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Lords Chamber

Volume 116: debated on Tuesday 30 April 1940

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House Of Lords

Tuesday, 30th April, 1940.

The House met at four of the clock, The LORD CHANCELLOR on the Woolsack.

South-Eastern Gas Corporation Limited (Associatedcompanies) Bill Hl

Order of the Day read for the consideration of the Report from the Chairman of Committees under Standing Order No. 109A.

The Lord Chairman reported as follows:

"This Report is made in pursuance of the duty placed upon the Chairman of Committees under the new Standing Order adopted by your Lordships on Tuesday the 16th instant, to report to the House on any Bill to which it appears to him that the attention of the House should be specially directed.
"The South-Eastern Gas Corporation Limited which is promoting this Bill is a company registered under the Companies Acts. It has no statutory power to supply gas, but it holds a controlling interest in twenty-four subsidiary companies which are gas companies having such statutory powers and carrying on the ordinary business of supplying and distributing gas.
"The Bill seeks to give to these subsidiary companies certain additional powers of a kind frequently applied for by and granted to gas companies by Private Bills promoted by such companies. A Bill promoted by a parent or holding company to confer such additional powers upon a number of other controlled or subsidiary companies is a novel form of Private Bill legislation and is outside the types of Private Bills provided for or contemplated in the Standing Orders of your Lordships' House. The cases dealt with by Standing Order 71, which does require what are usually called 'Wharncliffe meetings' of a company other than the promoting company, are not analogous: that Standing Order applies only where the powers sought to be conferred on the non-promoting company are powers such as those of amalgamation, sale or abandonment of their undertaking, or the purchase of another undertaking.
"In the case of this Bill the most important point would appear to be that under its provisions the subsidiary companies would be granted the proposed additional powers without its being necessary for each of those companies to comply with the Standing Orders relating to the submission of the Bill to the shareholders of the company, and obtaining a three-fourths majority in value of the shareholders present at the meeting, as would be necessary if each of such companies had promoted such a Bill to obtain such powers for itself. Therefore the Bill was certified by the Examiners as having complied with Standing Orders.
"In so far as the present Bill is concerned, the promoting company holds more than 75 per cent. of the issued share capital in all but three of the subsidiary companies, and a little less than 75 per cent. (viz., 72 per cent., 68 per cent. and 63 per cent.) in the remaining three companies. Moreover the promoters have expressed their readiness to submit the Bill to special meetings of all the subsidiary companies in the same way as would be required under Standing Orders had separate Bills been promoted by the several companies. But if the principle were established that Bills of this kind are legitimate it would cover cases where only 51 per cent. of the capital was so held, unless Standing Orders were altered requiring what are usually called 'Wharncliffe meetings' of all the subsidiary companies in such cases.
"The most important of the additional powers sought under this Bill to be conferred upon the subsidiary companies are financial powers, such as powers of raising additional share capital, and powers of raising additional loan capital by increasing the percentage which the loan capital may bear to the share capital. The other powers proposed to be conferred on the subsidiary companies are for the most part of an administrative nature mainly affecting the internal economy of the companies. But the attention of your Lordships should be called to Clause 31 of this Bill which proposes to alter the voting rights of shareholders in the subsidiary companies. In this Bill the effect of the alteration proposed would be to give one vote for every £1 in nominal value of the shares or stock held; which is much more favourable to the large shareholders than the scale of voting laid down by the Companies Clauses Acts which would be superseded.
"The advantage of permitting this type of legislation is that it would result in a very substantial saving of expense, and thus facilitate the business of the companies concerned: to take this Bill as an example, it would save the promotion of separate Bills in respect of all the 24 subsidiary companies concerned, and several of the companies are so small that the cost of promoting Bills would be prohibitive. It would thus not only save expense, but save time and a certain amount of trouble. On the other hand careful consideration should be given to the position and effect of the Bill in regard to every one of the subsidiary companies concerned.
"Though the present Bill may of itself be innocuous, the precedent which it would create is one to which I think it my duty under the Standing Order recently adopted by your Lordships to call the attention of the House.
"I propose under Standing Order 110 that this Bill which is unopposed to proceed, should be proceeded with as an opposed Bill and with your Lordships' approval to invite the Committee to give their special attention to the considerations which I have ventured to lay before your Lordships."

