Jackson v National Coal Board

[1955] 1 All ER 145

Categories:        INDUSTRY        

Court:        LEEDS ASSIZES        

Lord(s):        HALLETT J        

Hearing Date(s):        23, 24, 25, 29 NOVEMBER 1954        

Coal Mining – Statutory duty – Breach – Security of travelling road and working place – Fall of roof occasioned by an explosion of a most abnormal character – Whether roof made secure – Whether reasonably practicable to avoid breach – Coal Mines Act, 1911 (1 & 2 Geo 5 c 50), s 49, s 102(8).

A shot-firer employed by the defendants in their coal mine was killed by a fall of roof occasioned by an explosion of a most abnormal character. He was carrying in a hessian bag, which was normally used for holding stemming materials, cartridges and detonators which by the Coal Mines (Explosives) Order, 1951, he ought to have carried in his powder canister and detonator case respectively. He put the bag at the foot of the coal face within easy reach of the hole which he was stemming and, when he fired a shot in the hole, the contents of the bag also exploded. The abnormal explosion displaced props which were supporting the roof. In an action by the widow of the deceased shot-firer against the defendants for damages for breach of statutory duty, imposed by s 49 of the Coal Mines Act, 1911, to make secure the roof,

Held – (i) in the circumstances the fall of the roof was due to a course of conduct by the deceased against which the defendants could not have been expected to provide and, accordingly, a breach of their duty under s 49 of the Coal Mines Act, 1911, to make secure the roof was not established.

Dictum of Lord Tucker in Marshall v Gotham Co Ltd ([1954] 1 All ER at p 943) applied.

(ii) even if the defendants had been in breach of their duty under s 49 it was not practicable to make the roof secure against such an explosion as had caused it to fall in the present case, and in the circumstances the defendants would be protected from liability under s 102(8) of the Act of 1911.

Notes

The Coal Mines Act, 1911, s 49 and s 102(8) are repealed as from a day to be appointed by the Mines and Quarries Act, 1954, s 189 and Sch 5, and are replaced with certain modifications by s 48 (1) and s 157 thereof.

As to the Civil Liability of Owner of Mine for Breach of Statutory Duty, see 22 Halsbury’s Laws (2nd Edn) 824, para 689; and for cases on the subject, see Supp to 34 Digest 744, 1189.

For the Coal Mines Act, 1911, s 49 and s 102(8), see 16 Halsbury’s Statutes (2nd Edn) 133, 162.

For the Coal Mines (Explosive) Order, 1951 (SI 1951 No 1675), see 14 Halsbury’s Statutory Instruments 103.

Cases referred to in judgment

Marshall v Gotham Co Ltd [1954] 1 All ER 937, [1954] AC 360.

Edwards v National Coal Board [1949] 1 All ER 743, [1949] 1 KB 704, 2nd Digest Supp.

Burns v Joseph Terry & Sons Ltd [1950] 2 All ER 987, [1951] 1 KB 454, 114 JP 613, 2nd Digest Supp.

Hayes v National Coal Board (Leeds Spring Assize, 29 April 1952), Unreported.

Walker v Bletchley Flettons Ltd [1937] 1 All ER 170, Digest Supp.

Smithwick v National Coal Board [1950] 2 KB 335, 2nd Digest Supp.

Action

The plaintiff, the widow and administratrix of Lawrence Jackson deceased, claimed damages under the Fatal Accidents Acts, 1846 to 1908, and the Law Reform (Miscellaneous Provisions) Act, 1934, s 2, against the defendants who were the owners of Crigglestone Colliery near Wakefield and employed the

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deceased as a shot-firer, in respect of his death on 16 December 1952, when he was killed by being buried under a fall of roof. The plaintiff alleged (i) breach of statutory duty by the defendants under s 49 of the Coal Mines Act, 1911, by failing to make secure the roof of a travelling road and working place and (ii) negligence at common law. The defendants, in addition to denying breach of statutory duty and negligence, relied in the alternative on s 102(8) of the Act alleging that it was not reasonably practicable to avoid or prevent such breach and that the accident was caused solely, or was contributed to, by the breach of statutory duty and negligence of the deceased.

The coal in the colliery was being worked by the “long wall advancing” method. The first step was to undercut the coal by means of a cutter machine to a depth of five feet six inches from the face and a thickness of five inches, thus leaving the coal above the undercut unsupported. At an appropriate time shot-holes were drilled in the face reaching to the same depth as the undercut. After the cutter and its crew had gone by the shot-firer charged a shot-hole, procedure in respect of charging and firing being subject to the Coal Mines (Explosives) Order, 1951 (SI 1951 No 1675). The charge consisted of two cartridges. The outer cartridge was primed with a detonator and the shot-firer then stemmed the hole with stemming material which he carried in a hessian bag. The shot-firer had a battery which was joined by a cable to the detonator leads and supplied the current to explode the detonator which in turn exploded the cartridges. The effect of a shot was to cause the coal to fall down into the undercut. A shot fired in this way could not normally cause a fall of roof running along the face, as the roof was supported by bars and props.

The deceased acted in contravention of a number of the provisions of the order. These were reg 20(2) which forbids shot-firers to charge any shot-hole until the shot is about to be fired; reg 7(3) which provides that no cartridge shall be taken from the canister until it is required immediately for charging a shot-hole; reg 17(2) which provides that no detonator shall be removed from the detonator case when not required for immediate use; reg 25(8) which prescribes that a cable not less than twenty yards in length shall be used when firing a single shot; reg 28(1) which requires the shot-firer to determine the danger zone likely to be created; and reg 28(2) which requires the shot-firer to ensure that all persons have withdrawn from the danger zone or have taken proper shelter and to take proper shelter himself. The court found as a fact that the deceased was carrying in his hessian stemming bag cartridges and detonators which he ought to have carried in his powder canister and detonator case respectively; that he put his stemming bag down in the normal place at the foot of the face within easy reach of the hole which he was stemming; that he fired the adjacent hole much too near to himself and the cutter crew and that either some material projected as a result of the shot struck the hessian bag and so caused the explosion which produced all the otherwise inexplicable phenomena, viz, the displacing of the bars and props supporting the roof and the fall of the roof, or possibly that the contents of the hessian bag being so close to the detonation in the shot-hole were unintentionally set off by sympathetic action.

The plaintiff contended that the mere fact that the roof fell, which was not disputed, established a breach by the defendants of their duty under s 49 of the Coal Mines Act, 1911; that the fall was due to the removal of a middle prop of the roof too soon after the cutting had been done and before the roof had time to settle (the court rejected this contention), and that the fall was caused by firing shots at the coal face too soon after the cutter had passed.

The defendants contended that the cause of the fall was the course of conduct of the shot-firer described above and that the conduct was in many respects illegal and obviously unwise and was beyond anything against which they could reasonably be expected to provide.

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G R Hinchcliffe QC and R Withers Payne for the plaintiff.

G Veale QC and A B Boyle for the defendants.

Cur adv vult

29 November 1954. The following judgment was delivered.

HALLETT J after considering the evidence and stating findings of fact as summarised above continued: I find that the fall of roof was occasioned solely by an explosion of a most abnormal character; that the explosion was caused in a most abnormal manner and by reason of numerous breaches on the part of the deceased, not only of regulations, but of obvious precautions for the safety of himself and others.

I must now consider the law. The plaintiff primarily relies on the provisions of s 49 of the Coal Mines Act, 1911. That section reads as follows:

“The roof and sides of every travelling road and working place shall be made secure … ”

and the section goes on to prohibit anyone from travelling along a road, except in certain circumstances, which is not so made secure. That requirement, however, has to be read in conjunction with s 102(8) of the same Act, which is as follows:

“The owner of a mine shall not be liable to an action for damages as for breach of statutory duty in respect of any contravention of or non-compliance with any of the provisions of this Act if it is shown that it was not reasonably practicable to avoid or prevent the breach.”

As I shall have occasion to refer to Marshall v Gotham Co Ltd it might be as well to mention that the statutory provisions under consideration were different. Regulation 7(3) of the Metalliferous Mines General Regulations, 1938 (SR & O 1938 No 630), requires that the roof and sides of every travelling road, outlet and working place shall be made secure; but it was held by their Lordships in Marshall v Gotham Co Ltd that the regulation must be read in conjunction with and qualified by the prefatory provisions contained in s 23 of the Metalliferous Mines Regulation Act, 1872, that

“The following general rules shall, so far as may be reasonably practicable, be observed … ”

Although I am not sure that all their Lordships in the House of Lords took that view it may be, therefore, that the duty in the case of a metalliferous mine is a qualified duty.

However that may be, under s 49 of the Coal Mines Act, 1911, there is no question whatever that the duty is an absolute duty. Two questions then arise. First, was the roof here made secure? Secondly, if it was not made secure and there was accordingly a breach of s 49, are the defendants protected from liability in damages in this action by reason of the provisions of s 102(8)? It is quite obvious and not disputed that, if the roof or side of a travelling road or working place in a coal mine falls, there is very strong, and, indeed, save in most exceptional circumstances, conclusive, evidence that the roof or side has not been made secure as required by s 49. Counsel for the defendants, however, has contended that in the exceptional circumstances of this case the plaintiff has failed to prove that the roof was not made secure. He says that a roof is secure if it falls solely by reason of such an abnormal and extraneous cause as the evidence discloses in this case. If, contrary to his contention, it be held by me that in this case there was a breach of the duty imposed by s 49, counsel further contends that the defendants are entitled to escape liability by reason of the provisions of s 102(8). He argues that no system of support which it would be reasonably practicable to adopt would make a roof secure against such an event as the evidence discloses to have caused the fall of the roof in the present case. If he be right in this second contention, which depends on the same view as to the cause of the fall, his first contention is superfluous; but he has pressed

Page 148 of [1955] 1 All ER 145

me to consider and deal with both contentions and I think it right to do so. The success of either contention is mainly dependent on my view of what caused the roof to fall, and it is partly for that reason that I have reviewed the facts and stated my findings about them before I dealt with the law. Unless the cause of the fall was that alleged by the defendants, it is to my mind quite clear that both contentions must fail and that, subject to the question of contributory negligence, the plaintiff must succeed. A fall due to removing props too soon is clearly foreseeable and it is clearly practicable to defer removing props until the proper time.

By way of authority on the questions of law I have been referred to four cases only, namely; Edwards v National Coal Board; Burns v Joseph Terry & Sons Ltd; Hayes v National Coal Board; and Marshall v Gotham Co Ltd.

As regards the first contention of counsel for the defendants, I can derive no assistance from Edwards v National Coal Board. In that case the fall was admittedly due to what is called a “glassy slant”, which is a well known kind of latent geological defect which had actually been observed in another place or places in the same roadway. Accordingly, it was not contended that the side had been made secure and, indeed, it was not alleged that anything whatever had been done to make it secure. Observations will be found in the judgments, for instance in the judgment of Singleton LJ ([1949] 1 All ER at p 748), which make that quite plain. The defendants relied solely on s 102(8). There is one passage perhaps in the judgment of Tucker LJ which is of some slight interest ([1949] 1 All ER at p 746):

“On the other hand, counsel for the plaintiff argues that nothing short of some external interference by some unauthorised third person, or some occurrence which could not reasonably be anticipated, can excuse the breach of the absolute duty.”

Tucker LJ however, expressed the view that the argument for the plaintiff limited unduly the operation of s 102(8). He and the other members of the court had no occasion to consider the point which arises here with regard to whether the roof had been made secure.

Hayes v National Coal Board is a decision of my own, and of the four cases I have mentioned certainly is the one most in point. Before last week when my attention was drawn to it and I was supplied with a transcript of my judgment, I had completely forgotten all about it. Because I came to the case after two and a half years with a completely fresh mind, I found it quite easy to re-consider with an unbiased mind, and I certainly should have had no hesitation in expressing the view that I was wrong two and a half years ago if that was the conclusion to which I had now come; but, reviewing my judgment in that case in cold blood, I still think it is right, although I am not sure that some of my reasoning may not have been too widely expressed. In that case a stretcher party was taking out of the pit a very badly injured man when they found their passage obstructed by a tub standing on the rails. Obviously it was undesirable for them to jolt the stretcher and desirable for them to handle it in as smooth a manner as possible. Accordingly, three out of four men who were following the stretcher to act as relief stretcher bearers set to work to move the tub out of the way, one of those men being the plaintiff Hayes. They turned the tub on its side, and then because it was not lying parallel to the rails they wanted to shift it a little more, which was rather difficult because it was a heavy thing. One of them pulled and the other two pushed, and in doing that, quite accidentally of course, they knocked the tub twice against one of the props that held up the bars which held up the roof. As a result of knocking the tub against the prop, the prop was pushed out of the vertical and a small fall of matter took place, which injured the plaintiff. It was on those facts that I had to decide the two contentions which are also raised in the present case. I held rightly or wrongly that, although

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there had been a fall in the circumstances which I have described, it did not show a failure on the part of the defendants to make the roof of that particular road secure.

I was influenced in so finding by, inter alia, the case of Burns v Joseph Terry & Sons Ltd. In that case the question was whether transmission machinery was securely fenced within s 13(1) of the Factories Act, 1937. The trial judge, Hilbery J had applied to the decision of that question what can be called for short the test of “foreseeability”. It was not disputed in that case that in deciding whether machinery is dangerous for the purposes of s 14(1) of the Factories Act, 1937, the foreseeability test is a proper test, and it was pointed out that in Walker v Bletchley Flettons Ltd Du Parcq J had applied that test both to the question of whether the machinery was dangerous and to the question of whether it was securely fenced. Hilbery J had referred to a note in Redgrave’s Factories, Truck And Shops Acts, which still appears in the 18th Edn at p 34, as being correct. Somervell LJ adopted the view that the foreseeability test applied both to the question whether the machine was dangerous and also to the question whether it was securely fenced, and Cohen LJ agreed with him, delivering no separate judgment. Denning LJ on the other hand, disagreed as regards applying the foreseeability test to the words “securely fenced”, but he did not disagree as regards applying that test to the word “dangerous” ([1950] 2 All ER at p 993):

“It is apparent, therefore, that in cases under s. 14, unless s. 15 applies, the only inquiries are: (i) Is the machine dangerous?, and (ii) If so, is it securely fenced? The answer to the first question depends on foreseeability, and the courts apply the test laid down by DU PARCQ, J, in Walker v. Bletchley Flettons Ltd, recently approved by this court in Smithwick v. National Coal Board”

which was also a machinery case. In the present case the word “dangerous” does not appear, but it seems to me that as regards the roof and sides of a travelling road or working place in a pit the word “secure” must mean sub-stantially the same as “not dangerous by reason of liability to fall”. A ceiling, for instance, is, I think, secure in ordinary parlance, though an earthquake or a bomb, or even a bath overflowing in a bathroom overhead, may bring it down.

Turning now to the case of Marshall v Gotham Co Ltd, there again the cause of the fall was not in doubt. It was a latent geological defect known as “slickenside,” which is a well known kind of geological defect and a known danger; see, for instance, what is said by Lord Reid ([1954] 1 All ER at p 941). Accordingly, it was not contended for the defendants in that case that the roof had been made secure (see per Lord Reid, ibid, at p 940 and per Lord Keith Of Avonholme, ibid, at p 945):

“It is obvious that the roof of the working place at which the deceased man was working was not secure … ”

Thus the only question for decision was whether in the circumstances disclosed by the evidence the defendants were protected by the proviso, which, as I have said, corresponds in substance, though not in form, to what is contained here in s 102(8). Lord Tucker, however, made in Marshall’s case an observation which is very greatly relied on here by counsel for the defendants. That observation, I think, was not necessary for the decision of the case; and, since the fall in the present case was not caused on the one hand by an earthquake or an atom bomb or on the other hand by a geological hazard such as a glassy slant or slickenside, Lord Tucker’s observation does not directly help me to decide on counsel’s first contention that this roof was secure. Lord Tucker said ([1954] 1 All ER at p 943):

“I agree that the word ‘secure’ does not involve security from the

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effects of earthquake or an atom bomb, but I think it must include security from all the known geological hazards inherent in mining operations.”

Lord Tucker clearly thought that the cause there fell within the category of “known geological hazards inherent in mining operations”. What I have to decide is whether the cause here falls within the first category of earthquake or atom bombs or within the second category of known geological hazards. I can find no further assistance on this point and I must therefore make up my own mind without the help of higher authority. Having held on the evidence that the cause of the fall was that alleged by the defendantsa, I have come to the conclusion that the fall does not in the circumstances of this case establish a failure to make the roof secure as required by s 49.

I think I have probably already disclosed, with perhaps unwise candour, that I felt a certain temptation to burke deciding that question having regard to what I am now going to decide with regard to the second contention, because, if I be wrong in what I have held as regards the first contention, it is necessary for me to decide whether the defendants have shown that it was not reasonably practicable to avoid or prevent the breach. Having regard to the grounds on which my own decision in Edwards v National Coal Board was reversed, I have been particularly careful to consider whether there is sufficient evidence, if accepted, to justify me in holding that it was not reasonably practicable to make the roof secure against that which according to the defendants’ case caused it to fall, namely, the displacement of a prop or props by an explosion such as could never have been contemplated, in my judgment, as even a possibility. It might perhaps have been better if some witness had been questioned on that aspect of the matter, but it seems to me to be obvious without evidence that it was not reasonably practicable to set props supporting bars under a roof so that they would remain undisplaced by such an explosion. The result is that, in my judgment and my view of the law, the decision of this case turns on whether I accept the defendants’ case as to what caused the fall. I have already stated that I do accept that case and I have indicated to some extent the reasons why I do so. Therefore, I rule that there was no breach of the defendants’ duty to make the roof secure, but even if there was such a breach it was not reasonably practicable to avoid or prevent it.

Judgment for the defendants.

Solicitors: Raley & Pratt, Barnsley (for the plaintiff); C M H Glover, Doncaster (for the defendants).

G M Smailes Esq   Barrister.

Petherick v Buckland

[1955] 1 All ER 151

Categories:        INSURANCE        

Court:        QUEEN’S BENCH DIVISION        

Lord(s):        LORD GODDARD CJ, CASSELS AND DEVLIN JJ        

Hearing Date(s):        13, 14 DECEMBER 1954        

Insurance – Motor insurance – Disqualification for holding licence – Power to limit disqualification to driving of vehicle of the same class or description as vehicle in relation to which offence committed – Disqualification limited to “five hundredweight vehicles” – No such vehicle mentioned in the Act – Road Traffic Act, 1930 (20 & 21 Geo 5 c 43), s 2(1), s 6(1), proviso.

The respondent was convicted before a court of summary jurisdiction of offences against the Road Traffic Act, 1930, s 9(4) and s 35(1), in relation to a motor vehicle which the justices described as “a delivery van of a size or capacity sometimes known as a ‘five hundredweight’”. Purporting to act under s 6(1) of the Act, which empowers the court to impose disqualification and to limit it to the driving of a motor vehicle of the same “class or description” as the vehicle in relation to which the offence was committed, the justices disqualified the respondent for holding or obtaining a licence for driving “five hundredweight vehicles” for twelve months. The Act contains no definition of “description” and creates no class of motor vehicles described as “five hundredweight”. On an appeal by the prosecution from the decision of the justices on the ground that there was no such class or description of vehicle as a five hundredweight vehicle,

Held – as, although the Act of 1930 contained references to descriptions of vehicles, it did not define what was meant by that term, the justices were entitled to define their own description of a motor vehicle, and, having described the vehicle in relation to which the respondent had committed the offences as a five hundredweight vehicle, the justices were entitled, under the proviso to s 6(1), to limit the disqualification to vehicles of that description.

Per Lord Goddard CJ: in future when justices are limiting the disqualification under the terms of the provisio to s 6(1), they should limit it to vehicles which are dealt with under a particular description in Sch 1 to the Act of 1930 or in the regulations (see p 153, letter g, post).

Appeal dismissed.

Notes

For the Road Traffic Act, 1930, s 2, s 6, s 9, s 10, s 35, and Sch 1, see 24 Halsbury’s Statutes (2nd Edn.) 572, 579, 583, 584, 602, and 664.

Cases referred to in judgment

Whittall v Kirby [1946] 2 All ER 552, [1947] KB 194, [1947] LJR 234, 175 LT 449, 111 JP 1, 2nd Digest Supp.

Case Stated by Essex justices

On 22 March 1954, at a court of summary jurisdiction sitting at Grays, the respondent was charged with permitting a youth under the age of seventeen years to drive a Morris goods van on 10 March 1954, contrary to s 9 of the Road Traffic Act, 1930, and with permitting the youth to use the van on the road without there being in force in relation to the user of the van a policy of insurance in respect of third-party risks, contrary to s 35(1) of the Act.

The information was heard on 5 May 1954. The justices found that the van in question was a delivery van of a size or capacity sometimes known as a “five hundredweight”. The respondent pleaded guilty to the offence under s 35 of the Act and was convicted of the offence under s 9. The justices were of the opinion that there were no special reasons for not ordering the respondent to be disqualified for holding or obtaining a driving licence but they decided that, having regard to the fact that the respondent earned his livelihood by driving motor vehicles and having regard to the provisions of s 6 of the Road Traffic Act, 1930, the disqualification could properly be limited to the driving of vans of a size and capacity of five hundredweight. Accordingly, they imposed a

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fine on the respondent and ordered him to be disqualified for holding or obtaining a licence for driving five hundred weight vehicles for twelve months. The appellant having appealed, the question for the opinion of the High Court was whether “five hundredweight vehicles” was a “class or description” of vehicles within the meaning of s 6 of the Act of 1930.

F H Lawton for the appellant.

The respondent did not appear.

Rodger Winn as amicus curiae.

14 December 1954. The following judgments were delivered.

LORD GODDARD CJ. This is a Case stated by justices for the county of Essex before whom the respondent was charged with certain offences in connection with a motor vehicle. It is not necessary to go into the particular offences because the matter we have to decide is entirely a matter of the provisions as to disqualification of a person who has committed an offence which carries with it the penalty of disqualification.

The justices said that the vehicle with which they were dealing was “a delivery van of a size or capacity sometimes known as a ‘five hundredweight’”. The case might not be so difficult if they had said that it was a vehicle well-known in the motor trade or something of that sort, but what they have said is that it is “sometimes known as a ‘five hundredweight’”. They decided that there was no special ground for not disqualifying the respondent, but that “having regard to the fact that the respondent earned his livelihood by driving motor vehicles“—which we have tried to point out ever since Whittall v Kirby is an immaterial matter—

“and having regard to the provisions of s. 6 of the Road Traffic Act, 1930, the disqualification could properly be limited to the driving of vans of a size and capacity of five hundredweight”.

They, therefore, disqualified him from obtaining a driving licence “for driving five hundredweight vehicles”.

The point raised in the case is that counsel for the appellant, the chief constable of Essex, says that there is no such description or class of vehicle as a “five hundredweight vehicle”. It is curious that this point which might have arisen ever since the Road Traffic Act, 1930, came into force has never arisen until the case was before us on the last occasion when this court was sitting. We thought that the case raised such a difficult and novel point that we should ask for the assistance of the Minister of Transport as the respondent was not represented, and counsel has attended on behalf of the Minister to assist the court as amicus curiae. It is not counsel’s fault, if I may say so with all due respect to him, that his argument has left the matter as difficult as it was before. It is an extraordinarily difficult position, and, as there is a Road Traffic Bill which has already been introduced into Parliament and had its first reading recently, is a position which the Minister ought to cause to be made clear.

The position is this. The Road Traffic Act, 1930, Part 1, which deals with the “Regulation of Motor Vehicles”, starts with the sub-heading of “Classification of Motor Vehicles”, and s 2(1) reads: “Motor vehicles shall, for the purposes of this Act and the regulations, be divided into the following classes … ” I pause there to point out that the words used are not “for the purposes of this Part of the Act,” but “for the purposes of this Act and the regulations”. The sub-section then proceeds to give the classes: heavy locomotives, light locomotives, motor tractors, heavy motor cars, motor cars—quite a long description of those—motor cycles and invalid carriages. Then, in almost every other part of the Act, one finds that, instead of the word “class”, the phrase “class or description” is used. The particular section with which we are concerned is s 6, which deals with this disqualification, and the proviso to s 6(1) reads:

“Provided that, if the court thinks fit, any disqualification imposed under this section may be limited to the driving of a motor vehicle of the

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same class or description as the vehicle in relation to which the offence was committed.”

If the vehicle were of the same class, no difficulty would arise, but here the words “class or description” are used, and there is nothing in the Act which states what “description” means or who is to prescribe any particular description or how vehicles of a class are to be divided so far as descriptions are concerned; the Act is entirely silent about it. The words “class or description” are used in a great many sections, but another curious thing is that in Sch 1 to the Act, which, of course, is part of the Act, and which deals with limits of speed, one finds that the limits of speed vary according to the class of vehicle. There are vehicles referred to in the schedule which do not fall exactly within any of the classes laid down in s 2 but may be said to be, I suppose, classes or descriptions. Section 10(1) reads:

“It shall not be lawful for any person to drive a motor vehicle of any class or description on a road at a speed greater than the speed specified in Sch. 1 to this Act … ”

Then, when one turns to Sch 1, one does not find “class or description of vehicle”, one finds “class of vehicle”.

At one time it seemed, at any rate to some members of the court, that the words “class or description” might be merely tautologous. We were told by counsel that such a construction terrified the Minister, because, he said, if that were so, a great many of the regulations would be completely ultra vires. They may be; I do not know. Some day we may have to decide that point, because the regulations deal with descriptions of vehicles and there is nothing in the Act which, apparently, enables the Minister to prescribe the different descriptions. Section 2, as I have already said, deals with classes. That is the division of motor vehicles in the Act, but the Minister has, throughout, apparently divided motor vehicles into different descriptions and one keeps on finding in the Act the expression “class or description”. Somebody must be able to define “description” or, at any rate, to say whether a vehicle is of a particular description or not, and, if the Minister can do it, I cannot see any reason why the justices cannot do it. The Minister, apparently, makes his own descriptions. He has to do certain things to carry out some of the sections which refer to “class or description”; so have the justices, and, if the justices, therefore, like to say that a man shall not drive a car of a particular description, we cannot say in law that they cannot do it. But I do say that it is inconvenient that they should do it in this way. The court thinks that, in this particular case, they cannot interfere with the disqualification which the justices have imposed. We do, however, strongly recommend, and, indeed, I think that we should direct the justices in future, that, where they are limiting the disqualification under the terms of the proviso to s 6(1), they should limit it to vehicles which are dealt with under a particular class in the Act or under a particular description in the regulations, for example, goods vehicles, passenger vehicles, heavy vehicles, light vehicles, and so forth. The only way in which the limited disqualification can work satisfactorily is if the justices will take one of the descriptions which is to be found either in Sch 1 to the Act or in the regulationsa and say “We apply the disqualification to that vehicle or class of vehicle and to no other”. In this extremely difficult case we are not blaming the justices in any way because the case has given the court very great difficulty. We uphold the disqualification in this case, but we do say that the justices should use another description in future.

CASSELS J. I agree.

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DEVLIN J. I also agree and I would only add this. The reason for the direction which my Lord has indicated and the justification for it seems to me to be this. If justices impose their own description, as we have held that under the words of the Act they are entitled to do, that description would, obviously, have to be most carefully defined, because any person driving a vehicle of that character commits an offence as a result of which he must be sent to prison unless there are special circumstances. Manifestly, therefore, any description of the vehicle would have to be most carefully defined and, therefore, by far the most convenient course is to take one of those descriptions, of which there are plenty in the Act or in the regulations, because those descriptions carry their own description and then there can be no difficulty about the enforcement of the justices’ order.

Appeal dismissed.

Solicitors: Sharpe, Pritchard & Co (for the appellant); Treasury Solicitor.

A P Pringle Esq   Barrister.

W L Thompson Ltd v R Robinson (Gunmakers) Ltd

[1955] 1 All ER 154

Categories:        CONTRACT        

Court:        CHANCERY DIVISION        

Lord(s):        UPJOHN J        

Hearing Date(s):        8, 9, 10, 13, 14 DECEMBER 1954        

Contract – Breach – Damages – Measure – Sale of motor car – Repudiation by purchaser – Vendor returning motor car to suppliers – “Available market” – Sale of Goods Act, 1893(56 & 57 Vict. c 71), s 50(3).

On 4 March 1954, the defendants agreed in writing with the plaintiffs, who were motor car suppliers, to purchase from them a Standard Vanguard motor car. On 5 March 1954, the defendants intimated to the plaintiffs that they were not prepared to accept delivery of the motor car. The plaintiffs returned the motor car to their suppliers, who did not seek compensation, and the plaintiffs now claimed damages for breach of the agreement. The price at which a Standard Vanguard motor car could be sold by suppliers throughout the country was fixed by the manufacturers and the amount of profit which the plaintiffs would have realised on the sale of the motor car was £61 1s 9d. At the time of the agreement, there was not such a demand in the locality of the plaintiffs as would absorb all Standard Vanguard motor cars available there for sale, but it was not shown that there was no available market in the broader sense which regarded the trade and marketing organisation for selling such motor cars throughout the whole country.

Held – The plaintiffs were entitled to be compensated for the loss of their bargain to the extent of the profit which they would have realised, viz, £61 1s 9d, because the plaintiffs had, by reason of the breach of contract, sold one motor car less than they otherwise would have sold; and even if, in determining whether there was an available market within the meaning of s 50(3) of the Sale of Goods Act, 1893, for the car, the whole of the trade and marketing organisation must be taken into consideration, yet in the present case it would not be just to apply s 50(3) and accordingly that enactment did not afford to the defendants a defence to the plaintiffs’ claim.

Re Vic Mill Ltd ([1913] 1 Ch 465) and dictum of James LJ in Dunkirk Colliery Co v Lever (1878) (9 ChD at p 24) applied.

Notes

As to Damages for Non-acceptance of Goods agreed to be sold, see 29 Halsbury’s Laws (2nd Edn) 191, para 256; and for cases on the subject, see 39 Digest 657, 658, 2501, 2502.

As to What is an Available Market for Goods Sold, see 29 Halsbury’s Laws (2nd Edn) 194, para 260, note (m); and for cases on the subject, see 39 Digest 674, 2600 et seq.

For the Sale of Goods Act, 1893, s 50(3), see 22 Halsbury’s Statutes (2nd Edn) 1013.

Page 155 of [1955] 1 All ER 154

Cases referred to in judgment

British Westinghouse Electric & Manufacturing Co Ltd v Underground Electric Rys Co of London Ltd [1912] AC 673, 81 LJKB 1132, 107 LT 325, 39 Digest 480, 1025.

Re Vic Mill Ltd [1913] 1 Ch 465, 82 LJCh 251, 108 LT 444, 39 Digest 658, 2502.

Cameron v Campbell & Worthington Ltd [1930] SASR 402, Digest Supp.

Mason & Risch Ltd v Christner (1920), 54 DLR 653, 48 OLR 8.

Brown v Buck [1934] 2 WWR 561, 4 DLR 446, 42 Man LR 336, Digest Supp.

Stewart v Hansen (1923), 62 Utah R 281, 218 Pacific R 959, 4 American LR 340.

Dunkirk Colliery Co v Lever (1878), 9 ChD 20, subsequent proceedings, (1879), 41 LT 633, on appeal HL, sub nom Ellis Lever & Co v Dunkirk Colliery Co (1880), 43 LT 706, 17 Digest (Repl) 108, 225.

Charrington & Co Ltd v Wooder [1914] AC 71, 83 LJKB 220, 110 LT 548, 39 Digest 408, 430.

Marshall & Co v Nicoll & Son, 1919 SC 244, affd HL, 1919 SC (HL) 129, 56 Sc LR 615, 39 Digest 674, 2600.

Action

The plaintiffs, who were dealers in and suppliers of motor cars, claimed damages for breach of contract by the defendants to purchase a new Standard Vanguard motor car.

G T Aldous and D C Johnson-Davies for the plaintiffs.

J F F Platts-Mills for the defendants.

14 December 1954. The following judgment was delivered.

UPJOHN J. This action raises a question of some importance to the motor trade as to the true measure of damages when the buyer of a motor car, in this case a Standard Vanguard, refuses to complete his bargain and take delivery. The plaintiffs, W L Thompson Ltd are motor agents and dealers, ie, their business is that of dealing in new and second-hand cars, and they carry on business in Hull. The defendants are a company, R Robinson (Gunmakers), Ltd who as their name would imply, are manufacturers and suppliers of guns and have no interest in the motor trade whatever, but the managing director of the defendants required a motor car for the business of his company, and it is common ground that on 4 March 1954, the managing director on behalf of the defendants signed an order for the purchase of this Vanguard, an old car being taken in part exchange. On the face of it that order appeared to constitute a contract, but it is said on behalf of the defendants that there was an oral collateral arrangement or agreement whereby the contract was to be conditional in this sense, that if a Ford Zephyr motor car, which had been ordered by the defendants from another dealer, was delivered before the Vanguard, then the contract for the supply of the Vanguard was to go off. However, when the managing director of the defendants gave evidence, it appeared to be doubtful whether he would establish on his own evidence that this collateral oral contract, if proved, in fact came into operation to put an end to the written contract. Therefore, the defence to this case on the facts seemed to be in some danger. In the circumstances, which I shall mention in a moment, his cross-examination was not completed, but I desire to say that, so far as it went, he seemed a perfectly honest and candid witness. On the other hand, the plaintiffs realised that their claim, which is for loss of profit on the sale of the Vanguard, was for only £61, and but for the importance which the motor trade attaches to the point, of course, the matter would have been litigated in the county court. However, it has been brought in the High Court, and I understand that, in fact, the British Motor Trade Association, which is an association of all manufacturers and motor car dealers in the country, is assisting with the prosecution of this case.

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The point is whether the plaintiffs are entitled to loss of profit on the transaction or whether damages are nominal. The defendants may, I think, be forgiven for a certain lack of enthusiasm for the point. Their representatives have sat in court for some time listening to a good deal of evidence about conditions in the motor car industry and trade generally, and they have listened to elaborate and (to me) interesting arguments, and they have heard cited reports of cases, not only in these courts but in courts in Scotland, Canada, Australia and the United States of America. To them the only point of interest is not the law; not that if they lose they will have to pay a trivial sum of £61, but that they will if they lose have to pay the whole costs of this action. That is the real point from the point of view of the defendants.

The plaintiffs, it is fair to say, recognise that, and with my full approval an arrangement has been made which is as follows: the defendants, for the purposes of this action, admit that there was a binding written agreement for the purchase of the motor car in question. It is conceded that it was broken the day after it was signed, when the defendants intimated that they were not prepared to accept delivery of the Vanguard motor car. It is also admitted for the purposes of the action that in the East Riding of Yorkshire, the transaction taking place actually in Hull, at the time the contract of sale took place there was no shortage of Vanguard models to meet all immediate demands, at any rate in the locality. In return for those concessions the plaintiffs are prepared to indemnify the defendants against their costs of the action.

In those circumstances I only need add a very few facts. It was proved first that, in common with other makes of motor car, dealers are only permitted to sell new Vanguard cars at a price fixed from time to time by the manufacturers, the Standard Motor Car Company. If a dealer breaks that rule he is soon put out of business. The dealer’s profit on the transaction is also fixed. He would have received in this case a commission of ten per cent on the list price of the Vanguard and accessories such as wireless and heaters supplied therewith. In this case, the amount of profit he would have made to be exact, I am told, is £61 1s 9d.

When the defendants repudiated the transaction on 5 March the plaintiffs mitigated their damages by rescinding the contract with their suppliers. Their supplier was a company called George Thompson Ltd who were the main distributors for the East Riding, and, as the name implies, they are closely associated with the plaintiffs, but that, I think, is irrelevant. At all events, George Thompson Ltd took back the Vanguard car which they had already supplied to the plaintiffs, free of any claim for damages, and later sold the car on 5 May 1954, to another purchaser. It is also common ground that, at this stage, the plaintiffs lost a sale in this sense, that if another purchaser had come into the plaintiffs’ premises there was available for another purchaser a Vanguard car for immediate delivery; so that the effect as a fact on the plaintiffs was that they lost their profit on a sale: they sold one Vanguard less than they would otherwise have done. The plaintiffs say that the true measure of damages in those circumstances is no more, no less, than their loss of profit, £61. The defendants say: “No, the loss is nominal, for you could have sold the car to another customer or you could do what, in fact, you did do, which was to get your suppliers to release you, and you have suffered no damage.”

The law is not really in doubt. It is set out in the Sale of Goods Act, 1893, s 50, which is in these terms:

“(1) Where the buyer wrongfully neglects or refuses to accept and pay for the goods, the seller may maintain an action against him for damages for non-acceptance. (2) The measure of damages is the estimated loss directly and naturally resulting, in the ordinary course of events, from the buyer’s breach of contract. (3) Where there is an available market for the goods in question the measure of damages is prima facie to be ascertained by the difference between the contract price and the market or current price

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at the time or times when the goods ought to have been accepted, or, if no time was fixed for acceptance, then at the time of the refusal to accept.”

That was declaratory of the existing law and the general principle which has been observed in all cases I take conveniently from the speech of Viscount Haldane LC in British Westinghouse Electric & Manufacturing Co Ltd v Underground Electric Rys Co of London Ltd. Viscount Haldane LC said ([1912] AC at p 689):

“Subject to these observations I think that there are certain broad principles which are quite well settled. The first is that, as far as possible, he who has proved a breach of a bargain to supply what he contracted to get is to be placed, as far as money can do it, in as good a situation as if the contract had been performed.”

That is the general rule.

Apart altogether from authority and statute, it would seem to me on the facts to be quite plain that the plaintiffs’ loss in this case is the loss of their bargain. They have sold one Vanguard less than they otherwise would. The plaintiffs, as the defendants must have known, are in business as dealers in motor cars and make their profit in buying and selling motor cars, and what they have lost is their profit on the sale of this Vanguard. There is no authority exactly in point in this country, although it seems to me that the principle to be applied is a clear one. It is to be found in Re Vic Mill Ltd, in which the supplier was to supply certain machines which he had to make and they were to be made to the particular specification of the purchaser although they were of a type generally in common use. It was not, as the present case is, a sale by a motor dealer of a standardised product. The purchaser repudiated his order, and with a view to mitigating damages the supplier, on getting another order for somewhat similar machinery, very sensibly made such alterations as were necessary to the machinery that he had made for the original purchaser and sold the machinery so altered to the second purchaser. His costs of doing that were comparatively trivial. It was said by the supplier that the measure of his damages was the loss of his bargain; by the purchaser that the measure of damages was merely the cost of the conversion of the machinery for the second purchaser and his slight loss on the re-sale. Hamilton LJ after setting out the facts said ([1913] 1 Ch at p 473):

“That was a reasonable mode of mitigating the damages, but it by no means follows that the damages are confined to the cost, a trivial one, of adapting the machines to the needs of the second customer, and the loss on re-sale to him, which was only £23, making £28 in all. The fallacy of that is in supposing that the second customer was a substituted customer, that, had all gone well, the makers would not have had both customers, both orders, and both profits. In fact, what they did, acting reasonably, and I think very likely more than reasonably in the interests of the Vic Mill, was to content themselves with earning the profit on the second contract at the cost of adapting the machines, which has been taken at £5; but they are still losers of the profit which they would have made on the Vic Mill contract, because they could, if they had been minded, have performed both the contracts, and have made the profit on both the contracts but for the breach by the Vic Mill Company of their contract.”

Buckley LJ put the matter succinctly in this way (ibid, at p 474):

“As regards No. 1, where the goods were manufactured, the respondents are, I think, entitled to both profits, because they were not bound to give the appellants the benefit of another order that the respondents had received. The respondents were left with these goods on their hands. They altered them and sold them to another buyer, but they could have made, and would otherwise, I suppose, have made, other goods for that

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buyer, and not employed these goods for that purpose. If they had done so, they would have made both profits.”

It seems to me that in principle that covers this case. True the motor car in question was not sold to another purchaser, but the plaintiffs did what was reasonable, they got out of their bargain with George Thompson Ltd but they sold one less Vanguard, and lost their profit on that transaction. Re Vic Mill Ltd, has been followed and applied to exactly the circumstances I have before me, ie, the sale of a motor car, in a number of cases abroad to which I have been referred. There was Cameron v Campbell & Worthington Ltd, which was a judgment of the Supreme Court of the State of South Australia. The headnote is short, and I will read it ([1930] SASR 402):

“Where a purchaser of a motor-truck chassis from a dealer refused to accept delivery of the motor-truck, which was then re-sold at a profit, there being evidence that similar motor-trucks were available for immediate delivery, and the property not having passed. Held, that the seller was entitled to retain the profit on re-sale, and also to damages for loss of profit on the original sale. Re Vic Mill Ltd, followed.”

Then there was Mason & Risch Ltd v Christner, that being a decision of the Appellate Division of the Supreme Court of Ontario, and the court came to a similar conclusion. That case was also followed in Brown v Buck, and the same result has been reached in the United States in a rather earlier case, that of Stewart v Hansen, being a decision of a majority of the Supreme Court of Utah.

The main case, however, put by the defendants is this: they submit that s 50(3) of the Sale of Goods Act, 1893, applies, because they say there is an available market for the goods in question, and in that available market we know that the price of the Vanguard is fixed. It is fixed by the manufacturers. Therefore, they say the measure of damages must necessarily be little more than nominal. Had the plaintiffs kept the car and sold it to another at a later stage, no doubt they would have been entitled to the costs of storage in the meantime, possibly interest on their money laid out, and so on, but, as they in fact mitigated damages by getting out of the contract, damages are nil.

Counsel for the defendants said that the market now must not be treated as a market or fair in a limited or technical sense. It is curious that there is a comparative absence of authority on the meaning of the phrase “available market”, because one would have thought there would have been many cases, but the researches of counsel have only disclosed one authority on s 50(3). It is Dunkirk Colliery Co v Lever, a decision of the Court of Appeal. The facts were far removed from the facts before me, and I do not think that I need recite them. It will be sufficient if I read an extract from the judgment of James LJ  He said (9 ChD at p 24):

“Under those circumstances the only thing that we can do is to send it back to the referee with an intimation that we are of opinion upon the facts (agreeing with the Master of the Rolls in that respect), that the facts do not warrant the application of the principle mentioned in the award, namely, that there was what may be properly called a market. What I understand by a market in such a case as this is, that when the defendant refused to take the three hundred tons the first week or the first month, the plaintiffs might have sent it in waggons somewhere else, where they could sell it, just as they sell corn on the Exchange, or cotton at Liverpool: that is to say, that there was a fair market where they could have found a purchaser either by themselves or through some agent at some particular place. That is my notion of the meaning of a market under those circumstances.”

If that be the right principle to apply, it was proved that there is nothing in the nature of a market like a Cotton Exchange or Baltic or Stock Exchange,

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or anything of the sort, for the sale of new motor cars. But counsel for the defendants submits that the word “market” is of no fixed legal significance. That I think is so, and is so stated by Lord Dunedin in Charrington & Co Ltd v Wooder (see [1914] AC at p 82). Counsel said that the meaning of the word must move with the time. In an interesting speech, tracing the history of the contract of sale and purchase, he pointed out that whereas originally all transactions were carried out in markets or fairs purely by barter and then later for a money consideration it was only quite recently that other forms of dealing have come to be familiar. He reminded me that as recently as 1812 Lord Mansfield pointed out that a sale by sample was a novel thing, and he says that one must now look on the market as the whole conspectus and complex of the selling structure of any trade and of the whole purchasing public. Every farmer, he instanced, is a part of the market in agriculture, and he says there being an available market the damages must necessarily be nominal for the reasons I have mentioned.

It is curious that in the Sale of Goods Act, 1893, s 51(3) (a sub-section in identical terms with s 50(3)) which deals with the remedies of the buyer when the seller defaults, a somewhat different view of the word “market” has been taken to that expressed by James LJ. The only case to which I have been referred is a case which started in the Court of Session, Marshall & Co v Nicoll & Son, but went to the House of Lords. The headnote of the report of the case in the House of Lords is as follows (1919 SC (HL) at p 129):

“In an action of damages for failure to deliver a consignment of annealed steel sheets, the Second Division—holding that there was an ‘available market’ for the sheets within the meaning of the Sale of Goods Act, 1893, s. 51(3), although they were not kept in stock and were not purchasable in the open market but were specially made to specification—awarded to the purchasers as damages for the sellers’ failure to deliver the goods a sum representing the difference between the contract price and the price current at the time of the refusal to deliver. On appeal the House of Lords affirmed the award; VISCOUNT FINLAY, however, being of opinion that, on the evidence, it had not been established that there was an ‘available market’ for the goods, but that the sum awarded should stand as representing damages assessed on the basis of what the goods, if delivered, would have been worth to the purchasers. Observations by LORD SHAW OF DUNFERMLINE on the method of assessing damages where purchasers have failed to prove an ‘available market’.”

The situation seems to have been that Viscount Finlay held there was no market on the facts; Viscount Cave held that although there was not a market in the narrow sense, there were facts on which the Lord Ordinary (Lord Hunter) could have found that there was an available market, and with that Lord Dunedin apparently concurred. On the other hand, Lord Shaw, when he came to deliver his speech, agreed with Lord Finlay.

I think that in that state of affairs the decision of the Court of Appeal in Dunkirk Colliery Co v Lever is binding on me, and, therefore, unless one finds something in the nature of a market in the sense used by James LJ s 50(3) has no further application. However, the point seems to me of somewhat academic interest in this case, because, if one gives to the word “market” an extended meaning, in my view on the facts which I have to consider, a precisely similar result is reached.

Had the matter been res integra, I think I should have found that an “available market” merely means that the situation in the particular trade in the particular area was such that the particular goods could freely be sold, and that there was a demand sufficient to absorb readily all the goods that were thrust on it, so that if a purchaser defaulted the goods in question could readily

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be disposed of. Indeed, such was the situation in the motor trade until very recently. It was, of course, notorious that dealers all over the country had long waiting lists for new motor cars. People put their names down and had to wait five or six years, and whenever a car was spared by the manufacturer from export it was snatched at. If any purchaser fell out, there were many waiting to take his place, and it was conceded that if those circumstances were still applicable to the Vanguard motor car, the claim for damages must necessarily have been purely nominal. But on the assumed facts, circumstances had changed in relation to Vanguard motor cars, and in March, 1954, there was not a demand in the East Riding which could readily absorb all the Vanguard motor cars available for sale. If a purchaser defaulted, that sale was lost and there was no means of readily disposing of the Vanguard contracted to be sold, so that there was not, even on the extended definition, an available market. But there is this further consideration: even if I accepted the defendants’ broad argument that one must now look at the market as being the whole conspectus of trade, organisation and marketing, I have to remember that s 50(3) provides only a prima facie rule, and, if on investigation of the facts, one finds that it is unjust to apply that rule, in the light of the general principles mentioned above it is not to be applied. In this case, as I said in the earlier part of my judgment, it seems to me plain almost beyond argument that, in fact, the loss to the plaintiffs is £61. Accordingly, however one interprets s 50(3), it seems to me on the facts that I have to consider one reaches the same result.

There will be judgment for the plaintiffs for £61 1s 9d, but the order must incorporate an undertaking by the plaintiffs to indemnify the defendants against their costs of this action. There must be a mutual set-off between the costs and the sum of £61.

Judgment for the plaintiffs

Solicitors: Osmond, Bard & Westbrook (for the plaintiffs); Smith & Hudson agents for Williamson, Stephenson & Hepton, Hull (for the defendants).

R D H Osborne Esq   Barrister.

Institute of Fuel v Morley (Valuation Officer) and Another

[1955] 1 All ER 161

Categories:        LOCAL GOVERNMENT        

Court:        COURT OF APPEAL        

Lord(s):        SIR RAYMOND EVERSHED MR, JENKINS AND BIRKETT LJJ        

Hearing Date(s):        10, 11 NOVEMBER, 15 DECEMBER 1954        

Rates – Exemption – Scientific society – “Purposes of science exclusively” – Institute for the advancement of fuel technology – Object also to uphold the status of members – Authorised purposes – Separate and distinct purposes – Scientific Societies Act, 1843(6 & 7 Vict c 36), s 1.

The Institute of Fuel was incorporated by royal charter in 1946, and the objects and purposes for which it was constituted were set out in para 7 of the charter. None of the objects set out in para 7 (a) to (g) inclusive were expressed to have any primacy over the others. Sub-paragraphs (a) and (d) read: “(a) To promote, foster, and develop the general advancement of the various branches of fuel technology as an end in itself, and as a means of furthering the more scientific and economic utilisation of fuel of all kinds for industrial, commercial, public, agricultural, domestic, transport and/or other purposes, and to promote, assist, finance and support such industrial and scientific research, investigation, and experimental work in the economical treatment and application of fuel as the institute may consider likely to conduce to those ends, and to the benefit of the community at large … . (d) To uphold the status of members of the institute by holding or prescribing examinations for candidates for election and by requiring standards of knowledge and experience which can be approved … ” Paragraph 15 of the charter authorised the several classes of members to use distinguishing initials after their names. Paragraph 16 provided, among other things, that the qualifications, privileges and obligations, including liability to expulsion or suspension of members, should be such as the bye-laws for the time being of the institute should direct; and by para 19 the members were empowered to make bye-laws “for the regulation, government and advantage of the institute, its members and property and for the furtherance of the objects and purposes of the institute,” subject to the approval of the Privy Council. Bye-law No 50 dealt with the “professional conduct of corporate members when engaged in an advisory or consultative capacity”. The institute claimed to be exempt from the payment of rates by virtue of s 1 of the Scientific Societies Act, 1843a, on the ground that it was a society instituted for purposes of science exclusively.

Held – (i) the question whether a particular society was instituted for purposes of science exclusively, within the meaning of s 1 of the Act of 1843, is to be determined by reference rather to the purposes of the society as defined by its constitution than to the purposes which it may actually have pursued in practice.

Principle stated by Jenkins J in Battersea Metropolitan Borough v British Iron & Steel Research Assocn ([1949] 1 KB at p 451) applied.

(ii) (Jenkins LJ dissenting) the institute was not a society instituted for the purposes of science exclusively, within the meaning of s 1 of the Act of 1843, because on the true construction of the charter and having regard to the institute’s bye-laws made under it (particularly bye-law 50 (e)) the upholding of the status of members (ie, the object stated in para 7 (d) of the charter) was a distinct object and purpose of the

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institute, not merely concomitant or incidental to a primary purpose of furthering science, and was directed to the enhancement of the standing of members of the institute as professional men, which was not a purpose of science; and, therefore, the institute was not entitled to exemption from payment of rates under the section.

Per Sir Raymond Evershed MR: in my judgment it may now be taken as established that as a result of the cases, Institution of Civil Engineers v Inland Revenue Comrs ([1932] 1 KB 149) and Royal College of Surgeons of England v National Provincial Bank Ltd ([1952] 1 All ER 984), both the Institution of Civil Engineers and the Royal College of Surgeons should be treated as instituted for purposes of science exclusively within the meaning of s 1 of the Scientific Societies Act, 1843, notwithstanding the decision, as regards the former institution, in R v Institution of Civil Engineers (1879) (5 QBD 48); see p 165, letter i, post.

Per Jenkins LJ: paragraph 7 (a) of the charter prescribes one object only, namely, the advancement of fuel technology, and the latter part of sub-para. (a) is no more than ancillary to that object (see p 174, letters c and e, post).

Per Birkett LJ: the second part of para 7 (a) of the charter disclosed a separate purpose which was a commercial purpose or social purpose rather than a scientific purpose (see p 177, letter d, post).

Appeal dismissed.

Notes

As to the Exemption of Scientific Societies from Rates, see 21 Halsbury’s Laws (2nd Edn) 12, para 26; and for cases on the subject, see 38 Digest 493–499, 485–540.

