§ (1) Where any sum has, whether before or after the passing of this Act, been paid 699 on account of any rent or mortgage interest, being a sum which by virtue of the Increase of Rent and Mortgage Interest (War Restrictions) Act, 1915, would have been irrecoverable by the landlord or mortgagee, the sum so paid shall be recoverable from the landlord or mortgagee by the tenant or mortgagor by whom it was paid, and may, without prejudice to any other method of recovery, be deducted by such tenant or mortgagor from any rent or interest payable by him to the landlord or mortgagee.
§ (2) If any person in any rent book or similar document makes an entry showing or purporting to show any tenant as being in arrears in respect of any sum which by virtue of the said Act is irrecoverable, or if, where any such entry has before the passing of this Act been made by or on behalf of any landlord, the landlord, on being requested by or on behalf of the tenant so to do, refuses or neglects to delete the entry, he shall on summary conviction be liable to a fine not exceeding ten pounds.
§ (3) This Section shall be construed as one with the Increase of Rent and Mort gage Interest (War Restrictions), 1915.
§ Lords Amendment:
§ In Sub-section (1) leave out the words "whether before or."
§ Motion made, and Question proposed," That this House doth agree with the Lords in the said Amendment."
Mr. T. WILSON
I beg to move "That this House doth disagree with the Lords in the said Amendment."
I hope that the Government are not going to accept this Amendment. If they do accept the Amendment it will be really a breach of the promise given in connection with the charging of increased rent. It seems to me that by this Amendment the Lords are becoming accessories to the landlords who have been taking that which did not belong to them, and as a member of the House of Commons I do not want to be an accessory to an. act of that kind. I hope that this House will not accept the Lords Amendment. It seems to me perfectly ridiculous to pass an Act of Parliament to empower landlords to keep that which they have really stolen. It is illegal on their part to charge increased rent, and now it is proposed that we should condone the offence. I am told 700 that in Birmingham alone 60,000 tenants have had the rents increased by the landlords, and increased rent has been collected in spite of the Act of Parliament.
§ Mr. SHERWELL
I think it is well that the House should give some consideration to this Amendment. I suppose every hon. Member—certainly those representing industrial constituencies—have had cases referred to them where, despite the legislation of this House, attempts have been made to evade it. There may be a very good reason not familiar to the House this morning for the particular Amendment now upon the paper, but unless the Solicitor-General can enlighten us I think we ought to hesitate about accepting this Amendment.
§ Mr. ROWLANDS
I hope this Amendment will not be passed without some clear explanation. It interferes very materially with the concession which we understand was to be made to the demand which was strongly urged in this House when the Bill was before us, dealing with the many cases which were brought before the House, and which have been going on ever since. I trust that the Solicitor-General will be able to give us some explanation, and I hope the Government, if possible, will reconsider their position.
§ Mr. RAMSAY MACDONALD
I was hoping that by now the Government would have given us some explanation of this series of changes, for it is not merely one, made in another place. I am not quite sure what they mean as a whole, but it seems to me that one thing has certainly gone. The Solicitor-General might explain to us the meaning of this Amendment. As the Clause stood when it left this House it was provided that increases of rent made, whether before, or after the passing of this Act, which were illegally made, should be recoverable by various methods, and one method was that of deduction by the tenant. Presumably, if the tenant felt that his rent had been raised illegally, he could of his own free will deduct the amount, and then, presumably, the landlord would sue him, and he would have to prove in Court, on his own initiative, that the increase was legitimate and 701 legal. That would work out to the advantage of the tenant. We must not put the tenant in the position of suing his landlord, and the great advantage of Clause 5 is that we are reversing that process. I want to stand by that, and I should like to know whether, if we accept the Lords Amendment, that privilege is retained, or whether the tenant has to sue his landlord for having made deductions that were illegal under the Increase of Rents and Mortgage Interest (War Restriction) Act, 1915. If that is so, then I think this House will refuse to accept the Lords Amendment. If the Solicitor-General can explain to us that that is wrong, then I am open to consider the point. Perhaps he will explain precisely what the Amended Clause means in regard to what it did mean when it left this House.
