Léim ar aghaidh chuig an bpríomhábhar
Gnáthamharc

Dáil Éireann díospóireacht -
Thursday, 21 Feb 1980

Vol. 318 No. 2

Landlord and Tenant (Amendment) Bill, 1979 [Seanad]: Committee Stage (Resumed).

Debate resumed on amendment No. 2:
In page 7, before section 4, to insert the following section:
"4.—(1) In this section `the relevant date' means the date on which a State authority acquires the interest of the lessor or immediate lessor of any premises.
(2) Subject to the following subsections, this Act shall not bind a State authority in its capacity as lessor or immediate lessor of any premises.
(3) Where a State authority acquires the interest of the lessor or immediate lessor of any premises after the commencement of this Act, section 13 shall apply as if the expressions `at any time' and `at that time' in subsection (1) thereof were references to the relevant date and Part II shall apply accordingly.
(4) Subject to the provisions of this Act, in a case to which subsection (3) applies, the tenant shall be entitled to a new tenancy in the tenement beginning on the termination of the tenancy under which he holds at the relevant date but he shall not be entitled to a further renewal of his tenancy.
(5) In a case to which subsection (3) applies, subsection (2) shall not apply so as to disqualify any person for payment of compensation for improvements in respect of such improvements as may have been carried out before the relevant date."
—(Minister for Justice).

(Cavan-Monaghan): When I reported progress yesterday we were dealing with an amendment on section 4, but this amendment essentially involves a discussion of section 4 because the amendment the Minister moved proposes to delete section 4 and substitute another section for it. Section 4 as it stands reads:

This Act shall not bind a State authority in its capacity as lessor or immediate lessor of any premises.

That means that the State as a landlord is not bound by the Act while as a tenant it is entitled to all the benefits of the Act. As a landlord the State does not have to shoulder any of the responsibilities imposed on landlords in general by the Bill but is entitled to all the benefits which accrue to tenants under the Bill. That is a most undesirable and most unreasonable approach.

The Minister said that has always been the law, that the State was never bound by landlord and tenant legislation. I disagree with that. That has never been adjudicated in the courts nor has it ever been ruled on in the courts. If the only argument the Minister can put forward in favour of that is the old dictum that the Crown can do do no wrong and that the Crown is exempt from obligations such as this that is unreasonable.

The Minister agrees that in 1926 the question arose out of a long standing letting of part of what is known in this city as the Post Office building but apparently on the advice then given the State settled that case. As far as I know, it was never litigated on. The position is that at best, as far as the Minister is concerned, there is a grave doubt whether or not the State was exempt from the provisions of the Landlord and Tenant Acts. I say there is no doubt the State was always bound by those Acts and was not exempt from them.

The Landlord and Tenant Commission, which the Minister referred to on a number of occasions, have reported on a lot of things. They have reported on the updating of the Landlord and Tenant Act, 1931, but they never recommended that the State should be exempt as a landlord from the provisions of this Act. The Minister seeks to give the impression that the Landlord and Tenant Commission had not been asked to consider that point. The Landlord and Tenant Commission had in their terms of reference the updating of the Landlord and Tenant Act, 1931. If they thought that that Act should have been amended to include the provisions of section 4 they would have so advised. The case I was making yesterday evening is that it was entirely unreasonable that the State should be exempt from obligations imposed on the landlord by this Bill while at the same time enjoying all the benefits given to tenants. I made the case that if section 4, or even the amended section proposed by the Minister which is an improvement in regard to the landlords interest bought by the State, is written into the Bill it will mean that a person could have been a tenant of a business premises for many years and could have built up a valuable goodwill and a valuable asset in it and, just because the State happened to be the landlord, he could be ejected from the premises on the termination of his tenancy without the ordinary right of renewal which is enjoyed by every tenant. That is most unfair and most unjust.

In replying to my argument yesterday the Minister seemed to suggest that it was necessary that the State should have control over certain property here and there and he instanced airports and other places like that. But the case he was making was that it is necessary that the State should be in a special position because it is the State and it is acting in the public interest and should have control and be able to recover possession of premises. As the law stands, and as the law will stand if section 4 unamended were put into the Act or even if the Minister's amendment is accepted, if the State gives a lease for 50 years it cannot recover possession of that premises for 50 years provided the tenant or the lessee observes the terms of the lease and pays the rent. It might be vital for the State to get possession after ten years because of changes in circumstances but, as the Minister knows, the State is protected because it can proceed then by way of compulsory acquisition order which is available to local authorities and to the State. In this way they can acquire the property. The only difference is that the unfortunate lessee would be protected and compensated. If the State wanted the property it could use the ordinary machinery that is there to get possession but the lessee would be compensated for the loss of his lease, the loss of his premises and the loss of his goodwill and, in default of agreement between the State and the lessee, compensation would be fixed.

That would be the case if the lease were interrupted in the public interest and for the national good. But we are not dealing with that position here. We are dealing with the position that will arise when a lease for 21 years or 50 years expires after a tenant or lessee has built up a valuable asset, valuable goodwill. In the case of an ordinary landlord the lessee would be entitled to a new tenancy on terms to be fixed in accordance with the Act on the expiration of the old tenancy. But the Minister, even with his amendment, wants to change that. He wants to provide that, unless there are very exceptional circumstances, the tenant will not be entitled to a new tenancy but will be turfed out and will not get a penny compensation.

I want to put the proposition to the Minister—I do not think it has been argued yet—that there are cases where, for good reason, the landlord is excused or relieved from granting a new lease because he has a scheme of reconstruction or a scheme of new management for his property and the law recognises that and the Acts to date recognise that but they say that in such a case a tenant is entitled to compensation on serving the usual notice. But here the State is not going to have to pay compensation. If the Minister gets his way the State will be entitled to refuse to renew a lease without giving a penny compensation to the tenant. Surely that is not reasonable. Surely the Minister will not continue to argue that the State should be put in a special category, that it is not going to be asked to renew a tenancy because it wants the property. Even if it does not want the property for any special purpose it is not going to be asked to renew the tenancy and the tenant will not have any right to have the tenancy renewed. Further it is going to be put in a special favoured position, distinct and apart from other landlords who, if they refuse to renew a lease for good reasons as set out in the Act, have to pay compensa tion. But the almighty State, on the basis of following the dictum that the king can do no wrong, is to be excused from that too.

The Deputy seems to be repeating the point.

(Cavan-Monaghan): When progress is reported one is inclined to have to make things a bit intelligent. I think I have made the argument sufficiently well for this and I would certainly like to hear the Minister's comments on the necessity for this innovation, and innovation it is in view of the compulsory acquisition proceedings which are available to the State if it wants to interrupt a lease. What objection has the Minister to putting the State in a position similar to the ordinary landlord, that is to say, giving the State the right to refuse to renew a lease on payment of compensation the same as any other citizen?

With the permission of the Ceann Comhairle I wish to raise on the adjournment of the Dáil this evening the question of the delay in the publication of the findings of the archaeological survey carried out by the Office of Public Works in respect of the counties in which that survey has been completed.

I will communicate with the Deputy.

Deputy Fitzpatrick has expressed the opinion that the landlord and tenant Acts do not bind the State. He is certainly entitled to hold that opinion since, as I pointed out yesterday, the doubt as to whether these Acts do bind the State has never been resolved by judicial decision. Nevertheless, the view has been very widely accepted up to the present time that those Acts do not bind the State. Accordingly, leases and lettings of State property would not have been framed, indeed would not have been granted, in the manner in which they were had it been assumed that the lesees and the tenants concerned could gain rights under the landlord and tenant code. Dispositions of State property would have been made differently. As these leases and lettings stand at present, the position could well be that if the doubt about the position of the State were to be resolved against the State by judicial decision in the absence of section 4 of the Bill, the basis on which these leases were made could very well be undermined. As I mentioned, one opinion about the position of the State under the landlord and tenant code is as valid as another in the absence of judicial decision. However, so far as the substance of section 4 is concerned, the doubt that has been raised must be resolved, because leases have been given by the State in the manner in which I have mentioned that doubt must be resolved in favour of the State.

Last evening Deputy Fitzpatrick also mentioned the Rent Restrictions Act and it is pertinent to note that the Rent Restrictions Acts of 1960-67 contained no provision exempting the State from liability under those Acts. Nevertheless, the Supreme Court held in relation to the earlier code of rent control in the case of Cork County Council v. the Commissioners of Local Works and others in 1945 that the State was not bound by the rents Acts.

(Cavan-Monaghan): The 1923 Act exempted the local authorities.

That is right. To make clear what is at issue here, I shall mention the case referred to yesterday, namely, the shop tenant in the GPO Building in O'Connell Street——

(Cavan-Monaghan): Henry Street, to be accurate.

Yes. I think the House will agree that the State must seek to keep control of what happens in the GPO and yet this was only one of scores of cases of various kinds. If we examine each case we will find, as did our predecessors in the preparation of the 1977 Bill when this matter was under consideration, that a clear case can be made for exempting the State as landlord of each type of property. The idea of providing a schedule of exceptions in connection with the question of State exemption was considered but the idea had to be abandoned as impracticable.

Deputy Fitzpatrick mentioned my reference last evening to the Landlord and Tenant Commission. Perhaps my statement was not as clear as it might have been but I wish to say that I did not use the commission as a crutch in having the package presented in the way it is at the moment. What I did say was that they did not recommend any change. I would not want the Deputy to take it that they recommended that it should stay as it is and if I conveyed that impression I was wrong; but certainly they did not recommend any change.

As I said last evening, section 4 simply writes into statute law a provision which is intended to confirm what has been the position in law since the foundation of the State. Basically that is all I am doing. I have paid particular attention to the points raised in the Seanad and it is obvious that the amendment before the House has come as a result. In fairness it must be stated that in theory the points raised by Deputy Fitzpatrick are correct but in practice it would not be as simple as it would appear to be.

(Cavan-Monaghan): What is the objection to compensation?

As I mentioned last evening, I am not prepared to make any change here. I have come as far as I can. I spelled out the consequences last evening. The Landlord and Tenant Commission are still sitting and they will be up-dating legislation of this kind while they are in existence. Having carefully studied this extremely complex area and having taken into account the fall-out of the changes which we are now discussing and which I cannot accept, if they come forward with a recommendation and if they make suggestions, I and my successor will certainly try to accommodate any changes suggested.

The suggestion that tenants of the State should be put on all fours with tenants whose landlords have redevelopment plans in regard to renewal rights, that is refusal of renewal or payment of compensation to business tenants only, is one that could receive consideration. However, this would cover only one aspect of the question. Questions of covenants could remain and I would be wrong if I gave an off-the-cuff undertaking in regard to changing the proposals as they concern the State. Tenants of the State accepted their tenancies on the basis that they did not have renewal rights and presumably they were somewhat below market rents on that account.

It is a complex area. Nobody has been able to analyse the consequences of what Deputy Fitzpatrick has suggested. As the records indicate, it has been suggested before. But the proper analysis that is vital for any Minister before he could bring in that change, which looks quite reasonable and acceptable on the face of it, has not been made. I am sorry to say that as of now I cannot go any further and I hope my reasons will be accepted. I agree that Deputy Fitzpatrick has an excellent case, but there is much to be said for and against the argument. My only regret is that I cannot go further.

(Cavan-Monaghan): There is no point in prolonging this debate unduly because the Minister has indicated he is prepared to dig his heels in. I think this is quite unreasonable. There is no obligation on the State to go into the property business or into the business of letting or leasing property. If it does not want to lease property, if it wants to keep control of it, it can give a shorter lease. At any rate, if it goes into the business of letting property it should be bound by the rules the same as anybody else. It is unreasonable that it should go into the business of letting property and excuse itself from those rules.

The Minister has said that this matter is very complicated but I cannot follow the logic of that. The only thing that is complicated is that the State does not want to yield an inch. It wants to keep itself separate and distinct, over and above everyone else. I cannot see where there is any complication in saying that if the State does not renew then it must compensate especially when other landlords must compensate and when the machinery for assessing compensation has existed since 1931. There is no mystery about it; there is no question of unlimited or unreasonable compensation being fixed. The machinery has been there since the 1931 Act.

The Minister is not big enough to take a bold step in this matter. His attitude should be that if the State is not going to be prejudiced irrevocably, if it is not going to be deprived of its property when it is wanted in the national interest, then he is prepared to say the State must compensate the same as everyone else. I hope that I would be big enough to do this if I were in the Minister's chair, to say that that does not need any research. This puts a completely different complexion on it. This does not need any commission who will sit for years and whose report will sit in some cubbyhole for another ten or 12 years.

