Seanad Éireann díospóireacht -
Wednesday, 2 May 1979

Vol. 92 No. 1

Landlord and Tenant (Amendment) Bill, 1979: Report and Final Stages.

Mr. Alexis FitzGerald

I move amendment No. 1:

In page 7 to delete lines 29 and 30.

This section has been debated both on Second Stage and on Committee Stage. I have considered the points made by the Minister of State on Committee Stage with regard to the retention of the section. It is quite clear that there are cases which he has given which would justify an absolute exclusion of tenant right, such as in all cases under the section which would result. I still think the section unwise.

I take the view that this whole code has been historically concerned with securing justice, the particular justice being the protection of the rights which somebody occupying a property as a tenant would develop by virtue of his own activity in that property. It would be unjust to allow a landlord to take advantage of the tenant's desire to stay in the place where he is carrying on his business. Because of his desire to stay in that place the landlord is able to rack rent him, is able to make the tenant pay to the landlord a price for what the tenant has created himself—the goodwill of his own business. If that is a matter of justice as between the landlords of property and their tenants, I see no way in which, if the State is excluded, the State can be required as a matter of right not to exploit the tenant, not to force the tenant to pay to the landlord for what is the landlord's own property at this stage, that is, the goodwill of his business.

If it is regarded as just that the tenant should have this right as against an ordinary landowner, it seems to follow that the tenant should equally be protected if he finds himself the tenant of a Minister or of the State. I said that I recognised the cases mentioned by the Minister of State, the position of the Minister for Defence, the position of the Minister in relation to airports, to the foreshore, the position of the Minister in relation to tourist development and such other cases as he indicated. The way to deal with this—and it is not going to be dealt with here but I would like the Minister to think about the matter between now and this Bill reaching Dáil Éireann—is to provide for the known cases such as have been garnered by investigation so far where it is proper that there should be exemption and to provide for the extension of these exemptions, if necessary by ministerial order in appropriate other cases that turn up.

No one should put the interests of any tenant ahead of the security of this State, the defence of this island. Therefore, there could be no question of a position being allowed to arise where the Minister for Defence's control of his own property could be hampered. That is an obvious case. I understand the Minister's position to be that, although he has been very helpful to this House, in half a dozen cases where, as a result of investigation, like situations exist which he knows about, there may be other cases he does not know about because there have been Departments that have not replied, having completed their investigation. In the course of the business of running this country other cases like those he has given may turn up. Let him take power so to provide, so that under an appropriate section in an appropriate case the Minister can be protected against that situation. Let us have the normal situation exist in the normal case where the State may be given property.

We have enacted Bills in this House in the last few years to provide for cases where property was given to the State, not to investigate these particular cases but there may have been tenants in these cases. I think there were tenants in some of these cases. It would be unthinkable that a tenant of a private landlord with rights against that landlord—rights to stay on there, live there and carry on his business—should suddenly find himself stripped of his rights because the donor has given over his interests to the State and the tenant no longer has the rights that he had before the donor gave his interests to the State. That is only one illustration but I gave others on Second Stage and Committee Stage. This is a hangover of the old principle that the King can do no wrong. This is a hangover of the proposition that in these matters the State should not be subject to the same control as private people. In these kinds of matters the State should be, and nobody's laziness in the administration of the State's property should be an excuse for this section.

I appreciate the background to the section. I accept what the Minister said, that it was the legal view that if an Act did not say expressly that the State was bound by it, it was not. Historically, that legal view is related also to the legal view that the King can do no wrong, a principle which itself was knocked down in the last decade and should stay knocked down. I do not like this section. I do not believe for one moment that my amendment is going to be accepted. I would ask the Minister to give further thought to the matter on his way to Dáil Éireann to see if there is not another way of protecting the very real interests he desires to protect by this section and which I agree should be protected, while at the same time preserving the rights and the justice of the case from the point of view of the small men who may be affected by this provision.

Minister of State at the Department of Justice (Mr. D. Andrews)

I am very persuaded by what Senator Alexis FitzGerald has said; he presented his case in a new way. This will be the third discussion we have had on this section. This is a new aspect to his argument. It is the most persuasive argument he put forward in pursuit of his objective. I will undertake to have a look at the matter on the basis on which he has now placed it between now and its passage through Dáil Éireann. I will have the officials look at it.

The facts of the matter are, as the Senator said, on previous occasions I gave a number of examples where it was just not practical that the State should undertake the obligations set out in the body of this Bill. If it is possible, as Senator FitzGerald says it is, to exempt the areas he mentioned—airport facilities, defence facilities and so on—and still leave the section more or less as it is, I will undertake to do that. If he withdraws his amendment, I will give him that undertaking. If he does not withdraw his amendment, I cannot accept it as it is presently constituted. In regard to all the other arguments which were put forward in the past, I have the same arguments in front of me again. I do not intend articulating them because he knows them, I know them and the House knows them. I am grateful to the Senator for his consistent pursuit of his objective. It is an admirable quality in every regard.

Amendment, by leave, withdrawn.

Mr. Cooney

I move amendment No. 2:

In page 7, line 37, after "buildings" to insert "or is land in an area of special amenity as declared pursuant to the Local Government (Planning and Development) Acts".

