Yes. Further, it has to be remembered that fee farm rents never came under the Land Acts. They were never touched by previous Land Acts and they were always regarded in much the same way as the tenure of houses in towns. It was never felt that there was any danger that they would be interfered with. Hence, they came to be looked upon as a security and as an easy and safe way of giving annuities under marriage settlements, family settlements, and so on. In that way, a number of mortgages and claims and charges grew up and were woven round fee farm rents all over the country where these rents exist. All that was based on the firm belief that fee farm rents, which had never come within the Land Acts, would never come within these Acts. That makes it extremely difficult to treat fee farm grantees at present as if they were tenants. The question was raised before, and I dealt with the considerations put forward by Deputy Baxter.
I realise that there are some cases where, at least on view, it does appear a hardship that a fee farm grantee should be treated in one way and a judicial tenant in another. Everybody is immensely impressed by the circumstances which surround him. People see fee-farm grantees farming their land in the ordinary way still at the old rent, having got no relief. On the other side of the ditch, they see judicial tenants with rents reduced 35 per cent., arrears added to the purchase money, and so on. You have, in those circumstances, an agitation for some sort of redress. There is the dilemma. Firstly, you have land tenures, always sacred, never touched by any Land Act, around which all sorts of family charges, mortgages, bank charges, grow up, and, secondly, you have tenures of rents which are very difficult to interfere with. On the other hand, you have cases where five or six small men, popularly called tenants of an estate, who held under fee farm grants and, consequently, were unable to get the advantages of the Land Acts.
Again, it is the old case where it is impossible, or almost impossible, to discriminate between persons. You can only discriminate between the merits of the cases—the tenures and circumstances. To meet that I proposed what was also proposed in Senator Butler's Bill—to give the same terms to fee-farm grantees outside the congested districts as inside the congested districts. Within the congested districts, untenanted land and land held under fee-farm grant as untenanted land, vested automatically in the Land Commission and then could be resold to the fee farm grantee. The fee farm grantee was the vendor—he was the owner of the fee farm grant. In the case of ten— anted land, the vendor is the owner of the fee—the landlord. The tenant is not the vendor. Within the congested districts, the fee farm grantee's land was, in effect, sold to the Land Commission and the Land Commission resold. Outside the congested districts, if the fee farm rent was to be redeemed or if a fee farm grantee was to get any relief, he had to apply to the Land Judge to have the rent redeemed. He was not in as strong a position as the fee farm grantee within the congested districts for two reasons. In practice the procedure in the congested districts enabled the fee farm grantee to have arrears, if any, added to the purchase money. Let us say that there is a fee farm rent of £100 on 100 acres and that there are three years' arrears due. The Land Commission buy it at £1,500 from the vendor, who, remember, is the fee farm grantee. They pay his charges—the charges that are on that purchase money—first. One charge is the fee farm rent and that fee farm rent is redeemed, say, at £800.
That £800 is transferred to the grantor, the owner of the rent as well as three years' rent, £300—a total of £1,100, and the fee farm grantee is then really paying interest and sinking fund at 4½ per cent. on £1,100. In other words, his arrears have been added to the purchase money. That did not happen outside the congested districts. In that way the fee farm grantee outside the congested districts was at a disadvantage compared with the fee farm grantee within the congested districts. He was at a disadvantage, as he did not get a loan at 4½ per cent. repayable in 67 years to pay off his arrears.
