On the last occasion I understand that we agreed to break at the beginning of Part III which deals with reversionary leases. This was part of the ad hoc agreement between myself and the main speakers of the Opposition. Having regard to the length of the Bill and the depth of knowledge one would want in dealing with it, it was decided to make a break. We are taking up from the last break as it were and we are going on to Part III. I gather from the main Opposition speakers that the back of the work has been more or less broken.
Landlord and Tenant (Amendment) Bill, 1979: Committee Stage (Resumed).
Question proposed: "That section 30 stand part of the Bill."
We are dealing with reversionary leaseholders today.
I think we should continue. I understand a motion on rape is being taken at 5.30. I will be taking that myself, as the Opposition will be pleased to hear——
It does not make any real difference.
The reality of the situation is that we have to stop discussing the Landlord and Tenant Bill at 5.30 p.m.
No, that is not so.
Am I right in thinking that the term "reversionary lease" subsumes building leases and proprietary leases under the earlier Acts?
That is so.
Question put and agreed to.
SECTION 31.
Question proposed: "That section 31 stand part of the Bill."
Does this represent any change in the existing law?
I understand that it represents one change of substance. The provisions in the section correspond with the one change mentioned, that is, the provisions contained in sections 11 and 12 of the 1958 Act, as amended by section 25 of the Ground Rents Act, 1967 and also in section 13 of the Act of 1858. For the information of the questioners, the change is that a person who is entitled to a reversionary lease is no longer being required to obtain the consent to his application of any sub-lessees who also have the right to reversionary leases or, alternatively, to exclude from that application the lands comprised in any sub-lease. We believe, and it is generally contended, that this change is one that, so far as it concerns the right to purchase the fee simple, has already been made by the 1978 (No. 2) Ground Rents Act. That is to say, purchasers of the fee simple no longer require the consent to that purchase by any of the sub-lessees. That is the main substantial change.
The person entitled may apply to the lessor not earlier than 15 years before the expiration of his existing lease and not later than the expiration of the lease or the expiration of three months from the service of notice. Is the word "and" the right word there? Should it not be "or"?
No. The same point occurred to me. I have it written here. I queried it on the same basis as Senator Cooney did. My information is that these are the parameters of time in which the application may, on the one hand, not earlier than and not later than, be made. We must keep within those two times as I understand it. Therefore, "and" is the correct word rather than "or". It is inclusive rather than exclusive.
Is the Minister happy about the 15 years?
I am not unhappy about it.
It is tied in in a subsequent section. One of the conditions for refusing a reversionary lease is that the reversioner must have freehold estate or in terms not less than 15 years. Which section has decided that 15 years is the term? Is it the restriction on the right to the reversionary lease or the time limit in this section?
I imagine it is the time limit in this section rather than the former proposition mentioned by the Senator. I see the Senator's point and perhaps I could have a look at it and bring it up on Report Stage with a number of other items which we have agreed to bring to the attention of the House at that time.
Question put and agreed to.
Section 32 agreed to.
SECTION 33.
Question proposed: "That section 33 stand part of the Bill."
On the question of the terms of the reversion, of 15 years, a person either owns the freehold or a term less than 15 years, and there is a vast difference in title between those two states. It seems that this extreme right—I agree it is circumscribed by other conditions, but one of the conditions for refusing to grant a reversion is the type of title which the reversionary interest has—of 15 years is a bit short.
Has the Senator any suggestion as to what might be the proper figure?
If it is contrasted with a freehold estate one would be talking in terms of a very long number of years.
Yes. The query the Senator mentioned in regard to a previous section is uppermost in his mind when he asks this question. If he refers to the 1958 Act he will find there was no change. It is exactly as it is in the 1958 Act.
Did it give the commission any trouble?
No.
The same point arises on this section as arose in an earlier section, that is with regard to the punitive damages, and whether there is an alternative mode which might satisfy the justice of the case if the court so decided either to adopt it in toto or in part, and a reduction of the damages——
The Senator referred to this on the previous occasion and I have a reply to it. When I am dealing with the next Stage I will reply to the Senator in full on that particular point.
On subsections (2) and (3), could the Minister give us some explanation or examples of how these will operate in practice?
From his own experience the Senator will appreciate that subsection (2) proposes the re-enactment with drafting changes only, this is where the Senator may be thrown off balance, of section 79 (3) of the 1963 Planning Act in accordance with which provisions were added to section 15 (1) of the 1958 Act. Planning authority development and development plan are defined in section 3 (1) of the Bill. Subsection (3) as the Senator rightly points out is a new provision. It provides that the grant of reversionary lease may be refused where the property is used wholly or in part for the purpose of carrying on a business and where the superior landlord is a local authority who will require possession for any of the purposes for which the local authority may acquire property compulsorily. That, of course, is within a period of five years after the termination of the existing lease. Effectively subsection (2) is an old piece of law and subsection (3) is a new provision.
On subsection (3), if the local authority do not require the land within the period of five years, is the lessee entitled to the reversionary lease and the local authority must grant it?
Yes. As I understand the situation, that is how it may be interpreted.
In other words, if the local authority do not operate the time limit, the lease would revert?
That is so.
The provisions in subsection (4) will apply to the person during that waiting period?
That is so. Subsection (4) is a re-enactment of the relative law in the 1958 Act. There are only drafting changes in that subsection.
Subsection (4) refers to the person remaining in possession upon such terms as the court may think proper. Is that a clause to deal with a situation where the parties have not been able to agree upon terms? I take it that if the parties could agree upon terms there would be no need to go to court to decide the terms in the interim.
That is so. If the terms of the Bill can be agreed there will be no recourse to the courts. The Senator is quite right on that account.
Question put and agreed to.
SECTION 34.
Question proposed: "That section 34 stand part of the Bill."
In anticipation of any queries Senators may have, this is a matter where the terms of the reversionary lease are settled by the court, assuming there is non-agreement in the first instance.
The parties could agree to start the term from a different date than the term of expiration of the old lease?
I assume so.
It would appear from subsection (5) that the court would have power to insert new covenants in the lease. Is this so?
As the section says, if any new covenant restricting the lessee's rights is included in the reversionary lease, the court may, if it so thinks proper, fix a lower rent. That answers the Senator's question. Most of what is contained in the Bill is a re-enactment of the 1931 and the 1958 Acts specifically, with two sections relating to two other Acts. The section the Senator refers to represents a re-enactment with drafting changes only of section 18 (3) (c) of the 1958 Act.
Question put and agreed to.
SECTION 35.
Question proposed: "That section 35 stand part of the Bill."
Perhaps the Minister would tell us what is new in this?
This represents drafting changes mainly, with one change of substance. The change of substance is in relation to the provisions of section 18 (4) of the 1948 Act and of section 26 of the 1967 Ground Rents Act. This amends and extends the provisions of section 18 (4) of the 1958 Act. I do not know whether that is helpful to the Senator. I do not think it is particularly so, but for the record these are the facts.
It is not really.
I think I misled the Senator in one regard, I said the 1948 Act, I meant the 1958 Act.
That rang a bit odd. Apart from that, what is new in this?
Subsection (2) defines a special allowance for the purpose of the new provision in subsection (1). The allowance covers increased letting value attributable to works construction, reconstruction or alteration carried out by the lessee or his predecessor, but not repairs and maintenance, while any works carried out as considerations, or as part consideration, for the grant of the lease are excluded.
Subsection (1) represents in part the re-enactment with drafting changes of section 18 (4) and so on. The subsection also proposes a new provision concerning the rent to be reserved in a reversionary lease. This I think is what the Senator is getting at. Under the new provisions that rent will be not one-eighth of the gross rent, but one-eighth of the difference between the gross rent and the special allowance, which I referred to for tenants' improvements defined in subsection (2). This new provision, taken in conjunction with the subsection (2) that I referred to at the beginning, is designed to bring law concerning the amount of the rent on the renewal of a ground rent lease into line with the law concerning the rent on the renewal of an occupational tenancy in that improvements carried out by the tenant will be taken into account. This effectively means that in so far as any increased letting value is attributable to the tenant's improvements that increased value will not be reckoned in the rent fixed on the renewal of the lease.