This amendment relates to section 5. Section 5 defines the type of property which gets rights or protection under the Bill. Historically, the type of property which was dealt with in the landlord and tenant code was urban-type property. To ensure that agricultural holdings did not come into the category, the definition provided that if the property consisted of land covered in part only by buildings that the portion of the land not covered by buildings was ancillary and subsidiary to the buildings. This was intended to cover the type of situation where you might have a roadhouse in a rural area with a very large car park and possibly gardens beside it. Those lands would be subsidiary and ancillary to the buildings but if there were fields there as well it would be a matter for the courts to decide whether they were subsidiary or ancillary. Historically, the intention was that such fields would not get the protection of the landlord and tenant code. It was felt that the Land Acts would be the proper way to deal with the rights of tenants in respect of pastoral holdings and that it was no business of the landlord and tenant code which was essentially urban-oriented in its approach.

I put down this amendment to extend the protection of the landlord and tenant code to a type of land which is between agricultural land but, one could argue, is not completely subsidiary and ancillary to the buildings, if one were to argue the words "subsidiary" and "ancillary" in a narrow way. Because of the history of these provisions a court would interpret those words in a narrow way so as to exclude any efforts to bring in agricultural or pastoral type property under this code. The type of property that I would like to see protected by this code is described in my amendment, that is, a holding with buildings on it, with more than just a subsidiary amount of land with it. It could have a substantial area of land but this would be land in an area of special amenity. I have used the Planning Acts to tell us what is an area of special amenity. These would be areas as found by the planning authority to be areas of special amenity.

The inspiration for this amendment came from a case which came to my notice. I am well aware that hard cases make bad law, but I would argue that there is a good principle here as well as an opportunity for this House to redress what is a very hard case. I will outline the facts of this case to the House as being the place where laws to protect citizens are passed.

In Lough Ree, adjacent to Athlone, there is an island of 100 acres, an area of high amenity in terms of scenery and recreation. This island was part of the estate of the Lords Castlemaine who were the landlords in that part of south Westmeath. In the late twenties and early thirties their estates were acquired by the Land Commission on a voluntary basis under the Land Acts. The lands were distributed in due course to the various tenant farmers.

This island was excluded from the proceedings under the Land Acts because it was used by the landlords mainly as a summer residence and as a place where they kept boats for boating and fishing on Lough Ree. They did not make much use of it but the facility was there for them. It was laid out in such a way as to be essentially amenity ground rather than agricultural ground. Some cattle were grazed on it because the land was available for grazing, but it was essentially a place for summer recreation for the landlord. A local family was looking after the island for the landlord. For many generations this family had looked after the island and acted as boatmen and ghillies and caretakers of the property and buildings and maintained the amenities for the landlords. Some time after the estate had dealt with the Land Commission the last of them went abroad and gave a lease at a nominal rent—a matter of £ per year—to the family who had worked for them for many generations. The lease was given in the middle thirties and was for a period of 30 odd years. That lease is due to expire this year.

A couple of years ago, a gentleman from this city, who is a member of my own profession, was cruising on Lough Ree and from a discussion with some local people he became curious about the island. He found out how the island was held by the people who had been on it for generations. It was held on a lease which was due to expire in 1979 and the rent reserved by the lease was something like £10 or £15 a year. He made approaches through a local agent to the person entitled to the estate who was then living in Australia and who was disposing of similar small rents around the town of Athlone. This gentleman made an offer of £250 or thereabouts for the landlord's interest and it was sold to him in accordance with the policy of the estate at that time to sell these small rents. I think the landlord, in fairnesss, was not aware of the legal consequences of the sale. This latter-day gombeen purchased the rent and constituted himself the landlord in place of the old Castlemaine estate. He then proceeded to inform the people who had been living on the island for generations that when their lease expired he would require vacant possession of the island. By a quirk in the land code this lease did not qualify for protection because it was granted after a certain date beyond which the land code did not operate. Consequently, the tenant farmers, whom the land code was designed to protect, found themselves without protection and at the mercy of this latter-day gombeen. He has indicated to the two elderly people that he will let them stay there for the rest of their lives but that their successors will not be entitled to come and live in what has been a family home for many generations.

This island is an area of special amenity and either has been, or will be so found by the local authority pursuant to the Local Government (Planning and Development) Acts. I am asking the House to do justice to those people by accepting this amendment so that the family will have rights under the landlord and tenant code to maintain their rights established historically on this island, and so that equity can be done to them and that they and their successors will not be ejected from what has been the traditional family residence.

The amendment has merit on a general application in the area of special amenity where the ground with the buildings has this special quality. If a person is fortunate enough, by geographical or historical accident, to reside in such an area he should be entitled to continuity in it and not just be subjected to arbitary eviction because the land is, strictly speaking, not subsidiary and ancillary to the buildings. It is the type of ground that is in between land that is subsidiary and ancillary to the buildings and land that is agricultural in character and use. That type of in-between situation, which is now becoming more common as areas are developed around the country and as we are looking on our environment with different eyes, will be encountered more frequently. Pressures on it from native gombeens or people coming in from outside will grow. The people who have been historically present in such areas are entitled to protection from the Legislature.

I have no doubt that Senators will sympathise with the people in the case I have outlined to the House. I hope that the Minister, representing the Government in charge of the welfare of all citizens, will see his way to accept this amendment and do justice to these people who are being harshly treated.

Mr. D. Andrews

It is not the Government's intention to do an injustice to the people Senator Cooney has mentioned, these island folk, who, on the basis of the case which he has presented to the House—I am not aware of the facts but naturally I take the Senator's word for it—are being very harshly treated by latter-day gombeen men, as he described them. I can only have the greatest sympathy for a case like that. It is unfortunate if, as Senator Cooney says, the law as it exists does not cover their case.

