§ Order of the Day for the Second Reading read.
§ THE LORD CHANCELLOR (VISCOUNT SIMON)
My Lords, I rise to move the Second Reading of this Bill which deals with the situation that results when premises that are under lease are requisitioned. When a requisitioning authority takes possession of such premises the tenant, of course, has to turn out, but the lease between the landlord and tenant does not on that account come to an end. Subject to certain special provisions about disclaimer, the parties to the lease remain bound to one another according to its terms. If, for example, a tenant has entered into a repairing covenant with his landlord, that repairing covenant continues to bind him even in respect of damage that is done to the premises after they have been taken over by the requisitioning authority and when the tenant has no control over them at all. The requisitioning authority, as matters now stand, may knock the premises about or fail to keep them watertight or in repair, but this makes no difference to the binding force of the repairing covenant on the displaced tenant.
It may be that your Lordships will think that that is a rather unsatisfactory situation. The intention of Parliament, no doubt, when passing the Compensation (Defence) Act, 1939, was to leave these matters to be adjusted by compensation from public funds, but I am quite satisfied, and I think your Lordships will be very easily satisfied, that amendments are needed, both to deal with the period during which the requisitioning is going on and also to deal with the situation when possession of the premises is given up, when—to use the modern phrase—de- 290 requisitioning takes place. The way in which we propose in this Bill to deal with the matter is quite simple and the Bill itself in its main clauses is very easy to follow. We propose that during the period when requisition is operating the repairing covenant is not to apply. If the tenant has been turned out and is not in a position to control the matter he would, under the Bill, during that period be no longer responsible under the repairing covenant, or if, as is sometimes the case, the landlord has undertaken to repair, he would likewise be relieved during that period. That is the first provision. I would point out in passing that the arrangement does no injury to the owner of the premises because his claims are met by compensation from public funds.
There is a second consequence of the present law affecting a repairing covenant when the leased premises have been requisitioned which undoubtedly requires consideration. Under the Act of 1939 compensation for damage which has occurred during requisitioning is paid to the landlord. But unless the landlord is specially bound, when he receives that compensation he is not under any obligation to the tenant to use the compensation to repair the premises. Indeed, under the existing law it seems that the landlord, if he were so unreasonable, might conceivably get compensation from public funds for the damage which had occurred and then claim on the tenant under the repairing covenant. This Bill, therefore, provides, in the second place, that where upon possession being given up after requisitioning, compensation for damage is paid to the person entitled to the benefit of the covenant, no remedy for breach of the covenant shall be enforced against the other party to the lease in respect of that damage. That, I am sure your Lordships will agree, is only fair. Of course, if the compensation from public funds is paid to the party who is under covenant to repair, then that covenant can be enforced against him and he can use the compensation money towards the cost of repair.
There is one further anomaly which we propose to correct and which is indeed rather surprising. It arises under Section 12, subsection (2), of the Act of 1939. Under that section it is provided that compensation from public funds for 291 damage to property which is requisitioned shall not be paid to a person who is entitled, apart from the Act, to recover damages or indemnities in respect of the damage. It has been pointed out that that might, at least, be understood to mean this: that the requisitioning authorities who have done the damage, need not pay compensation for it at all if the landlord can enforce the repairing covenant against the tenant, because the landlord has got a second string to his bow—an alternative way of being indemnified. That is plainly inequitable, and it is remedied in Section 3, subsection (2) of this measure.
Those are the main provisions of this little Bill. I have tried to state them clearly. There is no doubt that in their nature they are rather technical, but though technical they are certainly important—very important to some people. I have only this to say further, that inasmuch as the Bill is correcting defects in the situation which would arise from existing war-time legislation in connexion with these covenants to repair, it seems plainly right that it should have effect as from the operative date of the Act of 1939. That Act took effect from August 24, 1939, a few days before the outbreak of war. This point is made clear by subsection (2) of Section 1 of the Bill. I cannot recommend this Bill to your Lordships as stimulating reading for a moment of leisure, but I thought it my duty to explain to the House what it proposes to do. I commend it to your Lordships' support.
§ Moved, That the Bill be now read 2a.— (The Lord Chancellor.)
§ LORD PONSONBY OF SHULBREDE
My Lords, may I ask the Lord Chancellor one specific question which might lead him to show the House, even more clearly than he has already done, exactly where the law is altered and how it will stand when this Bill is passed? The instance I would give, but only very generally, will no doubt be known to the Lord Chancellor. It is the instance of Shillinglee, Lord Winterton's house in Sussex. That establishment was practically demolished by fire while in the occupation of the military, and I do not quite know how matters stand with regard to repairs and the payment of the sum necessary for the repairs. It occurs to me that this would 292 come under this Bill, and if the Lord Chancellor is cognizant of the particular case he will no doubt enlighten me.
§ THE LORD CHANCELLOR
My Lords, willingly, with the leave of the House, I will say a word in reply to what has been put to me by the noble Lord. I am afraid that I am not myself informed as to the particular case to which he refers, but the first question that would arise so far as this present Bill is concerned is this: is that a case of a house which is held on lease? If, as I rather suppose, it is freehold, this Bill has nothing to do with it. This Bill is solely concerned with adjusting the rights of parties if the premises concerned are, at the time, the subject of a lease and the authorities requisition them. If I may, I will make inquiries about the case which the noble Lord mentions and perhaps I might communicate with him.
§ On Question, Bill read 2a and committed to a Committee of the Whole House.