May I inquire from the Minister whether the effect of sub-section (2) of this section is to bring into this Bill the definition of "tenement" that is included in Section 2 of the original Act of 1931 and to make it clear that this Bill applies only to tenements as so defined?
Committee on Finance. - Landlord and Tenant (Reversionary Leases) Bill, 1957—Committee Stage.
Question proposed: "That Section 1 stand part of the Bill."
It applies to all those categories mentioned in the Act.
The Minister will remember I wrote him a letter about the definition of a tenement. As far as I can understand the wording of sub-section (2), it restricts the operation of this Bill to tenements as defined in Section 2 of the Act of 1931. As the Minister will recollect, that means that it is restricted to land or premises either situate in an urban area or situate elsewhere, not exceeding an acre.
There is no reference to tenements in the Bill at all.
I am aware there is no definition in the Bill, but does sub-section (2), making it construable with the parent Act, bring in that?
I do not quite get what the Deputy means. He is bringing in something that does not arise.
If there is a lease for a building situate in a non-urban area and the area of land demised with the house exceeds one acre, does this Bill apply to it? If it does, then the definition is not brought in. If it does not, the definition is brought in.
There is no reference to it here. That is the only answer I can give the Deputy. Tenements are not brought into it at all.
We will leave it at that until we come to the section where it arises. It will be easier then. I am not trying to catch the Minister out.
Question put and agreed to.
SECTION 2.
Question proposed: "That Section 2 stand part of the Bill."
Section 2, under "Definitions" describes "building lessee" as "the lessee under a building lease". I suggest that this definition should be amended as it does not include anyone except the original lessee. It should correspond to that of "tenant" in the Act of 1931 and should read: "the person for the time being entitled to the interest of the lessee under a building lease". On line 31, it is sought to define "proprietary lessee". In the Bill as drafted, "proprietary lessee" means "the lessee under a proprietary lease". I suggest that should be changed to mean the person for the time being entitled to the interest of the lessee under a proprietary lease.
I do not know whether the Minister will want any further explanation, but it is obviously too tightly drawn and could be construed to mean a particular lessee, the original lessee, if you like, as distinct from persons who are now in possession. I wonder if the Minister will give that consideration and, possibly on the Report Stage, agree to have the necessary amendment made.
I am advised that the parliamentary draftsman is satisfied that no amendment is necessary because Section 2 of the 1931 Act says: "The word ‘lessee' shall, where the context so admits, be construed as including the executors, administrators and assigns of the lessee," and Section 1 (2) of this Bill provides that the Act of 1931 shall be construed together with this Bill.
With all respect to the Minister and to the House, I should like to say that one of the problems that arises with people who are in dispute and who have to go to litigation is the fact that, no matter what the draftsman might construe as being the meaning, the courts do not always hold, and therefore when we make the necessary amendments under the landlord and tenant legislation, we should at least make sure that the definitions are quite clear and that there can be no ambiguity about them.
We have often had discussions in the House as to the meaning of legislation, and then immediately after the legislation is passed and becomes an Act of the land, there is litigation and the judge trying the case will say: "I am concerned only with what the Act specifically states." What I suggest will not make any change in the policy or in the intentions of the Minister, and I urge him to accept the suggestions which I make and which I consider are necessary.
The statement which Deputy Briscoe has just made makes it clear, to my mind, that it is an impossibility to get what might be described as perfect legislation. I have had the same experience as Deputy Briscoe with Bills that have been brought into the House. They have been discussed at length, examined by experts and then examined by people here with technical and practical knowledge such as Deputy Briscoe would have in a matter of this kind, and then it has been found that, when the Bill becomes an Act, there are all these loopholes which he mentioned.
While we cannot get the perfect Act, we try to get as near perfection as possible. However, I will have the matter examined, but I must, of course, take into serious consideration the advice my experts give me.
I am very pleased the Minister has indicated that he proposes to have my suggestions examined, but in view of what he has said just now, may I point out to him again in a simple form that any layman understands the definition of "building lessee" which the Bill here specifically states means the lessee under a building lease. That can bear an interpretation only that whoever was the original lessee of a building lease is the person so meant by this Bill. There is nothing very radical or extraordinary in suggesting that the building lessee should be "the person for the time being entitled to the interest of the lessee under a building lease." It means then that if he were the original lessee and sold any interest, there can be no doubt that the person to whom he assigned is entitled to everything he is entitled to and that there can be no limitations. The original landlord could say: "I had certain rights. I was not asked about them. I did not intend to do this." One could have unnecessary litigation.
In the same way, in regard to the second suggestion I have made, I shall be quite happy if the Minister will put these amendments to the draftsman and his advisers and have them reconsidered for Report Stage.
I will give an assurance to have it looked into.