However, Senator Cooney, in this instance, wishes to cure what he considers to be a defect in the law to protect these unfortunate people. I do not think for one moment that his proposed amendment would cover the island folk he wishes to protect. That is most unfortunate for the people concerned. The reasons for this are set out clearly and, consequently, the amendment is not acceptable. Its effect would be to give the right to a renewed tenancy to a new class of occupational tenant, that is, where (a) the premises the subject of the tenancy are situated in an area that has been declared by order made under planning legislation to be an area of special amenity, and where (b) land other than is subsidiary and ancillary to the buildings is included in the tenancy. For example, a farm in a special amenity area, no matter how extensive, would become a "tenement" under this legislation so long as it had any buildings on it at all and so long as it satisfied the other conditions in this section of the Bill. It would become unnecessary to consider whether the land was subsidiary and ancillary to the buildings or whether it was the buildings that were subsidiary and ancillary to the land. It is my intention to touch on this subject later when I come to deal with another point on these amendments. It relates to a suggestion made by Senator Alexis FitzGerald on Committee Stage.

However, what Senator Cooney's amendment seeks to do is to give renewal right to occupational tenants regardless of how much land is included in the tenancy along with the buildings, provided only the land is in a special amenity area. On a matter of drafting, I would remind the Senator that he might have inserted "Acts of 1963 and 1976", but I am not making an issue of that. It was probably unnecessary to make the point.

The important objection to the amendment is, that it seeks to introduce a fundamental change in the code of law and to do so on a basis that has only the flimsiest connection with that code of law. It seeks to give rights to occupational tenants of properties other than buildings or built-on land. I remind the House that this code of law originated as a code of law for town tenants and that even under the 1931 Act a "tenement" outside an urban area is defined more strictly than it is within an urban area. In this Bill we are removing those very restrictions on non-urban "tenements" but we are not going to the length of abandoning one of the very bases of the code, that it concerns not land as such but buildings or built-on land.

I might add a touch of humanity in defence of what Senator Cooney has said when we are considering all these matters—land and built-on land. We might also have considered that the authors of the landlord and tenant code in years gone by obviously did not give too much consideration to the effect it would have on the human being who would be the occupier of the land. That is unfortunate. What we are doing in this Bill is to take into account everything, including the individuals concerned.

In this connection the expression "subsidiary and ancillary" is the test that is applied to the unbuilt-on land in relation to the buildings. This is the test according to which proprietary rights in unbuilt-on land are settled in this code of law. The balance of those rights is not something lightly to be upset, particularly in the case of land which is ripe for development. I must point out that while the development value of land may indeed be affected by its being in a special amenity area, the balance of proprietary rights in that land, or the shares in that development value, should not be affected by the existence of a special amenity area order.

There may be some case for clarifying the expression "subsidiary and ancillary". It is difficult to see the case for simply getting around the principle represented by that expression by reference to areas of special amenity. The expression represents a well-established and fair guideline for determining the rights of the two parties involved—landlord and tenant—regarding any unbuilt-on area of land that is included in a tenancy of lands and buildings. No general case has been made against the principle involved, which is fair enough. What Senator Cooney is concerned about is the case he has given to the House, namely, the unfortunate position of these people who have been put into the position through no fault of their own and who are now being abused by a citizen who decides to use the lack of law to his own advantage and to the disadvantage of the individuals against whom he is working the injustice. It is difficult to see the case for simply getting round the principle represented by that expression by reference to areas of special amenity. As I have said, the expression represents a well-established and fair guideline for determining the rights of two parties involved.

If, on the other hand, the purpose of the amendment is to permit renewed tenancies under landlord and tenant legislation of residential and other properties in special amenity areas —properties so extensive that they could not qualify as "tenements" apart from the amendment—so as to protect or preserve such properties from development, I must point out that not only is this not a function of the landlord and tenant code but it is a function of the planning code and it could not succeed even in that respect. If the landlord's purpose in recovering possession is to develop, section 17 of the Bill already caters for that situation. That does not relate to the matter Senator Cooney has brought in. We can only anticipate the type of arguments that might be proposed. In this instance we did not anticipate that Senator Cooney would bring up a case of this nature. However, taking all the areas of argument into consideration, in all the circumstances the amendment proposed, worthy as it is and aimed at the curing of the injustice which Senator Cooney has brought to the attention of the House, is not acceptable.

Mr. Cooney

It is a pity in the centenary year.

Mr. D. Andrews

I accept that. Hard cases make bad law. The amendment would not improve the situation. The Senator is aware of that.

Amendment, by leave, withdrawn.

Mr. Molony

I move amendment No. 3:

In page 9, line 30, after "used" to insert "bona fide”

The credit for noticing this change in the Bill lies with Senator FitzGerald who noticed it on Committee Stage. As Members of the House are aware, this amendment relates to that section of the Bill which provides for what is known in legal and business circles as the "business equity". The law as it presently exists provides that where somebody has been bona fide using premises for business for a period in excess of three years he would be entitled to a new lease. That is the business equity. It is a right acquired through building up business and goodwill in the premises owned by a landlord. This Bill proposes to change the law in the particular respect; to remove the elements of good faith from the necessary qualifying period during which the business equity is acquired. The Bill provides that the tenement must have been, during the whole of the period of three years ending at that time, used by the tenant wholly or partly for purposes of carrying on a business.