I can see that that is a very desirable principle to introduce. I wonder how it will work in practice. I can see it giving rise to a lot of contention. First, a comparison has to be made with the letting value when it was last in possession of the lessor, and I presume that would have been a long time previously when it might not have been possible to make a comparison. I can see contention as to whether the works carried out were improvements and additions or repairs and maintenance. If parties cannot agree, I take it the court will have to determine the nature of the works.
What we are hoping is—and I am sure the main philosophy or policy in relation to most legislation is the same—that in the main the courts will not be resorted to. It is hoped that in the application of this new section sense will prevail and agreement will be reached. In the event of agreement not being reached as the Senator properly pointed out, the court will then decide the issues as between the parties. We want to avoid that situation and if the Senator feels, in the circumstances of this new subsection, that in some way its operability can be queried, now is the time to tidy it up. I might do a note on it for the Senator on the next Stage to allay any worries he may have and to give him an example or two of the type of situation which will arise and which will effectively be dealt with by the section under scrutiny.
I am obliged to the Minister of State. On the question of the fraction of the gross rent, that will be the rent in the reversionary lease, one-eighth, the present fraction?
Yes. The next section defines gross rent and the Senator might like to raise the matter on that section.
On the queston of the fraction, section 35 (3) gives power to the Minister to amend the fraction up or down. Is there any need to have the fraction changed when there is provision for the gross rent to change with changing times? Should the fraction not remain constant?
The fraction will remain constant. It is a saver more than anything else because in practice that will not happen. I would remind Senator Cooney that it is a lift from previous legislation and is part of the general over-all consolidating of the various pieces of legislation we are now dealing with.
Question put and agreed to.
SECTION 36.
Question proposed: "That section 36 stand part of the Bill."
I would like the Minister to indicate what is new in this.
Subsection (1) provides for the re-enactment of the 1958 Act, subject to drafting changes, and two other changes. Section 18 (5) (a) (i) of the 1958 Act reads as follows:
(i) on the basis that vacant possession is given and that the lessee pays rates and taxes in respect of the land (other than the lessor's proportion of income tax) and is liable to insure against fire and to keep the premises in repair;
Paragraph (a) of subsection (1), which corresponds to the relevant provisions of the 1958 Act, omits the words "other than the lessor's proportion of income tax". These words are no longer necessary because of the change in the law made by the Finance Act, 1969. Section 65 and Schedule V of the 1969 Finance Act abolished liability for Schedule A taxation. Schedule A taxation, as we know, is a tax charged in respect of the property on all lands, tenements and hereditaments in the State and was based, as the Senators will appreciate, on rateable valuation. There are a number of other changes. I do not know whether the Senators want me to take up the time of the House in mentioning them.
Are there any substantial changes?
There are, I expect, in a sense; but who is to decide what is or is not substantial? The second major change in comparison with the letting values of other lands for the purposes of determining the gross rent is restricted to lands of a similar character in the vicinity of the land comprised in the lease by section 18 (5) (a) (ii) of the 1958 Act under paragraph (b) of subsection (1) which is the corresponding provision in this Bill. Comparison with the letting values of other land for the purposes of determining the gross rent is not being restricted to lands in the vicinity, provided the lands are in a comparable area. This change follows a similar change relating to occupational tenancies that has been made in section 23 (5) and which was recommended by the Landlord and Tenant Commission. Effectively we are bringing in new legislation recommended by the Landlord and Tenant Commission. These are the two new substantial changes in section 36 which relates to gross rent.
Question put and agreed to.
SECTION 37.
Question proposed: "That section 37 stand part of the Bill."
Do the words "his failure to proceed with an application for such lease" envisage a situation where the notices are served to the court but are not proceeded with, or does it envisage a situation where there has been failure to serve notices?
This deals with the problem in relation to the failure to serve notices. There is nothing new in this section. It is a re-enactment, with the usual drafting changes, of section 25 of the 1958 Act.
The Minister will appreciate that there is a very important distinction, whether "failure" there covered failure to serve the notices or whether it merely intended to be a failure to pursue the proceedings after the notices were served. If there is a failure to serve notices, this section could permit a forfeited right to be re-established.
I think my assessment is correct. However, having regard to my lack of experience in relation to the operation generally of the Landlord and Tenant Acts, it is proper that I should give the Senator assistance on the Report Stage in relation to the definitions he seeks.
Question put and agreed to.
Sections 38 and 39 agreed to.
SECTION 40.
Question proposed: "That section 40 stand part of the Bill."
It is a re-enactment of the earlier Act. Is the use of the word "possession" in line 48 of subsection (2) the proper word rather than the word "occupation"?
Yes.
The situation is that a person is remaining in occupation by a special position of this section pending the determination of the rights of the parties. The presence is physical occupation rather than legal possession. Would the word "occupation" not be more apt there?
It is a question of terminology. The section applies to the right of a lessee to continue in occupation and this probably is what is giving the Senator some difficulty. The lessee is entitled to remain in possession of the land. The proper meaning for that might well be taken as "occupation" rather than "legal possession".
In practice it probably would make no real difference.
It is a matter of semantics and general usage in the context of the draftman's approach to the drafting of the section.
Question put and agreed to.
SECTION 41.
Question proposed: "That section 41 stand part of the Bill."
Sections 40 and 41 are re-enactments.
Question put and agreed to.
Sections 42 and 43 agreed to.
SECTION 44.
Question proposed: "That section 44 stand part of the Bill."
What is the necessity for this section?
Although the 1958 Act has been repealed and the expressions "building lease" and "proprietary lease" die with the repeal, the provisions of the 1967 Ground Rents Act which use these expressions must be saved. This section achieves this by providing that references to a building lease or a proprietary lease are to be construed as references to a lease which gives rise to a right to a reversionary lease in accordance with section 30 (2) of the Bill, such a lease is a lease that satisfies the conditions of section 9 of the Landlord and Tenant (Ground Rents) (No. 2) Act, 1978 as applied by sections 10, 11, 12 and 14 of that Act.
Question put and agreed to.
SECTION 45.
Question proposed: "That section 45 stand part of the Bill."
This is Part IV of the Bill.
Perhaps the Minister will comment at the next Stage on the—it is a repeat of the definition of improvement in the 1931 Act—the different usage of the words "ancillary" and "subsidiary" in this definition in cases where there is a tenement with land which has to be ancillary and subsidiary. I am sure there must be some deliberations here. It has been noted in textbooks as a difference but I have not seen any comment by any textbook writer as to why it should be different.
This is a matter for the inhabitants of Académe.
I do not mean it that way.
I am taking it in the spirit in which the Senator has offered it. On the basis that it is a matter of definition I will be glad to have it clarified on the next Stage. The Senator is correct in relation to the first observation he made. The definition of improvement is that as contained in section 2 of the 1931 Act.
Question put and agreed to.
SECTION 46.
Question proposed: "That section 46 stand part of the Bill."
Is this a change of the law?
It re-enacts the provisions of section 10 of the 1931 Act. It confers the right of compensation for improvements and also the provisions of section 36 (1) of the same Act concerning the time for payment to a tenant of such compensation. It is a direct lift from the 1931 Act.
It is a re-enactment.
Yes.
In subsection (1) (b) (i) the right of a tenant to compensation for improvements does not apply where the tenant has terminated the tenancy by notice of surrender or otherwise. In paragraph (ii) the tenant is ejected for non-payment of rent irrespective of how they are framed. What does the word "otherwise" mean.
I would refer the Senator to section 17 (1). This section will take care of his query in relation to the use of the word "otherwise".
What does it mean in section 17 (1)?
I could be light about this and say that the Senator could refer to section 46, but it does not answer the Senator's query.
We could have a rally.
Yes, a little bit of legislative ping-pong which might not be altogether appropriate to the seriousness of discussion before the House.
It is being careful.
It is being conservative.
Question put and agreed to.
SECTION 47.
Question proposed: "That section 47 stand part of the Bill."