Cases referred to in judgment

Institution of Civil Engineers v Inland Revenue Comrs [1932] 1 KB 149, 100 LJKB 705, 145 LT 553, 16 Tax Cas 158, Digest Supp.

Royal College of Surgeons of England v National Provincial Bank Ltd [1952] 1 All ER 984, [1952] AC 631, 3rd Digest Supp.

Inland Revenue Comrs v Forrest (1890), 15 App Cas 334, 60 LJQB 281, 63 LT 36, 54 JP 772, 3 Tax Cas 117, affg SC sub nom Re Duty on Estate of Civil Engineers Institution, (1888), 20 QBD 621, 57 LJQB 353, 59 LT 282, 52 JP 549, 38 Digest 496, 503.

Battersea Metropolitan Borough v British Iron & Steel Research Assocn [1949] 1 KB 434, [1949] LJR 646, 2nd Digest Supp.

R v Institution of Civil Engineers (1879), 5 QBD 48, 49 LJMC 34, 42 LT 145, 44 JP 265, 38 Digest 497, 508.

Art Union of London v Savoy Overseers [1894] 2 QB 609, 63 LJMC 253, 71 LT 40, 59 JP 20, revsd HL sub nom Savoy Overseers v Art Union of London, [1896] AC 296, 65 LJMC 161, 74 LT 497, 60 JP 660, 38 Digest 498, 525.

Stephens v Mysore Reefs (Kangundy) Mining Co Ltd [1902] 1 Ch 745, 71 LJCh 295, 86 LT 221, 9 Digest 83, 325.

R v Cockburn (1852), 16 QB 480, 18 LTOS 302, 117 ER 962, sub nom R v St Martin-in-the-Fields (Churchwardens & Overseers), 21 LJMC 53, 16 JP 198, 38 Digest 495, 495.

Case Stated

This was a Case Stated by the Lands Tribunal pursuant to s 3(4) of the Lands Tribunal Act, 1949, for the decision of the Court of Appeal.

The appellant, the Institute of Fuel, was the occupier of offices and other premises (comprising the basement, ground, first and secon floors), at 18, Devonshire Street, London, W.1. Until February, 1953, the premises had not been assessed to rates on the ground that the institute was a scientific society within the meaning of the Scientific Societies Act, 1843, s 1. On 20 February 1953, the valuation officer made a proposal for the alteration of the valuation list for the Metropolitan Borough of St Marylebone by the insertion of the premises occupied by the appellant at a gross value of £365 and rateable value of £301. The

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institute objected, and the valuation officer appealed to a local valuation court for North-West London. On 8 July 1953, the local valuation court determined that the premises should be entered in the valuation list at the values proposed by the valuation officer. The institute thereupon appealed to the Lands Tribunal.

The Lands Tribunal found that the premises were occupied by the institute for the transaction of its business and for carrying into effect its purposes; that the institute was constituted by royal charter and was instituted for the purposes of science within the meaning of s 1 of the Scientific Societies Act, 1843; that a certificate had been obtained under s 2 of the Act of 1843 that the institute was entitled to the benefits of the provisions of the Act; that the institute was supported wholly or in part by voluntary contributions, and did not, as by its charter it might not, make any dividend, gift, division or bonus in money to or between any of its members; and that bye-laws had been made under para 19 of the charter.

The question for the decision of the Lands Tribunal was whether or not the institute was instituted exclusively for the purposes of science within the meaning of s 1 of the Act of 1843. It was contended on behalf of the institute (i) that all the objects set out in the charter were incidental to the main object, namely, the promotion, fostering and development of the general advancement of the various branches of fuel technology, and that, as that object was scientific, the institute was instituted exclusively for the purposes of science; and (ii) that the case was governed by Institution of Civil Engineers v Inland Revenue Comrs and Royal College of Surgeons of England v National Provincial Bank Ltd. It was contended on behalf of the respondents, the valuation officer and the rating authority, that the institute was instituted for purposes which included (a) the application of science in contradistinction to its advancement, (b) the purposes of its members, (c) industrial and commercial purposes, (d) technical education of persons engaged or likely to be engaged in industry or commerce; and that, therefore, the institute was not instituted exclusively for purposes of science. The tribunal was of the opinion that paras 7 (d), 15, 16 and 19 of the institute’s charter (which was annexed to and formed part of the Case) and No 50 of the institute’s bye-laws (which were also annexed to and formed part of the Case) were directed to a separate purpose, namely, that of upholding and enhancing the status of those fuel technologists who were members of the institute and affording to them advantages in their professional capacity, not merely from the point of view of technical efficiency, but also from the point of view of persons bound to pursue a high moral code in their professional capacity, and not to any purpose of science; and that this object was collateral, and not ancillary, to the main object of the institute. Having regard to the speech of Lord Macnaghten in Inland Revenue Comrs v Forrest (15 App Cas at p 354), the tribunal came to the conclusion that the institute was not instituted exclusively for the purposes of science within the meaning of s 1 of the Act of 1843, and dismissed the appeal, but, at the request of the institute, stated a Case for the decision of the Court of Appeal. The question for the court was whether the tribunal came to a correct decision in point of law in holding that the institute was not a “society instituted for purposes of science exclusively” within the meaning of s 1 of the Act of 1843.

Michael Rowe QC and F A Amies for the appellant, the Institute of Fuel.

Maurice Lyell QC and Harold Brown for the respondents, the valuation officer and the rating authority.

Cur adv vult

15 December 1954. The following judgments were delivered.

SIR RAYMOND EVERSHED MR. The Institute of Fuel is a body corporate incorporated by royal charter in 1946. It occupies certain offices and other premises at 18, Devonshire Street, in the City of Westminster, and

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claims in the present proceedings to be entitled to exemption from rates as being a body “instituted for purposes of science … exclusively” within the meaning of s 1 of the Scientific Societies Act, 1843. This claim was rejected both by the Local Valuation Court for North West London and by the Lands Tribunal. From the decision of the tribunal the institute now appeals to this court.

The scientific purpose for which alone, according to its case, the Institute of Fuel was “instituted” was that of the promotion of fuel technology. The exact character and scope of fuel technology were not explained to us; but, from the terms of the royal charter, it is clearly concerned with the efficient and economical use of fuel of various kinds, and it is not in dispute that fuel technology is an “applied science”, and, therefore, “science” within the scope of the Act of 1843. The sole question which was debated before the Lands Tribunal and which has been debated before us is whether the Institute of Fuel was instituted exclusively for the advancement or promotion of that science.

The question must, in my judgment, depend on an ascertainment, according to the true interpretation of the charter, of the purposes of the institute. So much appears to me to have been laid down by this court in Battersea Metropolitan Borough v British Iron & Steel Research Assocn. Jenkins J in the course of his judgment in that case, formulated the principles to be applied in answering the question posed in this case as well as in that. He said ([1949] 1 KB at p 451):

“The question whether a particular society is ‘instituted for purposes of science literature or the fine arts exclusively’ within the meaning of the section must be determined by reference to the purposes of the society as defined by its constitution, rather than the purposes it may actually have pursued in practice.”

Then, after observing that a society might forfeit its privilege under the Act of 1843 by pursuing an activity outside the terms of s 1, even though it was unauthorised, the learned judge continued (ibid, at p 452):

“But, in general, I think a claim to exemption must stand or fall by reference simply to the society’s authorised purposes, the circumstance that an authorised purpose has never in fact been pursued being irrelevant … ”

It becomes, accordingly, necessary to refer to the charter of the institute. Paragraph 7 states the purposes of the institute, and is as follows:

“The objects and purposes for which the Institute of Fuel is hereby constituted are:—(a) To promote, foster, and develop the general advancement of the various branches of fuel technology as an end in itself, and as a means of furthering the more scientific and economic utilisation of fuel of all kinds for industrial, commercial, public, agricultural, domestic, transport and/or other purposes, and to promote, assist, finance and support such industrial and scientific research, investigation, and experimental work in the economical treatment, and application of fuel as the institute may consider likely to conduce to those ends, and to the benefit of the community at large. (b) To hold meetings in London and at established provincial centres for the reading and discussion of papers, to issue regularly a technical journal, to join with other institutions in promoting objects of mutual interest, and generally to take such a prominent and active part in the advancement of the knowledge and practice of fuel technology as its status requires. (c) To co-operate with government departments, universities, educational institutions, associations, companies, or individual persons in establishing or maintaining any investigation or research relating to any branch of fuel technology. (d) To uphold the status of members of the institute by holding or prescribing examinations for candidates for election

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and by requiring standards of knowledge and experience which can be approved. (e) To print and publish, sell, lend and distribute any communications made to the institute or any similar society, and any reports of the proceedings or transactions of the institute or any similar society, and to produce, purchase, reproduce, print, publish and distribute any other books, papers, treatises or communications relating to fuel technology and to establish and maintain a library. (f) To invite foreign delegates to attend any meetings, conferences or functions promoted or supported by the institute and to defray or contribute to their expenses; to defray or contribute to the expenses of any duly appointed officials or representatives of the institute attending any foreign scientific meetings or conferences at the request of the council of the institute, and to translate, print, publish and distribute any books, communications, papers or proceedings or abstracts or extracts thereof which are of scientific interest. (g) To provide facilities for conferences and functions in support of the objects of the institute. (h) To do all other things incidental or conducive to the attainment of the above objects or any of them.”

It is to be observed that, according to the terms of the paragraph, no one of the sub-paras. (a) to (g) inclusive is expressed to have any primacy over the others. The final sub-para (h), on the other hand, covers activities “incidental or conducive to the attainment of the above objects or any of them”. Though, no doubt, the object or purpose stated in the first sub-para, (a), would, on a natural reading of the language, be expected to relate to the most significant of the institute’s objects or purposes, it does not seem to me legitimate, as a matter of construction, to regard the contents of sub-paras. (b) to (g) inclusive as not being objects or purposes at all—as constituting merely incidents of the firstnamed object, means towards its achievement or consequences flowing from its pursuit—unless these other objects and purposes are by their nature of such a character as to be substantially incapable of being otherwise effected. If this is a correct approach to the problem, then, in my judgment, the question will be found to turn on the arguments submitted to us on the meaning and effect, in the general context of the charter, of sub-para. (d). Does that sub-paragraph mean and have the effect that the furtherance of the interests of members of the institute, as professional men practising fuel technology, is an object or purpose of the institute distinct and collateral, even though relatively subsidiary, to the most important object or purpose specified in the first sub-paragraph? If so, then, in my judgment, according to the principles above mentioned, the institute fails to qualify for the exemption claimed. The valuation court and the Lands Tribunal so determined, and I am, for my part, not persuaded that they were wrong.

In formulating the question as I have done, I have reflected the language used in judgments and speeches in other and similar cases, particularly in Institution of Civil Engineers v Inland Revenue Comrs and Royal College of Surgeons of England v National Provincial Bank Ltd. In the former of those cases the question was of exemption from income tax, and in the latter the question was whether the appellant college was a “charity” within the scope of the preamble to the Statute of Elizabeth 1(43 Eliz 1 c 4). The purposes or objects of both bodies, viz, the Institution of Civil Engineers and the Royal College of Surgeons, have more than once been under consideration in the courts. As a result of the two cases cited it may, in my judgment, now be taken as established that each body (and, in the case of the Institution of Civil Engineers, notwithstanding the earlier decision of R v Institution of Civil Engineers, should be treated as instituted for purposes of science exclusively, within the meaning of the Scientific Societies Act, 1843. Counsel for the institute, in the present case, contended that the Institute of Fuel should be no less privileged. In my judgment, however, the facts relating to the Institute of Fuel are in certain essential respects different

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from the facts relating to the Institution of Civil Engineers and to the Royal College of Surgeons.

Before I expand that statement I shall make some references to the judgments in this court in Institution of Civil Engineers v Inland Revenue Comrs. The passages which I desire to quote were made in reference to the question whether the Institution of Civil Engineers was “established for charitable purposes only”, but they are, in my view, equally applicable (mutatis mutandis) to the question with which in this case we are concerned. Lord Hanworth MR said ([1932] 1 KB at p 161):

“As ROWLATT, J., has said, there may be a charitable institution for the relief of sickness, and incidental advantages can be gained by a subscriber to the funds, without the institution losing its character; but if there is an object, e.g., the promotion of the profession in addition to the promotion of science that is collateral and not merely incidental, the result is that the institution cannot be described as established for charitable purposes only.”

Lawrence LJ at the beginning of his judgment (ibid, at p 167) stated that the question was whether the institution was established for charitable purposes only, and proceeded:

“The answer to this question depends upon whether the institution is established solely for the advancement of the science of civil engineering (an admittedly charitable purpose), or whether one of the purposes for which it is established is to benefit civil engineers in order to enable them to practise their profession to greater advantage.”

The lord justice quoted (ibid, at p 170) and proceeded to apply the well-known language of Lord Macnaghten in Inland Revenue Comrs v Forrest (15 App Cas at p 354):

“It cannot I think be doubted that the institution has raised the standard of the profession, and that to a civil engineer it is of advantage and probably of pecuniary advantage to be a member. But is that result the purpose of the society, or is it an incidental, though an important and perhaps a necessary consequence of the way in which the institution does its work in the pursuit of science?”

Finally, Romer LJ said ([1932] 1 KB at p 174) of certain language which he had quoted from the judgment of A L Smith LJ ([1894] 2 QB at p 627) in Art Union of London v Savoy Overseers:

“The emphasis here laid upon the difference between an object that, although subsidiary to the main object of a society, is nevertheless distinct from it, and an object that is merely a means to the end of carrying out the main object, was repeated when the case came before the House of Lords.”

After quoting the same passage from Lord Macnaghten’s speech in Forrest’s case which Lawrence LJ had cited, Romer LJ said ([1932] 1 KB at p 176):

“But if the advantage to the members is not the purpose of the society, but merely an incidental consequence of the way in which it promotes science, then it seems to me that the society was established for ‘the promotion of science’ only, unless I have misunderstood the meaning of the word ‘only’ as used in s. 37 of the Income Tax Act.”

In the Royal College of Surgeons case the leading speech on the part of the majority of the House was that of Lord Morton Of Henryton. The noble Lord referred with approval to the judgments in Institution of Civil Entineers v Inland Revenue Comrs. He quoted also the passage which I have already twice mentioned from Lord Macnaghten’s speech in Forrest’s case (3) which he

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treated as entirely applicable to the case which he had to determine with the necessary substitution for the Institution of Civil Engineers and the science of civil engineering of the Royal College of Surgeons and the science of surgery.

Applying the tests so formulated and expressed, the Court of Appeal, in the one case, and the House of Lords, in the other, decided in favour of the Institution of Civil Engineers and the Royal College of Surgeons respectively. In each case, however, it was a fact, to my mind, of the highest significance that there was but one single object or purpose. In the Civil Engineers case (1) that single object (contained in a recital in the society’s original charter) was:

“the general advancement of mechanical science, and more particularly for promoting the acquisition of that species of knowledge which constitutes the profession of a civil engineer, being the act of directing the great source of power in nature for the use and convenience of man.”

There was no doubt that civil engineers derived real and material benefit from their membership of the institution, including a right (closely comparable to that possessed by members of the Institute of Fuel in the present case) to place certain initials after their names, for which specific provision was made in a supplemental charter of the institution. It was the presence of these advantages for the members that led Rowlatt J to hold that the institution was not established for charitable purposes only. In the view of all the members of the Court of Appeal, however, the enjoyment of these advantages was an incident and the consequence of the institution’s activity. Their attainment was not an object or purpose of the institution. Its purpose remained the single purpose already quoted. Thus Lawrence LJ said ([1932] 1 KB at p 171):

“Bearing in mind that the original charter of 1828 clearly states the only purpose for which the institution was established, and that this purpose has never been added to or varied by any of the supplemental charters, and further bearing in mind and the House of Lords has decided that this purpose is for the general advancement of the science of civil engineering, it follows in my judgment that the institution is established for a charitable purpose only, notwithstanding that it is of advantage to a civil engineer in his profession to be a member of the institution, this result not being a purpose for which the institution was established but being incidental to and consequent upon the way in which the institution carries out the charitable purpose for which alone it was established.”

So in the case of the Royal College of Surgeons the sole object, according to its charters (and again it only appeared as recital) was “… the due promotion and encouragement of the study and practice of the … art and science” of surgery. The real question had been whether the use of the words “and practice” imported into the statement of the objects or purposes of the college that of the promotion of the profession advantage of surgeons. The majority of the House thought not, but were of opinion that the significance of the phrase “study and practice” lay in a reference to

“… the acquisition of knowledge and skill in surgery both by abstract study and by the exercise of the art in the dissecting room and the anatomy theatre … ”

(per Lord Normand, [1952] 1 All ER at p 987). So the House of Lords decided, as the Court of Appeal had decided in Institution of Civil Engineers v Inland Revenue Comrs, that the professional advantage of the members of the society was, in substance, not an object or purpose, but a consequence. Lord Morton Of Henryton said ([1952] 1 All ER at p 997):

“I think that the promotion of the interests of practising surgeons is ‘an incidental, though an important and, perhaps, a necessary, consequence’ of the work of the college in carrying out its main object, the promotion

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and encouragement of the study and practice of the art and science of surgery.”

No doubt, because the professional advancement of surgeons was a consequence and a necessary, and also (I have no doubt) a welcome and desired, consequence of the pursuit of the stated object or purpose, so the college in pursuing the latter was in a sense pursuing also the consequential advantages. The question, however, is (in the present case), for what objects or purposes was the body corporate “instituted”? And if, on a fair construction of its charter, it appears that it was instituted with the object or purpose—that is, the distinct or direct object or purpose—of pursuing or achieving an end not within the scope of s 1 of the Act of 1843, then, though that object or purpose be not the main object and be relatively of a subsidiary character, in my judgment the privileges of the Act cannot be had.

I return, then, to the appellant institute’s charter and to para 7 thereof in particular. It is, at least, clear on the face of it that the statement of objects or purposes in the present case is very widely different indeed from the corresponding statements in the Civil Engineers case and the Royal College of Surgeons case. As I have said earlier in this judgment, each of the sub-paras. (a) to (g) inclusive of para 7 states, prima facie as a matter of construction, a distinct object or purpose. Moreover, the sub-paragraphs, after the first, do not relate to wide general matters so as, on that account, to lend themselves to interpretation as ancillary to the first or main object (see, for example, Stephens v Mysore Reefs (Kangundy) Mining Co Ltd. On the contrary, each of the sub-paras. (b) to (g) inclusive relates to a distinct and precise subject-matter. What, then, does the paragraph mean? Counsel for the respondents submitted that the first sub-para, (a), was itself composed of two distinct parts, comprehending two distinct objects, namely, (i) the study, both on academic and empirical lines, of “fuel technology”, that is, of the better and more efficient use of fuels; an object which he conceded to be “scientific”; and (ii) the persuasion of users of fuel of all kinds to put into practice the result of the studies made by the institute and its members, an object which, he contended, was altogether more mundane and commercial in character and not properly “scientific” within the meaning of the statute.

The language of sub-para (a) is, undoubtedly, elaborate and, at least, lends itself to the view that there are two distinct “ends” or objects. Having regard to the decisive significance which I attach to sub-para (d), it is unnecessary for me to express a conclusion on counsel’s submission on sub-para (a). I am prepared to assume (without deciding) that the sub-paragraph does not, of itself, do more than indicate that the study of full technology is to be pursued not only as an academic matter, an “end in itself”, but also with a view to the public benefit. I am prepared also to assume that sub-paras (b) and (c) are (like sub-paras (e), (f) and (g)) fairly consistent with exclusively “scientific” activities. To my mind, the real question is, as I have earlier stated, of the meaning to be given to sub-para (d). It was on this sub-paragraph, particularly when read with other parts of the charter and the bye-laws made thereunder, that the argument of counsel for the respondents was mainly concentrated. According to that argument, sub-para (d) contemplated and stated as a distinct object or purpose the creation of a body of persons which a recognised status as skilled advisers in the science or art of the efficient utilisation of fuel and with high professional standards—on other words, the object of enhancing the standing of, and otherwise benefiting, fuel technologists, members of the institute.

I have come to the conclusion that this submission is justified. The words of the sub-paragraph are far from clear, particularly the concluding language “by requiring standards of knowledge and experience which can be approved”. The question may be asked: “approved by whom and for what purpose?” Does this language intend no more than that the members of the institute should

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be of a quality best calculated to promote the advancement of what I have assumed to be the exclusively “scientific” objectives comprehended in subpara (a)? I have been unable to give so restricted a meaning to sub-para. (d). In my judgment, the second part of sub-para. (a) (which, I have assumed, does not of itself point to a distinct non-scientific object in that sub-paragraph) nevertheless throws a significant light on sub-para. (d) and supports the view that, by that sub-paragraph, is intended the enhancement of the standard and prestige of fuel technologists as professional men. The tribunal relied also on paras 15, 16 and 19 of the charter as lending, in their context, further support to this view. In my judgment, para 19 is, of these, the most significant, giving power, as it does, to the institute members to make

“bye-laws … for the regulation, government and advantage of the institute, its members and property and for the furtherance of the objects and purposes of the institute … ”

It is not, in my view, legitimate to dismiss the ordinary significance of this language by saying that the paragraph is merely verbose. It is, of course, true that bye-laws made by the members (and requiring the approval of the Privy Council) could not enlarge the objects of the institute. The question, however, is of the meaning and intention of para 7 (d); and para 19 throws, to my mind, significant light on that question. The bye-laws bound up with the charter are those made as contemplated by para 20 of the charter and may, therefore, be reasonably expected to reflect its intention. Bye-law No 50 owes its existence and authority, in my view, to the provisions, which I have quoted, in para 19 of the charter, and it is plainly directed to the standing and prestige of members of the institute—not so as thereby to improve their contribution to scientific inquiry, but as professional men. To quote but one example, para 50 (e) of the bye-laws reads:

“He shall not in any circumstances improperly solicit advisory or consultative work, either directly or by an agent, not shall he pay, by commission or otherwise, any person who may introduce clients to him.”

There is one other matter to which counsel for the respondents referred, and which I think to be of some significance and to point in the same direction. “Fuel technology” as a defined branch of science is of modern origin. I do not, of course, at all say that it is the less important and valuable on that account. It would, however, be at least natural in such a case to have special regard to the position of the practitioners in the art, to the new profession of fuel technologists. In the documentb annexed to the Case and marked “B” it is stated that the Institute of Fuel “resulted from a merger of the Institution of Fuel Technology and the Institution of Fuel Economy Engineers.” The presence of the second party to the merger may well account for the emphasis which, I think is to be found in the charter on the position of members of the chartered institute.

I have found the case a difficult one—as those whose who were concerned with them found the other cases to which I have referred. My difficulties have been increased by the fact that Jenkins LJ whose judgment I have had the advantage of reading in advance, has reached the contrary conclusion to my own. However, for the reasons which I have attempted to state, I think that the appellant institute have failed to make good their claim for exemption, and I would dismiss the appeal.

JENKINS LJ. This is an appeal by way of Case Stated from a decision of the Lands Tribunal (Mr Erskine Simes QC), affirming a decision of the local valuation court to the effect that the appellant Institute of Fuel is not entitled in respect of its premises 18, Devonshire Street, London, W1, to the

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exemption from rates accorded by s 1 of the Scientific Societies Act, 1843, to “any society instituted for purposes of science, literature, or the fine arts exclusively” and fulfilling certain other conditions prescribed by the section, the purposes relevant in the present case being those of science.

As appears from the summary contained in the Case of the facts proved or admitted before the Lands Tribunal, the institute fulfils all the condition of exemption required by the Act of 1843 apart from the primary condition as to its purposes, and further fulfils the last-mentioned condition to the extent that it is instituted for purposes of science within the meaning of the Act. The sole question in issue in the present appeal is, therefore, whether the institute, being a society instituted for purposes of science, is instituted for such purposes “exclusively” within the meaning of the Act.

Claims by various bodies or societies to exemption from rates under this Act, of from duty under the Customs and Inland Revenue Act, 1885, s 11, by virtue of the exemption accorded by para (3) of the section to

“Property which, or the income or profits whereof, shall be legally appropriated and applied … for the promotion of education, literature, science, or the fine arts”,

or from income tax by virtue of the exemption accorded by s 37(1)(b) of the Income Tax Act, 1918, to a “body of persons … established for charitable purposes only” have been considered in many reported cases.

It will be seen that the word “exclusively” in the exemption given by s 1 of the Act of 1843, while matched by the synonym “only” in the exemption given by s 37(1)(b) of the Income Tax Act, 1918, has no counterpart in the exemption given by para (3) of s 11 of the Act of 1885. This suggests that a given institution might, as regards its purposes, qualify for exemption under the Act of 1885 while failing to do so under the Act of 1843, and a comparison of R v Institution of Civil Engineers, where the Institution of Civil Engineers was held not to qualify for exemption under the Act of 1843, with Inland Revenue Comrs v Forrest, where the same institution was held to qualify for exemption under the Act of 1885, might at first sight appear to support this conclusion. It must now, however, be taken as settled that R v Institution of Civil Engineers, so far as it proceeded on the ground that the Institution of Civil Engineers was not instituted for purposes of science exclusively, is to be considered as overruled by Forrest’s case. (See Institution of Civil Engineers v Inland Revenue Comrs, [1932] 1 KB at pp 163, 170, 177.) It is, therefore, a justifiable assumption that, if the question now arose for decision de novo, the Institution of Civil Engineers would be held to be instituted “for purposes of science exclusively,” just as it was held in Institution of Civil Engineers v Inland Revenue Comrs to be “established for charitable purposes only.” It follows that the Institution of Civil Engineers can properly be taken as affording an example of a society instituted for purposes of science exclusively, within the meaning of the Act of 1843, with which comparison may be made in considering the claim of the appellant institute in the present case to be a society so instituted.

In the comparatively recent case of Battersea Metropolitan Borough v British Iron & Steel Research Assocn, an attempt was made in this court to state the principles to be applied in answering the question whether a given society is instituted for purposes of science exclusively. I will briefly recapitulate what was then said. (i) Science for the present purpose includes applied, as well as pure or speculative science. (See per Lord Macnaghten in Inland Revenue Comrs v Forrest, 15 App Cas at pp 353, 354.) Nothing turns on this in the present case, and it is not in dispute that fuel technology, the advancement of which is claimed by the appellant institute to be its exclusive object, is “science” within the meaning of the Act of 1843. (ii) The question whether a

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particular society is “instituted for purposes of science … exclusively” within the meaning of s 1 of the Act of 1843 must be determined by reference to the purposes of the society as defined by its constitution, rather than the purposes it may actually have pursued in practice. See per Lord Campbell CJ in R v Cockburn, where he said (16 QB at p 490):

“… but are the purposes so described and explained exclusively scientific? We are bound to look to all the purposes for which the society is professedly founded, and to which, without a breach of trust, its funds may be applied.”

(iii) As observed by Lord Watson in Inland Revenue Comrs v Forrest (15 App Cas at p 348):

“… it is not sufficient compliance with the plain language of the Act that a society be established chiefly for the purpose of promoting science, literature, or the fine arts. One or other of these must be its exclusive object; so that an institution which also contemplated some other, though altogether subsidiary object, could not claim the benefit of the exemption.”

(iv) A distinction is, however, to be drawn between the purposes of a society and the means adopted to attain those purposes. Thus a society having for its purpose the promotion of science is not disqualified from exemption merely because its authorised activities include, as means of attaining that end, activities which, considered as ends in themselves, would be ends other than the promotion of science.

A point of particular importance in the present case is the bearing of the third and fourth of these principles on the question whether provisions in the constitution or rules of a given society designed to confine membership to persons attaining suitable degrees of proficiency or distinction in the science which it is formed to promote, to impose proper standards of professional conduct on its members, or to authorise the use by its members of descriptions denoting their membership or particular category of membership, calculated as such provisions are to enhance the prestige of the society and to cause membership of it to redound to the personal credit and advantage of its members, will have the effect of defeating a claim by the society to be “instituted for purposes of science … exclusively” within the meaning of the Act of 1843, as distinct from being instituted partly for the promotion of science and party for the personal advantage of its members.

This question was discussed at length by this court in Institution of Civil Engineers v Inland Revenue Comrs in relation to the claim of that institution to exemption from income tax under s 37(1)(b) of the Act of 1918 as a society established for charitable purposes only. Lord Hanworth MR said this ([1932] 1 KB at p 162):

“I confess that I have a difficulty in attaching the same weight as was given to it by the commissioners and the learned judge to the fact that members of the institution can attach letters as suffixes to their names. The requirement of the institution whereby its members have to possess an adequate qualification does not appear to me to connote an advantage, amounting to a collateral purpose in the sense above. That its members should bring a certain knowledge and capacity for learning to the institution seems only to confirm its purpose of the general advancement of mechanical science and knowledge.”

Lawrence LJ said this (ibid, at p 170):

“The main contention on behalf of the Crown in the present case is that one of the purposes for which the society was established was to benefit civil engineers in their profession, and that therefore the institution was not established for charitable purposes only. The answer to this contention

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is, I think, to be found in the following passages of LORD MACNAGHTEN’S judgment in Forrest’s case (15 App. Cas. at p. 354): ‘It cannot I think be doubted that the institution has raised the standard of the profession, and that to a civil engineer it is of advantage nd probably of pecuniary advantage to be a member. But is that result the purpose of the society, or is it an incidental, though an important and perhaps a necessary consequence of the way in which the institution does its work in the pursuit of science?' and the answer to the question is summed up by LORD MACNAGHTEN as follows (ibid., at p. 356): ‘The action of the society may incidentally benefit the profession to which its members belong—I have no doubt that is so—but I agree with the Master of the Rolls in thinking that ‘that which this society does is something higher and larger than the mere education of students and others for the profession of civil engineer.’

“In view of the contention that the institution is not established for the promotion of science only, because under the supplementary charter of 1922 a civil engineer is entitled to advertise the fact that he is a member of the institution by placing the initials M.I.C.E. after his name or otherwise, the following passage in the judgment of FRY, L.J., in Forrest’s case (20 Q.B.D. at p. 631) is peculiarly apposite: ‘It has been pressed upon us that the membership in this society is of pecuniary value to engineers, and I have no doubt that that is the case: but the observation does not appear to me to go far. It is obvious that membership in many bodies formed for the cultivation of science is of pecuniary value to certain classes of persons. A fellowship in the Royal Society is undoubtedly of pecuniary value to medical men, to engineers, chemists, and others; nevertheless it is plain that the object of that society is the promotion of science’.”

At the conclusion of his judgment Lawrence LJ said this ([1932] 1 KB at p 171):

… it follows in my judgment that the institution is established for a charitable purpose only, notwithstanding that it is of advantage to a civil engineer in his profession to be a member of the institution, this result not being a purpose for which the institution was established but being incidental to and consequent upon the way in which the institution carries out the charitable purpose for which alone it was established.”

Romer LJ after referring to R v Institution of Civil Engineers, said this (ibid, at p 172):

“For the moment I am merely concerned with the meaning that was given to the word ‘exclusively’, a word, of course, that is synonymous with ‘solely’ or ‘only’. It is clear that some such meaning must be attributed to these words. Where a society is instituted for a charitable purpose, it is obvious that the membership of the society may confer upon its holder personal advantages of considerable value to him in his profession or in his social standing. He may, for instance, have an exclusive right to affix to his name a certain designation, and will be well known to the public as a person belonging to the society. He may have to observe disciplinary rules laid down with a view to ensuring that he does not bring discredit upon other members of the society. But in such cases, although the securing of such advantages to the members may in a sense be regarded as one of the objects of the society, such object is merely concomitant or incidental to the real object of the society; and if that real object be charitable, the society is established for charitable purposes only.”

Romer LJ quoted (ibid, at p 174) this passage from the speech of Lord Macnaghten in Savoy Overseers v Art Union of London ([1896] AC at p 313):

“… it has been held in several cases that where a contributor derives

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personal advantage from being a member of a society, the society, though formed for one of the purposes favoured by the Act, cannot be considered as formed for that purpose ‘exclusively’. This mode of construction may be admissible when the society is not incorporated, and its purpose, consequently, is not defined by charter or statute. When, however, that is the case, it seems to confuse the purpose of the society with the object of individual members in joining it.”

And Romer LJ continued ([1932] 1 KB at p 174):

“This passage in LORD MACNAGHTEN’S speech not only throws light upon the meaning of the word ‘exclusively’. It seems to indicate that he would have been of opinion that the Institution of Civil Engineers was established exclusively for the purposes mentioned in its charter. But this is not a matter of inference to be drawn from LORD MACNAGHTEN’S speech in the Art Union case. It was, in my opinion, actually so decided by the House of Lords in Forrest’s case, to which I have already referred for another purpose.”

Romer LJ after referring to R v Institution of Civil Engineers said this (ibid, at p 175):

“It had been argued for the appellants in that case that when the charter and the bye-laws of the institution were looked at, appeared that the main, the primary, object of the institution was to promote the interests of the profession of engineers, and not to increase scientific knowledge. For the purpose of dealing with this argument, LORD WATSON considered in detail the charter and the by-laws, and, having done so, said this (15 App. Cas. at p. 350): ‘The mere fact that membership is confined to those who are actively engaged, and have attained some degree of eminence, in the profession, does not militate against the object of the institution being the advancement of engineering science; because they are really the only persons possessing the knowledge and practical experience requisite for the efficient promotion of that object’; and a little later (ibid., at p. 351): ‘I do not doubt that membership is accompanied with a certain amount of prestige which may prove to be of service to the member in his professional career; but I believe that the same result would attend membership of any society which effectively promoted a branch of science intimately connected with the profession or business in which the member was engaged.' In conclusion he said (ibid., at p. 352): ‘I have accordingly come to the conclusion that the income of the institution is, in fact, applied, not for the professional ends of individuals, but for “the promotion of science” in the proper sense of the words … ’.”

Then Romer LJ after quoting the passage from Lord Macnaghten’s speech in Forrest’s case (15 App Cas at p 354) to which Lawrence LJ had already referred, said this ([1932] 1 KB at p 176):

“But if the advantage of the members is not the purpose of the society, but merely an incidental consequence of the way in which it promotes science, then it seems to me that the society was established for ‘the promotion of science’ only, unless I have misunderstood the meaning of the word ‘only’ as used in s. 37 of the Income Tax Act.”

In Royal College of Surgeons of England v National Provincial Bank Ltd the House of Lords adopted and applied the reasoning in Forrest’s case and Institution of Civil Engineers v Inland Revenue Comrs in holding by a majority that the Royal College of Surgeons was a charitable institution, because its main purpose was the charitable one of promoting and encouraging the study and practice of the act and science of surgery, and the advantages derived by practising surgeons from its activities were merely incidental to that main purpose.

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It remains to apply the law as above stated to the objects of the appellant institute. This institute was incorporated by royal charter in 1946. Its avowed objects are set out in para 7 of the charter. [His Lordship read the paragraph and continued:] The language of these provisions is somewhat diffuse and obscure, but, given that fuel technology is a form of applied science (which is not in dispute), I cannot find in them any object that is not directed either to the advancement of this science or to purposes purely ancillary to such advancement, or, in other words, purposes which, though expressed as substantive objects, are in truth no more than means whereby the advancement of the science in question is to be brought about. Paragraph 7(a) is, as I read it, directed to the advancement of fuel technology and nothing else. Counsel for the respondents contended that it comprised two objects, the first being the advancement of fuel technology and as such purely scientific, and the second being to persuade users of fuel to put into practice the methods evolved or perfected in pursuance of the first, which is a social or economic object as distinct from a scientific one. I cannot agree. The sub-paragraph, as a matter of construction, prescribes one object only, namely, the advancement of fuel technology, and goes on to say, in effect, that this object is to be pursued not merely as an end in itself (that is, for the purpose of increasing the sum of academic or laboratory knowledge pertaining to this science), but also in order that the fuel-using public may benefit from the new and improved methods of fuel utilisation which the advancement of the science by the institute may be expected to produce. In other words, the institute is not only to increase this department of scientific knowledge, but also to make known to the world and available for public use the knowledge thus gained. The rest of sub-para. (a), which relates to industrial and scientific research, investigation, and experimental work in the economical treatment and application of fuel, is, I think, clearly no more than ancillary to the advancement of fuel technology.

Paragraph 7(b) provides for activities (in particular the holding of meetings and the publication of a technical journal) in which any scientific society would normally engage within the field of the particular science which it was formed to promote, and the clause introduced by the words “and generally” makes it plain that these activities are to be pursued purely as means to the end of advancing fuel technology and as ancillary to that end. There was some discussion as to the meaning of the phrase “as its status requires”. Does this mean the status (that is, importance) of the science of fuel technology, or does it mean the status (that is, standing) of the institute as “the Institute of Fuel incorporated by royal charter”? I think it must mean that latter, but either way I do not think it affects the purely ancillary character of para 7 (b).

Passing over para 7 (c) as clearly no more than ancillary, I come to para 7 (d), which is one of the provisions held by the Lands Tribunal to defeat the appellant institute’s claim to exemption. It is true that this provision is in terms included amongst the substantive objects, but its purpose is plain, and is simply to ensure that membership of the institute shall be confined to persons who have attained a suitable degree of proficiency in the field of fuel technology. This is one of the matters classed as merely ancillary in the authorities to which I have referred, and I do not think its ancillary character is altered by the inappropriate placing of para 7 (d) amongst the substantive objects of the institute. It does not make sense as a substantive object, which it clearly is not. I think that the various objects set out in the remaining sub-paras. (e) to (h) of para 7 are likewise all of a purely ancillary character, and no point was raised on any of them by counsel for the respondents. Accordingly, so far as its avowed objects are concerned, that is to say, its objects as set out eo nomine in para 7 of the charter, I am of opinion that the institute is entitled to succeed.

Reference was also made to para 6 of the charter, which, by way of exception from the prohibition of the receipt of any profit by members, provided that

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nothing therein contained should prevent the giving of privileges to members of the institute; to para 15, which authorised the use by the several classes of members of distinguishing initials after their names; to para 16, which provided that (inter alia) the qualifications, privileges and obligations, including liability to expulsion or suspension of members, should be such as the bye-laws for the time being of the institute should direct; and to para 19, which provided for the making of bye-laws “for the regulation, government and advantage of the institute, its members and property” with a proviso that no bye-law or alteration, revocation or amendment of any bye-law should have effect until allowed by the Privy Council.

Paragraph 15 can be shortly disposed of by saying that this matter of the use of initials is again one of the very matters classed as merely ancillary in the authorities referred to above. I attach no importance to the general references to the privileges of members in paras 6 and 16 and to the advantage of members in para 19. As appears from paras 16 and 19, such privileges were to be defined by bye-laws, and, as appears from para 19, such buy-laws require the sanction of the Privy Council in order to be effective, and while they are to be “for the regulation, government and advantage of the institute, its members and property”, they must not be repugnant to the charter. I cannot regard these provisions in regard to privileges as adding to the objects of the institute a distinct or collateral object in the shape of conferring privileges on members, and I think they should be construed as referring to privileges of an incidental description. As to the phrase “for the regulation, government and advantage of the institute, its members and property”, I do not think it can fairly be construed as authorising bye-laws for the advantage of the members as distinct from the institute of which they are members. Moreover, inasmuch as the privileges and advantage of members referred to in these paragraphs depend on the bye-laws, and bye-laws can only be made or altered with the sanction of the Privy Council, I think that the argument based on paras 6, 16 and 19 must be judged by reference to the existing bye-laws and not by reference to the possible effect of future bye-laws. Accordingly, I cannot agree with the Lands Tribunal that there is anything in any of these paragraphs of the charter to defeat the appellant institute’s claim.

I turn now to the bye-laws, with which I can deal quite briefly. Numbers 47 and 48 headed “Privileges of Members” show the modest character of the privileges enjoyed by the members under the bye-laws now in force. They are (No 47) to have notice of and attend and speak, but, unless a corporate member, not to vote, at all general and special general meetings, and (No 48) to receive a copy of the current issued of the journal of the institute. Importance was attached by the Lands Tribunal to No 50 headed “Professional Conduct of Corporate Members when engaged in an advisory or consultative capacity”, and the tribunal held that this bye-law, in conjunction with paras 7 (d), 15, 16 and 19 of the charter, defeated the claim to exemption. I have already expressed my dissent from the tribunal’s views as to the effect of these paragraphs of the charter. I also dissent from the tribunal’s view as to the effect of bye-law 50. I cannot see that this bye-law does anything more than require members to whom it applies to observe disciplinary rules laid down with a view to ensuring that they do not bring discredit on other members of the institute. While such rules are to the advantage of members of the association, the securing of such advantage, though in a sense one of the society’s objects, is to be regarded as merely ancillary to the real object of the society. (See per Romer LJ in Institution of Civil Engineers v Inland Revenue Comrs, [1932] 1 KB at p 173.)

We were referred to a number of other provisions in the bye-laws. I do not propose to go over them in detail, but will content myself with saying that I can see nothing in any of those provisions which is in any way inconsistent

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with the conclusion that the appellant institute is instituted for purposes of science exclusively within the meaning of the Act of 1843, construed in the light of the authorities to which I have referred, or which provides any material ground for distinguishing the case of this institute, so far as the scientific nature of its purposes is concerned, from that of the Institution of Civil Engineers. Accordingly, I would allow this appeal.

BIRKETT LJ. On 8 July 1953, a local valuation court for North-West London determined that the premises occupied by the Institute of Fuel at 18, Devonshire Street, London, should be inserted in the valuation list for the Metropolitan Borough of St Marylebone with a gross value of £365 and a rateable value of £301. Previously, the premises of the institute had not been assessed to rates at all. The institute appealed against this determination to the Lands Tribunal on the ground that the premises in question belonged to the institute, which is a society instituted for the purposes of science exclusively, within the meaning of the Scientific Societies Act, 1843, and had been duly certified under s 2 of that Act to be entitled to the benefits of the Act, and until 8 July 1953, had enjoyed them. The Lands Tribunal affirmed the determination of the local valuation court.

The only question in the present appeal from the decision of the Lands Tribunal is whether the Institute of Fuel is instituted exclusively for the purposes of science within the meaning of the Act of 1843. That question is to be answered in the present appeal by finding out what are the purposes of the institute as defined in its royal charter and its bye-laws made under the provisions of the charter. The decision of the Court of Appeal in Battersea Metropolitan Borough v British Iron & Steel Research Assocn makes it quite clear that in general, to use the words of Jenkins J ([1949] 1 KB at p 452), “a claim to exemption must stand or fall by reference simply to the society’s authorised purposes … ”

The objects and purposes for which the institute was founded are set out in para 7 of the royal charter. It has never been contended that the institute was not founded for the purposes of science at all; the contention of the respondents has been, and is, that it was not instituted for the purposes of science exclusively. To this end, counsel for the respondents examined the provisions of the charter in some detail. He submitted that para 7 (a) of the charter disclosed two purposes, the one admittedly a purpose of science in the words “To promote, foster, and develop the general advancement of the various branches of fuel technology as an end in itself”, and the other not a purpose of science in the words

“and as a means of furthering the more scientific and economic utilisation of fuel of all kinds for industrial, commercial, public, agricultural, domestic, transport and/or other purposes, and to promote, assist, finance and support such industrial and scientific research, investigation, and experimental work in the economical treatment, and application of fuel as the institute may consider likely to conduce to those ends, and to the benefit of the community at large.”

It is not easy to say with precision what those last words of para 7 (a) are designed to cover. It was submitted on behalf of the institute that the words of para 7 (a) disclosed one object only, and that object was exclusively scientific—to advance the science of fuel technology and to make the fruits of scientific research more widely available. For the respondents it was said that an examination of the charter revealed three purposes at least for which the institute was instituted: (a) To encourage and stimulate study and research in order that fuel of all kinds should be the better adapted for public use. (b) To persuade users of fuel of all kinds to make better use of the fuel they employed in their industrial and commercial undertakings by following the advice of the Institute of Fuel given as a result of the scientific investigation. (c) To create a body of persons

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with high professional standards and recognised status to act as skilled advisers in the science of using fuel of all kinds to its maximum efficiency.

In my opinion, the second part of para 7 (a) of the charter discloses a purpose that cannot be said to be a purpose of science exclusively. The purpose of science set out in the earlier part of the paragraph is to be applied to the means of causing fuel of all kinds to be used more widely in every kind of commercial undertaking and to be used more scientifically and economically. The industrial and scientific research, investigation and experimental work which the institute is to finance and assist is to be such as the institute may consider likely to conduce to the purpose thus expressed. No doubt this is a most laudable purpose, and the fuel-consuming public will have the benefit of it. The question in this appeal, however, is not whether the purposes of the institute are laudable, but whether they are exclusively scientific. Parliament has recently emphasised the great importance of technology in the life of the nation, and has granted very large sums of money for the scientific study of the practical and industrial arts. It is necessary, however, to observe that this appeal is not concerned with the great importance of technology (which nobody doubts), nor with the support which ought to be given to its advancement, but with the rather mundane question whether the Institute of Fuel qualifies to be relieved of the payment of rates on its premises because its purposes are exclusively scientific.

I am of the opinion that the second part of para 7 (a) of the charter discloses a purpose more properly described as a commercial purpose or a social purpose rather than a scientific purpose. It is quite true that by para 5 of the charter it is provided that

“The institute shall not carry on any trade or business or engage in any transaction with a view to the pecuniary gain or profit of the members thereof.”

It is, however, quite plain from bye-law 50 that it is contemplated that members of the institute will be engaged by clients in an advisory or consultative capacity, and the more extensive use of fuel of all kinds by the public cannot fail to be of advantage to the members by increasing their opportunities of serving clients in such capacities. By para 19 of the charter the members of the institute at a special general meeting shall have power to make bye-laws

“… as to them shall seem requisite and convenient for the regulation, government and advantage of the institute, its members and property, and for the furtherance of the objects and purposes of the institute … ”

This paragraph, too, would seem to contemplate the advantage of the members as a distinct consideration which the members of the institute in special general meeting assembled were empowered and entitled to consider.

In these circumstances, it seems difficult to say that the objects of the institute were for purposes of science exclusively. The members were fuel technologists, and naturally interested in the use of fuel of all kinds by the public generally, and while, no doubt, the scientific research was essential to the production of the more economical and efficient commodity with which the institute was concerned, the wide use of the commodity by the public was a distinct object of the members.

In document 17c, a pamphlet which explains the purposes of the institute, it is stated that the funds for acquiring the premises of the institute were raised

“from individual and collective members and from supporting interests amongst the firms and other organisations with which members are associated … ”

This, it seems to me, lends some colour to the view which I have stated that the second part of para 7 (a) is in some degree, at least, a commercial purpose as distinct from a scientific one. The Lands Tribunal made no decision on the

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construction of para 7 (a) of the charter which was contended for by the respondents, but, in my opinion, the paragraph does disclose a purpose that cannot be described as exclusively scientific.

I think, however, that there is another ground on which the respondents succeed. Paragraph 7 (d) of the charter sets out a further distinct object of the institute in these words:

“To uphold the status of members of the institute by holding or prescribing examinations for candidates for election and by requiring standards of knowledge and experience which can be approved.”

Paragraph 15 of the charter provides for the use of certain initials which certain classes of members may use and certain descriptions which they may apply to themselves. Paragraph 16 provides for the qualifications of members and for the obligations of members, including the liability to expulsion or suspension to be determined by the bye-laws which can be made by virtue of para 19 of the charter. The only bye-law relied on by the respondents was bye-law 50, which is headed: “Professional conduct of corporate members when engaged in an advisory or consultative capacity,” and deals with the professional conduct of members and has no concern with the scientific attainments of the member at all. Reading paras 7 (d), 15, 16 and 19, and bye-law 50 together, it seems plain that a distinct and avowed object of the institute was to establish and uphold the professional status of fuel technologists who should have become members of the institute, and cannot be classed as a purpose of science in any way whatever.

I regard it as a matter of importance that para 7 (d) does set out separately and distinctly this particular object of the institute. It is perfectly reasonable to suppose that the founders of the institute were well aware of the great advantages which the institute could confer on the members in their professional capacity, and was anxious to see those advantages made real. If the purpose of the founders was merely to secure that nobody should be a member of the institute unless he had reached a certain standard in the science of fuel technology, it would have been a simple thing to have said so. The founders, however, went out of their way to set out quite clearly this particular provision as a separate object, and I find it impossible to say that it was a purpose of science. The same point, I think, was in the mind of Lord Macnaghten in his speech in Inland Revenue Comrs v Forrest. That was a case under s 11 of the Customs and Inland Revenue Act, 1885, and the exemption from duty in s 11(3) was in favour of “property which … shall be legally appropriated and applied for … the promotion of … science”. Lord Watson said (15 App Cas at p 348):

“In order to bring a society within s. 1 of the Act of 1843, two statutory requisites must concur. The society must be one instituted exclusively for purposes of science, literature, or the fine arts; and it must also be supported, in whole or in part, by annual voluntary contributions. I do not think the legislature intended that fixed yearly payments which individuals agree to make in consideration of their being admitted to a society and allowed to share in its management (there being a legal obligation to make such payments as long as their membership continues), should be regarded as voluntary contributions within the meaning of the Act. But the contrary was decided, after some hesitation, and to that circumstance the difficulties subsequently encountered in construing the exemption appear to me to have been mainly due. Then it is not sufficient compliance with the plain language of the Act that a society be established chiefly for the purpose of promoting science, literature, or the fine arts. One or other of these must be its exclusive object; so that an institution which also contemplated some other, though altogether subsidiary object, could not claim the benefit of the exemption.”

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Lord Macnaghten said (ibid, at p 354):

“Probably the founders of the society were not insensible of the advantages which such an institution was likely to confer upon its members in their professional capacity. That would have been a formidable objection if the language of the Act of 1885 had been the same as that of the Act of 1843. But under the Act of 1885, in the case of a scientific institution, the only question is whether the property sought to be charged is legally appropriated and applied for the promotion of science. If it is, it seems to me that the exemption must hold good, although the institution to which the property belongs may serve another purpose as well.”

In Institution of Civil Engineers v Inland Revenue Comrs Romer LJ said ([1932] 1 KB at p 175):

“LORD MACNAGHTEN, indeed, intimated that if the language of the Act of 1885 had been the same as that of the Act of 1843, the fact that the founders of the society were not insensible of the advantages which such an institution was likely to confer upon its members in their professional capacity would have been a formidable objection. But he did not have to consider, and did not consider in fact, the question whether such an objection would have been successful. In my opinion, however, it necessarily follows, from what he and LORD WATSON did decide, that the word ‘exclusively’ or ‘solely’ would have made no difference. It had been argued for the appellants in that case that when the charter and the by-laws of the institution were looked at, it appeared that the main, the primary, object of the institution was to promote the interests of the profession of engineers, and not to increase scientific knowledge. For the purpose of dealing with this argument, LORD WATSON considered in detail the charter and the by-laws, and, having done so, said this (15 App. Cas. at p. 350): ‘The mere fact that membership is confined to those who are actively engaged, and have attained some degree of eminence, in the profession, does not militate against the object of the institution being the advancement of engineering science; because they are really the only persons possessing the knowledge and practical experience requisite for the efficient promotion of that object’; and a little later (ibid., at p. 351): ‘I do not doubt that membership is accompanied with a certain amount of prestige which may prove to be of service to the member in his professional career; but I believe that the same result would attend membership of any society which effectively promoted a branch of science intimately connected with the profession or business in which the member was engaged.' In conclusion he said (ibid., at p. 352): ‘I have accordingly come to the conclusion that the income of the institution is, in fact, applied, not for the professional ends of individuals, but for “the promotion of science” in the proper sense of the words; and in that view, I entertain no doubt that such income is “legally appropriated” within the meaning of the Act, because the purposes to which it is applied are the same with those prescribed by the charter of incorporation’.”