Question put and agreed to.
Section 3 agreed to.
SECTION 4.
Question proposed: "That Section 4 stand part of the Bill."
Has there been any indication of what area is considered the maximum area that would be covered by paragraph (b) in sub-section (2)? I regret having to ask the Minister technical questions like this, but that was one of the reasons why the forerunner of this Bill was sent to a Special Committee.
That is a matter which will have to be settled by the courts.
In each individual case.
Yes.
Would it not be desirable to try to provide some rule of thumb method, perhaps, to operate as a primary basis, leaving parties who are dissatisfied with it as prima facie evidence to take the issue to the courts, rather than to have to go to the courts for each individual definition?
I would not have sufficient technical knowledge to know whether that would be likely to arise or arise very often.
I can see it arise.
Has Deputy Sweetman finished?
On that point, yes. In relation to some of these technical points, probably the best thing to do is to raise them now so that they can be looked into between now and Report Stage.
I can give that assurance.
I think it would be easier for the Minister.
Anything of a disputable nature will be examined.
I wish to draw the Minister's attention to sub-section (3) (a) of Section 4. In order to make that specifically clear, there should be added at the end of the first line of the section, the words "commencing on or after the 1st January, 1914", so that the section would begin "Where a lease is for a term of not less than 50 years commencing on or after the 1st January, 1914, and the rent reserved..." I think that is the intention of this sub-section. I would ask the Minister to have that considered for the Report Stage so as to make that provision clear. I might add it is considered that the supposition that the fact that the land leased at less than the poor law valuation indicates that the lease is a building lease may be valid in the case of leases entered into after 1914, but would not be valid in the case of leases entered into before 1914. It is again a technical matter and the Minister may like to consider that for inclusion in the Report Stage.
I have a note which says that the acceptance of such an amendment would defeat the object of the provisions of sub-section (3) as far as leases entered into before 1914 are concerned. It is precisely because records of pre-1914 leases are often so scanty and evidence as to who built the property is so hard to establish by the present lessee that sub-section (3) was introduced. However, the Commission of Valuation has been asked for his advice on the matter, and further consideration will be given to it.
Paragraph (b) of sub-section (3) provides that the certificate of the Commissioner of Valuation shall be conclusive evidence. Certainly the certificate should be prima facie evidence. It is possible there might be an error in the certificate, and I suggest that the section should provide only that the certificate of the Commissioner of Valuation shall be prima facie, so that there will be an opportunity for a litigant to show a mistake, if in fact there was a genuine bona fide mistake in the certificate.
We will have to examine that in conjunction with Deputy Briscoe's submission.
The same point arises in sub-section (4) (a).
Under sub-section (5), it is intended, I understand, to carry out the recommendations in clause 68 of the Conroy Report. This sub-section does not clearly do so. What was aimed at was the reinstatement by a sub-lessee. I would suggest the word "any" should be substituted for the word "the" before "lessee". Preferably it should read:—
"Where permanent buildings on land comprised in any lease or sub-lease have been reinstated by the person for the time being entitled to the interest of the lessee under such lease or sub-lease in pursuance of a covenant contained in such lease or sub-lease in the event of their destruction by fire or otherwise such buildings shall be deemed to have been erected by the person who erected the original buildings."
I think that would probably meet the case. I do not know whether the Minister has had any suggestions made to him on this sub-section so as to be able to give his opinion now. I will be satisfied with having the matter put on record and the Minister will probably have it examined again.
There again I am advised that the draftsman does not see any necessity for amendment, but, in view of what the Deputy has said, I will have the matter put to the draftsman again.
I wish to raise a different point on sub-section (5). I am not too happy that the word "reinstate" is adequate. In relation to this section, it seems to me there is a possibility of a very strict interpretation by a court. Take the case of buildings which have been destroyed by fire and a new building has been erected which is substantially the same as the old building. It may be slightly different; it may be an improvement. I am a little bit worried that a slightly different building, even though an improvement, might not be considered as being a reinstatement. If there is anything in my anxiety in that respect, I would suggest it would be met by the insertion of the word "substantially" before "reinstated"—"where permanent buildings have been substantially reinstated." I do not think anybody would desire that the sub-section should be construed too rigidly, and without some covering adjective of that nature, there might be that danger.
The only thing about that is that "reinstated" is the word used by the Conroy Commission.
I appreciate that but I am not quite clear whether they were considering it from a drafting point of view or not.
All these views, in conjunction with other views, will be brought to the draftsman.
I am perfectly happy with that.
It is not suggested, is is, that the draftsmen are infallible?
It would be very bad for the lawyers if they were.
Question put and agreed to.
SECTION 5.
Question proposed: "That Section 5 stand part of the Bill."
