|5||(1) The provisions of this section shall have effect where goods are let under a hire-purchase agreement to which the principal Act applies, and that agreement, or any other agreement, contains a provision (however expressed, and whether limited to defaults in payment or not) whereby, apart from this section, on the occurrence of, or at a time to ascertained by reference to, a default in the payment of one or more instalments or other sums payable by the hirer, such of the consequences mentioned in the next following subsection as are specified in that provision (in this section referred to as "the specified consequences") would follow.|
|10||(2) The consequences referred to in the preceding subsection are that the hire-purchase agreement, or the bailment of the goods, shall terminate, or shall be terminable, or that the owner shall have a right to recover possession of the goods.|
|15||(3) If default is made in the payment of one or more sums to which that provision (in this subsection referred to as "the relevant provision") applies, the specified consequences shall not follow by reason of that default unless the owner serves on the hirer, by post or otherwise, a notice (in this section referred to as a "notice of default") stating the amount which has become due, but remains unpaid, in respect of sums to which the relevant provision applies, and requiring the amount so stated to be paid within such period (not being less than seven days beginning with the date of service of the notice) as may be specified in the notice.|
|20||(4) Where a notice of default is served, the specified consequences shall not follow before the end of the period specified in the notice by reason of any default to which the notice relates; and, if before the end of that period the amount specified in the notice is paid or tendered by or on behalf of the hirer or any guarantor, the specified consequences shall not follow thereafter by reason of any such default.|
|25||(5) In a case where the specified consequences are that the hire-purchase agreement, or the bailment of the goods, may be terminated by notice given by the owner, a notice of default may include a notice terminating the hire-purchase agreement or the bailment at or after the end of the period specified therein in accordance with subsection (3) of this section, subject to a condition that the termination is not to take effect if before the end of that period the amount specified in the notice of default is paid or tendered as mentioned in the last preceding subsection.|
|30||(6) Without prejudice to the service of a notice of default in any way in which such a notice could be served apart from this subsection, a notice of default shall be deemed to be served on the hirer under a hire-purchase agreement if—|
|35||(a) it is addressed to the person last known to the owner as the hirer under the agreement, and is delivered at, or sent by post to, the last known address of that person, or|
|40||(b) in a case where that person has died, the notice (if not served in accordance with the preceding paragraph) is addressed to that person's personal representative (whether by that or any similar description, and whether for the time being there is any personal representative of his or not) and is delivered at, or sent by post to, the address which was the last known address of the deceased person.|
§ effect on a contract of sale which was later rescinded, and I would very much welcome an explanation.
The definition is that it is acontract of sale (including a conditional sale agreement).The Bill deals with conditional sale agreement as well as with hire purchase.
§ Mr. Silkin
If I might speak again with the leave of the House, I Suggest, with respect, that the omission of the words "contract of sale (including a"—and then follow certain other words—would have done just as well.
§ Question put and a agreed to.
§ Clause read a Second time, and added to the Bill.717
|45||(7) Where the person who, immediately before his death, was the hirer under a hire-purchase agreement has died, and his rights under the agreement have not yet passed to a personal representative,—|
|50||(a) section 9 of the Administration of Estates Act 1925 (vesting of estate of intestate between death and grant of administration) shall not be construed as enabling a notice of default to be served on the Probate Judge (as defined by that Act) as being the hirer under that agreement, and|
|(b) subsections (1) to (5) of this section shall have effect as if the deceased person had not died, and any reference in those subsections to default in the payment of a sum payable by the hirer shall be construed accordingly.|
|55||(8) At any time after the service of a notice of default and before the amount 55 specified in the notice is paid or tendered as mentioned in subsection (4) of this section or the period specified in the notice expires (whichever first occurs) the goods to which the hire-purchase agreement relates shall not be treated—|
|60||(a) for the purposes of section 4 of the Law of Distress Amendment Act 1908, as goods comprised in a hire-purchase agreement made by the hirer, or|
|(b) for the purposes of that section or of section 38 of the Bankruptcy Act 1914, as goods which are by the consent and permission of the owner in the possession, order or disposition of the hirer.—[Mr. D. Price.]|
§ Brought up, and read the First time.
§ 8.30 p.m.
§ Mr. D. Price
I beg to move, That the Clause be read a Second time.
This is not an entirely new Clause, although it is presented as such. It is, in effect, a revised version of Clause 15 of the Bill, the deletion of which I shall be moving later.