This is a re-enactment of the equivalent section of the 1931 Act. Is there ground any longer for placing a limit of 15 on the annual amount of the addition as a valuation for the improvements in the inflationary circumstances in which we have for some years found ourselves? Should it not be left to the court to determine, as it is allowed to look at and must have regard to all the relevant circumstances and if having done so, determines on a figure which happens to be in excess of 15, is it right to place a statutory restriction when, in the circumstances, the landlord with the free premises is going to have, in fact, a very considerable sum out of which to pay it? I would like to take advantage of this section, which relates the measure of compensation to a capitalisation of the letting value, to raise the question of the manner in which the court is to determine this letting value. I take it, in doing so, it would be in the absence of anything circumscribing it. It would have to look at the market rent and in determining this rent would not do so by reference to the very artificial terms in the section relating to the fixing of the rent of a new tenancy but would seem to have regard to the market rent and, having determined what the market rent attributable to the improvement expenditure was, to capitalise that. It may be useful to put on the record of the House something that might equally well have been said on the earlier section but which is relevant to this section. It is the important decision of the Supreme Court in the case of Byrne v. Loftus which was delivered in July 1977. I quote from the judgment of Mr. Justice Kenny. We are referring back to precisely the same language as exists under the code which is in this matter being repeated. He says:
If the court finds that a tenant is entitled to a new tenancy it should fix the terms of the new tenancy and shall make an order requiring the landlord to grant and the tenant to accept a new tenancy and premises. When the court fixes the terms of the new tenancy it must order that the lease is to be for a minimum term of 21 and a maximum of 99 years—the landlord has the necessary reversion. The rent to be paid by the tenant is the difference between the gross rent and the allowance for improvements. The formula for ascertaining gross rent is of such importance to this case that it must be quoted.
He quotes in full section 29 (f) of the Act. The judge goes on to comment on the language of that section which we, in this Bill, are proposing to re-enact. This is a judicial comment on precisely similar language to the language which it is proposed that this Legislature would use again.
Rarely could a draftsman have produced such an ill-framed paragraph. It contains one economic absurdity and a phrase "the willing lessor" whose literal meaning makes nonsense of the paragraph. It is not a justification for this paragraph that it was based on a corresponding section in England. The economic absurdity is that the court must assume the supply of similar tenants is sufficient to meet the demand as part of the process of determining the rent. Supply and demand, however, depend upon the rent sought by the landlord. At one rent, the supply may grossly exceed the demand, at a much lower rent the demand will exceed the supply. Supply will be sufficient to meet the demand at a specific rent but until this is known one cannot assume that the supply equals demand. To compel the court to fix a rent on the basis that supply equals demand necessarily assumes the court knows the rent although the whole purpose of the formula is to determine it. The judges of the High Court and Circuit Court with their usual good sense have made the formula workable by ignoring the provision. A willing lessor presupposes the landlord is anxious to make a letting and not to get possession. Willing lessor must, therefore, be interpreted as meaning a lessor anxious to make a letting for a term of 21 years without a rent review clause.
This is very relevant to our Bill.
The paragraph envisages a situation in which the parties will bargain and ultimately reach an agreed figure for rent payable for a minimum of 21 years without a rent review clause however wildly improbably it is that such a landlord will be found today. The Act of 1931 was passed at a time when money had a comparatively stable value but the gradual inflation since 1951 and the very rapid one since 1973 have made the task of fixing a rent in accordance with the formula almost impossible. With an annual rate of inflation of about 18 per cent each year since 1973 the rent will obviously be too low after 5 years. The extent of the inflation is vividly shown.
He quotes from the Central Bank, and so on, which we can skip.
During the last seven years this problem of the rapid decline in the value of money in fixing rent has been dealt with in freely negotiated leases by a clause that the rent has to be reviewed every three, five or seven years and that if the landlord and tenant cannot agree a new figure the amount of the reasonable rent payable is to be determined by an independent person, skilled in assessing letting values. There is, however, no power given to the court by the Act of 1931 to insert a rent review clause in any lease which it orders to be given. In some Circuit Court areas the circuit judges now fix the rent in accordance with section 29 and add 10 per cent of that rent to compensate for future inflation. But this is to make provision for about one year's inflation and it is obviously not the amount which a willing lessor would take as the rent for 21 years.
That is probably sufficient for the purposes of the point I wish to make. I by no means desire to be unhelpful about this. I was not aware that the view which I have expressed was held on the section of the Bill as proposed, that is, that the decision in Byrne v. Loftus will continue to prevail as the law in the interpretation of the section of this Bill. We therefore, will have leases and fixed rents which will disregard the review provisions. It is all relevant to this question because in this section one would have to have a related provision for it. Perhaps the Minister could help me as to where I might find the review provision.
Under section 24 of the Bill.
The view which has been put to me and which I wish to bring to the Minister's attention is that, having regard to the way that this is drafted, under section 23 the court will fix the tenancy but it will not have power to put in a rent review clause in the tenancy which will be fixed. Therefore it will be fixing a rent in disregard of that at the beginning. Section 24 seems to contemplate that a lease would be made under the terms of section 23 and that under section 24 the application would then be made for review during the currency of that lease.
While I was aware of the existence of the case of Byrne v. Loftus, I was not aware of the pearls of wisdom contained in the judgment. I would be pleased to study that case before I reply. The Senator and the House require a full reply on the views contained in the case of Byrne v. Loftus. While the Supreme Court judge who gave this judgment had the full paraphernalia of the law and all the wisdom of the legal world at his disposal, there are some aspects of it that I would be very anxious to establish for the benefit of the House. The ignoring of the provision and maybe the formula of work by the ignoring of the provision, is an unusual but probably proper statement. I am not denying that. It would be wrong to suggest a denial of the judge's right to say what he did say.
In relation to the first part of the Senator's two points on the question of inflation, section 47 (4) reads:
The capitalised value for the purposes of this section of an addition to the letting value of a tenement shall be fixed by the Court having regard to the probable duration of such addition, the probable life of the improvement and all other relevant circumstances but shall not in any case exceed fifteen times the annual amount of the addition.
That is the point that gives the Senator some difficulty. Again, with my limited knowledge of economics, I would say that 15 times the annual amount of the addition would pose no difficulty in relation to inflation because 15 times the annual amount of the addition would certainly be far different in, say, 1985 than in 1975. Consequently, whilst the expression "15 times" is used, the amount of money would have increased to take care of the formula and will come under the formula. A constant figure would take care of inflation. This is very important because whatever it costs in 1975 it would certainly cost far more in 1985 and 1995.
I will be giving the Minister a free run through a lot of the following sections so could I press him a little on this one? There is no justification for restriction. The value of the benefit to the landlord of the improvements which have been carried out will be increasing with the increased value of the building on which the improvement work has been done. If the landlord is going to make fresh lettings to somebody else at some stage he will be able to arrange it to get his rent reviews and pull back a return from the appreciating value of what has been, in effect, sold on to the landlord. If there is some reason for placing a limit I do not see what it is. Having regard to the relevant circumstances, I cannot see a court giving more than the over-all value of the premises. It must have regard to the value of the premises on which the improvement work is being done.
The Senator has made a very fair point. The Senator said that he would be anxious to facilitate me in relation to subsequent sections so I do not want to deny the advantages he is giving me. I would be glad to help the Senator and I am delighted to have his co-operation. I will be glad to deal with it more specifically on the next section. This sounds as if I am putting everything on to the next section. That is not so. There are about eight points with which I have to deal on the next section, out of 82 sections. That is not a bad par for the course.
Section 47 (4) gives the tenant up to 15 times the present value of the rental addition. He has no claim on the future value once he has been paid his money.
Question put and agreed to.
SECTION 48.
Question proposed: "That section 48 stand part of the Bill."
This is purely technical.
What is new in it as against the 1931 Act?
This is a procedural provision which provides for the services improvement notice, improvement consent, improvement undertaking and improvement objection. As I understand from the section all these notices have to be in the form prescribed by the regulations to be made by the Minister under section 9. The section proposes the re-enactment of section 12 of the 1931 Act with certain changes which are dealt with. Subsection (1) provides for the re-enactment with modifications of section 12 of the 1931 Act. Subsection (2) provides for the re-enactment of section 12 (2) of the 1931 Act but with the time limit in that provision reduced, as recommended by the first report of the Landlord and Tenant Commission. A landlord who is served with an improvement notice may, within two months, serve on the tenant an improvement consent, an improvement undertaking or an improvement objection. Subsection (2) proposes that the time limit within which these notices may be served by the landlord should be reduced to one month so as to speed up the procedure. Senators will agree that that is an improvement.