My Lords, this is the first time that it has fallen to me to invite your Lordships to consider a Report on a Private Bill, a Report made under the Standing Order which your Lordships adopted at my suggestion a short time ago. On that occasion I explained why it seemed to me that such reports would be of value in the consideration of Bills of this kind by your Lordships' House. The Report in question, which is before your Lordships, deals with the South-Eastern Gas Corporation Limited (Associated Companies) Bill. The reasons why it seemed to me that it was my duty to make this Report to your Lordships are these. The most important point under the provisions of the Bill is that the subsidiary companies would be granted proposed additional powers without it being necessary for each of those companies to comply with the Standing Order relating to the submission of the Bill to the shareholders—what is called the "Wharncliffe meeting." The companies which are affected by this Bill are owned by the holding company in twenty-one cases up to 75 per cent., while in the other three cases 72 per cent., 68 per cent. and 63 per cent. respectively of the shares are held by the holding company. As a matter of fact, the promoters have no objection to the subsidiary companies holding special meetings to comply with the Standing Order as if there was an obligation on the holding company to provide for such meetings in the case of this particular Bill.

The Bill is unopposed, and I do not see any points in it which are of outstanding importance, apart from one to which I will call your Lordships' a moment. It is, however, a question of principle. This is the first time that a holding company has promoted a Bill for subsidiary companies in which it holds the majority of the shares. If the principle were established, it would mean that Bills of this kind would be legitimate if the promoting company held only 51 per cent. of the capital; and that, I think, is a matter which should be gone into carefully. The other point relates to Clause 31 of the Bill, where it is proposed to alter the voting rights of the shareholders in a manner which was not contemplated by the Companies Clauses Acts, which would be superseded in this case.

In those circumstances, it seems to me that it would be desirable that the Bill should receive rather more careful consideration than could be given to it under the ordinary procedure. I do not want to comment upon any of the other clauses in the Bill. I should like to say that this type of legislation would certainly save money and time and would have considerable advantages in that, for example, there might be one Bill instead of twenty-four; but I think that the two points which I have ventured to place before your Lordships are of importance and should receive rather more consideration, as I said before, than can be given under the ordinary procedure. Therefore, with your Lordships' permission, I suggest that I should return this Bill under Standing Order No. 110 as an opposed Bill, and that it should be carefully considered by a Committee of your Lordships. There is a Report from the Board of Trade which would go before the Committee. I move that the Report be referred to the Select Committee to which the Bill is to be referred under Standing Order No. 110.

Moved, That the Report be referred to the Committee on the Bill.—( The Earl of Onslow.)

On Question, Motion agreed to, and ordered accordingly: the Committee to be proposed by the Committee of Selection.

War Charities Bill Hl

4.10 p.m.


My Lords, I beg leave to present a Bill to provide for the registration and control of war charities and for the extension of the objects of certain war charities, and for purposes connected with the matters aforesaid; and to move that it be read a first time.

Moved, That the Bill be now read 1a —( The Marquess of Dufferin and Ava.)

On Question, Bill read 1a , and to be printed.

Solicitors Bill Hl

My Lords, I beg leave to introduce a Bill to establish a fund for relief in certain cases of losses due to dishonesty of solicitors, to reduce the stamp duties on solicitors' practising certificates, to require accountants' certificates as to compliance with the Solicitors' Accounts Rules, to make provision with respect to the membership of the Law Society and with respect to the Council and committees thereof, to amend the enactments relating to solicitors, and for purposes connected therewith. I move that the Bill be read a first time.

Moved, That the Bill be now read 1a —( Lord Wright.)

On Question, Bill read 1a , and to be printed.

Evidence And Powers Ofattorney Bill Hl

Order of the Day for the Second Reading read.

4.12 p.m.

My Lords, I beg to move that this Bill be read a second time. The Bill is mainly a war measure but, as I will show in a moment, it is proposed to continue part of its main provisions so as to operate in any war in which His Majesty may be engaged. Shortly after the beginning of the war the Service Departments and the Law Society made representations to me as to the inconvenience and hardship which were caused to men serving in His Majesty's Forces owing to the lack of facilities for swearing oaths and affidavits. I thought it was convenient that the matter should be considered by a Committee. I was fortunate enough to secure the consent of my noble and learned friend Lord Maugham to preside over the Committee, and to examine the question and advise me as to what steps should be taken.

The Committee recommended that power to administer oaths should be conferred on officers of substantial rank in His Majesty's Forces, these officers thus taking the place of the Commissioner for Oaths, who would be the ordinary person to act. It is not proposed that junior officers should be entrusted with this power. The orders will be made, according to Clause 1 of the Bill, either by the Lord Chancellor, who will empower officers of His Majesty's Forces to administer oaths, or by the Secretary of State, who will be able to empower persons serving in the diplomatic, consular, or other foreign service of a Power which has undertaken to represent this country, to administer an oath. This last proposal is consequent upon a representation made to me by my noble friend the Foreign Secretary, as to the difficulty of persons who might for the time being be kept in a foreign country when they wanted to make some declaration on oath which was essential. Your Lordships will appreciate, as the Committee pointed out, that it is often desirable and necessary, apart from litigious proceedings, to take an oath, as, for instance, in connection with affidavits which are required on the winding up of an estate of a deceased person, and if this Bill is approved, persons serving in His Majesty's Forces will find ready at hand a means by which they may discharge these duties.