This is a simple proposition. If the State wants the property on the termination of a lease, and certifies that it wants it for its business in a Department of State, it will not have to renew the lease but it will have to compensate the unfortunate tenant when the case may be that all he owns in the world is the goodwill in this place. What is wrong with that? I do not accept as a reasonable offer that if the Landlord and Tenant Commission, having studied the matter, come up with a reasonable proposition, it will be considered by the Department and that, if they so recommend, consideration will be given to amendment of the law. Several people could be bankrupt and destroyed in the meantime by having their leases refused.

Would the Deputy mind me interrupting him? To my knowledge, up to now nobody has been interfered with. There is no basic difference. The State is not in this business for the purpose of making profit. Its role is completely different from that of the ordinary landlord who is involved. There is an enormous difference. Would the Deputy agree there?

(Cavan-Monaghan): I do, but I cannot see the objection to compensating him. All the other arguments may be at least valid as arguments but the refusal to compensate is not valid as an argument. I am not prepared to accept an offer that some time when the Landlord and Tenant Commission get round to it and recommend it the law will be changed. The last comprehensive Landlord and Tenant Act was enacted by this Oireachtas in 1931, and 31 from 80 is 49. We are getting round to updating it now. Will it be perhaps another 50 years before this is updated? We know how hard it is to get any Department to amend legislation piecemeal. That is an unreasonable approach and I challenge the Minister to debate the reasonableness of agreeing to compensation the same as in the case of any other landlord. It will not stand up.

The Minister says that the State is not in the property market to make money, that the State will not be unreasonable. Supposing there is a case where the State wants the property and it would be reasonable to compensate. Would not the obvious answer that would be forthcoming from the Department concerned be: "We are sorry, we have no statutory authority to pay compensation. We are precluded from paying compensation because you are not legally entitled to it and if we did pay compensation the Comptroller and Auditor General could surcharge the Secretary of the Department as the Accounting Officer"? Is not that the answer that would be given in that case? Why not provide against that and why not protect the Department from themselves? Why not enable the Department in a case like that to do the right thing? I believe I have said enough to convince any person who is prepared to move. I sympathise with the Minister to the extent that the law of landlord and tenant is complicated and to that extent he is in the hands of his advisers. Advisers are slow to advise the giving away of departmental rights, but surely the principle of compensation is a simple, uncomplicated bit of machinery that would say "Yes, the State must be protected, so must the citizen". The way we protect the State is to ensure that it will not be obliged to renew a lease where it wants the property for its own use and the way we protect a citizen is to put him in the same position vis-á-vis the State as a landlord refusing to renew as he would be vis-á-vis John Citizen as a landlord refusing to renew. This is a reasonable proposition.

I can only say that I am sorry there is such a wide gap between Deputy Fitzpatrick and myself and I am sorry that I cannot bridge the gap because there should be no reason why the gap should be there. I would be the first to say, "Right, let us try. We can more than meet each other half way and we would possibly have better legislation".

Theoretically everything that Deputy Fitzpatrick is saying perhaps is so, but the practicalities of it would cause extremely serious problems, so great that I am advised that we do not even know the extent of these problems. In no way do I want to point-score off anybody, but my predecessor had the same view as I have and the previous Government had the same view in supporting their Minister as this Government have in supporting me. I would like the bridge to be there. I would hope that another review of this legislation will not be as long as 50 years away. I would hate to think that the Landlord and Tenant Commission would be there for I do not know how long. It will not do their morale any good if they are going to be hanging around in some shape or form for another 50 years.

I share the concern of Deputy Fitzpatrick that things could go wrong. They might go wrong and the tenants would be hard done by. I suppose my line of defence here would naturally have to be that it has not happened up to now, it has never happened and the State is an exceptionally good landlord not motivated by profits as ordinary landlords are. On the question of compensation, tenants of the State know that they are not in the same position as tenants of private landlords and they know the terms on which they hold and they agree to those terms at certain levels of rent. Theoretically Deputy Fitzpatrick is correct, but in practice his suggestions would not work.

For the purpose of the record I say again that I would be quite prepared to ask the Landlord and Tenant Commission to give this area priority for the purpose of examination, proper analysis and consultations in relation to the change suggested. I would then be prepared to use my voice if I am here, or I would suggest to my successor, of whatever party might be in Government, that I will use my voice as a Member of the Dáil to see that any recommendation will not be put on the long finger. I know this is piecemeal legislation and I know the effects of it, but a start has to be made. I would not want Deputy Fitzpatrick to believe that I am digging in for the sake of digging it, because I am not; I have no option.

(Cavan-Monaghan): I am convinced that the Minister knows that I have a reasonable case but he is not prepared to move because he has not the authority of his Department. I will vote against this section. I will not vote against the amendment because it is marginally better than what was there before.

The Chair would point out that, if the amendment is accepted, the old section disap pears.

(Cavan-Monaghan): It is still highly undesirable.

When the Deputy says that he will vote against the section he will be voting against the amendment.

(Cavan-Monaghan): The new section will be put after the amendment.

No, the amendment is the new section.

(Cavan-Monaghan): Then we will move against the whole shooting gallery.

The only new point that the Minister has made is that when people contract with the State they know the terms on which they contract. That is not so up to the present time. Even on the Minister's case there is a doubt. I am satisfied beyond doubt that if a Court were asked to adjudicate in the absence of section 4 they would hold that the State is bound by the ordinary Landlord and tenant statute law the same as anybody else. The Minister says that when people enter into a contract with the State they know the terms on which they enter. Human nature being such as it is, I am sure the Minister is aware that people think that 50 years will never pass. I bought a leasehold premises which was to run for 27 years and it ran and expired.

Like the life of the Dáil, it does not run, it flies.

(Cavan-Monaghan): The 27 years expired and I had to pay a fancy price for the fee simple. When people enter a long term contract like that they feel that 30 or 50 years will never pass, but it does and that is a situation I want to protect.

The Minister's attitude is utterly unreasonable, especially when I put to him my belief that the solution is to bring in an amendment that will give compensation. This is the first time that that argument was raised and I am convinced that no reasonable Minister or administration could oppose it. I will vote against this section because it does not go far enough and I would ask the Minister to at least give an assurance that he will think about this between now and Report Stage when he can talk to the Attorney General and can have another bite of the cherry.

I will do that.

Amendment put.
The Committee divided: Tá, 61; Níl, 33.

  • Ahern, Bertie.
  • Ahern, Kit.
  • Andrews, Niall.
  • Aylward, Liam.
  • Barrett, Sylvester.
  • Brady, Vincent.
  • Briscoe, Ben.
  • Browne, Seán.
  • Callanan, John.
  • Calleary, Seán.
  • Cogan, Barry.
  • Colley, George.
  • Collins, Gerard.
  • Conaghan, Hugh.
  • Connolly, Gerard.
  • Cowen, Bernard.
  • Daly, Brendan.
  • Doherty, Seán.
  • Fahey, Jackie.
  • Farrell, Joe.
  • Faulkner, Pádraig.
  • Filgate, Eddie.
  • Fitzgerald, Gene.
  • Fitzpatrick, Tom (Dublin South-Central).
  • Fitzsimons, James N.
  • Flynn, Pádraig.
  • Fox, Christopher J.
  • French, Seán.
  • Geoghegan-Quinn, Máire.
  • Gibbons, Jim.
  • Haughey, Charles J.
  • Herbert, Michael.
  • Hussey, Thomas.
  • Killeen, Tim.
  • Killilea, Mark.
  • Lawlor, Liam.
  • Lemass, Eileen.
  • Lenihan, Brian.
  • Leonard, Jimmy.
  • Leonard, Tom.
  • Leyden, Terry.
  • Loughnane, William.
  • Lynch, Jack.
  • McCreevy, Charlie.
  • McEllistrim, Thomas.
  • MacSharry, Ray.
  • Moore, Seán.
  • Morley, P.J.
  • Nolan, Tom.
  • Noonan, Michael.
  • O'Hanlon, Rory.
  • O'Kennedy, Michael.
  • O'Malley, Desmond.
  • Power, Paddy.
  • Reynolds, Albert.
  • Smith, Michael.
  • Tunney, Jim.
  • Walsh, Joe.
  • Wilson, John P.
  • Woods, Michael J.
  • Wyse, Pearse.

Níl

  • Barry, Myra.
  • Barry, Richard.
  • Begley, Michael.
  • Belton, Luke.
  • Bruton, John.
  • Burke, Joan.
  • Cluskey, Frank.
  • Collins, Edward.
  • Cosgrave, Michael J.
  • Creed, Donal.
  • D'Arcy, Michael J.
  • Deasy, Martin A.
  • Desmond, Barry.
  • Donnellan, John F.
  • Enright, Thomas W.
  • FitzGerald, Garret.
  • Fitzpatrick, Tom (Cavan-Monaghan).
  • Gilhawley, Eugene.
  • Griffin, Brendan.
  • Hegarty, Paddy.
  • Horgan, John.
  • Kenny, Enda.
  • L'Estrange, Gerry.
  • McMahon, Larry.
  • Mitchell, Jim.
  • O'Brien, Fergus.
  • O'Brien, William.
  • O'Keeffe, Jim.
  • O'Toole, Paddy.
  • Taylor, Frank.
  • Timmins, Godfrey.
  • Treacy, Seán.
  • Tully, James.
Tellers: Tá, Deputies Moore and Briscoe; Níl, Deputies L'Estrange and B. Desmond.
Amendment declared carried.
SECTION 5.

Amendments Nos. 4 and 5 are consequential on amendment No. 3 and they may be discussed together.

(Cavan-Monaghan): I move amendment No. 3:

In page 7, line 34, after "building" to insert "or they consist of land used wholly or partly as a scrap yard, sales yard or arena, a yard used for storing materials in the course of business, a car park or for any similar trade or business".

Section 5 defines a tenement. The word "tenement" is very fundamental to the Bill in general and, therefore, it is important that there should be a proper definition of that word. Otherwise, structures or areas which were intended to be covered by the Bill will not be. If we do not have a proper definition of tenement structures which should be protected by the Bill will not be. Section 5 defines "tenement" as premises complying with a number of conditions including the following:

(i) they consist either of land covered wholly or partly by buildings or of a defined portion of a building;

My amendment seeks to add land used wholly or partly as a scrap yard, sales yard or arena, a yard used for storing materials in the course of business, a car park or for any similar trade or business. Covered areas or buildings are not as necessary now as they were some years ago. For example, arenas for showing motor cars are invariably fenced in and uncovered, but they are just as much a building as a building in the real sense of the word. In the old days big sheds were used for storing cars. The same applies to cattle yards and builders' warehouses but now non-perishable items are stored in the open.

If the Bill is to cover the type of structure it was intended, the Minister must extend the definition of the word "tenement" as I suggested. Otherwise a person son who leases a car sales yard or arena for a number of years will not be able to avail of the Bill to renew his lease. However, a person carrying on a similar business in a building is entitled to benefit under the Bill.

The code of landlord and tenant legislation applies not to land as such but to buildings or built-on land. If that code were to be extended to apply to lettings of vacant land, as would happen if the amendment was accepted, then I am afraid the scope and character of the entire landlord and tenant code would be changed with consequences that would be difficult to envisage. For example, the idea of unbuilt-on land that may comprise part of a tenement by reason of being subsidiary and ancillary to the buildings on the land may well lose its significance. If lettings of merely vacant land were to be brought within the scope of the landlord and tenant code there is no apparent reason left for imposing any restrictions on the amount of unbuilt-on land that may form part of a tenement for the purposes of Part II and Part IV of the Bill or that may form part of the land the subject of a ground rent lease or tenancy for the purpose of establishing the right to buy out the fee simple under the 1967 and 1978 ground rent legislation. The question of what is subsidiary and ancillary land is extremely important in that connection. This is the most obvious of many far-reaching implications if the kind of change that is in question was to be brought about.

Several of the types of land use specified in amendment No. 3 indicate vacant land in which little or no investment has been made by anyone and in which an equity to renewal would hardly be said to arise since the tenant is not committed to that particular letting or piece of ground in any way as is, for example, the tenant of a shop premises. On the other hand, if the vacant land has been developed for use, even if only to the extent of being hard-covered, it is not easy to see why it should not qualify as a building and hence come within the definition of tenement as defined in the Bill. I should like to point out to the House that a roofless underground petrol tank has been held to be a building for that purpose.

(Cavan-Monaghan): That is for the purpose of rating under the Valuation Acts.

According to the commission it would apply here. It deals with the Mason-Leahy case of 1952.

(Cavan-Monaghan): When I listened to the Minister at the outset I was inclined to accuse him of old-fashioned and back ward thinking, of refusing to move with the times, but I now understand his argument to be that the definition is wide enough to cater for the type of area I have in mind. I do not agree. To confine tenant's rights to buildings, as we understand buildings, would be old-fashioned and a refusal to move with the times. We all know that in recent years the method of displaying goods and the structure of sales areas has changed even within buildings. Who would have thought of a supermarket type of shop 20 years ago or a supermarket method of displaying goods or a self-service system 50 years ago?