In Committee I introduced Clause 15 pursuant to an undertaking given by the Government in another place. Clause 15 provides a new safeguard for a hirer who fails to pay an instalment when it is due. It prevents immediate repossession of the goods and thus safeguards the hirer in the event of illness or simply oversight.
In practice, the cases in which this additional safeguard is most likely to be useful are those where there is a default of payment before one-third of the hire-purchase price has been paid. Clause 15 provides that if a default in a payment occurs, the owner cannot exercise any right that he has under the agreement to terminate or regain possession of the goods immediately. He must first send the hirer a notice of default, stating the amount due and giving him not less than seven days in which to pay. If the hirer does not pay in the period specified, the owner is free to exercise his rights.
When this Clause was considered in Committee, I said that the Government would amend it on Report to deal with certain situations which could arise if the hirer died. "Hirer" is defined, in Section 21(1) of the 1938 Act, as including a person to whom the hirer's rights or liabilities have passed by operation of 718 law. So, normally the Clause as it stood would safeguard a man's estate after his death. But, where there is no will or no person representative, the Clause requires amendment to safeguard the estate. I also accepted an Amendment moved by the hon. Member for Deptford (Mr. Silkin) which was added to the Clause as subsection (6). We think that there is a further respect in which the provisions of this Clause can be made more comprehensive; this is by requiring the notice of default to be served in all cases, even if the right the owner wishes to enforce is actually contained in another agreement, and not in the hire-purchase agreement itself.
For the convenience of the House, we have put down this new Clause, rather than a series of individual Amendments to Clause 15.
The provisions of subsections (1) to (5) of the new Clause are very similar to those in subsections (1) to (5) of Clause 15. Subsection (1) now covers the possibility of the owner's rights being contained not in the hire-purchase agreement itself but in a separate agreement, and, by referring to a default in payment of a sum payable by the hirer instead of to a default by the hirer, it covers the situation where he has died. Similarly, subsection (4) now provides for the money due being paid by or on behalf of the hirer, so covering the situation where there is no hirer within the terms of the definition in the 1938 Act.
Subsections (6) and (7) of the new Clause are additions. They provide additional methods of service of a notice to cover cases of difficulty where the hirer has died. The situation then 719 will be that, on the one hand, the estate should be entitled to the protection of the Clause, but, on the other, the owner must have someone on whom he can validly serve a notice. What is now provided is that a notice of default will be deemed to be served on the hirer if it is addressed to the person last known to the owner as the hirer, and if it is delivered or sent to the last known address of that person. It is also provided that if the hirer has died a notice of default can also be served by sending it to his personal representative at the deceased hirer's address; this covers the case where the owner knows the hirer is dead but does not know the precise name of the personal representative, or even whether there is one.
Subsection (8) is based upon the Amendment which was moved in Committee by the hon. Member for Deptford and which provided that, during the period of the notice of default, the goods listed in the agreement should not be liable to seizure under the distress and bankruptcy laws. I accepted that Amendment but, on closer examination, I think that the hon. Gentleman will agree that, as drafted, it went a little further than was intended. It would have continued the protection even after the amount stated in the notice of default had been paid, until the period specified in the notice expired. We have therefore amended subsection (6) so that the protection it gives will cease when the sum claimed is paid.
§ Question put and agreed to.
§ Clause read a Second time.
§ Mr. Silkin
I beg to move, as an Amendment to the proposed Clause, in line 51, at the beginning to insert "subject to paragraph (c) below".
This Amendment goes with the following Amendment, in line 53, at end insert:(c) where a notice of default is served and within such period (not being less than seven days beginning with the date of service of the notice) as may be specified in the notice the owner becomes aware of the death of the hirer then to the period of notice specified in the notice of default there shall be added a further period of one month.Some of my hon. Friends and I feel that in the circumstances arising on the 720 death of a person, particularly one who has made no will, confusion is sometimes very much worse confounded than in the normal cases of default. For example, somebody may become ill and be rushed to hospital, purely as a result of which he becomes in default. While he is in hospital he may die, and during all this time the seven days' notice is ticking away, as it were.
What the Amendments seek to do is to provide that if, as would be the normal course of events, somebody picks up a telephone and tells the owner, or writes to him, and says, "I am sorry, but the hirer is dead," another month is automatically added to the period of notice, during which the necessary next steps can be continued by the survivor, the next of kin, the personal representative, or what have you, of the deceased.
I hope that in the circumstances the Government will be prepared to accept the Amendment.