Would the Minister mind asking the draftsman to look again at the drafting of paragraph (a)? It is a very cumbersome method of arriving at the result. It may not be possible to do it by a more simple method but it is a very cumbersome method.
All right.
One would have to sit down with a wet towel around one's head to understand it.
Of course, most of these paragraphs are heavy.
This one is worse than many of them.
And once the lawyers get at them it makes them heavier still.
If the Dáil got at them it might save the lawyers having to get at them.
We shall look into all these points.
Question put and agreed to.
SECTION 6.
Question proposed: "That Section 6 stand part of the Bill."
With regard to sub-paragraph (ii) at the top of page 5, as I understand it, the effect is to apportion the rent between the land that has new buildings on it and the land that has not, by reference to area alone. That need not necessarily be a fair apportionment. We all know, for example, that in relation to any building site the portion that is near the road, near the water and sewerage services, is of greater value than the portion that is at the back that requires development before building can take place on it. Equally, it often happens in relation to a building site, particularly in an urban area, that the site consists of old buildings and virgin land. In such circumstances the old buildings have some value. I would suggest that the general position should be that the natural possibilities of the site should be taken into account that it should not be merely a strict area division, excluding old buildings, as I think this draft excludes them.
This is a re-enactment of the 1943 provision.
I am aware of that but I think it is defective.
Again, we should have it examined.
Thank you.
Question put and agreed to.
SECTION 7.
I move amendment No. 1:—
In sub-section (2), paragraph (d), sub-paragraph (ii), page 5, line 43, before "of" where it secondly occurs to insert "(otherwise than on decoration)".
In order to qualify as a proprietary lessee a lessee must have paid a capital sum, or fine as it is usually called, to the lessor or have spent a substantial sum of money on the premises or have both paid a fine and spent money on the premises. The object of having this condition is to ensure that the person to be entitled to the reversionary lease has acquired the beneficial interest either by buying the premises or by spending a substantial sum on it. It has been suggested that sums of money spent on decoration of the premises should not reckon as expenditure on them for the purpose of giving the sub-lessee rights to a reversionary lease to the exclusion of his lessor and this amendment gives effect to that suggestion. The sub-paragraph would then read: "partly in consideration of the expenditure (otherwise than on decoration) of a sum of money" and so on.
I had intended to suggest an amendment almost the same as that and for the same reasons as those adduced by the Minister but, rather than the expression "otherwise than", I thought it would be better that the sub-section should read "partly in consideration of the expenditure (other than expenditure on decoration)" and so on. That makes it specific that for the purpose of negotiation and calculation and for the establishment of rights one way or the other the occupant of a building now claiming new reversionary rights and so forth cannot make a claim arising from any expenditure whatever on decoration. The Minister might consider my words as compared with his own. They mean the same thing but I believe it is better from a layman's point of view to use the words I suggest.
It is only a matter of words. I think the Deputy will have to agree with my amendment.
I am satisfied.
It covers what the Deputy is looking for.
Yes.
Amendment agreed to.
Question proposed: "That the section, as amended, stand part of the Bill."
I am not quite clear as to what is intended by the words "exceptional rent" in sub-section (3), paragraph (b). The case I have in mind is the type of case where there is a graded rent for different periods of the term. If it is a graded rent for different periods of the term and if part of that graded rent is in operation for the last five years, then the rent so graded and so in operation should be considered. I agree entirely that a penal rent for breach of covenant should not be taken into account, but that is the first part of the paragraph. The second part of the paragraph says "an exceptional rent." I do not want to make a pun but I am not satisfied that that is happy phraseology. I think a graded rent could be an exceptional rent.
For example, there could be the case that there is a lease where, if the premises are used as a private dwellinghouse, one rent is charged and, if the lessee changes that user into shop premises, another rent is charged. If the lessee does that some ten years, shall we say, before the end of the term and the shop rent is accordingly payable during the last five years, that is an exceptional rent but it is not a rent which should be excluded in the same way as a penal rent for breach of covenant is excluded. I think that the sub-section as drafted excludes cases that should not be excluded while properly excluding penal rent cases.
If the Deputy has doubts about it we shall have it examined.
Question put and agreed to.
SECTION 8.
Question proposed: "That Section 8 stand part of the Bill."
Could the Minister explain to me the necessity for this section? I have tried to understand it. I am sure there is something in the brief.
It was recommended in paragraph 177 of the Report that the new legislation should not prejudice the rights of any person who, between the passing of the 1931 Act and the passing of this Act, made a sub-lease which was expressly framed so as to reserve his right to a reversionary lease under present law. The section as now drafted differs somewhat from the recommendation in paragraph 177 in that it now only says sub-leases granted during this period for a term of less than 99 years and expiring more than five years before the building lease. This modification of the recommendation is considered to be consistent with the views expressed earlier in the report that a building lessee who gives a sub-lease for a term greater than 99 years should be deemed to have parted entirely with the beneficial interest in the premises, quite irrespective of the length of the reversion which he reserved to himself.