It is not contended in this case that the primary purpose of the institute is to advance the interests of the members; it is not to be denied that membership of a scientific institution must necessarily add to the prestige of the members; but what is said is that the founders of the institute were careful to include in the charter a distinct and separate object, not as something concomitant or incidental to the real object of the society, not as something which would be the means to the end of carrying into effect the main object, but as an end and object in itself. The “upholding of the status” of members of the institute was not, in my opinion, an incidental consequence of the way in which the institute promoted and fostered science, but was a clearly stated object of the institute, and, although it might be regarded as a subsidiary object, it was, nevertheless,

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an object which defeats the claim of the institute that it was instituted for the purposes of science exclusively. I would dismiss the appeal and uphold the decision of the Lands Tribunal.

Appeal dismissed. Leave to appeal to the House of Lords granted.

Solicitors: Philip Conway, Thomas & Co (for the appellant); Sharpe, Pritchard & Co (for the respondents).

F Guttman Esq   Barrister.

Rusholme and Bolton and Roberts Hadfield Ltd v S G Read & Co (London) Ltd

[1955] 1 All ER 180

Categories:        SALE OF GOODS        

Court:        MANCHESTER ASSIZES        

Lord(s):        PEARCE J        

Hearing Date(s):        16, 17, 20 DECEMBER 1954        

Sale of Goods – Contract – “Subject to confirmation and payment” by confirming house – Confirmation by confirming house – Concellation of original orders – Whether confirming house liable as principal.

By a document, described as indent No 14, W Ltd an Australian company, ordered goods from the plaintiffs through their Australian agents, subject to confirmation and payment by S & Co Ltd the defendants, a confirming house carrying on business in London. Subsequently the defendants confirmed to the plaintiffs in writing by a document described as Order No … /Letter … , which purported to be an order for the goods and contained the words “Purchase by [S & Co Ltd], holders of Purchase Tax No … , of goods as stock intended for exportation”. The document set out the name and addresses of the plaintiffs and defendants and gave details of quality, quantity and price, and mentioned a time and place for delivery. The document contained nothing to show that it referred to any other transaction except the words at the bottom “In confirmation of your agents’ intent No 14”. There was a second contract in relation to which the documents were not materially different. The Australian company cancelled the orders. In an action by the plaintiffs against the defendants, who refused to accept the goods, for damages for breach of contract,

Held – By their “confirmation” the defendants assumed the liability of a principal buyer as between themselves and the plaintiffs, and the indent was not the real contract; accordingly, the defendants were liable to the plaintiffs in damages for breach of contract.

Notes

As to Liability of an Agent as Principal, see 1 Halsbury’s Laws (3rd Edn) 229, para 517; and for cases on the subject, see 1 Digest 620, 2457 et seq.

Cases referred to in judgment

Chapman v Smith [1907] 2 Ch 97, 76 LJCh 394, 96 LT 662, 1 Digest 632, 2549.

Brandt (HO) & Co v Morris (HN) & Co Ltd [1917] 2 KB 784, 87 LJKB 101, 117 LT 196, 1 Digest 631, 2542.

Gadd v Houghton (1876), 1 ExD 357, 46 LJQB 71, 35 LT 222, 1 Digest 631, 2546.

Thomson v Davenport (1829), 9 B & C 78, 7 LJOSKB 134, 109 ER 30, 1 Digest 576, 2179.

Miller, Gibb & Co v Smith & Tyrer Ltd [1917] 2 KB 141, 86 LJKB 1259, 116 LT 753, 1 Digest 637, 2585.

Abdul Karim Basma v Weekes [1950] 2 All ER 146, sub nom Basma v Weekes, [1950] AC 441, 2nd Digest Supp.

Higgins v Senior (1841), 8 M & W 834, 11 LJEx 199, 151 ER 1278, 1 Digest 639, 2599.

Hornby v Lacy (1817), 6 M & S 166, 105 ER 1205, 1 Digest 280, 123.

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Gabriel (Thomas) & Sons v Churchill & Sim, [1914] 3 KB 1272, 84 LJKB 233, 111 LT 933, 1 Digest 280, 127.

Action.

The plaintiffs who were textile manufacturers sued the defendants who were a confirming house for damages for breach of two contracts.

A document dated 29 May 1951, described as indent No 14, purporting to be an order by Wembley Wear Proprietary Ltd of Sydney, Australia, for five thousand yards of shirting material was given to the plaintiffs through their Australian agents. The indent contained the following words

“Terms—confirmation and payment by [the defendants]”.

By a document, described as Order No … /Letter … , dated 6 June 1951, the defendants purported to order five thousand yards of shirting material from the plaintiffs. The order contained the same details as indent No 14, as respects price, quality, and quantity, and mentioned a time and place for delivery. The order contained the words

“Purchase by [the defendants], holders of Purchase Tax No. Central … , of goods as stock intended for exportation”,

but contained nothing to show that it was referable to any other transaction, except that towards the bottom of the document there appeared the words “In confirmation of your agents’ indent No 14”. A footnote stated, inter alia

“This order must be delivered within the specified time. Any extension or alteration in delivery or price must be notified for our written confirmation”.

The order of 6 June 1951, was accepted by the plaintiffs who wrote on 7 June 1951, to the defendants

“We thank you for the above order for Wembley Wear, Ltd. of Sydney and have pleasure in confirming same.”

The letter then set out the terms of the order.

The documents and circumstances of the second contract,which was also for five thousand yards of shirting material, and the indent to which it referred, were not different in any material particular from those previously mentioned.

Wembley Wear Proprietary Ltd cancelled the orders. The defendants refused to accept the goods and the plaintiffs brought this action. The amount of the damages was agreed. The question at issue was whether the defendants were liable in contract to the plaintiffs.

J D Cantley QC and W D T Hodgson for the plaintiffs.

R H Mais for the defendants.

Cur adv vult

20 December 1954. The following judgment was delivered.

PEARCE J read the following judgment in which, after stating the facts, he continued. It is plain therefore that the transaction was this. The Australian company arranged with the plaintiffs’ Australian agents that they should buy certain goods on certain terms “subject to confirmation and payment by” the defendants. The defendants then confirmed this arrangement in a letter in which they purported to order the goods as principals and to become liable as such on the contract. This order was accepted by the plaintiffs, who proceeded with the manufacture of the goods.

Owing to a trade recession before the delivery date the Australian company cancelled both orders and the defendants refused to accept delivery. The parties and their solicitors have co-operated very sensibly in efforts to minimise the damage and to obtain payment from the Australian company. Unfortunately, they have been unsuccessful, and this action has been brought to decide which of two innocent parties shall bear the loss occasioned by the defaulting Australian company.

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I am satisfied by the evidence of the plaintiffs’ director (who seemed to be honest and reliable) that he would not have accepted this order without the interposition of an English confirming house, that he took no interest in the financial stability of the Australian company, that he made inquiries as to that of the defendants and found it satisfactory and that he relied on that fact in this transaction. Had he not had the order from the defendants he would not have agreed to supply the goods. He regarded the indent from the Australian company, not as a contract but as an expression of a desire to purchase the goods. He understood the indent to have been accepted as an indent and not as an order by his Australian agents, and the fact that the indents were signed by the respective parties to be merely an indication of a genuine desire to buy, and not to be an indication that a firm order was being made subject to conditions precedent. Where a confirming house confirms a contract, his view is that he is entitled to look to the confirming house personally to see that the contract is carried out.

The evidence of the defendants’ director, Mr Read, was in my view unreliable and I do not accept it. In spite of his denial in the witness-box I consider that his true view of the transaction is contained in two letters which he wrote to the Australian company after the cancellation. In a letter of 28 September 1951, he said:

“These orders are sent to us for confirmation and they have been confirmed on our official order sheet which, of course, creates a liability as far as we are concerned, and the manufacturers can, of course, hold us responsible. Although we do not raise any particular objection to you corresponding direct we feel that it would be better if you had instructed us, and in any case we think that in your letters you should have referred to the confirmation which we sent to these various people on your behalf.”

In a letter of 28 November 1951, the defendants write:

“On receiving an indent from overseas we confirm the same to the manufacturer on an official order sheet, which order sheet is sent out to comply with the various regulations applying to the export of goods from the United Kingdom, including purchase tax certificate number which permits us to handle the goods without having to pay British purchase tax and obtain a refund on shipment. The terms with overseas clients are arranged previously and we would point out that in reference to your good selves the terms are … payment against irrevocable letter of credit opened in our favour. Normally such credits should be opened when the indent is sent, but it is our usual procedure with established accounts to cable for the credit when the goods are ready for shipment, and by so doing avoid clients establishing several credits and the necessary expense involved”

The view of the parties themselves as to what liability they were incurring is not a deciding factor where, as here, the transaction was in documents. In cases of ambiguity, however, some weight may properly be given to it as part of the surrounding circumstances.

In Chapman v Smith, Parker J said ([1907] 2 Ch at p 103):

“My attention was called to a great many authorities bearing on the question whether a person expressed to contract as agent, either for a named or an unnamed principal, can himself be personally liable on the contract. Having come to the conclusion that this question is in each case a question of construction having regard to the surrounding circumstances, I need not consider these authorities in detail.”

There is no authority that deals with the position and liability of a confirming house. Both from the documents and the surrounding circumstances it appears to me that its functions are wider than those of a bank which has an irrevocable

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credit and pays against a delivery (after delivery has been properly checked for quantity) but has no liability on the contract.

The fact that a person is agent and is so known to be does not itself prevent his incurring personal liability. Whether he does so is to be determined by the nature and terms of the contract and the surrounding circumstances. Where he contracts on behalf of a foreign principal there is a presumption that he is incurring a personal liability, unless a contrary intention appears. The same presumption arises when he signs in his own name without qualification.

In H O Brandt & Co v H N Morris & Co Ltd, Scrutton LJ said ([1917] 2 KB at p 796):

“Later, in Gadd v. Houghton, which may perhaps be called the leading case, MELLISH, L.J., states the same principle (1 Ex.D. at p. 360)—‘As is said in the note to Thomson v. Davenport, when a man signs a contract in his own name he is prima facie a contracting party and liable, and there must be something very strong on the face of the instrument to show that the liability does not attach to him’. When I find in this contract the words ‘We have this day bought from you’ and the signature ‘H. O. Brandt & Co.’, in my view something very strong is needed to show that Brandt & Co. have not contracted personally.”

And later in the same case, Scrutton LJ adds ([1917] 2 KB at p 797):

“The other fact which I take into account is that Messrs. Sayles Bleacheries are foreigners, and while I think that one cannot at the present day attach the importance which used to be attached forty or fifty years ago to the fact that the supposed principal is a foreigner, it is still a matter to be taken into account in deciding whether the person said to be an English agent has or has not made himself personally liable.”

Counsel for the defendants stresses the dissenting judgment of Neville J in that case, and the case of Miller, Gibb & Co v Smith & Tyrer Ltd. The latter case, however, was cited to the court in H O Brandt & Co v H N Morris & Co Ltd, and it appears to me that the judgment of Scrutton LJ which I have quoted, correctly sets out the law.

In Abdul Karim Basma v Weekes, Lord Reid, delivering the judgment of the Board, clearly affirms Higgins v Senior, and says ([1950] 2 All ER at p 152):

“An agent who contracts in his own name does not cease to be contractually bound because it is proved that the other party knew, when the contract was made, that he was acting as agent.”

Counsel for the defendants in his careful and ingenious argument contends as follows. The contract sued on is not the real contract. The real contract was the contract (sometimes called the indent) directly between the plaintiffs and the Australian company. The contract sued on incorporates the indent by reference. When one regards both those documents one sees that there was a firm contract of sale in the indent (which was headed as an order and of which copies were signed by both parties to it) made between the Australian company and the plaintiffs through their Australian agents subject to two conditions precedent, namely, confirmation and payment by the defendants. Those conditions precedent were fulfilled by the confirmation and the defendants’ agreement to pay. But this was only an agreement to pay on delivery. It imports no other liability and if goods are refused even at the last moment, so that there is no delivery, the defendants have no obligation to pay. At most the defendants, like a del credere agent, guarantee the solvency of the buyer. A del credere agent is only liable in respect of an ascertained sum or certain sum due as a debt from the buyer to the seller; he is not the person with whom the seller is entitled to litigate disputes arising out of the contract and ascertain what is due on it. At best, therefore, the defendants have no liability at all;

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at worst they are not liable until judgment has been obtained against the Australian company.

I do not think the analogy of a del credere agent helps. The exact limits of his liability have not been defined. Lord Mansfield took the view that he was liable to the seller in the first instance, but this view was corrected later, and as the law now stands the agent is a guarantor of the buyer’s solvency. It would seem that he is a guarantor to the seller of any mischief arising from the buyer’s insolvency once that mischief has been quantified (see Hornby v Lacy and Thomas Gabriel & Sons v Churchill & Sim). If the defendants’ liability were similar to that of a del credere agent, they would not be liable until the plaintiffs had litigated with the defendants and quantified their damages in such litigation, and this action would not now lie.

I do not think, however, that the defendants’ liability is limited to that of a del credere agent. I do not accept the view that the real contract is the indent between the Australian company and the plaintiffs through their agent. If that were so the Australian company would have had a contractual duty to do all in their power to procure the performance of the condition precedent, namely, that a confirming house should confirm and make arrangements to pay. On the view that I take of the documents and surrounding circumstances there was no such contractual duty. I think that if either party had taken no steps to implement the indent, the other party might well have considered himself to have been badly treated. But I think that either party to the indent would have been surprised to be told that it constituted a breach of contract.

In my opinion the words “confirmation and payment by [the defendants]” meant that a confirmation such as the order now sued on was to be issued by the defendants and that financial liability was to be assumed by the defendants.

I see no reason why “payment” should be restricted to payment on delivery and should exclude other payments such as payments due for breach of contract. Such a restriction would make the defendants’ intervention less onerous, but also far less valuable. It would leave the English merchant completely unprotected against cancellation at the last moment. It would be less than the protection given by a del credere agent. I do not believe that was the commercial intention of the parties.

I see no reason to doubt that the document means what it says, namely, that the defendants are assuming the liability of a principal buyer as between themselves and the plaintiffs. It would have been easy for the defendants to put a different wording in the document had the intention been otherwise. The defendants at first claimed that their wording “Purchase by S G Read & Co (London) Ltd” was inserted on the compulsion of the Board of Trade as a condition of the holding by the defendants of a purchase tax certificate, but in cross-examination Mr Read had to admit that this was not so. He could have set out in terms that they were purchasing only as agents, but he said that that was omitted because it was obvious. I do not accept that explanation.

In my opinion the document on which the plaintiffs sue was the true contract between the parties. It was intended by the parties to impose and by its terms does impose a liability on the defendants in respect of the performance of the contract.

I find nothing to counteract the presumption that the defendants incurred personal liability. The documents and the surrounding circumstances support the presumption.

The plaintiffs are entitled to judgment for £1,110 and costs.

Judgment for the plaintiffs.

Solicitors: Knott & Castle, Manchester (for the plaintiffs); H A Crowe & Co (for the defendants).

M Denise Chorlton   Barrister.

Re Harrison’s Share Under A Settlement Harrison v Harrison and Others

Re Ropner’s Settlement Trusts Ropner v Ropner and Others

[1955] 1 All ER 185

Categories:        ADMINISTRATION OF JUSTICE; Judiciary        

Court:        COURT OF APPEAL        

Lord(s):        JENKINS AND HODSON LJJ AND VAISEY J        

Hearing Date(s):        1, 21 DECEMBER 1954        

Judgment – Order – Recall by judge – Chancery Division.

Although the order of a judge dates from the day of its being pronounced, it can always be withdrawn, or altered or modified by him until it is drawn up, passed and entered. In the meantime it is provisionally effective, and can be treated as a subsisting order in cases where the justice of the case requires it and the right of withdrawal will not be prevented or prejudiced thereby.

An application was made to the Chancery Division of the High Court for approval of a scheme varying the trusts of a settlement on behalf of infants and unborn and unascertained persons. Following a decision of the Court of Appeal in a similar case, a judge in chambers made an order approving the scheme. Before the order was perfected, the House of Lords reversed the decision of the Court of Appeal and held that the court had no jurisdiction to make an order sanctioning variations in trusts in such cases. The judge thereupon recalled his order, adjourned the case into court for further argument and there dismissed the summons. On appeal,

Held – A judge was entitled so to recall the order on his own initiative, whether the order was originally made in chambers or in open court, and notwithstanding any consequential inequality in relation to other similar orders already perfected, and in the present case it was right that the order should have been recalled.

Re Thomas ([1911] 2 Ch 389) approved.

Millensted v Grosvenor House (Park Lane) Ltd ([1937] 1 Al ER 736) followed.

Dictum of Lord Westbury LC in Re Risca Coal & Iron Co Ex p Hookey (1862) (4 De GF & J at p 458) distinguished.

Decision of Roxburgh J ([1954] 2 All ER 453) affirmed.

Cases referred to in judgment

Re Downshire’s Settled Estates, Re Chapman’s Settlement Trusts, Re Blackwell’s Settlement Trusts [1953] 1 All ER 103, [1953] Ch 218, on appeal, HL sub nom Chapman v Chapman, [1954] 1 All ER 798, [1954] AC 429, 3rd Digest Supp.

Chapman v Chapman [1954] 1 All ER 798, [1954] AC 429.

Re Yates’ Settlement Trusts [1954] 1 All ER 619.

Re Thomas [1911] 2 Ch 389, 396, 105 LT 59, Digest (Practice) 736 3176.

Re Risca Coal & Iron Co, Ex p Hookey (1862), 4 De GF & J 456, 31 LJCh 429, 6 LT 567, 45 ER 1261, Digest (Practice) 709, 3039.

Re Australian Direct Steam Navigation Co, Miller’s Case (1876), 3 ChD 661, affd, (1877), 5 ChD 70, 9 Digest 453, 2943.

Re St Nazaire Co (1879), 12 ChD 88, 91, 41 LT 110, Digest (Practice) 815, 3759.

Re Roberts [1887] WN 231, Digest (Practice) 815, 3761.

Re Eyton (Adam) Ltd Ex p Charlesworth, (1887), 36 ChD 299, 57 LJCh 127, Digest (Practice) 815, 3760.

Re Suffield & Watts, Ex p Brown (1888), 20 QBD 693, 697, 58 LT 911, Digest (Practice) 815, 3762.

Page 186 of [1955] 1 All ER 185

Preston Banking Co v Allsup (William) & Sons, [1895] 1 Ch 141, 144, 64 LJCh 196, 71 LT 708, Digest (Practice) 815, 3764.

Millested v Grosvenor House (Park Lane) Ltd [1937] 1 All ER 736, [1937] 1 KB 717, 106 LJKB 221, 156 LT 383, Digest Supp.

Moon Motors Ltd v Kiuan Wou [1952] 2 Lloyd’s Rep 80.

Appeal

The plaintiffs in two causes commenced by originating summons appealed against orders of Roxburgh J dated 28 May 1954, and reported [1954] 2 All ER 453, recalling orders approving schemes varying the trusts of two settlements on behalf of infants and unborn and unascertained persons. After the orders had been made but before they had been drawn up and entered the House of Lords held in a similar case, Chapman v Chapman, that the court had no jurisdiction to make such orders. Roxburgh J held that he had power on his own initiative to recall the orders and, as persons not parties to the application were affected, that it was his duty to do so, and he dismissed the originating summonses on which the orders had been made.

Sir Hartley Shawcross QC Raymond Jennings QC and L M Jopling for the appellant tenant for life in the first appeal.

J M Price for the trustees in the first appeal.

F G King for the respondents interested in the income in the first appeal.

Sir Hartley Shawcross QC and D A Ziegler for the appellant tenant for life in the second appeal.

B S Tatham for certain infant beneficiaries in the second appeal.

Cur adv vult

21 December 1954. The following judgment was delivered.

JENKINS LJ read the following judgment of the court. In each of these two cases an application by originating summons for sanction on behalf of infant, and unborn, and unascertained persons of a scheme making variations in the trusts of a settlement came before Roxburgh J in chambers on 1 March 1954. According to the decisions of this court in Re Downshire’s Settled Estates and Re Blackwell’s Settlement Trusts, the variations sought were such as the court would have jurisdiction to sanction if satisfied that they were for the benefit of the infant unborn and unascertained persons interested or potentially interested under the trusts.

There was, however, then pending before the House of Lords the case of Chapman v Chapman, and, as it appeared to Roxburgh J that the decision in that case might impair or destroy the authority of the Downshire and Blackwell cases, he adjourned the two summonses with a view to dealing with them after and in the light of the expected decision in Chapman v Chapman. On the following day, however, Roxburgh J saw a report of the case of Re Yates’ Settlement Trusts in which this court had held (though in somewhat special circumstances) that a similar application should not have been adjourned, as Harman J had adjourned it, pending the decision of the House of Lords in Chapman v Chapman, but should have been heard and determined in the ordinary course.

Roxburgh J regarded the decision in Re Yates’ Settlement Trusts as applicable to the two summonses now in question. He accordingly caused them to be restored to his list and sanctioned both schemes by orders orally pronounced in chambers on 15 March and 17 March respectively. On the assumption that the Downshire and Blackwell cases were authoritative these orders were, at the dates on which he pronounced them, orders which he could properly make.

On 25 March 1954, the House of Lords pronounced their decision in Chapman v Chapman, and the effect of that decision was to destroy the authority of the Downshire and Blackwell cases and to make it clear that the court’s jurisdiction over trusts did not extend to the sanctioning of variations in trusts such as those which Roxburgh J had orally sanctioned on 15 March and 17 March 1954. At the date of the House of Lords’ decision, these orders had not yet

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been entered, or in other words had not been perfected as formal acts of the court. In these circumstances Roxburgh J directed the registrar not to proceed further with the perfecting of the orders, and caused the summonses to be restored to his list and adjourned into court for further argument.

At this further hearing the parties found it impossible to contend that the schemes could properly be sanctioned by fresh orders then made, in view of the House of Lords’ decision in Chapman v Chapman. But all parties joined in contending that the learned judge ought not to recall or vary the orders of 15 March and 17 March and that these orders should to perfected in the terms in which they were orally pronounced as orders bearing the dates on which they were respectively so pronounced. Roxburgh J rejected this contention, recalled the two unperfected orders, and by two further orders both dated 28 May 1954, dismissed the summonses. From such dismissal the plaintiffs in both cases now appeal to this court, with the support of all other parties, and they ask for relief by way of declaration or direction to lead to the perfecting of the orders as orally pronounced by Roxburgh J in the first instance.

The submissions in support of the appeals are to the effect:—First, that in general an order is made once and for all at the time when it is orally pronounced, and cannot thereafter be discharged or varied otherwise than on appeal. Secondly, that by way of exception to this general rule a judge may have a limited discretionary power of varying or discharging an order orally pronounced by him at any time before it is perfected by entry, but any such power is confined to cases of manifest error or omission or, in other words, cases broadly speaking comparable to those in which an order can be corrected after entry under RSC, Ord 28, r 11. Thirdly, that in any case a judge should not vary or discharge an order between oral pronouncement and entry on his own initiative, as distinct from doing so on the application of one or other of the parties. Fourthly, that, if and so far as there is any such discretionary power, the learned judge should not have exercised it as he did in these two cases. Fifthly, that for the purposes of the foregoing submissions there is no valid distinction between an order orally pronounced in chambers (as were the two orders now under consideration) and one so pronounced in open court.

We accept the last of these submissions, and agree that nothing turns on the fact that the two orally pronounced orders with which we are concerned were pronounced in chambers, while those substituted for them were made in open court. But we reject the limitations sought to be placed by the first three submissions on the power of a judge to recall his own order at any time before it has been perfected by entry. So far as the limitations involved in the first and second submissions are concerned, these seem to us to be plainly inconsistent with practice and the weight of authority, but it has been argued that, if the practice is wrong, it is not too late for the court to say so, and that the authorities are founded on obiter dicta which are later in date than an authority which ought to be followed and which was not brought to the notice of the court in the later cases.

We take the first three submissions together, for in our opinion it can make no difference to the answer to the question whether a judge can recall his own order before it can be perfected that in one case his attention has been drawn to some relevant consideration of law or fact by one of the parties to the matter under consideration, whereas in another case he has made the discovery for himself by his own diligence or even by accident. It is true that the cases cited to the court have all been cases in which a judge has varied his order after application had been made by one of the parties either for that purpose or at any rate in such a way as to give an incidental opportunity for revision, but those cases would naturally be more common than cases in which a judge might act on his own initiative. In the cases under consideration there was no opposition and it was in the interest of no one to ask the judge to recall his order. These three

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submissions would, we think, if accepted, produce an unworkable result. Few judgments are reversed and it would be unfortunate if once the words of a judgment were pronounced there were no locus poenitentiae. The appellants make a nominal concession to meet this difficulty by saying that the judge retains seisin of the matter so long as the parties are before him, but that, once the parties have left the court and the next case has been called, it is too late because the parties may have already acted on his oral judgment. Our answer to this is that, although the judgment dates from the day of its pronouncement, it is not perfected until drawn up, passed and entered, and anyone who acts on it beforehand must take such risk as there is that it will not be drawn in the form in which it was heard to be pronounced.

We think that an order pronounced by the judge can always be withdrawn, or altered or modified, by him until it is drawn up, passed and entered. In the meantime it is provisionally effective, and can be treated as a subsisting order in cases where the justice of the case requires it, and the right of withdrawal would not be thereby prevented or prejudiced. For example, the granting of an injunction, though open to review, would generally operate immediately, ie, as soon as the relevant words are spoken. But an order which could only be treated as operative at the expense of making it, in effect, irrevocable, eg, an order for the payment of money, cannot be treated as operative until it has been passed and entered. Where the nature of the case requires it, the process of passing and entering can be accelerated by the judge’s direction, and this is often done in the Chancery Division.

A reported example is the case of Re Thomas. In that case a contract for the sale of land required the approval of the court, and it was argued that all that was required by the contract was that the receiver should apply for and endeavour to obtain the approbation of the court to the contract. That requirement, it was contended, was satisfied when the master expressed his approbation and, from that moment, the purchaser’s rights crystallised and the contract became binding.

This argument was rejected in no uncertain terms by Arrington J who said ([1911] 2 Ch at p 395):

“Now, is the matter open? The purchaser says that all that was provided for by this contract was that the receiver should apply for, and endeavour to obtain, the approbation of the Chancery Division to this contract, and in case such approbation could not ultimately be obtained the agreement should be void; and he says that that provision is satisfied when the master has said ‘I approve of this contract’, whether that approval is recorded in the form of a note, or whether it is made in the form of an order or not. As a matter of fact the master here purported to make an order, and I think it was necessary that he should make an order, because at that moment the order for sale with the approbation of the judge was a conditional order. He could make it because he had jurisdiction to do so under R.S.C., Ord. 51, r. 1. He intended to make an order. What is it that renders an order finally effective so that there is no longer any possibility of going back from it? It seems to me that it is the passing and entering of the order. It is the everyday practice that, until an order is passed and entered, the mater can be brought before the judge, and if a mistake has been made it can be put right. But the matter does not rest there. This was an order made by the judge in chambers, that is to say, in this particular case made by the master as the deputy of the judge. It is the right of any party interested to adjourn a question from the judge’s deputy to the judge himself.”

Then after some further discussion of the question of adjournment to the judge, the learned judge said this (ibid., at p 396):

“I think that is the correct way of dealing with the matter for the reason

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that, until the order is finally passed and entered, it leaves open an opportunity of reviewing and re-considering what has been done.”

The authority mainly relied on by the appellants is the decision of Lord Westbury LC sitting in the Chancery Division in Re Risca Coal & Iron Co Ex p Hookey. No doubt a literal reading of the language used by the Lord Chancellor supports the appellants’ contention that no order can be varied by the judge who pronounced it, even before it has been passed and entered. In that case Lord Westbury said at the beginning of his judgment (4 De GF & J at p 457):

“I have very little doubt how this question ought to be determined. It has been urged upon me that I must construe the word ‘made’ as it occurs in the particular section of this Act of Parliament as equivalent to ‘orally pronounced’.”

Then a little further on he said (ibid, at p 458):

“But I am willing to take the question which I have to determine without any special regard to the policy of this particular statute, and it is fairer to the appellant himself so to take it, than to pray in aid the general intent of the Act. I regard it as a question of very considerable importance. If I permitted any doubt to be entertained upon it, the extent of that doubt it is scarcely possible to foresee. It might bring the whole of the computation of the periods of time defined by the orders or by the statutes into a great degree of inconvenient uncertainty. It is better, therefore, to abide by one certain and positive rule, and I have not the least doubt that that rule is to be derived from the uniform principle and practice of the court that has been abided by without any variation, and which has always determined the date of its orders. An order of the Court of Chancery, however, long a time may elapse in the ministerial duty of drawing up that order and committing it to paper, is made to bear date on the day when it is pronounced by the court. That date appears in the document in which the order is recorded, and the principle, therefore, involves of necessity this consequence, that the order must be accepted for all purposes as having been made on the day on which it is dated … The greatest possible confusion would arise were it otherwise. In fact, all persons dating their rights from the time of the order being pronounced would be thrown into a state of most inconvenient uncertainty, if they could not exhibit to another court, or produce for the purpose of any legal inquiry the order containing the directions of the court with the date, in the certainty that that date will be accepted as the time when the order is made … The principle which makes the order, whenever drawn up and entered, to bear date on the date when it is pronounced by the court, I hold to be one in perfect conformity with the whole theory of judicial procedure. The theory of judicial procedure is that the cogent and binding effect of the order begins immediately from the time when the order is pronounced by the lips of the judge, and if that could be done physically which legally is supposed to be done, and which one would desire to be done if it were possible, every order would be completed on the spot, written out by the judicial officer and in curia before the court rises, and delivered to the parties. That is the unquestionable theory of judicial procedure, and in conformity with that theory that is the time when the order is ‘made’, for the two words must be considered as equivalent and capable of being substituted the one for the other. The mere defining of the words of the court by writing and reducing them into a form in which they can be evidence is a ministerial operation which, according to the true theory, succeeds the delivery of the order by the judge, and must be in point of fact nothing in the world more than the physical embodiment on the spot by the court of the words which the judge has used.”

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It must be remembered, however, that the only decision in the case was that, for the purpose of computing the time allowed for appealing, an order was “made” at the time when it was pronounced, and although the Lord Chancellor based this conclusion on the principle that an order took effect from the date of its pronouncement, and was at pains to point out that in an ideal system every order would be completed on the spot, it does not seem to us to involve the proposition contended for, that, after the words have passed his lips and before the order is perfected, a judge who has in his belief delivered an erroneous judgment has no power to recall it.

This course was taken by Sir George Jessel MR in Re Australian Direct Steam Navigation Co Miller’s Case. It is said that this might well have been by consent of the parties but if jurisdiction was in question this would not affect the validity of the authority. It is to be observed that in this case the learned Master of the Rolls, after he had given an oral judgment and before the final order was made and perfected, considered other material to which his attention had not previously been drawn. The same learned judge later referred to Miller’s Case in Re St Nazaire Co, in these words (12 ChD at p 91):

“In Miller’s Case no order had been drawn up. A judge can always re-consider his decision until the order has been drawn up.”

In Re Roberts Kay J regarded himself as free where an order had not been drawn up, whether it were an order made in chambers or in court, to stay the drawing up of the order and re-hear the matter before making a final order. He acted accordingly.

The case of Re Adam Eyton Ltd Ex p Charlesworth, contains conflicting dicta of Fry LJ (36 ChD at p 301), and Cotton LJ (ibid), on this topic, but the appellant is entitled to say that the judgment of the Court of Appeal treated as an effective order an earlier order than the one on appeal although the earlier one had not been drawn up. This case, therefore, lends some support to the argument of the appellants. In Re Suffield & Watts, Ex p Brown the order had been perfected but Fry LJ repeating his earlier dictum in Re Adam Eyton’s case, said (20 QBD at p 697):

“Re St. Nazaire Co. shows that, when an order or judgment of the High Court has once been perfected, the court has no jurisdiction to alter it. So long as the order has not been perfected the judge has a power of reconsidering the matter, but, when once the order has been completed, the jurisdiction of the judge over it has come to an end.”

In Preston Banking Co v William Allsup & Sons A L Smith LJ ([1895] 1 Ch at p 144) expressly assented to what Fry LJ had said in Re Suffield & Watts, and also referred to the St Nazaire case in support of the proposition. In Millensted v Grosvenor House (Park Lane) Ltd, the trial judge, after delivering his oral judgment and before it had been drawn up, reduced the amount of damages awarded from £50 to £35. The Court of Appeal upheld the order. Farwell J said ([1937] 1 All ER at p 740):

“It is now well settled that, until an order made by a judge has been perfected, by being passed and entered, there is no final order, and, consequently, the judge may, at any time until the order is so perfected, vary or alter the order which he had intended to make: Re Suffield & Watts, Ex p. Brown.”

In the more recent case of Moon Motors Ltd v Kiuan Wou ([1952] 2 Lloyd’s Rep at p 85) the same principle was applied by the Court of Appeal on appeal from a county court judge.

The appellants’ fourth submission, to the effect that, if there is a discretionary power to recall an unperfected order, the learned judge was wrong in exercising

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that discretion in these two cases, is based mainly on the contention that inequality of treatment between litigants is likely to result in cases such as this, owing to the variation in time between the pronouncement of orders and the “ministerial duty” of drawing them up and “committing them to paper”. We were told that other orders in similar cases orally pronounced before the decision of the House of Lords but not perfected by the time that decision was made known have nevertheless been allowed to proceed to completion by entry, and to take effect accordingly. It was also submitted that, as the orders orally pronounced in the present two cases were at the time of their pronouncement orders proper to be made according to the authorities as they then stood, and the learned judge was then well aware of the possibility that these authorities might be displaced by the expected decision of the House of Lords in Chapman v Chapman, the subsequent realisation of that possibility did not suffice to justify the learned judge in going back on the decision he had previously reached and orally pronounced without any misapprehension of fact or law.

As to the argument based on inequality in the treatment of litigants, the question for this court is whether Roxburgh J was justified in recalling the two orders with which we are concerned, and not whether some other judge ought to have recalled other similar orders. Inequality is, moreover, inevitable in all cases falling within a given field of law where the House of Lords arrives at a decision to the effect that the law in that field is not as hitherto understood. Cases determined before the House of Lords’ decision go one way, and cases determined after it go the other, whether the date of determination is taken as being the date when the order is orally pronounced or the date when the order is perfected. Whichever date is taken, the result must necessarily depend on circumstances purely accidental, whether they relate to the state of the lists or the state of business in the Scrivenery Department, or the length of time for which the House of Lords find it necessary to reserve their decision.

Moreover, while it so happened that, in the two cases now before the court, it was claimed to be in the interests of all parties that the orders should go in the form in which they were orally pronounced, there might equally well be a case in which the interests of all parties demanded that a fresh order should be made on the basis of the law as declared by some supervening decision of the House of Lords before the original order was perfected. To take by way of example an imaginary inversion of the two instant cases, if the decisions of this court in the Downshire and Blackwell cases had imposed some restriction on the jurisdiction of the court to vary trusts, and if Roxburgh J following these cases, had by his orders as orally pronounced refused to sanction the schemes proposed in the two cases now under appeal on the ground that he had no jurisdiction to do so, and if before those orders were perfected the House of Lords’ decision in Chapman v Chapman had supervened with a pronouncement to the effect that there was no jurisdiction in law for any such restriction, we find it difficult to suppose that it would not have been contended on behalf of all parties that Roxburgh J should recall his two unperfected orders, and proceed to consider the two applications on their merits in accordance with the law as laid down by the House of Lords. But if the appellants are right, it must follow that, in the hypothetical circumstances, Roxburgh J would have been constrained to say in effect: “It is true that the House of Lords’ decision shows me to have been wrong in refusing these applications in limine, and that the orders which I orally pronounced before that decision was made known will, when drawn up, passed and entered in accordance with the language I then used, be plainly at variance with that decision. Nevertheless, I am irretrievably bound by what I then said. The orders must therefore proceed to completion, wrong as they are now known to be, and you must be put to the expense of taking them to the Court of Appeal, who will certainly reverse them, and either proceed to hear you on the merits, or, more probably, remit the applications to me in

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order that I may do so.” We venture to think that, in the hypothetical circumstances we have stated, it would be more reasonable, and better for the parties, if the learned judge could say: “The orders which I orally pronounced are now shown by the House of Lords’ decision to have been wrong. But they are not yet perfected. I will therefore recall them and re-hear the two applications on their merits.” It is also pertinent to consider the position which would arise in a contested case in which a decision of the House of Lords, made known after the oral pronouncement of the judge’s order but before its completion by entry, showed the order as orally pronounced to have been founded on a misconception as to the law. If the appellants are right, then, no matter how clearly it might appear from the House of Lords’ decision that the judge’s order as orally pronounced was erroneous, such order would have to proceed to completion and the dissatisfied party would be faced with the necessity of appealing as the only means, short of agreement, which might or might not be possible, of putting the matter right. The cannot think that this would be a desirable state of affairs.

It is important to remember that, in the ordinary way, the recall of an unperfected order results in a re-hearing at which all parties can present such further arguments as they may be advised having regard to the matter, whatever it may be, which is sought to cast doubt on the correctness of the order as orally pronounced. But in the present cases the parties found it impossible to contend that the schemes were such as could properly be sanctioned by the court since the decision of the House of Lords in Chapman v Chapman, and accordingly did not avail themselves of the re-hearing offered by Roxburgh J  This appears from the last paragraph of his judgment, where he said ([1954] 2 All ER at p 457):

“I should have proceeded to re-hear the cases, but nobody wishes me to do so, because the result is a foregone conclusion.”

As to the argument to the effect that the orders orally pronounced by the learned judge were proper orders at the time of their pronouncement and should therefore be allowed to stand, this seems to us to be based on the erroneous supposition that Chapman v Chapman altered the law, whereas in truth that decision merely declared the law as it always was, and showed it to have been theretofore misapprehended in the courts below.

The law having been declared by the House of Lords in Chapman v Chapman, before Roxburgh J’s orders were perfected, in terms which clearly indicated that those orders ought not to have been made, and this having come to the learned judge’s knowledge, it was in our opinion right that he should recall the orders orally pronounced by him notwithstanding the fact that, at the time when they were pronounced, they appeared to be correct according to the authorities as they then stood. When a judge has pronounced judgment he retails control over the case until the order giving effect to his judgment is formally completed. This control must be used in accordance with his discretion exercised judicially and not capriciously. The learned judge in these two cases exercised his discretion judicially in recalling his original orders, and there is in our opinion no ground for disturbing the orders finally made. These appeals, therefore, should be dismissed.

Appeals dismissed.

Solicitors: Theodore Goddard & Co (in the first appeal); Tamplin, Joseph & Flux agents for Darling, Heslop & Forster, Darlington (in the second appeal).

F A Amies Esq   Barrister.

Note

Scappaticci v Attorney General

[1955] 1 All ER 193

Categories:        FAMILY; Family Proceedings        

Court:        PROBATE, DIVORCE AND ADMIRALTY DIVISION        

Lord(s):        WILLMER J        

Hearing Date(s):        13 DECEMBER 1954        

Legitimation – Legitimatio per subsequens matrimonium – Domicil of father at date of marriage – Domicil of choice – Death of father – Statements made by father to petitioner – Admissibility – Legitimacy Act, 1926 (16 & 17 Geo 5 c 60), s 1(1).

Domicil – Change of domicil – Declarations as to intention – Petition for declaration of legitimacy – Legitimatio per subsequens matrimonium – Domicil of father at date of marriage – Death of father – Statements made by father to petitioner – Admissibility.

Notes

As to Legitimation by Subsequent Marriage, see 3 Halsbury’s Laws (3rd Edn) 93, para 147; and for cases on the subject, see 3 Digest 372–374, 131–142; and as to the Admission of Evidence of Declarations by a Deceased on Legitimacy Petitions, see 3 Halsbury’s Laws (3rd Edn) 101, para 157 note (i).

As to Evidence of Intention as to Change of Domicil, see 7 Halsbury’s Laws (3rd Edn) 20, para 36; and for cases on the subject, see 11 Digest (Repl) 337, 95, 96.

For the Legitimacy Act, 1926, s 1(1), see 2 Halsbury’s Statutes (2nd Edn) 493.

For the Matrimonial Causes Act, 1950, s 17(2), see 29 Halsbury’s Statutes (2nd Edn) 404.

Cases referred to in judgment

Re Davy [1935] P 1, sub nom Davy v A-G, 103 LJP 115, 151 LT 562, Digest Supp.

Battle v A-G [1949] P 358, [1949] LJR 1015, 2nd Digest Supp.

Petition under the Matrimonial Causes Act, 1950, s 17(2), for a declaration of legitimacy.

In 1900 Gaetano Scappaticci came from Italy to England. He thereafter lived and worked in London continuously (except for certain holidays which he spent in Italy) until 1910. The petitioner was born on 18 July 1910, and his birth was recorded by an entry in the register of births in the sub-district of Shoreditch Northwest made on 26 July 1910, in which his name was entered as John Antonio and that of his mother as Mary Cabella. The mother did not sign her name in the entry but made her mark.

On 22 October 1910, an entry was made in the register of marriages of a marriage solemnised at St Peters Italian Church in the district of Holborn between one Gaetano Scappaticci and Maria Cabrelli. The wife did not sign her name but made her mark at the foot of the entry. In 1910 or 1911, Gaetano Scappaticci returned to Italy with his wife and the petitioner.

The wife died on 12 November 1936, in Italy. Gaetano Scappaticci never returned to England, except for a holiday in 1949, and died on 2 June 1950, in Italy.

By his petition dated 10 April 1952, the petitioner alleged:

“3. That the petitioner is the natural child of Maria Scappaticci who at the time of his said birth was Maria Cabrelli, spinster, and who in the … birth certificate is described as Mary Cabella, and of Gaetano Scappaticci, a bachelor. That neither the said Maria Cabrelli nor the said Gaetano Scappaticci was lawfully married at the date of birth of the petitioner.

“4. That the said Maria Cabrelli and the said Gaetano Scappaticci were lawfully married on Oct. 22, 1910, at St. Peters Italian Church in the district of Holborn in the county of London.

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“5. That the said Gaetano Scappaticci was at the date of the said marriage domiciled in England.

“6. That in the alternative at that date the said Gaetano Scappaticci was domiciled in Italy and that by the law of Italy an illegitimate person is legitimated by the subsequent marriage of his parents.

“8. That the said Maria Scappaticci died on Nov. 12, 1936, and the said Gaetano Scappaticci died on June 2, 1950.

“The petitioner therefore prays that the court will decree and declare (i) that the said Gaetano Scappaticci and the said Maria Scappaticci were lawfully married on Oct. 22, 1910 … (ii) that by the said marriage the petitioner became legitimated as from Jan. 1, 1927, for the purposes of the Legitimacy Act, 1926 … ”

On 15 September 1952, an appearance was entered on behalf of the Attorney General. On 2 October 1952, Mr Registrar Pereira ordered that the petition should be served on the brother and three sisters, all resident in Italy, of Gaetano Scappaticci.

The petitioner abandoned his claim based on para 6 of his petition since Italian law required, for legitimation by subsequent marriage, certain formalities, such as registration, which had not been carried out in the present case.

The petitioner sought to establish that Mary Cabella and Maria Cabrelli were one and the same person, and that Gaetano Scappaticci had at the date of the marriage of 22 October 1910, acquired a domicil of choice in England, so that the petitioner had become thereby legitimated in accordance with the provisions of the Legitimacy Act, 1926, s 1(1). The only evidence available on the question of domicil was certain statements made to the petitioner by Gaetano Scappaticci to the effect that he greatly admired England and but for his aged parents he would never have returned to Italy. The petitioner now sought to give oral evidence of these statements. Counsel for the Attorney General raised the question of the admissibility of this evidence. The case is reported only on this question.

H E L McCreery for the petitioner. The issue of domicil is ancillary to the question of establishing legitimacy, and the question whether a petitioner’s father had acquired a domicil of choice in England involves considering what was his state of mind at the relevant time. Statements made by him are after his death the best evidence of his state of mind. Counsel referred to and cited passages from the judgments in Re Davy ([1935] P at p 15) and Battle v A-G ([1949] P at p 360).

Colin Duncan for the Attorney General. Although there is authority for admitting on a question of paternity evidence which would otherwise be inadmissible as hearsay, there is no authority for admitting it on an issue of domicil. The admission of evidence of statements made by the deceased in his lifetime in support of his having acquired a domicil of choice was not covered by authority, and there might be other evidence, such as the length of time the deceased had been in the country, what property he had in the country he was said to have adopted and how far he had severed his connections with the country of his domicil of origin. Nevertheless, although the admission of hearsay evidence of this character has so far been limited to declarations bearing on the question whether one man was the father of another, the Attorney General does not object to the admission of the evidence in this case, if the court thinks fit to receive it.

H E L McCreery for the petitioner.

Colin Duncan for the Attorney General.

13 December 1954. The following judgment was delivered.

WILLMER J. I propose to admit the evidence. It seems to me that on a matter such as domicil, where the state of mind of the deceased person is the crucial question, that which he may have said in his lifetime is certainly excellent, if not the best, evidence, as to what his state of mind was. There is authority in the cases which have been cited to me for a relaxation of the rules relating

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to hearsay in cases of this character, though the authority is not, it is true, direct authority for the admissibility of this particular type of evidence. I think, as this question has now arisen in relation to an issue of domicil, that the relaxation of the rule allowed in Re Davy and in Battle v A-G ought to be extended sufficiently to enable the evidence in the present case to be received.

Evidence admitted accordingly.

[At the conclusion of the hearing His Lordship held that the petitioner had failed to establish that Gaetano Scappaticci had acquired a domicil of choice in England at the date of the marriage, and dismissed the petition.]

Solicitors: Cunliffe & Airy (for the petitioner); Treasury Solicitor.

A T Hoolahan Esq   Barrister.

Chelsea Estates Investment Trust Co Ltd v Marche and Others

[1955] 1 All ER 195

Categories:        LAND; Mortgages        

Court:        CHANCERY DIVISION        

Lord(s):        UPJOHN J        

Hearing Date(s):        15, 16, 17, 21 DECEMBER 1954        

Mortgage – Redemption – Lease mortgaged by legal charge – Mortgagee obtained relief against forfeiture of lease on default of mortgagor – Order giving relief granted new lease for full residue of term – Whether new lease subject to mortgagor’s right of redemption – Law of Property Act, 1925 (15 & 16 Geo 5 c 20), s 146(4).

Landlord and Tenant – Lease – Forfeiture – Relief – Relief to mortgagee – Whether new lease subject to mortgagor’s right to redeem.

By a lease dated 18 April 1952, the landlords granted premises to M for a term of years expiring on 24 June 2010. By a deed dated 27 January 1953, M assigned the residue of the term to the plaintiffs who on the same day executed a registered legal charge of that date in favour of M to secure repayment of a principal sum and payment of interest. The plaintiffs failed to pay the rent, and the landlords obtained an order for possession against them in default of appearance. The plaintiffs obtained an order granting them on conditions relief against forfeiture, but they did not fulfil the conditions and their application for relief was ultimately dismissed. Subsequently M applied for relief under s 146(4) of the Law of Property Act, 1925, and on 29 April 1954, it was ordered that “the premises … do vest in [M.] for all the residue of the term expiring on 24 June 2010 … ” The plaintiffs brought an action against M to redeem the premises comprised in the legal charge.

Held – (i) the order of 29 April 1954, operated as a grant of a new lease to M for a term of years expiring on 24 June 2010, on the same terms as the original lease dated 18 April 1952, and did not constitute an assignment of the original term.

(ii) the new lease so vested in M must be regarded as a substituted security in his hands, and was subject to any right to redeem the registered charge dated 27 January 1953, subsisting in the plaintiffs.

Dicta of Sir Richard Henn Collins MR and Romer LJ in Re Biss ([1903] 2 Ch at pp 56, 62) and dictum of Vaughan Williams LJ in Ewart v Fryer ([1901] 1 Ch at p 512) applied.

Page 196 of [1955] 1 All ER 195

Notes

As to the Equity of Redemption, see 23 Halsbury’s Laws (2nd Edn) 300, para 452; and for cases on the subject, see 35 Digest 343, 852 et seq.

As to Relief against Forfeiture for Non-payment of Rent, see 20 Halsbury’s Laws (2nd Edn) 264–267, paras 297–299; and for cases on the subject, see 31 Digest (Repl) 534–537, 6592–6612.

Cases referred to in judgment

Ewart v Fryer [1901] 1 Ch 499, 70 LJCh 138, 83 LT 551, affd HL sub nom Fryer v Ewart, [1902] AC 187, 71 LJCh 433, sub nom Watney, Combe, Reid & Co v Ewart, 86 LT 242, 31 Digest (Repl) 552, 6724.

Serjeant v Nash, Field & Co [1903] 2 KB 304, 72 LJKB 630, 89 LT 112, 31 Digest (Repl) 553, 6733.

Nelson v Hannam [1942] 2 All ER 680, [1943] Ch 59, 112 LJCh 57, 168 LT 146, 2nd Digest Supp.

Re Biss [1903] 2 Ch 40, 72 LJCh 473, 88 LT 403, 35 Digest 311, 573.

Rushworth’s Case (1676), Freem Ch 13, 22 ER 1026, 35 Digest 310, 571.

Palmer v Young (1684), 1 Vern 276 (23 ER 468), 1 Eq Cas Abr 380 (21 ER 1116), 43 Digest 632, 709.

Featherstonhaugh v Fenwick (1810), 17 Ves 298, 34 ER 115, 30 Digest (Repl) 436, 791.

Nesbitt v Tredennick (1808), 1 Ball & B 29, 43 Digest 635, 733 i.

Rakestraw v Brewer (1729), 2 P Wms 511 (24 ER 839), Mos 189 (25 ER 342), 2 Eq Cas Abr 162, 601 (22 ER 138, 505), 35 Digest 311, 572.

Grand Junction Canal v Bates [1954] 2 All ER 385, [1954] 2 QB 160.

Action

Chelsea Estates Investment Trust Co Ltd brought an action commenced by writ in which they claimed to redeem premises comprised in a legal charge dated 27 January 1953.

By a lease dated 18 April 1952, the Prudential Assurance Co Ltd as landlords, demised to Peter Marche, the first defendant, the premises known as Nos 35 and 36 Princes Square, Bayswater, in the county of London from 15 April 1952, to 24 June 1952, and thereafter for a term of fifty-eight years (expiring on 24 June 2010) at a rent after 24 June 1952, of £400 per annum. The lease contained the usual proviso for forfeiture for non-payment of rent, and user of the premises was restricted to the carrying on of the business of a high-class hotel or boarding-house. The lease was registered as a good leasehold title in HM Land Registry on 29 May 1952.

On 27 January 1953, the first defendant assigned the residue of the term of the lease to the plaintiffs, and Anthony Edward Coles, the principal shareholder in the plaintiff company, was joined as guarantor for the performance by the plaintiffs of the covenants in the lease. On the same day, the plaintiffs executed a deed of registered legal charge of even date whereby the premises were charged in favour of the first defendant to secure repayment of £4,500 together with interest. Both the assignment and legal charge were registered at the Land Registry on 11 March 1953. The plaintiffs entered into possession, but never paid any rent, and on 13 May 1953, the landlords issued a writ against the plaintiffs and the said Anthony Edward Coles for possession. On 29 May 1953, the landlords obtained in the Queen’s Bench Division judgment in default of appearance for possession of the premises, but never went into possession.

On 20 May 1953, the first defendant issued a writ against the plaintiffs and the guarantor, the said Anthony Edward Coles, for repayment of the principal sum due under the legal charge and on 17 July 1953, obtained judgment in the Chancery Division against the said Anthony Edward Coles.

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On 16 March 1954, the plaintiffs applied in the landlords’ action for relief against forfeiture, and on 23 March 1954, an order was made setting aside the judgment of 29 May 1953, and granting relief against forfeiture to the plaintiffs on conditions as to the payment of costs, payment of arrears of rent and other matters. The plaintiffs did not fulfil the conditions of the order, and the application was dismissed.