On Committee Stage the Minister gave his reason for the removal of the words "bona fide". He described the words as just a piece of superfluous jargon which lawyers are inclined to use. That may be and certainly lawyers are possibly inclined to use words that are properly described as legal mumbojumbo. I do not accept that in this case the words are superfluous jargon which lawyers are inclined to use. I believe they were put there for a purpose and I would like to illustrate this by quoting case examples where it matters and where the removal of these words would bring out a change in the law. It is for that reason that we propose this amendment.

Lord Justice Bramwell in the case of Rex v Holl, 7 Q.B.D. 57S, said of the phrase:

The correct province of this phrase is, therefore, to qualify things or actions that have relation to the mind or motive of the individual; and it has no meaning when joined to things or actions common to all mankind, though sometimes it is used in a figurative, but inaccurate, sense. A fact completely within physical apprehension can neither be bona, nor mala, fide: a mental fact may be either.

That is a perfect exposition of what that phrase means. In other words one can have a bona fide traveller. Members of the House who recall that law being in existence will remember what that phrase meant. If somebody travelled over a distance further than three miles solely for the purposes of getting a drink, he was not a bona fide traveller for the purposes of the law; but if he was genuinely travelling a distance in excess of three miles for a purpose not associated necessarily with getting a drink, he was a bona fide traveller. There lay the difference. On the other hand, one could not possibly have a bona fide jockey but one could have a jockey bona fide not trying or trying to win a race.

I put it to the Minister that in this particular context the words being removed from the law will create a substantive change in the law. I cannot, unfortunately, quote a reference for the case, but I recall when going through my legal studies a case where a man had occupation of a premises that were described in the course of the judgement as something in the nature of a dump. He had not used the premises; they contained two or three articles of broken furniture. He certainly did not use them bona fide for business purposes. He argued that he did because he used them as a store. It was true that inside the building there were two or three articles of broken furniture which had been there for a long time. The question the courts had to consider at that time was whether he was using them bona fide for business purposes. The courts had no difficulty in deciding that he was not using them bona fide for business purposes.

The point that Senator FitzGerald made on Committee Stage is very important in this respect. The courts must take cognizance of the fact that there is a change in the law; that the law at one time was that premises had to be used bona fide for business purposes; that the law is being changed so that premises are now used for business purposes and not used bona fide for business purposes and they will see some distinction in that.

I know that the Minister may feel these words are but a piece of superfluous jargon which lawyers are inclined to use, but I put it to him that in the context of this legislation it would create a substantive change in the law. I would urge him to accept the amendment. I would ask him to state when replying whether he still believes that those words are nothing but superfluous jargon which lawyers are inclined to use or whether he desires to bring about a substantive change in the law.

Mr. D. Andrews

I have no reason to change my opinion. I still think it is superfluous jargon which lawyers are inclined to use. This has been a very courteous and civil debate and I do not want in any to interject a note of incivility in regard to what Senator Molony has said, but his argument proves my point with regard to mumbojumbo and jargon. He did not give us the year of the case he mentioned and perhaps he might do so. I do not intend introducing a note of acrimony into what has, after all, been a well-conducted and very lengthy debate and I have no reason to change my posture in relation to the original statement I made. There is an awful lot of jargon still used in the legal code and as a result of that lawyers use it. I am not in any way blaming lawyers for using it. The language is there, but it is out-of-date language. It has not been up-dated and consequently is meaningless to anybody who would wish to understand it, except lawyers. This is not a condemnation of lawyers and their use of language which would have been proper to the middle of the last century or the century before.

We have an obligation to make Acts meaningful not only to the people who practise the law but to people who actually use the law in defence of their interests. It is also a well-known matter of social justice that people in the capacity of private citizens are entitled to go to the courts without, dare I day it, the services of a solicitor or a barrister. Consequently, to ensure that fundamental concept of social justice we have an obligation to make Bills in this House, which eventually become Acts, as meaningful as possible. I have no reason to change my views in relation to the use of the words "bona fide".

The amendment itself is not acceptable. The dropping of "bona fide" in the re-enactment of the relevant provisions of section 19 (1) (a) of the 1931 Act is purely a drafting amendment. I undertook to have the point re-examined because it gave me as much concern as it gave Senator Molony and Senator Alexis FitzGerald. I asked for a resumé of the reasons for leaving it out and I am quite satisfied on the advice I have been given that it is absolutely unnecessary to retain it in this section and that the text of section 13 (1) (a) is satisfactory. In terms of drafting practice I believe it is an improvement of the 1931 Act provision.

I am also satisfied that there is no reason to fear—as Senator FitzGerald seemed to fear when he raised the matter in the debate, and as Senator Molony now seems to fear, re-echoing the views of Senator FitzGerald, though that, does not devalue Senator Molony's argument—that the courts will apply this provision so as to hold that a tenant who is not bona fide using a property for business should be given rights as if he were a bona fide business tenant. These are the arguments which we hold to be reasonable.

Mr. Alexis FitzGerald

Does the Minister say that this is a phrase which really should not appear in the legislation?

Mr. D. Andrews

No. I would suggest that in the context of the legislation we are discussing it is out of date. It is an anachronism and is unnecessary. Instead of putting in the words "bona fide" could we not use the words "good faith"? Why do we use Latin phrases when we can use English, Irish or French phrases or whatever?

Mr. Molony

We have not used "good faith".

Mr. D. Andrews

I know. I am not talking in relation to this specifically but why can we not make it understandable to the laymen? Why do we have to use Latin catchphrases when they could be put into plain English? As we are discussing an English language text, why do we have to use Latin expressions? That is all I am saying. I do not think that is unreasonable.

Mr. Alexis FitzGerald

If we changed it to "good faith", would the Minister accept it?