§ Sir G. HEWART
I should have risen before to explain this Amendment had it not been clear that several Members were desirous of addressing the House on it. I will endeavour to explain the effect of the change which has been made in the Clause since it left the House of Commons. First of all with reference to the question put to me by the hon. Member (Mr. Ramsay Macdonald), I may say that the effect of that which has been done is not in the least to make it obligatory upon the tenant, if he desires to obtain his remedy, to commence an action against the landlord. The right of deduction remains in the Bill no less now than it did before. But in order to see what is the change in substance that has been made it is necessary that I should remind the House of the state of the law at the time when this Bill was introduced. As the House remembers, by the Act which was passed in "December, 1915, the Increase of Rent and Mortgage Interest (War Restrictions) Act, it was provided by Section 1 that in the case of a dwelling house to which the Act referred the rent should not be raised above the standard rent, and it was provided further with regard to mortgage interest that that should not be raised. In the one case as in the other it was provided that where an increase was made beyond that which the Act permitted, the landlord, or In the other case the mortgagee, should not be able to recover that excess. So far the Act went, and no further. In other words, the Act retrained, and pointedly refrained, from enabling the tenant if he paid the excess I 702 to recover it back, and from enabling the mortgagor if he paid the excess interest to recover it back from the mortgagee.
The matter stood in this way—and was made plain in a case which started in a County Court in the Midlands, I think, and ultimately came to the Court of Appeal— that if against the wish of a tenant the landlord unduly increased the rent,, or if against the wish of the mortgagor the mortgagee unduly increased the interest, he could not recover in either case. On the other hand, if for any reason the tenant in the one case, or the mortgagor in the other case, paid the excess, then he did not have an opportunity of getting it back, and ho did not have that opportunity for two reasons. In the first place, if the payment were made in mistake it would be money paid not in mistake of fact, but of law. Secondly, it would be money paid under an agreement which was lawful when it was made.
That was the position with which the House had to deal when the Courts (Emergency Powers) Bill was introduced. As the House will remember, when the Bill was introduced there was no provision in it relating to this matter, and this particular provision was the result of discussion and, I think, negotiation in this House. When the Bill left this House the position was that if at any time whatever, whether before or after the passing of this Act, the excess rent was imposed or the excess Interest was paid, the tenant in the one case and the mortgagor in the other case could recover it or could deduct it from future payments. The House of Lords has made a compromise upon that. I do not think that anybody who has made, a study of the matter will deny that among the arrangements which were made with regard to the increase of rent or interest there were many purely voluntary arrangements. Take, for example, the case of a mortgagor who was paying a certain rate of interest in August, 1914. He might be perfectly willing not only to pay that rate of interest, but to pay a somewhat increased rate, for this reason, that otherwise the mortgagee might call in his money and the mortgagor when he came to raise the money might have to pay a considerably enhanced rate of interest. So that it might be to the interest of the mortgagor no less than that of the mortgagee to agree, on an increased rate. In fact, those payments were made, and were made upon a considerable scale, and a question arose with regard to what has 703 been done in the interval between the passing of the Act of 1915 and this new Act. Was the new Act to remain retrospective? Was that quite fair to trustees and beneficiaries?
I am not going to say that there may not be a great deal to be said in favour of its being retrospective. One is not dealing here with his personal inclinations or prejudices. On the other hand, it is quite plain to anyone who has looked into the facts or has made himself aware of the course of. the discussion in another place that there is a great deal to be said against the retrospective part of the Clause. As the result of considerable discussion, what has been done in another place is this, that the Clause remains with its twofold remedy of either deduction or action, but two limitations have been introduced. One is that the Section is limited so as to apply only to the period that follows the passing of the Act, and the second is that the claim to recover must be made within six months after the payment. In other words, a person who pays the increased interest or increased rent is not to let it rest for two or three or four years, until the time when the Statute of Limitations prohibits recovery, but within the period of six months after the payment made he is to seek a remedy. I am far from saying that the Clause is a perfect Clause. I am not saying that there may not be a great deal of argument which could be advanced for retaining the retrospective part of it. But the view of the matter which I submit to the House is this, that in 1915 the Legislature pointedly abstained from giving the tenant or the mortgagor any right to recover any excess of rent or interest, notwithstanding that the landlord or the mortgagee could not recover it from him if he refused to pay. This new Clause, limited as it is in the two ways to which I have called attention, does give a remedy in the one case and the other in every instance that may arise after the passing of this Act.