Indeed, the same can be said of the case by which I am trying to demonstrate my argument, that is, the question of a sales area for second-hand cars. These cars are sold in areas that have been developed by way of the laying of a metal surface on the ground which is then covered with ornamental gravel, for instance, while the area is surrounded by a proper fence. I do not think that any reasonable person could define such a development as a building. It might be referred to as an arena, whatever that may be, or it might be referred to as a structure, but not as a building. That is the type of area that should be included: an area of ground that has been developed for a specific purpose and at considerable expense and which is not suitable for market gardening ing or for other agricultural purposes because of having been transformed into a sales area.

The Minister's draftsmen would be able to cover this matter in a much better way than any amendment of mine would cover it. I am told that the definition is not wide enough to include a scrap yard, a car dealer's yard, a yard used for storing material or a private car park which, though without any building, could involve substantial expenditure. Neither is the definition wide enough to include a market garden or other premises where there is not a building but which may have been actively used by a tenant for business purposes. That is my advice on the situation and it is advice that appeals to me as being reasonable.

Perhaps the Minister would help me to clear my mind as to his attitude. When he began speaking I thought he was talking about the old traditional building and saying that such should qualify. But as he continued his argument I understood him to say that he agreed that the type of structure I have in mind should be protected by the Bill but that the definition was wide enough to include such structure. I disagree with him in both cases. First, if he is saying that only the old fashioned business should be protected, that is not moving with the times. But, if he is not saying that and is saying that he agrees that the cattle sales yard, the scrap dealer's yard and so on should be included and are included in the definition, I disagree because I do not regard the definition as being wide enough in this respect.

Regarding the latter part of what I had to say, I thank the Deputy for his complimentary remarks about my not being old fashioned. I contend that the type of case mentioned by the Deputy, the sales yard for second-hand cars, is covered. As I have said already, if a roofless petrol tank is a building within the code of law, it must be very fair to argue that a sales yard which had been developed by way of the laying of a metal tarmacadam base is also a building. But a person who takes a letting on merely a vacant space is not within the scope of this code of law, which began as a code for the protection of town tenants, for tenants whose livelihoods were bound up with their tenancies. I am satisfied, having regard to the court case of 1952 to which I have referred, that the type of structure referred to by the Deputy are included.

(Cavan-Monaghan): Did that case arise out of the Landlord and Tenant Acts? I think it concerned the commissioners' definition.

We are not sure how it arose but we are satisfied that the Landlord and Tenant Commission accepted it was valid in this instance. However, in case there may be any doubt I am prepared to double-check it.

(Cavan-Monaghan): I think that was a case about whether there was a hereditament within the meaning of the rating code but the Minister says it was acceptable to the commission.

I am satisfied about that, but I shall make a double-check.

(Cavan-Monaghan): It is not my intention to push the amendment. However, it is my opinion they the type of situation I have in mind—if land is let in the form of a scrap yard, of a car dealer's yard, of a yard used for storing materials or as a private car park or if it is let for conversion for any one ot those purposes—it should be covered by this Bill and I want the Minister to agree with me on this.

I am prepared to check out what the Deputy has suggested. However, I believe the example he gives is covered within the ambit of the Bill.

(Cavan-Monaghan): Within the definition of “building”?

Amendment, by leave, withdrawn.
Amendments Nos. 4 and 5 not moved.

With the permission of the House, I wish at this Stage to give notice of my intention to move on the Report Stage a further amendment to section 5 concerning the following matter. A question has been raised very recently concerning the effect of the provisions of section 5 subsection (1) (a) of Part IV of the Bill. The matter is under examination and an amendment may be necessary to cater for the points in question. Consequently, I am giving notice now of my intention to table an appropriate amendment for Report Stage, if warranted.

The question that has been raised concerns the effect of the words "the person making the letting or of the person taking it". The corresponding expressions in the 1931 Act provision, in section 2 (d), are "lessor" and "lessee". Since the words "lessor" and "lessee" are defined in the 1931 Act and in the Bill as including successors in title, the argument has been put forward that the change signifies an intention to prevent an assignee of the original lessor or lessee from taking over and relying on the original temporary convenience. The argument goes that a temporary convenience letting is outside the scope of the legislation initially if it comes within the provisions of section 5, subsection (1) (a) of Part IV of the Bill. That paragraph excludes such lettings from the definition of a tenament. However, it is argued that since an assignee or, say, the person making a letting is not that person, the application of section 5, subsection (1) (a) of Part IV ceases with the assignment and with it the exclusion from the scope of the legislation.

In fact, the change in the wording of section 5 (1) (a) (iv) was made so that oral lettings for temporary convenience would come within the ambit of the provision as well as lettings in writing to which alone the expressions "lessor" and "lessee" refer. The view was not taken that section 5 (1) (a) (iv) would cease to apply by reason of an assignment of the letting. The matter is of particular importance in regard to the question of renewal rights for tenants who take lettings for temporary convenience in premises that are awaiting redevelopment. It is at present under examination by the Landlord and Tenant Commission. It would be well to have the commission's considered view of the matter before deciding the question of the need for an amendment.

I formally give notice to the House of my intention on Report Stage, if it is necessary, to introduce an amendment but I am awaiting advice on the matter.

(Cavan-Monaghan): Is it the intention to continue the exclusion in favour of temporary convenience lettings?

That is right.

That will come up on Report Stage.

Would the Deputy like a copy of what I said?

(Cavan-Monaghan): Thank you.

I move amendment No. 6:

In page 8, line 4, after "thereof" to insert "notwithstanding that they may be occupied for the purposes of another State authority".

One of the requirements to qualify as a tenement—see section 5 (1) (a) (iii)—is that the tenant is the actual occupier. The Landlord and Tenant Commission point out in their first report, paragraphs 76 and 77, that this condition is not satisfied in cases where a tenancy of premises is taken by the Commissioner of Public Works for the accommodation of one or other of the branches of the Public Service so that the Commissioners are not themselves the occupiers. They recommend in paragraph 34 (3) of the first report that in such cases the Commissioners should be taken to be the tenants and to be in exclusive occupation for the purposes of the 1931 Act. This would mean that the Commissioners would, for example, be able to claim a new tenancy under Part II on the same terms as ordinary business tenants. Subsection (2) provides accordingly and uses the expression "State authority". This can be seen in section 4 and in the definition section 3 (1) which, as well as the Commissioners of Public Works, includes a Minister of the Government and the Land Commission.

In their comments on this Bill which they furnished recently, the Landlord and Tenant Commission gave it as their opinion that the protection of section 5 (2) should apply only where the property let by the State has been let to any branch of the public service. The amendment before the House proposes to restrict the scope of that subsection accordingly. This is basically to comply with the recommendation and advice of the commission in this area.

(Cavan-Monaghan): Does it restrict the scope of the section?

No, it is a restriction of the subsection.

(Cavan-Monaghan): But it is an extension of the right in favour of the State? As I understand this amendment, it seeks to provide that if a building is leased to one Department of State but used by another Department of State it will still be regarded as in the occupation of the State to qualify for renewal rights.

That is right.

(Cavan-Monaghan): As I understand the amendment, it seeks to say that if a building is let to the Office of Public Works for use by the Land Commission and then the Land Commission do not want it and the Post Office move in, it will still be regarded as being in the continuous occupation of the State for three years.

That is so.

(Cavan-Monaghan): Strange as it may appear, I have no objection to that, but it emphasises very fully how unfairly the State is behaving. The State is grasping out in all directions to protect its own little self against the big, bad, private citizen but it will not give the big, bad, private citizen any protection under this legislation. That is my immediate reaction to this.

I think that is a reasonable amendment because the Office of Public Works are usually the agency who take the lettings for the State. It is reasonable that they should be able to tenant them by any Department of State as long as they comply with the terms of the lease. I repeat that this emphasises how unreasonably the state and the Minister are behaving in regard to section 4. I accept this amendment.

Amendment agreed to.

I move amendment No. 7:

In page 8, to delete lines 16 to 26 and substitute the following:

"(ii) that person being a company which is another company's holding company, the premises are used for the purpose of carrying on a business by the other company, or

(iii) that person being a company which is another company's subsidiary, the premises are used for the purpose of carrying on a business by the other company, or

(iv) that person being a company which is another company's subsidiary, the premises are used for the purpose of carrying on a business by another subsidiary of the other company,

The private company, the other company or the other subsidiary (as the case may be) shall be deemed for the purposes of subsection (1) (a) (iii) to be the tenant of the premises and to be in exclusive occupation thereof.

(4) In subsection (3) `company', `private company', `holding company' and `subsidiary' have the same meanings respectively as in the Companies Act, 1963.".

The provisions in section 5 (3) (e) (i) and (ii) of the Bill as they stand stem from recommendations made in the First Report of the Landlord and Tenant Commission. They ensure that rights of renewal are secured in certain places where a tenement would not otherwise exist because the tenant is not the person in actual occupation by reason of the formation of a private company to carry on the business of the individual who holds the tenancy, or by reason of the tenancy being held by a holding company while the business is being carried on by a subsidiary of the holding company.

The amendment now proposes for two further cases as follows. Firstly, where the company that holds the tenancy is a subsidiary of the company that carries on the business and secondly, where the company that holds the tenancy and the company that carries on the business are both subsidiaries of the same holding company.

Representations were made by the Incorporated Law Society of Ireland that the provisions in section 5 (3) (c) (ii) of the Bill no longer reflect the general practice in company arrangements involving a property holding company and a trading company. It has been pointed out that the more usual practice nowadays is for a holding company to have two collateral subsidiaries, one of which holds the group's properties while the other is a trading company. It was suggested that the provision in question should cover the circumstances where the trading and tenancy are divided between a parent company and a subsidiary or between the two subsidiaries of the one parent company, regardless of which company is doing which.

It is reasonable to take that view if the situation is to be catered for effectively and in up-to-date terms—that was the subject of the relevant recommendation of the Landlord and Tenant Commission, First Report, paragraph 84—and the amendment is proposed accordingly.

The amendment also incorporates a drafting amendment in respect of the provision in section 5 (3) (c) (ii) by deleting the reference to "permission". The preceding provision in (3) (c) (i) deals with the case of a private company using the premises with the permission of the person who is entitled to be in occupation. However, a similar reference to "permission" is included in the following provision to which I have referred. That concerns quite a different situation involving arrangements between two associated companies. The reference to "permission" in that provision is inappropriate and incorrect and it is proposed to delete it.

(Cavan-Monaghan): Will the Minister confirm for me if the purpose of this amendment is to cover the changed situation now prevailing whereby it is no longer general practice for holding companies to be the property holding companies of trading companies? I think that is the object of the amendment, but does it go any further?

It does not go any further.

(Cavan-Monaghan): I can understand that the Minister is working on the reports given to his predecessor in 1967 or 1968. Even since then the law, the general practice, has been changed. I do not profess to be an authority on company law but according to my reasoning the practice has been changed in recent years, and apparently what would have been a valid recommendation by the commission in 1967 or 1968 is already outdated. We are living in rapidly changing times.

I accept that.

Amendment agreed to.
Section 5, as amended, agreed to.
SECTION 6.

I move amendment No. 8:

In page 8, lines 27 and 29, to delete "buildings" and insert "premises".

This is a drafting amendment. This section, while re-enacting section 3 of the Landlord and Tenant Act, 1931, proposes a change of substance inasmuch as business tenants in buildings have been given rights under the Bill as occupational tenants. However, section 6 goes further than is intended in one type of case, that is, where the building provided by the housing authority is the subject of separate lettings, some for business and some for residential purposes. In such a case, section 6 as it stands might be held to give rights under the Bill to all tenants, whether business or not. The proposed amendment makes it clear that the exemption of housing authorities from the obligations of the legislation is being preserved except where business lettings are concerned. The word "premises" defines the property that is the subject of the individual lettings whereas "buildings" is not so restricted or might be held not to be so restricted.

(Cavan-Monaghan): Is the object of the amendment to ensure that residential tenants of local authorities will not acquire rights under the Bill but that business tenants will?

That is so.

(Cavan-Monaghan): I do not think there is anything wrong with that because the object of having businesses there is for the convenience of the estate in general.

Amendment agreed to.
Question proposed: "That section 6, as amended, stand part of the Bill."

(Cavan-Monaghan): Has the Minister considered a reference to section 6 made by an Incorporated Law Society committee as follows:

Bearing in mind the collective construction, there is an element of conflict between this section and sections 2 and 4 of the 1978 Act and section 26 of the second 1978 Act. To remove any doubts it is suggested that there should be a saver in this section for the earlier provisions.

Has the Minister had that brought to his attention and if so has he considered it?