Mr. D. Andrews

I could not under any circumstances accept it. In relation to laws and in relation to the usage of language in laws, why do we not use "in good faith" rather than "bona fide" or whatever other pieces of Latin we use from time to time? In relation to the principle involved here, whether the words "bona fide" or "good faith" are used, it still remains the same. The amendment is unacceptable for the reasons I have outlined.

Mr. Molony

The phrase does have an established meaning.

Mr. D. Andrews

It does. I am not saying anything about that, but I am talking about the relevancy of where it is used and where it is not used.

Mr. Alexis FitzGerald

I find it difficult to listen to people who are talking about what they should not know and talking as if it was a virtue that they did not know. I have listened to Senators in this House speaking contemptuously of my own discipline of the law. I think they do themselves discredit when they do that, as I should be doing myself discredit if I spoke contemptuously of any discipline of the mind, even one I have not been subjected to myself. The truth would be best reached by us all if we had respect for each others' disciplines, at the least the respect of silence when we did not know the meaning of terms appropriate to the disciplines that we did not know. It is hard enough to hear Senators talking about one's own discipline, as one has to, in the manner I have described when they do not pursue that discipline, but how can they be encouraged to have respect for the discipline of the law, as educated lawyers should have respect for the disciplines of economies or sociology or any of the natural sciences, when a lawyer such as the Minister does not himself have respect for the discipline?

Mr. D. Andrews

On a point of order, I must make my position very clear. I think Senator FitzGerald has been most unreal and unreasonable. I did not attack the discipline of the law. I did nothing to undervalue the discipline of the law or of lawyers. I am sticking to my point and I am immovable from it. I am speaking about the language of the law. I am not attacking the Senator; I am not attacking the legal system; I am not attacking lawyers working within the legal system; I am not attacking the discipline of the law; I am talking about legal language.

An Cathaoirleach

We must get down to what is in the amendment.

Mr. Alexis FitzGerald

May I make my speech on the Report Stage of this Bill, which I can do without assistance? I am speaking about this amendment and I am speaking in reply to what the Minister has said.

Mr. D. Andrews

The Senator was attacking me in a personal manner.

Mr. Alexis FitzGerald

I was not attacking the Minister.

Mr. D. Andrews

By implication.

Mr. Alexis FitzGerald

If I want to attack the Minister I will do it expressly. The Minister says that he did not speak ill of the discipline of the law and yet during Committee Stage debate in this House he referred to the language which we in this amendment are proposing should be restored to this law. He described the words "bona fide" as "superfluous jargon".

Mr. D. Andrews

I stick to it.

Mr. Alexis FitzGerald

I do not think that is language which, even used by a non-lawyer, would show respect, because these words are not superfluous jargon.

Mr. D. Andrews

That is a matter of opinion.

Mr. Alexis FitzGerald

The Minister would be assisting his own reputation if he would stop interrupting me and enable this debate to be finished quickly. The Minister referred to the language "bona fide" as if it were inappropriate to this day and age, superfluous in this particular section. I could give the House half a dozen illustrations of how these words can most helpfully achieve what the Legislature may want to achieve in a particular case. In fact I will give the Minister just one or two examples—perhaps three.

In the case Morgan v. Davis, (1962) New South Wales Report 1013, Justice Wallace, dealing with a case where a lessee had ceased to be a bona fide occupant of premises, said: The words “bona fide” stress the substantial and genuine nature of the occupation required. That was decided in 1962, not 1662. There was a Canadian case in 1961, Carson v. Dunsmuir Construction Limited, 35 W.W.R. 521. Here are the number of words which were saved by using the two words “bona fide”, the superfluous jargon that has been got rid of: The expression “bona fide secured” was held to mean “in good faith, not as a sham or a mere paper transaction, not collusively or as part of a scheme to defraud anybody, but being in fact what it is in form, a genuine transaction”. A lot of superfluous words were got rid of by using the two words “bona fide” in that case. In another case, the Dougmor Realty Holdings Limited, Fisher against Wilgorn Investments Limited in 1967, Mr. Justice Lieff, interpreting the Fraudulent Conveyances Act which excepted transactions made to defeat creditors where there had been good consideration and the transfer was made bona fide, said:

In my view, the phrase bona fide in this context ought to be taken to mean a sale to a real purchaser and not merely a nominee or put another way, the transaction must be more than a form of purchase. The phrase bona fide signifies something done in good faith without fraud or deceit or collusion. There must be honesty in fact. There must be complete frankness.

In this particular section it has been the law and is the law at this moment that the use by the tenant has to be bona fide for the purposes of carrying on of business, not anything other than genuine, not a pretence, not something lacking in truth or frankness. It must be a substantial and genuine use and the word "genuine" is used throughout the cases on this. I do not think the Minister is doing the law any good whatever in creating a situation where the use, it can be argued, need no longer be genuine. The Minister did not deal at all with this fact when speaking on the amendment. It is a very different matter to come to this House with a Bill without the words "bona fide" if this were legislation for the first time in this area. Then the courts looking at that legislation would say it has to be bona fide, it has to be genuine, the Legislature must have meant real occuption, real user. But that is not the position in this case. At this moment the words "bona fide" appear in the law and the Legislature is deleting them. It is telling the courts to look at this new Act and read our intentions as meaning we do not want bona fide user. Just find out who is the user, genuine or not.

Mr. D. Andrews

That is nonsense.