§ Mr. KING
The explanation of the Solicitor-General, clear and attractive as it is, is not at all satisfactory. I hope very much that we shall have a Division on this. I believe that if the House as a whole could know the facts, it would be overwhelmingly against the acceptance of this Amendment. The Government have not hurried this legislation at all. It has been a very long time before this House and the other House. Then the com- 704 promise in this House, which has now been upset in another place, was not only accepted by the Government, but was actually introduced by the Government, and the Solicitor-General himself was quite enthusiastic about it. It is obvious that the Government have given way against their mature and better judgment, and I am convinced that there ought to be a Division on this Amendment and also on the next Amendment.
§ General Sir IVOR PHILIPPS
The Solicitor-General has given a very clear account of this Amendment, but I do not think that he has given any guidance as to whether he considers that we should accept it. I do not think that anything he said contained any advice. In fact, if anything, he rather suggested that we should not accept the Amendment.
§ Sir G. HEWART dissented.
§ Sir IVOR PHILIPPS
I certainly noticed no single word suggesting that either he or the Government approved of this action of the House of Lords. In these circumstances no Division should be necessary, and the expression of opinion of Members of this House should be sufficient to have this Amendment omitted.
§ Mr. BOYTON
It is very evident, from what has happened, that there has been a very great inquiry into this subject in another place, and that it has been found impossible to carry out the desire of this House, whether before or after the passing of the Act. When we talk of landlords, it is assumed that those spoken of as rack renters are the actual landlords. That is not really the fact, and they are very largely in the hands of the mortgagees, and it may be that the mortgagees raised the rents. It is found that there would be great difficulty in connection with matters of account going beyond six months, and it seems to me that this compromise is really one decided upon in a very fair spirit. Many people would like to recover excess payments by deducting six months' rent or six months' mortgage interest, but in the case of small people who have taken mortgages on property—and building societies are also brought into it—it would be difficult, if not impossible, to make the Bill actually retrospective. As this matter has been very fully and fairly discussed, and as all the difficulties have been pointed out in another place, I hope the House will accept the Amendment.
§ 1.0 P.M.
§ Mr. HUDSON
The Solicitor-General has given a very clear explanation of this matter, but, in connection with this Bill, I would point out that it was clearly understood that one of the most serious complaints raised on this matter referred to the past action of either landlords or landlords' agents. It should be considered that many people were not conversant with the Rent Restrictions Act, and they did not know what they could do in cases where excess rent was demanded from them. In regard to the hon. Gentleman who has just spoken, at the time when the Bill was before the House he challenged us to point out where there were any actual excess charges, and I produced a rent book which showed that there had been £8 or £9 continuous overcharge, under the provisions of the Act of 1915 Surely either the landlord or the agent, who have received excess payments, should not now be allowed to keep the money, and that was the decision at which we arrived. We, however, say that a fair amount of time should be allowed for the repayment of that which has been paid under misapprehension. This is one of the most important points in this particular Amendment, and I think that the Government should be relieved from the responsibility of passing an Amendment, simply because there will be a difficulty probably on the part of some people who have a great deal more money and who better understand increases in mortgages. I hope that the Solicitor-General will reject this Amendment.
§ Sir G. HEWART
It may be that the House inferred from what I have said that I took no strong view as to the way in which the vote of the House should be given. I desired to put the matter plainly and frankly before the House, and I desire now to add only this, that a further compromise has been made in another place upon a compromise which originated here, but the second part of the Clause remains. With regard to the Amendment, for my own part I think I must vote in favour of it, but so far as the House is concerned it is a matter which will be left to the unfettered judgment of hon. Members.