Agreed.
Subsection (3) is a new provision based on the recommendation of the Landlord and Tenant Commission. It limits the grounds on which a landlord may object to the making of the improvement by the tenant to the grounds specified in the subsection, whether the proposed improvement is development for which planning permission is not required or for which it is required and has been granted. Subsection (4) provides for the re-enactment of section 12 (3) of the 1931 Act but with the time limit provided in that provision reduced, as recommended by the Landlord and Tenant Commission. The changes proposed are as follows: under section 12 (3) of the 1931 Act, a landlord on whom an improvement notice has been served must, in certain circumstances, serve the notice or a copy thereof as immediate superior landlord and must do so within one month.
This subsection proposes that this period be reduced to one week. Under the same provision of the 1931 Act the immediate superior landlord is given two months from the date of service of the improvement notice by the tenant, in which to serve either a consent to an improvement or an objection on the landlord and on the tenant. This subsection proposes that this period be reduced to one month. Provision is also being made in subsection 4 for the re-enactment without change of substance of the provisions of section 12 (5) of the 1931 Act requiring a landlord on whom an improvement notice has been served to transmit the notice to his immediate superior landlord, and to endorse on the notice, or on a copy thereof, which he serves on his immediate superior landlord the date on which that notice has been served on him.
Subsection (5) provides for the re-enactment with drafting changes only of section 12 of the 1931 Act. The time limit of one week provided in that section is not being changed.
On the question of service, up to recently we could always provide the service of legal documents by post, registered or ordinary. There is no provision in section 82, the service section, for personal service. Perhaps the Minister would think about that.
Yes.
There are difficulties here. When we do not have post, in a landlord and tenant situation, particularly in a superior landlord situation, it may not be possible to effect personal service within the times limited by the Act. The landlord could be abroad, and it may not be possible to effect service at all. The Minister will obviously have to consider the position arising from postal disputes now and in the future as regards the service of notices, and what effect failure to serve, because of that reason, has on the rights of the parties.
Question put and agreed to.
SECTION 49.
Question proposed: "That section 49 stand part of the Bill."
On section 49, the time limit given to the tenant to pass on to the landlord the notice that the tenant has received from the local authority is three days. I appreciate that when a local authority serves a notice under the Act specified in the section, there would be an element of urgency about it. Nevertheless three days seems to put a burden on the tenant it may not be possile to discharge even with the best will. I suggest that the tenant should be given a week to pass on the notice from the local authority to the landlord.
What I said about the question of service applies here as well. We will go into that when we come to section 82, but three days' notice is hardly sufficient. I see further difficulties with regard to this. The sanitary authority will serve a notice on the tenant directing the carrying out of certain works, and will not say in their notice, and it would not be their business to say whether the works in question are an improvement as defined in the Landlord and Tenant Act 1979. It is only if the works are an improvement that the obligation is on the tenant to tell the landlord. If the works are merely to put the houses into repair there is no obligation on the tenant to pass the matter to the landlord. A whole legal chain of events could be set in motion by the local authority calling for something to be done. It would be better if the section were rephased. It says that
a notice on the tenant of a tenement requiring him to execute an improvement
If that were rephased to read "a notice on the tenant of a tenement requiring him to execute works" there would be no difficulty as to the nature of the work to be carried out, whether it was an improvement or merely a repair under the meaning of this Act. I make that point for the Minister's consideration.
These are matters which were teased out at some considerable length. On the balance of practice it was felt that the 1931 Act should be left unchanged. That is, effectively, what is happening here. The only new subsection in section 49 is subsection (3). With the exception of subsection (3) all the other subsections are direct lifts from section 30 of the 1931 Act. This represents the re-enactment of that Act with drafting changes only.
The Senator has a good point, but in the case of Byrne v. Loftus the judges ignored the formulae proposed by us as the legislators, and again the court might well in the circumstances ignore the three-day rule, and interpret it in a more flexible fashion. However, the requirement is there from the 1931 Act. I agree that there is nothing sacrosanct about the 1931 Act. In the circumstances a change might have been proper. Certainly I will be glad to have a look at the matter.
The question of works was decided on the balance of practice. It was decided that "improvement" would be the proper word to leave in there, having regard to the experience since the 1931 Act which did not present any difficulties. The Senator has a point here. It is only a matter of choice.
It is more than a matter of choice as to whether we use the word "improvement" or the word "works". The word "improvement" has a specific meaning given to it by this Act which sets in train a whole set of legal consequences for the tenants in this case. If he receives a notice from the local authority he cannot take the chance that in his reading of the notice, it is merely a requirement to do a repair which is not an improvement under this Act, and then not serve the notice on the landlord which would subsequently prejudice himself. We should leave the matter quite clear and substitute the word "works" for the word "improvement" in this section so that every notice served by a sanitary authority must be passed by the tenant to the landlord. The Minister's point that this is a re-enactment of the 1931 Act that apparently worked satisfactorily is not clear enough. I do not know whether the Minister knows it worked satisfactorily or is assuming it did. I imagine that the number of notices that arose under this provision have been very few and the section may never have been called into question at all. When we have the opportunity to renew the wording of it, it would be a good exercise to improve it, if we can. To extend the time limit would be an improvement not within the meaning of the section but within the ordinary meaning of the word and to change the word "work" for the word "improvement" would be an improvement within the meaning of the section. Does the Minister follow?
I follow what the Senator is saying. We had a number of points of view in relation to the Bill. This matter did not arise. Indeed, the Landlord and Tenant Commission did not make any observation in relation to it, nor did the Incorporated Law Society or others who offered opinions on the workability of the Bill as proposed. The Senator is quite right that I do not have any experience of the working of section 49, and he is equally right that in those circumstances I do not have any knowledge that it has worked since the operation of the 1931 Act. I am not trying to mislead the Senator in that regard. It is simply the application of a word used in the 1931 Act which does not appear to have caused any difficulty. Whether substituting the word "works" for "improvement" would cause difficulty is another question which could only be answered by the practical operation of the section. I suggest that we leave well enough alone. I know that does not answer the Senator's point that the word "works" would be an improvement on the word "improvement". However, I would be glad to answer the Senator in more detail on another occasion.
The Minister will look at it on Report Stage?
Yes.
Question put and agreed to.
SECTION 50.
Question proposed: "That section 50 stand part of the Bill."
I have a question which I would have to tie to the question of the wording in section 51 (2) and section 55 (1) (a). Section 50 provides for the execution of an improvement, where the notice is served and the landlord does not serve an improvement undertaking or an improvement objection:
...the tenant shall be entitled to execute at any time within one year after such service (whether an improvement consent has or has not been served by the landlord or superior landlord) the improvement specified in the improvement notice in accordance in all respects with the notice.
Section 51 deals with the position where the landlord has served an improvement undertaking and the obligation on him to carry out the work is described in the terms that he must "execute and complete" the work not later than six months after the expiration of the 14 days. The obligation on the tenant is expressed by the one word "execute" at any time within one year. Does that mean "execute and complete" or does it mean, "commence" within one year? With regard to the landlord's obligation, where it says that not later than six months he shall "execute and complete", does that mean he must have the total job finished within six months from the expiration of the 14 days after he serves his notice?
Section 55 (1) (a) which is the section which provides for the issue of an improvement certificate after improvement works have been carried out deals with the case where the tenant carries out the works and states that the tenant "executes and completes" within one year, whereas section 50, which imposes the obligation on the tenant to do the work, merely says "execute at any time within one year". To have it all the same, the obligation on the tenant in section 50 should be to "execute and complete". Perhaps the Minister would clarify the obligation of the landlord when we come to section 51. With regard to section 50 I suggest that the Minister keep section 50 in line with sections 51 and 55, by including the words "and complete" after "execute".
The continuity, as the Senator pointed out, appears to be broken by the omission of the words "and complete" in relation to the sections he has mentioned, particularly in relation to section 50. I should be glad to look at this.
My understanding of the section is that it is more or less a direct lift from section 14 (1) of the 1931 Act, which has not been changed. The Senator made a very good point, and I would be glad to have a look at it.
Question put and agreed to.
SECTION 51.
Question proposed: "That section 51 stand part of the Bill."