Might I repeat the Minister's comment: I should like an opportunity of reading through the explanation that the Minister has so kindly given.
Question put and agreed to.
SECTION 9.
I move amendment No. 2:—
In paragraph (b), page 6, line 17, before "if" to insert "or a proprietary lease".
The object of the amendment is to make it clear that persons holding under renewals of proprietary type leases which expired before the 1931 Act was passed will have the right to get a further reversionary lease when the present lease expires.
As it stands, the section gives this right to persons holding under renewals of building-type leases which expired before 1931, but there are some cases where the renewal of the lease was made to a sublessee who, if the transaction were to take place now, would be regarded as a proprietary lessee. Acceptance of the amendment will make the section in full accord with the recommendation in paragraph 101 of the Conroy Report.
I shall have to think about that one.
I can assure Deputy Sweetman there is no need——
Deputy Sweetman will think all the same.
We had good advice on it and it was to the effect of what the Minister has suggested, in the sense, anyway.
The reason I want to think about it is that I am worried about the case where a renewal of a lease expires just before this Bill becomes law and the lessor has not committed himself in any way by irretrievable action. There may be certain cases of that type and I am particularly concerned in the case of one estate in my own constituency and, as I say, I should like an opportunity of reading the Minister's comment before saying any more.
Is it not true that this is, in fact, a retrospective section dealing specifically with the aspect of the case that has been mentioned by Deputy Sweetman—particularly so now in view of the amendment offered by the Minister?
I think there is still a gap.
As far as I can see, it covers the situation.
Before I offer that opinion I want to read it to make sure.
Amendment agreed to.
Section, as amended, agreed to.
SECTION 10.
I move amendment No. 3:—
In page 6, before sub-section (2), to insert a new sub-section as follows:—
(2) The notice referred to in paragraph (b) of sub-section (1) of this section shall be a valid notice only if served not earlier than 15 years before the expiration of the building lease.
One of the objects of Section 10 is to ensure that a lessee will not be deprived of his right to a reversionary lease where he omits to apply before the expiration of the existing lease. It seeks to secure this by providing that the lessee will be entitled to apply for the reversionary lease even after the building lease has expired so long as he applies within three months of receiving a notice from the lessor of the expiration of the lease. However, the object could be circumvented by the landlord serving notice well in advance of the expiry of the lease— perhaps at the very commencement of the lease. The amendment closes this possible loophole by rendering invalid any notice which is served more than 15 years before the expiration of the building lease.
Amendment No. 4 makes similar provision in the case of a proprietary lease.
Amendment agreed to.
Section, as amended, agreed to.
SECTION 11.
I move amendment No. 4:—
In page 6, before sub-section (2), to insert a new sub-section as follows:—
(2) The notice referred to in paragraph (b) of sub-section (1) of this section shall be a valid notice only if served not earlier than 15 years before the expiration of the proprietary lease.
This amendment is consequential on No. 3. It provides that only notices of expiration served within 15 years before the expiry of a proprietary lease will be valid.
Amendment agreed to.
Section, as amended, agreed to.
Section 12 agreed to.
SECTION 13.
Question proposed: "That Section 13 stand part of the Bill."
In regard to sub-paragraph (b) is there not a danger in respect of the wording of that paragraph that where somebody allows a person to stay on to get alternative accommodation and at the same time it was desirable that the right to a reversionary lease should be negatived because of the other methods in the Bill such as the development of a building estate and so on, that that right would be lost? I am afraid I have put the case in a rather cumbersome way. What I really mean is this: where this section comes into operation, is it clear that the savers that there are against a reversionary lease —and which savers would ultimately be decided by the courts if necessary —still operate notwithstanding the provisions of Section 13?
This provision is designed to give effect to the recommendation in paragraph 175 of the report which itself followed the lines of Section 47, sub-section (4) of the 1931 Act. The object of Section 47 (4) was to give certain limited rights to claim a reversionary lease to a lessee whose lease would expire within five years before new legislation came into force but who were still in occupation of premises. It is proposed in this section that any person whose lease expired within five years before new legislation comes into force who is in possession of property demised by lease and who has not previously had the right to a reversionary lease should be given a period of 12 months instead of six months—the period mentioned in Section 47—in which to claim a reversionary lease.
It is only a right to claim and therefore Section 14 overrides Section 13 if the court deems it proper. I think that is so but I should like confirmation of it.
Yes.
Then I am quite happy about it.
Question put and agreed to.
SECTION 14.
Question proposed: "That Section 14 stand part of the Bill."
