§ (1) Where the rent payable for any premises is entered in the register under the provisions of the Act of 1946, and, in the case in which the approval, reduction or increase made by the tribunal is limited to rent payable in respect of a particular period, that period has not expired, the following provisions of this Section shall apply in relation to the premises.
§ (2) Save as hereinafter provided, a person shall not, as a condition of the grant, renewal, continuance or assignment of rights under a contract to which the Act of 1946 applies, require the payment of any premium:824
§ Provided that this subsection shall not prevent—
- (a) a requirement that there shall be paid so much of any outgoings discharged by a grantor or assignor as is referable to any period after the grant or assignment takes effect;
- (b) a requirement that there shall be paid a reasonable amount in respect of goodwill of a business, trade or profession, being goodwill transferred to a grantee or assignee in connection with the grant or assignment or accruing to him in consequence thereof.
§ (3) Subsections (7), (8) and (10) of Section three, and Section four, of this Act shall with the necessary modifications apply for the purposes of this Section as they apply for the purposes of the said Section three.
§ (4) The following provisions of the Act of 1946, that is to say—
- (a) paragraph (b) of subsection (1) of Section four (which prohibits the requiring of premiums on a grant, continuance or renewal of a letting where the rent payable is registered under the Act of 1946);
- (b) in subsection (2) of that Section the words "or consideration," "or value" and or given";
- (c) in subsection (1) of Section nine of the Act of 1946, the words "or any consideration," "or the value of the consideration given." and "or the consideration given,"
§ Provided that, without prejudice to the operation of Section thirty-eight of the Interpretation Act, 1889, nothing in this Section shall be construed as affecting the operation of the said provisions of the Act of 1946 as respects anything done before the commencement of this Act.—[Mr. Blenkinsop.]
§ Brought up, and read the First time.
§ 3.45 p.m.
§ Mr. Blenkinsop
I beg to move, "That the Clause be read a Second time."
This new Clause does not raise any new principle. It is merely to meet the point raised in Committee that we should provide a similar procedure in regard to the illegality of premiums in respect of furnished lettings as has now been provided by this Bill in other cases. The procedure here is to be similar. There is provision here to establish the same procedure as in the other cases.
§ Mr. Janner (Leicester, West)
I should like to thank my hon. Friend for having accepted the suggestion that was made by me in Committee and for having put it in a form which is very much better than the one I myself prepared. There is, however, a point I should like to put about it, because there is a question of 825 some doubt in my mind and in the minds of others as to the meaning of the new Clause. Is the period referred to—the Clause says the "period has not expired "—sufficient to cover a case where an extension of time has been given by the tribunal in respect of the period during which the notice shall run? I can understand that the period should be the time originally provided for in the Bill. Does this, however, clearly cover the case where extended periods are given for security? It may cover that quite definitely. I want to be assured that it does so.
§ Mr. Janner
Reference is made here to… a case in which the approval, reduction or increase made by the tribunal is limited to rent payable in respect of a particular period, that period has not expired. …Does that also cover the period which has been extended? I want to know whether the new Clause covers the extended period which the tribunal may have given.
§ Lieut.-Colonel Elliot
I want to draw attention to the difficulties Parliament places on such bodies as these by this sort of legislation. I draw attention particularly to subsection (2, b) which says:Provided that this subsection shall not prevent—This is a point which will come up again later, but it does seem to me that the burden being placed upon the bodies which are to determine these amounts is growing greater with every Clause we add to the Bill. The House will remember the very complicated and exacting provisions that were made in the National Health Service Act to ensure that no transfer of goodwill could possibly take 826 place in connection with a doctor's house. Conceive the set of circumstances which are arising here, where a tribunal will have to determine what is the reasonable sum, let us say, in respect of a house previously occupied by a masseuse.
- (b) a requirement that there shall be paid a reasonable amount in respect of goodwill of a business, trade or profession, being goodwill transferred to a grantee or assignee in connection with a grant or assignment or accruing to him in consequence thereof."