How does the Minister read subsection (2) with regard to the landlord's obligations?
Subsection (2) says that the landlord shall "execute and complete". "Execute" would mean to set in train or begin and "complete" would mean to conclude. I read it, as does the Senator, that the matter would have to be begun and completed within the time limit.
That is, within six months?
That is, within six months, as provided for in section 51 (2).
That was my reading of it. That might impose too strict a time scale on the landlord. If the works to be done were in any way substantial, having regard to the difficulties of weather, contractors and so on, six months may not be sufficient. The Minister might consider amending six months to one year.
Certainly, I will have a look at it. It is the voice of experience contained in section 51 (2). In the circumstances, I would not be too optimistic about extending the time from six months to 12 months, but I will certainly have a look at it in the light of what the Senator says, particularly with reference to section 50 with the apparent exclusion of the words "and complete". That is a very important matter that might well be clarified. I am more concerned about that than about the six or 12 months. But I will certainly have a look at it.
Before we leave section 51 would the Minister tell us what is new in section 51, compared with the 1931 Act?
It is a re-enactment of section 15 of the 1931 Act subject to one change in subsection (1) which involves a time limit. That is consequential on a change in time limits proposed in section 48 (2) and (4) of the Bill. The only other changes are of a drafting nature.
Question put and agreed to.
SECTION 52.
Question proposed: "That section 52 stand part of the Bill".
What is new in this compared with the 1931 Act?
There are drafting changes.
The time limits are reduced again?
Yes, they are the main changes in this section.
Question put and agreed to.
SECTION 53.
Question proposed: "That section 53 stand part of the Bill".
Why was it necessary to bring in this new section?
It was brought in for the sake of clarification. Its object is to make it clear that nothing in Part IV of the Bill.
shall authorise the charging, in the case of a controlled dwelling, of a rent exceeding the lawful rent of the dwelling as defined by section II of the Rent Restrictions Act, 1960.
For the sake of clarification, section II of the 1960 Act is as follows:
The lawful rent of a controlled dwelling shall be—
(a) in case there is no lawful addition to the basic rent of the dwelling, the basic rent of the dwelling,
(b) in any other case, the sum of the basic rent of the dwelling and the lawful addition thereto.
Basic rent means, in relation to a controlled dwelling, the basic rent of a dwelling determined under sections 7, 8 and 9 of the 1960 Rent Restrictions Act as amended by the 1967 Act. Lawful addition means in relation to the basic rent of a controlled dwelling any sum which is by virtue of Section 10 of the 1960 Act as amended by the 1967 Act a lawful addition to basic rent. I am quite satisfied, on scrutiny, that this is necessary for the sake of clarification.
Am I right in thinking that what it guards against is the lawful rent being exceeded by an increase attributable to work carried out on foot of an improvement undertaking?
That appears to be the situation.
I suppose that as a matter of practice if the landlord knew that his premises were rent controlled he would never serve an improvement undertaking but would let the tenant carry out the improvement works.
Probably.
Because if he did the improvement work he could not get any increase in rent for it. Is there a provision for a lawful addition as a percentage of an improvement expenditure? I think that he would probably get some of it back.
He would probably. There is some provision for the landlord to be compensated, despite the rather strict interpretation in section 53.
It seems a very strongly worded section. Is there any case to be made for giving the court some discretion in the matter?
The Senator may have missed the earlier part of our general discussion. Senator Alexis FitzGerald suggested that in the case of Burke v. Loftus in certain instances the court ignored the heavy words of the legislators.
They had to, because the legislators had ignored what the courts had asked them to charge.
No. We recognise, with the greatest of respect, the courts in the democratic system. It is a necessarily strict provision which is required in the circumstances. The courts will generally conclude their deliberations on the side of justice, which is generally what litigants are looking for, although sometimes there might be personal problems between the litigants and they are not looking for justice at all.
I assume the Minister is not suggesting that the court would intentionally ignore the section. Would it not be better if some discretion were given to the court because as Senator Cooney has pointed out, it is likely that a landlord who knows that he cannot achieve any increase in his rent will not even think about improvements?
We can leave it to the discretion of the courts.
It is not left to the discretion of the courts under the section.
Senator Cooney made the point that there were other sections where the landlord is provided for, despite the strict interpretation of this section.
Question put and agreed to.
SECTION 54.
Question proposed: "That section 54 stand part of the Bill."
What are the new provisions introduced by this section as opposed to the 1931 Act?
The section provides for the re-enactment of section 17 of the 1931 Act subject to a number of changes. Subsection (1) provides for the re-enactment with drafting changes only, of section 17 (2) of the 1931 Act. Subsection (2) represents a new provision replacing section 17 (3) of the 1931 Act and is designed to implement a recommendation of the Landlord and Tenant Commission, by providing that a tenant who carries out an improvement at any time after the passing of the 1931 Act whether before or after the commencement date of this Bill may in certain circumstances obtain compensation for the improvement, even though he did not serve an improvement notice. That appears to be a just section. In certain circumstances the tenant may not be aware of his obligations under the law, and this is a recommendation by the Landlord and Tenant Commission.
Am I right in thinking that he does not get his compensation if the landlord satisfies (a), (b) or (c)? (c)?
That he does not?
If there is no notice, and none of (a), (b) or (c) applies he can still get his compensation?
Yes, indeed. That appears to be the situation.
Is that the only thing?
No. Subsection (3) of section 54 is a new provision which replaces——
The landlord vis-a-vis the superior landlord?
Yes. That is the only section. Subsection (4) provides for the re-enactment of the relevant subsection at section 17 of the 1931 Act.
Question put and agreed to.
SECTION 55.
Question proposed: "That section 55 stand part of the Bill."
This section reenacts section 18 of the 1931 Act, but there is a new element in subsection (6). Section 18 (6) of the 1931 Act provides that a landlord or sanitary authority, to whom application for an improvement certificate or sanitary improvement certificate is made, may demand payment of the expense calculated according to a prescribed scale incurred in giving such a certificate.
Question put and agreed to.
SECTION 56.
Question proposed: "That section 56 stand part of the Bill."
I assume that is largely the same as the 1931 Act. Was there not an obligation in the 1931 Act to serve notice?
That is so. The time limits in question are those set out in sections 20 and 22 which correspond with those in section 24 (2) of the 1931 Act. The Senator is quite right.
Question put and agreed to.
Section 57 agreed to.
SECTION 58.
Question proposed: "That section 58 stand part of the Bill."
This section deals with drafting changes only. It is basically a re-enactment of the provisions of the 1931 Landlord and Tenant Act.
Question put and agreed to.
SECTION 59.
Question proposed: "That section 59 stand part of the Bill."
I should point out that section 12 is a re-enactment of the 1931 Act with drafting changes. Section 16 of the 1958 Act, the Landlord and Tenant (Reversionary Leases) Act provides for payment of compensation to a person who, because of certain specified circumstances, is refused the grant of a reversionary lease. Subsection (5) of section 16 of the 1958 Act dealing with payment of compensation in certain circumstances where a mortgage is involved is being re-enacted, not in this section but in section 62 of the Bill. Whilst the physical presence is still there, the mechanics are a little bit different.
Question put and agreed to.
SECTION 60.
Question proposed: "That section 60 stand part of the Bill."
I know that the section is largely the suggestion of the Landlord and Tenant Commission First Report. There are some changes. The explanatory memorandum refers to such modifications. Would the Minister tell us what changes have been made?
Certainly, yes. The Senator is right when he says that it is a new provision which is designed to give effect, with some modifications, to recommendations in the Landlord and Tenant Commission's First Report. The section provides that a landlord of a tenement should, in certain circumstances, and before the lease or contract of tenancy expires, be enabled to obtain from the court an order terminating the tenancy of that tenement in the building which itself is obsolete, or situated in an obsolete area, provided that he pays compensation to the tenant at a specially high level as prescribed in subsection (5).
Apparently, the subsection does not apply where a person holds as a ground rent tenant either an obsolete building or a building which is situated in an obsolete area, and my note tells me to see subsection (6). In this connection, it may be noted that under section 33 (1) of the Bill, if a ground landlord satisfies the court that he has development plans for which he has obtained Planning permission he may not be required to grant a reversionary lease although he will have to pay compensation to the ground rent tenant under section 59 of the Bill. Compensation will, however, be at a lower level than that prescribed in subsection (5) of this section. I refer the Senators to section 59 (3) as compared with subsection (5) of this section.