The matter has been brought to my attention, it has been carefully examined and we are quite satisfied there is no conflict.

(Cavan-Monaghan): I have raised the matter now so that I may raise it again on Report Stage if I am so advised or if I find it is necessary. I am told it might be a matter of considerable importance if the view put forward by the Incorporated Law Society is the right one. The Minister has said that the provision in the Bill will not give rise to conflict. If that is correct I am satisfied, but if I find it is not I will raise it again on Report Stage.

Question put and agreed to.
Sections 7 and 8 agreed to.
SECTION 9
Question proposed: "That section 9 stand part of the Bill."

(Cavan-Monaghan): This section provides for the making of regulations and all I wish to say is that where necessary these regulations should be made as quickly as possible after the Bill becomes law. My reason for saying that is in connection with the Housing (Miscellaneous Provisions) Bill, 1977, in which power was given to the Minister to make regulations increasing the authority of a local authority, on request, to make loans of between £600 and £1,000. The making of these regulations was delayed until the loans had been abolished. Indeed the regulations were never made. I urge on the Minister the necessity to have these regulations made and brought into force immediately the Bill becomes law.

Question put and agreed to.
Sections 10 to 12, inclusive, agreed to.
SECTION 13.

An Leas-Cheann Chomhairle

Amendments Nos. 9 and 10 are related. We will discuss both the amendments together.

I move amendment No. 9:

In page 9, to delete lines 29 to 31 and substitute:

"(a) the tenement was, during the whole of the period of three years ending at that time, continuously in the occupation of the person who was the tenant immediately before that time or of his predecessors in title and bona fide used wholly or partly for the purpose of carrying on a business, or".

Under section 19 (1) (a) of the 1931 Act the right to a new tenancy is given inter alia to a tenant where the tenancy is on a yearly basis at least and where the tenement has been used for business for three years by the tenant for the time being. In the 1931 Act and this Bill the relevant part of the definition of tenant is that the person for the time being entitled to the occupation of a tenement. On the basis that the right to a new tenancy is and was intended to apply where a tenant with his predecessors has used the property for business for three years, the qualification for the time being in section 19 (1) (a) of the 1931 Act was dropped. Section 13 (1) (a) of the Bill as it stands refers simply to the tenant.

In the recent comments on the Bill the Landlord and Tenant Commission recommended that the subsection be amended to make it clear that the reference to tenant therein includes a reference to the predecessors in title of the tenant. Moreover, apart from this recommendation of the commission, two cases have come to notice that bear meaning of that expression, the O'Neill v Whelan case and the Gatien Motor Company Limited v Continental Oil Company of Ireland Limited. The decision in these cases raised a doubt as to the circumstances in which the right to a new tenancy arises under the relevant provision of the 1931 Act. In particular they leave it unclear whether that right applies whenever there has been three years' business use, perhaps for a series of unrelated businesses, provided only that both business use and the tenancies of more than one have been continuous.

The amendment makes it clear that, provided there has been a continuous business use for the three-year period, the right to a new tenancy applies in two kinds of cases: firstly, where an individual person or firm has been the tenant for three years, whether under one continuous tenancy or under a series of consecutive tenancies, and, secondly, where the business use has been by a tenant together with his predecessors under a single continuous tenancy.

The amendment proposes also to rehabilitate a requirement in the corresponding provisions in section 19 (1) (a) of the 1931 Act in accordance with which the use for business must be bona fide. The expression has been dropped as unnecessary, as indeed it has been dropped elsewhere in the Bill. However, in the course of debate on this Bill in Seanad Éireann a good argument was advanced in favour of the retention of that expression in section 13 (1) (a) of the Bill. It was pointed out by Senator Alexis FitzGerald, and later by Senator Molony, that certain premises may be used simply as accommodation addresses or may be used for a business in an occasional or almost frivolous way merely for the purpose of gaining rights under the landlord and tenant code.

Accordingly, the requirement of the 1931 Act that the business use should be bona fide or genuine is a substantive requirement. On mature consideration of the argument I have come to share that view and, accordingly, the amendment proposes to restore the requirement that the business use must be bona fide. A degree of uncertainty exists as to the intentions of the Legislature as regards section 19 (1) (a) of the 1931 Act, that is section 13 (1) (a) of this Bill. In the debates on the 1931 Act what was mainly under discussion was the question of the right to a new tenancy for a business tenant who had by three years' business user built up a goodwill. It is certainly reasonable to argue that a tenant could, with his predecessors in title, build up that goodwill and thus qualify for a renewal of his tenancy. This interpretation was implicitly adopted by the Landlord and Tenant Commission in their first report, paragraph 154, and explicitly in their recent comments, despite the apparent distinction that appears in section 19 of the 1931 Act, which refers, in section 19 (1) (a), to the "tenant for the time being" and in section 19 (1) (b), (c) and (d) to the "tenant or his predecessors in title".

(Cavan-Monaghan): Am I right in thinking that under the 1931 Act in order to qualify for a new tenancy after three years the tenant had to be in occupation as a yearly tenant?

That is so.

(Cavan-Monaghan): Has that been changed now and a person can qualify once he is three years in occupation whether he is a weekly tenant or not?

That is so.

(Cavan-Monaghan): Is the object of the Minister's amendment to state that clearly and to ensure that a person can be in occupation either through his own occupation or through the occupation of his predecessors in title? Is that it in a nutshell?

That is all that is intended.

Amendment agreed to.

I move amendment No. 10:

In page 9, line 42, to delete "an unforeseen" and substitute "a".

(Cavan-Monaghan): The interruption before this had to be one that was brought about by fire or some unforeseen circumstances. It did not cover an amendment which was provided for for the express purpose of getting around the Act. It is a very necessary amendment.

Amendment agreed to.
Section 13, as amended, agreed to.
Section 14 agreed to.
SECTION 15.

Amendment No. 11 is in the names of the Minister and Deputy Fitzpatrick. Amendment No. 12, in the name of the Minister, is related. We will discuss both together.

I move amendment No. 11:

In page 10, line 18, to delete "under the Rent Restrictions Act, 1960".

Section 3 (1) of the Bill defines a controlled dwelling as a controlled dwelling under the Rent Restrictions Act of 1960. That is the 1960 Act as amended by the 1967 Rent Act. The reference to subsection 1 of section 15 to a controlled dwelling under the Rent Restrictions Act of 1960 denotes in the light of the definition of section 3 (1) of the Bill a dwelling whose control is under the 1960 Act apart from the 1967 Act. This is intended to confine the scope of the provision to the scope of the corresponding Rent Act provision that is being re-enacted, that is, section 13 (1) of the 1967 Rent Act. However, not only is the reference to a controlled dwelling under the Rent Restrictions Act of 1960 possibly confusing, or at least confusing until the provision is carefully analysed, but it is also unnecessary. In subsection (1) the scope of the provision extends to houses and self-contained flats that were controlled dwellings immediately before the passing of the 1967 Rent Act. Such a dwelling could have been controlled only under the 1960 Rent Act and the inclusion in the subsection of a reference to the 1960 Act is unnecessary. Accordingly, in order to improve the clarity of the provision the deletion of the reference to the 1960 Act is being proposed.

Subsection (2) of section 15 as drafted is correcting a defect in section 13 (2) of the 1967 Rent Act by relating the scope of the provision to dwellings that previously had been controlled dwellings but it goes unnecessarily far in specifying that the control similarly should have been under the 1960 Rent Act. After the passing of the 1967 Rent Act a dwelling could only be a controlled dwelling under the 1960 Rent Act as amended by the 1967 Rent Act. What is in question in subsection (2) is a controlled house with a rateable valuation exceeding £10 that becomes decontrolled in accordance with sections 3 (2) (1) of the 1960 Rent Restrictions Act as inserted by section 2 (4) of the 1967 Rent Act. Such decontrol takes place if an unmarried person between 21 and 65 years becomes the tenant. Accordingly the reference in subsection (2) of section 15 of the 1960 Rent Act should be deleted since the provision is concerned only with events taking place after the passing of the 1967 Rent Act. In other words, if the dwelling in question had been a controlled dwelling under the 1960 Act before its amendment by the 1967 Act but would not be a controlled dwelling after the passing of the 1967 Rent Act, then that dwelling would already have been decontrolled. In such a circumstance section 15 (2) of the Bill, if it were not to be amended as it is now proposed, could give special rise to a new tenancy in cases where no grounds exist for the grant of such special rights.

(Cavan-Monaghan): I accept these amendments. The words sought to be deleted are unnecessary because a controlled dwelling is defined in the definition section of the Bill, section 3, which says that controlled dwelling means a controlled dwelling under the Rent Restrictions Act of 1960. I regard it as a drafting amendment.

Amendment agreed to.

I move amendment No. 12:

In page 10, lines 37 and 38, to delete "under the Rent Restrictions Act, 1960".

Amendment agreed to.
Section 15, as amended, agreed to.
Section 16 agreed to.
SECTION 17.

Amendments Nos. 13, 16, 32 and 35 may be discussed together.

(Cavan-Monaghan): I move amendment No. 13:

In page 11, line 41, after "landlord" to insert "bona fide".

Section 17 is the section which restricts the tenant's right to a new tenancy in certain circumstances, one of the circumstances being that the landlord intends to pull down and rebuild or reconstruct the buildings. This is the sort of case I was talking about this morning that I thought should apply to the State as a landlord under section 4. Section 17 (2) (a) provides that a tenant shall not be entitled to a new tenancy under this part where it appears to the court that the landlord intends or has agreed to pull down and rebuild or reconstruct the buildings or any part of the buildings included in a tenement and has obtained planning permission for the work. We have nearly reached a stage where people have become a bit obsessed by planning permission and think that it is the evidence of anything and everything. For example if a man's land is going to be taken from him by the Land Commission he will run in with planning permission for building and he then thinks that should frighten off the Land Commission immediately and they should accept that as conclusive evidence that he is going to build. I do not regard planning permission as evidence of anything but the fact that the planning authority have agreed to the proposed buildings if and when they are erected. To write it into this subsection here as a condition precedent to refusing a new tenancy is going too far. Insisting on planning permission as a condition precedent to the refusal of a tenant's application for a new tenancy is going too far because the tenant might not have got around to applying for planning permission or indeed the planning authority might——

Deputy Fitzpatrick is probably addressing himself to amendments Nos. 14 and 17 rather than amendments Nos. 13 and 16.

We are dealing with amendment No. 13 at the moment and we are taking amendments Nos. 16, 32 and 35 with it.

(Cavan-Monaghan): This is really part and parcel of the argument I am going to make anyway. I do not believe that planning permission should be a condition precedent to the refusal of a tenant's application for a new tenancy if that application is opposed on the grounds that it is proposed to pull down and rebuild or reconstruct the premises, but it should be made clear beyond doubt that the landlord must have a bona fide intention of pulling down and reconstructing or rebuilding the premises. I see, to write in the words “bona fide” here as a protection and in lieu of the planning permission and if the court is satisfied that the landlord bona fide intends to pull down the building and rebuild or reconstruct it, then planning permission should not be insisted upon. It is not necessary to go any further with the argument here.

Amendment No. 13 seeks to revert to the wording of the corresponding provision, section 22 of the 1931 Act where the intention of the landlord must expressly be bona fide. Amendment No. 16 would insert the expression "bona fide" where it does not occur in the corresponding provision of the 1931 Act. The dropping of the expression "bona fide" in subparagraph (2) (a) (i) is a matter of drafting practice. The expression here lacks altogether the significance which it had in section 19 (1) (a) of the 1931 Act where that expression relates to the genuineness of the use of the property for a business. The modern view is that as a drafting matter the expression "bona fide" in section 17 (2) (a) (i) is unnecessary since the landlord's intention must be bona fide. If it is not he will not succeed in his case.

However, it is not simply a matter of indifference whether the expression is inserted or dropped. If it is not necessary, and the view is that its insertion is not necessary, then to insert it here could raise confusion as to the construction of other provisions in the law, not by any means confined to the landlord and tenant code, that mention a person's intention without expressly mentioning that the intention should be bona fide. It is not modern drafting practice to use that expression when it is already clear that the intention must be bona fide. Since that is the case, to introduce it here could serve no purpose but could risk a certain amount of confusion.

(Cavan-Monaghan): I accept the reasoning put forward by the Minister. I wrote it in here in lieu of the planning permission but I am satisfied on the advice the Minister has received that bona fide is implied both in section 17 (2) (a) (i) and (ii). On that understanding I withdraw the amendment.

Amendment, by leave, withdrawn.

Amendment 14 is in the name of Deputy Fitzpatrick. Amendments Nos. 17, 33 and 36 are cognate and amendments Nos. 15, 18, 34 and 37 are related. The Deputy will move amendment No. 14 and we will take with it amendments Nos. 15, 17, 18, 33, 34, 36 and 37.