Mr. Alexis FitzGerald

The Minister will not aid anything by saying "that is nonsense". It is a principle of statutory interpretation that when an Act of Parliament is amended by another Act, the new Act is construed in the light and in the terms of the Act which it is amending. That is a proposition of law and the Minister cannot describe it as nonsense by way of interruption of my speech as a contribution to this debate. If he wants to argue that is nonsense, let him produce his argument and not contemptuously say it is nonsense.

Acting Chairman (Mr. Reynolds)

The Senator should be allowed to make his speech without interruption.

Mr. D. Andrews

I find it very difficult to listen to that sort of lecture. The Senator knows very well that I am precluded from replying by the rules of debate.

Mr. Molony

I would urge the Minister to accept this amendment. I join with Senator FitzGerald in expressing disappointment that the point which we have made has not been answered, other than to say that the phrase is superfluous jargon and that it is nonsense to suggest there is any change being brought about in our law. We have cited case examples to show how important the phrase is in this respect.

The Landlord and Tenant Commission considered the landlord and tenant law and these particular sections in great detail and reported at very considerable length on these matters. They saw no need, and never referred to the necessity, to remove these words. If they were thought to be "superfluous jargon" they would have recommended their deletion because the proposals they made were, in my view, proposals that could give us a sensible and comprehensive and, in so far as it can be, a simple landlord and tenant legal code. The Minister's intractable position is of no help to us at all. The Minister did not say it is the Government's policy to remove these words because they do not believe that they are necessary; that in the 1931 Act they felt it was necessary to say that business must be used bona fide for business purposes, and that now they have decided that it is necessary only that a person occupies a premises, whether it is for bona fide or mala fide business purposes. That would be a policy decision.

It will be the courts of law who will interpret this legislation as time goes on. The law is clear. The words "bona fide" in this section carry a great meaning. Cases have been fought and tried on the issue of those words. All I can do is express great disappointment that the Minister has seen fit to refuse to accept that those cases exist, and has refused to accept that a change in the law of a substantive nature is being brought about because of this. I would urge him to accept the amendment.

Mr. Dowling

I should like to say a word in relation to this.

Acting Chairman

The debate is concluded. Is the amendment withdrawn?

Mr. Molony

No.

Amendment put and declared lost.

Mr. Molony

I move amendment No. 4:

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

This is another matter which was first discussed on Committee Stage. Section 13 (2) is a new provision. It arose from a suggestion by the Landlord and Tenant Commission that a temporary break in a business letting should not be regarded as being to the detriment of the right of somebody to a business equity. For some reason or another—and we on this side of the House do not know why—the word "unforseen" was introduced before "temporary break". The subsection now reads:

...an unforeseen temporary break ...shall be disregarded if the Court considers it reasonable to disregard it.

The introduction of the word "unforeseen" could have consequences greater than would first appear. As matters stand, someone occupies a tenement on a two-year and nine month letting and, when the lease expires, there is a break of, let us say, a week which the landlord insists on before he grants a new lease to ensure that the tenant would not obtain a business equity. That break, being a foreseen rather than an unforeseen break, if this section stands in the law as it is now proposed that it should stand, would mean that that person would not acquire a business equity.

We must make up our minds on a matter of policy here. We either decide that a person who has used premises for a period in excess of three years, regardless of what his title has been, whether it has been from one lease to another, or whether it has been a five or six-year lease, is entitled to a new lease or he is not. If we decide we do not want him always to be entitled to a new lease, that is fine. If we wish let us use this way of doing it, although, again, there does not seem any particular reason why we should. As I understand the purpose of this legislation, it is to ensure that the person who has built up a business, who has created his own goodwill, or who has built on the landlord's goodwill and has worked in premises for a period in excess of three years, is entitled to continue to operate in those premises.

I know that there are hundreds of short leases around the country. I know that, in very many instances, landlords insist on a break after the expiry of a lease. Let us say the first lease is for two years and nine months and a month later or a week later the landlord grants a second lease of two years and nine months, thus ensuring that a tenant would not acquire a business equity. I know this matter has been questioned by the courts. I understand that a couple of cases have been decided in favour of the tenant. I understand also that cases have been decided in favour of the landlord. The fact that the law does not seem to be absolutely clear is another reason why we should, at this stage, make sure that the legislation we are now passing is clear. The introduction of the word "unforeseen" is bad in that it goes against the spirit of this legislation. I know of no reason why it has been introduced. Therefore, I would ask that the amendment be accepted.

Mr. D. Andrews

I appreciate the spirit in which Senator Molony put down this amendment. As he says, it was his intention undoubtedly to make the law, as he sees it, clear and more concise. However, in all the circumstances, and on examining this and the other amendments which we received last evening, it is quite difficult to accede to Senator Molony's request, much as I should like to do so.

If the amendment were accepted it would introduce an element of confusion into the law. Foreseen temporary breaks may be arranged, as the Senator knows, under the law as it stands so as to ensure that a particular arrangement does not come within the scope of the landlord and tenant legislation. Any doubt there might have been in this regard has been resolved by the recent Supreme Court decision in Gatien Motor Company Limited and the Continental Oil Company of Ireland Limited.

Foreseen temporary breaks may continue to be arranged under the proposals in this Bill where both parties are agreed on such an arrangement. This is something quite different from the subject matter of section 13 (2) of the Bill. Section 13 (2) says, in effect, that, where the court considers is reasonable, a tenant shall be regarded as having a three year's business user—and thus satisfy the condition in section 13 (1) (a) of the Bill—even though there has been a fortuitous temporary break in business use during the three years. We say that to omit the word "unforeseen" would not only change completely the meaning of the provision, but would also introduce a degree of uncertainty bordering on chaos into the question of renewal rights where there had been a break or breaks in business use.