I suggest that sub-section (2) be amended by the insertion of a few words—that is, by inserting after the word "section" in line 2, the words "or his successors in title"; and after the word "application" in line 6, the words "or his successor in title". Then the sub-section would read:—
"(2) An applicant who has been declared not to be entitled to a reversionary lease under sub-section (1) of this section or his successors in title shall be entitled to remain in possession of the premises comprised in his lease after the expiration of the lease, upon such terms as to the court may seem just, until the person who successfully objected to the application or his successor in title becomes entitled to possession thereof upon the expiration of the lease or leases upon which his reversion is dependent."
It might also be advisable to add at the end "and shall then give up possession to such person or his successor in title". That might be necessary so as to avoid what might be called a stoppage of continuity.
I shall have that matter examined.
In regard to sub-section (3), as I read it, it is to the effect that if a lessor objects successfully to the granting of a reversionary lease on the basis that he is going to do certain development work, new building work or good estate management, and gives an undertaking to the court to that effect, and then fails to carry out the undertaking, he is liable to a fine not exceeding £500.
Surely more, if it is a big premises?
I can see a case where a lessor would very well say: "I will go in and object and, if I win and do not go on with the work, I lose only £500 and the benefit I get by putting up the objection will be considerably more than that £500." It seems to me there ought to be a provision as well that, in the event of a successful objector not carrying out, within the time allotted by the court, the terms of an undertaking which he gave to the court and on which his objection was allowed, the court should have the right in addition to imposing the fine, to direct that he must grant the reversionary lease on application.
I must say I am thoroughly in agreement with Deputy Sweetman there. There have been cases where objections to reversionary leases, successfully contested, have been in fact securing back the premises from an occupant by what one might claim as false pretences. I do not agree so much with the figure of the fine, since that is relevant always to the premises concerned. If, however, the person does not complete the undertaking in a reasonable time or a fixed time, the original occupant should be allowed to claim back his tenancy and occupation of the premises. I have known cases where, if you have enough money to contest something successfully and get possession of something on the grounds that you are going to do something, you dispossess the other person and then you do not go on with the undertaking, saying that the times have changed, and then you dispose of the premises at a very considerable profit.
Am I to presume the Deputy is not satisfied with a fine of £500 as sufficient, that he wants added to that the right of the lessee still to get his reversionary lease?
I would, rather than add to it, put the option that the court could decide the proper thing to do.
I think that is fair enough and I shall give that sympathetic consideration.
Question put and agreed to.
SECTION 15.
Question proposed: "That Section 15 stand part of the Bill."
I should like the Minister to consider whether he would be prepared to amend this section by adding a new sub-section after sub-section (1), as follows:—
"(2) In this section the words ‘applicant', ‘objector' and ‘proprietary lessee' respectively shall mean and include the person or persons who, when such compensation shall become due and payable, is or are entitled to the interest in the land the subject of the application for a reversionary lease which when such application was refused was vested in the original applicant, objector or proprietary lessee as the case may be."
Then the subsequent sub-sections would need to be renumbered. I should like to say that the section does not take into consideration the fact that the application may be made and refused 14 years before the expiration of a lease. We have a number of cases which are well known, where for the purpose of reconstructing premises, remodelling them or rebuilding them, you have to anticipate the expiry date and you ask for a reversionary lease before the expiration of the actual lease. Therefore, it is counterside of that.
The section does not take into consideration the fact that the application may be made 14 years before the expiry of the lease and during that time the interests of both parties may have devolved upon other persons either by assignment under a settlement, will or intestacy, or by operation of law. I am not prepared to say how the section should be redrafted, but if the intention is that the compensation should be paid to and by the parties entitled to the interests of the applicant and objector when the lease expires and the reversionary lease, if granted, would have begun, the section fails completely to carry out that intention and should be redrafted entirely, or else a "sub-definition" clause should be inserted for that particular section.
If the Minister would consider that, he will find that this application for a reversionary lease years ahead of expiry of the original lease is quite a common thing and in many cases would be refused before the end of the lease and would result in the occurrence of the things I have suggested. I should like the Minister to indicate that he is willing to have this suggestion examined with a view to seeing if there is any merit in it and, if there is, to having it introduced on the Report Stage.
It is a pretty complex verbal amendment that the Deputy has just recited and I would not see the purport of it just from hearing it read out that way. I undertake to have it examined in the light thrown on it.
Question put and agreed to.
SECTION 16.
Question proposed: "That Section 16 stand part of the Bill."
This is a new section. I do not think it was in the 1931 Act; if it was I have failed to find it. I should like to make just one point in relation to sub-section (3) (a). There should be a saving clause in that sub-section that the tenant for life or other person in a fiduciary position could only have recourse to the capital funds of the settlement to recover the compensation he has paid if he has not been guilty of any default. If a tenant for life, or if a trustee has personally been guilty of default in dealing with the matter it should not be right that he should have recourse to the capital funds of the settlement. There should be that saver in it.