On 14 April 1954, the first defendant made an application in the landlords’ action for relief against forfeiture, under s 146(4) of the Law of Property Act, 1925, and on 29 April 1954, an order was made in these terms:

“The court doth pursuant to s. 146 of the Law of Property Act, 1925, order that the two messuages and premises … comprised in a lease dated Apr. 18, 1952 … do vest in [the first defendant] for all the residue of the term expiring on June 24, 2010, granted by the said lease … ”,

the first defendant to pay the costs and arrears of rent. On 10 July 1954, the plaintiffs delivered up possession to the first defendant, who entered into possession. On 4 October 1954, the first defendant, as beneficial owner, entered into a contract with the second, third and fourth defendants to sell the property to them for a price in excess of the amount of the mortgage. By an order dated 6 October 1954, the Chief Land Registrar ordered the register to be amended to give effect to the order dated 29 April 1954, and that a caution be registered to safeguard the interest of the plaintiffs until disposal of the action. The first defendant was registered as proprietor of the premises and the registration of the plaintiffs as proprietors and the registration of the legal charge were cancelled. On 9 August 1954, the plaintiffs issued a writ against the first defendant claiming a declaration that they were entitled to redeem the premises comprised in the legal charge and redemption and other relief, and by amendment the other defendants, who were purchasers from the first defendant, were later added.

P Ingress Bell, Qc,/ and I C Duthie for the plaintiffs.

Lionel Edwards QC Elson Rees, and T I Payne for the first defendant.

D A Thomas for the remaining defendants.

21 December 1954. The following judgment was delivered.

UPJOHN J having stated the facts, continued). The real question which I have to determine is, first, does the first defendant hold the demised premises free from mortgage or as a substituted security? If he holds them free from the mortgage, cadit quaestio. If not, the question arises what are the rights and liabilities of the parties, having regard to the fact that the first defendant has entered into a contract of sale with the second, third and fourth defendants.

With regard to the first point, it is put in two ways. It is said, first of all, that the order of 29 April 1954, operates as a reassignment to the first defendant of the lease previously vested in the plaintiffs, and, of course, if that be right, it is the same lease throughout and must necessarily, therefore, be subject to the mortgage. On the other hand, it is said that the order was not an assignment of the original lease, but that it created a new lease between the Prudential Assurance Co Ltd as landlords, and the first defendant as lessee.

It is to be noted that the order was made pursuant to the Law of Property Act, 1925, s 146, and the only sub-section of that section which is applicable to the case of an under-lessee is sub-s (4). It is common ground that the proper way of giving effect to s 146(4) is by creating a new term in the under-lessee. That, I think, is plain from the whole framework of sub-s (4), particularly the concluding words,

“… but in no case shall any such under-lessee be entitled to require a lease to be granted to him for any longer term than he had under his original sub-lease”,

and that view is confirmed by Ewart v Fryer, and Serjeant v Nash,

Page 198 of [1955] 1 All ER 195

Field & Co. If in fact the court ordered the lease to be assigned, then, there having been no appeal, that would I think bind me, even if made without jurisdiction; but at all events one approaches the construction of the order with this in mind, that the proper way of granting relief to an under-lessee is by way of new lease rather than under-lease. I do not read the relevant part of the order again. It is not happily expressed. In the first place, the term granted to the under-lessee is not the term which he had, viz, a term for one day less than the original term, but the whole of the original term. He was entitled to no more than one day less, but he did get the whole term. That is perhaps not very important; but it is also to be observed that nothing is said as to the terms on which the property is to be vested in him, but I think the words “on the terms and conditions of the lease” must be implied. Looking at this order and approaching it in the manner I have mentioned, I think it is reasonably clear that the order did not operate as an assignment, but operated as a grant of a lease expiring on 24 June 2010, on the terms and conditions of the original lease, so that the first defendant thereby again became in direct contractual relationship with the Prudential Assurance Company, the original lease having expired. Therefore, it seems to me that the first defendant must be treated as holding under a lease created by the order of 29 April 1954. The question then is whether he holds that new lease free from the mortgage or subject to it.

The law is, I think, not really in dispute. Where a lease which is in mortgage contains a right to renew it or an option to purchase a freehold reversion and those rights or options are exercised by the mortgagee, it is quite clear that the renewed term or the freehold reversion is held by the mortgagee as part of his security. That was made clear by the Court of Appeal in Nelson v Hannam. In that case, Lord Greene MR said ([1942] 2 All ER at p 685):

“The real truth of the matter, in my opinion, is this: a mortgagee who takes as part of his security an option to purchase the freehold is in principle in the same position as a mortgagee of a lease which contains an option to the lessee to renew. It is established by a number of old authorities, and, indeed, if I may say so at this time of day, at any rate, it would not require authority to establish the proposition, that, where pursuant to such a right to renew the mortgagee obtains the renewal, he must hold the renewed lease subject to the same equity of redemption as existed in relation to the original lease.”

That does not directly cover this case.

The general law is conveniently summed up in Re Biss. That case was not dealing with mortgages, but with the renewal of a lease which formed part of a trust estate; but both Sir Richard Henn Collins MR and Romer LJ dealt with the position of mortgagees.

Sir Richard Henn Collins MR said ([1903] 2 Ch at p 56):

“But there is another class of cases in which, as it seems to me, there is no presumption of law, but at most a rebuttable presumption of fact. In this class apparently are mortgagees; Rushworth’s case; joint tenants, Palmer v. Young; and partners, Featherstonhaugh v. Fenwick. Prima facie, a mortgagee cannot renew for himself: he cannot hold the accretion, any more than he can hold the term itself, free from the right to redeem; the reason here is analogous to that which governs the rights of tenants for life. But in this case the presumption is apparently rebuttable; and in Nesbitt v. Tredennick LORD MANNERS held it was rebutted. He said (1 Ball. & B. at p. 47): ‘Here no part of Nesbitt’s conduct shows a contrivance, nor was he in possession: all that Nesbitt or Tredennick treated for, was a new lease, giving full opportunity to the plaintiffs, to dispose of their interests or to renew if they were enabled so to do’.”

Page 199 of [1955] 1 All ER 195

Romer LJ said ([1903] 2 Ch at p 62):

“I will next deal with the cases decided as between mortgagor and mortgagee. Each of these owes a duty to the other in respect of the mortgaged property; and in case of one being able, by virtue of his position, to obtain a renewal of a mortgaged lease, there are obvious grounds why it should be held against him, at any rate as a rule, that the renewed lease should be treated as engrafted on the old and as forming part of the mortgage security. In the case of a mortgagee renewing it was put as follows by the court in the case of Rakestraw v. Brewer (2 P. Wms. at p. 513): ‘This additional term comes from the old root, and is of the same nature, subject to the same equity of redemption, else hardships might be brought upon mortgagors by the mortgagees getting such additional terms more easily, as being possessed of one not expired, and by that means worming out and oppressing a poor mortgagor’.”

In both those passages the court was dealing with the case where a mortgagee is able to renew not as of right, but where, on the expiry of the old lease, the mortgagee by virtue of his position was or might be favourably placed to obtain a renewal from the landlord. As Sir Richard Henn Collins pointed out, however, where the mortgagee is guilty of no contrivance, where he is not in possession and where, in the words of the old case of Nesbitt v Tredennick, he has not “amused” the mortgagor, “with hopes of his redeeming”, the mortgagee may be in a position to keep the new lease for himself; but one starts with this, that prima facie the mortgagee holds a new term as part of the old stock and subject of the mortgage.

Counsel for the first defendant has forcibly pointed out here that the plaintiffs have never paid any rent or any interest. They did at one time repay £750 of capital, but that is all that they have ever done in the way of payment under the lease and under the mortgage. They had every opportunity of getting relief from forfeiture. On 23 March 1954, an order was made in their favour which could not be described as unduly onerous in any way, but they entirely failed to take advantage of that order. The first defendant only obtained the order of 29 April 1954, vesting the premises in him when the plaintiffs had wholly failed to take advantage of the order which they had obtained and it stood dismissed. It is admitted by the plaintiffs here that there is no question of the first defendant having in any way abused his position or gone behind the backs of the plaintiffs in any way. He has behaved with perfect propriety, and gave every opportunity to the plaintiffs themselves to get relief, and it was only when they failed that he took steps. He was not, of course, at the relevant time in possession of the mortgaged premises. Counsel for the first defendant submits that really the matter rests on conscience and there is nothing whatever unconscionable in the first defendant claiming the lease for his own. He claimed it in the presence of the plaintiffs, who were parties to his application, and, indeed, they appealed to the judge in chambers. They had had their chance, and then it was open to the first defendant to step in and get a lease, and, therefore, it is said with much force that the lease granted to the first defendant ought to be treated as his own and not subject to the mortgage.

Now whichever be the right view, certain anomalies, it seems to me, necessarily arise. If this new lease is not treated as part of the mortgage security, then I can see no reason in law why the first defendant should not keep his new lease and at the same time sue the plaintiffs for the whole mortgage money under the covenants in the mortgage, for the position in law can be no different from the case where the leasehold security has expired not by forfeiture, but by effluxion of time; that would seem to be a hardship on the plaintiffs. On the other hand, the anomalies certainly arise the other way if the plaintiffs are right. It is clear at the mortgagee receiving a new lease will remain liable on his covenants throughout the residue of the term, although he may be redeemed

Page 200 of [1955] 1 All ER 195

by the mortgagor next day. If the mortgagor applied for relief, but was found to be quite unsuitable, because, for instance, he has used the demised premises as a brothel, and relief is refused on that ground, but a new lease is granted to the mortgagee, as happened in the recent case before me, Grand Junction Canal v Bates, then, if the plaintiffs are right, the mortgagor being in a position to redeem the mortgage, the landlord, who has been compelled to grant a new lease to the mortgagee, finds that the wholly unsuitable mortgagor is again in possession of the demised premises. That would seem strange. Hardship arises whichever may one looks at the matter, and the question of hardship seldom affords a true guide as to the proper principles to be applied.

I think the matter is to be looked at in this way. At common law, if a lease was forfeited, that necessarily brought down with it all under-leases and much hardship to innocent persons was thereby caused. Thus it became the practice of the Court of Chancery to relieve against forfeiture for non-payment of rent, because the lease was looked on as mere security for the payment of rent; and statute carried that principle furthera. I need not review the history of the statutes, which is too well known to require it. The relevant statutory provision is now embodied in the Law of Property Act, 1925, s 146(4). The whole object of the enactments was to relieve from the hardship of the common law. Looked at in that way, it seems to me that in principle, where the lessee defaults and the under-lessee comes forward, he comes forward to protect his position and to protect what in substance is his under-lease. It is quite true that he gets a new lease, but the whole essence of the matter is that he is to be protected in substance in respect of his under-lease, as Vaughan Williams LJ said in Ewart v Fryer (1) ([1901] 1 Ch at p 512):

“Now, in my judgment, s. 4 of the Conveyancing Act, 1892, was intended to protect a vested interest which the legislature thought ought to be protected. At law there is no privity between the under-lessee and the original lessor. The object of the statute was that protection should be given to the under-lessee.”

So here, it seems to me, in substance the legislature intends that the mortgagee shall be protected, and he is protected by his being given a new lease, but it must necessarily be a lease substituted for the old, and, therefore, in the case of a mortgagor, it must be in my judgment a substituted security.

Another way of regarding the matter is this. It seems to me that the position is closely analogous to cases of the right to renew a lease or to purchase the freehold reversion. Here, of course, there is no absolute and unqualified right, but everyone entering into a lease and an under-lease knows that there will be available to them the right of applying to the court to exercise a discretion in their favour on suitable terms where the lessee defaults. Accordingly, in my judgment, the lease created by the order of 29 April 1954, must be treated as subject to the mortgage.

That gives rise to the second point. As I have already mentioned, on 4 October 1954, the first defendant entered into a contract to sell the demised premises to the remaining defendants, and he contracted confessedly not in the exercise

Page 201 of [1955] 1 All ER 195

of his power of sale, which he could have done, notwithstanding the issue of the writ, but as absolute owner, he maintaining perfectly fairly, though in my judgment wrongly, that he was the absolute owner of the new lease granted to him. There was some argument before me, but, of course, counsel for the first defendant fairly admitted that, if he was wrong on the main point, as I have now held him to be, he could not resist an accounting of the proceeds of sale, having sold at a substantial profit. There was some discussion this morning, and it seemed to me possible that there might be some ground for restraining him from proceeding with this particular contract, because he had entered into it not rightfully in exercise of his power of sale but wrongfully purporting to deny the plaintiffs’ title and to exercise his rights as absolute owner. The matter, however, does not call for decision, for counsel for the plaintiffs elected not to ask for any injunction to restrain the first defendant from proceeding with his contract. I shall make a declaration that the substituted lease is subject to the mortgage without prejudice to the question whether there is having regard to the contract a subsisting right to redeem and the register must be rectified in the appropriate manner.

Declaration accordingly.

Solicitors: Mark Lemon (for the plaintiffs); Scadding & Bodkin (for the first defendant); Henry E Goodrich (for the remaining defendants).

R D H Osborne Esq   Barrister.

Broome v Broome (Edmundson cited)

[1955] 1 All ER 201

Categories:        CIVIL PROCEDURE        

Court:        PROBATE, DIVORCE AND ADMIRALTY DIVISION        

Lord(s):        SACHS J        

Hearing Date(s):        6, 7, 8, 15 DECEMBER 1954        

Discovery – Production of documents – Privilege – Production contrary to the public interest – Oral evidence of witness under subpoena – Application by Crown to set aside subpoena.

In a defended suit for divorce the wife caused a subpoena ad testificandum to be served on a representative of the Soldiers’, Sailors’, and Airmen’s Families Association, and a subpoena duces tecum to be served on the Secretary of State of War to bring “All letters received by, copies of letters sent by, and memoranda and records made by, the … Association,” concerning the parties. The Secretary of State issued a certificate in which he stated that in his opinion it was not in the public interest that the documents should be produced or the evidence of the representative given orally. At the hearing of the suit application was made on behalf of the Crown to set aside the subpoenas.

Held – (i) Crown privilege from disclosure could attach to all documents, irrespective of where they originated or in whose custody they reposed, provided that they had properly either emanated from, or come into the possession of, some servant or agent of the Crown; physical possession of a document by the Crown normally enabled the Crown to claim privilege; accordingly, Crown privilege attached to the documents in the present case (Duncan v Cammell Laird & Co Ltd [1942] 1 All ER 587 and Ellis v Home Office, [1953] 2 All ER 149 applied).

(ii) even if it were within the competence of a Minister of the Crown to prevent a witness giving evidence on some set or class of facts, it was wrong to adopt a procedure which would prevent the witness giving any evidence of any sort; and, since the evidence of the SSAFA representative might be of facts which it was not against the public interest to disclose and since to set aside the subpoena ad testificandum would have prevented the witness giving evidence of any fact, the application to set aside that subpoena failed.

Page 202 of [1955] 1 All ER 201

(iii) as it was not possible to ascertain from the wording of the certificate the nature of the evidence for which privilege was claimed, it would not be right to allow counsel for the Crown to listen to each question and to take objection if he desired (observations of Jenkins LJ in Ellis v Home Office, [1953] 2 All ER at p 161, distinguished).

Notes

The claim of the Crown against the giving of evidence under the subpoena ad testificandum in the present case failed on a procedural question, but Sachs, J, referred to a passage in the opinion of Viscount Simon in  Duncan v Cammell Laird & Co Ltd ([1942] 1 All ER at p 595, letter h) where it was said that the principle of Crown privilege (ie, the rule that the interests of the state must not be put in jeopardy by the production of documents whose publication would be contrary to the public interest) must also apply to exclude verbal evidence (see p 205, letter c, post). The present case leaves open the question of substantive law whether this dictum ought to be applied either to the type of fact with which the court was concerned in the case of Duncan v Cammell Laird & Co, Ltd or to wider sets of fact such as those with which the court was concerned in the present case.

As to Discovery by or against the Crown, see 10 Halsbury’s Laws (2nd Edn) 352, para 423; and for cases on the subject, see 18 Digest 59–61, 161–176.

As to Publich Policy as a ground for Resisting Production of Documents, see 10 Halsbury’s Laws (2nd Edn) 397, para 479; and for cases on the subject, see 18 Digest 166–169, 1201–1223.

Cases referred to in judgment

Duncan v Cammell Laird & Co Ltd [1942] 1 All ER 587, [1942] AC 624, 111 LJKB 406, 166 LT 366, 2nd Digest Supp.

Ellis v Home Office [1953] 2 All ER 149, [1953] 2 QB 135, 3rd Digest Supp.

Ankin v London & North Eastern Ry Co [1930] 1 KB 527, 99 LJKB 293, 142 LT 368, Digest Supp.

Moss v Chesham UDC (16 January 1945), Unreported.

McTaggart v McTaggart [1948] 2 All ER 754, [1949] P 94, [1949] LJR 82, 27 Digest (Repl) 368, 3044.

Mole v Mole [1950] 2 All ER 328, [1951] P 21, 27 Digest (Repl) 368, 3046.

R v Baines [1909] 1 KB 258, 78 LJKB 119, 100 LT 78, 72 JP 524, 11 Digest (Repl) 575, 108.

Petition for divorce

The wife, by petition dated 12 August 1953, prayed that her marriage to the respondent might be dissolved. The parties were married in March, 1945, and there were two children of the marriage. The husband was a sergeant in the army and in 1949 was posted abroad. In March, 1951, the wife and the children joined the husband in Hong Kong, but returned to England in September, 1951. By her petition the wife alleged that the husband had treated her with cruelty and alleged, among other allegations:

“That on her arrival [in Hong Kong] the [wife] found that the [husband] had not applied for married quarters, and he took her to a filthy apartment of a standard far below his means; the [husband] failed to provide the [wife] with any help or assistance; kept her short of money and behaved disgracefully towards her.”

The wife prayed, accordingly, that the marriage might be dissolved. The husband by his answer dated 19 November 1953, denied the charge of cruelty. The wife caused a subpoena ad testificandum dated 10 December 1953, to be served on one Mrs Allsop, who was at the material time the sole representative of the Soldiers’, Sailors’, and Airmen’s Families Association in Hong Kong. On 4 October 1954, the husband amended his answer by adding an allegation that the wife

Page 203 of [1955] 1 All ER 201

had committed adultery and cross-praying for a divorce. The wife caused a subpoena duces tecum, dated 12 November 1954, to be served on the Secretary of State for War, to bring

“All letters received by, copies of letters sent by, and memoranda and records made by, the Soldiers’, Sailors’, and Airmen’s Families Association, concerning the [wife] and the [husband].”

By a certificate dated 29 November 1954, the Secretary of State for War stated:

“I have read the correspondence and notes covered by the subpoena issued to me dated Nov. 12, 1954, and I have considered the evidence which Mrs … . Allsop could give, as set out in a statement taken from her and submitted to the Treasury Solicitor by [the wife’s solicitors], and I am of opinion that it is not in the public interest that the documents should be produced or the evidence of Mrs. Allsop given orally.”

When the suit came on for hearing counsel instructed by the Treasury Solicitor applied, before the opening of the case, to set aside both subpoenas, but at the request of Sachs J the argument was deferred until Mrs Allsop was called to the witness-box. The report deals solely with the rulings of Sachs J on the claim of privilege made before the witness was sworn.

P R Hollins for the wife.

T Dewar for the husband.

Rodger Winn for the Treasury Solicitor.

Cur adv vult

15 December 1954. The following judgment was delivered.

SACHS J read a judgment in the course of which he said. It is convenient first to refer to the subpoena duces tecum. It was explained to me that the Soldiers’, Sailors’, and Airmen’s Families Association, which I will call by its usual abbreviation SSAFA, is an association to which had been granted a charter of incorporation—and copies were in due course produced to me of its charter together with its rules, and its “duties of office bearers”. Further, there was put before me, by consent of all concerned, the SSAFA handbook of May, 1952, which details the work and administration of the association, a pamphlet of January, 1953, entitled “Welfare Notes for SSAFA Overseas”, and pp 75 to 80 of the Manual of Pay Duties—which has a section entitled “Separation or estrangement between the soldier and his wife”. It being an integral part of the argument as put forward to me that SSAFA was an independent body, and that neither the association itself nor its staff were employees of the Crown, it is convenient to state at the outset that the association’s independence is made clear by its charter. Its work is, of course, well known to be of magnificent assistance to members and ex-members of the armed forces of the Crown and their families; and on pp 21 to 22 of the handbook there is to be found a list of some twenty or thirty examples of the work of the association. Amongst these many examples figure “family welfare and problems” and “service family problems”. Other examples range from “apprenticeship fees” to “widows, grants to”. In connection with “family welfare and problems” SSAFA’s function as regards matrimonial cases, which has the special object of effecting reconciliations, is set out at p 15 of the handbook.

With the aid of this background information counsel for the Treasury Solicitor referred to the certificate by the Secretary of State for War dated 29 November 1954, which stated, inter alia, that having read the correspondence and notes covered by the subpoena duces tecum addressed to him he was of the opinion that it was not in the public interest that the documents should be produced. In support of the claim for privilege counsel referred me to the well-known authorities Duncan v Cammell Laird & Co Ltd, Ellis v Home Office and Ankin v London & North Eastern Ry Co. In addition he assisted me by reading

Page 204 of [1955] 1 All ER 201

considerable extracts from the argument of Mr Comyns Carr KC and Sir Valentine Holmes KC respectively before Lynskey J in Moss v Chesham UDC, together with the dicta of Lynskey J in the course of those arguments. The above decisions seem to make it clear that where documents are concerned the Crown privilege can attach irrespective of where a document originates or in whose custody it reposes—subject, however, to the points that all the decided cases relate to documents which have either emanated from or have come into the possession of some servant or agent of the Crown properly, and that physical possession of a document by the Crown normally of itself enables the Crown to claim privilege. Although it was not made entirely clear how the documents came into the possession of the War Office, it has of course been assumed by me that they had not been lodged with the Secretary of State for War solely for the purpose of a claim for Crown privilege being made, and on that footing I accordingly ruled that Crown privilege attached to them—and, indeed, counsel for the wife did not in the upshot argue to the contrary.

Counsel for the Treasury Solicitor further argued that secondary evidence of the contents of the documents was not admissible on the ground that where it is contrary to the public interest for the document to be produced, then the privilege applies to secondary evidence, whether that evidence consists of a copy of the document or of oral evidence as to its contents. That point, however, did not arise in the present case, as no such secondary evidence was tendered. The authorities, however, appeared to support counsel’s argument in relation to documents sent in the normal course of communication by or to servants of the Crown or their agents; but I am not sure (in the absence of full information as to precisely how the Crown came to possess these particular documents) whether the rule as to secondary evidence would necessarily have applied here. The position where the Crown is a mere bailee may need further examination. One point, however, I should make plain—that counsel for the Treasury Solicitor disclaimed (as indeed was clearly right) any suggestion that a fact stated in a privileged document could not be put in evidence aliunde merely because it had been stated in a privileged document.

Then came the argument on the application to set aside the subpoena ad testificandum addressed to Mrs Allsop. Counsel for the Treasury Solicitor adduced arguments of a far-reaching nature to support first the Secretary of State for War’s certificate which was in the following terms:

“I have read the correspondence and notes covered by the subpoena issued to me dated Nov. 12, 1954, and I have considered the evidence which Mrs … Allsop could give, as set out in a statement taken from her and submitted to the Treasury Solicitor by [the wife’s solicitors], and I am of opinion that it is not in the public interest that the documents should be produced or the evidence of Mrs. Allsop given orally,”

and, secondly, his argument that a correct method of attaining the object aimed at by the certificate was to have the subpoena set aside. The substance of his argument was that Crown privilege attached not merely to documents, to secondary evidence as to the contents of those documents, and to evidence as to what occurred at any government-instigated inquiries (other than public inquiries) that might have resulted in the compilation of the documents (e.g., if they happened to consist of reports), but also to any facts whatsoever, whether or not mentioned in documents to which Crown privilege attached. He submitted that a Minister of the Crown could give a certificate that the giving of evidence by any specified witness (whether or not a servant or agent of the Crown) as to any set of facts or class of facts would be contrary to the public interest, and that once that certificate was given those facts could not be given in evidence in court by the witness. Counsel submitted that if, for example, the issue in a civil action was whether A stole money or goods from B, it would be competent for a Minister of the Crown to certify that it was contrary to the public interest

Page 205 of [1955] 1 All ER 201

for a witness who saw the theft to give evidence to that effect. According to counsel the sole test whether the privilege attached was the opinion of a Minister that for the witness to give that piece of evidence was contrary to the public interest, an opinion into which, he submitted, the court could make no inquiry. What may be compendiously described as “privilege by unexaminable certificate” was thus asserted to be all-embracing. That being counsel’s submission as to the state of the law, he went on to submit that the correct procedure when a Minister of the Crown had given a certificate in the general form used in the present case was for the Crown to apply for the subpoena addressed to the witness to be set aside.

As regards the law relating to the powers of the Crown to prevent any and every witness giving evidence of facts which that witness had seen, counsel stated that he was unable to produce any authority as to a court acting after full argument (or even without full argument) on such a broad claim by the Crown. He relied, however, on a dictum in the speech of Viscount Simon LC in Duncan v Cammell Laird & Co Ltd, a case relating to the specification and other documents held by agents of the Crown touching the construction of, and the condition of, a ship of war—the submarine Thetis. There it was stated ([1942] 1 All ER at p 595):

The present opinion is concerned only with the production of documents, but it seems to me that the same principle must also apply to the exclusion of verbal evidence which, if given, would jeopardise the interests of the community.”

As regards the evidence of Mrs Allsop, counsel stated that the desire of the Crown was to ensure that those works of SSAFA which were concerned with maintaining good relations between husband and wife, and which often took the form of attempts to reconcile them after troubles had arisen, should be given the same sort of protection from disclosure in court as the efforts of probation officers and others who come within the Court of Appeal decision of McTaggart v McTaggart and Mole v Mole. For the SSAFA organisation it was, however, desired by the Minister of War that the protection from its efforts being the subject of evidence should apply whether or not the parties desired such protection, or even if both parties desired that the evidence be given. Counsel’s point was that the privilege in cases like Mole v Mole could be waived by the parties, whereas the Minister of War desired that there should be no chance of such a waiver. The head of public interest put forward was that of the maintenance of the morale of the armed forces.

When, however, one had regard to the issues which were being contested in the present case, it was obvious that the case had so developed that the evidence of Mrs Allsop might well be relevant to points which had arisen before there was any occasion for reconciliation between the parties. Thus there were disputes both as to what accommodation could have been secured by the husband at the time when his wife arrived in Hong Kong; as to whether or not the accommodation he in fact secured was reasonable accommodation in the circumstances; and as to matters relating to general conditions in Hong Kong. Until questions were put to the witness it was obviously impossible to tell whether or not they came within that area of SSAFA activities for which the Minister of War was stated to desire protection. An application to set aside the subpoena would, if granted, have prevented the witness even being sworn, and would certainly have prevented her having given evidence on any fact, whether or not it was one against the public interest to disclose. Further, any certificate in a “blanket form” which stopped a witness going into the witness-box seems contrary in principle to those portions of the decided cases which enjoin Ministers before giving a certificate as regards documents to examine each in turn in the light of the issues arising in the casea.

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In those circumstances it seemed to me that even if it was within the competence of a Minister of the Crown to prevent a witness giving evidence on some set of facts or class of facts, it was surely wrong to adopt a procedure which would prevent the witness giving any evidence whatsoever of any sort. Certainly nothing in R v Baines assisted counsel, as the present subpoena did not refer to a witness who could give no relevant evidence, nor was the subpoena oppressive in any way. Accordingly, I ruled that the application to set aside the subpoena failed.

Counsel then suggested that it might be left open to him to listen to each question in turn and take on that question such objection as might seem right. It that behalf he relied on a suggestion made by Jenkins LJ in his judgment in Ellis v Home Office ([1953] 2 All ER at p 161). That suggestion, however, relates to the waiver of privilege after that privilege has been established. In the present case the form of the certificate was not such as to enable the court to ascertain from its wording what really was the nature of the evidence for which privilege was being claimed, and I declined to allow counsel to adopt the suggested course unless he obtained some further certificate on which I could consider better whether the privilege arose and what it attached to. I offered him an adjournment for that purpose, or in case he wished to test my ruling on the subpoena by going to the Court of Appeal, but in all the circumstances he preferred not to be granted such an adjournment for either purpose. The result was that he ceased to have a locus standi in the case, but helpfully volunteered to and did remain as amicus curiae.

As the claim to Crown privilege thus failed on an issue of procedure, it is not necessary for me to decide whether the privilege claimed exists or what is the correct procedure for claiming it; but the points having been developed in lucid and congent argument on behalf of the Crown it seems right to say that at the stage when my ruling was given I had not been persuaded of the existence of the privilege in the terms in which it was submitted to me.

No case having been found in the reports of such privilege having been thus successfully asserted by the Crown, and no text-book vouching for its existence having been cited, I feel that any court would consider carefully before conceding to the Crown what would be in effect a general power wholly to suppress evidence from every source of facts merely on the unexaminable opinion of a Minister as to what that Minister regarded as the public interest. Whatever may be the position in other countries it would seem that this country has progressed for some considerable period without such a wide power having been thus asserted. In relation to the present case the claim involved the extension or development of Crown privilege in three separate directions, viz, (i) as to the all-embracing nature of the evidence privileged (for previous claims in this form have related only to documents) (ii) as to the persons affected (the claim referred to all witnesses, as opposed to classes of witnesses) and (iii) as to the heads of public interest (the head here asserted being maintenance of the morale of the forces). Before the claim of the Crown to such wide privilege were held to be valid in law, my inclination would have been to call for argument on certain further points. First, whether the development of Crown privilege on the grounds of public interest might not now be regarded by the courts in the same light as development of new heads of public policy invalidating contracts, and new heads of criminal charges against individuals of acting to the public mischief; the tendency in each of these matters being for the courts not to develop fresh heads but to leave that to the legislature. Secondly, if there is to be development it might be considered whether the development might not be circumscribed by reference to certain specific heads of public interest, such as the safety of the realm, international relations, and the prevention and detection of crime. (One cannot help noting that the steps which would extend the heads of public interest from “maintaining the morale of the forces” to “maintaining general

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public morale” and thence to “maintaining the faith of the public in specific institutions serving it” are neither very large nor unduly illogical.) Thirdly, whether the present method for claiming privilege in relation to specific documents is necessarily apt for claiming privilege in relation to a witness who may be asked in the box to answer questions, the precise form of which cannot be ascertained until counsel has put those questions in the light of the course the case takes at the trial. Whilst the courts have never been slow to prevent improper disclosure of matters truly injurious to the vital interests of the realm, I doubt whether it can rightly be said that they in the past have found themselves unable or are now unable to prevent such improper disclosure of matters (at any rate in relation to the reasonably circumscribed matters indicated above) without the Crown being held to have so wide an area of privilege by unexaminable certificate as it now seeks to assert.

It is of obvious importance to ensure generally that claims of Crown privilege are not used unnecessarily to the detriment of the vital need to the courts to have the truth put before them; and the facts of the present case will illustrate how easily it can be sought unnecessarily, albeit in the utmost good faith, to make such a claim. When Mrs Allsop was called she spoke of the way in which the wife was received at the quay at Hong Kong, of the sort of accommodation which was available for wives, of the suitability of certain accommodation which the husband had secured, and of the wife having a certain disability which made it the harder for her to bear intensely hot weather. On all those points her evidence was of assistance to the court; on none of them was there any apparent cause for any intervention in the name of Crown privilege. When the witness’s evidence began to verge on later matters which had been her concern in her capacity as conciliator it was easy to ensure that the principles laid down in Mole v Mole were applied. Indeed, counsel for the Treasury Solicitor in the upshot appeared readily to concede that nothing had happened which really called for intervention by the Crown, even if the privilege existed. The effect of the evidence which thus became available was as follows: that the husband and wife on their meeting on the quay were in tears of joy, and that there was nothing unfriendly in the reception of the wife on the part of the husband. Next, that the wife was taken to accommodation which had been approved as suitable by the commanding officer—although the accommodation to which she was taken was not Lytton House to which most of the other wives on the transport had gone. Lytton House it so happened had been one of the places where the husband tried to get accommodation, but he had been told that it was full.

Rule accordingly.

Solicitors: Barton & Hanning (for the wife); Rowley, Ashworth & Co agents for Nash, Howett, Cocks & Clapp, Plymouth (for the husband); Treasury Solicitor.

A T Hoolahan Esq   Barrister.

Wright v Walford

[1955] 1 All ER 207

Categories:        LANDLORD AND TENANT; Rent        

Court:        COURT OF APPEAL        

Lord(s):        SIR RAYMOND EVERSHED MR, BIRKETT AND ROMER LJJ        

Hearing Date(s):        14, 15, 16 DECEMBER 1954        

Rent Restriction – Possession – House required by landlord – “Not being a landlord who has become landlord by purchasing the dwelling-house after 1 September 1939” – Purchase by sub-tenant in 1952 – Surrender of tenancy of the whole house against grant of new tenancy of the part of the house occupied by tenant – Rent and Mortgage Interest Restrictions (Amendment) Act, 1933 (23 & 24 Geo 5 c 32), Sch 1, para (h), as amended by Rent and Mortgage Interest Restrictions Act, 1939 (2 & 3 Geo 6 c 71), s 3(1) and Sch 1.

In 1940 the then landlord let to the defendant a dwelling-house consisting of a basement and three floors at a weekly rent of £1. In 1948 the defendant sub-let the two top floors to the plaintiff. In January, 1952, the plaintiff purchased the freehold of the dwelling-house, but continued to occupy

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the two top floors as sub-tenant of the defendant. In July, 1952, the plaintiff gave to the defendant notice to quit the whole house, offering as alternative accommodation the part in fact occupied by the defendant, namely, the basement and ground floor. By an agreement made in September, 1952, the defendant surrendered his tenancy of the whole house to the plaintiff and became a contractual tenant of the basement and the ground floor. In May, 1954, the plaintiff served on the defendant notice to quit the basement and ground floor. The plaintiff now claimed possession of the basement and the ground floor under Sch 1, para (h), to the Rent and Mortgage Interest Restrictions (Amendment) Act, 1933, alleging that he, not being a landlord who had become landlord by purchasing the dwelling-house after 1 September 1939, reasonably required the same for occupation as a residence for himself.

Held – Since the plaintiff had become the landlord of the defendant as result of purchasing the dwelling-house and had so remained without a break ever since, even though the incidents of the relationship between the plaintiff and the defendant had been varied by negotiation, the plaintiff was a landlord who had become a landlord by purchasing the dwelling-house within the meaning of para (h) of Sch 1 to the Act of 1933, and, therefore, was not entitled to recover possession under that paragraph.

Dictum of Scott LJ in Fowle v Bell ([1946] 2 All ER at p 669) considered and the dictum of Denning LJ in Littlechild v Holt ([1949] 1 All ER at p 937) distinguished and not applied.

Appeal dismissed.

Notes

As to Landlord’s Right to Possession of a Dwelling-House for His Own Occupation under the Rent Restrictions Acts, see 20 Halsbury’s Laws (2nd Edn) 332, para 396; and for cases on the subject, see 31 Digest (Repl) 705, 706, 7937–7948.

For the Increase of Rent and Mortgage Interest (Restrictions) Act, 1920, s 15(3), the Rent and Mortgage Interest Restrictions Act, 1939, Sch 1, see 13 Halsbury’s Statutes (2nd Edn) 1019, 1060 and 1081.

Cases referred to in judgments

Epps v Rothnie [1946] 1 All ER 146, [1945] KB 562, 114 LJKB 511, 173 LT 353, 31 Digest (Repl) 705, 7938.

Fowle v Bell [1946] 2 All ER 668, [1947] KB 242, [1947] LJR 115, 31 Digest (Repl) 708, 7957.

Littlechild v Holt [1949] 1 All ER 933, [1950] 1 KB 1, [1949] LJR 1299, 31 Digest 707, 7953.

Cairns v Piper [1954] 2 All ER 611, [1954] 2 QB 210.

Appeal

The plaintiff appealed against an order of His Honour Judge Glazebrook, sitting at Gravesend County Court, dated 19 July 1954.

In 1940, premises at 11 Darnley Street, Gravesend, were let to the defendant. The premises consisted of the basement and ground floor (having together five rooms) and the first and second floors (having together three rooms). In 1948 the defendant sub-let the first and second floors to the plaintiff, but remained in occupation of the basement and ground floor. In January, 1952, the plaintiff bought the premises from the then landlord, the defendant being unable or unwilling to make the purchase. On 16 July 1952, the plaintiff sent to the defendant a notice to quit the premises, and by letter of the same day offered as alternative accommodation the two floors which the defendant then in fact occupied, namely, the basement and ground floor. The defendant accepted that offer and by an agreement made on 30 September 1952, the defendant surrendered his tenancy of the premises and entered into a new contract of tenancy with the plaintiff in respect of the basement and ground floor. By a

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notice to quit dated 11 May 1954, the plaintiff determined that tenancy. On 26 May 1954, the plaintiff instituted proceedings in the county court claiming against the defendant possession of the basement and ground floor and offering as alternative accommodation the two rooms and kitchen in the basement, alternatively alleging that the basement and ground floor were reasonably required for occupation as a residence for himself, the plaintiff, and his family. At the hearing the plaintiff stated that he would be satisfied if he obtained possession of only one room on the ground floor and not the two rooms which he had claimed.

The county court judge found (i) that the alternative accommodation offered was not reasonably suitable to the needs of the defendant and his family as regards extent and (ii) that the plaintiff had become landlord by purchasing the dwelling-house after 1 September 1939, within the meaning of the Rent and Mortgage Interest Restrictions (Amendment) Act, 1933, Sch 1, para (h), and that, therefore, the plaintiff’s claim failed.

On the merits of the second issue, the county court judge found that the plaintiff would have been entitled to recover possession of one room on the ground floor, and that it would have been reasonable to have made such an order under s 3(1) of the Act of 1933. The plaintiff now appealed.

R E Megarry for the plaintiff.

G Avgherinos for the defendant.

16 December 1954. The following judgments were delivered.

SIR RAYMOND EVERSHED MR. The question in this difficult case is whether or not the plaintiff is entitled to an order for possession against the defendant (the county court judge having intimated that he would exercise all the discretions which are relevant in the plaintiff’s favour), having regard to the provisions in the parenthesis in para (h) of Sch 1 to the Rent and Mortgage Interest Restrictions (Amendment) Act, 1933. The parenthesis is well known, and reads:

“not being a landlord who has become landlord by purchasing the dwelling-house or any interest therein after [a particular date which may vary with the particular house].”

Although on a first reading those few words in the parenthesis would not appear abstruse or involved, they have, none the less, given rise from time to time to questions which have been decided in this court. For example, it was held in Epps v Rothnie that the words did not apply where the tenant being sued had been granted his tenancy after the landlord had purchased the house, which had been vacant when the previous owner sold. In Fowle v Bell it was held in somewhat similar circumstances that, where at the date of the purchase the house was tenanted, but by a different tenant from the tenant who was the defendant in the suit, the parenthesis did not apply so as to give an added measure of protection to the tenant. A third case, Littlechild v Holt was more complicated. At the date of the hearing the person in the position of landlord was not the landlord who had acquired the premises; for the latter had died, and his position had been taken by his wife as his personal representative. Similarly, the tenant who was in fact in occupation at the date of the purchase, had also died, but his position had been taken by a relative in pursuance of the special privileges conferred on a certain class of relatives by the Increase of Rent and Mortgage Interest (Resrictions) Act, 1920, s 12(1)(g). In the peculiar circumstances of that case, this court came to the conclusion that the protection which had belonged originally to the tenant at the time of the purchase persisted in the person of that tenant’s relative and availed against the former landlord’s widow. The last case in point of time was Cairns v Piper where the problem posed was: If the person being sued as tenant at the date of the writ had been a sub-tenant at the date of the purchase, how did that person stand as

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regards this parenthesis? And this court said: That person does not get the protection of the parenthesis.

It is not uncommon in regard to questions arising under the Rent Acts to find that that which appears at first sight plain, when applied to particular facts, gives rise to problems which are far from easy. The facts of the present case are different from any of those which I have mentioned.

[His Lordship stated the facts and continued:] In 1952 the plaintiff was, without doubt, vis-à-vis the defendant subject to the disability of para (h), and when he gave the defendant notice to quit in July, 1952, he offered alternative accommodation to the defendant. On a first reading of this legislation no one would think that a landlord could offer as alternative accommodation the same accommodation which the tenant was then occupying; but that that can be done is now accepted. The plaintiff, therefore, offered to the defendant the two floors which he then in fact occupied. The defendant thought that, having regard to the threat of proceedings, it was better for him to accept that offer. I have no doubt that he came to that conclusion on good advice and thereby avoided the expensive luxury of litigation. By agreement between the parties there was, therefore, an agreement on the defendant’s part to surrender the original tenancy of the whole house. That was followed by a new contractual tenancy between the plaintiff and the defendant limited to the ground floor and basement. The plaintiff’s original sub-tenancy determined, of course, with the surrender of the head tenancy. The present proceedings were then started, the plaintiff seeking possession, having first validly determined the contractual tenancy, of the ground floor and basement. He is really asking for no more than one room only, but he says: “I am now no longer in this matter subject to the special prohibition of the parenthesis, because our relationship is something quite new which has come into being by the voluntary act or acts of the parties since I, the landlord, purchased this house. Therefore, it is no more true to say of me that I have become your landlord by purchasing the dwelling-house than it would be if you, the defendant, had gone away altogether and I had granted a new tenancy to an entirely different person who had never been there before.” That is the problem, and it is plain that it is really in a small compass, although, having regard to the decided cases, it is not easy to keep it in its right perspective. I am bound, indeed, to make some references to those earlier cases.

I preface my references to those cases with this observation, an observation which in other contexts has been made before. After a matter has come before the courts on the meaning of a phrase in an Act of Parliament there is a certain danger that the courts thereafter will be construing not the Act of Parliament and the words in it, but expositions of the Act of Parliament which find their place in judgments of the court. That is apt to be a dangerous process, because the expositions were made in reference to, and in a sense so as to be necessarily limited to, the particular facts of the particular cases in which they were pronounced. I need say no more than I have done about Epps v Rothnie. In Fowle v Bell, the argument, having regard to the facts which I have already stated, resolved itself into this question: Did the phrase “not being a landlord who has become landlord” mean merely “become landlord of the premises”? If it meant that, then any tenant could pray in aid the restriction of the parenthesis against a landlord who, in fact, had become landlord of the premises since the relevant date, even though the tenant came into possession much later than the purchase. That view, put forward by the tenant, was rejected by this court. In the course of his judgment Scott LJ used this language, and having regard to the later citations of this passage it is obviously most important ([1946] 2 All ER at p 669):

“In considering the bracketed exception to para. (h), we must bear in mind that it is found in an enabling provision which confers jurisdiction on

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the judge to order possession to be given to the landlord, and, therefore, if there be ambiguity in the exception, it ought to be construed in favour of the landlord and not against him. The phraseology seems to me necessarily to mean this, ‘not being a landlord who, in relation to the tenant before the court, has become that tenant’s landlord by purchasing the dwelling-house or any interest therein after’ the given date. The exception so read would achieve what I cannot help thinking was the object of enacting it, namely, to prevent an outsider buying a house occupied by a tenant, giving the tenant notice to quit, and coming to the court for an order to get rid of him.”

Scott LJ also made reference (ibid, at p 670) to the language of MacKinnon LJ in Epps v Rothnie ([1946] 1 All ER at p 148) to this effect, that if the contrary view prevailed, that is, if “the landlord” meant “the landlord of premises”, then it was a mere waste of words to put in the long formula “not being a landlord who has become landlord.”

The statement which I have read sufficed to decide the case of Fowle v Bell. It need hardly be said, however, that such a case as the present was not in the mind of the learned lord justice, and when he said: “The phraseology seems to me necessarily to mean this … ” I do not think he was intending to give an exhaustive exposition of the exact scope and significance of this phrase for all purposes. If he was, it will be seen at once that a problem of some difficulty arises. What happens if the “sitting” tenant at the date of the purchase subsequently goes away, returns years later and then claims under a new contractual tenancy? The question would then be whether or not he would have attached to him the privilege of para (h). If the answer to that question were “yes”, it would, I think, be a very strange result, and would appear to have no sort of relation to what, agreeing with Scott LJ I assume has been the plain intention of the Act. But the exegesis of Scott LJ does not decide that point:

“The phraseology seems to me necessarily to mean this, ‘not being a landlord who, in relation to the tenant before the court, has become that tenant’s landlord by purchasing the dwelling-house … ’.”

It is impossible, I think, to read that phrase as conferring this exemption on a particular individual, however long might be his absence from the premises. That point impressed me so much in the plaintiff’s favour that I thought at first that the argument for the defendant would have to concede this rather peculiar anomaly: that if you said that “the landlord” must mean either the landlord of the premises or the landlord of a particular tenant, then if you chose the latter, you gave to a particular individual a special and quite irrational privilege. Counsel for the defendant did not accept that he was in that difficult position. Indeed, it was so clearly an irrational result that counsel for the plaintiff himself suggested that the word “landlord” should not in any case be defined as meaning “the landlord of a particular tenant” (that is, the tenant before the court) but as the landlord of the tenant by virtue of a particular contractual or other relationship; the landlord, that is to say, who became landlord of the tenant before the court holding under his present title. That suggestion involves undoubtedly inserting words into the statute. It may sometimes be that the words inserted are in truth inherent in the word actually used, in this case the word “landlord”. But on the whole I have come to the conclusion that the insertion suggested by counsel for the plaintiff is not justified. I cannot find that we ought to put so elaborate a character on this simple phrase—even for the purpose of avoiding the anomalous consequence which follows from interpreting the word “landlord” as meaning “landlord of the tenant”.

I will now refer to Littlechild v Holt. Plainly, as I read the judgments in that case (and I am fortified in that view by the circumstance that Birkett J one of the judges then sitting, has his own recollection of the matter) the most

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important question was:—did the widow of Mr Littlechild stand in any better position than her deceased husband, she having acquired the premises not by purchase, but because she was the widow, the administratrix, and the beneficiary of her late husband? The court answered that question negatively by saying that she could be in no better position than Mr Littlechild; putting it conversely, that Mr Littlechild could not confer on his widow any greater right or title than he himself possessed. The judgments of Lord Goddard CJ who presided over the court, and Birkett J are, indeed, confined to that matter. There was, of course, a second point. Mrs Holt, the defendant, as I have said, had succeeded to the occupation of the house because she was the daughter of her late father, Mr Mills, and, therefore, the court also had to decide how she stood in relation to this matter. Naturally enough Fowle v Bell and the language of Scott LJ were cited. It was said that Mrs Holt was outside this formula of Scott LJ’s language. That formula “not being a landlord who, in relation to the tenant before the court, has become that tenant’s landlord”, had no application in Mrs Holt’s case, since when Mr Littlechild purchased Mrs Holt was not the tenant at all. My own view of Littlechild v Holt is that that second question was resolved in Mrs Holt’s favour in this fashion. It was said that if you look at the operative part of the Act of 1933 and the opening paragraph of Sch 1, you find that it is there provided that “A court shall … make … an order for the ejectment of a tenant” if certain things happen; and it was said that the particular right which s 12(1)(g) of the Act of 1920 confers on certain relatives is done by an oblique method, since it merely provides something in the way of a definition.

Section 12(1)(g) a, says:

“… the expressions ‘tenant’ and ‘tenancy’ include sub-tenant and sub-tenancy, and the expression ‘let’ includes sub-let; and the expression ‘tenant’ includes the widow of a tenant who was residing with him at the time of his death, or, where a tenant … leaves no widow or is a woman, such member of the tenant’s family so residing as aforesaid as may be decided in default of agreement by the county court.”

The result of that somewhat unusual method of enactment is not to confer affirmatively by statute a particular right on a named relative, but by definition to extend the meaning of the word “tenant” to persons other than the one individual; in other words, for the purpose of Littlechild v Holt  the court proceeded, as I think, on the view that Mr Mills and his daughter Mrs Holt were indivisible and indistinguishable for all relevant purposes. Both were comprehended in the words “the tenant” for those purposes. But Denning LJ went a good deal further, and alone of the members of the court dealt generally with the situation of a tenant claiming the protection of this parenthesis. He said ([1949] 1 All ER at p 937): “For a landlord to be under the disability, three requisites are necessary.” I leave out the first, because nothing turns on that in the present case, and he continues:

“Secondly, there must have been a contractual or statutory tenancy in existence at the time of the purchase which is still in existence today, but there need not be the same tenant there. It is the tenancy which is protected, whether it is a contractual tenancy which since the purchase has become a statutory tenancy, or whether it has been a statutory tenancy all the time. The protection is not lost by a contractual tenant assigning his interest to another, or by a member of the tenant’s family succeeding to a statutory tenancy, but it is lost when the tenancy expires and a new one is voluntarily created.”

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Counsel for the plaintiff, naturally enough, fastened on that passage in the judgment of Denning LJ and said that if that were to be treated as an exhaustive exposition of the relevant provisions of the Act, then the plaintiff must win the present case, because beyond a peradventure the “tenancy” which existed and which related the plaintiff to the defendant when the premises were purchased has since expired, and has given place to a new one voluntarily created. But once more, with all respect to Denning LJ I do not think he was intending to propound an exhaustive exposition of this parenthesis, and it was quite unnecessary for him to do so. Equally clear is it to my mind that he had not a case like the present in mind, for the cases he cited in support of his last and vital sentence were Epps v Rothnie and Fowle v Bell. Therefore, just as Scott LJ’s statement is not to be regarded as more than an exposition of the Act for the purposes of Fowle v Bell, so I take the exposition of Denning LJ as no more than one equally appropriate for dealing with, but only with, Littlechild v Holt. If it went further, I, for my part, as at present advised, should not agree with it. I do not myself find it easy to accept the notion that when Parliament speaks of a landlord it means a landlord not of premises, not of a tenant, but of a “tenancy”. It seems (if I may say so with all respect to those who have in other places used the phrase) an unnatural use of language. If Denning LJ is right, according to the literal sense of his language, it seems to me that very curious results are produced. For, according to Denning LJ’s phrase, if the tenant in possession under a contractual tenancy when the landlord purchased later assigned for value to someone else, then that someone else would get the protection of this paragraph. That seems to me to be no less irrational and contrary to the real intention of the statute than the other imaginary case put forward by counsel for the plaintiff.

Having referred, therefore, to those two passages, the one of Scott LJ and the other of Denning LJ and finding neither is sufficient in terms to decide this case, or ought to be regarded by this court as binding us to decide it in a particular way, I now return to the facts of the present case and to the language of the Act of 1933 as it stands. I ask myself the question: Having regard to the facts which I have stated, is the plaintiff here a landlord who has become landlord (and that must mean here the tenant’s landlord) by purchasing the dwelling-house? According to the common sense of the matter, I think the answer is that he is. As a result of his purchase he became in truth, as to the ground floor and the basement, the landlord of the defendant, and so he has remained without a break ever since. It is true that the precise character and incidents of the relationship have varied. There was a period when the defendant was a statutory tenant and when his tenancy comprehended other rooms, though he was not in personal enjoyment of those other rooms; and now a new tenancy has been created. But as regards the dwelling-house of which those two floors consist, the plaintiff became, as a result of the purchase, the defendant’s landlord of that dwelling-house, and so he has remained consistently ever since. I think I am helped towards that conclusion by referring again to the Act of 1933. Paragraph (h) of Sch 1 is to be read in conjunction with the opening words of the schedule which refer to the ejectment of a tenant. I begin by noting in para (h) the words “the dwelling-house is reasonably required by the landlord”, and I ask—Who is that? Obviously the tenant’s landlord, the landlord of the tenant against whom the landlord has proceeded. Then comes the parenthesis “(not being a landlord who has become … )”, and I interpret that as meaning “not being one who has become such by purchasing … ”. I notice the phrase is “has become”, not “became”. Applying the standards of common sense to the facts in the present case, I think, as I have said, that the plaintiff cannot avoid the result that he is a person who “has become” the defendant’s landlord by purchasing; for that is how it is that he both became, and also has remained, his landlord, although he has since by negotiation altered somewhat the precise incidents to the relationship between them.