§ Mr. D. Price
I always feel diffident in rising after the hon. Member has spoken, because he puts his case so persuasively. These two Amendments are intended to make additional provision for the case where the hirer has died, and they propose to add a further period of a month to whatever time—now not less than seven days—has already been allowed under the notice of default for the hirer's overdue payments to be made good.
It is the overdue payment and not the total outstanding of the purchase price that we are concerned with. This was part of the proposal that was made in another place, and we can all understand the reasoning behind it. The time immediately after death is often one when ready cash is short, and there is also the real point that a bereaved family does not immediately think of all the outstanding hire-purchase commitments. On the other hand, we must be mindful of the legitimate interests of those who lend goods on hire purchase. There is the risk that after the hirer's death the goods may not be properly looked after. I have in mind particularly the question of motor cars. However, I do not want to make too much of that point, although it is relevant.
I have already said a great deal about the situation when the hirer has died. Clause 16, pursuant to the recommenda- 721 tions of the Molony Committee, avoids the termination of the agreement simply because the hirer has died. This is a most important new protection. Clause 17 goes further and ensures that if one-third of the purchase price has been paid and the hirer, had he lived, would therefore have been protected against repossession without a court order, and eligible for an order under Section 12 of the 1938 Act, giving him longer to pay, his estate shall have the same protection and the same benefits.
I have already explained that this new Clause has been carefully adjusted to ensure that, following the death of the hirer, his family would in all cases have the protection of the Clause, even in cases where there is no will. I think this is as far, in fairness to the other side in a hire-purchase agreement, as it is reasonable to go; bearing in mind that under Clause 17 there is already full protection if one-third of the hire-purchase price has been paid. I do not think that it would be fair to the owner to prevent him from taking action for a further month. This applies only in cases where less than one-third has been paid.
§ Mr. A. J. Irvine
I wish to support the Amendment, but I must acknowledge that it is a very difficult matter to know how one may best deal with this situation. I have no doubt that hon. Members on both sides of the House will recognise at once that where there has been a bereavement in a family a document like a notice of hirer's default is, in the practical world of affairs, just the kind of document which is overlooked and does not receive, in the agitation of the circumstances, the attention that it would normally receive. We have here a real and a practical difficulty and it is right that hon. Members should apply their minds to it. It is a matter affecting the public interest, albeit in a fairly limited way.
I am sure that my hon. Friend the Member for Deptford (Mr. Silkin) would be the first to recognise that it is extraordinarily difficult to put forward a provision which will be fair to the owner. In other contexts we have been concerned to achieve fairness to everyone and we must maintain that purpose in this case. It is extremely hard, as we 722 would all readily acknowledge, that an owner of a chattel, dispatching notices of default, should be handicapped in the conduct of his affairs by the circumstance, of which he can hardly be expected in most instances to have knowledge, that there has been a bereavement in the household of the recipient, or the lessee is dead.
I cannot think of a better way to deal with the problem than that proposed by my hon. Friend. One has the choice between the Government's treatment of the matter, which makes no distinction in the period of the notice, and my hon. Friend's proposal, which makes a distinction in point of time. It would lead, as has been indicated, to some possible unfairness affecting the owner. I suppose that the way the thing would work out would be that were my hon. Friend's Amendment accepted in the kind of case we are seeking to consider now, the notice of the hirer's default would be sent and the period of seven days, on the hypothesis on which we are concerned, would expire. The owner would take appropriate steps, or what he thought were appropriate steps, to recover possession or remedy his situation or grievance, and then, if there were some kind of provision such as my hon. Friend proposes, when the owner did that, on this hypothesis, if in the course of so doing and bearing in mind that my hon. Friend's period of time had elapsed—the fact that the hirer's death came to the knowledge of the owner would render all the action taken by the owner ineffective.
When one comes to reflect on it, that is, perhaps, not a very great hardship for the owner. We are anxious to be fair to everyone. I ask the House this question: is this a very great hardship or uncertainty to impose on the owner of a chattel which is the subject of a hire-purchase agreement, when compared with the possibly rather grievous and distressing hardship which may accrue to a hirer who, because of family bereavement and circumstances of distress, had overlooked the arrival, or at least the significance, of the notice of default?
I commend my hon. Friend's Amendment to the House. He would not claim perfection for it, but I imagine that one cannot get perfection on a 723 point of this kind. The balance of advantage is with his argument. One would regard it as an improvement to the Bill if this provision were inserted.
§ 8.45 p.m.