The Commission, in their first report, describe representations that were made to them to the effect that sitting tenants, who either will not give up possession except for exorbitant compensation, or who cannot be induced to move at all, are able to hold up development or reconstruction projects and, in fact, hold up the development and modernisation of cities and towns. The Commission accepted that they were creating a problem which required attention. They concluded at paragraph 214 that the giving of a general power to terminate tenancies prematurely in order to carry out a scheme of development or reconstruction could be open to abuse.
Speculators, the Landlord and Tenant Commission surmise, could acquire a building with a reasonable period of useful life and oust, by a money payment, tenants who might not be adequately compensated for leaving. The Commission were satisfied that a general power of this nature should not be given, but considered that a limited right to terminate the tenancy prematurely, subject to the most stringent conditions should be given. These conditions are set out in paragraphs 216 to 221 of the Report and—with certain modifications which I hope to explain—such a limited right, subject as I have already stated, to the most stringent conditions as recommended by the Commission, is provided for in the Bill.
While the provision is likely to meet some opposition, on the ground that it involves a radical departure in so far as the landlord and tenant code is concerned, by authorising the displacement of tenants before the tenancies expire, the various safeguards which are incorporated in the section are considered adequate to ensure that it can be availed of only in relatively rare cases, where it would be in the interests of the community generally that it should be availed of, and where the tenants concerned are adequately compensated. This is the important aspect of the section itself, that, whilst in certain circumstances the tenant might be asked to leave, he would be adequately compensated before doing so. In the event of compensation not being agreed in those circumstances the courts will come into play. The courts would adjudicate on what is fair and proper compensation as far as the tenant is concerned.
Whilst the section itself in some aspects might sound rather radical I do not think there is anything wrong with being a little radical from time to time as long as radicalism does not work against the better interest of the parties concerned or work an injustice against either of the parties concerned. I do not think there is anything wrong with being a little radical in the interests of the community. That is open to interpretation. I leave it to the Senators, in their own experience, to decide whether this is right or wrong.
I notice a couple of things that I think are not in the Commission's Report or that differ from the Commission's Report. Unless I am missing a point, the definition of "the relevant building", which is in the section, includes in (b) a defined portion of the building, which is not in the report. I do not see objection to what is in the section but should like to know the consideration for having it in. The second point is that the occupation period allowed to the tenant, where there is termination under subsection (4), is one year, and if I read it correctly it recommended three years in the report. Most important, and perhaps wrongly, what is in the section and is not in the report and not recommended, is the proviso "that the lease or other contract of tenancy under which the tenant, at the time the notice is served on him, holds the tenement is for a term of which not less than three..." That is in the report. The next bit is not. It does not seem to me to be right "... and not more than 25 years are unexpired." Surely what is relevant here is not the length of the term the tenant has but the length of life in the building on the premises. It is where the building, not the lease, has a short life.
I do not think this is a very disturbing kind of radicalism. It seems to be a correct power to give the court. The court can prevent somebody with an obsolescent building or a building which is going to have a short life from sitting on a lease. The court can prevent such a person from holding up full development; he is holding the developer up to ransom in a situation where it must be to the disadvantage of the community, if the plan submitted by the developer has been approved by the planning authority. I do not like the addition "and not more than twenty-five years are unexpired". I think there ought to be a limitation "in which not less than three are unexpired" but exclude "and not more than twenty-five years are unexpired".
Yes. I shall deal with the last part of what the Senator has said regarding the general interpretation of subsection (2). The subsection defines the scope of the section and sets out its central provision. As the Senator properly points out, it is wider than the commission's recommendations in that it applies, not alone where a building is beyond repair or where it cannot possibly be used without being reconstructed, but also to cases where a building is situated in an obsolete area as defined under the Local Government (Planning and Development) Act, 1963.
The proviso in subsection (2), as the commission recommend in the first report, stipulates that the provision concerning determination of tenancies in obsolete buildings and so on should apply only where the tenancy has at least three years to run. It does more than this, in that it also applies the provision to cases where the tenancy has not more than 25 years to run. I accept that the Senator has certain reservations on that, but my advice is that this is reasonable, inasmuch as the tenancy with more than 25 years to run either (1) was originally granted for a considerable term on which the tenant can be held to be entitled to rely, or (2) was granted under Part II of this Bill when an Act went into law within the preceding 10 years, at which time the question of rebuilding or redevelopment could have been raised. That is basically the thinking behind it. The restriction of the provision to cases where the tenancy has not more than 25 years to run was inserted for the information of the chairman of the Landlord and Tenant Commission, the respected Judge Conroy. For the information of the House, the chairman made the suggestion after the commission had already presented their first report. He is to be commended, in this respect, for his attentiveness to his job, from his own experience as a judge and, indeed maybe, as a practitioner, he felt that it was necessary to bring this to the attention of the people concerned and they felt that they should take his advice.
No one in this House has greater respect for Judge Conroy in this field than I. When you get down to a debate, however, a man's view depends on his argument; what reasons did he give for this? This is so that we could make an assessment.
I think you are entitled to ask that question on the basis that I raised the matter. The relevant provisions were inserted at the suggestion of Judge Conroy and the Ground Rents Commission, apparently, had accepted, in the Report on Ground Rents, paragraph 134 (2) (b), that, where a lease comes to within 25 years of its expiration, the equities, or to use the lawyers' term "stakes" of the tenant in the property of the landlord begin to change in favour of the landlord. It appeared to the Ground Rents Commission that where the landlord's reversion was more than 25 years distant that landlord's interest in a ground-rented property had a market value no greater than the capitalised value of the ground rent. However, where that reversion has less than 25 years to run, and the value of the landlord's interest over and above the capital value of the rent becomes a factor in the market value, it could not be held as inequitable to place under threat of dispossession, under whatever terms of compensation, tenancies, the leases of which have more than 25 years to run. In the circumstances, Judge Conroy was persuaded that in the interests of justice the situation as propounded by him should carry the day. We took cognisance of what he said and decided to take care of his recommendations.
So that, between now and Report Stage, I could consider what the Minister has said, could he repeat that? I take it he is referring to a paragraph in the Second Report, or am I wrong?
No, I probably misled the Senator. I was going through the notes before me rather too quickly, which one is inclined to do. The Ground Rents Commission had accepted, in the Report on Ground Rents, paragraph 134 (2) (b) that, where a lease comes to within 25 years of its expiration, the equities in the property of the landlord and of the tenant begin to change in favour of the landlord. In the meantime, I might take the opportunity of sending the Senator a note for his information, between now and Fourth Stage——
Thank you.
Where the landlord applies to the court saying that he proposes to carry out improvements and submits a scheme of improvements or development to the court, and he succeeds in getting an order against the tenant and the tenant leaves the property, is there any obligation, then, on the landlord to execute the improvements?
In the meantime, the tenant will have been adequately compensated. I am sure that is the Senator's concern, in the context. I understand the Senator's point that the landlord, having compensated the tenant, having got the required planning permission and so on, and not being in a position to execute the permission so obtained and, having taken care of all his other obligations, what is his position there? I assume that there is some provision in the Bill to take care of that problem but I am unable to put my finger on it at this moment. The note I get confirms exactly what I have said.
There is no obligation on the landlord?
No.
I thought we dealt under an earlier section with the tenant whose tenancy had expired and the tenant not being entitled to a new tenancy because the landlord proposes to carry out a scheme of improvements. Under that section—I cannot remember which section it was—was there not provision that a tenant would be entitled to punitive damages from the landlord? Is that the case?
Yes. Of course, the Senator would agree that it would be a different situation. The Senator's memory is quite right in relation to the matter of punitive damages. I do not think there is any suggestion that both cases are on all fours.
I am not suggesting that they are. In regard to an earlier section I argued that to be fair and logical about it the reasonable thing would be that the landlord should be given a specified and reasonable time within which to carry out the improvements, and that if he did not carry out the improvements the tenant should have the option of going back in. The Minister's answer was reasonable when he said that the tenant could obtain damages. If the Bill is to be consistent—and the Minister has prescribed this radical change—surely it is reasonable that the tenant whose lease has two years or longer or less, to run, and who is denied the right to remain on in his home, shall be given damages, apart from getting compensation for the pecuniary out-of-pocket expenses he incurs, particularly if the landlord does not want to carry out the improvements afterwards?