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Confining myself, therefore, to the limited circumstances of the present case, I conclude that the answer is that which the county court judge gave. I realise (and I mention it because counsel for the plaintiff very naturally and properly emphasised it) that the decision does create something of an anomaly between the case where a landlord, admittedly restricted by the parenthesis, proceeds for possession and provides alternative accommodation elsewhere on the one hand, and the case where the landlord’s alternative accommodation consists of the precise accommodation which the tenant was in fact enjoying at the time of the proceedings. I have said that the idea that the latter is, or was regarded by Parliament as being, alternative accommodation seems to me to be, perhaps, one of the most surprising results of the legislation; but I think that somewhat remarkable result being now accepted, the anomaly has in consequence been created. I am not, however, dismayed by it, because, so far as I can see, whatever attempts one makes to answer this problem, it is impossible to avoid some peculiar results. Nor, secondly, do I forget the passage in Scott LJ’s judgment that where there is ambiguity the court should tend to favour the landlord, since para (h) of Sch 1 was a provision for a landlord’s benefit. But the first thing is to try to see what the words mean when applied to the facts of the case, and having reached my conclusion on that process, I find no room for another view which would favour the landlord, particularly since, as I think, the alternative would inevitably involve considerable interpolations into the words Parliament has used of further words of explanation or definition. I desire, lastly, to make it clear that I have not forgotten the importance of the point that the defendant in any case has the protection of the county court judge’s discretion on the matter of reasonableness. b  That, I think, is a highly impressive point, and I feel, if I may say so, that the result in the present case is rather hard for the landlord. A more reasonable sharing of this house, according to the judge, would have resulted from a yielding on the defendant’s part of one room to the plaintiff. Having regard to the changes in the families of both the parties, it may be that a certain amount of good neighbourliness and consideration can now be brought to bear so as to overcome the present difficulty. That, however, is another matter.

It seems to me that, if a person was in occupation of a dwelling-house when the reversion of his tenancy was acquired by another, and if he has never ceased to occupy that dwelling-house as the tenant of that other, then it would offend against the sense and intention of Sch 1, para (h), and of the plain words used, to say: “Since the precise relationship which governs the relationship of landlord and tenant has undergone a voluntary change, therefore you, the tenant, can no longer allege against the landlord that he has become your landlord by purchasing the dwelling-house.” I have done little more than follow and expand the reasoning of the county court judge. He said, after reading the passage from Denning LJ’s judgment:

“If the words of the second requisite [“that there must have been a contractual or statutory tenancy which is still in existence today”] are accepted literally, the landlord here must succeed. But in Littlechild v. Holt the tenant seeking protection was a person who had succeeded to the tenancy under s. 12(1)(g) of the Act of 1920, and the reference to Epps v. Rothnie and Fowlev. Bell seems to me to indicate that the lord justice did not have in mind the circumstances that have arisen in the present case. Further, the lord justice says ‘voluntarily created’, and, as I have already indicated, I do not think the agreement of Sept. 30, 1952, was in a true sense voluntary. It would be strange if a tenant could put himself in a better position by incurring the costs of unnecessary litigation and

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submitting to an order of the court. My conclusion is that it is the policy of the Acts to protect a tenant i the position of the defendant; that the words of the disabling phrase [in para. (h)] are clearly capable of being construed to protect him and that they ought to be construed accordingly.”

My conclusion is the same. I would dismiss the appeal.

BIRKETT LJ. I agree. The only question with which we are concerned is whether or not, on the special facts of the present case, the plaintiff is a landlord who has become landlord by purchasing the dwelling-house after 1 September 1939, so as to place him under the disability of para (h) of Sch 1 to the Rent and Mortgage Interest Restrictions (Amendment) Act, 1933. I agree with Sir Raymond Evershed MR that the county court judge dealt with this topic in the words which he has quoted, and in particular in words which I desire to emphasise:

“My conclusion is that it is the policy of the Acts to protect a tenant in the position of the defendant; that the words of the disabling phrase [in para. (h)] are clearly capable of being construed to protect him, and that they ought to be construed accordingly.”

In my experience no point arising under the Rent Acts is ever simple or easy; on the contrary, some of the most complicated and thorny problems arise under the provisions of these Acts, and one must simply do the best one can. [His Lordship stated the facts and continued:] It appears to have been conceded that so far as the defendant’s contractual tenancy in the first instance was concerned, the disability that attached to para (h) of Sch 1 to the Act of 1933 was binding on the plaintiff. Similarly, the same disability attached to the statutory tenancy which arose in consequence of the notice to quit served in July, 1952; but it is said, “Because of the agreement made on 30 September 1952, which is set out in the correspondence in detail, whereby the defendant surrendered the tenancy which was subsisting in July, 1952, and entered into this new tenancy for different rooms in the same house, the old disability under para (h) of Sch 1 thereby departed.” I gathered that counsel for the plaintiff’s sole point on this matter was that whilst the disability clearly attached before the moment when the defendant’s tenancy had been surrendered, and the new agreement had been entered into, yet the disability ceased from that moment and the plaintiff was no longer restricted by the disability. He relied strongly, as Sir Raymond Evershed MR said, on Littlechild v Holt. It is idle to say five years afterwards that I, as a member of that court, remember that case in great detail, but I do remember the case well.

It is clear that there were two points in that case, a major and a minor point. The minor point concerned the position of Mrs Holt. Was she a tenant, and was she protected, or was she not? I think her counsel said that, by reason of s 12(1)(g) of the Increase of Rent and Mortgage Interest (Restrictions) Act, 1920, as amended c, she stood in the shoes of her father as the sitting tenant and was similarly protected; that is to say, that she could not be evicted because of the disabling provision in para (h) of Sch 1 to the Act of 1933. In reply, counsel for Mrs Littlechild said that Mr Littlechild was within the exception of that paragraph as against Mr Mills, the original tenant, but that Mrs Holt’s tenancy was a separate tenancy. On that point Lord Goddard CJ who delivered the leading judgment, said ([1949] 1 All ER at p 935):

“The question then arises whether or not Mrs. Holt was in the position of a protected person holding over after her father’s death. I think there is no doubt that she was. By the Increase of Rent and Mortgage Interest (Restrictions) Act, 1920, s. 12(1)(g)a … ‘ … the expression “tenant“

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includes the widow of a tenant who was residing with him at the time of his death, or, where a tenant leaves no widow or is a woman, such member of the tenant’s family so residing as aforesaid as may be decided in default of agreement by the county court.' Mrs. Holt has been found by the learned judge to be a member of the tenant’s family residing with him at the time of his death, and it is necessary that she should have resided there for six months. That also, we must assume, was found in her favour by the learned judge.”

For the moment I pass over the judgment of Denning LJ  I said (ibid, at p 937):

“My Lord, in his judgment, stated clearly the position of Mrs. Holt, and came to the conclusion, both on the construction of the Acts of Parliament and on the findings of the learned county court judge, that she was a protected tenant.”

Denning LJ who dealt first of all in his judgment with the major question, referred to the matter of Mrs Holt’s position in these words (ibid, at p 937):

“There was then a statutory tenancy in existence in the hands of Mr. Mills. That tenancy is still in existence today in the hands of his daughter, Mrs. Holt, who, as a member of his family, succeeded to the tenancy. Mr. Littlechild was, therefore, subject to the disability, and his wife, as his successor, is in no better position than he. Therefore, the disability applies, and the landlord cannot get possession without giving alternative accommodation.”

The learned county court judge in Littlechild v Holt had taken the words in para (h) literally and said that whatever might have been the position of Mr Littlechild, who did undoubtedly purchase the premises, Mrs Littlechild never bought the premises, and, therefore, she was not, and could not be, a landlord who had become landlord by purchase, and the court, dealing, as I have said, with the major problem, unanimously reversed that decision.

The only difficulty about that case arises from the words in the judgment of Denning LJ on which, naturally, counsel for the plaintiff placed great reliance. It is difficult, of course, for anyone to say what exactly was in the mind of a judge dealing with particular facts in a particular case when he gave utterance to certain words, but I speak with some confidence when I say for my own part I am sure Denning LJ did not have in mind at that time the situation with which we have been confronted in the present case. Indeed, if the words on which counsel for the plaintiff relied are looked at for a moment, I think that becomes plain (ibid, at p 937):

“Secondly, there must have been a contractual or statutory tenancy in existence at the time of the purchase which is still in existence today, but there need not be the same tenant there.”

That was to apply to Mrs Holt. We were dealing with a case where it had been contended, on the one hand, that Mrs Holt was a separate person altogether, and that hers was quite a separate tenancy, and, on the other hand, that she stood in the shoes of her father under s 12(1)(g) of the Act of 1920. Then Denning LJ proceeded (ibid, at p 937):

“It is the tenancy which is protected, whether it is a contractual tenancy which since the purchase has become a statutory tenancy, or whether it has been a statutory tenancy all the time.”

The learned lord justice went on in this rather, if I may say so with great respect, controversial sentence:

“The protection is not lost by a contractual tenant assigning his interest to another, or by a member of the tenant’s family succeeding to a statutory tenancy, but it is lost when the tenancy expires and a new one is voluntarily created.”

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Then, as Sir Raymond Evershed MR has pointed out, the learned lord justice in support of that contention referred to Epps v Rothnie, where it was held that the disability does not apply to a person who buys with vacant possession and subsequently lets the house, and to Fowle v Bell, where a landlord, when the house became vacant, re-let to a new tenant. I cannot think the very special facts of the present case were present to Denning LJ’s mind when he made those observations.

I think it must be clearly faced, as counsel for the plaintiff said, that there was in the present case a surrender of the existing tenancy, and the creation of a new tenancy in the terms of the letter of 30 September 1952; but I am by no means satisfied on the facts that, therefore, the disabling provision of para (h) is removed, and I think myself I would like to adopt exactly what Sir Raymond Evershed MR said with regard to that matter. If on the facts of the present case anyone was to ask how this plaintiff became the landlord of this defendant the answer is that he obviously became the landlord because he bought the premises. It is true there has been an adjustment which has been the subject of agreement, and it is true that the defendant surrendered the tenancy which formerly existed between them with regard to certain rooms and took on other rooms in the same building which had been purchased by the landlord. I think if the question is asked: Did the plaintiff become landlord by purchase? the answer is “yes”. I think the words “has become” refer to a past event. The words “who has become the landlord” relate to the present. The plaintiff may have purchased two years ago, but he is the landlord today in consequence of that purchase; thus he has become the landlord by purchase. I see clearly the strength of counsel for the plaintiff’s contention, namely, that though the plaintiff certainly was the landlord by purchase with regard to the original contractual tenancy, and certainly was the landlord by purchase in the case of the statutory tenancy which came into existence after the notice to quit in July, 1952, the moment that statutory tenancy was ended, and the new contractual tenancy was brought into being between the parties in September, 1952, a new state of affairs was created and the disabling provision of para (h) no longer applied. I still take the view, however, that the county court judge was right in his decision. After examining all the facts in the present case, and bearing in mind what Denning LJ had said ([1949] 2 All ER at p 937), the county court judge expressed the view which I think has much to support it:

“that the lord justice did not have in mind the circumstances that have arisen in the present case … My conclusion is that it is the policy of the Acts to protect a tenant in the position of the defendant; that the words of the disabling phrase [in para. (h)] are clearly capable of being construed to protect him, and they ought to be construed accordingly.”

It clearly was the intention of Parliament when the rent restrictions legislation was first introduced, and as it was later developed, to say: “In certain circumstances the landlord may obtain possession if he can show that the premises are reasonably required by him, but we will absolutely bar a man from saying: ‘I am the landlord, and I do want the premises for my own possession, but I have only recently bought the premises and put myself in the position so that I can turn that tenant out’.” Paragraph (h) provided an additional protection to tenants, and I think, on the special facts in the present case, the protection ought to be given to the defendant, as the county court judge decided. In answer to the question—Is the plaintiff a landlord who has become landlord by purchase since 1939?—I would say—“In my opinion, he is“—and I would dismiss the appeal.

ROMER LJ. I agree. I am satisfied, after the elaborate and able argument which has been addressed to us, that the word “landlord” which appears in parenthesis in para (h) of Sch 1 to the Rent and Mortgage Interest

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Restrictions (Amendment) Act, 1933, is related to “tenant” and not to “tenancy”. In the first place, I think the conception of “landlord of a tenancy” is extremely unusual, and I, personally, have never met it in practice. That being so, one would assume that the word was intended to be used in its ordinary meaning and that it should be read as meaning either “landlord of premises” or “landlord of a tenant”. “Landlord of premises” is not the construction it has received from the courts, and that leaves, therefore, only “landlord of a tenant”; and that that is what is meant is plain, I think, from the words which introduce Sch 1 to the Act of 1933 and which refer to the ejectment of a tenant. So I conclude that “not being a landlord who has become landlord” means who has become “landlord of the tenant”. That is the view of the matter which was taken by Scott LJ in Fowle v Bell in the passage ([1946] 2 All ER at p 669) to which Sir Raymond Evershed MR has referred, and also by Bucknill LJ who said in the course of his judgment in that case ([1946] 2 All ER at p 670):

“I think there are two possible interpretations of these words. One is ‘not being a landlord who has become landlord of the dwelling-house,’ and the other ‘not being a landlord who has become landlord of the present tenant by purchasing the dwelling-house’.”

Somervell LJ (ibid, at p 671), placed this construction on the phrase, saying that it was restricted to cases in which the tenant sought to be evicted was a sitting tenant at the time of the purchase.

Those ways of looking at the matter are fatal to the plaintiff, and his counsel sought to add to the definition given by Bucknill LJ (which was approved and adopted by Singleton LJ in Cairns v Piper [1954] 2 All ER at p 614) the words “who has become landlord of the present tenant holding under his present title“. Counsel sought to introduce that addition to Bucknill L J’s definition in order, as he said, to avoid certain anomalies which he pointed out might arise out of the alternative accommodation provision. For my part, I do not think there is any justification for adding those words, and I am not prepared to do so. I think that the definition which has been given and which, if applied to the present case, affords protection to the defendant should be adopted, and that the appeal consequently fails.

Appeal dismissed.

Solicitors: Harold Tuffee & Son, Gravesend (for the plaintiff); Hatten, Winnett & Holland, Gravesend (for the defendant)

F Guttman Esq   Barrister.

Daniels v Ford Motor Co Ltd

[1955] 1 All ER 218

Categories:        INDUSTRY        

Court:        COURT OF APPEAL        

Lord(s):        DENNING, MORRIS AND PARKER LJJ        

Hearing Date(s):        17, 20 DECEMBER 1954        

Factory – Protection of eyes – Obligation to provide goggles – Extent of statutory duty – Suitable goggles provided but liable to misting – Eye injured while cleaning misty goggles – Factories Act, 1937 (1 Edw 8 & 1 Geo 6 c 67), s 49.

The plaintiff was employed by the defendants in a process to which s 49 of the Factories Act, 1937, applied. That section requires that “suitable goggles … shall … be provided to protect the eyes of the persons employed”. Goggles of the types best adapted to the process at which the plaintiff worked were made available by the defendants for their employees. The goggles selected and worn by the plaintiff had a tendency to mist over while being worn. At the material time the goggles worn by the plaintiff did mist over and he pulled them away from his eyes sufficiently far to enable him to clear away the misting; at that moment a fragment of metal hit his right eye and caused injury. The plaintiff claimed damages for breach of statutory duty under s 49 of the Factories Act, 1937.

Page 219 of [1955] 1 All ER 218

Held – The obligation on the defendants under s 49 of the Act of 1937 was to provide goggles which were suitable and would protect the wearer’s eyes, but was not an absolute obligation to protect the wearer’s eyes; on the facts, the defendants had provided the plaintiff with suitable goggles and were not in breach of their duty under the section, and, therefore, the plaintiff was not entitled to recover damages.

Appeal allowed.

Notes

For the Factories Act, 1937, s 49, see 9 Halsbury’s Statutes (2nd Edn) 1039.

For a note of cases on the Protection of Eyes Regulations, 1938 (SR & O 1938 No 654), see 8 Halsbury’s Statutory Instruments 187.

Cases referred to in judgments

Galashiels Gas Co Ltd v O’Donnell or Millar [1949] 1 All ER 319, [1949] AC 275, 1949 SC (HL) 31, [1949] LJR 540, 113 JP 144, 2nd Digest Supp.

Appeal

The defendants appealed against an order of Finnemore J dated 28 October 1954, whereby he gave judgment for the plaintiff and awarded him damages on the ground of a breach by the defendants of their statutory duty under s 49 of the Factories Act, 1937.

The facts appear in the judgment of Parker LJ

F W Beney QC and B Caulfield for the defendants.

Marven Everett QC and D P Croom-Johnson for the plaintiff.

20 December 1954. The following judgments were delivered.

PARKER LJ. This is an appeal by the defendants, the Ford Motor Co Ltd from a judgment of Finnemore J given on 28 October 1954, awarding the plaintiff, Mr Daniels, who was employed by the defendants, damages for an eye injury which he suffered while at work. He was working at the time in what is called the “knockout” department of the defendants’ factory at Dagenham where castings are brought along conveyor belts in moulds and have to be knocked out. The plaintiff and the others working in that department were engaged in the process of fettling, a process in which there is a well-known risk of injury to the eye, not merely from sand and dust but from fragments of metal flying. It is one of the processes to which s 49 of the Factories Act, 1937, applies a, and accordingly it was the duty of the defendants to provide the plaintiff (to use the words of the statute) with “suitable goggles … to protect the eyes”. On the day of the accident the plaintiff was wearing goggles of a type which were referred to throughout the evidence as the red” goggles and which were attached by an elastic band to the back of the head. They were apt (as indeed all goggles are, to a greater or less extent) to mist over, either from perspiration from the wearer or from condensation of the outside atmosphere, or, indeed, as one of the witnesses said, from the wearer’s breath. While he was at work on this day the plaintiff’s goggles misted over, he pulled them an inch or two away from the nose sufficiently to insert a finger and thumb and clean the lenses. On this occasion, although the goggles at the time they were pulled away must still have afforded some ninety per cent protection and although the plaintiff’s hands were holding the goggles and cleaning the lenses, a bit of metal, presumable knocked off by a fellow worker, most unfortunately hit the plaintiff’s right eye, causing injury, which happily proved not to be serious.

The position as to these goggles is stated by the learned judge in this way, and is abundantly borne out by the evidence,

Page 220 of [1955] 1 All ER 218

“I think the fair result of the evidence, first of all, is this—and I think it ought to be said—that there is no doubt at all that the defendants have given very careful consideration to this problem. They have considered all kinds of goggles. They have had various kinds on display. They offer to their workmen different sorts, so that each man, within reasonable limits, can make his own choice. Everybody knows that men can be extremely fussy about goggles. Not only have the men had a measure of choice, but obviously from the evidence of Mr. Thomas—nobody challenged it, or wished to challenge it—inquiries have been made and tests have been made and a considerable amount of attention and experiment has been given to this matter by the defendants to try to produce a perfect set of goggles. The result of it all is that so far nobody has produced, so far as I can see, a perfect set of goggles.”

Mr Thomas, who had been the safety officer of the defendants for some eleven years, was a witness who clearly impressed the learned judge, and the learned judge went on to say this:

“Mr. Thomas summarised admirably all the points which had to be considered, whether you should use Triplex safety glass or whether you should use Perspex, whether the sides should be opaque, such as aluminium with holes in it or gauze, or Perspex again, and points for and against these goggles were paraded before me. I think that result is that whatever pair of goggles in fact you adopt there are advantages and there are disadvantages. It may well be that, in the result, the red pair of goggles, which the defendants say are still preferred, in spite of the other models they have had produced, by the great majority of their men who work in the foundry, are as good and as useful a pair as has been produced.”

As I have said, one of the disadvantages of these red goggles is that they are apt to mist over rather more than other goggles. On the other hand, they have marked advantages over other goggles which can be obtained, certainly for fettling. One of the matters, apparently, that weighed with the defendants was that if there were only gauze at the sides or openings which would allow considerable ventilation, there would be a grave disadvantage in that it would not afford adequate protection from flying metal. The learned judge, however, while at pains to point out that no sort of blame attached to the defendants, held that they were in breach of their statutory duty in that these goggles had to be rubbed clean from time to time and when this was being done they did not (as, indeed, this accident shows) afford full protection to the eyes. In other words, he has decided this case quite irrespective of any negligence or blame on the part of the defendants but merely on the basis that the duty imposed by s 49 is an absolute duty.

It would indeed be a surprising result if employers who provided the most well-adapted goggles which the wit of man has so far produced should be guilty not only of a criminal offence but of a breach of a statutory duty. However, counsel for the plaintiff, quite rightly, does not shrink from that and points out that in many cases that result follows in dealing with other sections of the Act, and he instances in particular the case of Galashiels Gas Co Ltd v O’Donnell or Millar. Speaking for myself, I do not think that the words of s 49 drive one to such a drastic conclusion. The word “suitable” in that section, as counsel for the defendants has pointed out, cannot mean “perfect”. “Suitable” is not apt to mean any such thing. It is a matter that can be comparative; something may be more suitable than something else. I think that in its context it must mean, well-adapted for the process under consideration (because there are a number of different processes, involving different risks, albeit all to the eyes) and well-adapted for the wearer in that they must fit him. If one stops there, I think that the argument would be quite untenable; but the words that follow must be read: the goggles are to be “suitable … to protect the eyes”.

Page 221 of [1955] 1 All ER 218

It has been urged (and I think this is what influenced the learned judge) that that phrase is equivalent to and should be read as “suitable goggles to ensure the protection of the eyes”, or “suitable goggles that will protect the eyes”. Again I see no reason to read the phrase as a whole in any such sense. It seems to me that the words “to protect the eyes” are merely describing the end which is sought to be achieved by the provision of the goggles and are not to be read as equivalent to ensuring protection. In other words, while the obligation to provide suitable goggles is quite clearly an absolute obligation, there is no absolute obligation that the goggles so provided shall ensure protection. In that respect the words are quite different from the words used in other sections of the Act which have been used to impose an absolute obligation—words such as “shall be securely fenced”, in s 14.

Counsel for the plaintiff raised before this court a second point. He said that if he is wrong and the section should be read as meaning that the duty is complied with if goggles which are well adapted for the process in question are provided, yet even so the defendants failed to provide such goggles in this case. It seems to me that the difficulty in his way there is the finding of the learned judge to which I have referred, which can be abundantly supported by the evidence, that in this case no blame at all attached to the defendants. The argument was really to this effect, that the fettling process on which the plaintiff was engaged was, in this case, of such a nature that the work was particularly strenuous and that in those circumstances goggles should be provided, whatever other disadvantages they had, which were properly ventilated. As I have said, it seems to me that the learned judge has in fact found in this case that the defendants were in no way to blame, and I see no reason for interfering with that finding. In those circumstances, I would allow this appeal.

MORRIS LJ. I have reached the same conclusion; but as I have formed a view different from that entertained by the learned judge I would just state my reasons in a few sentences.

The question involves a consideration of the words that have been used in s 49 of the Factories Act, 1937, and in particular the words

“suitable goggles … shall … be provided to provided to protect the eyes of the persons employed in the process.”

That is the only wording which we have to consider and not any alternative wording that might possibly have been used, such as that “goggles shall be provided which will protect the eyes of the persons employed in the process”. It seems clear from the evidence in this case that it does on occasion happen that there is either condensation caused by the atmosphere or that, as a result of the perspiration of the wearer of goggles, there may be misting of the goggles. To that extent there may be a criticism of the goggles which the defendants provided, but a criticism only in this limited sense, that, as the defendants themselves acknowledge, the goggles are not perfect goggles for the reason that such misting does at times occur. The learned judge summarised the way in which the matter was put by the defendants in these sentences:

“On the other side it is said ‘Well, in the sense that suitable goggles mean perfect goggles, then these goggles are not perfect, because there are times when the wearer has to do this clearing. It is a very short time indeed. If he does it carefully with a piece of rag and uses his hands sensibly he can still protect his eyes, because at that moment, of course, he has got two hands and he has not got to look at his work or carry out any operation, and you ought to construe the word “suitable” in a reasonable sense as meaning goggles which are suited to this kind of work, which are suited to the man who wears them, and the mere fact that from time to time he removes them altogether is something which does not prevent them being still described as “suitable“’”.

Page 222 of [1955] 1 All ER 218

In that passage various points are indicated. It has been said by the defendants that the occurrence that gave rise to this litigation was an extraordinary mischance. It has further been said that when somebody finds occasion to wipe goggles because of misting, it could be done merely by withdrawing the goggles a short distance from the brow, by pulling the elastic, and that the clearing could be done while protecting the eyes completely with the two hands which are then free for that operation.

The learned judge at a later part of his judgment said this:

“Now, can it be said—this is the whole point—that if goggles are provided, however excellently they are designed (and I say not a word against them) which, owing to the particular kind of work which was being done by the plaintiff, had to be removed sometimes, thereby leaving the eyes unprotected, could those goggles be said, within the meaning of s. 49, to be suitable goggles to protect the eyes of the person, in this case the plaintiff, employed in the process to which the section has been applied by the regulation b?”.

I quote that sentence because the learned judge is saying that he has not a word against the design of these goggles. He uses the words

“however excellently they are designed (and I say not a word against them)”.

It seems to me that on the learned judge’s finding the goggles, if remaining over the wearer’s eyes after misting, were still goggles that would protect the eyes of the wearer although he could not continue to do his work as he would wish to do it while that misting remained. Because of the lay-out and planning of the work there might in this case have been some difficulties in withdrawing some distance from the work in order to clear the goggles, but the goggles as goggles, according to the learned judge’s finding, remained goggles that would protect the eyes. The learned judge really held that the goggles supplied to the plaintiff were goggles that fitted him; they were goggles that were suitable when worn to protect the eyes; and, subject only to the question of misting, they were goggles that were suited to the kind of work. It seems to me that the question becomes ultimately a question of fact whether in this case the goggles supplied to the plaintiff were goggles that were suitable to protect the eyes in the process on which he was employed; and, on the learned judge’s findings, notwithstanding that some misting could and did occur, I do not think it was shown that there was a breach of this section. I would allow the appeal.

DENNING LJ. I agree with both the judgments of my Lords and have nothing to add.

Appeal allowed.

Solicitors: A E Wyeth & Co (for the defendants); Pattinson & Brewer (for the plaintiff).

Phillippa Price   Barrister.

Re Cochrane’s Settlement Trusts

Shaw v Cochrane and Others

[1955] 1 All ER 222

Categories:        TRUSTS        

Court:        CHANCERY DIVISION        

Lord(s):        HARMAN J        

Hearing Date(s):        16, 17 DECEMBER 1954        

Settlement – Construction – Beneficial interests – Gap in limitations – No provision for events that happened – Whether gap remediable by construction.

By a post-nuptial settlement dated 17 August 1898, certain assets called “the wife’s part” and further assets called “the husband’s part” were vested in trustees on trust to invest the same and pay the income thereof to the wife for life “so long as she shall continue to reside with the husband” and after her death “or the prior determination of the trust in her favour” to the husband for life if then living and from and after the decease of the survivor of them in trust for their issue as they should jointly appoint and in

Page 223 of [1955] 1 All ER 222

default of such appointment as the survivor should appoint and in default of such appointment for all their children who should attain the age of twenty-one in equal shares. There was issue of the marriage two daughters who attained the age of twenty-one. The wife, during the subsistence of the marriage, ceased to reside with the husband and her interest thereupon ceased. The husband died in January, 1953, his wife surviving him. On a summons to determine whether on the husband’s death the children of the marriage became entitled to the income during the life of the wife.

Held – Although there was clearly an omission by the draftsman of the settlement in that there was no limitation to cover the events that had happened, viz, the cesser of both interests during the life of the survivor of the spouses, it was impossible to fill the gap by reading in a trust in favour of the children because it could not be said with certainty what was the trust which had been omitted, having regard particularly to the fact that during the life of the wife her power of appointment as the survivor still remained and she could by the exercise of that power alter the beneficial interests in remainder: during the remainder of her life there were resulting trusts in favour of the estate of the husband and in favour of the wife of the income of their respective parts of the trust fund.

Re Akeroyd’s Settlement ([1893] 3 Ch 363) distinguished.

Notes

This case may be contrasted with two recent cases, each of which related to a will: Re Smith ([1947] 2 All ER 708), and Re Follett ([1954] 3 All ER 478). In both those cases, the court found that it was a necessary implication from the context that certain trusts were intended to have been included by the testator. The obstacle to a similar implication in the present case is that there is no sufficient indication what should be implied, however much it may be thought that, had the matter been considered, the settlor would have provided that the children should take equally. The interests of the children in remainder could not be accelerated as in Re Akeroyd’s Settlement ([1983] 3 Ch 363), because those interests were subject to the exercise of the widow’s power of appointment.

As to the Implication of Beneficial Interests in Settlements, see 29 Halsbury’s Laws (2nd Edn) 600, para 871; and for cases on the subject, see 40 Digest 562, 1010 et seq.

Cases referred to in judgment

Re Akeroyd’s Settlement [1893] 3 Ch 363, 63 LJCh 32, 69 LT 474, 5 Digest 670, 5941.

Re Tredwell [1891] 2 Ch 640, 60 LJCh 657, 65 LT 399, 44 Digest 1175, 10,162.

Lill v Lill (1857), as reported in 23 Beav 446, 53 ER 175, 44 Digest 776, 6336.

Re Master’s Settlement [1911] 1 Ch 321, 80 LJCh 190, 103 LT 899, 37 Digest 476, 749.

Re Sassoon [1933] Ch 858, 102 LJCh 374, 149 LT 217, affd HL, (1934), 104 LJCh 24, 152 LT 217, sub nom  Inland Revenue Comrs v Raphael, [1935] AC 96, Digest Supp.

Re Laing [1912] 2 Ch 386, 81 LJCh 686, 107 LT 822, 44 Digest 507, 3259.

Adjourned Summons

The sole surviving trustee of the post-nuptial settlement hereinafter mentioned applied to the court by originating summons to determine whether following the death of Walter John Basil Cochrane (“the husband”) on 29 January 1953, the income

Page 224 of [1955] 1 All ER 222

of the trust fund subject to his marriage settlement dated 17 August 1898, vested during the life of the wife, Emily Maude Cochrane, in the children of the marriage, or whether after the death of the husband and until the death of the wife, there was a resulting trust in favour of each spouse of the income of his or her part of the fund. By a post-nuptial settlement dated 17 August 1898, and made between the husband of the first part, the wife of the second part and the husband and John Franklin, as trustees, of the third part, assets amounting in value to £1,150, known as “the wife’s part” and further assets valued at £4,100, known as “the husband’s part” were vested in the trustees on trust to invest the same and pay the income thereof

“to the wife during her life so long as she shall continue to reside with the husband and shall remain faithful to him, and from and after the decease of the wife or the prior determination of the trust in her favour as hereinbefore mentioned upon trust to pay the income”

“as they shall by deed or will jointly appoint and in default of such appointment as the survivor of them shall by deed or will appoint and in default of such appointment for all the children who being male shall attain the age of twenty-one or being female shall attain that age or marry under it, in equal shares … ”

There was issue of the marriage two daughters, the first defendant, Elaine Emily Cochrane, who attained the age of twenty-one, and Eleanor Cochrane who died a spinster and intestate in April, 1942, also having attained the age of twenty-one. The wife, after the birth of the two children of the marriage, ceased to reside with the husband, who died on 29 January 1953. The wife then re-married and was, as Emily Maude Theobald, the fourth defendant to the summons. The plaintiff, Herbert Alfred Shaw, was, at the date of the summons, the sole trustee of the settlement. The second and third defendants, together with the first defendant, were the personal representatives of the husband.

J A Plowman QC for the plaintiff.

P W E Taylor for the first defendant.

T J R Barnes (with him I L R Romer) for the second and third defendants.

M Browne for the fourth defendant.

17 December 1954. The following judgment was delivered.

HARMAN J. This is a summons arising out of a post-nuptial settlement dated 17 August 1898, the parties to which were Walter John Basil Cochrane of the first part, his wife, now Emily Maude Theobald, the fourth defendant, of the second part, and the husband and John Franklin of the third part as trustees. The plaintiff is now the sole trustee of that settlement, and the settled property now consists of certain freeholds and leaseholds which stand in his name. The first defendant, Elaine Emily Cochrane, is the only surviving child of the marriage; the second and third defendants are, together with the first defendant, the personal representatives of the husband. There was issue of the marriage one other daughter, Eleanor, who died a spinster and intestate in 1942 having attained the age of twenty-one. She has no personal representatives, and any property falling to her would go as to half to her father and half to her mother.

The settlement was in an unusual form. It recited pre-nuptial articles under which certain property had been put into the hands of the wife, although still an infant. It further recited that she had now attained the age of twenty-one and had asked her husband to make the settlement, and that in consideration of that settlement by him she brought in certain assets amounting to £1,150 which were called the wife’s part. The husband’s settled property amounting to £4,100 was called the husband’s part. Both parts were vested in the trustees on certain trusts to invest, and to pay the income to the wife during her life so long as she should continue to reside with the husband and should remain faithful to him. That is a very curious limitation. Then, after the decease of the wife

Page 225 of [1955] 1 All ER 222

“or the prior determination of the trusts in her favour as hereinbefore mentioned upon trust to pay the income”

The question I have to determine is, what happens to the trust fund, or the income thereof on the death of the husband? The settlement is silent on that matter: after the limitation to the husband during his life it provides that from and after the decease of the survivor of the husband and wife the fund should be held in trust for their issue as they should jointly appoint, and in default as the survivor should by deed or will appoint, and in default of appointment for all the children who should attain the age of twenty-one equally. On the face of the deed there is no further limitation until after the death of the survivor of the husband and wife. The draftsman has omitted to provide, as is usual in a marriage settlement, for life interests successively to the spouses with remainders over after the death of the survivor, but has limited the period of the wife’s interest to that during which she should reside with the husband. She has forfeited her interest by leaving him, and, he having died and she still being alive, there is a gap in the limitations. On the one hand, it is said that that gap can be filled by construction, because one can see on looking at the deed what limitation ought to be there and, that if that is sufficiently clear, then without rectification it can be inserted. The other view is that this is an oversight, that no provision has been made and, therefore, until the wife’s death there is a resulting trust for each spouse of his or her part.

It is a rather startling proposition that one can by construction fill up a gap of this sort, but there is the authority of the Court of Appeal for it in Re Akeroyd’s Settlement. In that case there was a marriage settlement in which the income was limited to the wife for life with remainder to her husband until he should become bankrupt with a limitation over to their issue after the decease of the survivor. The husband became bankrupt and his wife pre-deceased him. The question was: Was there a gap? It was held that the limitation over had taken effect, and that the income of the trust fund between the death of the wife and the death of the husband belonged to the children. Lindley LJ after reciting the limitations for the husband and wife, said ([1893] 3 Ch at p 366):

“That is intelligible enough. Then there is a trust in remainder which does not fit all the events upon which his interest [i.e., the husband interest] is to cease. The gift over is confined to his death, and after the decease of the survivor of the husband and wife … then to the children. Then there are clauses of advancement by the trustee with the consent of the husband. I confess that, without knowing anything at all about the events which have happened, about the date of his liquidation, the circumstances of his discharge, and when these interests fell into possession, but looking only at the recitals and at the operative part of the deed, it does appear to me to be as plain as can be, that the real intention of the parties was that this property was to go to the children upon the determination of the life interest of their parents. I cannot doubt that for a moment. I do not call that guessing. The intention is plain; but by a piece of bad drafting the draftsman has failed to give full effect to that plain intention, because in the gift over he has confined it to one of the events instead of putting in some general words which would cover the whole; but that particular kind of flaw does not require a suit to rectify the instrument. The mistake can be corrected by construction provided the intention is clear and plain from the document itself.”

Lopes LJ (ibid, at p 367) also thought it was plain that the settlor intended

“… to make a gift over on the determination by death or by bankruptcy.

Page 226 of [1955] 1 All ER 222

I cannot help thinking that this is the clear intention which is to be found upon this particular clause.”

Then he said it could be tested by seeing what would happen if there were a resulting trust, the husband being bankrupt. The income would all go to his creditors, which was the very thing the settlement was intended to prevent. A L Smith LJ concurred and cited Lindley LJ [in Re Tredwell [1891] 2 Ch at p 655] in these terms ([1893] 3 Ch at p 368):

“… it is necessary ‘to see something in the will [and the same is true of a settlement,] which convinces the mind that the testator must have meant that these legacies’, the equivalent to the gift over in this case, ‘should be paid at some time or other different from what he has said’”.

So then I am to be convinced that the draftsman on the face of it clearly intended the interests of the children to come into operation on the cesser of the interests of their parents. In other words, I am to read the words “from and after the decease of the survivor of them”, the husband and wife, as “subject to the several interests of them”, the husband and wife, and there is no doubt that “after the death of A” has in a good many circumstances been construed as meaning “subject to A’s interest”. The case of Lill v Lill is a good instance of that.

Is it clear here not only that something has been left out but also what it is that ought to be supplied? The second is much the more difficult matter to decide. One can see that the limitations over do not marry with the prior trusts, and that it should have been obvious to the draftsman that the event which in fact has happened might happen. But is it clear that the gift over should, so to speak, be accelerated? I do not think it is clear on this particular settlement, and I base my decision on this, that I cannot see clearly what it is that would have been written in. There is a power for the spouses jointly to appoint to issue and there is a power for the survivor to appoint. It is clear and conceded that the fourth defendant, notwithstanding that she forfeited her interest in her husband’s lifetime, still has for the rest of her life, following her husband’s death, power to dispose of the fund as the survivor of the two, either by deed or by will. That power clearly did not cease with the cesser of her interest, so that she could alter the beneficial interests by appointing not to the children but in favour of grandchildren or by making an unequal division between her daughters, and it seems to me in the face of that that it is impossible to say that the interest vested in the children at the date of the cesser of the husband’s interest. It was in fact admitted before me that the fund could not be distributed so long as the power of appointment in the survivor of the two spouses was outstanding, and that alone seems to me to show that it is not true to say that the remainder should vest until the event has happened which is stated to be the event in the deed, viz, the death of the survivor of the husband and wife.

The result is that the draftsman has failed to provide for the event which has happened. Though this is the last resort to which the law has recourse when the draftsman has failed to dispose of that which he has set out to dispose of, yet here, I think, there is a resulting trust of the income of the fund until the death of the survivor of the spouses. The income will be divisible according to the proportion one part bears to the other or if the parts have become intermixed then in proportion to their respective values as recited in the settlement.

Declaration accordingly.

Solicitors: Preston, Lane-Claypon & O’Kelly (for the plaintiff); Gibson & Weldon agents for Bellamy-Knights & Griffin, Shoreham (for the first, second, third and fourth defendants).

Philippa Price   Barrister.

Portman Building Society v Gallwey and Another

[1955] 1 All ER 227

Categories:        COMPANY; Other Company        

Court:        CHANCERY DIVISION        

Lord(s):        WYNN-PARRY J        

Hearing Date(s):        2 NOVEMBER 1954        

Company – Receiver – Appointment of corporate body – Payments to mortgagee by receiver – Acknowledgment of mortgagor’s indebtedness – Companies Act, 1929 (19 & 20 Geo 5 c 23), s 306 – Law of Property Act, 1925 (15 & 16 Geo 5 c 20), s 109(2), s 109(8).

Limitation of Action – Acknowledgment – Mortgage – Payments made to mortgagee by receiver appointed under a different mortgage – Receiver’s appointment contrary to Companies Act, 1929 (19 & 20 Geo 5 c 23), s 306.

In February, 1936, the mortgagors, a limited company, mortgaged their leasehold premises to T Ltd and by the mortgage deed a firm of solicitors was immediately appointed receivers of the rents and profits of the premises. On 28 September 1936, the mortgagors mortgaged the premises to the plaintiffs, and the first defendant and one S joined in the mortgage as sureties for the repayment of the principal and interest thereby secured. By a deed of the same date made between T Ltd the mortgagors and the plaintiffs, the mortgage of February, 1936, was postponed to the mortgage of September, 1936. In July, 1938, T Ltd in exercise of powers conferred by the mortgage of February, 1936, appointed T G I Ltd receivers in place of the solicitors, and in 1941 appointed another limited company, H Ltd receivers in place of T G I Ltd. By virtue of s 109 of the Law of Property Act, 1925, the receivers would, if duly appointed, have been the agents of the mortgagors. In November, 1939, the mortgagors made default in payment of sums secured by the mortgage of September, 1936, and the plaintiffs’ power of sale accordingly became exercisable in February, 1940, and all sums secured by the mortgage became payable by the sureties. In February, 1949, the mortgagors were dissolved under the Companies Act, 1948, s 353. On 27 March 1953, a writ was issued by the plaintiffs against the first defendant and the second defendant as the personal representative of S who had died, claiming payment by them as sureties of all moneys due under the mortgage of September, 1936. The defendants pleaded the Limitation Act, 1939, and in reply the plaintiffs pleaded that up to and including 1948 payments had been made to them by the receivers as agents for the mortgagors on account of moneys owing under the mortgage of September, 1936. The deed of postponement of 1936 was not pleaded.

Held – (i) The payments made to the plaintiffs by the solicitors after the appointments of the limited companies as receivers must be taken to have been directed by the receivers and, assuming that the appointments were valid, the defendants (as sureties for the mortgagors) could not maintain that on the pleadings the payments ought not to be regarded as payments to the plaintiffs on behalf of the mortgagors in respect of the mortgage of September, 1936, because, even though the receivers were appointed under the mortgage of February, 1936, and were subject to the provisions of s 109(8) of the Law of Property Act, 1925, for the application of the moneys towards repayment of that mortgage, the receivers were agents of the mortgagors by virtue of s 109(2) of the Act of 1925; but

(ii) as at the relevant dates a limited company was disqualified from becoming a receiver of the property of another limited company by virtue of s 306 of the Companies Act, 1929, the purported appointments of T G I Ltd and of H Ltd as receivers were a nullity and failed to create any contractual relation between those companies as receivers and the mortgagors and, accordingly, the payments made to the plaintiffs by the solicitors on the direction of T G I Ltd and of H Ltd were not made by agents of the mortgagors and did not defeat the defence under the Limitation Act, 1939, which, therefore, succeeded.

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Notes

For the Companies Act, 1948, s 366, which has superseded s 306 of the Companies Act, 1929, see 3 Halsbury’s Statutes (2nd Edn) 735.

For the Law of Property Act, 1925, s 109, see 20 Halsbury’s Statutes (2nd Edn 673–677.

For the Limitation Act, 1939, s 23, which provides for the fresh accrual of a right of action on acknowledgment or part payment, see 13 Halsbury’s Statutes (2nd Edn) 1184.

Action

The plaintiffs as mortgagees under a mortgage dated 28 September 1936, sued the defendants respectively as surety and as the personal representative of a deceased surety for the repayment of moneys due under the mortgage from the mortgagors, S G Properties Ltd a company which had been dissolved. The only defence pleaded was that the claim was barred by the Limitation Act, 1939. The plaintiffs in their reply relied on the fact that receivers appointed under a prior mortgage, and their successors, had, from time to time up to and including 1948, made payments to them as mortgagees in respect of moneys due under the mortgage of September,1936.

The relevant facts appear in the judgment.

Denys B Buckley for the plaintiffs.

J G Monroe for the first defendant.

R B S Instone for the second defendant.

2 November 1954. The following judgment was delivered.

WYNN-PARRY J. In this action the plaintiffs, as mortgagees under a mortgage dated 28 September 1936, sue the two defendants as sureties, or, in the case of the second defendant, as representing the estate of a deceased surety, they having guaranteed the payment of moneys due under the mortgage by the mortgagor company, S G Properties, Ltd

At the date of that mortgage, there was in existence a prior mortgage on the same property dated 25 February 1936, in favour of a company called Tudor Investment Trust, Ltd. Under that document, provision was made for the immediate appointment of a receiver, and in fact a firm of solicitors, Messrs  Shirley Woolmer & Co as they then were, were appointed and acted as receivers. The evidence shows that it was part of the bargain represented by the mortgage of 28 September 1936, that the prior mortgage should be postponed and, indeed, by a document of even date with the mortgage, the prior mortgage was postponed so as to rank after the mortgage in favour of the plaintiffs. Messrs  Shirley Woolmer & Co acted as receivers under the mortgage of 25 February 1936, until 27 July 1938, when, by a deed of that date made between the Tudor Investment Trust Ltd, Messrs  Shirley Woolmer & Co and the Temple General Investment Co Ltd which recited that Messrs  Shirley Woolmer & Co were desirous of being discharged and the mortgagees were desirous of appointing the Temple General Investment Co Ltd as receivers in their place, it was provided by cl 1:

“The mortgagees [Tudor Investment Trust, Ltd.] in exercise of the powers conferred on them by the principal deed [of Feb. 25, 1936] or by statute or otherwise hereby appoint the receiver to be receiver of the rents and profits and income of the premises comprised in the principal deed in the place of the solicitors.”

By cl 3 the mortgagees released the solicitors from the provisions of the principal deed, which included their appointment as receivers, and from all moneys received or which ought to have been received pursuant to the provisions therein contained. By cl 4 they gave to the solicitors a complete and full indemnity.

The new receivers, Temple General Investment Co Ltd continued to act until 11 August 1941, when, by a deed of that date, they were removed and a company called Hallingbury Trust Ltd were appointed receivers in their place. Throughout the whole of the material period, the actual collection of money continued to be made by Messrs  Shirley Woolmer & Co and a partner in that

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firm, Mr Storrs, gave evidence before me to the effect that, in each case, his firm collected the rents as solicitors and agents for the limited company in question. This procedure continued down to and, indeed, subsequent to 15 February 1949, when the mortgagors, S G Properties Ltd were dissolved pursuant to the Companies Act, 1948, s 353. I ought then to add that the mortgagors made default in payment of the monthly sums reserved and made payable by the mortgage of 28 September 1936, in November, 1939, and accordingly, under the provisions of that mortgage, the mortgagees’ power of sale became exercisable and the moneys owing to the plaintiffs from the two defendants as sureties became due and payable in February, 1940.

The two defendants plead the Limitation Act, 1939, and prima facie that is a good plea. It is met by the reply delivered by the plaintiffs to the two defences which is to the effect that, as a result of the relevant documents to which I have referred, Hallingbury Trust Ltd became and remained until 15 February 1949—the date of the dissolution of the company—the agents of the mortgagors. The reply shows, and the evidence confirms, that payments were made to the plaintiffs by Messrs  Shirley Woolmer & Co or their successors almost down to the present time, and it is pleaded that Hallingbury Trust Ltd as agents for the mortgagors, paid or procured to be paid to the plaintiffs those moneys.

Now, two points are taken by counsel for the second defendant. The first is that the deed of 28 September 1936, postponing the prior mortgage is not pleaded and that therefore the plaintiffs are not entitled to rely on the fact of postponement, and accordingly that the payments which the receivers made must be taken not to have been in accordance with the Law of Property Act, 1925, s 109(8), which applied, as they were receivers of the income under that Act, and required them to make payments in accordance with the document [ie  the mortgage of 25 February 1936] in right of which they were appointed. Counsel says that those wrongful payments cannot be attributed to the mortgagors. To that counsel for the plaintiff replies, and in my view with force, that the receivers must be taken to have directed the payments by Messrs  Shirley Woolmer & Co and as the receivers were, by virtue of s 109(2) of the Act of 1925, throughout the agents of the mortgagors, it does not lie in the mouths either of the mortgagors or of the sureties to question what they did. Therefore, whether or not the court is apprised of the deed postponing the prior mortgage is immaterial. I think that the point is well taken, and, therefore, I do not accept the first submission of counsel for the second defendant. But he has another and, to my mind, much more formidable submission. He draws attention to the fact that under the Companies Act, 1929, s 306, re-enacted substantially by the Companies Act, 1948, s 366, a body corporate is not qualified for appointment as receiver of the property of a company. In 1936, s 306 of the Act of 1929 applied and that section was lightly different in form from s 366 of the Act of 1948 because it was necessary to make an exception in 1929 as regards bodies corporate which had been appointed receivers prior to 3 August 1928. Section 306 is divided into two sub-sections,sub-s (1) containing the disqualification, and sub-s (2) dealing with the exception. At the end of sub-s (2) it is provided that

“subject as aforesaid any body corporate which acts as receiver as aforesaid shall be liable to a fine not exceeding £100.”

On the basis of that section it is submitted that the appointment first of the Temple General Investment Co Ltd and, secondly, the second company, Hallingbury Trust Ltd was a nullity and that therefore it must follow that the plea on which the plaintiffs rely, that Hallingbury Trust Ltd became and remained until 15 February 1949, the agent of the mortgagors, is not sustained.

It was urged on me by counsel for the plaintiffs that I should recognise that in fact the parties proceeded all through on the basis that whatever defect in law there might be in the appointment of the Temple General Investment Co

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Ltd and Hallingbury Trust Ltd they were receivers and they should therefore be treated as agents of the mortgagors for whom Messrs  Shirley Woolmer & Co acted as agents.

I must, I think, proceed strictly on the basis of the pleadings. The point is purely a point of law which is taken by counsel for the second defendant and, therefore, if I come to the conclusion in his favour that the effect of his point is to destroy the plea that Hallingbury Trust Ltd became and remained the agent of the mortgagors, then the plaintiffs ought not to succeed. The point is a very short one. The language of s 306 is:

“A body corporate shall not be qualified for appointment as receiver of the property of a company.”

In my view, the language is perfectly clear and it is intended to prevent, and has the effect of preventing, a body corporate from being the receiver of the property of a company. It has, in my view, the effect of making it ultra vires any body corporate to act as receiver, and it follows, in my judgment, that any attempt to appoint a body corporate as receiver of the property of a company must be a nullity and must fail to create any contractual relations between the body corporate in question and the company over whose property it purports to be appointed receiver.

The evidence of Mr Storrs is that, from the time when his firm ceased to act as receivers, his firm acted as solicitors and agents first for the Temple General Investment Co Ltd and, secondly, for the Hallingbury Trust Ltd but I cannot conclude from that, as counsel for the plaintiffs would have me conclude, that they went on acting as agents for the mortgagors to collect and hand over the money to the plaintiffs. It may be that on differently drafted pleadings the point might be taken, and I say nothing as to what might have been the outcome; but, on the case as it is presented, I do not see that that point is open. The sole point put forward in the reply is that the Hallingbury Trust Ltd were, throughout the material period of the dissolution, the agents of the mortgagors as receivers, and, in my view, I am forced, for the reasons which I have given, by the language of the Companies Act, 1929, s 306(1), to hold to the contrary.

For these short reasons, therefore, I come to the conclusion, not without the reluctance which the court usually feels on a successful plea of the Limitation Act, 1939, that the plea in this case is successfully taken by each of the defendants, and that therefore I must dismiss the action with costs.

Judgment for the defendants.

Solicitors: Hewlett & Co (for the plaintiffs); Lewis Lloyd & Co (for the first defendant); Edwin E Clark & Son (for the second defendant).

R D H Osbourne Esq   Barrister.

