the primary legislation and leave it at that. However, I shall be happy to consider that further.

Lord Meston

I am grateful for that indication. I would wish the power of the court to shorten the period to be preserved. But, subject to that observation, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 212 to 212C not moved.]

Schedule 8 agreed to.

Schedule 9 [Modifications, Saving and Transitional]:

The Lord Chancellor moved Amendment No. 213: Page 78, leave out lines 13 to 18.

The noble and learned Lord said: This is a drafting amendment. I beg to move.

On Question, amendment agreed to.

Schedule 9, as amended, agreed to.

Remaining schedule agreed to.

House resumed: Bill reported with amendments.