What the provision as it stands does is to enable the court to say, where it would be reasonable to say so, that a fortuitous break in business use shall not count against the tenant's right to a new tenancy. We would respectfully suggest to Senator Molony that his amendment would ask the court to do the impossible, that is, not only to apply the provision as it stands in the Bill but also to apply it to the case of an intentional break, that is, a break expressly provided for so as to leave a particular arrangement outside the scope of this part of the Bill.

We ask this of the proposer of the amendment: what test of reasonableness could the court apply to such a case? Either the court would have to introduce a general rule that a prearranged break either was or was not "reasonable" for the purpose of applying section 13 (1) (a) of the Bill—which would be at variance with the simple meaning of the provision as it would read—or else no one could know in advance whether any particular arrangement was outside the new Act.

In this connection I should make the point that this Bill, like the 1931 Landlord and Tenant Act, must leave room for arrangements where rights of renewal do not accrue; must take account of circumstances where no letting arrangement at all can be contemplated if renewal rights are to be raised. One such circumstance, for example, is the case of shop concessions within hotel premises, where the hotel proprietor for obvious reasons must be in control of his hotel, must be in control of the general premises, where the hotel proprietor must be in a position to insist on a certain standard of service since, if the service is not up to his own requirements, then his business can suffer. That is not unreasonable. Representations from the hotel industry to this effect were received at the time of the 1977 lapsed Bill. Basically this is one of the reasons why we think the words we suggest should stand. The amendment proposed by Senator Molony is intended to make the section more meaningful and more concise. We accept that is the intention of the amendment, but it does not necessarily achieve its intention. This word "unforseen" was to have been inserted into the lapsed Bill by way of an official amendment since the necessity for it had become apparent on the grounds I have just outlined.

It is fair to say that the word "unforeseen" was to have been put into the 1977 Bill. I got into some difficulty on the last occasion when I mentioned that it was a creature of the then Coalition Government, and maybe I should not have mentioned that. They saw fit to have it in their Bill and we saw no reason not to have it in our Bill. It was a reasonable proposition by the original authors. We do not see any reason to interfere with it.

I am grateful to Senator Molony for the manner in which he articulated his concern. I certainly appreciate that. I am very sorry I cannot be more positive in relation to his amendment and, indeed, the other amendments. I have good news in relation to amendment No. 7 and I am sure the Senator will then see I am not as intractable as Senator Alexis Fitzgerald represented me to be on the last occasion on which he spoke.

Mr. Molony

The Minister had his bona fide argument against my amendments.

Mr. D. Andrews

I used the words "good faith".

Mr. Molony

I am prepared to accept it. The only point I would make is that my intention in putting forward the amendment was not to make the section any clearer. I take a different view from that of the Minister on the question of policy in this matter. I believe it is wrong that a landlord should be in a position where he can have a tenant in occupation of his premises for 20 years at the end of which he can throw the tenant out. He can do this now by means of a continuous stream of leases under three years with daily breaks in between these two-year leases or just under three-year leases. I accept that the Minister has his own reasons for disagreeing. This is purely on a matter of policy. In the circumstances I will withdraw the amendment.

Amendment, by leave, withdrawn.

Mr. Molony

I move amendment No. 5:

In page 12, line 27, after "may" to insert "if it thinks proper grant a new tenancy to the tenant and/or".

Section 17 provides for restrictions on tenants' rights to new tenancies. One of those restrictions arise where a landlord who owns a block of premises or premises proposes to carry out a scheme of improvements. The law proposes that where a landlord obtains planning permission for a new scheme, and wishes to go ahead with it, the tenant would not be entitled to a new tenancy.

Subsection (4) provides that where after a reasonable time the tenant has vacated the premises and the landlord has not proceeded with his scheme of improvement, application can be made to the court on behalf of the tenant for damages, for compensation or indeed punitive damages. He has been removed from his premises and the landlord has not proceeded to carry out the scheme of improvements he originally intended to carry out, or at least said he would carry out. The purpose of this amendment is to give the right to the court, if the court thinks fit, to restore the tenant to the tenement, and to give the tenant a new tenancy, a new lease or whatever it might be, if the court thinks proper.

I can envisage circumstances in which it would be quite inappropriate that the tenant should return, for example, a tenant may have moved elsewhere and established himself afresh. The time in which one might expect a scheme of improvements to get under way might be a year, or two years, or longer in some cases and during that time the tenant may have set himself up elsewhere, or circumstances may have changed. It might be inappropriate that the court should return him to his original tenement and grant him a new tenancy. I am certain, too, that there would be circumstances in which it would be entirely appropriate. Where a landlord has had a tenant removed from premises, and has had a tenant denied the right to a new tenancy, and the landlord has not gone ahead with the changes he proposed, it might be entirely appropriate that the tenant should be restored to the original premises. For that reason I propose in the amendment that, as an alternative, or in addition to an award of punitive damages, the court should be given the right to restore the tenant.

Mr. D. Andrews

Senator Molony has obviously gone to a lot of trouble in presenting his case for the amendment. Without appearing negative in the context of this proposal, again I am afraid his amendment is not acceptable. The reason for is unacceptability can be stated very briefly. A landlord who, for any reason—good or bad is not proceeding with plans on the basis of which he procured the refusal of a new tenancy is by section 17 (4) of the Bill made liable for punitive damages. That provision is enough to ensure that a landlord who fails to carry out these plans is, in his own interest, obliged to negotiate with his former tenant. He may offer the tenant a new tenancy, or compensation in money, or he may offer both.