(Cavan-Monaghan): I move amendment No. 14:

In page 11, lines 43 and 44, to delete "and has obtained planning permission for the work".

I am not certain of the reason for writing into the sections the planning permission requirement. If it is as evidence of the intention of the landlord to rebuild, reconstruct or redevelop, I say it is valueless entirely. I believe there are other provisions in the Bill to penalise the landlord or to subject him to an action for damages if he gets permission of the premises under false pretences as would be the case if he said he was going to rebuild, reconstruct or to redevelop the premises and did not do so. I will confine myself to that remark until I hear the Minister's comments. In my opinion the planning permission requirement is unnecessary and it should not be included.

The purpose of the Government amendments is to make it clear that the requirement in section 17 (2) (a) (i) and (ii) concerning planning permission is a requirement for a current unexpired planning permission and is not satisfied by a planning permission that, although valid during a period in the past, has ceased to be valid by reason of the lapse of time since the permission was granted. Planning permission normally expires five years after the date of granting the permission—that is under section 29 of the Local Government (Planning and Development) Act, 1976—if the development has not been carried out within that time.

The effect of the amendments put forward by Deputy Fitzpatrick would be to delete completely these requirements concerning planning permission in subparagraphs (i) and (ii) of section 17 (2) (a). Section 17 (2) (a) (i) and (ii) of the Bill re-enact the provisions of section 22 (i) (a) and (b) of the Landlord and Tenant Act, 1931. The Supreme Court in the case of Dolan v. the Corn Exchange Building Company and Vico Estates Limited, 1975, on page 315 of the report read an implied requirement to have obtained planning permission into section 22 (i) (b) of the 1931 Act. Section 17 (2) (a) (i) and (ii), as drafted, incorporate this judgment into statute law.

Deputy Fitzpatrick's amendments, if carried, would represent not a re-enactment of the corresponding provisions in the 1931 Act—if that is what is intended—but an actual change in the law as it stands. Moreover it is difficult to see the point of the amendments inasmuch as the landlord must have planning permission before he can carry out the works and the deletion of the references to planning permission would not improve his position. On the other hand, the court, where it is being asked to refuse the grant of a new tenancy on the ground that such works are proposed, could very reasonably raise the question of planning permission; that is the gist of the Supreme Court judgment that has just been mentioned and it is the basis of the express provision concerning planning permission that is now being made.

Amendments Nos. 33, 34, 36 and 37 are consequential on the above amendments. Amendments Nos. 34 and 37 are Government amendments that are consequential on Government amendments Nos. 15 and 18. Amendments Nos. 33 and 36 are Opposition amendments that are consequential on Opposition amendments Nos. 14 and 17. I presume the discussion incorporates all the amendments.

The case for Government amendments Nos. 34 and 37 is the same as the case for Government amendments Nos. 15 and 18. Their purpose is to make it clear that the planning requirement for a landlord's rebuilding or redevelopment plans—where that landlord is opposing the grant of a reversionary lease—is satisfied only by possession of a current valid planning permission and not by a planning permission that has lapsed.

The case against amendments Nos. 33 and 36 is the same as the case against amendments Nos. 14 and 17. A marginal difference is that the requirement to have planning permission covering the intended rebuilding or development work is not, in the case of the landlord who is opposing the grant of a reversionary lease, covered specifically by judicial decision. However, it is reasonable to assume that the court would come to a similar decision. There could not, in any event, be a difference in the treatment of the case where an application for a reversionary lease is not involved as against the treatment of the case where an application for the grant of a new tenancy is involved. Under the proposals in part 2 of the Bill a tenant may apply for and obtain the grant of a new tenancy as soon as he is qualified therefor and without awaiting the termination of his existing tenancy. Accordingly, the time of any such application may be uncertain so far as the landlord is concerned. Nevertheless, if the landlord has rebuilding or redevelopment plans involving a tenement whose existing tenancy still has a considerable period of time to run, it is reasonable that he should have to apply for and obtain planning permission as soon as he has formulated those plans and that he should update the planning permission as may be necessary, since so far as he, the landlord, is concerned he may at any time have to contest the tenant's claims for the grant of a new tenancy on the basis of those plans. If the argument were to be accepted that this is onerous and that the requirement concerning planning permission should be dropped, the further consideration remains that to drop that requirement in the face of the Supreme Court judgment would be to risk introducing confusion into law.

(Cavan-Monaghan): I was not aware of the Supreme Court judgement but apparently the effect of it is to say that in order to comply with the 1931 Act, planning permission under the 1963 Act must be produced. Apparently that is the effect of it.

That is the effect of it.

(Cavan-Monaghan): I concede one point and that is that, of course, the landlord must obtain planning permission before he actually carries out the work. The argument then is that if the court were to refuse a new tenancy on the basis that the landlord was going to reconstruct, rebuild or redevelop and he was then refused planning permission, he would have the vacant possession of his property and he would not have to rebuild, redevelop or reconstruct because it would be illegal for him to do so. I would be satisfied if the Minister would have a look at the matter with a view to providing for the case where the landlord had overlooked getting planning permission to see if the proceedings could be adjourned for a reasonable time to give him an opportunity of applying for planning permission. I suppose the court would have power to adjourn the case in any event and they probably would. That is one way around it, but I was thinking that the landlord—I have been thinking of the tenant all the way up, now I am thinking of the landlord—who finds himself confronted with an application for a new tenancy and does intend genuinely to redevelop or rebuild his property but has not obtained planning permission, would find himself without this defence to the application for a new tenancy. I suggest that the Minister would have a look at this between now and Report Stage.

I will do that.

Amendment, by leave, withdrawn.

I move amendment No. 15:

In page 11, line 44, to delete "obtained".

Amendment agreed to.
Amendments 16 and 17 not moved.

I move amendment No. 18:

In page 11, line 47, to delete "obtained".

Amendment agreed to.
Question proposed: "That section 17, as amended, stand part of the Bill."
Question put and agreed to.
Sections 18 and 19 agreed to.
SECTION 20.

(Cavan-Monaghan): I move amendment No. 19:

In page 13, line 16, to delete "before the termination of the tenancy" and substitute "within 3 years of the termination of the tenancy".

The provisions of section 20 (2) appear to be too wide because a tenant can serve notice of intention to claim relief while there are still 30 years of the lease unexpired or at the beginning of a fairly substantial leasehold term. This could give rise to considerable problems arising out of changes of ownership in the interests of either landlord or tenant or a change of user by the tenant prior to the expiry of the lease that would have deprived the tenant of a right to a new tenancy under section 13. I suggest that a notice of intention to claim relief should not be allowed earlier than three years before the termination of the tenancy. The purpose of the amendment is to provide that notice of intention to claim relief may not be served earlier than 3 years before the lease of a tenancy expires.

Section 20 (2) as it stands represents one of the major policy planks of the Bill in that in contrast with the provisions of the 1931 Act it permits a tenant to apply for and obtain a grant of a new tenancy as soon as he has satisfied the conditions necessary for the granting of that new tenancy. Under the 1931 Act a new tenancy may be obtained at or about the time of the termination of the existing tenancy. The policy of the Bill in this regard follows on from a recommendation of the Landlord and Tenant Commission in their first report, paragraphs 225 and 235-237. That policy has important benefits for the tenant in terms of security of tenure and consequently in terms of collateral to finance development. The proposed amendments would represent a substantial departure from that position and it would be a change in the policy embodied in the Bill. In addition I should point out that the amendments if accepted would mean that the provision in section 20 (2) (a) would be at variance with the provisions in the two succeeding paragraphs (b) and (c) of the subsection. In other words, a tenant coming under paragraph (a) could not apply for and obtain the grant of a new tenancy until the existing tenancy was within three years of termination. However, a tenant under a tenancy to which paragraphs (b) or (c) of the subsection applied would remain free to apply for and obtain the grant of a new tenancy as soon as he had qualified therefor and without reference to any termination date. Furthermore, changes elsewhere in the Bill, for example in sections 13 (1) and 16, could be involved if an amendment on these lines were to be accepted. Since this part of the Bill is structured on the basis of a tenant's right to apply for and obtain a grant of new tenancy without reference to the date of termination of his existing tenancy, a change in section 20 (2) (a) (i), or even a series of changes to section 20, would hardly cover the kind of change sought to be made.

(Cavan-Monaghan): Instead of creating certainty this Bill creates a lot of uncertainty because it means that the tenant could serve a notice 20 or 30 years before the lease expired. All the circumstances might be changed at the time of expiration. The landlord might not have the funds to knock down and redevelop his property now, but in 50 years' time the circumstances might have changed and he might have acquired the funds and his intentions might be totally different. The circumstances prevailing in or about the time of the termination of the tenancy should determine the right to a new tenancy. If the section stands as it is now we might as well give the tenant a lease for 999 years in the first instance. The whole circumstances of both parties could change completely and the landlord might have valid reasons for refusing to renew the tenancy and he would have to give compensation in lieu of it.

Regarding the Minister's argument that if he were to accept the amendment the other two subsections would be out of line, I do not attach any weight to that because the obvious thing to do would be to amend them. I only put forward this amendment as a basis for argument. I feel strongly about it and am convinced that my proposal is reasonable.

Deputy Fitzpatrick is quite right in that this is a very definite major change. It is a change in favour of the tenant on foot of a recommendation from the Landlord and Tenant Commission. The change has important benefits for the tenant in terms of security of tenure and certainly if he wishes to get collateral to develop it. If I accepted the Deputy's amendment the tenant would lose out. The arguments for the acceptance of the section as it stands are based on a definite recommendation favouring the tenant by the commission.

Is the amendment withdrawn?

(Cavan-Monaghan): No.

Amendment put and declared lost.

(Cavan-Monaghan): I move amendment No. 20:

In page 13, lines 17 and 18, to delete "one month" and substitute "three months".

It is provided here that in order to claim or be entitled to a new tenancy the tenant must serve a notice claiming a new tenancy. The Minister has just provided in the Bill that he can do that at any time after he becomes entitled to a new tenancy. It is also provided in the section that he loses the right to a new tenancy if his right to a new tenancy arises from the happening of an uncertain event such as the death of some person or if it happens by the effluxion of time or on the termination of the tenancy if he does not claim that new tenancy within one month of the happening of the uncertain event.

I am convinced beyond doubt that a period of one month is far too short. If the right arises on the death of some person it might not even be known about and if it arises on the death of a near relative, for instance, it could be overlooked having regard to the trauma that accompanies such an event. People can also be grossly careless and can overlook their right to claim a tenancy. Also, a person could be ill in hospital, or in this age of modern travel he could be at the far ends of the earth for a number of months. My only doubt is that three months may not be long enough. There should be a period of six months. A period of six months is provided for elsewhere in the Bill where a person who would not but for the Bill be entitled to a new tenancy is given six months to claim it. Will the Minister at least accept the amendment and perhaps he might put in six instead of three months?

Deputy Fitzpatrick's amendment seeks to extend from one month to three months the period during which, following service by the landlord of notice of the termination of a tenancy, the tenant may serve notice of his claim for a new tenancy. The corresponding provision in the 1931 Act, section 24 (2) (b), requires the tenant to serve notice of his claim at least three months before the termination of his existing tenancy. The proposal in the Bill extends that time up to one month after service of the landlord's notice. This is already a considerable change in favour of the tenant, since if the landlord has not served his notice of termination the tenant's right to serve his claim continues whether or not termination has already occurred. The proposals in the Bill would enable a tenant to serve his notice of claim at any time, perhaps long before the termination of the existing tenancy. This is also a considerable change in favour of tenants. A tenant who nevertheless does not initiate proceedings to obtain a new tenancy until the existing tenancy has almost run out is still protected inasmuch as he may validly initiate those proceedings up to one month after the service of the landlord's notice of termination.

I understand that the Landlord and Tenant Commission in their first report were concerned in a number of recommendations to shorten the time limits provided in the 1931 Act so as to speed up the various procedures. These recommendations are embodied in the proposals in the Bill. The commission recently furnished their comments on these proposals and endorsed the policy of speeding up the procedures I have mentioned. I believe that to grant an extension of the time limit as proposed in the amendment would raise an argument for similar or even greater extensions elsewhere in the Bill which would completely undermine the policy of the Bill.

Attention may be drawn to the proposals contained in section 78 under which provision is made for the grant by the court of an extension of time in every case, unless injustice would be caused, provided the failure to observe the time limit arose from any reasonable cause. There is a convincing argument in favour of maintaining the position in the Bill.

(Cavan-Monaghan): I am sorry that I cannot accept the Minister's argument. I am aware of section 78 but I believe that a period of one month from the service of a notice to quit or the death of a person is too short. People do not always act as quickly as they should and a much longer period than one month could elapse before the lessee gets around to thinking about his position, consulting a solicitor and the service of a notice by the solicitor. I may have put down an amendment in regard to one paragraph but of course I mean the amendment to cover all the cases where notice is necessary. There could be carelessness involved or the tenant or his solicitor could be out of the country.

