I move the following amendment to amendment No. 2:—
In the definition of "lessee", to add after "lessee" where it secondly occurs "and a person who has acquired by mortgage by sub demise the term created by the lease save a nominal reversion therein and the executors, administrators and assigns of such person".
Amendment No. 2, which the Minister has brought in, is merely bringing out of the parent Act of 1931 the definition there included and putting it into this Bill for the purpose of making it a more coherent whole. I think it is a wise course. I should say at this stage that, during the Committee Stage of the Bill, the Minister gave an undertaking across the House that he would submit the various points raised then and let me have his observations on them before we came to discuss the Bill on the Report Stage. The memorandum he sent me was most helpful indeed and I am grateful for it.
The point in my amendment is to cover the situation which is highly technical and yet arises fairly frequently. A person who has received a building lease, a building lessee, borrows money on the security of the property demised to him by the building lease, borrows it on mortgage. The normal way for a mortgage to be drawn is that the building lessee as mortgagor would demise to the mortgagee a sub-term of years, being the equivalent of the term of years demised by the building lease, save the last day or last three days thereof; the last day or the last three days, as the case may be in its circumstances, is known as the nominal reversion. If the mortgagor does not then repay the loan he has borrowed, the mortgagee, to recover the moneys he has lent, sells the property. If he does not assign the property, he has only the sub-term created by the mortgage to sell, and in certain circumstances he might not have the means of conveying the nominal reversion.
If he had not the means of conveying the nominal reversion, then it is pretty clear, as the Bill is drawn, the person who draws his title from that mortgagee sale, years and years after the mortgagee sale, would not be in a position to claim a reversionary lease. I think it is quite clear to everybody concerned, the commission, the Minister, and all of us, if a person had paid his money for the property comprised in a building lease, he should be able to get a renewal on the terms of that lease.
I would not suggest for a minute that the wording I have included in my amendment is a very eloquent wording to achieve exactly what I had in my mind. What I want to do is to protect a person who is a successor in title by purchase following mortgage in those circumstances and who has the whole term created by the reversionary lease, except the nominal reversion. I think it is desirable in such a case. I have in mind cases which I have come across in the course of my business from time to time, cases of old reversionary leases, and in particular those under the Conveyancing Act of 1881, where the root of title starts in that year. Many of them are 99 years leases and are now coming to an end. If there is no sound method put into this Bill to protect those people, whose predecessors in title have been in factual possession of the reversionary lease, whole term during all these years, then they will not be the lessees within the meaning of the Minister's amendment and will not, therefore, be entitled to the benefit.