It is perfectly proper where everything correct has been done by a trustee, or tenant for life, that he should be reimbursed but if he has deliberately decided to flout an order of the court, and thereby caused additional costs to be incurred, or where he has not furnished the information which is required to be furnished by notice under this Act, even though he had that information in his possession all along, and that has caused additional costs to be incurred, I do not think a person in the light of a default like that should have recourse to the fund. All I am anxious to ensure is that a tenant for life or trustee acting bona fide in the matter would be reimbursed, and if he does not act bona fide he should not be reimbursed.
It is quite possible the ordinary law covers that sort of situation. I rather imagine, myself, it would but if it does not, if we find the ordinary law would not be likely to deal with that, we shall have that examined too.
Question put and agreed to.
SECTION 17.
I move amendment No. 5:—
To delete sub-section (2) and substitute the following new sub-section:—
(2) The lease shall be for a term expiring 99 years after the expiration of the lease to which it is reversionary.
This is a drafting amendment. Its object is to avoid any possible conflict with sub-section (6) of Section 12, which alters the present law by providing that a reversionary lease which has been applied for after the expiration of the old lease should normally commence on the date of the application for the reversionary lease and not from the expiration of the old lease. It is considered that the present draft is not fully in harmony with the altered circumstances and that the revised draft is an improvement.
Amendment agreed to.
I move amendment No. 6:—
In sub-section (5), paragraph (a), subparagraph (i), page 10, line 32, before "and" where it secondly occurs to insert "against fire".
The only risk against which lessees are ordinarily required to insure is fire. In calculating the gross rent it has been suggested that this should be specifically recognised and I am accepting the suggestion.
Amendment agreed to.
I move amendment No. 7:—
In sub-section (5), paragraph (c), page 10, line 57, to delete "or have been".
The object of this amendment is to secure that when fixing the gross rent of property which is controlled by the Rent Acts the court will have regard to the restricted rent permitted by these Acts only where there is a tenant actually in occupation of the property. As the Bill stands, the fact that the property had at some previous time been let would have obliged the court to have regard to the restricted level of rents permitted by the Rent Acts, even though no tenant would now be in occupation or even though the tenant who would now be in occupation would be paying a much higher rent, e.g., under a furnished, and therefore uncontrolled, letting.
I am obliged to the Minister.
Amendment agreed to.
I move amendment No. 8:—
In sub-section (6), paragraph (b), page 11, line 9, before "and" to insert "against fire".
This amendment is consequential on amendment No. 6.
Amendment agreed to.
Amendments Nos. 9, 10, 11 and 12 may be discussed together.
I move amendment No. 9:—
In sub-section (7), paragraph (a), page 11, line 12, before "to" to insert "or to execute specified repairs".
These amendments are designed to prevent an order of the court requiring an applicant for a reversionary lease to do repairs being frustrated. The only power the court has, as the Bill stands, in the direction of compelling an applicant to put his premises in repair before granting a 99-year reversionary lease is that of requiring him to spend "a specified sum of money on repairs". It is possible that the lessee would refuse to do the repairs which the court had in mind when making the order but spend the specified sum on other repair work, while neglecting the repairs necessary to prolong the life of the building. The amendment empowers the court to specify the particular jobs to be carried out. Amendment Nos. 10 to 12 are purely consequential.
With reference to this section——
The section is not open for discussion yet.
I want to come to my amendment. I have been proceeding along a certain line with reference to the Bill and I have given way.
I think the Deputy may have given way in error.
I am not anxious to curtail the Deputy at all, but the section is not under discussion.
We are discussing a sub-section of the section.
Amendment agreed to.
I move amendment No. 10:—
In sub-section (7), paragraph (a), page 11, line 15, to delete "that sum of money has been so expended" and substitute "the requirement has been complied with".
Amendment agreed to.
I move amendment No. 11:—
In sub-section (7), paragraph (a), page 11, lines 16 and 17, to delete "within which the money is to be expended".
Amendment agreed to.
I move amendment No. 12:—
In sub-section (7), paragraph (b), page 11, lines 20 and 21, to delete "expend the specified sum of money on repairs" and substitute "comply with the requirement of the Court".
Amendment agreed to.
Question proposed: "That the section as amended, stand part of the Bill."
I wish to refer to paragraph (c) of sub-section (3).
The Deputy is raising a matter which I have also in mind.
I hope we are in agreement and that I get the Deputy's support. That paragraph reads:—
"If any new covenant or condition restricting the lessee's rights is included in the reversionary lease, the court shall have power to fix a lower rent where it thinks proper to do so."