§ Mr. WING
I regret that this compromise has been made in another place, and I submit that if the Government accept it they will turn their back upon their previous decision in this House. For myself, I have received a number of complaints 706 relating to increase of rents, and I have always told the people to resist any increase. I would further point out that there is a general impression in the country that where increases have been paid the people who have made the payments will be able to deduct them. It will be a very great disappointment to the country if that should prove not to be the fact. I certainly oppose the Amendment.
§ Question, "That this House doth agree with the Lords in the said Amendment," put, and negatived.
§ Lords Amendment:
§ In Sub-section (1), after the word "shall" ["shall be recoverable"], insert the words "at any time within six months after the date of payment."
§ Sir G. HEWART
After what has taken place it will be necessary now to insert some further words. I beg to move, as an Amendment to the Lords Amendment, to add the words "or in the case of payment made before the passing of the Act within six months of the passing thereof." That will deal with payments which took place before the Act came into force.
Mr. T. WILSON
I understand this means that a claim for a refund of rent which has been overcharged must be made within six months after the passing of the Act?
§ Sir G. HEWART
As the Clause stands at present, as amended, the claim has to be made within six months after the date of payment. The words I have proposed to add provide with regard to such payments made before the passing of the Act that the claim has to be made within six months of the passing of the Act.
§ Amendment to the Lords Amendment agreed to.
§ Lords Amendment, as amended, agreed to.
§ Lords Amendment:
§ In Sub-section (1), after the word "mortgagee" ["from the landlord or mortgagee"], insert the words "who received the payment or his legal personal representative."—Agreed to.707
§ Lords Amendment:
§ In Sub-section (1), after the word "payable," insert the words "within such six months," and leave out the word "the" ["to the landlord"], and insert instead thereof the word "such."
§ Motion made, and Question proposed, "That this House doth agree with the Lords in the said Amendment."
§ Sir G. HEWART
If the Clause remains as it is now, no doubt the period would be six months after the date of payment.
§ Question put, and agreed to.
§ Lords Amendment:
§ In Sub-section (2), leave out the word "arrears," and insert instead thereof the word "arrear."—Agreed to
§ Lords Amendment:
§ After Clause 5 insert the following new Clauses:
§ (Exclusion of Judgments in Actions of Tort from Section one (1) (a) of 4 & 5 Geo. 5, c. 78.)
§ The provisions of Section one, Subsection (1) (a) of the Courts Emergency Powers) Act, 1914, shall not apply to any judgment or order for recovery or payment of any sum of money or costs given or made in any action of tort, or in Scotland in any action of reparation founded on delinquency, whether before or after the commencement of this Act.
§ (Provision as to Leases at Lens than Back Rent.)
§ In Sub-section (6) of Section two of the Increase of Rent and Mortgage Interest (War Restrictions) Act, 1915, which relates to tenancies at less than rack rent, the word "standard" shall be omitted, and at the end of the Sub-section there shall be inserted the following words "and this Act shall apply in respect of such dwelling-house as if no such tenancy existed or had ever existed."
§ (Application of Subsection (1) of Section One of 4 & 5, Geo. 5, c. 78, to Officers and Soldiers.)708
§ Sub-section (1) of Section one shall apply-to any sum of money due and payable in pursuance of a contract made before the officer or man has joined His Majesty's Forces.
§ —Proposed New Clauses agreed to.
§ Committee appointed to draw up Reasons to be assigned to the Lords for disagreeing to one of their Amendments to the Bill.
§ Committee nominated of Sir Gordon Hewart, Mr. Boyton, and Mr. Wing.
§ Two to be the quorum.
§ To withdraw immediately.
§ Reasons for disagreeing to one of the Lords Amendments reported, and agreed to.
§ To be communicated to the Lords.— [Sir. G. Hewart.]