§ Mr. Graham Page (Crosby)
I am very hesitant about intervening at this stage when I have not taken any part previously in the discussions, but this is an Amendment which I think of some considerable importance. I support the hon. Member for Deptford (Mr. Silkin), who proposed it.
Normally when there is a death those who have to collect money on behalf of supply services, for example, never press for payment for a time. The electricity board, the gas board, the telephone service and so on, all of whom have a perfect right to cut off supplies if the bill is owing, never do so as a matter of practice. They observe the ordinary decencies when a family is bereaved and the relatives have to try to tidy up the business and pull together the threads. I am sure that most finance companies and owners of goods on hire-purchase would adopt the same humane practice, but there may be some which would not. This is where the Amendment would be of assistance.
We are in difficulties at this late stage on the Bill as this is the very last opportunity we have to make an Amendment of this sort. I ask my hon. Friend the Parliamentary Secretary to look at the matter from a humane point of view. This would not mean any great burden on any owner. When there is a death he would be asked to wait, instead of seven days, 28 days or perhaps a calendar month. That could not mean any great loss, but, from the practical point of view, to the relatives of the deceased person it would be of great importance.
Suppose that a death occurred from an accident. Suppose there were an inquest. The relatives would be concerned with the inquest and all the strange procedure they would have to go through. They would not have the time to collect the deceased's payments in the first seven days. Frequently the solicitor does not get his instructions for 10 or 14 days, and very reasonably so. We cannot expect the relatives to collect the papers in less than that time. These 724 payments may not come to light for several days. All the Amendment asks is that instead of seven days there should be a month's respite.
I cannot ask my hon. Friend to think again about this matter and bring forward a proposal at a later stage. That is the difficulty; we can only ask him to make a decision here and now, a generous and humane decision, and to accept the Amendment.
§ Mr. D. Price
Before attempting to respond to the challenge made by my hon. Friend the Member for Crosby (Mr. Graham Page) and by hon. Members opposite, I make two points. The first I made in my opening remarks on the Amendment. We must remember that what is involved here is the outstanding instalment, not the whole purchase price which has yet to be paid.
Secondly, I am advised that the Amendment as drafted would not entirely achieve what the hon. Member for Deptford (Mr. Silkin) and my hon. Friend want. This applies particularly to the drafting, which says:the owner becomes aware of the death of the hirer.There is imprecision. My hon. Friend asked me to make an on-the-spot decision and recommended acceptance. I have to make an on-the-spot decision on wording because, as he pointed out, we shall not have a second bite at this. Therefore, I cannot advise the House to accept the Amendment.
§ Mr. Graham Page
On the particular point about drafting, these words were deliberately chosen. The alternative was to say that the owner has received notice or has been served with a notice. It is obvious that the occasion might arise when the owner learns of the matter through his own initiative and not through having been served with a written notice. I do not think there is any harm in the words of the Amendment as drafted.
§ Mr. Darling
May I, too, appeal to the Parliamentary Secretary? I was impressed not only by the arguments put forward for the acceptance of the Amendments but by the fact that they were put forward from both sides of the House by solicitors—and solicitors get involved in the settlement of estates 725 in the way that has been suggested. The Parliamentary Secretary rests upon the argument that the wording of the Amendment is imprecise. Would he like me to go through the Bill and to show him other examples of imprecise wording? There are plenty in the Bill. This is no argument when a strong case of this kind has been put forward.
I recognise the Parliamentary Secretary's difficulties in the way in which the proceedings of the Bill have been conducted by the Government. As a result of that, we have to deal with 11 new Clauses and 109 Amendments on Report on a Bill which started in another place, which means that we cannot refer anything to later stages. This is the end. I therefore appeal to the Parliamentary Secretary to forget the advisers behind him for a change and to do something which I know that he personally wishes to do—put these two Amendments in the Bill.
§ Mr. Silkin
I reinforce what has been said by hon. Members on both sides of the House. This is a very humble little Amendment, designed to meet a very small and limited circumstance. The Parliamentary Secretary said that the wording is loose and imprecise—and there was only one example of that. It was intended to be loose and imprecise, for the simple reason that I wanted to make certain that if a finance house became aware in any manner whatever of the death of the hirer, the Amendment would come into effect. I know that all the reputable finance houses are very willing in these circumstances to give much longer periods of notice. This is a matter of practice. They all do it.
All I can say is that if we give it the effect of law it will see that this is generally carried out throughout the country and that some civilised standards of behaviour will become operative at the moment of bereavement.
§ Amendment negatived.
§ Clause added to the Bill.