I should like the Minister to consider amending that sub-section to read:—
"If any new covenant or condition restricting the lessee's rights is included in the reversionary lease, other than a covenant restricting the use to the then existing user of the premises and/or a covenant restricting erection of additional buildings, the court shall have power to fix a lower rent where it thinks proper to do so."
I think that is self-evident. I do not know if the Minister has had this point put to him and argued to him, but I recommend the Minister to consider it seriously. Many old leases contain virtually no restrictions. It is considered that, in a modern lease, the lessor should be able to control a change of user and that, in fact, unless he is able to exercise such control it is impossible to fix a rent on the premises. It is also considered that the lessor should be entitled to control the development of the land by the erection of new buildings and should be in a position to obtain the full ground rents from such new development if it is allowed.
In our local authority we had this case recently. We had given a lease to a public institution for a specific purpose. That meant that the land remained agricultural land for the period of an unexpired portion of a 99-year lease, of which roughly 30 years had gone. It now turns out that the tenant has applied to the Dublin Corporation for permission to sell six of those acres to another public authority at a very substantial sum of money. They applied to us also for a reduction in their rent because they will now be paying on a piece of ground less the six acres.
We have considered the matter. We hope that, under this Bill, we will have a right to insist that we will be given a portion of the purchase price because it was a lease with a restriction. If we agree, we will share in the purchase price and we will also be enabled to recover from the purchaser a capital sum equivalent to our loss of rent on the six acres which are now being surrendered.
It the Bill goes through in its present form, any lessor in a transaction such as that, if there is not protection, might be prevented from getting reasonable rights. I suggest, therefore, that the Minister re-examine the Bill. If he wants further particulars of the case to which I have referred, I shall be available. I do not think the case will come to any litigation because the three parties to the problem are all sensible and I think agreement will be reached.
The amendment which the Deputy has suggested is pretty complex. I would point out that there are eight amendments in respect of this section. It did not occur to us to make an amendment of that particular type. Again, however, as in the other cases, we shall have it examined. It is somewhat complex.
It is very simple when you understand it.
If I correctly understood the suggested amendment by Deputy Briscoe, I am 100 per cent. against it. It seems to me that it overrides all the rights in relation to private property. I understood the Deputy to suggest that portion of the value that a lessee has attained under this Bill or under the 1931 Act should be expropriated to the Dublin Corporation.
No.
That is what I understood the Deputy to mean. If the Deputy is merely suggesting that the apportioned rent on the part being sold should be redeemed, he is entitled to make that suggestion. However, to make the suggestion, in addition, that the lessee should pay away part of the value of his property held subject to a reversionary lease seems to me contrary to the entire spirit of this Bill and to the entire spirit of the 1931 Act. Perhaps I misunderstood the Deputy.
The Deputy did.
When we have an opportunity of reading what Deputy Briscoe has said, and the amendment which he has suggested, then he and I and the Minister will, each of us, have an opportunity of knowing what the real meaning of his suggested amendment is.
I want to make another suggestion in relation to paragraph (c) of sub-section (3). This sub-section visualises solely that the rights of the lessee should be restricted by the new reversionary lease. I had a case recently where the opposite obtained. A building lease was coming to an end. The lessor and the lessee both desired that, in the new reversionary lease that was to be granted, permission would be given to the lessee to extend the rights he held under the old lease. The old lease was silent on who was entitled to erect neon signs on the building. In fact, in certain respects, it was agreed between the lessee and the lessor that the right to erect neon signs and get additional rentals from them was jointly vested in the old lease in the lessor and the lessee. Both the lessor and the lessee agreed that it was desirable that that right should be vested solely in the lessee in the future. That is an enlargement of the lessee's rights.
Happily, the parties were able to agree on a rent but, if they had not been able to agree on a rent because it was an enlargement, not a restriction, there would be no power under this Bill, when it becomes an Act, to enable such a case to be decided. It would merely mean that the parties would have to go on in the same inchoate state in which they were before, with doubts on either side. I think the case could be met quite easily by ensuring that if the covenant was to be varied either by way of enlargement or restriction the court would then have the right to vary the rent according as it thought fit.
While Deputy Sweetman is 100 per cent. against the suggestion I made, he has argued 100 per cent. in favour of it, except that he takes a different illustration. In this particular case, it was not a question of the corporation's acquiring something. The corporation was the lessor of a restricted lease. Because of new development—or, if you like, these new signs; new improvement—they sought the very same thing which Deputy Sweetman now seeks to preserve for the private lessor. It is exactly what I said.