Fishburn v Fishburn

[1955] 1 All ER 230

Categories:        FAMILY; Divorce        

Court:        PROBATE, DIVORCE AND ADMIRALTY DIVISION        

Lord(s):        WILLMER J        

Hearing Date(s):        8, 9, 10, 13 DECEMBER 1954        

Divorce – Desertion – Continuance of desertion – Determination of deserted spouse not to take back deserting spouse – Deserting spouse deprived of locus poenitentiae and prevented from attempting reconciliation.

The parties were married in 1919. In 1946 the husband started going out alone on Sunday afternoons and evenings but would not tell the wife where he went. She also found stains on his handkerchiefs which appeared to her to be caused by lipstick. In January, 1947, she intercepted two letters written to her husband by another woman, and in consequence she withdrew from the matrimonial bedroom but the parties continued to live as one household. On 18 June 1949, the husband ceased to make any weekly allowance to the wife. On about 9 July 1949, the wife ceased to perform any wifely duties for the husband. On 19 July 1949, the wife

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caused a summons to be issued against the husband on her complaint that he had wilfully neglected to provide reasonable maintenance for her. On 9 August 1949, the complaint was heard and the case adjourned. On 2 September 1949, the husband threw the wife’s clothes out of his room which he thereafter kept locked against her. On 3 November 1949, the wife’s complaint was dismissed. Shortly afterwards the wife fitted a Yale lock to her room to keep the husband out and to prevent him eating his meals in there, telling him that if he would not have her she would not have him. In 1952 the wife was forced to give up work. On 4 December 1952, she caused a summons to be issued against the husband on her complaint that he had deserted her and had wilfully neglected to provide reasonable maintenance for her. On 1 January 1953, the complaints were heard and dismissed.

On 13 November 1954, the husband filed a petition for divorce on the ground of the wife’s desertion. By her answer the wife denied desertion and cross-prayed for a divorce on the ground of the husband’s desertion.

Held – (i) On the facts the husband’s conduct in 1946 and 1947 had justified the wife in withdrawing from the marriage bed in 1947; thereafter the husband had made no attempt to effect a reconciliation but had in fact made it as clear as he could that he wanted no more to do with her; accordingly, he was not able to show that during the three years preceding the presentation of his petition, the wife was separated from him without his consent and his petition should be dismissed.

(ii) although the wife was justified in withdrawing from the matrimonial bed in 1947, the withdrawal so justified was no more than temporary.

Observations of Davies J in Forbes v Forbes ([1954] 3 All ER at p 466) applied.

(iii) on the facts, the wife had promptly evinced a firm and decisive determination that the husband should not return to her, thereby depriving him of any locus poenitentiae and preventing him from attempting a reconciliation, and accordingly her cross-prayer should also be dismissed.

Barnett v Barnett ([1954] 3 All ER 689) followed and applied.

Church v Church ([1952] 2 All ER 441) distinguished.

Notes

As to Refusal by Petitioner to Resume Conjugal Relations, see 10 Halsbury’s Laws (2nd Edn) 657, para 967; and for cases on the subject, see 27 Digest (Repl) 347–350, 2877–2896.

Cases referred to in judgment

Hopes v Hopes [1948] 2 All ER 920, [1949] P 227, [1949] LJR 104, 113 JP 10, 27 Digest (Repl) 340, 2818.

Lang v Lang [1954] 3 All ER 571.

Baker v Baker [1953] 2 All ER 1199, [1954] P 33, 117 JP 556, 3rd Digest Supp.

Forbes v Forbes [1954] 3 All ER 461.

Barnett v barnett [1954] 3 All ER 689.

Church v Church [1952] 2 All ER 441, [1952] P 313, 3rd Digest Supp.

Pratt v Pratt [1939] 3 All ER 437, [1939] AC 417, 108 LJP 97, 161 LT 49, 27 Digest (Repl) 349, 2895.

Cohen v Cohen [1940] 2 All ER 331, [1940] AC 631, 109 LJP 53, 163 LT 183, 27 Digest (Repl) 362, 2996.

Harriman v Harriman [1909] P 123, 78 LJP 62, 100 LT 557, 73 JP 193, 27 Digest (Repl) 363, 3005.

Petition

Petition for divorce by the husband.

The parties were married on 8 May 1919, and there were two children of the marriage, one born in 1921 and the other born in 1925. The husband was formerly in the lighthouse service which he left in about 1940, since when the parties had resided at a house in Abbey Wood, a house purchased by them through a building society and registered in the names of both of them. In 1938 the wife found a

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contraceptive appliance in the husband’s pocket, which made her suspicious as the husband did not use such a thing with the wife. In 1946 the husband started going out alone on Sunday afternoons and evenings and refused to say where he had been. The wife also found stains on his handkerchiefs which appeared to her to be caused by lipstick. In January, 1947, the wife, as a result of her suspicions of her husband’s conduct, intercepted two of the husband’s letters from another woman, B. The wife thereupon withdrew from the matrimonial bedroom, but the parties continued to live as one household. On 10 May 1948, there was a quarrel during which the husband struck the wife; the husband was charged with assault and bound over to keep the peace. At the end of 1948 or the beginning of 1949 the husband reduced from £3 to £2 10s the weekly allowance which he paid to the wife. On 18 June 1949, he ceased to pay her any weekly allowance. On 2 July 1949, the wife went away for a week’s holiday and on her return she ceased to perform any wifely duties for the husband. On 19 July 1949, the wife caused a summons to be issued under the Summary Jurisdiction (Separation and Maintenance) Acts, 1895 to 1949, complaining that he had wilfully neglected to provide reasonable maintenance for her. On 9 August 1949, the complaint was heard by the magistrate sitting at Woolwich. Both parties gave evidence and the case was adjourned. Negotiations then took place as to the amount to be paid to the wife but no agreement could be reached and the husband in fact made no further payment. On 2 September 1949, the husband threw the wife’s clothes out of his room which he thereafter kept locked against her. On 3 November 1949, the hearing of the wife’s complaint was resumed and the complaint was dismissed. Shortly afterwards the wife fitted a Yale lock to her own door for the express purpose of keeping the husband out and of preventing him eating his meals in her room, telling him that if he would not have her she would not have him. In 1952 the husband instituted proceedings in the Woolwich County Court under the Married Women’s Property Act, 1882, s 17, in respect of the house, and the court made an order by consent that the legal estate was vested in both parties as joint tenants and that both parties should be at liberty to continue to occupy the parts of the house that each was then occupying. Shortly afterwards the wife was forced to give up work, and had not been able to work since. On 4 December 1952, the wife caused summonses to be issued against the husband, complaining that he had deserted her and had wilfully neglected to provide reasonable maintenance for her. On 1 January 1953, the complaints were heard and dismissed. On 13 November 1954, the husband filed a petition for divorce on the ground of desertion, alleging that after he had left the lighthouse service, the wife, without cause, on numerous occasions accused him of associating with other women and also quarrelled with him concerning money; that she had moved her bedding into a separate room from that occupied by him, and that at a date in June or July, 1949, she had ceased to cook or clean for him or to look after him in any way, and had ever since lived separate and apart from him. By her answer as amended the wife alleged (i) that the separation between the parties was consensual, (ii) that she had just cause for living separate and apart from him, (iii) that the husband had by his conduct driven her away and that he was, therefore, the deserting party.

At the conclusion of the hearing of the evidence the wife sought and was granted leave to amend her answer by adding a cross-prayer for dissolution.

E J R Crowther for the husband.

James Miskin for the wife.

13 December 1954. The following judgment was delivered.

WILLMER J. It should be stated at once that both the parties reside, and have for many years resided, in the same house. The legal estate in that house has been declared by a consent judgment of the county court to be vested in both of them as joint tenants. Although they live, and have lived for many years, under the same roof, I find as a fact, and indeed it is the case of both sides, that since the autumn of 1949 at least they have lived completely separate

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and apart, having no common life and each keeping to his or her own part of the house. In those circumstances, it seems to me that the test laid down by Denning LJ in Hopes v Hopes namely, that they were living as two households, is abundantly satisfied. [His Lordship stated the facts and continued:] The final separation between the parties came in 1949. The sequence of events which led up to this is, of course, a matter of crucial importance, and it has been the subject of a considerable conflict of evidence. For the moment it is sufficient to say, without dealing with the chronological sequence, first, that the husband reduced, and then stopped altogether, the payment of any housekeeping allowance; secondly, the wife stopped cooking for the husband or performing any other household duties; thirdly, the husband threw the wife’s clothes out of his bedroom, where hitherto they had been kept; fourthly, both the husband and the wife took to locking the doors of their respective rooms and keeping them locked against each other, each denying the other access; and lastly, the wife issued on 19 July 1949, a summons for wilful neglect to maintain. [His Lordship considered the evidence and continued:] It is necessary to consider the allegation of desertion which each party makes against the other. So far as the husband is concerned, he admitted in cross-examination that for years he had hated his wife like poison and has long since lost any desire to live with her. I appreciate that, as was pointed out by the Privy Council in Lang v Lang, desire is by no means the same thing as intention, and that it is intention only which is material in considering a charge of desertion. I mention the husband’s freely admitted desire because in the present case it appears to me on the facts that desire and intention go hand in hand. I am satisfied that the husband’s behaviour in 1946 and early 1947—his staying out every Sunday afternoon and evening, and refusing to give any reason; and the discovery of stains resembling lipstick on his handkerchiefs, as to which I substantially accept the wife’s evidence—gave her grounds for suspecting that the husband was carrying on some sort of association with another woman. The discovery of the contraceptive in 1938 was not of particular significance, and in view of the fact that it was followed by eight years of normal marital relations, could not by itself be relied on by the wife as an excuse for withdrawing in 1947. The incident does, however, have this significance: that it gave the wife some additional ground for suspecting the husband’s behaviour in 1946 and 1947. When this behaviour was followed by the interception of the two letters from the woman B, for which neither at the time nor in evidence in this court was the husband able to offer any credible explanation, the wife had, in my judgment, abundant justification for withdrawing from the husband’s bedroom. I think there is some force in the comment made by counsel for the wife that no attempt was made by the husband to obtain the evidence of the woman B., nor that of the husband’s sister, who it is said was the real (and perfectly innocent) cause of the husband’s Sunday afternoon outings.

I pause here to remark that I am only concerned at the moment with the wife’s withdrawal from the marriage bed. It was part of the wife’s case, as put forward in the further and better particulars of the answer, that her later withdrawal from cohabitation was, in part at least, justifiable on the ground of a reasonable belief on her part that her husband had been guilty of adultery; and some argument was addressed to me on this point, in the course of which Baker v Baker was cited. If this argument had been pressed, I should have felt some difficulty in acceding to it, in view of the fact that no actual charge of adultery has ever been put forward, and that at no time during the eight years which have elapsed does the wife appear ever to have investigated the matter. Her belief in the husband’s adultery may have been reasonable enough, in view of all the suspicious circumstances, in 1947; but it does not follow that it continued to be reasonable during the three years immediately preceding the presentation of the answer, having regard to the wife’s total absence of effort during all this time to ascertain the true facts. In this connection I would respectfully adopt the

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words used by Davies J in Forbes v Forbes ([1954] 3 All ER at p 466):

“In my judgment, the fact that a petitioner has not chosen to bring and does not now make a charge of adultery may well be a most relevant matter for consideration when the court is asked to find that the petitioner on reasonable grounds believes, and has believed for three years preceding the presentation of the petition, that the respondent had committed adultery.”

For these reasons I regard the wife’s reasonable suspicions in January, 1947, as no more than justification for her temporary withdrawal from the husband’s bed.

But what followed? The husband does not appear ever to have invited her to return. Nor is there any evidence that he sought at any time to make amends, or to convince the wife of his innocence. He was content to allow relations with his wife to deteriorate still further, and in 1948 was found guilty of assaulting her. The culmination came in June, 1949, when he ceased to support her, for no sufficient reason that I have been able to find. When the wife issued her summons he expressed his willingness in court to pay her, but, in fact, has never done so: on the contrary, he made it clear that he was only prepared to pay her on terms that she should withdraw and live elsewhere. Finally, he threw her clothes out of his room, which had been the matrimonial bedroom, and took to keeping the door locked against her, thereby making it as clear as he could that he wanted no more to do with her. That was five years ago, and since that date there is no evidence to show that he ever altered his mind, that he ever made any offer of amends, or indeed, that he ever tried to approach the wife, except to the extent that, according to the wife’s evidence, he persisted for a time in trying to take his meals into her room. In those circumstances, it appears to me hopeless for the husband to contend now that during the three years immediately preceding the presentation of the petition his wife was separated from him without his consent. At the best he made it abundantly clear by his conduct that he never intended in any circumstances to have the wife back; at the worst, he himself was guilty of expulsive conduct. In neither case could his petition succeed.

As I am now also concerned with the wife’s cross-charge of desertion, it is necessary for me to resolve that question. I would say at once that, in my judgment, the proper inference to be drawn from the husband’s conduct is that he expelled his wife, and that it was he who by his conduct brought the cohabitation to an end. I find accordingly that the de facto separation between the parties, which has subsisted since the autumn of 1949, was in fact initially brought about by an act of desertion on the part of the husband, for which at no time since has he sought to make amends. What then of the wife’s cross-prayer for relief? The question is whether she can satisfy me that the separation initiated by the husband’s act if desertion continued to be without her consent during the statutory period, having regard to the fact that shortly after the husband left she locked him out of her room, and at the same time told him that if he would not have her she would not have him. On behalf of the husband it is contended that those facts are indistinguishable from the facts in Barnett v Barnett, recently before Sachs J and that the wife’s cross-prayer must accordingly fail. In that case the wife, who had been deserted by her husband, changed the lock on her front door immediately after his departure for the express purpose of preventing him from returning; and when he did shortly afterwards come to the house for the purpose of collecting his clothes she made it abundantly clear to him that she would not ever receive him back. In such circumstances, Sachs J held that the wife could not set up that the desertion of the husband continued over the period during which she had evinced to him a firm and decisive determination that he should not return to her.

On behalf of the wife it was contended that the facts in the present case are

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distinguishable from those in Barnett v Barnett. It was said that the inference as to the wife’s intention which might otherwise be drawn from the fact of her locking her door was rebutted by evidence which she gave to the effect that in certain conditions she would have been prepared to return to her husband; that the act of locking her door, in the circumstances of the present case, was no more than her natural reaction to her husband’s behaviour in expelling her from his room; and, therefore, it affords no evidence of any intention on her part to bring the cohabitation to an end. On the contrary, it was argued that the wife in the present case, having been expelled, was to be regarded in law as being the same position as if she had gone to live elsewhere, in which case it would have been natural to keep her door locked against the husband, just as much as against anyone else, until some move was made by the husband to approach her. On the wife’s side reliance was placed on a decision of my own in Church v Church. In that case the husband, who had been deserted by his wife in 1946, committed adultery in 1949 and wrote a letter to his wife informing her of this adultery, and stating that he never intended to return to her, and invited her to bring divorce proceedings against him. The wife took no action. The husband then took proceedings on the ground of the wife’s desertion. It was argued on behalf of the wife that when the husband communicated to her his irrevocable intention never to have her back the separation was no longer without his consent, and he could, therefore, no longer allege desertion. I held, however, that in the absence of any approach by the wife, whose state of mind was quite unaffected by hearing of the husband’s adultery, there was nothing to stop the wife’s desertion from continuing to run. In the present case it has been argued on behalf of the wife that the decision in Church v Church, whereby it was held that the husband whom having committed adultery, communicated to his wife his intention not to have her back, was not debarred from asserting that his wife’s desertion continued, should apply in the case of the wife here, notwithstanding the fact that by locking her door she was, inferentially at least, communicating to her husband her intention never to receive him back.

In Barnett v Barnett Sachs J clearly had some difficulty in reconciling what I had said in Church v Church with various dicta of members of the House of Lords in Pratt v Pratt and Cohen v Cohen and with the decision of the Court of Appeal in Harriman v Harriman. It may well be that in Church v Church I used words which went beyond what was necessary for the case, and which conflicted with what was said by the House of Lords and the Court of Appeal in the cases referred to. Be that as it may, I do not think that the present case is governed by the decision in Church v Church. It seems to me to be clearly distinguishable. In the first place, there is no question in this case of adultery on the part of the deserting spouse. Secondly, in Church v Church the deserted husband’s intention not to receive his wife back was not communicated to her until a considerable time after the wife’s desertion—in fact, the three years’ period had already nearly elapsed. Over the intervening period the deserting wife’s unshakable determination never to return had already been made apparent. In the present case, on the other hand, the wife’s act in locking her door against the husband followed so swiftly after his act of desertion as not to afford him any reasonable locus poenitentiae. Thirdly, the deserted husband’s communication to his wife in Church v Church did nothing to prevent the wife from making overtures, however, belated, for a reconciliation; whereas in the present case the act of the wife in locking her door, and keeping it locked against her husband, effectively prevented him thereafter from approaching her by the most suitable method reasonably open to him. Indeed, on the wife’s own evidence it can be put even higher against her, for she said that she only did it to prevent him taking his meals in her room, which it may well be thought might have provided him with most suitable opportunities to make overtures for a reconciliation. I have come to the conclusion that it is impossible

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to distinguish the present case from Barnett v Barnett. The act of the wife in fitting a Yale lock to her door could only have been directed against the husband, in the same way as the wife’s act in changing the lock in that case was clearly directed against the husband. What the wife in the present case did in fitting the lock must be taken in conjunction with what, on her own evidence, she said to the husband at the time. Both by her act and by her words this wife evinced to her husband a firm and decisive determination that he should not return to her. Having evinced that determination in advance, and having, as it were, put it out of the husband’s power, had he been so minded, to return to her, it seems to me that she is, in law, in the same position as she would have been if he had made a bona fide approach for reconciliation which she rejected.

In the result, I am satisfied that neither of these parties is entitled to the relief prayed for. It may seem unfortunate that a marriage which has so palpably broken down, and which for many years now has been a marriage in name only, should not be dissolved; but I am satisfied that my decision is in full accord with the realities of the case. The one thing that has been abundantly clear throughout the hearing of the present case is that neither party at any time within the three years immediately preceding the institution of the suit ever had the slightest desire or intention of resuming cohabitation with the other. There is one other matter to which I should briefly refer. It was suggested by counsel for the wife, before he had been instructed to ask leave to amend his answer by including a cross-prayer for relief, that the consent judgment obtained in the county court in 1952 constituted evidence that from that time onwards, at any rate, the separation was consensual, on the ground that each of the parties then consented to the other continuing to occupy such respective part of the premises as was then occupied. I find it impossible to construe the terms of this judgment as a consent to continued separation. It seems to me to do no more than provide that neither party should seek to evict the other, and otherwise to leave the position precisely as it was before. I wish to make it clear, therefore, that I do not found my decision on any inference to be drawn from the terms of the consent judgment in the county court proceedings.

Prayer and cross-prayer rejected.

Solicitors: H E Thomas & Co (for the husband); L H Whitlamsmith (for the wife).

A T Hoolahan Esq   Barrister.

Kuruma Son of Kaniu v Reginam

[1955] 1 All ER 236

Categories:        CRIMINAL; Criminal Evidence, Criminal Law        

Court:        PRIVY COUNCIL        

Lord(s):        LORD GODDARD CJ, LORD OAKSEY AND MR L M D DE SILVA        

Hearing Date(s):        7, 8 DECEMBER 1954, 11 JANUARY 1955        

Criminal Law – Evidence – Admissibility – Relevant to matters in issue – Whether court concerned with method of obtaining evidence.

In considering whether evidence is admissible, the test is whether it is relevant to the matters in issue, and, if it is relevant, the court is not concerned with the method by which it was obtained (dictum of Crompton J in R v Leatham (1861) (8 Cox C C at p 501) approved) or with the question whether that method was tortious but excusable; this principle, however, does not qualify the rule that a confession can only be received in evidence if it is voluntary.

There is no difference in principle for this purpose between a criminal case and a civil case.

Per Curiam: it may well be that where an indictment alleges that an offence was committed at a particular place and no issue is raised thereon at the trial the court may take judicial notice that the place is where the indictment says that it is or may apply the maxim omnia praesumuntur rite esse acta (see p 238, letter i, post).

Appeal dismissed.

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Notes

As to the Admissibility of Evidence obtained wrongfully, see 13 Halsbury’s Laws (2nd Edn) 533, para 602.

Cases referred to in opinion

Saleh Mohamed v Regem (1951), Unreported.

R v Leatham (1861), 3 E & E 658, 8 Cox CC 498, 30 LJQB 205, 3 LT 777, 25 JP 468, 121 ER 589, 14 Digest 244, 2343.

Lloyd v Mostyn (1842), 10 M & W 478, 12 LJEx 1, 152 ER 558, 22 Digest (Repl) 238, 2329.

Calcraft v Guest [1898] 1 QB 759, 67 LJQB 505, 78 LT 283, 22 Digest 211, 1976.

Noor Mohamed v Regem [1949] 1 All ER 365, [1949] AC 182, 2nd Digest Supp.

Harris v Public Prosecutions Director [1952] 1 All ER 1044, [1952] AC 694, 116 JP 248, 3rd Digest Supp.

HM Advocate v Turnbull, 1951 SC (J) 96, [1951] SLT 409.

Rattray v Rattray (1897), 25 R (Ct of Sess) 315, 35 SLR 294, 5 SLT 245.

Lawrie v Muir, 1950 SC (J) 19, 2nd Digest Supp.

Fairley v Fishmongers of London, 1951 SC (J) 14, 2nd Digest Supp.

Elias v Pasmore [1934] 2 KB 164, 103 LJKB 223, 150 LT 438, 98 JP 92, Digest Supp.

Olmstead v United States (1928), 277 US 438.

R v Thompson [1893] 2 QB 12, 62 LJMC 93, 69 LT 22, 57 JP 312, 14 Digest 412, 4314.

Appeal against conviction

Appeal by special leave in forma pauperis from an order of the Court of Appeal for Eastern Africa, dated 27 March 1954, dismissing an appeal by the appellant, Kuruma Son of Kaniu, against his conviction on 11 February 1954, by a Court of Emergency Assize of the Supreme Court of Kenya at Nairobi, whereby he was convicted of being in unlawful possession of two rounds of ammunition, contrary to the Emergency Regulations, 1952, reg 8A(1)(b), of the Colony and Protectorate of Kenya, and was sentenced to death. The facts appear in the judgment.

W D Collard for the appellant.

D A Grant for the Crown.

Their Lordships dismissed the appeal.

11 January 1955. The following opinion was delivered.

LORD GODDARD CJ. This is an appeal by special leave from a judgment of the Court of Appeal for Eastern Africa dismissing an appeal from a conviction by an Emergency Cout of Assize in Kenya whereby the appellant was convicted of being in unlawful possession of two rounds of ammunition contrary to reg 8A(1)(b) of the Emergency Regulations, 1952, of the said colony and sentenced to death. The ground on which leave had been obtained was that the evidence proving that the appellant was in possession of the ammunition had been illegally obtained and should not have been admitted.

Before detailing the facts it will be convenient to recite reg 29 of the Emergency Regulations, as it was this that formed the ground on which the objection was taken. Omitting words immaterial for the present case it is in these terms:

“Any police officer of or above the rank of assistant inspector may … with or without assistance and using force if necessary … (b) stop and search … any individual, whether in a public place or not, if he suspects that any evidence of the commission of an offence against these regulations is likely to be found on such … individual, and he may seize any evidence so found.”

On the day in question the appellant, hitherto a man of good character, had leave of absence from the European farmer by whom he was employed to visit

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his reserve. About 10 am he started off on his bicycle along a main road on which he knew there was a road block where he would be liable to be stopped and searched. This was not the only way to his reserve; he could have gone by another route where he would not have encountered a road block. At the block he was stopped and Police Constable Ogwang examined his papers which were in order and then ran his hands over the outside of the appellant’s clothing. According to his evidence, believing that he felt in the fob pocket of the appellant’s shorts what seemed to be a pocket knife and ammunition, he blew his whistle to summon a superior officer, Rattan Singh. Neither of these police officers were of or above the rank of assistant inspector. They said that the appellant was taken by them to an enclosure where he was made to take off his shorts, which were then shaken and a pocket knife and two rounds fell out. He was then taken to the police station and charged with the offence. The two rounds were marked and were subsequently produced in evidence, and it is only right to say that they differed from those which the police officers then had as part of their equipment. The appellant all along denied that he was carrying these rounds and at the trial also denied that he had had a pocket knife on him. The police said they had returned the knife to him after he was in custody. No explanation was given of this remarkable action on their part, nor was the knife produced at the trial nor any reason given for its absence. It is also to be observed that three other persons, two police officers and one civilian, were said to have been present when the appellant was searched, and one of them indeed was said to have actually picked up the two rounds after they had fallen from the appellant’s shorts. Their Lordships think it was most unfortunate, considering the grave character of the offence charged, which carries a capital penalty, that these important witnesses were not called by the prosecution: it was not suggested that they were not available. The assessors were all in favour of an acquittal, but the magistrate overruled them and convicted the appellant.

The first matter to which their Lordships desire to call attention is that the offence was alleged to have been committed at Chania Bridge in Thika in the Central Province. Thika was declared to be a Special Area by the Special Areas (No 13) Order, 1953. By the Emergency Regulations, 1952, reg 22B, which was added by the Emergency Amendment (No 2) Regulation, 1953, it is provided that it is the duty of any person in a special area to stop and submit to search by an authorised officer, which means, by reg 22A, a police officer. If, therefore, Chania Bridge was in Thika, as the indictment alleged, it would appear that the action of the policeman was regular as permitted by law. No point seems to have been taken on this matter at the Assize Court. In the Court of Appeal it was taken but that court said that, as no evidence had been given on the subject beyond the evidence of the constable who said he was on duty at Chania road block near Thika, it had not been proved that the offence was committed in a Special Area, and that it was too late for the Crown to rely on it. They referred to Saleh Mohamed v Regem as disapproving a dictum of the Supreme Court of Kenya that a magistrate was entitled to have judicial knowledge of the location of all the towns and villages in Kenya. A report of that case was not before the Board and their Lordships have no wish to criticise a decision that they have not read, but, with all respect to the Court of Appeal, it appears to them that this was, perhaps, an unduly narrow view to take. They think it may well be that, when an indictment alleges that a particular offence was committed at a particular place and no challenge or issue is raised at the trial on that point, the court may assume, or at least take judicial knowledge, that the place is situate where the indictment states it is or that the maxim omnia praesumuntur rite esse acta would apply. However, the Board will proceed to deal with the case on the footing that there was no power in any police officer under the rank of assistant inspector to search the appellant. As it was a direct result of the search that the ammunition was found on the appellant, it is submitted that the evidence was illegally obtained and, therefore,

Page 239 of [1955] 1 All ER 236

could not be given, or that the court was bound to ignore it. The proposition must be put in this alternative manner because it appears that no objection was taken when the witnesses were giving their evidence, but a submission to this effect was made at the close of the case for the prosecution.

In their Lordships’ opinion, the test to be applied in considering whether evidence is admissible is whether it is relevant to the matters in issue. If it is, it is admissible and the court is not concerned with how the evidence was obtained. While this proposition may not have been stated in so many words in any English case, there are decisions which support it and, in their Lordships’ opinion, it is plainly right in principle. In R v Leatham, an information for penalties under the Corrupt Practices Prevention Act, 1854, objection was taken to the production of a letter written by the defendant because its existence only became known by answers he had given to the commissioners who held the inquiry under the Act, which provided that answers before that tribunal should not be admissible in evidence against him. The Court of Queen’s Bench held that, though the defendant’s answers could not be used against him, yet if a clue was thereby given to other evidence, in that case the letter, which would prove the case, it was admissible. Crompton J said (8 Cox C C at p 501):

“It matters not how you get it; if you steal it even, it would be admissible.”

Lloyd v Mostyn was an action on a bond. The person in whose possession it was objected to produce it on the ground of privilege. The plaintiff’s attorney, however, had got a copy of it and, notice to produce the original being proved, the court admitted the copy as secondary evidence. To the same effect was Calcraft v Guest. There can be no difference in principle for this purpose between a civil and a criminal case. No doubt in a criminal case the judge always has a discretion to disallow evidence if the strict rules of admissibility would operate unfairly against an accused. This was emphasised in the case before this Board of Noor Mohamed v Regem ([1949] 1 All ER at p 370), and in the recent case in the House of Lords of Harris v Public Prosecutions Director ([1952] 1 All ER at p 1048, per Viscount Simon). If, for instance, some admission of some piece of evidence, eg, a document, had been obtained from a defendant by a trick, no doubt the judge might properly rule it out. It was this discretion that lay at the root of the ruling of Lord Guthrie in HM Advocate v Turnbull. The other cases from Scotland to which their Lordships’ attention was drawn, Rattray v Rattray, Lawrie v Muir and Fairley v Fishmongers of London, all support the view that, if the evidence is relevant, it is admissible and the court is not concerned with how it is obtained. No doubt their Lordships in the Court of Justiciary appear at least to some extent to consider the question from the point of view whether the alleged illegality in the obtaining of the evidence could properly be excused, and it is true that Horridge J in Elias v Pasmore (11) used that expression. It is to be observed, however, that what the learned judge was there concerned with was an action of trespass and he held that the trespass was excused, In their Lordships’ opinion, when it is a question of the admission of evidence strictly it is not whether the method by which it was obtained is tortious but excusable, but whether what has been obtained is relevant to the issue being tried. Their Lordships are not now concerned with whether an action for assault would lie against the police officers and express no opinion on that point. Certain decisions of the Supreme Court of the United States of America were also cited in argument. Their Lordships do not think it necessary to examine them in detail. Suffice it to say that there appears to be considerable difference of opinion among the judges both in the State and Federal Courts whether or not the rejection of evidence obtained by illegal means depends on certain articles in the American Constitution. At any rate, in Olmstead v United States, the majority of the Supreme Court were clearly of opinion that the common

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law did not reject relevant evidence on that ground. It is right, however, that it should be stated that the rule with regard to the admission of confessions, whether it be regarded as an exception to the general rule or not, is a rule of law which their Lordships are not qualifying in any degree whatsoever. The rule is that a confession can only be admitted if it is voluntary and, therefore, one obtained by threats or promises held out by a person in authority is not to be admitted. It is only necessary to refer to R v Thompson, where the law was fully reviewed by the Court for Crown Cases Reserved.

As they announced at the conclusion of the arguments, their Lordships have no doubt that the evidence to which objection has been taken was properly admitted. The ground on which leave to appeal was given therefore fails, and they have humbly advised Her Majesty to dismiss the appeal. Their Lordships indicated when they announced their decision that there were matters of fact in the case which caused them some uneasiness, though they did not consider they were of a nature which, according to the settled practice of the Board, would entitle them to tender other humble advice. But they thought it right to call them to the attention of the Secretary of State and, accordingly, they say no more about them.

Appeal dismissed.

Solicitors: Gaster & Turner (for the appellant); Charles Russell & Co (for the Crown).

G A Kidner Esq   Barrister.

Simmons v Pennington & Son (a firm)

[1955] 1 All ER 240

Categories:        PROFESSIONS; Lawyers        

Court:        COURT OF APPEAL        

Lord(s):        DENNING, HODSON AND PARKER LJJ        

Hearing Date(s):        26, 29 NOVEMBER 1954        

Solicitor – Negligence – Sale of land by client – Requisition answered in accordance with general conveyancing practice – Purchaser thereby enabled to refuse to complete and to recover deposit – Opportunity for re-sale pending trial of action for return of deposit – Advice against re-sale – Premises subsequently damaged by fire – Remotencess of damage.

Premises, of which the plaintiff had been the owner since 1922, were subject to a covenant restricting their use to that of a private dwelling-house, but had in fact been used continuously for business purposes since before 1922 without any complaint being made. In 1948 the plaintiff sold the premises by auction to B, who paid a deposit. The particulars of sale described the premises as “valuable and commanding freehold corner shop premises”, and there were special conditions of sale of which condition 7 provided that the property was sold subject to the restrictive covenants as to user and other matters contained in a certain deed, being the deed which had imposed the particular covenant restricting user to that of a private dwelling-house, so far as the covenants were subsisting and capable of taking effect. The special conditions stated that a copy of the restrictive covenants might be inspected at the offices of the vendor’s solicitors, but did not further define the exact nature of the particular covenants. In answer to a requisition on title whether the property was subject to restrictive covenants the defendants, who were acting as solicitors for the plaintiff, replied “Yes. See Special Condition 7. There appear to have been breaches of the covenant as to user but no notice of breach has been served”. The purchaser refused to complete and recovered his deposit in an action brought by him for the purpose against the plaintiff. In 1949, while the action was pending, opportunity arose to sell the premises to another purchaser, but the plaintiff was advised by the defendants through their managing clerk not to sell during the pendency of the proceedings,

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and accordingly did not sell. Subsequently the premises were severely damaged by fire at a time when they were not insured against that risk, the plaintiff having allowed the insurance to lapse. In an action by the plaintiff against the defendants for damages for negligence as his solicitors,

Held – (i) As the reply given by the defendants to the requisition on title was in accordance with the general conveyancing practice which had prevailed for a long time, the defendants were not negligent, although the answer enabled the purchaser to refuse to complete the contract, because that consequence could not reasonably have been foreseen at the time when the requisition was answered.

(ii) even if the advice given by the defendants in 1949 against selling the premises was negligent, yet the damage to the premises by fire was too remote and the plaintiff’s claim to recover this damage failed.

Appeal dismissed.

Notes

As to the Negligence of a Solicitor in Non-Contentious Matters, see 31 Halsbury’s Laws (2nd Edn) 134, para 181; and for cases on the subject, see 42 Digest 105, 997 et seq.

Cases referred to in judgment

Fletcher & Son v Jubb, Booth & Helliwell [1920] 1 KB 275, 89 LJKB 236, 122 LT 258, 42 Digest 97, 894.

Purves v Landell (1845), 12 Cl & Fin 91, 8 ER 1332, 42 Digest 92, 838.

Adam Bell v Strathern & Blair (1954), 104 LJo 618.

Cooke v Falconer’s Representatives (1850), 13 Dunlop (C of S).

Appeal

The plaintiff appealed against an order of Harman J dated 25 June 1954, dismissing an action brought by the plaintiff against the defendants, Pennington & Son, for damages for negligence as his solicitors in, in effect, so answering requisitions made by the purchaser under a contract by the plaintiff for the sale of land as to enable the purchaser to call off the sale, and for negligently advising the plaintiff, pending an action for the return of the deposit, not to re-sell the premises.

The plaintiff was the owner of certain shop property in Forest Gate, which he had bought in or about 1922. The title to the premises included a conveyance of 1870 which contained restrictive covenants prohibiting the use of the premises otherwise than as a private dwelling-house. When the plaintiff bought the premises they had been converted into shop premises and were being and were thereafter always used as shop premises without any complaint about that user being made.

In 1948 the plaintiff offered the premises for sale by auction. The particulars of sale described the premises as “valuable and commanding freehold corner shop premises”, and there were special conditions of sale, of which one, inserted on the advice of the defendants, was in the following terms:

“7. This property is sold subject to the restrictive covenants as to user and other matters contained in a deed dated Sept. 29, 1870, and made between [J.G.] of the one part and [G.E.W.] of the other part so far as the same are still subsisting and capable of taking effect, and the purchaser shall in the conveyance to him covenant to observe the same so far as aforesaid and to indemnify the vendor in respect thereof. A copy of the said restrictive covenants may be inspected at the offices of the vendor’s solicitors at any time during business hours or at the auction room and the purchaser whether he inspects the same or not shall be deemed to purchase with full notice thereof.”

A purchaser bought the premises at the auction, signed a contract and paid a deposit of £900 to stakeholders. The purchaser had known the premises for

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twenty-seven years and knew them to have been shop premises for all that time. The plaintiff instructed the defendants to act as his solicitors and to complete the sale. The purchaser’s requisitions on title included the following:

“(14) Is the property, or any part thereof, subject to any covenant or agreement restrictive of the user or enjoyment thereof or otherwise? If so, has the same been duly observed or performed?”

The answer returned by the defendants to the purchaser’s solicitors was:

“Yes. See Special Condition 7. There appear to have been breaches of the covenant as to user but no notice of breach has been served.”

The purchaser’s solicitors then wrote to the defendants stating that the purchaser had not been informed before the sale that there was a restrictive covenant which restricted the use of the property to that of a private dwelling-house, and that the purchaser was not prepared to complete, and requesting that the stakeholders should be instructed to return the deposit. Later, the purchaser brought an action against the plaintiff for the return of the deposit.

In 1949 while the action was pending there arose an opportunity to sell the premises to another purchaser, but the defendants by their managing clerk advised against selling the property while the action was pending. Acting on this advice the plaintiff did not sell the property. Subsequently there was a fire at the premises which caused great damage at a time when the premises were not insured, the plaintiff not having renewed the insurance policy since the auction sale in 1948.

In 1951 the action for return of the deposit was tried before Romer J who held that the purchaser was entitled to recover his deposit and this decision was affirmed on appeal.

The plaintiff then brought the present action against the defendants for damages for negligence as his solicitors, both in answering the requisition on title and in advising him against a sale of the premises in 1949. In relation to the alleged negligence in answering the requisition the plaintiff averred that by the answer the defendants represented, expressly or impliedly, that the restrictive covenant was or might be enforceable. The damages claimed for the alleged negligence in advising against sale included the loss by reason of the damage by fire when the premises were not insured.

At the trial Harman J held (i) that the defendants were not negligent in regard to the answer to the requisition and (ii) that the defendants were negligent in the advice which they gave regarding the sale of the property pending the action for the return of the deposit, but that the damage, ie, the damage resulting from the fire, was too remote since it was attributable to the plaintiff’s omission to insure the property, which omission the defendants could not reasonably be expected to have foreseen.

Melford Stevenson QC and J T Molony for the plaintiff

Gerald Gardiner QC and P M O’connor for the defendants.

29 November 1954. The following judgments were delivered.

DENNING LJ. stated the facts and continued: The action for the return of the deposit came to trial in 1951 before Romer J and then it went to the Court of Appeal. Both courts held that the purchaser was entitled to recover his deposit. The reason was because of the answer which the plaintiff’s solicitors gave to the requisition. It was wrong, the courts said, for the solicitors to answer “Yes”, because that meant there was a restrictive covenant. It was also wrong, the courts said, to say: “There appear to have been breaches of the covenant”, because that meant that the covenant was still subsisting. Both courts said that the answer to the requisition was plain and unambiguous. It meant that the property, although sold as shop premises, was still subject to a covenant forbidding it to be used except as a private dwelling-house. It showed that the vendor was not going to make a good title. It was equivalent to

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a repudiation or a refusal to perform his part of the bargain, and the purchaser on that account was entitled to call off the contract. That appears, I think, most distinctly from the judgments of Sir Raymond Evershed MR and of Birkett LJ in the Court of Appeal. The Master of the Rolls said the answer to the requisition provided the purchaser

“with a heaven-sent opportunity to resile from a bargain of which he had already repented and he embraced that opportunity with alacrity … he undoubtedly took advantage of the rigour of the game and the loss must fall upon the vendor.”

So the answer to the requisition was a fatal mistake. It enabled the purchaser at once to get out of his bargain. He was entitled to cancel the contract forthwith and did so.

The plaintiff, naturally, blames his solicitors for what has happened. He says: “I instructed you to carry this contract through for me. Instead of doing so, you repudiated it and lost me the contract. It is all very well for you to say that you did not mean to repudiate it, but everyone knows that, for a statement to be a repudiation, it must be clear and unequivocal, evincing an intention no longer to be bound by the contract. If you made such a statement on my behalf you must have been negligent.”

I find it very difficult to give a satisfactory answer to this argument, but I know that there must be one; for I am quite satisfied that the solicitors were not negligent. Let any lawyer put himself in their position. They knew that there were some old restrictions on these premises which had not been enforced for years. The restrictions were in all probability obsolete, but the solicitors could not assert categorically that they were obsolete. It would obviously not be right for solicitors, without full investigation, to commit the vendor to a warranty that the restrictions were obsolete. So they guarded their client by putting a special condition in the contract saying that he sold the property subject to the restrictions so far as they were still subsisting and capable of taking effect: and when it came to the answer to the requisition, they tried to protect their client by saying the same thing over again or, rather, what they thought was the same thing. It was, in the words of the very experienced managing clerk who dealt with it, a “stock requisition”, and he answered in the “stock form”. He answered it in the way in which, Harman J said, such questions had been answered from the time of the memory of man, or at all events for a long time. But by ill luck the courts held that the words which the solicitors used, instead of protecting their clients, amounted to a repudiation of the contract. That was, in my view, not the solicitors’ fault. It was not a thing which could reasonably have been anticipated to flow from the answer to the requisition. The solicitors acted in accordance with the general practice of conveyancers. No ill consequences had ever been known to flow from an answer in this form. Now that the case has gone adversely to the plaintiff, we can see that it was a mistake, but it is so easy to be wise after the event. One has to try to put oneself in the position of the solicitors at the time and see whether they failed to come up to a reasonable standard of care and skill such as is rightfully required of an ordinary prudent solicitor. It seems to me, applying that test, that it is impossible to say that these solicitors were guilty of a breach of duty to their client. It was one of those misadventures and misfortunes which do sometimes happen even in the best-conducted businesses. I think that Harman J was right in holding the solicitors were not guilty of negligence in regard to the answer to the requisition.

The next point is as to the advice which the solicitors gave to their client advising him that he should not sell pending the action. The judge has found that the solicitors were negligent in giving that advice, because the action only affected the deposit. Neither side was at that time insisting on the sale or asking for specific performance. If the solicitors had thought about the matter

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for ten minutes, they would have realised there was no objection to the sale. I do not propose to say anything on the question of negligence because, in my judgment, the plaintiff’s claim on this point fails because the damage is too remote. The market price did not go down at all and no damage would have been sustained if the property had been insured. The trouble was that the property was not insured against damage or loss by fire, and that was the fault of the plaintiff himself. He had the whole insurance entirely in his own hands, and the loss was due to his own omission to insure. The ordinary prudent course for owners of property is to insure against fire, and the plaintiff did not follow it. The solicitors could not reasonably be expected to foresee that damage by fire would fall on the plaintiff. It was not, to use the phrase of Asquith LJ a, a thing which was “on the cards”.

The result is that I am in complete agreement with the judgment of Harman J on both points and I would dismiss the appeal.

HODSON LJ. I agree. The gist of the plaintiff’s action on the first point was that he had lost the benefit of his bargain for the sale of his property by reason of the negligence of the experienced managing clerk employed by the solicitors who were doing the work for him. The particular act of negligence relied on is the giving by the clerk of an answer to a requisition, which had the effect, as this court has held, of making the vendor say to the purchaser that he was forcing on him a property essentially different from that which was advertised. Reference to the advertisement shows that the property in question was advertised as “freehold corner shop premises”. The answer to the requisition:

“Is the property, or any part thereof, subject to any covenant or agreement restrictive of the user or enjoyment thereof or otherwise? If so, has the same been duly observed or performed?”

“Yes. See Special Condition 7. There appear to have been breaches of the covenant as to user but no notice of breach has been served.”

There being a covenant against user of the premises except for the purpose of a private dwelling-house, that was the answer which the managing clerk naturally gave, and he drew attention to the special conditions in the catalogue which, if followed up, would have shown the purchaser the existence of the restrictive covenant. Admittedly, in answering the question in what was described as the usual way, the managing clerk had not in mind, nor, until long after this action started, had anybody else in mind that he was putting forward a description of the property which was not the same but vitally different from the description of the property advertised for sale. That is the force of the plaintiff’s case. He says that the defendants ought to have been alive to this and to have stated that the restrictive covenant was obsolete, as admitted on both sides at the hearing before Romer J

Harman J has considered this matter and I think it worth while to read what he said.

“Was [the managing clerk] negligent in putting his answer in that way even though he did not mean to do so? If he did it by carelessness it may well be negligence on his part. I cannot see that there was any negligence at all. He answered in a way which, although unfortunate in form, was in substance a way in which such questions have been answered from the time of memory of man.”

I should imagine the learned judge was drawing on his own experience as a practitioner in the Chancery Court. He went on:

“Both the experienced Chancery counsel who represented the plaintiff

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thought he should succeed and that this pretext of the purchaser would not be held valid. That turned out to be wrong, but if the managing clerk was wrong, he was wrong in very good company and everyone knows that it is not every piece of wrong advice which a lawyer gives which is held in our law to be negligence.”

Both the learned counsel referred to gave evidence in this case and they thought the opinion expressed by Romer J that this inconsistency defeated the plaintiff was wrong. They advised an appeal but a division of this court took a different view from theirs. In those circumstances, it would be a remarkable thing if a solicitors’ managing clerk who had produced that result, which was ultimately found to be wrong, should be held to be negligent within the ordinary principles of the law of negligence. It is said that Harman J misdirected himself on the matter, but I cannot accept that. What he said was:

“I do not think I need deal at any great length with the question of a solicitor’s liability for negligence. It is the same as anybody else’s liability. Having regard to the degree of skill held out to the public by solicitors, does the conduct of the solicitor fall short of the standard which the public has been led to expect of the solicitor?”

I think that that direction was right and consistent with authority. To my mind, the strongest way in which the plaintiff’s case could be put is that this is not a case of negligent advice, which is the subject-matter of most of the decisions on solicitors’ negligence, but that it is really a case of misdescription of a piece of property by a professional man. It is said that if a solicitor acting for a vendor misdescribes the property, he must, having regard to the professional skill which a solicitor is expected to exercise, be regarded as negligent. I have in mind, in considering the direction which Harman J gave to himself, the language of Scrutton LJ in Fletcher & Son v Jubb, Booth & Helliwell, where he said ([1920] 1 KB at p 280):

“… it would be extremely difficult to define the exact limit by which the skill and diligence which a solicitor undertakes to furnish in the conduct of a case is bounded, or to trace precisely the dividing line between that reasonable skill and diligence which appears to satisfy his undertaking, and that crassa negligentia, or lata culpa mentioned in some of the cases, for which he is undoubtedly responsible. It is a question of degree and there is a border-land within which it is difficult to say whether a breach of duty has or has not been committed.”

“Crass” and other adjectives attached to “negligence” are no longer used. The learned judge did not limit himself in any way. He did not direct himself by that adjective, although he did quote a passage from a decision in the House of Lords in Purves v Landell in which it appears. He had also before him a Scottish case, Adam Bell v Strathern & Blair, in which a number of the authorities were brought together, and in particular there was a passage which seems to me to be applicable to this case although it has not any direct reference to professional advice but rather to other professional activities:

“In Cookev. Falconer’s Representatives, 1850, 13 D., page 157, LORD FULLERTON at page 172 said: ‘A professional man does not warrant that what he does will certainly have the effect which is expected from it … He warrants only that he shall bestow on the matter committed to him the skill generally possessed by his brethren in the profession. It is not enough in order to recover damages from a professional man to show that something which was committed to him to do has not had the effect which was expected from it: he must show an act of gross ignorance such as could not have been committed by any other ordinarily informed member of the profession’.”

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I have no hesitation myself in coming to the conclusion on this evidence that the learned judge came to a right conclusion on this part of the case.

On the second question, I agree with what my Lord has said as to the remoteness of the damage claimed and I have very little to add. It is unnecessary to go further and consider whether in any event the learned judge was right in finding negligence against the solicitors in view of the fact that during the pendency of the litigation in question the defendant’s managing clerk had advised the plaintiff not to sell the property. I think, in fairness to the managing clerk, it might be well to set out his reasons for giving that advice. The first reason was:

“I thought the status quo should be maintained, as there was a pending action, until the action was decided.”

That may not be a very good reason, but it is a very natural reaction of a solicitor to give such advice to his client when an action which concerns a particular subject-matter is before the court. To continue with his answer:

“A second reason was that in the defence we were claiming forfeiture of the deposit and I thought that the court might order, if they decided that there was a binding contract, that the purchaser should have an opportunity of completing the purchase instead of forfeiting his deposit.”

There seems to be some force, at any rate, in that reason, although it is perfectly true no doubt that, if the managing clerk had thought the matter over deeply or considered it with his principals or with counsel, he would have appreciated that if the property had been in fact disposed of there could be no question of specific performance of the contract. The third reason he gave was this:

“There was another reason, that in the defence we were asking the court for a declaration that we were entitled to re-sell, and I thought that if we were asking the court to say that we were entitled to re-sell we should not re-sell until the court said we could.”

It is unnecessary to express any conclusion about that matter and I for my part am not prepared, in those circumstances, nor is it necessary to do so, to criticise the learned judge’s finding on it. I have drawn attention to the answers which the solicitors gave which show, at any rate, that there was something to be said for the view that there was no negligence on that part of the matter. I agree that the appeal fails.

PARKER LJ. I agree that the appeal should be dismissed. The first ground on which it is said the defendants were negligent is based on the answer given by their managing clerk to requisition (14). That requisition and the answer to it have already been read, but it is to be observed that nowhere in the answer is there a plain statement, as it is said there should have been, that any restrictions as to user were obsolete and unenforceable. On the contrary, it has been held by this court that the words are plain and unambiguous and amount to a statement that the restrictions are living restrictions of which there have been breaches and that, accordingly, the statement in the answer amounts to a repudiation, in that it was being stated that property of a different description was being sold from that advertised in the particulars. In those circumstances, the plaintiff says, in effect: “I employed you, the defendants, to carry through the transaction. I did not employ you to repudiate it, and your statement giving rise to this repudiation was a mis-statement made with no conceivable excuse and you have fallen short of your duty to exercise reasonable skill”. In the light of after-events that argument is a very attractive one, but at the same time I have no doubt that it fails. To state affirmatively that the covenants were obsolete and unenforceable was something the defendants’ managing clerk was not called on to do. That was a matter for the purchaser to satisfy himself

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about. Indeed, if the managing clerk had taken on himself to state that the restrictions were obsolete and it turned out that he was wrong in some respect, it might well be said that he was negligent for having taken on himself something which it was not part of his duty to do. What it really comes to is this. It is said that he should have used some more negative words such as “there appears to have been a user inconsistent with the covenant, assuming it is not obsolete, but no notice of breach has been served”; in other words, some words which fell short of affirming that the restrictions were living restrictions. For my part I am quite satisfied that at the time when that answer was made no one, whether solicitor or counsel, could reasonably be expected to foresee the difficulties which might follow according to whether one formula was used rather than another.

So far as the second question is concerned, I find it unnecessary to go into the question whether the advice given by the defendants’ managing clerk was given negligently, because it has not been shown, as it must be shown before damage can be recovered, that it was, to use the phrase used by Asquith LJ “on the cards” b not merely that a fire might result but that a fire might result at a time when the plaintiff was uninsured.

For these reasons, in my opinion the appeal should be dismissed.

Appeal dismissed.

Solicitors: Cree, Godfrey & Wood agents for Preston & Redman, Bournemouth (for the plaintiff); Hewitt, Woollacott & Chown (for the defendants).

Philippa Price   Barrister.

R v Onufrejczyk

[1955] 1 All ER 247

Categories:        CRIMINAL; Criminal Law        

Court:        COURT OF CRIMINAL APPEAL        

Lord(s):        LORD GODDARD CJ, CASSELS AND SELLERS JJ        

Hearing Date(s):        11 JANUARY 1955        

Criminal Law – Murder – Corpus delicti – Body of murdered man not found – Proof by circumstantial evidence.

On a charge of murder the corpus delicti may be proved by such circumstantial evidence as leaves open no other rational hypothesis than murder.