Section 78 foresees all this and states:

Where a person fails to do any act or thing in the time provided for by or under this Act, the Court may, on such terms as it thinks proper (and shall unless satisfied that injustice would be caused) extend the time where it is shown that the failure was occasioned by disability, mistake, absence from the State, inability to obtain requisite information or any other reasonable cause.

Unlike the Minister, I think section 78 is an argument for giving reasonable time in the first instance rather than providing for this short period of one month, thereby putting people to the expense of making a special application to the court and cluttering up court files with unnecessary applications of this sort. The reasonable approach is to provide the time of three or six months in the first instance.

Section 20 (2) (d) states:

in the case of a tenancy to which section 29 applies—within six months after the commencement of this Act.

I agree that this is a once-off operation where a lot of applications would be made, but at the same time there is provision for six months. Section 78 will apply there and the six months could be extended to ten years if it were thought necessary.

The period three months used to be a nightmare and a solicitor invariably told the tenant to make a note of it and remind him because the solicitor would not want that responsibility. The period of one month is too short and it will be extended automatically because of the provisions of section 78. The Minister may take it that, unless the Judiciary are changed, judges will extend the time as a matter of course but people will be put to expense and trouble.

I find myself in something of a dilemma. On the one hand I am swayed by the practicalities of the situation which Deputy Fitzpatrick has outlined. There is much merit in what he says. On the other hand, I am swayed by the commission who want to speed up the proceedure and streamline it. Would the Deputy consider withdrawing his amendment to give me a chance to have further consultation and discussion on the practicalities of the arguments he has put forward? I will endeavour to meet his wishes on Report Stage but, if not, the Deputy will be in a position to table a further amendment.

The Chair would like to point out that Deputy Fitzpatrick mentioned that this applied to three cases in the section but the amendment only applies to one.

I can see merit in a lot of the points made by the Deputy, but basically I am trying to do what has been recommended to me by the com-mission—to speed up the procedure. There is a danger that we would be putting people to a lot of extra expense by having to go to court under a later section, but I have no doubt that the courts would facilitate such people. I would be worried that people would be put to that expense unnecessarily. I also accept that members of the profession might be indisposed or on holidays and that in this day and age we have difficulties with regard to telephones and communications generally. There is a strong argument for this, but it is purely a matter of personal choice. I do not wish to make that choice now without giving it further thought.

(Cavan-Monaghan): I will withdraw the amendment, but we should not be too hidebound by what we are told by commissions or permanent advisers. At the end of the day we have to bring our commonsense to bear on such matters. This is not a technical matter; it is a matter of commonsense. The commission have put forward the argument that by shortening the time they will speed up the procedures, but in many cases the change could have the opposite effect. As things stand, a person will be given one month to serve notice but he may forget to do so or his solicitor may be indisposed or on holidays. As a result of that a person would have to apply to the Circuit Court but he may have to wait up to six months for that court to sit in his district. I am convinced that instead of speeding up business it will mean long delays. The Minister should accept my suggestion; he should be a man or a mouse—I do not mean to be offensive.

Many years ago I learned that if one gives half an inch one is taken for a mile. It is not a question of me being a man or a mouse; it is a question of commonsense. There is a lot of commonsense in the Deputy's argument and I am prepared to have another look at the matter to try to meet his request. There are other areas that must be amended. I am being swayed by both sides. It is not a question of being hidebound or of having to listen to advisers. I am prepared to do everything possible to go more than half way to meet the Deputy if he withdraws his amendment.

(Cavan-Monaghan): Does that mean the Minister will make it six months instead of three?

Amendment, by leave, withdrawn.

Amendment No. 22 is cognate with amendment No. 21 and they may be discussed together.

I move amendment No. 21:

In page 13, line 24, before "before" to insert "at any time but".

These are two drafting amendments. The time limits set out in paragraphs (a), (b), (c) and (d) of subsection (2) are in all cases the later time limits for service of a notice of intention to claim relief. No early time limits are prescribed since it is the intention that an applicant may serve that notice as soon as he wishes to do so. However, it has been represented to me by the Incorporated Law Society of Ireland that paragraphs (b) and (c) restrict the times for claiming a new tenancy to the periods after service of the landlord's notice. Although this is not what is intended, it is a possible reading of those provisions as they stand. The amendments are, accordingly, being proposed so as to clarify the meaning of those provisions.

Amendment agreed to.

I move amendment No. 22:

In page 13, line 29, before "before" to insert "at any time but".

Amendment agreed to.
Amendment No. 23 not moved.
Question proposed: "That section 20, as amended, stand part of the Bill."

(Cavan-Monaghan): Did the Minister bear in mind what the Incorporated Law Society of Ireland said in relation to this? They pointed out that there was an anomaly in relation to tenancies which do not terminate by the effluxion of time or the happening of a particular event, namely, yearly, quarterly, monthly or weekly tenancies. Although these tenancies may enjoy the protection of Part II of the Bill such tenants cannot claim a new tenancy unless and until notice to quit is served. The committee of the society supported the recommendation of the Landlord and Tenant Commission that such tenants should be given a right to apply for and serve notice of intention to claim relief. Has the Minister made provision for that?

The official amendments cater for that.

(Cavan-Monaghan): A person does not have to wait until a notice to quit is served?

That is so.

(Cavan-Monaghan): I always agreed with that and felt that the law should have been changed in that way. If a landlord sat tight and did not serve a notice to quit, the tenant could not do anything to get himself a new tenancy.

That is catered for now.

(Cavan-Monaghan): By providing that the notice may be served at any time before but not later than one month after?

That is so.

Section, as amended, agreed to.
Section 21 agreed to.
SECTION 22.

I move amendment No. 24:

In page 14, line 44, to delete "is or" and insert "and the tenant".

This is purely a drafting amendment. The subsection represents the re-enactment of subsection (5) of section 28 of the 1931 Act. In that re-enactment a reference to the tenant was omitted in this Bill on the basis that the reference to person or persons already includes a reference to the tenant. However, such a reading raises a difficulty about the interpretation of the word "respectively" where the word occurred in these subsections. In addition, the restoration of the reference to "tenant" makes for easier reading of the provision. The insertion of a reference to the tenant enables the subsection to be read lucidly in the context of section 22, subsection (4).

Amendment agreed to.
Section, as amended, agreed to.
SECTION 23.

(Cavan-Monaghan): I move amendment No. 25:

In page 15, line 6, after "rent" where it secondly occurs to insert "at the date of the commencement of the new tenancy if the application to the court is contemporaneous with or after the commencement of the new tenancy or at the date of the hearing or such earlier date as may be stipulated by the Court if the application to the Court pre-dates the commencement of the tenancy.".

I move this amendment because I do not consider it clear from the section what date should be taken by the courts for the assessment of the gross rent and for any allowance for improvements. It is suggested that, having regard to the continuing inflation, an appropriate date should be stipulated so that the court will not be faced with the almost impossible task of trying to assess a rent for a new tenancy commencing two or three years later. It is submitted that this should be whichever of the following is appropriate. If the application to the court is contemporaneous with or is after the commencement of the tenancy, the rent should be the rent prevailing at the date of the commencement of the new tenancy. If the application pre-dates by several years, as may well happen, the commencement of the tenancy, the rent should be assessed by reference to the date of the hearing or such earlier date as may be stipulated by the court.

The amendment provides that after "rent", where it occurs secondly, to insert "at the date of the commencement of the new tenancy if the applications to the court is contemporaneous with or after the commencement of the new tenancy or at the date of the hearing or such earlier date as may be stipulated by the court, if the application to the court pre-dates the commencement of the tenancy". I am told that after much consideration it is considered necessary that this amendment is necessary because otherwise the court would be faced with an impossible situation.

I am advised that the amendment, if agreed to, would bring about two changes which would have very serious consequences.

The first of these changes concerns the case where the court is fixing the term of a new tenancy at some date subsequent to the termination of the previous tenancy, that is to say, at some date subsequent to the date for which the new tenancy is to commence. This could happen under the provisions of section 20 of the Bill in certain cases or again, for example, under the provisions of section 22. In such a case the amendment seeks to have the gross rent determined by reference to the date of that commencement instead of having the court take the current gross rent. What this implies is that if rents were tending to rise and if some significant period of time were involved as between the date of commencement of the new tenancy and the date of the hearing, the tenant would stand to gain to the extent that that historic gross rent could be less than the current gross rent, so that at least until the first review of rent came to be made the rent payable under the new tenancy, which falls to be calculated partly on the basis of the gross rent, could be less than it might otherwise be.

The argument for this kind of change could be that, where the terms of the new tenancy have to be back-dated, as it were, though being fixed in arrear, the rent should be calculated by reference to that past date instead of to a current date when that rent might work out at a rather higher figure. However, the benefit of this kind of change is likely to be quite marginal since the time span involved is likely to be a year or so at most in the usual type of case where this situation would arise.

On the other hand, there are objections to a change of this kind and the objections well outweigh the benefits. In the first place, such a provision would add a further complication to a court of law which we are concerned to simplify and would do so for a marginal benefit only. In the second place, apart from the complications of such a provision there could be difficulties in applying it. The ascertainment of the current gross rent of a property is one matter. To require the parties concerned in effect to equip themselves in respect of a further matter, that is the calculation of a historic gross rent, could be burdensome and expensive.

Thirdly, the tenant, under the proposals in this Bill, is being given the considerable concession of being able to obtain the grant of a new tenancy even after his previous tenancy has terminated, if the landlord has failed to notify him of that termination. It is hardly reasonable to give that tenant the further concession of a historic gross rent.

The second change that the amendment seeks to bring about concerns the case where the court is fixing the terms of the new tenancy at a date prior to the date of the commencement of the new tenancy. In such a case the amendment would give the court a discretion to fix the rent either by a reference to the current gross rent or by reference to the gross rent as it could have been at some date in the past. There is not proposed to be given to the court any indication as to the basis on which it might exercise that discretion. There would not be any indication given to it as to what date in the past might be chosen for the historic gross rent, whether a recent date or a date in the distant past. There is not evidence of any ground for fixing, in any circumstances, a historic gross rent in relation to a tenancy that is not to commence until a further date. For these reasons and because the objections to the amendment outweigh by far any benefits that might accrue if the amendment were accepted, I cannot accept the amendment.

(Cavan-Monaghan): There are a few questions I wish to ask the Minister in order to assure myself that I understand the position clearly. Am I right in thinking that the rent might be fixed 20 years before the expiration of an old lease and the beginning of a new lease? Am I also right in thinking that all these leases will provide for five-yearly revisions of the rent? Could it happen that there would be three or four revision of the old rent subsequent to the fixing of the new rent and that at the expiration of the old lease, there would be a situation where the rent of the old lease might be far more than the rent of the new lease and that until the first revision of the new lease, the tenant would be paying a far lower rent for the new lease than he was paying for the old lease? I imagine that would be rectified on the first revision. Is that the position?

The Deputy is quite right in saying that the rent might be fixed for 20 years before the expiry date. Section 24 provides for up-dating the reviews. The third question was could there be three or four revisions of the old rent, subsequent to the fixing of the new rent? The old rent will not be renewed. It is only the rent under the new tenancy that will be renewed.

(Cavan-Monaghan): That was not my question. Say, there are 20 years of the old lease to run and there is provision for a revision of the rent. There could be three or four revisions of the rent under the old lease before the new lease comes into existence. Am I right?

Would the Deputy repeat his question?

(Cavan-Monaghan): Am I right in thinking that the rent of the new tenancy could be fixed 20 years before the old lease would terminate?

That is so.

(Cavan-Monaghan): I am speaking about the future, but am I right in thinking that from now on leases will provide machinery for revising the rent every five years?

New leases, yes.

(Cavan-Monaghan): I am talking about the future and presumably inflation will be around for a long time yet. It could happen that there would be three or four revisions of the rent payable under the old lease before the new lease will become law.

That is so.

(Cavan-Monaghan): At the final termination of the old lease, it could happen that a tenant would be paying £400 a year and he would then move into a situation where for two or three years he would be paying £200 a year—he would have a substantial drop.

That cannot happen. There would be no question of having the rent reduced.

(Cavan-Monaghan) Where is that provided?

In section 24 (1).

(Cavan-Monaghan): I am glad I got that information.

There would be an immediate rent review at that time which would prevent that from happening.

(Cavan-Monaghan): This is quite a long section. It reads:

(1) In the case of a new tenancy under this Part the terms of which were fixed by the Court—

(a) the landlord or the tenant shall be entitled to apply to the Court for a review of the rent at any time after the expiration of five years from the commencement of the tenancy;

My amendment is being moved to strengthen section 24 so that the review of the rent would be available immediately.