In the first place, I said that many old leases contain virtually no restrictions and that it is considered that, in a modern lease, the lessor should be able to control a change of user and that, in fact, unless he is able to exercise such control, it is impossible to fix a rent on the premises. I said it is also considered that the lessor should be entitled to control the development of the land by the erection of new buildings and should be in a position to obtain the full ground rents from such new development if it is allowed. That is another way of saying that portion of the benefit accruing to the lessee from the new development he is able to get by way of an income in respect of neon signs, for example, should fall to the lessor. I shall leave it to the Minister first of all to consider what we have said and whether he is prepared to introduce a further amendment on Report Stage. I feel sure that when, in the peace and quietness of his home and office, Deputy Sweetman considers what I have said he will withdraw his objection.
The Deputy's suggested amendment is in opposition to what he has just said. However, I shall look at it later in peace and quietness.
Question put and agreed to.
SECTION 18.
Question proposed: "That Section 18 stand part of the Bill."
Whilst I hesitate to suggest any amendment to this section, I should like to say that I think the section is a layman's section. One knows what is meant to be dealt with, but doubts the manner of doing it effectively. A lease cannot be negotiated under an Act unless the Act provides the machinery of the negotiation. Some of the ambiguity could be removed by saying: "A reversionary lease granted to a building lessee or a proprietary lessee in consequence of an application to the immediate lessor of such lessee for a reversionary lease to be made to him by such immediate lessor under Part V of the Act of 1931 or this Act whether such reversionary lease shall have been granted by the court or negotiated between the parties shall be deemed to be a building lease...." I would suggest that the section be framed in that manner.
Are we to understand that that is simpler than the section as framed?
I said I hesitated to suggest how it could be done effectively but I expressed a hope that legal phraseology could be drafted to put the thing in such a manner that this difficulty would be eliminated.
Is that layman's phraseology?
Mine is.
What the Deputy has just read out?
The Deputy has a very short and convenient memory. At the beginning of our discussion I pointed out that in so far as particular amendments were concerned I was in fact instructed.
That is what I thought.
The Deputy had forgotten that I told him so. I do not pretend for a moment to be able to draft these things without some help and advice and indeed I might even need to have these things written out for me. I would ask the Minister to consider introducing some form of phraseology that would bring about the situation my suggested amendment implies.
Question put and agreed to.
SECTION 19.
Question proposed: "That Section 19 stand part of the Bill".
Again, under instruction, I should like to say that I think this section has even yet failed to accomplish completely its intention. I think that, to meet the circumstances for which the Baggot v. Doherty covenant is now usually inserted in building leases, the words "which expression shall in this section include a built-on lease which under Section 6 of this Act is deemed to be a building lease" should be inserted in the first line thereof after the words "building lease." The whole snag about these provisions has always been that the lease—where the ejectment is for failure to erect all the houses—is not a building lease at all. In other words I suggest that after the words, "where a building lease," at the beginning of this section, we should add "which expression shall in this section include a built-on lease which under Section 6 of this Act is deemed to be a building lease." I think that is simple enough and understandable enough.
I shall have that examined between now and Report Stage.
Question put and agreed to.
Section 20 agreed to.
SECTION 21.
Question proposed: "That Section 21 stand part of the Bill."
Could the Minister tell me whether the mandatory nature of sub-section (1) of this section is new or not?
There is no change.
Question put and agreed to.
SECTION 22.
Question proposed: "That Section 22 stand part of the Bill."
This section is inconsistent with Section 17 (2) which makes the reversionary lease commence from the expiration of the lease, and might enable a lessee by well-planned inaction or obstruction to defeat the Act. The whole provision is unnecessary, and should be deleted, or, alternatively, there should be inserted the words: "and who has applied to his immediate lessor for such a reversionary lease." I am reliably informed——
And instructed?
——and instructed that this section is inconsistent with sub-section (2) of Section 17 which makes the reversionary lease commence from the expiration of the lease. If the Minister examines this position he might find that he could introduce an amendment along the lines I have suggested.
We shall have that looked into before Report Stage.
Question put and agreed to.
SECTION 23.
Question proposed: "That Section 23 stand part of the Bill."
I should like to suggest that the Minister would consider inserting at the end of sub-section (3) of this section words similar to those which occur at the end of sub-section (4) as follows: "and a reversionary lease in which a person so empowered shall grant, or join in granting, shall be as valid and effectual in law as if such person had been capable of granting or joining in granting such lease".
We shall look into that also.
Question put and agreed to.
Section 24 agreed to.
Title agreed to.
Bill reported with amendments.
Next stage?
On the question of ordering the next stage, may I say to the Minister that we had a helpful discussion this afternoon——
Very.
——and it would perhaps be of assistance on Report Stage if, before then, the Minister indicated to Deputy Briscoe and myself what his view was going to be on the technical aspects which were raised.
We will do that.
It would save unnecessary amendments.
Report Stage ordered for Wednesday, November 20th, 1957.