I am asking your Lordships in this Bill to accept the recommendations of the Committee presided over by my noble and learned friend. As I said a few moments ago, it is not proposed that this plan should be limited to the period of the present war; it will continue to operate in any war in which His Majesty may be engaged. There is one class of oath which requires some special provision. Powers of attorney, as your Lordships very well know, are documents of great importance which may be used for the purpose of disposing of the whole of a man's property. It is essential therefore in this connection that some special safeguards should be provided. It is necessary to give some assurance to a person who is asked to act on a power of attorney that it has really been executed by the grantor. The safeguards which were proposed by the Committee, and which have been inserted in this Bill, are, first, that there shall be a witness who will swear an affidavit of due execution, an affidavit which may be sworn before the officer empowered to administer an oath; and secondly, that the power of attorney must be filed or registered in the Supreme Court, or in the corresponding offices either in Scotland or in Northern Ireland, and it is not to be accepted for filing unless it is accompanied by a solicitor's affidavit that he sent the document out for swearing and believes the signature to it to be the signature of his client. It is quite obvious that there is no absolute safeguard against fraud if persons are minded to commit a fraud, but I respectfully suggest that these recommendations of the Committee are so substantial that your Lordships may accept them as satisfactory.

The other part of the Bill deals with a different subject matter. It was apparent, soon after the beginning of the war, that in connection with criminal proceedings it would be necessary very often to give proof of intercepted letters and of other documents, for instance, in prosecutions under the Trading with the Enemy Act, or in connection with offences against the Defence Finance Regulations. It may be necessary to prove that a particular letter went through the post; it may have been intercepted and sent on, or it may have been intercepted and retained. It seemed inconvenient for a junior member of the Censor's Department to prove such facts. In this connection also I thought it desirable to have advice, and again I was fortunate enough to secure a learned Judge to preside over a Committee to consider the matter. Mr. Justice Humphreys, assisted by the Recorder of London and a number of members of the Bar familiar with criminal proceedings, have recommended that proof shall be given in respect of the documents which have to be given in evidence, by a certificate made by a properly authorised officer of the Censor's Department that the letter was intercepted in the ordinary course of the duties of the officers of that Department.

I venture to think that this is a recommendation which will commend itself to your Lordships. The officer who makes the declaration will thus be relieved of the necessity of attending the Court to prove a document, of which it was very likely that he would have no special recollection, intercepted in the ordinary course of the duties of the officers of the Department, and it is reasonably safe to assume that proof of that fact should be satisfactory proof of the existence of the document. As I said, this is a war measure. I venture to think that it is a useful measure which will be very much for the convenience of every serving soldier, sailor and airman who may have duties in connection with legal proceedings and legal matters, and I ask your Lordships now to give the Bill a Second Reading.

Moved, That the Bill be now read 2a .( The Lord Chancellor.)

4.20 p.m.

My Lords, would the Lord Chancellor be good enough to give one word of explanation about Clause 2? He cited instances where these documents were needed in evidence in cases of trading with the enemy and breaches of currency regulations; but there are other prosecutions that might take place against persons to whom the Government objected for various reasons. It is our duty to guard very closely against any weakening of the safeguards which the subject has. I am not learned in the law, like the noble and learned Viscount on the Woolsack and many others of your Lordships, and I am not quite sure—this is the point which I hope the Lord Chancellor will clear up—whether this is only for the purpose of preventing unnecessary journeys to the Courts by censors, or whether it is a widening of the laws of evidence. I should be very much obliged if the noble Viscount could clear that point up.

4.22 p.m.

My Lords, in answer to the noble Lord, I may say it is an elementary rule of evidence that the best evidence obtainable must be given. If a document must be proved in the course of criminal proceedings, it would be necessary to call someone who remembered having handled it and that it had been intercepted. The object of this clause is to prevent the necessity for evidence of that sort. Ordinarily, a certificate signed by an official of the Department would not be received by the learned Judge as proper proof. The officer himself must be called to prove it, so that, in answer to the noble Lord's question as to whether this is an enlargement of the rules of evidence, to the extent to which a certificate properly signed by an official is accepted instead of evidence by a junior official, that is an extension of the law of evidence; but it is one which, in my humble submission, conduces to more satisfactory proof than could be expected to be obtained, perhaps, from some junior clerk who was expected to remember one of hundreds, perhaps thousands, of documents which had passed through his hands. This would be a certificate by a responsible officer who would be able to ascertain from the records, or possibly from stamps on the document itself, that it had passed through the routine of the office and might therefore be accepted as the document it purported to be, and one that had been intercepted in the course of the post. I hope that explanation will satisfy the noble Lord.

4.25 p.m.