The second point is not so obvious, but it is equally important. Within the congested districts the land was bought as untenanted land at a certain price. Say, without going into the acreage, that land is bought at £2,000 by the Land Commission in the ordinary way as untenanted land. They can only buy it in one way. They have to buy it as if they were going to resell it. They have to buy it at a price which would leave it an economic proposition to resell and which would make the annuity economic to the tenant purchaser. They have to buy it at such a price that, repayable at 4¾ per cent., it is an economic proposition for the tenants and the landless men in the event of their dividing it. They have to buy at a smaller price than land can be bought in the open market. They have to buy it at certainly an economic price. It is bought, say, at £2,000 within the congested districts. There is a rent on it. There is one charge to be paid out of the £2,000 before the owner gets what is coming to him, the owner being the fee-farm grantee, and that is the redemption of the head rent. The Land Judge must redeem the head rent in such a way as to give a fair proportion of the money to the grantee for his occupation interest and a reasonable proportion to the grantor for his interest as being a rent holder. He must, if the price is small, have some fair relation between the interests of the grantor and of the grantee who is in occupation, who had all the profits of the land, who had a fixed tenure in the land, and whose interest must be regarded in the average case as at least as important and as valuable as the interest of the grantor.
He must redeem the rent in such a way as to leave a sufficient allowance for the interest of the grantee. In other words, he must assume that he is not going to resell the land to the grantee; he must assume that he will require it for the relief of congestion. There is £2,000 there and it has to be divided between two persons, one who owned the rent, and the other who had the occupation interest. That mere fact lowers the redemption value of the rent. By putting the grantee outside the congested districts, in the same position as the grantee in the congested districts you certainly confer two big advantages. If there is a very high rent on the land and if at the same time the land is being bought on Land Commission principles—at such a price as it might be resold to tenants and yet leave an economic annuity to be paid by these tenants—it is obvious that the Land Judge must take into consideration, not only the rent but the occupation interest and it is obvious he cannot redeem the rent at a very high price so you do ensure that the rent is redeemed at some sort of reasonable price when you provide that the arrears be added to the purchase money.
What is happening in practice is this: that a man who held land under one of these tenures subject to a rent payable for ever gets that rent redeemed at a very reduced price. He has the other choice which I need not go into now, paying a bigger rent and taking the money in hand to pay off other debts or refusing to take any money and putting it against the annuity, leaving himself with a very small rent as compared with the rent he paid previously. Anyway he is in the position that this rent which he had to pay for ever as a fixed rent is redeemed now at a reasonable figure. The land judge has to take all the circumstances into account in each case that comes before him. A certain number of years' arrears are added to the purchase money. He gets a loan at 4½ per cent on that and he gets 67 years to repay that. I think that meets all the equities of the case. Again we have the same case that we debated five minutes ago. You cannot do the ideal thing for every tenant. You must simply try and do approximate justice to everybody in an Act of Parliament. An Act of Parliament must be based on general principles which must apply evenly all round. This is the very best we could do and to make the position quite clear I am proposing to add this sub-section at the end of the section. It is an amendment which I have given a considerable amount of thought and consideration to, because the last thing we want to do is to interfere with property that has been regarded as a security up to this. We realise the grave danger of cutting too near the quick. All I really desired to do was to make it certain that, first of all the purchase should take place in such a way as, in the nature of the case, to ensure that the rent would be redeemed at a fair price, and then to insert certain definite provisions in a section as a safeguard, so that the Judicial Commissioner would, at least, take certain things into account in fixing the redemption price. I am suggesting, therefore, that the following sub-section should be added to Section 10. (Amendment quoted.)
Remember, the vendor is a fee-farm grantee, and this is based on sections in other Acts which deal with the redemption, out of the purchase money, of interests which have been diminished by a particular Act. For instance, take the case of tenanted land, where the rent is lower and where there are specified provisions in an Act of Parliament which insure that the price of the tenancy shall be small and less than it would be if the rent had not been lowered—less than it would be if the sale had taken place in the open market. There follows in some of these cases a provision that when redeeming the charges which might have been deemed against the tenancy, and which now exist against the purchase money, the Land Judge shall take into account the price given for the tenancy. I am adopting the words in the previous Acts of Parliament for this purpose. The meaning of these words is well settled. There are decided cases on it, so that there is no danger of their being misinterpreted. Three years' arrears shall be added, to the purchase money, but not more. I suggest that that meets the case.