(Cavan-Monaghan): At the moment the review of the rent does not take place for five years. I have an amendment down to the same effect.

We are both trying to do the same thing.

(Cavan-Monaghan): I understand the position.

Amendment, by leave, withdrawn.
SECTION 23.

Amendments Nos. 26 and 40 are consequential and may be discussed together.

I move amendment No. 26:

In page 15, lines 12 to 14, to delete all words from and including "and in such circumstances" in line 12, down to and including "normal" in line 14.

The "gross rent" is the basis on which the rent to be reserved under either a new occupational tenancy or a reversionary lease falls to be calculated. The grant of a new tenancy is provided for in Part II of the Bill and the grant of a reversionary lease in Part III. The formula for determining the "gross rent" in relation to a new occupational tenancy is set out in section 29(f) of the 1931 Act. This formula was considered by the Landlord and Tenant commission and in their first report, paragraphs 266 to 268 they recorded their conclusions. The commission recommended one change in the formula and that change is proposed in the Bill: this change permits a comparison to be made with the rents of similar tenements, whether or not those tenements are in the same vicinity, so long as they are in a comparable area. Apart from that, however, the commission, while accepting that certain criticisms of the “gross rent” formula were well founded, considered that except in a period of continuing inflation it had been possible to work the formula reasonably satisfactorily.

On 28 July 1977 in the course of its judgment in Byrne v. Loftus—that case is unreported as yet—the Supreme Court commented unfavourably on the provisions of section 29 (f) of the 1931 Act. Arising out of this judgment, the question of the “gross rent” formula was referred to the Landlord and Tenant Commission for re-examination. This re-examination was still in progress at the time the Bill was before Seanad Éireann. In consequence, although the “gross rent” formula came under criticism also in that House, the Minister of State was not at that time in a position to introduce any amendment to meet those criticisms.

The views of the Landlord and Tenant Commission have since been received arising out of their re-examination of the "gross rent" formula. The burden of their findings is that the "gross rent" formula should be revised so that "gross rent" would mean in effect the open market rent of the property, less the value of the tenant's goodwill. The rent to be fixed on the grant of a new occupational tenancy should accordingly be that gross rent, less any further allowance for improvements carried out by the tenant that would qualify for compensation for improvements under Part IV of the Bill.

The amendment I am proposing is designed to give effect to the findings of the commission. It also meets the criticism of the 1931 Act provisions that was made in the Supreme Court judgment in so far as that criticism is relevant to the provisions of the Bill.

Amendment No. 40 proposes a corresponding change in the definition of "gross rent" where that definition appears—in a somewhat different form, in section 36 (1) of the Bill—as part of the provisions for the determination of the rent in a reversionary lease granted under Part III of the Bill.

(Cavan-Monaghan): In effect the amendment is deleting the portion of section 23 (5) which adds as a yardstick that in considering the gross rent the Court shall assume that the supply of similar tenements is sufficient to meet the demand and that competition therefore is normal.

That is so.

(Cavan-Monaghan): That phrase has been in the legislation since 1931, as the Minister has said, and I was never too clear as to what exactly it meant. I should not like to think that its removal from the Act would leave the way open to what I would call a black market where if there was a great scarcity of houses in a town there would be what the Minister has called an open market and where scarce commodity prices would obtain. I do not think that would be desirable.

Let us take Navan as an example. There is an influx of people because of the mines and houses could become virtually unobtainable. That is the danger that would prevail with this provision gone from the Bill. I was never too clear about what it meant but it seems to me to be an indication to the courts to disregard impossibility to get houses. We should be very careful. I am afraid we are doing what I fear because the provision would then read:

The gross rent shall be the rent which in the opinion of the Court a willing lessee not already in occupation would give and a willing lessor would take for the tenement, in each case on the basis of vacant possession being given, and having regard to other terms of the tenancy and to the letting value of tenements of a similar character to the tenement, and situated in a comparable area, without regard to any goodwill which may exist in respect of the tenement.

That leaves the door open to the fixing of grossly excessive rents where the population of a town is increasing or where a town is developing but where house building is not keeping pace with the development of the town or the increase in the population.

I concede that I directed my thoughts to this since I began to talk about it, but it needs to be looked into carefully, and I ask the Minister to do that and to get common sense advice on it between now and Report Stage.

I thank the Deputy for his contribution. It would be our intention and that of the House to rectify a situation brought to our attention by the Supreme Court. I assure the Deputy about that. In the Byrne v Loftus case, which is unreported so far, Mr. Justice Kenny said:

Rarely can a draftsman have produced such an ill-framed paragraph. It contains an economic absurdity and a phrase "a willing lessor" whose literal meaning makes nonsense of the paragraph.

The "economic absurdity" to which Mr. Justice Kenny refers is the phrase which it is proposed to delete from section 23 (5). It was made clear later in his judgment that Mr. Justice Kenny was criticising that phrase in the context of the 1931 Act provision for renewed occupational leases of 21 to 99 years without rent reviews, his point being that a lessor would not willingly enter into such an arrangement. The criticism does not invalidate the retention of that phrase in a Bill that provides for rent reviews.

I have already given the background to the necessity for the amendment. I will consider carefully what Deputy Fitzpatrick has said that we may be creating other problems by doing what we are doing now. I will have it examined in great detail before Report Stage.

(Cavan-Monaghan): I have the greatest respect for Mr. Justice Kenny, who is an eminent judge of great distinction. I never liked that phraseology. It probably got on Mr. Justice Kenny's nerves as it got on mine. Whatever it does not mean, it lays down clearly that the court is not to have regard to the scarcity of houses. It is a direction to the courts not to have regard to a scarcity of dwellinghouses with abnormal demand. If that can be said in some other words it should be so said.

Amendment agreed to.
Section, as amended, agreed to.
SECTION 24.

Amendments Nos. 27 and 28 are related and Nos. 29 and 30 are consequential. The four amendments may be discussed together.

I move amendment No. 27:

In page 15, lines 42 and 43, to delete "the commencement of the tenancy" and substitute "the date on which the terms were fixed".

Section 24 (1), as it stands, is open to the objection—indeed the objection has been raised—that, where the terms of a new tenancy have been fixed somewhat longer than five years prior to the termination of the existing tenancy, the first review of rent under that new tenancy is not obtainable until after five years of the term of the new tenancy have expired. That means that almost ten years could elapse before the rent could be reviewed.

Under the proposals in Part II of the Bill an occupational tenant may apply for and obtain the grant of a new tenancy as soon as he satisfies the necessary conditions for the grant of that new tenancy regardless of the date of the expiration of his existing tenancy. Accordingly, the grant of that new tenancy might be obtained just under five years short of that expiration, and the new tenancy would not accordingly become subject to rent review until almost ten years had elapsed from the time its term were fixed. This is not intended.

The proposed amendment of paragraph (a) of section 24 (1), by relating the five year review periods to the date the terms of the new tenancy are fixed instead of to the date of commencement of the new tenancy, ensures that a rent review will always be obtainable by either the landlord or the tenant as soon as five years have elapsed, regardless of the date of that commencement.

The amendments affecting paragraphs (b) and (c) of section 24 (1) are consequential on the amendment proposed in paragraph (a). Since under paragraph (a), as proposed to be amended, taken together with the provisions in paragraph (c), a review of the rent will always be obtainable after five years have elapsed from the time the terms of the new tenancy are fixed—or from the time of the preceeding review of the rent—the provision in paragraph (b) becomes unnecessary and that paragraph is proposed to be deleted. Where, for example, either the terms of the new tenancy or the first review of rent are settled a little less than five years before the commencement of that new tenancy, the first or second review of rent, as the case may be, is obtainable very shortly after that commencement. The change affecting paragraph (c) is simply a consequential change arising from the deletion of paragraph (b).

I understand that amendment No. 28 in the name of Deputy Fitzpatrick has a purpose similar to that of amendment No. 27, in that it would seek to relate the five-yearly review periods, not to the commencement of the tenancy, but to the time by reference to which the rent is fixed initially. As a matter of wording, it appears to have been framed by reference to the change that is sought to be made in section 23 of the Bill by amendment No. 25.

(Cavan-Monaghan): The Minister is saying either party may apply for a review at any time after five years from the date of the fixing of the term?

That is so.

(Cavan-Monaghan): That being so, section 24 (1) (b) is not necessary and is being deleted.

That is quite so.

(Cavan-Monaghan)): That is the only change. That complies with the desires of the Incorporated Law Society.

Amendment agreed to.
Amendment No. 28 not moved.

I move amendment No. 29:

In page 15, to delete lines 44 to 47.

Amendment agreed to.

I move amendment No. 30:

In page 15, line 48, to delete ", in either such case,".

Amendment agreed to.

I move amendment No. 31:

In page 16, to delete lines 1 to 4 and substitute:

"(4) In default of agreement, the rent fixed upon such review shall become payable on whichever of the following dates is the later—

(a) the first gale day after service of the notice of intention to apply for the review, or

(b) (i) where the rent has not previously been reviewed, the first gale day following the review,

(ii) where the rent has previously been reviewed, five years after the first gale day following the previous review."

This is a drafting amendment. In the first place, the amendment proposes to delete the references in the subsection, as it stands, to the date for commencing payment of a reviewed rent where that review is settled by agreement between the parties. It is not appropriate that the legislation should prescribe any such date. Where the parties are settling matters by agreement they should be left free to do so. Just as section 23 of the Bill provides for the fixing of the terms of the new tenancy—but only where the court is being asked to do so and where the parties cannot agree—so in section 24 provision need be made, and should be made, only for review of the rent where the parties themselves cannot agree.

In the second place, the amendment is designed to eliminate any doubt as to the meaning of the expression "the relevant period", in the subsection as it stands, in the light of the circumstances that reviews of the rent may take place at any time after the expiration of five years from the date on which the terms of the tenancy were fixed, or from the date of any subsequent review of rent and need not necessarily take place once in every such five-year period.

For example, it could happen that neither landlord nor tenant takes any action in regard to a rent review until, let us say, almost ten years have elapsed, instead of five years. In consequence, the notice of intention to apply for a review of rent that is required to be served under subsection (2) of the section is not served until sometime during the tenth year instead of, as might have been the case, sometime during the fifth year. In accordance with subsection (4) of the section, as it stands in the Bill, the reviewed rent is, accordingly, payable only from the first gale day, following service of that notice under subsection (2), which in this example, would be from about the beginning of the eleventh year—that is, the first rent review becomes effective only in the third five-year period instead of, as might have been arranged, during the second five-year period.

Now let us further suppose that the next notice under subsection (2) is given in good time—let us suppose it is given very early in the course of the third five-year period, say during the eleventh year. In accordance with subsection (1) of the section, the second review cannot take place until after five years have elapsed following the previous rent review, however prompt the notice of that review. That is, this second review cannot take place until during perhaps the sixteenth year. It is in such a case that the question could become perplexing: what is the relevant period? Is it the commencement of the third five-year period, counting from the beginning? Or is it the five-year period counting from the previous review which, in the example I have taken, did not take place until the ninth year or thereabouts?

Depending on the circumstances of the case, "relevant period" in section 24 (4), as it stands, could mean each five-year period of the term of the new tenancy, or each five-year period counting from the date the terms of the new tenancy are fixed, or the period of five years since the preceding rent review. Clearly, it would be unsatisfactory to leave the provision open to this kind of misunderstanding. The proposed amendment is designed to eliminate any such problems by making it clear from just what gale day the reviewed rent is payable, whatever the date of the review.

(Cavan-Monaghan)): Subsection (4) is being deleted and this is the new subsection (4). Under subsection (4) (b) (ii) where the rent has been reviewed previously, five years after the first gale day following the previous review, if this were the case of a long lease and the landlord reviewed after the first five years and then let 20 years elapse before he made another application to the court for a review, the new rent would then be payable retrospectively for 15 years. I think that is so. If it is, it could impose a considerable hardship on the tenant. It is complicated. My case is where the rent has been reviewed previously. It is a lease for 50 years from this year. It is reviewed after the first five years and then it is not reviewed for another 20 years. Therefore, there are 15 years payable at the rate of the first reviewed rent, but the new rent is to be payable five years after the first gale day following the previous review. Surely that would be paid retrospectively for 15 years. Does the Minister agree with that?

I am advised that certainly the Deputy has a very valid point in what he says. I should like to look at it.

(Cavan-Monaghan): If that is so it would seem to me to constitute a hardship. The whole idea of rent is that it is paid by the quarter, by the year, and one knows where one stands. But, if I am correct, there could be a large demand retrospectively.