Since the failure to proceed with a development or a rebuilding project does not usually become manifest for some time, during which time the former tenant presumably has to find fresh premises, the offer of renewed tenancy is not on the face of it an offer that is likely to be useful to that former tenant. However, it is certainly one of the factors in the situation. If the parties cannot agree and the matter comes before the court, the court in assessing the damages to be awarded can take account of the factor I have mentioned. That is to say the court can ask whether a renewed tenancy was offered, with or without an offer of money in addition, and whether refusal of that offer by the tenant was reasonable in all the circumstances.

There could of course, in particular cases, be other factors besides a renewed tenancy and money compensation. Since to mention any one factor in the subsection—such as the offer of a renewed tenancy—could only throw doubt on the relevance of such other factors, it is better that none be mentioned. Accordingly, not only is the amendment unnecessary, as we suggest, or as the Minister for Justice suggests, but it could have the effect of making the provision less clear in its meaning than as it stands at present. I am quite satisfied Senator Molony does not want to do that.

That is a matter of opinion. Senator Molony might take the view that what I have stated is not altogether acceptable to him. However, we take the view that the amendment he proposes is not acceptable to the Minister for Justice and, in the circumstances, I regret again that from Senator Molony's point of view I am being less than positive. The amendment as proposed can only confuse the situation. The Senator will understand my reasons for not accepting it. He might find my reasons unacceptable, but he will understand them.

Mr. Molony

On this occasion I do not understand the reasons. The last amendment was unacceptable but I do not appreciate the Minister's reasons on this amendment.

Amendment, by leave, withdrawn.

Mr. Molony

I move amendment No. 6:

In page 13, line 16, after "tenancy" to insert "(in which case it shall be served not more than six months before the termination of the tenancy)".

This is a very simple amendment. As proposed in this Bill, a tenant is obliged to serve a notice of intention when he wants to obtain a new lease. Where he has a lease for three years—if I may illustrate my point in this way—or for five years, under this section he is obliged to serve notice of intention to claim a new lease when his lease expires. Because of the way in which the legislation has been drafted, he is in a position to a serve a notice of intention to claim relief, as it is called, or a notice to make it simple for a new tenancy the first day he goes into the premises. The whole intention of serving notice is to draw the landlord's attention to the tenant's needs.

It is a bit senseless that, on the day a tenant signs a lease, or the day he goes into occupation of the premises, let us say on a ten-year lease, he should simply hand the landlord a notice of intention to claim relief, and say: "When all this is finished, I will want another lease". I imagine it will become part of the functions of his legal advisor, his solicitor, when the first lease transaction is closed, as well as handing over the first instalment of rent to also hand over a notice of intention to claim relief. It makes a bit of a farce out of the intention behind this. The suggestion I make is that the tenant should serve his notice of intention to claim relief within six months of the expiry of the tenancy.

Mr. D. Andrews

The amendment is unacceptable. I do not say that in any facetious way. Part II of the Bill, as the Senator is aware, is fundamental to the whole Bill. Following the recommendations of the Landlord and Tenant Commission—second report, paragraph 225 and 235 to 237—the proposals in Part II of the Bill are designed to enable a tenant to apply for and obtain the grant of a new tenancy as soon as he has satisfied the necessary conditions—I gave the example before of a three years business user—and without having to await the termination of his tenancy. This is one of the fundamental changes the Bill proposes. It was recommended by the Landlord and Tenant Commission. It was accepted by the Minister for Justice. The amendment proposed would leave a tenant back in the situation that obtains under the Act of 1931 where his right to a new tenancy arises only in or about the time his existing tenancy terminates. I do not think this is what the commission recommended. It is certainly not what the Bill proposes. In all the circumstances, the amendment is not acceptable.

Amendment, by leave, withdrawn.

Government amendment No. 7:

In page 19, lines 24 to 26, to delete from "as compared with" to "predecessors in title".

Mr. D. Andrews

I said I will be positive. I will put the House in good humour at the end of the day and at the end of the amendments. I must acknowledge that this amendment is based on the arguments put forward by Senator Cooney. I have to thank him for directing my attention to a flaw in section 35 (2) of the Bill when he argued, on Committee Stage, that the provision as it stands requires comparison to be made with the letting value when the property was last in the possession of the lessor, that this would have been a long time previously, and that the comparison could prove impossible to make. I agreed with Senator Cooney that I would have it examined and, on examination of the matter, I agree that the reference to the letting value when the land was last in the lessor's possession could give rise to doubts, ambiguities and real difficulties, examples of which Senator Cooney gave.

As the Senator remarked, the reference would be to a long time past, perhaps 100 years or more in the past, where comparisons could be baffling and where the very facts on which to base comparisons might be unavailable and probably, in many instances, unidentifiable. The reference is actually unnecessary and all that is in question are additions to letting values as a result of works carried out by the lessee, over and above the building work on foot of which the lease was granted, that is to say, over and above the original buildings that constituted the lease as a ground rent lease. The amendment proposed permits the subsection to convey that idea not only more clearly but also without the doubts and difficulties to which attention was drawn on Committee Stage.

Senator Cooney's views in this regard have prevailed and it is only proper that I should thank him for bringing the matter to the attention of the House and, having done so, to give credit where credit is due and acknowledge the authorship to which Senator Cooney's name must be attached.

Amendment agreed to.

Agreed to take remaining Stage today.

Bill, as amended, received for final consideration and passed.