My Lords, may I ask my noble friend a question? Does Clause 3 affect the cast of which I shall give an instance? A soldier is called up and joins his regiment overseas. He has given an ordinary proper power of attorney to his father, and in a few weeks he becomes a trustee or executor under a will. His father will probably act under the power of attorney and carry on the duties which the son would have undertaken. Does Clause 3 interfere with such a power of attorney?

The answer is in the negative. A power of attorney executed before the grantor went abroad on military service would be as effective after the grantor had gone on military service as it was while he was still in this country.

4.26 p.m.

My Lords, may I add one word to the reply which has been given regarding Clause 2? Unfortunately the noble Lord who raised the question has left the House for a moment. Those who are not acquainted with the law—fortunate people!—are perhaps not aware that there are a number of things which are taken by the Courts as being proved because they are in the ordinary course of business. One of the simplest examples is that if you produce a letter with a particular postmark on it—let us say, the first of April, in a particular year—you do not need to call the official who punched the letter and put the postmark on. The Courts take it that it was postmarked on that particular day, and therefore either arrived or left as the nature of the postmark might require, on the date mentioned. There are many other examples of this kind. In this particular case, two things are being made admissible evidence in the Courts which are almost as simple and obvious as that.

It is true, as my noble friend has said, the Bill does extend the laws of evidence because it admits something as evidence without positive proof. The two things are these. In the first case you have got somebody employed in an office, say, in Victoria Street, who has opened a bundle of letters and has found a document within it, and that document has got to be subject to certain legal proceedings hereafter. That person, as my noble friend has said, is perhaps looking at several hundred documents a day, and the case may come on for hearing before some tribunal weeks or months, perhaps longer, afterwards. He or she cannot possibly remember, but has to go and say, "Yes, I opened that bundle, and I found that letter there," and so do his or her best, with the help, no doubt, of others. This provision gives you something that is probably better than the evidence which he or she would give, because what it requires him or her to do is to make a certificate as soon as a question has arisen regarding the document, certifying that this letter was in a particular postal packet which he or she examined a few days before. That certificate can be produced in evidence months later, and will be proper evidence that it was in the packet on that particular day. I do not hesitate to say that a certificate of that sort, made shortly after the official in question opened the packet, is much better evidence than he or she could give by coming to swear to it in Court months afterwards, because it is certain that the official in question has got no interest at all in the matter and has simply opened the packet and found the letter there.

The other matter is with regard to photographs. You generally have to call a photographer, but in many cases you do not bother because the other side will admit the photograph. A photograph, though it may be faked, as certain very ingenious proceedings by certain people in foreign countries show, gives you a very good copy of documents. This only requires that somebody should certify that the photographic copy is a true copy of the document which formed or constituted part of such a postal packet as was mentioned. I hope I have not detained your Lordships unnecessarily, but I rather agree with my noble friend Lord Strabolgi that one ought to be very careful about any alteration of or tampering with the law of evidence, and for my part I should never resent people requiring the fullest explanation of any such alteration, but, if I may say so, I most fully agree with what has fallen from the noble and learned Lord Chancellor that really these are matters to which this House can properly agree.

On Question, Bill read 2a , and committed to a Committee of the Whole House.

Business Of The House

4.31 p.m.

My Lords, I understand that at the request of my right honourable friend the Minister for Mines Lord Addison has postponed the Motion he has on the Paper for to-morrow relating to the Coal Commission. As that will not now appear on the Order Paper to-morrow, we have no business down for to-morrow. On the other hand I am not in a position at this moment to say whether the Government will be making a statement to-morrow or on Thursday. I think there is likely to be one on the one day or the other, but I am not yet sure which. Therefore, although we have nothing on the Paper for to-morrow, none the less I suggest that we should meet at four o'clock in case there is a statement to be made.

House adjourned at twenty-eight minutes before five o'clock.

From Minutes Of April 30

Monmouthshire And Southwales Employers' Mutualindemnity Society, Limitedbill Hl

Committed: The Committee to be proposed by the Committee of Selection.

Birmingham Corporation Bill

Brought from the Commons; read 1a , and referred to the Examiners.

Land Drainage Grants (Postponement Of Prescribeddate) Order, 1940

Order, dated 11th April, 1940, made by the Minister of Agriculture and Fisheries under Section 15(3) of the Agriculture Act, 1937:

Laid before the House (pursuant to Act) for affirmative Resolution and referred to the Special Orders Committee.

Land Fertility Scheme (Postponement Of Prescribeddate) Order, 1940

Order, dated 11th April, 1940, made by the Minister of Agriculture and Fisheries and the Secretaries of State respectively concerned with Agriculture in Scotland and in Northern Ireland acting jointly, under Section 1(3) of the Agriculture Act, 1937:

Laid before the House (pursuant to Act) for affirmative Resolution and referred to the Special orders Committee.