I should not imagine that, in the circumstances, the carrying out effectively of the improvements is specifically any business of the tenant. Once the tenant receives adequate compensation, his day has ended—he has had his day. In relation to the possibility in those circumstances, for example, of his being compensated according to the law, the suggestion, if I understand the Senator correctly, is that maybe he should be given additional damages or, alternatively, he might be allowed back into the property. I would not have thought that the tenant, in the circumstances, should be allowed back into the property, apart altogether from the fact that we are talking about obsolete areas and also about buildings which, effectively, are no longer habitable. I do not think that suggestion holds up. In the circumstances, the tenant has been adequately taken care of by the law. I am quite satisfied that, in the circumstances, his legal advisers will ensure that he has proper representation by adequate defence and so on and that he is properly compensated. The court will certainly ensure that.
The only point I would make to the Minister is that it is provided under subsection (5) that compensation shall primarily be the pecuniary loss, damage or expense. In other words, the compensation is very much related to the financial loss which the tenant suffers. There is the point in this that the tenant is being asked to leave his home. If one is to take a reasonable or radical view of it, he is entitled to something more than merely his out-of-pocket expenses where he is asked to leave his home. Having made that point to the Minister, I ask him why in this instance where somebody's tenancy has not expired the position should be different from the earlier section, where a tenancy has expired and on application for a new tenancy the tenant fails because the landlord proposes to carry out a scheme of improvements? Why is not this tenant, in these circumstances, entitled to damages?
First of all, it should be technically corrected that it is not the tenant's home, it is the landlord's home.
No, it is the tenant's home.
Yes, but it is a small point.
I have seen that, I accept that.
But I would refer the Senator to section 60, subsection (5) (a) which reads:
such amount as the Court considers reasonable shall be added for the pecuniary benefit accruing to the landlord which is referable to his getting possession of the tenement earlier than he was entitled to under the lease or other contract of tenancy, and—
this is the addition—
(b) such amount as the Court considers reasonable shall be added for any further hardship which the tenant sustains through the making of the order terminating the tenancy.
I would be most anxious that the tenant be properly catered for. In the circumstances of this Bill the tenant is being properly looked after as far as we, the legislators, can do it. The Court will in fact ensure that in the circumstances of a particular tenant's problems arising out of the provisions of this section he will be given the protection of the Court and consequently the law. I cannot see, from reading the section and projecting into the future, any hardship falling on the tenant, having regard to the provisions of the Bill itself. That is no mere pious hope; it is a reality, and when we look back on it in ten or 15 years' time we will find that we have done a good day's work in relation to the proposed protection of the tenant.
I see what the Minister is saying, but do not accept that there is any great consistency in providing for punitive damages in one instance and not in the other. I would ask the Minister, before Report Stage to consider drafting into this section something along the lines of subsection (4) of section 17 which provides that where the landlord has not, within a reasonable time, carried out the intention, agreement or purpose, as the case may be, on account of which the tenant's application for renewal of tenancy, the tenant's application to the Court was refused, the Court may order the landlord to pay punitive damages to the tenant.
I will do it more in hope than anything else. I see the Senator's point all right but with respect I do not think there is much to be made of it. Certainly in deference to the attitude of the Senator, generally, I will have a look at it.
Question put and agreed to.
Sections 61 to 63, inclusive, agreed to.
NEW SECTION.
Government amendment No. 1:
In page 32, before section 64, but in Part V, to insert the following section:
64.—In this Part,"lease"includes a yearly tenancy arising by operation of law or by inference on the expiration of a lease and a statutory tenancy implied by holding over premises on the expiration of a lease which reserves a yearly rent.
I will just make a technical point here. If the amendment is accepted the other sections move up one, as it were: section 64 becomes section 65 and section 65 becomes section 66 and so on. The amendment proposes to insert a new section at the beginning of Part V, before section 64. It deals with covenants and leases of tenements. The purpose of the amendment is to make it clear that the relief against covenants, which is given to lessees of tenements by sections 64 to 68 of the Bill, also extends to covenants carried over into a yearly tenancy that arises on the expiration of a lease. Effectively, it is to deal with the subsequent section, and it proves, to a great degree, what is intended. I would place the amendment before the House and hope Senators would accept the amendment in the spirit in which it is intended, mainly as an improvement to the overall generality of the Bill.
Would the Minister explain the difference between "operation of law" and "by inference"? For instance, if a tenancy ends and the tenant sits there, a yearly tenancy will arise if rent is paid and accepted. Does that arise by operation of law or by inference? Are there two types of separate situations I do not know about?
I will be glad to give the Senator the information. The recommendation of the Black Tribunal, which was the agreed report of the town and tenants occupational tenancies tribunal, published in 1941, and the decision of the High Court both concerned section 55 only of the 1931 Act. It is being proposed that the new provision should apply to Part V of the Bill generally. The arguments for applying the new provisions to section 55 of the 1931 Act, that is section 64 of this Bill, applies with equal force to the provisions in Part V of the Bill.
In a recent as yet unreported judgment of the High Court, the case of Whelan and Others v Magidan, it was held that the relief given by the section of the 1931 Act was not available to a tenant who holds over on the expiration of a lease in which the relevant covenant was contained. Since this puts the position beyond doubt, and since the relief should clearly be available to a tenant of a tenement who is still bound by the covenant even though the original lease has expired, the new section is proposed for insertion in the Bill. I do not know if this helps the Senator, it does not help me. I will undertake to give some further information to the Senator on the next Stage.
Amendment agreed to.
Section 64 agreed to.
SECTION 65.
Question proposed: "That section 65 stand part of the Bill."
This section is also a re-enactment of the 1931 Act and there is nothing new in it.
Question put and agreed to.
SECTION 66.
Question proposed: "That section 66 stand part of the Bill."
Is there any change in this section?
This provides no change, but it includes certain provisions that are consequential on the proposed repeal of the 1958 Act.
Question put and agreed to.
Sections 67 and 68 agreed to.
SECTION 69.
Question proposed: "That section 69 stand part of the Bill."
This is Part VI, the concluding part of the Bill.
Question put and agreed to.
Section 70 agreed to.
SECTION 71.
Question proposed: "That section 71 stand part of the Bill."
Why was it decided to introduce this section? Was it a policy decision?
This is a new provision in so far as it concerns the 1931 and 1958 Acts. Under existing law on the death of a person his personal representative may act in all matters consequential on a claim which is outstanding at the time. This section puts this situation beyond doubt in that a successor in title is similarly so entitled to act. It is an improvement.
Did somebody express a doubt?
I cannot say that somebody did, but in the event of the possibility of a doubt, it is now beyond doubt.
On that logic there could be 100 more sections in this Bill.
Question put and agreed to.
SECTION 72.
Question proposed: "That section 72 stand part of the Bill."
Part of this section is new.
That is so.
I have no objection to what is new in it, but I should like to ask about all the new things that are in the Bill: the new situations and the people who are newly deprived of rights that they have at present where they are tenants of the State authority. In what way can the Minister put in appropriate savers for any of these different situations?
Could the Senator give an example?
If the Minister for Justice decides to acquire premises in which to conduct affairs of State and there happens to be a tenant in the building that he requires and that tenant was on his way to acquiring rights if he stayed long enough but has not done so, and the landlord sold the premises to the Minister so that he would have rights, now he will be shorn of the rights. What saver is there for that case in that provision? That is just one example; there are many others. He has been 20 years in a house under the law occupation position, as he stands at the moment, and his landlord at the moment is thinking he has to stay another ten years before he need put the tenant out. He could wake up and find he has got rights straight away. Is it decided in that situation that the landlord who is conducting his policy on the basis that he could let the house to him for 29 years is going to find out that he is wrong, that he has lost by this statutory change his right to put him out? There is the other case where we are changing the position by abolishing the urban restrictions. There are all sorts of lettings made by people who think they are outside the Act in making these lettings but find they are inside the Act now, and people are going to either have rights or find they are subject to rights, Is there not to be maybe a decision in each of these cases?