I accept that certainly it appears the Deputy has a valid point and one requiring examination. If it is found that an amendment is necessary to prevent such an eventuality, I would be quite prepared to so move on Report Stage. I accept that there is a very valid argument in what the Deputy suggests.

Does this amendment stand?

This amendment will stand but I shall bring in another amendment to close the loophole the Deputy mentions.

(Cavan-Monaghan): Amendment No. 31 says:

...In default of agreement, the rent fixed upon such review shall be become payable on whichever of the following dates is the later—

(a) the first gale day after service of the notice of intention to apply for the review, or

(b) (i) where the rent has not previously been reviewed, the first gale day following the review,

Which of those applies in the case about which we were talking earlier, that is, where the rent was fixed, where, but for this machinery, one could have a lower rent payable under the new lease than was payable under the old lease. Which of those alternatives would cure that situation?

I understand that the later day applies.

(Cavan-Monaghan): We discussed earlier and agreed that, but for amendments which the Minister said he would introduce, a tenant could be paying a much lower rent under the new lease than he was paying under the old one. I understood the Minister to say that amendments he would introduce would cure that eventuality and enable an application for review to be made immediately. I want to know which of these paragraphs will bring the new rent into operation on the coming into effect of the new lease.

I have covered that eventuality in amendments Nos. 27, 29 and 30. They cover the point raised by the Deputy in relation to section 23.

(Cavan-Monaghan): To revert to the other point about the retrospective provision, there would seem to be a conflict between subparagraphs (b) (i) and (ii) because subparagraph (b) (i) says that where the rent has not previously been reviewed the new rent will become payable the first gale day following the review—that is, if no previous review has been undertaken. But, according to subparagraph (b) (ii), if a review has taken place and there is a big gap before the new review, the new rent becomes payable retrospectively. Those two subparagraphs conflict seriously.

That is the point we are undertaking to examine.

(Cavan-Monaghan): If the Minister will undertake to do that, I am agreeable.

Amendment agreed to.
Section, as amended, agreed to.
Sections 25 to 28, inclusive, agreed to.
SECTION 29.
Question proposed: "That section 29 stand part of the Bill."

(Cavan-Monaghan): This is the section giving the right to short tenancies to qualify.

That is correct. This section represents a re-enactment of section 39 of the 1931 Act. However, as a matter of drafting, the wording of the provision follows the modern form of wording of such provisions, such as section 9 of the Landlord and Tenant (Amendment) Act, 1931, section 13 of the Landlord and Tenant (Ground Rents) (No. 2) Act 1978, instead of the wording of the 1931 Act provision. While the reference in the 1931 Act provision to the passing of that Act becomes a reference to the commencement of the present legislation, in accordance with section 20 (2) (d) of the Bill, corresponding to section 24 (2) (d) of the 1931 Act, tenants coming within the scope of this provision may lodge a claim for a new tenancy under Part II within six months of the commencement of the new Act. Therefore, tenants whose tenancies terminated before the commencement of the new Act but who nevertheless are still in possession—although without having obtained a new tenancy—may benefit under the provision in two types of cases, the first, where the right to the new tenancy is being given for the first time, that is, under section 13 (1) (b) of this Bill and, secondly, where the tenant previously had a right to a new tenancy under Part III of the 1931 Act but failed to serve the necessary notice in time—section 24 (1) and (2) of the 1931 Act which we have just been talking about. As regards the second type of case, it may be noted that under the proposals in the Bill tenants are being protected against inadvertently losing the right to a new tenancy, to losing sight of the need to claim a new tenancy in time. We have just discussed that with section 20 (2) (a).

(Cavan-Monaghan): Broadly speaking, it gives rights to a new tenancy, to tenants who missed the boat by not applying for it?

Basically that is it.

Question put and agreed to.
Sections 29 to 32, inclusive, agreed to.
SECTION 33.
Amendments Nos. 32 and 33 not moved.

Amendment No. 34 has already been discussed with amendment No. 14.

I move amendment No. 34:

In page 18, line 12, to delete "obtained".

Amendment agreed to.
Amendments Nos. 35 and 36 not moved.

Amendment No. 37 has been discussed already with amendment No. 14.

I move amendment No. 37:

In page 18, line 16, to delete "obtained".

Amendment agreed to.
Question proposed: "That section 33, as amended, stand part of the Bill."

(Cavan-Monaghan): The provisions of subsection (5) contrast with section 45 (2) of the 1977 Bill. The present Bill appears to exclude the award of damages where the order was obtained by misrepresentation or concealment of material facts. It is not clear why such an exclusion should be allowed and it is submitted that the section should be suitably amended. Under the previous Bill if a land person—we will have to talk about land persons instead of landlords—got possession by misrepresentation or by concealment of material facts he was liable to damages. Apparently under this Bill that right to damages is being taken away. It would be more important to leave that provision in than to insist on planning permission.

Section 33 (5) is a new provision to replace section 15 (3) of the 1958 Act. Section 15 (3) of the 1958 Act makes it an offence, carrying liability of a fine up to £500, where a person who successfully objected to the granting of a reversionary lease failed within a reasonable time to carry out any intention on account of which the lease was refused. The Landlord and Tenant Commission in their first report recommended that the corresponding provisions in section 22 of the 1931 Act dealing with the grounds on which the grant of a new tenancy under Part III of the 1931 Act may be refused should be amended so as to entitle the tenant to recover compensation from his landlord where the intention was not carried out. The Bill provides for punitive damages against the person who obtained refusal of the grant of a new tenancy under Part II but fails to carry out the intention, agreement or purpose on account of which the refusal was made. Subsection (5) proposes a similar provision in relation to obtaining refusal of the grant of a reversionary lease.

(Cavan-Monaghan): Subsection (5) as drafted confers a right of action for damages on a tenant who has been refused a new tenancy on the grounds that reconstruction, redevelopment or building did not take place. Under the old Act if a person successfully defended a claim for a new tenancy by misrepresentation or concealment of material facts and it could be proved that he did so, the tenant had a right of action. That right is being taken away from him here.

The right the Deputy mentioned is not being taken away. The change in the wording suggested by the Deputy was to have been moved as an official amendment to the lapsed Bill, the 1977 Bill. The lapsed Bill as it would have been amended if the official amendment had gone through would have been completely in line with section 33 (5). In subsection (5) the court has discretion as to the damages it can award and so may take into account the circumstances that the lessor offered or failed to offer a reversionary lease as soon as he became unable to proceed with his development, if honest inability was the reason. Accordingly there is no need to write in a provision for the offer of the reversionary lease.

(Cavan-Monaghan): We appear to be at cross purposes. Section 33 (5) reads:

(5) Where a lease has been refused under subsection (1), (2) or (3) and it appears to the Court, on application by the person who has been refused, that the intention, agreement or purpose, as the case may be, on account of which the application was refused has not been carried out within a reasonable time the Court may order the person concerned to pay such sum as it considers proper by way of punitive damages.

If he successfully defended an application for a new lease by misrepresentation or concealment of facts I am advised that there does not appear to be a right of action for damages as there was previously.

There is something in what the Deputy is saying and I am prepared to have a look at it.

(Cavan-Monaghan): I refer the Minister to the Law Society's brief in which it is stated that the present Bill appears to exclude the award of damages where the order was obtained by misrepresentation or concealment of material facts. It is not clear why such exclusion should be allowed and the section should be suitably amended.

There is no such exclusion. It is much wider. It does not matter whether he misrepresents it or not. For fear of confusion we will be prepared to——

(Cavan-Monaghan): I imagine what is at the back of this is that he might have said that the redevelopment was necessary because of a particular set of circumstances which he presented to the court as true circumstances but which later turned out to be bogus.

We will examine the point.

(Cavan-Monaghan): I am not all that clear about it.

Question put and agreed to.
SECTION 34.

Mr. Collins

I move amendment No. 38:

In page 18, to delete lines 55 and 56 and substitute:

"(2) The lease shall be for a term expiring ninety-nine years after the expiration of the lease to which it is reversionary.".

This is a drafting amendment. Under Part III a reversionary lease may in certain circumstances be applied for and obtained after the expiration of the previous lease—for example, when the landlords notice of expiration of the previous lease is served after that lease has expired. Section 32 (4) of the Bill, as it stands, may be unclear, that is, it might be held that in such a case section 34 (1) of the Bill means that the reversionary lease is to expire, not 99 years after the expiration of the previous lease but 99 years after the date it is granted. Accordingly, the amendment clarifies that the reversionary lease shall be for a term expiring 99 years after the expiration of the previous lease. This provision re-enacts the provisions of section 18 (2) of the 1958 Reversionary Leases Act. No change in the substance of section 18 (2) is, or was, intended. This is truly a drafting amendment.

Amendment agreed to.

(Cavan-Monaghan): I move amendment No. 39:

In page 19, line 14, after "fire" to insert "for their full reinstatement value or their full market value at the option of the lessor".

Section 34 (6) says:

If the Court fixes the covenants of the lease, the lessee shall be made liable to pay all rates and taxes in respect of the land and to insure against fire and keep the premises in repair.

My amendment is in regard to insurance. This subsection merely says "and to insure against fire"; it does not say in what amount. There is no direction as to whether it is to be for the market value of the premises or for the reinstatement value of the premises. There are very often long and cantankerous arguments on things like that. My amendment seeks to insert after the word "fire" the following: "for their full reinstatement value or their full market value at the option of the lessor". Certainly, whichever formula is accepted, there is no doubt that the subsection needs clarification. It is unsatisfactory merely to provide—as is provided in subsection (6) of section 34—that the lessee is to be obliged to insure against fire without stipulating the amount. I know it would not be possible in a Bill to write in the amount, but it is possible to provide a yardstick, and the usual yardstick is to say "for their full replacement value or their full market value". Indeed, it might be advisable to move in accordance with modern thinking on insurance and to provide for the index-linking of the policy. Perhaps that is going too far, but certainly we should say whether we want the lessee to insure for the reinstatement value or the market value.

The purpose of the relevant provisions in section 34 (6) of the Bill is to provide that, in default of agreement by the parties, the covenants in the lease will include covenants to insure against fire and to keep in repair. I am advised that it would not be proper for the statute to set out the details of these covenants or indeed of any other covenants. Under the insurance covenant the duty of the lessee is to insure against his liability under the general law and against his liability under the terms of the lease. To include in the statutory provisions any reference to insurance for market value or to insurance on some other kind of basis could be not only irrelevant but confusing. Under the general law, the Accidental Fires Act of 1943 could, for example, have a bearing on the lessee's liability.

Again, the other terms of the lease may themselves indicate what kind of insurance is required to comply with the covenant to insure, and where the court is settling the matter it will certainly do so having regard to the general terms of the lease. Apart from those other terms, the insurance liability of the lessee is a liability to insure against whatever damage the lessor might suffer in consequence of a fire and, depending on the case, this may have no relationship to either market value or reinstatement value. As far as the lessee's obligation under the reinstatement value is concerned, it would be extremely difficult, for example, in the case of damage to a period building constructed of material not now readily available. I am advised that what is in the Bill is more than sufficient to cover the situation.

(Cavan-Monaghan): Well, doctors differ——

——and patients die and houses burn down.

(Cavan-Monaghan): I think this is too vague. Here we are directing the court to covenants that are to be written into the Bill. We say that, if the court fixes the covenant of the lease, the lessee shall be made liable to pay all rates—I understand that—and taxes in regard to the land. That is clear. The tenant will have to pay all rates if rates are payable and all taxes payable on the lands. But, in regard to insuring against fire, surely to goodness the extent of the insurance should be stated? One person might argue to the judge that it should be the full market value of the premises for the time being. Somebody else might argue that it should be the reinstatement value, that it is reinstatement with which we are concerned. It should be a comparatively simple matter arriving at whether we mean reinstatement or market value. It is inviting confusion not to do so. I do not accept the argument that the Minister has been given.

"To keep the premises in repair"—that is a loose phrase also. This would probably be interpreted as to keep the premises in repair, both exterior and interior. We all know that there is a distinction drawn very often between structural repair and non-structural repair, between interior and exterior repair. Those two things need to be clarified. Anybody would require a direction, or a guideline, in regard to insurance because there are certainly two different standards of insurance, either replacement value or market value. I would ask the Minister to have a look at that matter before Report Stage.

The requirement to insure against fire is a requirement to insure against such losses as the lessor may suffer. It is a covenant in the lease that is in question, not a term in an insurance context, as such. The lessor's loss to be insured against has no necessary relationship to reinstatement value or market value.

I take the point raised by Deputy Fitzpatrick. We did have consultations with the draftsman to see if he was satisfied with it as it is, and he was satisfied. However, I am quite prepared to go back for further discussions and, if the Deputy likes, we can raise the matter again on Report Stage.

Amendment; by leave, withdrawn.
Progress reported; Committee to meet again.
Barr
Roinn