I do not intend, of course, to ask the House to reject this Clause because I think that the Minister, having started upon this course, must do his best to provide against the various contingencies. I do, however, draw attention to the point we shall make later—to the necessity for co-ordinating the decisions, the inevitably conflicting and divergent decisions, which will be given by scores of tribunals operating without any direction whatever in circumstances of enormous diversity. I do ask the House to consider what half a. dozen tribunals in different parts of the country may easily decide to be a reasonable amount to be paid in respect ofgoodwill of a … profession… transferred to a grantee or assignee in connection with the grant or assignment or accruing to him in consequence thereof.The difficulty is added to because the conditions are retrospective. How do we get at what is reasonable in the case of the business of a masseuse, the goodwill of which was transferred some time ago in consequence of a decision made by two people in ignorance of the fact that Parliament was about to take any account of the action many years afterwards? The tribunal will have to weigh this up. It has been said in the courts of law that the devil himself cannot know the mind of man. In this case, it is lay people who are being asked to know the minds of two persons and to go back to what they were thinking six or seven years before. It shows the state to which Parliament is being led by legislation of this kind and by retrospective provisions. I do not wish to dilate on the difficulties of the furniture provisions, although they will differ from one part of the country to another. On this simple point of goodwill, it seems to us on this side of the House that the case which it makes out for some co-ordination of these decisions, and which we shall move in later stages, is irresistible.
§ Mr. Manningham-Buller (Daventry)
There is one question which I wish to ask on this point of the interpretation of the word "goodwill." It will be no 827 doubt recalled that under the Landlord and Tenant Act, 1927, provision was made for compensation for goodwill in certain circumstances. It was provided there by Section (4) thatthe tribunal shall, in determining the amount of goodwill—disregard any value which is attributable exclusively to the situation of the premises.Is it sought to import into the word "goodwill" in the new Clause the same meaning as is attached to the word "goodwill" by the Landlord and Tenant Act, or are we to have words used in a different sense? If we are not going to disregard any value which is "attributable exclusively to the situation of the premises," it seems to me that the tribunal will get into very great difficulty in administering and interpreting this provision. I should like the right hon. Gentleman to indicate to what extent the definition of the word "goodwill" here differs from the definition in that Act.
§ Mr. Bevan
It is not possible for me to define what is meant by "goodwill" because the tribunal itself will do that. It would be improper for me here to utter what would not be a statutory direction unless included in the Bill. The tribunal fixes the rents. We are not dealing with the matter on which the tribunal will arbitrate. It will be for the courts to construe this matter. This is a prohibition on assignment, and we are getting rather confused in imagining that the tribunal itself will construe this. All that the tribunal will do is to fix the rent.
§ Lieut.-Colonel Elliot
How does the right hon. Gentleman connect that with subsection (1) of the new Clause:in a case in which the approval, reduction or increase made by the tribunal is limited to rent payable in respect of a particular period, that period has not expired, the following provisions of this Section shall apply in relation to the premises.It seems to me to connect it with a decision of the tribunal.
§ Mr. Bevan
The tribunal will have to determine what was a reasonable rent in the first instance and it will be determining from time to time, as the hon. Member for West Leicester (Mr. Janner) intimated in his question, what would be the period of tenancy. As to whether in fact a certain sum of money could be 828 paid on assignment, is a matter for the court to construe and not for the tribunal, as I understand the position from my legal advisers.
As to the actual merits of the proposal itself, this will occur in very rare instances indeed. This is not a normal eventuality and, therefore, any mischief, if mischief there be, will be expressly limited. It is perfectly true that the tribunal will reach a large number of different decisions. The circumstances themselves will be very diverse. I am talking about the way in which the tribunal will be fixing the rent and not the way in which the court will construe the Clause. The rents will be fixed by the tribunal having regard to all the circumstances of the case. As the circumstances will be inevitably diverse, then the decisions themselves will inevitably be diverse.
It is because of the diversity of the conditions that we have to have a tribunal of this kind to determine them. In this whole field of rent legislation, the courts have reached a diversity of decision about the same facts. It is because the courts have reached so many diverse decisions about what we thought were the same facts, that part of this Bill is necessary. The tribunal itself, being a much more flexible instrument, will be able to make its decisions relate to the particular facts of the case. That is why we put forward the merits of the tribunal for cases like this as distinct from the merits of the courts.
§ Lieut.-Colonel Elliot
If I may speak again by leave of the House, I would say that the Minister's point that the courts had given diverse decisions was not exactly germane to the question of these decisions. The courts give different decisions, but there is a court of appeal by who those diverse decisions are coordinated. These decisions in the tribunals are being given independently, without any appeal and without any possibility of a co-ordinating decision which will bring into relation these diverse decisions. Although, as the Minister said, the courts will construe this Clause, yet the tribunal itself, in giving these decisions, is surely bound by the remainder of the Clause; and in its decisions as to what ought or ought not to be reasonable, or where something had unreasonably been done, or a rent ought to be 829 reduced, it would surely have to make these decisions in accordance with its own interpretation of the remaining subsections of the Clause.
§ Question put, and agreed to.
§ Clause read a Second time, and added to the Bill.