In other cases where at the moment business tenants of local authorities do not have rights, are they going to wake up in the morning with rights? As long as I know what we are deciding to do I will be delighted to do it. Should we put in some kind of a saver amendment to survey each of these cases and decide what is to be the solution? What was done in 1931 is applied to existing tenancies, all the occupation periods and so on, all turned on what was there before 1931. On the other hand, there are various provisions even in this Bill which continue the situations which existed before 1931 and distinguished them from cases that existed after 1931. We should know exactly where we are changing in any significant way rights one way or another.
Take the Minister for Justice who is fed up with the building he has and decides to sell it and the chap there sensibly decides that he could not occupy one floor or he did not need to occupy one floor. He got in a tenant—the tenant in question, having the Minister for Justice as his lessor, does not think he has any rights. If a new property man buys from the Minister for Justice, does the new tenancy qualify for him in relation to claims against his successor in title? He has been there with a landlord who was burdened with nothing, he now finds his landlord is a different character, is treated differently by the law. Is his past occupancy to be used against his new landlord? If his new landlord was buying the property, what questions has he got to ask? What is the position of the tenant? These are all matters for decision by the legislature, for clarity for the positions of people who are buying or selling in these situations and for people who are occupying.
There must be a saver section. It would be much more helpful if the Minister decided the policy on this and put in savers where he thinks they ought to be. Perhaps he will tell us that he thinks there should be no savers and that everybody should have been reading closely the drafts of the different Bills that have been circulating for the last few years, including an announcement made by the Minister for Justice in 1972 that the law was to be changed from 1971. People may have read that announcement at that time and conducted all their property affairs on the basis that that was the law. It never became the law, and an entirely different law is now being enacted. I suggest that it is a very bad principle for the Legislature to assume that private citizens have all the time in the world to follow all the statements of the different Ministers, whether they are in Government or out, and to be looking at draft commission reports and draft Bills. They should be expected to be dealt with on the basis of the law as it is, and as it is when it becomes what it is, and not on the basis of proposed changes that may never come about. If somebody has been kindly to a poorish tenant, has left the tenant there for 20 years and wants to continue to leave him there as long as he possibly can, but cannot afford to give away the house to the tenant, he should not suddenly wake up in the morning and find that he has lost his house. In that situation, the tenant may end up better off than the landlord, whose situation might change. He might, for example, die and leave a widow worse off than he.
Each one should be looked at. We are dealing with a lot of human relations of importance. People get tired where property is involved. I am sorry, but property happens to exist between human beings and we have to make some sort of just rules with regard to it. What they ought to be in any given case, I have not the slightest idea at this moment.
I appreciate the Senator's statement on this aspect of this legislation. The Senator raised this issue on section 4, and I think it is section 4 observation which he raised properly on that section. This is a thread of the Senator's argument which runs throughout the Bill, and whether the State is in a special position in relation to tenancies and to the cases and examples which the Senator gave. I undertook, when dealing with the Report Stage, to give a rather long exposition in reply to the Senator's observations. I do not intend avoiding my responsibilities to the Senator in that regard.
Having spent a lot of time studying the Official Report of the Seanad when we discussed this Bill in Committee and having spent a lot of time going through the Senator's observations which are relatively the same points, but made in a different way, on this occasion in relation to section 4, we have a long, hopefully, convincing essay in relation to the points raised. I would like to put the Senator on notice that I am not too optimistic about the prospective outcome, it is only fair to him to say that at this stage, of his views prevailing in relation to possible amendments. It would not be proper to give the Senator hope where it does not exist.
I have taken note of the Senator's persuasive arguments in relation to this general topic. Once more I will spend considerable time examining what has been said on this occasion. I cannot go any further than that. At the same time I do not want to mislead the Senator in relation to a hopeful outcome. Perhaps he said something which may have been more persuasive than the last occasion, but I do not think it is possible for him to be more persuasive.
Section 4 states that the State is not bound by the provisions of this Bill. I think it was on section 11 that the other question was discussed. I am not sure. I raised the point under section 2 and the Minister asked me to wait until section 11 to discuss it and said that he would think about it. His thinking seems to be that he does not propose to allow for savers in this Bill. This will cause great hardship to some people. As Senator FitzGerald pointed out, people, particularly non-legal people, cannot be expected to read Bills and to be aware of what might happen in the future. The Incorporated Law Society provide a service of informing solicitors after legislation like this has been passed, to watch for changes. The majority of solicitors would not be aware of the changes that take place. It may come as a disappointment to Members of the Legislature to know they are not regarded as the be-all and end-all of everything. The Legislature is not regarded as the nub of the universe.
I would urge the Minister to reconsider the difficulty we have on this side of the House in drafting such a provision. As Senator FitzGerald pointed out, there are many different cases. In one instance policy might dictate that there is no case to be argued for notice or for a saver but in other instances there might be. It might be that a different type of saver or a transitional arrangement would need to be made for any of the cases. The Minister should seriously consider having his Department draw up alternatives as far as savers are concerned. Grave hardship will be occasioned to some people if the Bill becomes law without any transitional arrangement being made.
I think the Senator is being unduly pessimistic about this. In the main, the State is subject to checks and balances. If a suggested hardship has worked against a tenant, he surely in the circumstances will have his remedy elsewhere. If a tenant feels badly done by he will go to see a solicitor, no matter what the prevailing circumstances are, and the solicitor will represent his best authority and present his case to the court. I am not arguing or gainsaying the Senator's point. We are now back to sections 4 and 11 of the Bill. It was an undertaking given by me which I said I would discharge to Senator FitzGerald, having regard to his concern about section 4. I think I gave the same undertaking to Senator Molony in relation to section 11. I will do both of those things; I have an obligation to do so but I would not be particularly optimistic about it.
I would like to point out to both Senators—and to Senator Molony in particular—that this Bill fell in 1977 because the Coalition Government were beaten at the polls. The simple truth of the matter is that it has been picked up in the main by the present administration. We are re-enacting effectively most of what was contained in the Coalition's Bill, as drafted. I outlined the reasons for the insertion of section 4 last Wednesday and I do not intend to go into the reason for placing section 4 in this Bill. I refer the Senators to the fact that section 4 was recommended in the Bill which lapsed and is now being taken up by us.
I agree there is no reason why we should do as the Coalition did. In some instances it would be very wrong of us to do what the Coalition did but in the circumstances of this legislation it is not unreasonable having regard to the fact that the then Minister, now Senator Cooney, in his wisdom decided, on the best possible advice, that sections 4 and 11 should stand part of the Bill. But that does not satisfy either of the Senators. Nevertheless I will discharge my obligation to them on Report Stage.
We are talking about section 72.
The debate seems to be moving away from section 72.
You will appreciate I am trying to redirect the debate. I am grateful to the Chair for his assistance on that. The Minister should have said for the very last time that this was the Coalition Bill. It does not matter a thrawneen damn whose Bill it is.
I said that.
We as a Legislature have a duty about it. Let us not waste time about which individual made which decisions in relation to the presentation of this Bill. We are concerned with making it right or we should be obliterated. There is not any function in this Seanad, as far as I can see, except to gas about motions, if it does not do the business of legislation properly.
Spare me the lecture.
All the money being spent on Senators could be spent on buying skilled assistance for Deputies if Senators are going to sit like mummies listening to talk about which Minister took which civil servant's advice in presenting Bills. If we are not doing our duty let us get to blazes out of here. People are rightly impatient with this kind of performance. I asked a question on this section and the Minister dealt with it. If there is something new here, I take it that new thing goes in. In other words, it does not matter a damn when the tenancy in question was created. This is a change of a kind that ought to apply to tenancies, whenever they were created. There were other cases where I did not think it necessarily followed that that was so.
Question put and agreed to.
SECTION 73.
Question proposed: "That section 73 stand part of the Bill."
To clarify one point, I take it that this applies to compensation payments of trust by a landlord. Could there not be situations where there are settled Land Act tenants, where the capital moneys might be by compensation rewards?
Question put and agreed to.
Sections 74 to 82, inclusive, agreed to.
Schedule agreed to.
Title agreed to.
Bill reported with amendment.
Report Stage ordered for Wednesday, 2 May, 1979.