The appellant, a Pole, and one S owned a farm in partnership. Their farming venture was a failure. The appellant was in need of money and S wanted to break off his relationship with the appellant. The last occasion when S was seen alive by anyone other than the appellant was on 14 December 1953, when S took a horse to the local blacksmith to be shod. Thereafter S disappeared completely and his body was never found. When the appellant was called to give an account of the disappearance he told a story of the departure of S which was improbable and was inconsistent with a prior account given by the appellant to a sheriff’s officer who had gone to the farm on 18 December 1953. The appellant wrote contemporary letters explicable only on the footing that he never expected S to return and put forward a proposition to one P which, if carried out, would have involved S being impersonated. Further the appellant endeavoured to persuade the blacksmith to say that S had taken the horse to be shod on 17 December. Minute amounts of the blood of S were found on the walls and ceiling of the kitchen in the house occupied by the appellant and S. The appellant was charged with the murder of S, the case for the prosecution being that he was murdered before 17 December 1953.

Held – (i) On a criminal charge the fact that the murdered man was killed, like any other fact, can be proved by circumstantial evidence, being evidence which leads only to that one conclusion of fact, although no body is found.

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(ii) in the present case there was evidence from which the jury could infer that S was dead, and, if he was dead, the circumstances of the case pointed to the fact that his death was not a natural death, and accordingly, the jury having been warned that the circumstantial evidence must be so cogent as to convince them that the facts could not be accounted for on any other rational hypothesis than murder, a corpus delicti had been established and the jury were entitled to find that the appellant murdered S.

R v Horry ([1952] NZLR 111) applied.

Appeal dismissed.

Notes

As to Proof of the Corpus Delicti, see 9 Halsbury’s Laws (2nd Edn) 183, para 268; and for cases on the subject, see 14 Digest 432–435, 4562–4586.

Cases referred to in judgment

Evans v Evans (1790), 1 Hag Con 35, 161 ER 466, 14 Digest 432, 4562.

R v Horry [1952] NZLR 111, 3rd Digest Supp.

Appeal against conviction

The appellant, Michael Onufrejczyk, was convicted on 1 December 1954, before Oliver J sitting with a jury at Swansea Assizes, of the murder of Stanislaw Sykut and was sentenced to death.

Elwyn Jones QC and T J Jones for the appellant.

H Edmund Davies QC W L Mars-Jones and Esyr Lewis for the Crown.

11 January 1955. The following judgment was delivered.

LORD GODDARD CJ delivered the judgment of the court: The appellant, who is a Pole and who has been in this country since 1947, was convicted before Oliver J at the last assizes for Swansea of the murder of another Pole, Sykut, his partner.

The principal question that has been argued, the trial having lasted for some twelve days and having been summed up with meticulous care by the learned judge who analysed the evidence in what I may describe as a masterly fashion, is whether there was proof of what the law calls a corpus delicti. In this case the remarkable fact, which has remained remarkable and unexplained, is that the body of this man, who was last seen so far as anybody knows on 14 December 1953, has completely disappeared and there is no trace whatever either of him, or of his clothes, or of his ashes. It has been submitted to us that the law is that, unless the body can be found or an account can be given of the death, there is no proof of a corpus delicti. Corpus delicti means, first, that a crime has been committed, that is to say that the man is dead, and that is death has been caused by a crime. As Sir William Scott (later Lord Stowell) pointed out a great many years ago in a matrimonial case (Evans v Evans, 1 Hag Con at p 105), one does not begin to inquire whether the prisoner is guilty of the crime until one has established that a crime has been committed.

There is, apparently, no reported case in English law where a man has been convicted of murder and there has been no trace of the body at all. But it is, we think, clear that the fact of death can be proved, like any other fact can be proved, by circumstantial evidence, that is to say, by evidence of facts which lead to one conclusion, provided that the jury are satisfied and are warned that the evidence must lead to one conclusion only.

Oliver J began and ended his summing-up to the jury with a direction, which he said was as clear a direction as he could give, and which he took from R v Horry, which was before the New Zealand Court of Appeal in 1951. The headnote of that case which Oliver J took as stating the law is this:

“At the trial of a person charged with murder, the fact of death is provable by circumstantial evidence, notwithstanding that neither the body nor any trace of the body has been found and that the accused has made no confession of any participation in the crime. Before he can be

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convicted, the fact of death should be proved by such circumstances as render the commission of the crime morally certain and leave no ground for reasonable doubt: the circumstantial evidence should be so cogent and compelling as to convince a jury that upon no rational hypothesis other than murder can the facts be accounted for.”

Speaking for myself, I entirely agree with that as a statement of law except that I would not use the words “morally certain”; I would say “such circumstances as render the commission of the crime certain”. I myself think that it is always a pity in dealing with matters of evidence to use epithets either for the purpose of increasing its value or decreasing its value; and when one talks about cases in the books and somebody using the expression “a high degree of certainty” or “strong evidence” and words of that sort, they really add nothing to what the law requires. The law requires a case to be proved, and the jury are warned and told that they have to be satisfied on the evidence that the crime is proved and that the prisoner is guilty of the crime; and they should be told that if, when they have heard the evidence, they are not satisfied, if they do not feel sure that the crime has been committed or that the prisoner has committed the crime, then their verdict should be not guilty. One should leave out of account, if one can, any expression such as “giving the prisoner the benefit of the doubt”. It is not a question of giving the benefit of the doubt; if the jury are left with any degree of doubt that the prisoner is guilty, then the case has not been proved.

Oliver J having read that statement of the law to the jury, said:

“It is indeed a grave step to find a murder proved when there is no body, but it is not the law, and I do not believe it has ever been the law; it is certainly not the law today that if a body can be got rid of so that no trace of it can be found, a murderer who has done so is not to be convicted. That is not the law. But, of course, the burden of proving everything against the man is upon the Crown. There is no burden on him to disprove anything. I think the most helpful way I can bring this to your minds is to say this. If Onufrejczyk had not given evidence at all in this case, and all you had was the case for the Crown, would you be satisfied with that case unanswered, the case for the Crown? If you would, then you will proceed. But if you were, for instance, to come to the conclusion that the case for the Crown standing uncontradicted was not good enough—suppose you took that view—then you need not go on to consider Onufrejczyk’s explanation; there is no burden upon him.”

A little later on, before he turned to the details of this remarkable case, he said this:

“If [Sykut] did not die by natural causes, he was killed. Members of the jury, if he was killed his body was concealed or destroyed and has not been found. If he is dead and was killed and the body was destroyed or concealed he was murdered, was he not? That is the point. I want you to apply your minds to that set of circumstances and decide for yourselves whether in the light of these facts, and many more to which I shall have to draw your attention, you can say you are satisfied that no rational hypothesis except that he is dead, dead by violence, is open. If you are driven to that conclusion that would be a verdict of murder; but if you think that would be going too far and that you could not safely say that no rational explanation of his death except murder could be conceived, why then it will mean you have a doubt about it and you will acquit him.”

I do not think that counsel for the appellant, for whose assistance in this case and for whose forceful and temporate argument the court is much indebted, would quarrel with that direction of the learned judge which seems to me as ample and as fair to the appellant as it is possible to conceive.

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Sir Matthew Hale, who was writing at the end of the seventeenth century, says in his Pleas Of The Crown, vol. 2, at p 290:

“I would never convict any person of murder or manslaughter, unless the fact were proved to be done, or at least the body found dead … ”

He says that you must prove the fact of the murder, or at least that the body has been found. He does not say, and it is very often quoted as though he had said, that you cannot convict a man of murder unless you can produce the body. One has to remember, I think, especially as there have been dicta of other judges in the earlier part of the last century going down to the middle of the century which give some colour to the idea that the court will always require in the case of murder or manslaughter the production of the body, that the circumstances of these days are different from what they were when Sir Matthew Hale wrote. When Sir Matthew Hale wrote, there was no police force; there was nothing except a watchman in a town and a parish constable, who might have been an old infirm man of seventy or eighty years, in the country. There was no telegraph. There were no motor cars. There was no aliens’ legislation such as we now know. There was no means of seeing that aliens were registered and did not get out of the country without permission once they were here, and matters of that sort. It would be, therefore, a strong thing indeed were any court to lay down that, without production of the body, or accounting for it by somebody who had seen it or seen the murder committed or something of that sort, a murderer could not be convicted.

The case against the appellant was that he and Sykut had a farm. The farm was a failure, and the appellant had come to the end of his resources. He was in dire need of money; of that there cannot be any doubt, and his own letters show it. He was trying to borrow money from this person and that person, that relation and that near friend, and failed every time. He had actually got to the point when he was obviously considering fraud, because he was hoping to get a valuer who would over-value the farm so that he might be able to raise more money on mortgage from his bank. Meanwhile, Sykut wanted to break off his association with the appellant. There was a suggestion that Sykut should be paid out. Sykut had invested his money in the farm and was willing to sell his share in the farm for £700 if he could get it from the appellant, and, if not, Sykut said that the farm had to be put up for sale. They had been to Mr Roberts, a solicitor of Llandilo, and their difficulties had been discussed before him. There was evidence, which I do not think, speaking for myself, was anything like so strong or convincing in pointing towards murder as a great deal of the other evidence, that these men had quarrelled; but we come to 14 December 1953, by which date no conclusion had been reached between these two men about the sale of the farm. The appellant at this time may or may not have had any money beyond perhaps a few shillings or a few pounds, but it seems clear that he had nothing at all to enable him to pay out his partner. The appellant was very anxious to avoid the sale by auction and wanted to get the whole farm because, I suppose, he thought if he had the whole of it he could make a satisfactory business out of it.

On 14 December Sykut disappeared, so far as is known, not only from Carmarthenshire, not only from England but, so far as is known, from the face of the earth. Letters came from Poland from his wife after his complete disappearance when there would have been ample time for him to have got back to Poland and got in touch with his friends, which would seem to show that he had not got back to Poland, and the last person who is known to have seen him is the appellant.

The appellant’s activities after 14 December were certainly very remarkable. There was evidence, and very strong evidence, that on 18 December he must have posted a letter to a Polish woman living not very far away not later than a quarter to five or, it may have been, five o’clock. He said in that letter:

Page 251 of [1955] 1 All ER 247

“My case is already completed, but I must if only for a few hours pop in to London to take from my acquaintances money. I gave my partner the gross [i.e., the larger part] of the money because I borrowed for a few weeks, only I must sell what is possible. So beg you very much to help me in this matter and I will be very grateful, at the moment this is all for now, the rest we talk over when Mrs. comes over. Beg you to inquire whether it is possible to sell the poultry alive before the holidays, as I must have at least part of the money to begin something and may be some of the cattle. Hand kisses, expecting as soon as possible to see you because my partner is leaving for fourteen days and might change his mind. Please don’t wait a moment because it might be too late.”

There he is saying that he has fixed up matters with his partner, that he has paid him most of the money and is expecting him to go away for a few days. What we know is that the appellant went up to London and was trying by every means in his power to borrow money from relatives there to enable him to pay off his partner. He was getting a woman, who came and gave evidence and evidently impressed the learned judge, to forge (there is no other word for it, though she may not have known she was forging) documents purporting to be agreements, and so forth, and then adding a signature to them purporting to be Sykut’s, and giving all sorts of contradictory accounts. When he had to give an account of how his partner disappeared, he told the sort of story you may see in a magazine, or a detective story, or a story by the late Phillips Oppenheim, of how a large, dark car, sometimes described as black and sometimes as green, had arrived at this lonely farm at 7.30 at night, finding its way up a dreadful rocky path; there were three men, one of whom had a revolver, and the unfortunate Sykut was put into that car at the point of the revolver and driven away. A story like that was told and yet, remarkably enough, on 18 December a sheriff’s officer had gone to the farm before seven o’clock at night to levy an execution. The execution was against the appellant alone, and when the officer came to the place where the business was carried on he naturally asked, as he had to see that he was not levying on partnership property: “Where is Mr Sykut?” He was told: “Oh, Sykut has gone to a doctor at Llandilo”. He never went to a doctor at Llandilo according to the evidence that was given, but at 7.30 that night he was supposed to be kidnapped and taken to London. Then the appellant said in his evidence to the court that he was expecting his partner back at the farm, and yet all the letters which he is writing then seem to say that his partner had gone to Poland and that he was not going to see him back. He was writing letters that can only be explained on the footing that he knew perfectly well that his partner could never turn up again. One of the matters of the greatest possible importance is that, when the appellant was in London and telling all sorts of contradictory stories to the people from whom he was trying to borrow money, he made two remarkable proposals. First, he asked Mrs Pokora, with whom he was evidently on terms of close friendship, to send him sham registered letters, that is to say, to get registered envelopes, to put sheets of paper in them and to send them to him, purporting to send him two hundred pounds. Another more remarkable thing was that he actually asked that the husband of this lady should come down and should go with him to see a solicitor at Llandilo and should impersonate his partner. Could he have done that, would he have dared to do that, if he had thought there was the smallest chance of his partner appearing again, although the appellant said in his evidence in court that he did expect his partner to come back again, his partner who had new clothes and other property and left everything behind, if the appellant’s story is true? His partner went off with these people, whether he was going to Poland or somewhere else, leaving his clothes, and never came back or made any attempt to get back. Indeed, the appellant said that he knew one of the men, Jablonski, which I daresay is as good as any other name if you are using

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a Polish name, arranged to meet his partner at Paddington station at three o’clock, on which day does not matter, and that Jablonski’s account was that he went there and waited until three o’clock and nobody came. Later, so it was said, be met them at a Polish club and there this document was signed, and the signature said by the prosecution to be a forgery was affixed in the presence of Mr Jablonski and another gentleman. There was nobody called from the Polish club to say that these people ever existed at all.

I do not propose to go all through the evidence that was called, but there was a very remarkable piece of evidence which cannot possibly be accounted for in any other way than that the appellant was deliberately trying to manufacture evidence with regard to the life of Sykut, and that was the local blacksmith’s evidence. On 14 December the last day on which anyone saw Sykut alive, a horse from the farm had been taken by the appellant to the blacksmith for shoeing, and had been fetched by Sykut on the same day. The blacksmith had charged 17s. 6d. for shoeing the horse. The blacksmith’s evidence was perfectly clear about that. He said there was no doubt in his mind at all about it; whether he referred to his book, I do not know, but I think he did. At the end of December, when the police were beginning to make inquiries, the appellant visited the blacksmith and paid him the money, and then he tried to persuade the blacksmith to say that it was on 17 December that Sykut went there to take the horse away. The case for the prosecution was that Sykut was dead by the 17th, that he was killed either on or immediately after the 14th. That was the last day anybody had seen that unhappy man alive, and here is the appellant, at the end of December, when the police had begun to make inquiries, trying to get a man whose evidence on one point was vital, to give untrue evidence as to the date on which Sykut fetched the horse. If the blacksmith’s evidence was true, the appellant was trying to get him to say something untrue.

Those are all matters which were from time to time pointed out to the jury by the learned judge and on which they had the advantage of hearing counsel on both sides. It is perfectly true that the learned judge did not point out to the jury all the matters. Moreover a judge does very often say to a jury—“It is very remarkable that such a point has not been proved, and if it could be, it ought to have been proved.” The case for the prosecution was:—This man has disappeared. He has completely gone from the ken of mankind. It is impossible to believe that he is alive now. I suppose it would have been possible for him to have got out of the country and become immured behind what is sometimes called the Iron Curtain; but here you have facts which point irresistibly towards the appellant being the person who knows and who disposed of that man in one form or another. It may be that it would be desirable to emphasise to the jury that the first thing to which they must apply their minds is: Was a murder committed? Speaking for myself, I think that the way the learned judge put it in the two passages which I have read did sufficiently direct the attention of the jury to the fact that they had to be satisfied of that, and, if they were satisfied of the death, and the violent death, of this man, they need not go any further. It is, no doubt, true that the prosecution relied considerably on certain minute spots of blood which were found in the kitchen when it was scientifically examined, spots so small that they might easily have escaped the attention of somebody who was trying to wash or wipe up blood. The appellant did not deny that the blood which was found, although it was a minute quantity, on the wall of the kitchen and, I think, on the ceiling of the kitchen, was the blood of his partner. He said that its presence there was due to the fact that his partner had cut his hand in the field with, I think, one of the tractors, and on coming in must have shaken his hand and shaken off some blood. That, of course, was a possibility and it was put to the jury. It was also a possibility that Sykut was disposed of in the kitchen, but there is no evidence that he was and, a matter which has been very properly stressed by counsel for the appellant, there is no evidence

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here how Sykut met his death. This court is of opinion, however, that there was evidence on which the jury could infer that he met his death, that he was dead; and, if he was dead, the circumstances of the case point to the fact that his death was not a natural death. Then, if that establishes, as it would, a corpus delicti, the evidence was such that the jury were entitled to find that the appellant murdered his partner.

For these reasons, we have been unable to find any misdirection by the learned judge or anything in the summing-up which would justify us in saying that the case was not properly presented to the jury. We have come to the conclusion that there was evidence on which the jury were entitled to find that the appellant’s partner was murdered and that the appellant was the murderer. Accordingly, this appeal is dismissed.

Appeal dismissed.

Solicitors: Porter & Glasbrook, Llandilo, Carmarthenshire (for the appellant);Director of Public Prosecutions (for the Crown).

G A Kidner Esq   Barrister.

Bull v Bull

[1955] 1 All ER 253

Categories:        LANDLORD AND TENANT; Tenancies        

Court:        COURT OF APPEAL        

Lord(s):        DENNING, HODSON AND PARKER LJJ        

Hearing Date(s):        25, 26 NOVEMBER, 20 DECEMBER 1954        

Tenancy in Common – Arising by way of resulting trust on purchase of freehold house – Beneficial interests in proceeds of sale – Occupation of portions of house by beneficiaries – Action for possession by one beneficiary against the other.

In 1949 the plaintiff and his mother, the defendant, together purchased a freehold house, the plaintiff contributing a larger part of the purchase price than the defendant and the conveyance being taken in his name. The money contributed by the defendant was not intended to be a gift from her to the plaintiff, and the defendant accordingly became entitled to an equitable interest proportionate to her contribution. The parties lived together in the house until April, 1953, when the plaintiff married and it was arranged that the defendant should occupy two rooms and that the plaintiff and his wife should occupy the rest of the house. Subsequently differences arose between the parties and the plaintiff brought an action for possession of the rooms occupied by the defendant.

Held – As the effect of the purchase of the house in 1949 was that the plaintiff and the defendant became beneficial tenants in common of the proceeds of sale of the property which was subjected to the statutory trust for sale, the defendant had a right to participate in the enjoyment of the property until it was sold, and the plaintiff’s action for possession failed.

Per Curiam: the answer to the question what is to happen if, in such circumstances as those of the present case, the two equitable tenants in common disagree is that the property may be sold in exercise of the statutory trusts for sale, for which purpose there must be two trustees for sale to enable a good receipt to be given for the price; if the trustees wish to sell with vacant possession and the assent of one tenant in common is withheld the only course open is to apply to the court under s 30 of the Law of Property Act, 1925 (see p 256, letter d, post).

Appeal dismissed.

Notes

The decision in this case is of particular interest not only because of the passages in the judgment of Denning LJ, with whom the other members of the court agreed, which indicate what the appropriate course of action in other cases may be, with which Hodson LJ and, it seems, Parker LJ, agree, but also because of the view expressed by Denning LJ that the

Page 254 of [1955] 1 All ER 253

statutory trusts for sale under s 35 of the Law of Property Act, 1925, would arise in circumstances such as those of the present case. Section 34 of that Act, except for sub-s (1), does not apply where land is conveyed for a legal estate after 1925 to one person and there is no express creation of undivided shares. Sub-section (1) of that section does not expressly create statutory trusts in such circumstances but forbids the arising of a tenancy in common of a legal estate, and s 36(4) of the Settled Land Act, 1925, is similarly expressed. Neither states positively that a trust for sale shall be created. The decision in the present case seems to have been reached on the basis that the legislation in fact creates a statutory trust for sale in the circumstances, and thus ensures that the legal position accords with the general scheme of the real property legislation of 1925. Harman J came to a similar conclusion in the case of partnership property in Re Rayleigh Weir Stadium ([1954] 2 All ER 283).

In applying the views expressed by the court regarding the appropriate remedy if there is disagreement between beneficiaries, their observations are not, it is thought, intended to comprehend all courses, but to relate to difficulties such as were presented by the particular circumstances of the present case; the court was not, for example, here considering the possibilities of partition under s 28(3) of the Law of Property Act, 1925.

For the Law of Property Act, 1925, s 14, s 35, see 20 Halsbury’s Statutes (2nd Edn) 457, 491.

Cases referred to in judgments

Jacobs v Seward (1872), LR 5 HL 464, 41 LJCP 221, 27 LT 185, 36 JP 771, 43 Digest 391, 146.

Cowper v Cowper (Earl), (1734), 2 P Wms 720 (24 ER 930), on appeal (1736), 2 PWms 755 n (24 ER 942), 43 Digest 626, 661.

Re Warren [1932] 1 Ch 42, 101 LJCh 85, 146 LT 224, Digest Supp.

Re Buchanan-Wollaston’s Conveyance [1939] 2 All ER 302, [1939] Ch 738, 108 LJCh 281, 160 LT 399, Digest Supp.

Re Hyde’s Conveyance (1 February 1952), Unreported, 102 LJo 58.

Appeal

The plaintiff appealed against an order of His Honour Judge Reginald Clark QC at Ilford County Court, dated 28 July 1954, whereby he dismissed the plaintiff’s claim to evict the defendant from the premises known as 101, Rishden Gardens, Ilford.

The facts appear in the judgment of Denning LJ

F Burrows for the plaintiff.

L B Schapiro for the defendant.Cur adv vult.

20 December 1954. The following judgments were delivered.

DENNING LJ read the following judgment. This is a most unfortunate dispute between mother and son. The son is now about thirty years of age and he has always lived with his mother. They have lived in several different houses, and, since 1949, the house has been 101, Rishden Gardens, Ilford. This house was bought partly with her money and partly with his, but the son seems to have provided the greater part and the conveyance was taken in his name. In April, 1953, the son married and it was arranged that his mother should have two rooms in the house and that he and his wife would have the rest. Soon afterwards, however, differences arose between the mother and her daughter-in-law with the result that the son told his mother to leave the house. She has not, she says, been able to find other accommodation suitable to her needs and so she has not left. She is still there. The son has, therefore, brought these proceedings to evict her. In answer to the claim the mother says that, although the house stands in her son’s name, she herself contributed quite a lot of money towards it, and that in these circumstances he cannot evict her or, at any rate, cannot evict her without paying her the amount which she put into it.

Page 255 of [1955] 1 All ER 253

The judge has found that the mother did contribute a substantial amount towards the house and that she did not intend to make a gift of that money to her son. There was, therefore, no presumption of advancement but a resulting trust in her favour. Furtherore, the judge has found that, when the house was bought, it was the intention of both mother and son that the house, although taken in the son’s name, should be a home for them both. The judge has held that in these circumstances the son cannot turn the mother out now as if she were a trespasser; and that his only remedy is by application to a court of equity. The son appeals to this court.

Similar circumstances must often arise in families, but strangely enough there is no authority on the point. The son is, of course, the legal owner of the house; but the mother and son are, I think, equitable tenants in common. Each is entitled in equity to an undivided share in the house, the share of each being in proportion to his or her contribution. The rights of equitable tenants in common as between themselves have never, so far as I know, been defined; but there is plenty of authority about the rights of legal owners in common. Each of them is entitled to the possession of the land and to the use and enjoyment of it in a proper manner. Neither can turn out the other; but if one of them should take more than his proper share the injured party can bring an action for an account. If one of them should go so far as to oust the other he is guilty of a trespass (see Jacobs v Seward). Such being the rights of legal tenants in common, I think that the rights of equitable owners in common are the same, save only for such differences as are necessarily consequent on the interest being equitable and not legal. It is well known that equity follows the law; and it does so in these cases about tenants in common as in others.

In support of this view I would refer to the words used by Sir Joseph Jekyll MR over two hundred years ago in Cowper v Earl Cowper (2 P Wms at p 753):

“The law is clear, and courts of equity ought to follow it in their judgments concerning titles to equitable estates; otherwise great uncertainty and confusion would ensue; … ”

I realise that since 1925 there has been no such thing as a legal tenancy in common (see s 1(6) of the Law of Property Act, 1925). All tenancies in common now are equitable only and take effect behind a trust for sale (see s 36(4) of the Settled Land Act, 1925). Nevertheless until a sale takes place these equitable tenants in common have the same right to enjoy the land as legal tenants used to have. Their position was well stated by Maugham J in Re Warren ([1932] 1 Ch at p 47):

“There is no doubt that, since the coming into force of the Law of Property Act, 1925, the position of undivided owners is different from what it was before. that Act, for the purpose of simplifying the law, has introduced provisions for undivided shares, and has made partition actions unnecessary and obsolete. But in substance the beneficial interests of the undivided owners in regard to enjoyment so long as the land remains unsold have not been altered, and it is true to say that the ordinary layman possessed of an undivided share in land would be quite unaware of any alteration in his rights as the result of the Act.”

My conclusion, therefore, is that, when there are two equitable tenants in common, then, until the property is sold, each of them is entitled concurrently with the other to the possession of the land and to the use and enjoyment of it in a proper manner; and that neither of them is entitled to evict the other.

The question may be asked: what is to happen when the two disagree, as they have done here? The answer is that the house must then be sold and the proceeds divided between mother and son in the proper proportions. The son is the legal owner and he holds it on the statutory trusts for sale. He cannot

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at the present moment sell the house because he cannot give a valid receipt for the proceeds. It needs two trustees to give a receipt (see s 14 of the Trustee Act, 1925). The son could get over this difficulty by appointing another trustee (under s 36(6) of the Trustee Act, 1925) who would agree with him to sell the house. The two trustees would, no doubt, have to consider the mother’s wishes, but as the son appears to have made the greater contribution he could in theory override her wishes about a sale: see s 26(3) of the Law of Property Act, 1925. The difficulty of the two trustees would be a practical difficulty because, so long as the mother is there, they could not sell with vacant possession. The mother is entitled to rely on her equitable interest as tenant in common which is preserved by two sections of the Law of Property Act, 1925. The first is s 14 which says that the Act

“… shall not prejudicially affect the interest of any person in possession or in actual occupation of land to which he may be entitled in right of such possession or occupation.”

The second is s 35 which says that the trust for sale is

“… subject to such … provisions, as may be requisite for giving effect to the rights of the persons … interested in the land … ”

In this case the mother is in possession and in actual occupation as equitable co-owner and by virtue of that interest cannot be evicted by the trustees except with her consent. If the trustees wished in these circumstances to sell with vacant possession the only thing they could do would be to apply to the court under s 30 of the Law of Property Act, 1925, on the ground that the mother’s consent could not be obtained. The court could then make such order as it thought fit and this would include, I think, an order to turn the mother out if it was right and proper for such an order to be made (compare Re Buchanan-Wollaston’s Conveyance, and Re Hyde’s Conveyance a).

My conclusion is, therefore, that the son, although he is the legal owner of the house, has no right to turn his mother out. She has an equitable interest which entitles her to remain in the house as tenant in common with him until the house is sold. If they disagree the house should be sold and the proceeds divided between them in the proper proportions; but he cannot at his will turn her out into the street. The house cannot be sold with vacant possession unless she consents. If she unreasonably refuses her consent, the son, by taking proper steps, can obtain an order for sale from the court and in aid of it the court can order the mother to go; but the court would only make such an order if it was satisfied that it was right and proper to do so and on such terms as to alternative accommodation as it thought right to impose. I find myself, therefore, in agreement with the learned judge and I would dismiss this appeal.

Hodson LJ. I agree.

PARKER LJ. I also agree and have nothing to add.

Appeal dismissed.

Solicitors: Canter, Hellyar & Co (for the plaintiff); Daybell, Court-Cooper & Co Ilford (for the defendant).

Philippa Price   Barrister.

Re A Solicitor

[1955] 1 All ER 257

Categories:        CIVIL PROCEDURE        

Court:        QUEEN’S BENCH DIVISION        

Lord(s):        GERRARD J        

Hearing Date(s):        11 JANUARY 1955        

Solicitor – Costs – “Contentious business” or non-contentious business – Lump sum or detailed bill – Lump sum bill submitted for costs incurred before commencement of proceedings – Solicitors’ Remuneration Order, 1883, art 2 (c) and Sch 2, as substituted by the Solicitors’ Remuneration Order, 1953 (S I 1953 No 117), art 2.

Statute –Order made under statutory power – Scope of order limited by scope of power – Repeal of statute – Superseding enactment conferring similar power not so limited – Original order saved – Scope of original order not extended.

In March, 1953, a client sought the advice of a firm of solicitors (“the first solicitors”) with regard to matrimonial difficulties which had caused her to live apart from her husband. On their advice inquiry agents were employed, a petition for judicial separation was prepared and costs were incurred in preparation for the filing of the petition which they had advised her to have ready if she decided to institute proceedings. At the same time the first solicitors advised the client on offers of financial provision made to her by her husband. The client withdrew her instructions from the first solicitors in July, 1953, before the petition had been filed and instructed a second firm. A petition in substantially the same form as that originally drafted was eventually filed by the second firm in December, 1953. In September, 1953, the first solicitors delivered a lump sum bill which contained a detailed description of the work that they had done. The client applied for and obtained from a master an order for the delivery of an itemised bill of costs. On appeal, the court, at the request of the parties, considered the appeal first on the footing that the lump sum bill was in respect of non-contentious business only.

Held – (i) Assuming that the whole of the business to which the lump sum bill related was non-contentious business within art 2 (c) of the Solicitors’ Remuneration Order, 1883, the lump sum bill was a good bill and in accordance with Sch 2 to that order as substituted by the Solicitors’ Remuneration Order, 1953, notwithstanding that the latter order had revoked the Solicitors’ Remuneration (Gross Sum) Order, 1934 (under which a gross or lump sum could be charged in lieu of detailed charges) and did not expressly enact that a gross sum could be charged or that a lump sum bill could be delivered; but

(ii) the scope of non-contentious business to which art 2 (c) of the Solicitors’ Remuneration Order, 1883, applied was limited by the words “and not being otherwise contentious business” in s 2 of the Solicitors Remuneration Act, 1881, under which the order was made, although those words did not appear in art 2 (c) of the order nor in the definition of non-contentious business in s 81(1) of the Solicitors Act, 1932, which had repealed and superseded the Act of 1881 but contained savings under which the order of 1883 continued to have effect; and

(iii) as the business to which the lump sum bill related was in part contentious, because it comprised the collection of information and the taking of all steps, even to the engrossment of a petition for judicial separation, necessary to launch proceedings against the husband, the delivery of a lump sum bill was not justified in the present case by the provisions of Sch 2 to the order of 1883, as amended, and accordingly the client was entitled to an itemised bill.

Re R P Morgan & Co ([1915] 1 Ch 182) not followed.

Notes

The whole of the work to which the lump sum bill of costs in the present case related was business which, if it were non-contentious business, would be within the scope of the Solicitors’ Remuneration Order, 1953, as that order applies to business transacted on or after 1 March 1953. The result of the present case which is important to the legal profession is that, if business is wholly non-contentious, a lump sum bill may be delivered for the fair and reasonable amount under Sch 2 to the Solicitors’ Remuneration Order,

Page 258 of [1955] 1 All ER 257

1883. The client’s remedy, if he wishes to question the amount, is, in accordance with Sch 2 to that order, to require the solicitor to obtain a certificate of reasonableness of the amount from the Law Society or to have the bill taxed by the court. The certificate cannot be required if the lump sum bill has been paid or taxed.

For the Solicitors Act, 1932, s 56, s 82(2), see 24 Halsbury’s Statutes (2nd Edn) 49, 73.

For the Solicitors’ Remuneration Order, 1883, and the Solicitors’ Remuneration Order, 1953, see 20 Halsbury’s Statutory Instruments 195, 209.

Cases referred to in judgment

Duffett v McEvoy (1885), 10 App Cas 300, 42 Digest 138 o.

Re Merchant Taylors’ Co (1885), 30 ChD 28, 54 LJCh 867, 52 LT 775, 42 Digest 241, 2732.

Pécheries Ostendaises (Soc Anon) v Merchants’ Marine Insurance Co [1928] 1 KB 750, 97 LJKB 445, 138 LT 532, Digest Supp.

Frankenburg v Famous Lasky Film Service Ltd [1931] 1 Ch 428, 100 LJKB 187, 144 LT 534, Digest (Practice) 948, 4878.

Re Morgan (RP) & Co [1915] 1 Ch 182, 84 LJCh 249, 112 LT 239, 42 Digest 256, 2879.

Appeal by solicitors from an order of Master Harwood for the delivery of a detailed bill of costs to a former client

The appeal was heard by Gerrard J in chambers, but the judgment was delivered in open court. The facts and history of the case appear from the judgment.

Sir Hartley Shawcross QC and Colin Duncan for the solicitors.

Maurice Lyell QC for the client.

Cur adv vult

11 January 1955. The following judgment was delivered.

GERRARD J read the following judgment: The client and her husband lived in South Africa for some years until February, 1953, when, because of difficulties which had arisen between them, she left that country. She arrived in England towards the end of the next month, and almost immediately sought the advice of the solicitors, to whom I shall refer as the first solicitors, about her matrimonial troubles. They advised her that it would be in her interest to have ready a petition for judicial separation, so that in the event of her deciding to institute proceedings, it could be filed at short notice, and served on the husband on one of his periodical visits to this country.

The first solicitors took a proof of evidence from the client, employed inquiry agents to watch the husband, and consulted counsel. On 3 June 1953, counsel settled a draft petition praying a judicial separation, the custody of the children of the marriage, alimony pending suit, and permanent alimony for the client and the children. That draft petition was based on certain allegations of cruelty. After the client had, with the first solicitors, considered counsel’s draft, it was decided that certain amendments were necessary. On 9 July 1953, counsel re-drafted the petition. In the re-draft, certain allegations of adultery, based in part on the agents’ inquiry, were added. The client approved the re-draft, and the document was engrossed by the first solicitors in order that proceedings might be launched at any moment if the client gave instructions for that to be done. Contemporaneously with these matters, the first solicitors were advising the client on offers of financial provision made to her on her husband’s behalf.

On 14 July 1953, she decided to terminate the retainer of the first solicitors, and retained another firm of solicitors, to whom I shall refer as the second solicitors. They conducted negotiations with the husband’s advisers with

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regard to financial provision for the client, and also employed inquiry agents to watch the husband. In December, 1953, the client decided to file the petition for judicial separation. The engrossment of the amended draft petition settled by counsel was treated as a draft and considered by the client under the guidance of the second solicitors. Very minor alterations were made in three of the first twenty-eight paragraphs, and a further allegation of adultery alleged to have taken place in London in October, 1953, was added. The prayer was amended by praying for the discretion of the court to be exercised in the client’s favour.

The petition in its final form was filed on 23 December 1953; service was effected on the husband on 26 December 1953, when he was visiting this country. The husband entered appearance under protest, objecting to the jurisdiction of the court. I understand that recently the question of jurisdiction was decided in the client’s favour. On 3 September 1953, the first solicitors delivered to the client a document containing a very detailed description of the work they had done on her behalf. The document contained a statement of their disbursements. It was not an itemised bill of costs in the traditional form; it was a lump sum bill which the first solicitors maintained complies with the Solicitors’ Remuneration Order, 1953 (S I 1953 No 117). The client was advised by the second solicitors to challenge the first solicitors’ right to present a bill in that form, and in due course sought and obtained an order from Master Harwood that the first solicitors should deliver a bill of costs. That order was made on 16 December 1953.

The first solicitors appealed from this order, and the appeal came before me on 10 February 1954, for the first time. I was asked to decide two points: (i) whether, having regard to the Solicitors’ Remuneration Order, 1953, the document was a good bill, and (ii) whether, having regard to that order, the court can compel the delivery of a traditional itemised bill of costs. At the hearing of the appeal, I was not asked to consider the terms of the document of 3 September 1953; I was asked to deal with the matter on the agreed footing that its contents related solely to non-contentious business, falling within the Solicitors’ Remuneration Order, 1953, which deals solely with that form of business.

After hearing argument on that agreed footing, I was about to deliver judgment in chambers in favour of the first solicitors when I was asked by counsel for the first solicitors if I would reserve judgment and deliver my judgment in court, so that the matter might be reported, as the first solicitors and the Law Society, who were interested in the matter, regarded the case as of great importance to all solicitors. I agreed to adopt this course. When I had prepared my judgment on the agreed footing, my attention was drawn to some of the work described in the document of 3 September 1953. It occurred to me as at any rate possible that some of the business to which the document refers was not non-contentious business, and if that were so, my judgment would be given on a wrong, though agreed basis. This was a situation which I did not relish, and I asked the parties to appear before me again. I informed counsel that although I had not come to any conclusion about the matter, I did not think it was by any means certain that the agreed basis was correct. I then learned for the first time that a petition had in fact been filed shortly after the hearing before the master. After some discussion between counsel, it was agreed that I should be furnished with the history of the case on affidavit, and that I should be asked to consider whether the whole of the business to which the document of 3 September 1953, relates was in fact non-contentious business, it being conceded that if any part was not, the document could not come within the Solicitors’ Remuneration Order, 1953. I heard the argument on this part of the case on 24 November 1954. I was asked to agree, and rightly or wrongly I did agree, that I would include in my judgment, whatever the result of the appeal, my reasons for the conclusion which I had already indicated, viz, that, assuming the whole of the business referred to in the document of 3 September 1953, to be non-contentious business, the document would be a good bill, and the order of the master could not be supported.

Page 260 of [1955] 1 All ER 257

I think it would be convenient if I give those reasons first. The decision of the matter involves a consideration of Solicitors’ Remuneration Orders prior to that of 1953. I have to start with the order of 1883, but because of the assumption I am making in this part of my judgment, I need not refer to the parts of the order defining the business it covers; I can go straight to para (c) of art 2. I ought to mention here, to avoid confusion, that nobody seems quite sure whether it is right to call the order the order of 1882 or the order of 1883 a. It is in fact called by both titles. Paragraph (c) of art 2 of the order reads b

“In respect of business not hereinbefore provided for, connected with any transaction, the remuneration for which, if completed, is hereinbefore, or in Sch. 1 hereto, prescribed, but which is not, in fact, completed, and in respect of settlements, mining leases or licences, or agreements therefor, re-conveyances, transfers of mortgage, or further charges, not provided for hereinbefore or in Sch. 1 hereto, assignments of leases not by way of purchase or mortgage, and in respect of all other deeds or documents, and of all other business the remuneration for which is not hereinbefore, or in Sch. 1 hereto, prescribed, the remuneration is to be regulated according to the present system as altered by Sch. 2 hereto.”

I draw attention to the words “according to the present system”. They relate to traditional detailed solicitors’ charges.

Schedule 2 reads:

“Such fees for instructions as, having regard to the care and labour required, the number and length of the papers to be perused, and the other circumstances … the allowance shall be … ”

I need not read any more of that.

The Solicitors’ Remuneration Act General Order, 1920 (S R & O 1920 No 1015), is the next material order, but I need not quote from it because it was, with variations not material to the present issue, re-enacted by the Solicitors’ Remuneration (Gross Sum) Order, 1934 (S R & O 1934 No 548). That order provides:

“(1) Without prejudice to the power possessed by the court under the Solicitors Act, 1932, or otherwise or to the powers conferred upon the solicitor or the party chargeable with the bill under s. 66 of the Solicitors Act, 1932, the remuneration of a solicitor in respect of all business regulated by cl. 2 (c) of the General Order of 1883 as amended by any subsequent General Order may at the option of the solicitor be by a gross sum in lieu of by detailed charges: provided that within six months after delivery of a charge made under this order whether it has been paid or not the client may require that a detailed bill of charges shall be delivered and the solicitor shall thereupon comply with the requisition and any bill so delivered shall be subject to taxation as if the provisions of this order with respect to the regulation of remuneration by gross sum had not been made.”

The significant features of the orders of 1920 and 1934 are (i) a charge by way of gross sum may be made; (ii) the client may, within a limited time, require that a detailed bill of charges shall be delivered and that any bill so delivered shall be subject to taxation in the ordinary way, as if no gross sum charge were permissible. The order of 1934 was revoked by art 8 of the

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Solicitors’ Remuneration Order, 1953, and by art 2 of the order of 1953 for the words “according to the present system as altered by Sch 2 hereto” contained in para (c) of art 2 of the order of 1883 there were substituted the words “in accordance with Sch 2 hereto”.

It is contended on behalf of the first solicitors that this new schedule is intended to make two significant changes in the law with regard to solicitors’ remuneration for non-contentious business. The first is that a solicitors’ remuneration is to be such sum as may be fair and reasonable having regard to all the circumstances of the case and in particular to certain criteria laid down in the schedule. It is, I think, clear that in relation to business within the scope of Sch 2 the principles of remuneration have changed and the schedule has substituted a more realistic method of ascertaining what the work done is really worth. About the substitution of these new principles of remuneration there is indeed no issue. It is with regard to the second alleged change that the dispute arises. It is contended for the first solicitors that although Sch 2 of the order of 1953 makes no specific reference to charging by way of a gross or lump sum and revokes the Solicitors’ Remuneration (Gross Sum) Order, 1934, it still enables a solicitor to deliver a lump sum bill in relation to business within its scope, and that in place of the protection given to the client by the orders of 1920 and 1934 under which he could call for a detailed bill of charges and have it taxed, a new method of protecting the client who receives a lump sum bill has been provided by the order of 1953.

In Sch 2 to the Solicitors’ Remuneration Order, 1883, as originally enacted reference is made to “fees”. In Sch 2 to the Solicitors’ Remuneration Order, 1883, as substituted by the Solicitors Remuneration Order, 1953, appear the words “such sum”, “the sum charged”, “a fair and reasonable sum”, “the sum so certified” and “the reasonableness of his charge”. It seems to me that these words clearly visualise the charging of a lump sum.

The arguments put forward on behalf of the client were, as I understand them, these: prior to the Solicitors’ Remuneration Act General Order, 1920, it was a fundamental principle that a bill had to be in a form which would enable the client to take it to an independent solicitor and obtain advice on it; as it was put in Duffett v McEvoy (10 App Cas at p 302) to “enable the party to judge of the goodness of the items”. It was argued that although the gross sum orders of 1920 and 1934 gave a right to a solicitor to charge by a lump sum, the fundamental principle was preserved because the client could, at his option require a detailed bill of charges and, if, on advice he was not satisfied of the goodness of the charges, he could have the bill taxed. Now it is said, that the client is not given by the order of 1953 any express right to require the delivery of a detailed bill, and as there are no express words giving a solicitor a right to charge by way of a lump sum, the wording of the order is not sufficiently strong to allow a lump sum charge to be made or to take away the ancient right of a client to have a detailed bill. Therefore, it is said, the document of 3 September 1953, is not good bill.

It is true that the Sch 2 substituted by the order of 1953 does not enable the client to call for a detailed bill; but it would be a very odd thing if the order were intended to deprive a solicitor of a right which he has enjoyed since 1920. The mere oddity of that situation is not, however, the test of the effect of the order. I think it is clear that taking the schedule as a whole, the “present system” referred to in the order of 1883 has plainly been substituted by a new system, and the new system involves a liberty to charge by way of a lump sum and gives a new form of protection to the client, the sufficiency of which can only be judged in the course of time. The right of the client to have the bill taxed is not affected, and the client may require the solicitor to obtain a certificate from the Law Society certifying that the sum charged is fair and reasonable, or, if it is not, what is a fair and reasonable sum, and the sum so certified, if less than that charged, shall, in the absence of taxation, be the sum payable.

Page 262 of [1955] 1 All ER 257

Further, before the solicitor brings proceedings to recover costs on his bill, he must, unless the costs have been taxed, have drawn the attention of the client in writing to his right to require the solicitor to obtain such a certificate from the Law Society as I have mentioned and to the provisions of the Solicitors Acts, 1932 to 1950, with regard to taxation of costs, and, if the taxing master allows less than one-half of the amount charged, he must bring the facts of the case to the attention of the Law Society. It seems to me that the order of 1953 has not deprived a solicitor of the right to make a lump sum charge and that its object is to effect what one may perhaps call a further “modernising” of solicitors’ charges in a process which began with the gross sum order of 1920. On any taxation of a bill delivered under the Sch 2 substituted by the order of 1953, the taxing master will no doubt require evidence to satisfy himself that the charge of the solicitors is fair and reasonable, and will not, I imagine, be hampered by the absence of a long traditional itemised bill of costs. The solicitor may be hampered if he has not kept careful records of the work done. So if the business for which the first solicitors seek to charge in the document of 3 September 1953, is wholly non-contentious business, in my view the order of the master cannot be supported.

I now turn to deal with the second aspect of the matter. As I have indicated, it is submitted on behalf of the client that the document of 3 September 1953, relates in part to contentious business, and it is common ground that if that submission is correct, the first solicitors have not delivered a “good bill” under the order of 1953. In order to discover the sorts of business to which that order relates it is necessary to go back to the Solicitors Remuneration Act, 1881. It is entitled:

“An Act for making better provision respecting the remuneration of solicitors in conveyancing and other non-contentious business.”

By s 2, certain persons were empowered to make general orders prescribing and regulating the remuneration of solicitors in respect of certain classes of business. After setting out the persons entitled to make orders, the section read:

“… may from time to time make any such general order as to them seems fit for prescribing and regulating the remuneration of solicitors in respect of business connected with sales, purchases, leases, mortgages, settlements, and other matters of conveyancing, and in respect of other business not being business in any action, or transacted in any court, or in the chambers of any judge or master, and not being otherwise contentious business … ”

“Under the Act I think it clear that what was meant was business other than conveyancing business, not being business in chambers or other contentions business … ”

Clearly the section confined the power to make orders to the regulation of remuneration for those sorts of business the nature of which is defined by eliminating every kind of contentious business.

It is convenient next to consider the orders made under the section. The first was the Solicitors’ Remuneration Order, 1883. Article 2 of the order does not exactly copy the wording of s 2 of the Act; it omits the words “and not being

Page 263 of [1955] 1 All ER 257

otherwise contentious business”. This seems to me a curious state of affairs. It is only in art 4 of the order that there is a reference to contentious business, and that is in order to provide that the prescribed remuneration for matters of conveyancing business is not to include any business of a contentious character or any proceedings in any court. What is the effect, if any, of the omission from the order of the words in s 2 of the Act? If one looks only at the order, ignoring matters of conveyancing, there would appear to be one test of whether business falls within art 2: is the work done business in any action or transacted in the court of any judge or master? If it is, it does not fall within the order; if it is not, then it does. This hardly seems to keep in line with the power to make orders, given by s 2, and it is not consistent with that part of art 4 of the order to which I have referred. The words there used, like s 2 of the Act, clearly visualise business of a contentious character outside as well as inside proceedings in a court. The words of the order cannot govern the Act, but the Act does govern the order. I cannot hold that what is not business in an action or transacted in any court or in the chambers of any judge or master must be non-contentious business; that would not march with s 2 of the Act. Whatever difficulties there may be in interpreting the order, it cannot alter my obligation to ask of the work done by the first solicitors: was it contentious business within the meaning of those words in the Act? If it was, then the order cannot be applicable.

So far, I have dealt with the order of 1883 and considered matters as I think they stood under the Act of 1881; but the Solicitors Act, 1932, a consolidating Act, has to be considered. By s 56 of that Act, there is substituted for the power to make orders given by s 2 of the Act of 1881 a new power to make orders regulating the remuneration of solicitors in respect of non-contentious business. By s 82(2) of the Act of 1932, it is provided, in effect, that the order of 1883 is to be treated as an order under and for the purposes of the corresponding provisions of the Act of 1932, viz, for this purpose s 56 of that Act. So the order of 1883 was given a new lease of life, and, indeed, the order of 1953 is merely an amendment of it made pursuant to s 56 of the Act of 1932.

A definition of non-contentious business appears in s 81 of the Act of 1932. It is of what I may call the “including” sort; it merely names some of the more obvious forms of non-contentious business as being included within that term. There is also a definition of contentious business of the same sort, naming obvious forms of contentious business. It does not seem to me that these forms of definition, or the fact that the order of 1953 was made pursuant to s 56 of the Act of 1932, should cause me to change the conclusion I have previously expressed, that there may be contentious business which is not business in any action or transacted in any court or in the chambers of any judge or master. Indeed, that distinction is still recognised in art 4 of the order of 1883 as it stands amended today.

The first solicitors, as I have said, did their work relating to this matter before the filing of the petition. The matter had passed out of their hands for some months by the time the petition was filed. Were they engaged in contentious or non-contentious business? I have reached a conclusion after considerable hesitation. I was referred to certain authorities, but I agree with counsels’ view that they do not greatly assist me in this matter; I shall have to refer to some authorities, but they will appear in their proper context at a later stage. I think it of assistance to consider the position which would have arisen if there had been one firm of solicitors acting throughout. As the petition has now been filed, it appears to me that in the event of an order being made in the pending proceedings, either by agreement or after the hearing of the petition, that the husband should pay the wife’s taxed party and party, or solicitor and client, costs, the costs to which the client will be entitled will have to be ascertained by

Page 264 of [1955] 1 All ER 257

reference to RSC, Ord 65, and Appendix N. By r 66(3) of the Matrimonial Causes Rules, 1950 (S I 1950 No 1940), it is provided that:

“In any cause or matter to which these rules apply the costs allowed to solicitors and the taxation of such costs shall, except where there rules otherwise provide, be in accordance with the provisions of Ord. 65 of the Rules of the Supreme Court so far as the same are applicable.”

The pending proceedings in the present case are a cause or matter to which the rules of 1950 apply no question of exception arises. RSC, Ord 65, r 8, provides that:

“In causes and matters commenced after these rules come into operation, solicitors shall be entitled to charge and be allowed the fees set forth in the column headed ‘lower scale’ in Appendix N in all causes and matters, and no higher fees shall be allowed in any case, except such as are by this order otherwise provided for; and in causes and matters pending at the time when these rules come into operation, to which the higher scale of costs previously in force was applicable, the same scale shall continue to be applied.”

Rule 9 provides for costs being allowed on the higher scale on special grounds, and there are other rules governing the amounts which may be allowed on taxation. On any taxation on such an order as I have visualised, I think it is clear that some of the work done by the first solicitors, and to which the document of 3 September 1953 relates, would have to be dealt with under item 72 and item 82 in Appendix N, subject to the discretionary powers of a taxing master under Ord 65 to increase the items.

In the petition, allegations are relied on which have their origin in work done by the first solicitors. Had there been one firm of solicitors acting throughout, that work would have had to be itemised in their bill of costs for the purpose of ascertaining the amount of costs payable by the husband under the order. A taxing master may, under Ord 65, allow costs in respect of work done before the filing of a petition if, in his opinion, they have been properly incurred in obtaining materials proving of use and service in the proceedings. The authority for that is Pécheries Ostendaises (Soc Anon) v Merchants’ Marine Insurance Co, and Frankenburg v Famous Lasky Film Service Ltd. Although there has been a change of solicitors, in my judgment if an order for the payment by the husband of the client’s taxed costs is made, the second solicitors will have to include in their bill for taxation appropriate items in respect of the work done by the first solicitors on the basis of which a substantial portion of the petition is founded. For, if such an order is made, the client has a right to recover from the husband all her proper costs of the proceedings, including those relating to work done on her behalf by the first solicitors. As there is a cause or matter, that is a basis on which a taxation must proceed. Then by the rules, the costs may relate back to work done when there was no cause or matter.

The difficulty in the dispute arises from the fact that at the date of the termination of the first solicitors’ retainer, and indeed at the date at which this matter came before the master, the petition had not been filed, there was then no cause or matter. I understand counsel for the client to contend that these circumstances are immaterial, and that, as on any taxation in the pending proceedings, items in respect of the work done by the first solicitors will fall to be dealt with under Ord 65, Appendix N, those items can never have had the quality of non-contentious business. He also contended that because items are to be found in Appendix N which would cover work done by the first solicitors, that work could not be non-contentious business.

Counsel for the first solicitors submitted that when they were acting there was no contention, and that there must be at least two parties contending before there can be a contention, and therefore before there can be contentious business.

