I move amendment No. 12:
In page 35, between lines 19 and 20, to insert:
73. Where, immediately before the commencement of the Landlord and Tenant (Ground Rents) (No. 2) Act, 1978, a person was, as respects any land, a person to whom section 3 of the Act of 1967 applied or would have been such a person if he had served a notice under section 4 of that Act, he shall as from such commencement be a person to whom Part II of the Landlord and Tenant (Ground Rents) (No. 2) Act, 1978, applies.".
This amendment relates to the classes of persons who have, as ground rent lessees or tenants, the right to purchase the fee simple. The House has already approved of two amendments to the Bill which propose to add to the classes of such persons as set out in Part II of the Landlord and Tenant (Ground Rents) (No. 2) Act, 1978. A most unusual type of case has lately came to notice that, while clearly involving a ground rent tenancy type of relationship with the landlord, is not covered by the 1978 (No. 2) Act. However, it appears that this type of case would have fallen within the type of ground rent leases and tenancies that were covered by the repealed provisions of section 3 of the 1967 Ground Rents Act; that is to say, what is in question is not a new class of ground rent lease or tenancy, but an unusual example of a class that had already been recognised in the law. The classes of ground rent leases and tenancies set out in Part II of the 1978 (No. 2) Act are, of course, set out therein in an intentionally simplified form, and simplification always involves some risk of excluding unusual cases. The principle of simplifying the extremely complicated categories of "building lease" and proprietary lease" that is enshrined in the 1978 (No. 2) Act has had the support of all parties in the House and has worked well in practice: it does have the drawback that unusual cases may require special provisions.
Here and now, no one can say whether some further new type of lease or tenancy may not come to light that would be seen, on examination, both to be a genuine ground rent lease or tenancy, and not merely a case that is marginally excluded, and also not to be covered by the legislation. However, the amendment we are now discussing does seem to me to spread the net widely enough to bring in every outstanding type of ground rent lease or tenancy that has been identified. In the nature of things one cannot be certain what the outcome would be were a particular case to come before the courts for decision but the advice I have is that the amendment will achieve that purpose. Certainly, the amendment is correct in principle since it was never the intention that the repeal of the greater part of section 3 of the 1967 Ground Rents Act should result in the right to purchase the fee simple being taken away from persons who came within the classes of persons recognised by that Act as ground rent tenants.
I will instance two types of cases that would be covered by this amendment, that are quite clearly cases where a ground rent tenancy situation exists and where the right to purchase the fee simple should clearly apply, and yet that do not come under the 1978 No. 2 Act as it stands.
One case is where a lease has expired that would have been a "building lease" or a "proprietary lease" as defined by the Landlord and Tenant (Reversionary Leases) Act, 1958, as amended. Contact with the ground landlord has long been lost and no rent is being paid, hence a yearly tenancy has not been raised following on the expiration of the lease. However, the right to obtain a reversionary lease continues in being, in accordance with section 11 (1) (b) and section 12 (1) (b) of the 1958 Act (or at least will so continue until after the repeal of that Act) since no notice of termination of the previous lease has been received from the landlord. Here we have one unusual type of case where the right to buy out should clearly apply and that was indeed covered by the repealed provisions in section 3 (2) (c) of the 1967 Ground Rents Act.
Another type of case is where a sub-lease is made that transfers to the sublessee from the sub-lessor that sublessor's interest, as lessee, in a ground rent lease but where for one reason or another a monetary fine is not exacted on the grant of the sub-lease, or where that monetary fine represents less than the market value because of particular circumstances. Such a sub-lease could fail to satisfy Part II of the 1978 No. 2 Act (which in such cases requires a monetary fine, or equivalent expenditure on the property, of not less than 15 times the annual amount of the rent payable under the sub-lease). Nevertheless, if a genuine ground rent lease is involved the right of purchase could have been given by the repealed provisions in section 3 (2) (d) (i) of the 1967 Ground Rents Act.
What the amendment proposes is that, if a person would have had the right to purchase the fee simple under the repealed provisions of section 3 of the 1967 Ground Rents Act, he shall continue to have that right under the 1978 No. 2 Act. I believe the amendment covers all cases of genuine ground rent tenancies that have been brought to notice and that are not already provided for. Again, I have to say, however, that since there is no definition in law of a "ground rent" no one can be absolutely certain that every type of meritorious case that may come to light in the future will actually be covered.
A point I may mention is that, if this amendment were to be accepted, section 72 as it stands in the Bill would become strictly unnecessary since a very careful reading of the relevant legislation would show that the type of case covered by section 72 is also covered by the proposed amendment. However, the draftsman is of the view—and indeed, I may say, so is the Minister for Justice and so am I—that section 72 should stand in the Bill. It is useful as a clarifying provision and I think it important to try to keep this area of the law as clear and straightforward as possible, whatever difficulties this involves in catering for unusual cases.
To go any further than this amendment proposes to go would involve bringing in an entirely new class (or classes) of ground rent leases or tenancies and, in accordance with the settled practice of successive Governments, this is something on which the Landlord and Tenant Commission would first have to be consulted. However, as I have indicated, it is not necessary to go further than this amendment which fairly caters, as it stands, for every known case of merit that is not already catered for.
One technical feature relating to the wording of the amendment that I should perhaps explain, since the significance of that part of the wording may not immediately be apparent is this. The reference to a person being a person to whom section 3 of the 1967 Act would have applied if he had served a notice under section 4 of that Act arises from section 3 (2) (d) (i) of the 1967 Act. One of the requirements to have been a person to whom section 3 of the 1967 Act applied was, in a case coming under subsection (2) (d) (i) of the section, that the relevant lease would not expire within 25 years after service of a notice under section 4 of the same Act. That is, it could be argued that an essential requirement to enable section 3 (2) (d) (i) to be applied to any person is that the person has served a section 4 notice. By reference to the date of that notice it could then be established whether his lease had or had not 25 years or more to run and hence whether he was or was not a person to whom section 3 (2) (d) (i) applied. Had he not seved that notice that test could not be applied and hence it would not be possible to say that he was a person to whom section 3 (2) (d) (i) applied. If that argument is not sound, that is if service of a section 4 notice was not necessary for the application of section 3 (2) (d) (i) of the 1967 Act, then the case is covered by the preceding provision in the proposed new section, which simply requires that the person be a person to whom section 3 of the 1967 Act applied (regardless of the question of service of a section 4 notice) before the commencement of the 1978 No. 2 Act.