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He pointed out that there is no evidence that the husband or his advisers had knowledge of the fact that inquiries and preparations were being made by the first solicitors with the object of launching the petition if it were thought expedient. He further argued that the business in which the first solicitors were engaged could not be contentious business because there was then no filed petition, and that Ord 65 could have no relevance to the first solicitors’ costs, because it deals solely with the costs when there is a cause or matter, and there was none at the date when the retainer ended, and they became entitled to demand their costs.

It seems to me that the test of whether business is contentious or not must be capable of being applied at the date when the solicitors were entitled to present their bill. The client might in July, 1953, have decided, after the first solicitors had done all their work, to drop the idea of taking proceedings, or she might have said: “I will return to South Africa and see what the law of South Africa can secure for me”. In either of these events, the first solicitors would have been entitled to ask for their costs, and to proceed to recover them. Clearly the test of whether they would then have been entitled to remuneration on a contentious or non-contentious basis should not be a guess whether the client would take proceedings at some date in the future. Further, it does not seem to me possible to say merely because she might at some date file a petition and thereafter obtain an order for costs, which then must be taxed under Ord 65, or merely because appropriate items appear in Appendix N, that solicitors seeking remuneration at a period when it was quite unknown whether a petition would ever be filed must demand their costs on the basis of Ord 65, which only applies, even by relation back, when there is a cause or matter. So I am unable to accept the contention of counsel for the client, but as I have said earlier, I am also unable to take the view that there cannot be contentious business outside the business in actual proceedings.

It is no doubt right that when the first solicitors were acting, the charges the client was minded to make against the husband had not been communicated to him or his advisers, nor so far as I am aware had any intention to make the charges been communicated to him or them, and there was then no contention between the parties in the sense in which counsel for the first solicitors used that word. I do not think, however, that I have to ask myself if there was then a contention in that sense. I think that I have to ask myself what was the nature of the business on which the first solicitors were then engaged, and to decide on its proper description. It was the collection of information and the taking of all steps, even to the engrossment of a petition, necessary to launch proceedings hostile to the husband at the moment the client gave the word, the background to this work being that differences between the client and her husband had resulted in her leaving the matrimonial home and South Africa at his suggestion. It seems to me that it is impossible without doing violence to language to describe that business as non-contentious. I hold that the document of 3 September 1953, related in part to contentious business, and the appeal therefore fails.

I ought to add that it would appear that the conclusion I have arrived at is not consistent with the decision of Neville J in Re R P Morgan & Co, but having carefully considered the argument addressed to me, and paid all due attention to that decision, I have felt bound to come to the conclusion I have already expressed.

Appeal dismissed.

Solicitors: Bull & Bull (for the solicitors); Forsyte, Kerman & Phillips (for the client).

A P Pringle Esq   Barrister.

Chan Kau alias Chan Kai v Reginam

[1955] 1 All ER 266

Categories:        CRIMINAL; Criminal Law        

Court:        PRIVY COUNCIL        

Lord(s):        LORD OAKSEY, LORD TUCKER AND MR L M D DE SILVA        

Hearing Date(s):        23, 24, 25 NOVEMBER 1954, 11 JANUARY 1955.        

Criminal Law – Murder – Self-defence or provocation – Burden of proof – Withdrawal of defence of provocation from jury.

Where murder is charged and the evidence discloses a possible defence of self-defence or of provocation, the burden of proof remains throughout on the prosecution and it is not at any time on the accused for him to establish either defence.

HM Advocate v Doherty ([1954] SLT 169) and Latour v Regem ([1951] 1 D  L R 834) approved.

Direction of Bosanquet J in R v Smith (1837) (8 C & P at p 162) disapproved.

Appeal allowed.

Notes

As to Burden of Proof in Criminal Cases, see 9 Halsbury’s Laws (2nd Edn) 182, para 266; and for cases on the subject, see 14 Digest 429, 4543 et seq.

Cases referred to in opinion

Woolmington v Public Prosecutions Director [1935] AC 462, 104 LJKB 433, 153 LT 232, Digest Supp.

Mancini v Public Prosecutions Director [1941] 3 All ER 272, [1942] AC 1, 111 LJKB 84, 165 LT 353, 2nd Digest Supp.

HM Advocate v Doherty [1954] SLT 169, 1954 SC (J) 1.

Latour v Regem [1951] 1 DLR 834, [1951] SCR 19, 98 Can CC 258, 11 CR 1, 2nd Digest Supp.

R v Smith (1837), 8 C & P 160, 173 ER 441, 15 Digest 783, 8408.

Teper v Reginam [1952] 2 All ER 447, [1952] AC 480, 116 JP 502, 3rd Digest Supp.

Appeal against conviction of murder

Appeal by special leave in forma pauperis against a judgment of the Supreme Court of Hong Kong (Appellate Division) dated 5 March 1954, dismissing the appellant’s appeal against his conviction of the murder of Chan Fook by the Supreme Court of Hong Kong (Reece J sitting with a mixed jury) on 23 December 1953. The facts appear in the judgment.

Dingle Foot QC and C I Poole for the appellant.

D A Grant for the Crown.

Their Lordships allowed the appeal.

11 January 1955. The following opinion was delivered.

LORD TUCKER. On 23 December 1953, the appellant was convicted of the murder of one Chan Fook on 23 July 1953, after a trial before Reece J and a mixed jury in the Supreme Court of Hong Kong. His appeal to the Appellate Division of the Supreme Court was dismissed on 5 March 1954. He now appeals in forma pauperis to Her Majesty in Council by special leave granted on 24 June 1954.

Among those employed at the Naval Dockyard at Stonecutters Island were two rival groups led respectively by two men called Mak Hei and Ho Kai, and, prior to 23 July 1953, there had been trouble between members of these groups with the result that the Mak Hei group decided to attack the Ho Kai group as they left Ho Kai’s house at the conclusion of a party which was taking place there that evening. Chan Fook was one of those attending the party and he was killed after leaving the house in the course of incidents arising out of the attack by Mak Hei’s group. There is no dispute that his death was due to one or more violent blows with a weapon, sometimes described as a chopper and sometimes called a knife, wielded by the appellant. The appellant was not normally a member of either of the two rival groups. He was employed by

Page 267 of [1955] 1 All ER 266

Mak Hei at a teahouse on Diamond Hill where Mak Hei carried on a business in addition to his employment at Stonecutters Island.

The case for the prosecution was that, although not a regular member of the Mak Hei group, the appellant, on the evening in question, joined with Mak Hei and other members of his group knowing that they intended to attack the Ho Kai group and that thereafter he actively assisted them in their unlawful enterprise, in the course of which he killed Chan Fook.

The case for the defence was that at no time was the appellant taking any part in the unlawful expedition or the attack. Certain creditors of Mak Hei who had been introduced by the appellant were pressing for payment of their accounts for goods supplied to the teahouse and causing trouble. Accordingly, the appellant went to see Mak Hei on the evening of 23 July and told him that some of the creditors were threatening to remove the Frigidaire from the teahouse if their accounts were not paid. Mak Hei tried to put him off by saying that he was busy and going to a fight. The appellant went with him, not in order to take part in the fight, but for the purpose of pressing Mak Hei to pay his creditors. When the fight began Chan Fook mistook the appellant for one of his assailants and attacked him. The appellant endeavoured to escape and picked up a knife from a nearby stall with which he struck Chan Fook in self-defence or, alternatively, under such provocation as would reduce the crime to manslaughter. Such in outline was the defence sworn to by the appellant, but it will be necessary later to set out verbatim that part of his evidence which dealt with the events immediately leading up to the blow which he struck.

This evidence differed materially from a statement which the appellant had made to the police on 23 July 1953, which, even allowing for difficulties of language and translation, the jury might well have thought amounted to an admission by the appellant that he had knowingly joined in Mak Hei’s party for the purpose of assisting in the attack. On a proper direction they might, accordingly, have altogether rejected the appellant’s sworn testimony, but he was entitled to have his defence as given in evidence fairly put before the jury and it was the judge’s duty to direct the jury on the law applicable to the case on that basis.

The appellant now submits that the defence of provocation was wrongly withdrawn from the jury and that there was misdirection with regard to the defence of self-defence.

Before dealing with these two separate aspects of the case, their Lordships think it desirable to state—and this was agreed by counsel for the Crown—that in cases where the evidence discloses a possible defence of self-defence the onus remains throughout on the prosecution to establish that the accused is guilty of the crime of murder and the onus is never on the accused to establish this defence any more than it is for him to establish provocation or any other defence apart from that of insanity. Since the decisions of the House of Lords in Woolmington v Public Prosecutions Director and Mancini v Public Prosecutions Director, it is clear that the rule with regard to the onus of proof in cases of murder and manslaughter is of general application and permits of no exceptions, save only in the case of insanity, which is not strictly a defence. It has been expressly so decided in the case of self-defence in Scotland and Canada; cf HM Advocate v Doherty and Latour v Regem. It is unfortunate that in Archbold’s Criminal Pleading, Evidence And Practice (33rd Edn), at p 942, para 1649, a passage is quoted from the summing-up

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in the case of R v Smith, where, dealing with self-defence, these words occur (8 C & P at p 162):

“Before a person can avail himself of that defence, he must satisfy the jury that that defence was necessary … ”

This actual passage was quoted by the trial judge in the course of his summing-up in the present case. It clearly needs some modification in the light of modern decisions.

Turning now to the two matters relied on in the present appeal. The issue of provocation was expressly withdrawn from the jury who were ultimately directed—in response to a question from their foreman—that the only possible verdicts were guilty of murder or not guilty. The appellant’s defence as given in evidence at the trial has already been outlined. It is now necessary to set out the vital passages verbatim, since withdrawal of the issue of provocation from the jury must be judged on a view of the evidence most favourable to the appellant. After describing the circumstances in which he came to be on the scene with Mak Hei and saying that Mak Hei had told him to go and tell a group of people not to start fighting as there was a policeman in sight, he said that, before he got to them, they had already started fighting and he saw three or four persons setting on another. The question and answers then proceed as follows:

“Q.—Did you see anybody holding anything? A.—Yes I did. Q.—What did you see? A.—I could not tell what it was but I saw something wrapped in newspaper. Q.—Then what happened? A.—Then this man ran and the other people ran after him. This person ran and the other people ran after him. Q.—Who do you mean by ‘this person’? A.—The person from the opposite party. Q.—Did you know him? A.—No. Q.—And what happened? A.—When this person was about near the Kong Wah Café, he turned around and fought with the group of pursuers. I then went up to these people and said, ‘Policeman, So Wing’. The several people stopped setting upon this person. I wanted to go. This person came up and grabbed me with both of his hands. (In the manner as demonstrated by the witness in the box—gripped by the chest.) Then he held me with his left hand and hit me with his right hand (demonstrates). Q.—When he hit you, did you notice whether he was injured or not? A.—Yes, I think he was suffering from minor injuries. REECE, J.: You think? A.—No; he had a little quantity of blood on his person. Q.—What happened then? A.—He kept on beating me and I wanted to give him an explanation. I said, ‘You hit the wrong man. I have nothing to do with it’. At that time this man was really ferocious and so I had to resist. I had a chance and I freed myself from him. I started to run. He ran after me and hit my back. Well, I was acting on good intention to go up and tell the people not to set upon him but, when he hit me, I felt that I was very angry. I ran up to a stall which I have said to be a candy stall but which I now say is a bread stall and, at that moment, I was haywire. He was taller and bigger than I am and I had to resort to something in my resistance. I did not know that there was a knife in that place. As a matter of fact, I tried to get a pole or a bottle or things like that. I was given no chance for consideration and I picked up a knife blindly. This man squatted and was looking for something. I continued to run and he ran after me into the street. He hit my head at the back. Q.—With what did he hit you? A.—I don’t know what it was but it was wooden. Q.—Did you see the object? A.—I did not. Q.—And then what happened? A.—I wanted to run but I was out of breath and, besides, I had flinching pains in both my loins. I was still beaten by him then, so I turned around (in a manner as demonstrated) and did this (demonstrates). I could not remember whether I struck once or twice. Then I ran along Sai Yeung Choi St.”

On this evidence, and assuming his presence at the scene of action to have been innocent, their Lordships are of opinion that there was a case with regard to provocation fit to be left to the jury, whose function it was, having regard to all the circumstances of the case, to weight in the scale the nature of the weapon

Page 269 of [1955] 1 All ER 266

used as against the degree of provocation received, and that, accordingly, the verdict of guilty of murder cannot stand.

With regard to self-defence, although the learned judge gave correct and ample directions in general terms at the beginning and end of his summing-up as to the onus of proof, when he came to deal with the defence of self-defence he quoted the passage referred to above from R v Smith and added the words “he the accused must satisfy you that the defence was necessary” with the result that the jury were not, in fact, adequately directed on this issue. It is also true that, when dealing with the evidence of the appellant, he omitted to mention his having been struck by Chan Fook with a wooden implement and treated it as an attack with fists only. He also spoke of him as having “gone back” after picking up the knife. The learned judge did, however, leave the issue of self-defence to the jury, and their Lordships think he was wise to do so. By their verdict the jury rejected it.

In his appeal to the Appellate Division, the appellant made no complaint of the summing-up with regard to self-defence.

The appeal court disposed of the matters relied on in support of his appeal, of which the only one now remaining is that relating to provocation, in a judgment of six lines stating there was no substance in any of the grounds of appeal.

Viewing the case as a whole, their Lordships do not consider that the jury’s rejection of the defence of self-defence amounted to a miscarriage of justice. It is difficult, if not impossible, to infer from the evidence, taking the most favourable view for the defence, that the appellant’s life was ever seriously endangered so as to justify—as distinct from excuse—the use of such a weapon.

Applying the test used in the case of Teper v Reginam in the judgment of the Board delivered by Lord Normand, viz ([1952] 2 All ER at p 451):

“The test is whether on a fair consideration of the whole proceedings the Board must hold that there is a probability that the improper admission of hearsay evidence turned the scale against the appellant”

In the result, their Lordships have, for the reasons stated above, humbly advised Her Majesty that the appeal should be allowed and the verdict of guilty of murder set aside and the case remitted to the Appellate Division of the Supreme Court of Hong Kong with a direction to record a verdict of guilty of manslaughter and to pass sentence accordingly.

Appeal allowed.

Solicitors: Hy S L Polak & Co (for the appellant); Charles Russell & Co (for the Crown).

G A Kidner Esq   Barrister.

R v Judge Fraser Harrison, Ex parte Law Society

[1955] 1 All ER 270

Categories:        ADMINISTRATION OF JUSTICE; Legal Aid and Advice: CIVIL PROCEDURE        

Court:        QUEEN’S BENCH DIVISION        

Lord(s):        LORD GODDARD CJ, CASSELS AND SELLERS JJ        

Hearing Date(s):        13 JANUARY 1955        

Legal Aid – Costs – Charge on property recovered for deficiency of costs – Nil contribution of assisted person – Whether any enforceable charge – Legal Aid and Advice Act, 1949 (12 & 13 Geo 6 c 51), s 3(4) – Legal Aid (General) Regulations, 1950 (S 2I 1950 No 1359), reg 19(1), (2).

An infant suing by his next friend was granted a civil aid certificate, and the contribution was assessed at nil. The infant recovered by way of settlement in High Court proceedings £500 without costs, which sum was transferred to the county court. The plaintiff’s costs having been taxed pursuant to the Legal Aid and Advice Act, 1949, Sch 3, the Law Society applied to the county court judge for the payment out of the sum in court of £134 14s 9d, part of the taxed costs, being the amount paid out of the legal aid fund on account of the assisted person to his counsel and solicitors. The county court judge refused the application. On a motion for mandamus,

Held – Section 3(4) of the Legal Aid and Advice Act, 1949, applied where a legally assisted person’s contribution was assessed at nil in the same way as it applied where the contribution was assessed at a substantive amount, and the £500 recovered for the infant being accordingly charged for the benefit of the legal aid fund with the £134 14s 9d, the order of mandamus should issue.

Notes

For the Legal Aid and Advice Act, 1949, s 3(4), see 18 Halsbury’s Statutes (2nd Edn) 537.

For the Legal Aid (General) Regulations, 1950, reg 19(1), (2), see 5 Halsbury’s Statutory Instruments 219.

Motion for mandamus

Motion on behalf of the Law Society for an order of mandamus directing His Honour Judge Fraser Harrison of the Liverpool County Court to make an order for payment out of the fund in court of the sum of £134 14s 9d to the Law Society’s No 7 (North Western) Legal Aid Area, being the net liability of the legal aid fund on an assisted person’s account in proceedings in which property was recovered for the assisted person pursuant to s 3(4)a of the Legal Aid and Advice Act, 1949.

On 13 February 1952, the Liverpool Local Committee in Legal Aid Area No 7 of the Law Society granted a civil aid certificate to one Joseph Jones, an infant, for an action by his father and next friend for damages for personal injury sustained by him by the negligence and breach of statutory duty of Ferroconcrete (Lancashire), Ltd. The contribution of the assisted person was assessed at nil. On 17 June 1953, the action came before Glyn-Jones J at the Liverpool Assizes, and was settled on the defendants’ undertaking to pay into court the sum of £500 without costs, which sum was ordered to be and was transferred to the Liverpool County Court there to be invested, applied or otherwise dealt with for the benefit of the assisted person in such manner as the county court in its discretion should think fit. When the terms of the settlement were brought to the notice of the trial judge with a view to their being approved by him he intimated that the assisted person seemed to have no case on the basis of the evidence which had been brought out, and that, if the case had gone on, he would have had to find in favour of the defendants, and that he regarded any payment by the defendants as an ex gratia payment. The trial judge added:

“I gather that the defendants have not offered to pay any costs. We

Page 271 of [1955] 1 All ER 270

must leave the legal aid fund to deal with the next friend. I make the usual order for taxation of costs … only as between solicitor and client.”

The order as drawn up read:

“on the defendants undertaking to pay into court the sum of £500 … It is ordered that on such payment into court being made all further proceedings herein be stayed, and that such sum be transferred to the Liverpool County Court there to be invested applied or otherwise dealt with for the benefit of the … infant plaintiff in such manner as the said county court in its discretion shall think fit. And it is ordered that the plaintiff’s costs be taxed as between solicitor and client in accordance with the Legal Aid and Advice Act, 1949, Sch. 3.”

The costs incurred by the legal aid fund on behalf of the assisted person were taxed at £153 6s 6d and the Law Society paid on account of the assisted person to his counsel and solicitors sums totalling £134 14s 9d

On 28 April 1954, the applicants applied in the Liverpool County Court for an order for the payment out of the fund in court of the sum of £134 14s 9d  On 15 June 1954, the county court judge refused the application on the ground that Glyn-Jones J had directed that the legal aid fund should deal with the next friend as regards costs, and that he could not deal with the matter because he could not decide on anything done by the trial judge to whom the application should be made. The applicants now applied for an order of mandamus. Notice of motion was served on the county court judge and the assisted person. Neither of them filed evidence, or took any other part in the proceedings. At the hearing counsel for the applicants drew the attention of the court to a doubt which had arisen whether on the construction of s 3(4) of the Act of 1949 the legal aid fund was entitled to enforce a charge on recovered property where the assisted person had to make no contribution to the costs of the proceedings.

Gerald Gardiner QC and J S Watson for the applicants.

The respondent did not appear.

13 January 1955. The following judgments were delivered.

LORD GODDARD CJ, stated the facts and continued: The applicants rightly say: “We want the costs we have been put to on behalf of the infant plaintiff out of the sum of money which has been paid into court and we are bound to ask for it because we are dealing with public money; the legal aid fund is public money and the Legal Aid and Advice Act, 1949, puts a duty on us”. They refer to the Legal Aid and Advice Act, 1949, s 3(4), which provides:

“Except so far as regulations otherwise provide, any sums remaining unpaid on account of a person’s contribution to the legal aid fund in respect of any proceedings and, if the total contribution is less than the net liability of that fund on his account, a sum equal to the deficiency shall be a first charge for the benefit of the legal aid fund on any property (wherever situate) which is recovered or preserved for him in the proceedings.”

Take a simple case: a man gets a certificate to enable him to bring proceedings and we will say that his contribution is assessed at £50. He proceeds with his action, he recovers judgment for £500 and he gets costs, but he can only recover the party and party costs against the defendant. Then the applicants could say: “We have on your behalf paid out costs exceeding that sum; we have expended a sum of £75”, which may represent solicitor and client costs, “and, therefore, we shall want out of the damages the difference between the £50 and the £75 we have had to pay.” That is the way it would work in the ordinary case. In the present case there is the difference that the contribution was, what is called, a nil contribution, that is to say, the infant, or his next friend, was not ordered to make any contribution towards the costs. We think it would

Page 272 of [1955] 1 All ER 270

be a very narrow construction to place on this sub-section to say that, if there is a nil contribution, then, although the person may recover heavy damages, no part of those damages is to go towards paying his costs. By means of the civil aid certificate, the infant managed to recover the substantial sum of £500. It would be very unfortunate if the court felt bound to construe s 3(4) as saying, that, if his contribution was nil, his damages were not to be subject to a charge for the present or any costs.

The only other statutory provision that is material is the Legal Aid (General) Regulations, 1950, reg 19(2) which provides:

“The Law Society may enforce any such charge b in any manner which would be available if the charge had been given inter partes.”

The applicants endeavoured to enforce their charge by applying to the county court judge to order payment out of court to them of the amount of the costs which they had incurred. The county court judge refused to make the order because he was informed of some interlocutory observation which Glyn-Jones J apparently made when the parties were before him in his private room. He said something about: “There will have to be costs” or “The costs will be looked after between the Law Society and the next friend”. His attention was not directed to the statute or the regulations and of course the learned judge did not make an order with regard to costs. The learned judge was not intending to do anything which would override the provisions of the Act of Parliament and regulations. He simply made no order whatever with regard to costs.

It seems, therefore, that the only question is whether or not this court can construe s 3(4) as applying not only to the case where there is a difference between the amount of the contribution and the costs incurred, but also to the case where there is no contribution. The court thinks that it is obvious that that was the intention of the legislature and, therefore, we think that this order must go.

CASSELS J. I agree.

SELLERS J. With regard to the construction of s 3(4) the assessment of the contribution might be very small, say £5 or £10 and I see no difference between the position of recovery of costs in those circumstances and where the assessment is nil. I agree with my Lord’s construction of this sub-section.

Order of mandamus granted.

Solicitors: Hempsons agents for Herbert J Davis, Berthen & Munro, Liverpool (for the applicants).

F Guttman Esq   Barrister.

Denton Urban District Council v Bursted Properties Ltd

[1955] 1 All ER 273

Categories:        HEALTH; Public health        

Court:        QUEEN’S BENCH DIVISION        

Lord(s):        LORD GODDARD CJ, CASSELS AND LYNSKEY JJ        

Hearing Date(s):        14 JANUARY 1955.        

Public Health – Paving and draining of yards and passages – Path giving access to a house – Whether included in “passage giving access to a house” – Public Health Act, 1936(26 Geo 5 & 1 Edw, 8 c 49), s 56(1).

B, Ltd owned a dwelling-house, access to which from the street was by means of a path running through the front garden to the front door and thence round the house to the back door. The path was made of asphalt, but was not so made as to allow of the satisfactory drainage of its surface or subsoil to a proper outfall. The local authority served a notice on the company under the Public Health Act, 1936, s 56(1), requiring the company to “flag, asphalt or pave” the path.

Held – The words “passage giving access to a house” in s 56(1) of the Act of 1936 did not include a path in an owner’s garden giving access from his front gate to the door of his house; and, therefore, the notice was not justified by the terms of s 56(1) and the appeal must be dismissed.

Appeal dismissed.

For the Public Health Act, 1936, s 56 see 19 Halsbury’s Statutes (2nd Edn) 353.

Case Stated.

This case was an appeal by Denton Urban District Council from a decision of Lancaster Quarter Sessions. Bursted Properties, Ltd, the respondents on the appeal to the High Court, owned 1 Fairbourne Road, Denton, Lancashire, an occupied dwelling-house. An asphalt path ran through the small front garden from the footpath of the street to the front door of the house (a distance of about sixteen feet) and thence round the side of the house to the back door. On 14 December 1953, the council, purporting to act under the Public Health Act, 1936, s 56, served notice on the company requiring them to flag, asphalt or pave the path. The company appealed under s 290 of the Public Health Act, 1936, to a court of summary jurisdiction and contended, inter alia, that the notice was not justified by the terms of s 56. On 22 January 1954, the court dismissed the appeal. The company then appealed to the Lancaster Quarter Sessions. On 12 March 1954, on the hearing of the appeal, the following facts were found. The path was made of asphalt, but was not so formed, flagged, asphalted or paved and was not provided with such works on, above or below its surface, as to allow of the satisfactory drainage of its surface or subsoil to a proper outfall. The path provided the only access from the street to the front door and thence to the back door of the house. The part of the path between the gate and the front door traversed a garden which extended on both sides to a width of about thirty feet at its widest point, and on each side of this part of the path were beds about two feet wide containing small shrubs. Paths similar to the path were normally described as “paths” and not “passages”.

Quarter sessions found that the path was not a “passage giving access to a house” within the meaning of s 56(1) of the Public Health Act, 1936, and that the notice was not, therefore, justified by the terms of that sub-section.

The council now appealed.

W D T Hodgson for the council.

L J Solley for the company.

14 January 1955. The following judgment was delivered.

LORD GODDARD CJ. This is a Case Stated by quarter sessions for the County of Lancaster before whom an appeal came in these circumstances. Under s 56 of the Public Health Act, 1936, it is provided:

Page 274 of [1955] 1 All ER 273

“(1) If any court or yard appurtenant to, or any passage giving access to, a house is not so formed, flagged, asphalted, or paved, or is not provided with such works on, above, or below its surface, as to allow of the satisfactory drainage of its surface or subsoil to a proper outfall, the local authority may by notice require the owner of the house to execute all such works as may be necessary to remedy the defect … ”

Then, if a notice is served on the owner and he desires to dispute it, he can appeal to a court of summary jurisdiction and from that court there is an appeal to quarter sessions a. Then, if quarter sessions state a Case it can come to this court. It is rather a long chain of court proceedings to decide a comparatively small point, but the point is of some importance because it would appear that the appellants, the Denton Urban District Council, are serving notices on several owners of small properties in front of which there are gardens, ie, small enclosures between the public highway and the front doors.

What the council have done in this case is to regard the way a person goes through his front garden to his front door as a passage, and they have served notice on the company to flag, asphalt or pave this passage. The justices held that it was a passage. On appeal, quarter sessions set out all the facts and said that, in their opinion, it was not a passage. Among other things they say:

“Paths similar to the said path are normally described as ‘paths’ and not as ‘passages’.”

In fact, as I say, it is a path over a little front garden of this house. Section 56(1) says:

“If any court or yard appurtenant to, or any passage giving access to, a house is not so formed … ”

If there is a court or yard appurtenant to a house, it is within the curtilage; it is what would pass with the grant of the house and its appurtenances.

It has not been suggested here, and counsel for the council does not contend, that “a court or a yard” would include a garden and there is no reason why it should. If a court or yard where cars may be washed is appurtenant to a house it is, no doubt, very desirable that the water should be made to drain away, especially if the court or yard is flagged or made hard in some way. Different considerations might apply to a mere path, but these words are not, “if any court or yard or passage appurtenant to a house”; they are “any passage giving access to a house”. I think that the section aims at a passage in the nature of a court. One knows perfectly well that in towns there are passages down which people go to get to houses. I do not think the word “passage” is apt in this context to describe what the council want to have paved in the present case, viz, the way a man may walk from his front gate to his front door and round the side of the house to the back door. At any rate, I am not prepared to differ from the conclusion to which quarter sessions came and, therefore, I would dismiss this appeal.

CASSELS J. I agree.

LYNSKEY J. I agree.

Appeal dismissed

Solicitors: Sharpe, Pritchard & Co agents for James Smith Denton (for the council); Capel Cure & Clarke (for the company).

G A Kidner Esq   Barrister.

Davis Contractors Ltd v Fareham Urban District Council

[1955] 1 All ER 275

Categories:        CONSTRUCTION: CONTRACT        

Court:        COURT OF APPEAL        

Lord(s):        DENNING, MORRIS AND PARKER LJJ        

Hearing Date(s):        13, 14, 20 DECEMBER 1954        

Building Contract – Delay not due to fault of either party – Scarcity of labour – Buildings ultimately completed – Whether contractors entitled to sum in excess of contract price on quantum meruit.

Contract – Frustration – Change of circumstances – Scarcity of labour to fulfil building contract.

In July, 1946, D. Ltd who were building contractors, agreed with the F council to build for them seventy-eight council houses within a period of eight months for a price fixed by the contract subject to certain adjustments. The parties contemplated that adequate supplies of labour would be available, and the contractors’ tender had been accompanied by a letter stating that the tender was subject to an adequate supply of labour being available. Owing to scarcity of skilled labour, however, the work of erecting the houses took twenty-two months instead of eight months. On completion of the buildings the council paid to the contractors the adjusted contract price. The contractors claimed that by reason of the scarcity of labour the contract had been brought to an end and that they were entitled to recover a sum in excess of the adjusted contract price on the basis of a quantum meruit.

Held – An unexpected turn of events which renders the performance of a contract more onerous than the parties contemplated does not release the party adversely affected from the contract; in the present case the scarcity of labour, which was not due to the fault of either party, was not sufficient to justify a finding that the contract had been brought to an end when the expectations of the parties were not realised, and accordingly the contractors had not been released from the terms of the contract as regards price and could not maintain a claim for payment on a quantum meruit.

Bush v Whitehaven Port & Town Trustees (1888) (2 Hudson’s B C, 4th Edn, p 122) explained and distinguished.

British Movietonews Ltd v London & District Cinemas Ltd ([1951] 2 All ER 617) followed.

Per Denning LJ: if, in the course of carrying out a contract, a situation fundamentally different from anything which the parties had in contemplation is brought about by the conduct of one of them, then, even though his conduct may not be a breach of contract, he will not be allowed to take advantage of the new situation to the detriment of the other party when it would be unjust to allow him to do so (see p 278, letter d, post).

Appeal allowed.

Notes

As to Variation of Building Price where Circumstances have Changed, see 3 Halsbury’s Laws (3rd Edn) 435, para 819; and as to the Implication of Conditions in Building Contracts where the Owner Prevents Completion, see ibid, 450, para 854; and for cases on the subject, see 7 Digest 370, 153 et seq.

Cases referred to in judgments

Bush v Whitehaven Port & Town Trustees (1888), 52 JP 392, 2 Hudson’s BC, 4th Edn, 122, affd CA 2 HUDSON’S @BC 4th Edn 130, 7 Digest 392, 232.

Sir Lindsay Parkinson & Co Ltd v Works & Public Buildings Comrs [1950] 1 All ER 208, [1949] 2 KB 632, 2nd Digest Supp.

New Zealand Shipping Co v Société des Ateliers et Chantiers de France, [1919] AC 1, 87 LJKB 746, 118 LT 731, 7 Digest 335, 20.

Page 276 of [1955] 1 All ER 275

Maritime National Fish Ltd v Ocean Trawlers Ltd [1935] AC 524, 104 LJPC 88, 153 LT 425, Digest Supp.

Jennings & Chapman Ltd v Woodman, Matthews & Co [1952] 2 T L R 409, 96 Sol Jo 561, 3rd Digest Supp.

Brewer Street Investments Ltd v Barclay’s Woollen Co Ltd [1953] 2 All ER 1330, [1954] 1 QB 428.

British Movietonews Ltd v London & District Cinemas Ltd [1951] 2 All ER 617, [1952] AC 166, 2nd Digest Supp.

F A Tamplin S S Co Ltd v Anglo-Mexican Petroleum Products Co Ltd [1916] 2 AC 397, 85 LJKB 1389, 115 LT 315, 12 Digest (Repl) 687, 5284.

Metropolitan Water Board v Dick, Kerr & Co [1918] AC 119, 87 LJKB 370, 117 LT 766, 82 JP 61, 12 Digest (Repl) 456, 3410.

Appeal

The Fareham Urban District Council appealed from a judgment of Lord Goddard CJ (Special Paper), dated 18 May 1954, whereby he upheld an arbitrator’s award in favour of the contractors.

The facts appear in the first judgment.

H L Phillimore QC and Stephen Chapman for the council.

C B Salmon QC and J S Daniel for the contractors.

Cur adv vult

20 December 1954. The following judgments were delivered.

DENNING LJ. In 1946 Davis Contractors Ltd agreed to build seventy-eight houses for the local urban district council at Fareham in Hampshire. The contract price was £92,425 8s 4d, subject to adjustments. The houses were to be completed within eight months, but owing to an unforeseen shortage of labour the work took twenty-two months. This delay was due to an unexpected lag in demobilisation. It was not the fault of the contractors and they are not liable in damages for it. They go further, however, and say that, on account of the delay, they are entitled to more pay. They have already received the contract price which, after various adjustments, comes to £94,424 17s 9d  They say, however, that, by reason of the delay, they are entitled to throw over the contract price and claim on a quantum meruit. The arbitrator has held that they are entitled to do this and has awarded them an extra £17,258 13s 1d  The reason for the arbitrator’s decision is because he found that both parties entered into the contract on the basis that adequate supplies of labour and materials would be available at the times required so as to finish the work within eight months. It turned out that they were not available, with the result that the work was unavoidably extended from a period of eight months to one of twenty-two months. On account of this he found that the footing of the contract was so changed that it became void and the contractors were entitled to a fair and reasonable price for the work they have done.

There are two points in the case: first, whether this extra payment is justified by the wording of the contract; secondly, whether it is justified by the general law on the principle of Bush v Whitehaven Port & Town Trustees.

The arbitrator has made two awards: an original award in the form of a Special Case: and a supplemental award. The original award came before Lord Goddard CJ who decided in the contractors’ favour on the first point. He thought that, on the wording of the contract, the contractors could throw over the contract price and sue on a quantum meruit. It was unnecessary for him, therefore, to go into the second point. On an appeal from him to this court, consisting of Somervell, Birkett and Romer LJJ this court differed from him on the first point. They thought that the wording of the contract was not sufficient to enable the contractors to throw over the contract price. It was necessary, therefore, for the court to consider the second point: but, as the

Page 277 of [1955] 1 All ER 275

findings of the arbitrator were not sufficiently specific, they remitted the case to him for further findings. He has now made a supplemental award in which he decides under the general law that the footing of the contract was so changed that its provisions no longer apply. Both points have been canvassed afresh before us. We have thought it right to consider, not only the second point, but also the first point: because, although this court gave a ruling on it, it was never embodied in a formal decision.

First, then, the wording of the contract. When the contractors submitted their tender to the council, they attached to it a letter dated 18 March 1946, in which they said:

“Our tender is subject to adequate supplies of material and labour being available as and when required to carry out the work within the time specified.”

There is some little doubt whether that letter was incorporated in the final contract, because it was not included amongst the documents that were signed and exchanged. [His Lordship then said that he approached the case on the footing that the condition contained in the letter of 18 March was incorporated in the contract, and came to the conclusion that on the true construction thereof, the condition was referable only to the time of completion and not to the contract price and that, when supplies of labour were not available, the contractors were released only of their obligation as to time. His Lordship continued:] Secondly, the application of Bush v Whitehaven Trustees. The arbitrator decided in favour of the contractors because he thought the case came within the principle of Bush v Whitehaven Trustees. We have, therefore, to consider what is the principle contained in that case. The facts were these: In 1886 Bush agreed with the trustees to build a water-main in the Lake District for £1,335. The contract was made in June and the work was to be done in the next four months, which were the dry summer months. Bush made his tender on that footing. The trustees were to give him possession of the site as and when required, but they failed to do so. The land was not all available until 6 October. The result was that the work had to be done in the wet winter months instead of the dry summer months. Bush claimed an extra payment on that account. His difficulty was that there was an express clause in the contract saying that, if the site was not made available in time, the contractor should be entitled to an extension of time but not to any increase of payment; but the courts got over that clause. The jury found that the conditions of the contract were so completely changed, in consequence of the defendants’ inability to hand over the site in the time required, as to make the special provisions of the contract inapplicable. On that finding it was held by this court that Bush was entitled to a further £600 over and above the contract price. Lord Esher MR said (2 Hudson’s B. C., 4th Edn, at p 131) that

“the condition of things had been so altered after the making of the original contract (they had been so greatly altered) that it was not reasonable, or right, or fair, or just to hold that the original contract was made with regard to those circumstances.”

He held that in the new situation Bush had a claim for a fair remuneration for the work done, in other words, to a quantum meruit.

The arbitrator thought that Bush’s case applied here, because, just as in that case a summer contract was turned into a winter contract, so here an eight months’ contract was turned into a twenty-two months’ contract. The arbitrator said:

“I find that the footing of the contract was so changed that it became void and the [contractors] are entitled to a fair and reasonable price for the work they have done.”

Page 278 of [1955] 1 All ER 275

There is, however, a great difference between Bush’s case and the present one. The Whitehaven trustees there had themselves failed in their duty to deliver the site to the contractor. This failure on their part did not give rise to a claim for damages against them, as they had been careful to safeguard themselves against that, but it was a failure within their sphere of operations. It had created a fundamentally different situation in which it was unjust to hold the contractor bound by the contract price. He was, therefore, released from it and allowed to sue on a quantum meruit. Likewise in the recent case of Sir Lindsay Parkinson & Co Ltd v Works & Public Buildings Comrs the Commissioners of Works, by ordering extra work to the tune of £1,000,000, themselves created a fundamentally different situation in which it was unjust to hold the contractors bound by the limitation of profit contained in the contract. The contractors were therefore released from that limit and allowed to sue on a quantum meruit. It would not be correct to regard those cases as frustration cases. They are illustrations of a very old principle laid down by Lord Coke long ago, that a man shall not be allowed to take advantage of a condition brought about by himself (see Coke Upon Littleton, 206b, quoted in New Zealand Shipping Co v Société des Ateliers et Chantiers de France, per Lord Finlay LC [1919] AC at pp 7, 8; see also Maritime National Fish Ltd v Ocean Trawlers Ltd). In this connection the principle means this: that if, in the course of carrying out a contract, a situation fundamentally different from anything which the parties had in contemplation is brought about by the conduct of one of them, then, even though his conduct may not be a breach of contract, he will not be allowed to take advantage of the new situation to the detriment of the other party when it would be unjust to allow him to do so. Recent illustrations of this principle are Jennings & Chapman Ltd v Woodman, Matthews & Co, and Brewer Street Investments Ltd v Barclay’s Woolen Co Ltd.

At the point in the argument counsel for the contractors tried to bring the present case within that principle. He suggested that the reason why labour was not available for this contract was because the council had licensed or started much other work at the same time which had drawn away much labour from this work. The arbitrator, however, made no finding to this effect. On the contrary, he found that the trouble was

“the national shortage of building labour at that time due to the unavoidable and unforeseen lag in demobilisation.”

That was not a thing for which the council were responsible. The case cannot, therefore, be brought within the principle of Bush v Whitehaven Trustees.

This case then becomes simply one where, without the fault of either party, there has been an unexpected turn of events which renders the contract more onerous than the parties had contemplated. This is not ground for relieving the party of the obligation he has undertaken. That is made quite clear by the decision of the House of Lords in British Movietonews Ltd v London & District Cinemas Ltd. When an owner employs a builder to do work for a fixed sum, his whole object is to secure himself against the unexpected difficulties which so often arise. We could seriously damage the sanctity of contracts if we allowed a builder to charge more simply because, without anyone’s fault, the work took him much longer than he thought. I would allow the appeal accordingly.

MORRIS LJ. When this appeal was before the court in July, 1954, the court ordered that the Special Case be referred back to the arbitrator so that he might make further findings of fact for the information of the court relevant to the application of the principle in the case of Bush v Whitehaven Trustees and the contentions of the parties on that issue. The previous award was not in certain respects clear and the arbitrator was invited, if he intended his award to be a final award, to state his own conclusions in relation

Page 279 of [1955] 1 All ER 275

to the contentions. The arbitrator made a supplemental award which is now before the court. The previous award which was stated in the form of a Special Case formulated two questions of law. The first was:

“Whether the stipulation as to availability of labour and materials made in the [contractors’] letter of Mar. 18, 1946, became a term of contract.”

The second was:

“Whether the [contractors] are entitled to be paid any sum in excess of £94,424 17s. 9d. already paid them.”

If the answer to the first question was “Yes”, then the arbitrator awarded £17,651 13s 1d to be paid to the contractors. If the answer to the first question was “No”, but to the second question it was “Yes”, then he awarded the like sum to be paid to the contractors. If the answer to both questions was “No”, then he awarded no further sum to the contractors. When the Special Case came before Lord Goddard CJ he answered the first question in the affirmative. He so answered the first question because he held that the contract was subject to a condition that adequate supplies of material and labour would be available. As they had not been available the contract ceased to operate and the contract price no longer held good. The work of erecting the houses had, however, continued, and continued with the concurrence of the council: the result of this was that the council impliedly promised to pay a reasonable sum. Being of this opinion the Lord Chief Justice accordingly answered the second question also in the affirmative. This was because the amount payable on a quantum meruit basis was found by the arbitrator to be an amount which exceeded the amount already paid by £17,651 13s 1d  The contractors themselves agreed that a sum of £393 ought in fact to be deducted from this figure. The Lord Chief Justice did not uphold the suggested application of the principle in the case of Bush v Whitehaven Trustees. He said:

“It is not necessary to go as far as in Bush v. Whitehaven Trustees, a well-known case which has apparently been approved by the House of Lords as well as by the Court of Appeal. I do not think that it is necessary to go as far as that because I do not think that it is a destruction of the whole foundation of the contract.”

When the appeal came before this court in July, 1954, the court consisted of Somervell, Birkett and Romer LJJ. Having heard full arguments from both sides on all questions relating to the applicability and effect of the letter of 18 March 1946, the court did not call for a reply from the council in regard to that part of the case. Somervell LJ addressing learned counsel for the council said:

“Mr. Phillimore, on the first point, my brethren both take the view that the letter must be regarded as incorporated. I am not quite sure about it, but we all take the view that we do not want to hear you on the construction: that is to say, assuming the letter was incorporated we accept your argument that these words do not give the contractors a right to claim the £17,000.”

The court did not, however, reach the stage of giving judgment, for when passing on to consider whether the principle in Bush v Whitehaven Trustees  applied, the court came to the view that the award did not sufficiently set out the arbitrator’s findings of fact referable to this issue. It was decided, therefore, to remit the award to the arbitrator, the parties having liberty to re-formulate their contentions. Somervell LJ remarked: “One of the troubles here is that the law and the facts have got a little mixed up”. Announcing the decision of the court to remit the award to the arbitrator, Somervell LJ said:

“I think we have made it clear, though we have got given our reasons, that we do not want to trouble the arbitrator further on the question of the

Page 280 of [1955] 1 All ER 275

letter and its construction because we have had full argument about that. You both realise we have decided that?”

The award was therefore remitted and a supplemental award has now been made and is before the court. The court is, however, now differently constituted and the matters previously argued have therefore been re-argued, and it becomes necessary for the court to arrive at independent conclusions.

In the supplemental award the questions of law have been somewhat re-formulated. They are as follows:

“(1) Whether the stipulation as to the availability of labour and materials made in the [contractors’] letter of Mar. 18, 1946, became a term of contract; (2) whether the [contractors] are entitled to be paid any sum in excess of the £94,424 17s. 9d. already paid them, namely, on a quantum meruit, by reason of (a) the footing upon which the contract was made having been so changed in the course of its execution that its provisions no longer applied, or (b) an implied term in the contract that it ceases to bind in the circumstances as found. (3) Whether if the [contractors] became entitled to claim any sum in excess of that already paid to them by the [council] such a claim was barred by the conduct of the parties after the [contractors] had first intimated their intention to claim additional payment.”

There are in effect two main issues to be considered when dealing with the questions of law which the award states for the opinion of the court. They are: A Is the letter of 18 March 1946, to be regarded as forming a part of the contractual documents and if so what is its meaning and effect? B Are the contractors in reliance on Bush v Whitehaven Trustees entitled to be paid a sum in excess of what they have already received? I will set out my conclusions in regard to these two main issues. [His Lordship then considered the question whether the letter of 18 March was incorporated in the final contract and came to the conclusion that it was so incorporated. He then proceeded to deal with the construction of the condition contained in the letter and decided that when supplies of labour became inadequate the contractors were released from the time limit of eight months but the contract did not come to an end and the contract price held good. His Lordship continued:] I pass now to B. It is important to have in mind the main findings of the arbitrator and the way in which they are expressed. Paragraph 4(6) of the award is as follows:

“At the time of entering into the said agreement the [contractors] and the [council] anticipated that there would be available in the building industry a sufficient labour force and a sufficient supply of materials to enable the work specified in the agreement to be carried out substantially within the time stipulated in the agreement”

“The conditions in which the work had to be carried out were different from the those anticipated by the [contractors] and the [council] in that”

“I find that both parties entered into the contract on the basis that adequate supplies of labour and materials would be available at the times required. (3) I find that adequate supplies of labour and material were not available at the times required and that as the duration of the work was unavoidably extended from a period of eight months to one of twenty-two months the footing of the contract was removed, from which it follows that the [contractors] are entitled to be paid a fair and reasonable price for the work they have done.”

Page 281 of [1955] 1 All ER 275

The arbitrator also says:

“I find that the footing of the contract was so changed that it became void and the [contractors] are entitled to a fair and reasonable price for the work they have done.”

It is clear that some of these findings involve a blend of law and fact: but what the arbitrator is holding is, I think, reasonably plain. Some of the words which he uses need some consideration. It is said that both parties entered into the contract on the “basis” that adequate supplies of labour and materials would be available when required: it is said that the “footing” of the contract was so changed that the contract became void. It is manifest and it has been held by the arbitrator that the parties expected that labour and materials would be available: it is held that these expectations were not realised. In one sense, therefore, the basis on which the parties had proceeded no longer remained. But before it can result as a matter of law that a contract becomes at an end it must appear that the parties to the contract only intended to remain bound by their contract provided that some basis or footing continued to exist. If A, a builder, enters into a contract with B by which A promises to build a house for B within a period of twelve months for £x, it may well be that both A and B would confidently have believed that labour conditions would enable A to complete the building of the house within the contract period. In one sense that would be the basis or footing on which they would have proceeded. If unexpected labour difficulties occurred so that A became involved in much extra cost and asserted that the contract had ended and that B should on the basis of a quantum meruit pay an increased amount he would probably find that B could successfully say that there was no room for any implication that the contract should not continue to bind even though the builder for his part had run into difficulties. B might be sympathetic with A in his difficulties but would resist any suggestion that there had been any implication that in the event of any such difficulties occurring the contract would cease to have binding validity.

In British Movietonews Ltd v London & District Cinemas Ltd, Viscount Simon said ([1951] 2 All ER at p 625):

“If, on the other hand, a consideration of the terms of the contract, in the light of the circumstances existing when it was made, shows that they never agreed to be bound in a fundamentally different situation which has now unexpectedly emerged, the contract ceases to bind at that point—not because the court in its discretion thinks it just and reasonable to qualify the terms of the contract, but because on its true construction it does not apply in that situation.”

Words of great importance in the section which I have just quoted are the words “never agreed to be bound”. Much to the same effect was a passage in the speech of Earl Loreburn in F A Tamplin S S Co Ltd v Anglo-Mexican Petroleum Products Co Ltd ([1916] 2 AC at p 403):

“But a court can and ought to examine the contract and the circumstances in which it was made, not of course to vary, but only to explain it, in order to see whether or not from the nature of it the parties must have made their bargain on the footing that a particular thing or state of things would continue to exist. And if they must have done so, then a term to that effect will be implied, though it be not expressed in the contract. In applying this rule it is manifest that such a term can rarely be implied except where the discontinuance is such as to upset altogether the purpose of the contract. Some delay or some change is very common in all human affairs, and it cannot be supposed that any bargain has been made on the tacit condition that such a thing will not happen in any degree … In most of the cases it is said that there was an implied condition in the contract which operated to release the parties from performing it, and in all of them I think that was at bottom

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the principle upon which the court proceeded. It is in my opinion the true principle, for no court has an absolving power, but it can infer from the nature of the contract and the surrounding circumstances that a condition which is not expressed was a foundation on which the parties contracted.”

In Bush v Whitehaven Trustees the plaintiff sent in his tender in the month of June and was given to understand that he was to begin at once and was to have four months in which to finish the work and his calculations were made on that footing. The contract contained certain express provisions in regard to the commencement of the work and the time for completion and there was a provision that non-delivery of the use of the site was not to vitiate or affect the contract. The defendants did not in fact make the site available until October. Instead of being summer work the work became winter work. The plaintiff claimed to treat the contract as at an end and to recover on a quantum meruit. At the trial the jury answered in the affirmative the question:

“Were the conditions of the contract so completely changed in consequence of the defendants’ inability to hand over the sites of the work as required as to make the special provisions of the contract inapplicable?”

On the answers of the jury to the questions put to them the plaintiff succeeded. Lord Esher MR in his judgment in the Court of Appeal said that there was evidence which entitled the jury to say that the new state of circumstances was so different from the former that it was wholly unreasonable and unjust to suppose that either party, if they had known the new state of circumstances, would have made the same contract in regard to them. Bush v Whitehaven Trustees was therefore a case in which it was shown and held that the parties had never agreed to be bound in the fundamentally new state of affairs: they must have made their bargain on the footing that the plaintiff would get on to the site in the month of June.

In the present case, although both parties thought that labour and material would be available when required, I can see no warrant for holding that the contract was only to bind if labour and material were available when required. The contractors raised the topic of the availability of labour and material in the covering letter. If, contrary to the view which I have expressed, the second paragraph of that letter brought it about that the contract came to an end when it happened that labour or material were not available when required, then the matters which I am now considering do not arise. But if the view that I earlier expressed is correct, then the contractors were providing for an extension of time and a freedom from penalties in the event of being held up by shortages of labour or material, and were therefore providing for a continuance of the contract in that eventuality. In my judgment, there are no circumstances in the present case similar to those in Bush v Whitehaven Trustees which show that conditions so completely changed as to make the special provisions of the contract inapplicable. In the present case the parties expected that the difficulties would not arise: but they envisaged the possibility that the difficulties might arise and in my view made a provision (by the terms of the covering letter) which would be applicable if the difficulties arose. There was no question of some unexpected emergence of a fundamentally new situation. The indications are therefore that they contemplated that the contract would be binding even though their expectations as to availability of labour and material might be disappointed. The findings of the arbitrator do not show or establish that the contract would cease to bind if supplies of labour or material became, or over a long period remained, unavailable. Although the basis or footing of the contract was removed in the limited sense that the expectations of the parties were not realised, the facts found do not require an implication in the contract that it was to come to an end if those expectations were not realised. Such an implication is not necessary and cannot be said to be denoted by the conduct or actions of the

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parties but on the contrary to be negatived. The contract provisions therefore did not cease to apply and the contractors are not entitled to be paid on the basis of a claim by way of quantum meruit.

For these reasons, while I would answer the first question of law: “Yes, but not so as to entitle the contractors to any of the sums now claimed”, I would answer the second question in the negative; the third question does not therefore arise. It follows that in my view the appeal succeeds.

PARKER LJ. dealt first with the question whether the letter of 18 March 1946, was incorporated in the contract and came to the conclusion that it did not form part of the final contract. His Lordship said that if he were wrong in that view, he construed the condition contained in the letter as affording a shield against penalties for delay and not as releasing the contractors from their obligations under the contract. His Lordship continued: It was further contended on behalf of the contractors—indeed this was counsel’s main point—that quite apart from any express term in the contract they were entitled to claim a quantum meruit based on the arbitrator’s finding that

“the footing upon which the contract was made has been so changed in the course of its execution that its provisions no longer apply”:

The question, accordingly, for this court can be stated simply as follows, namely, whether in these circumstances the contractors’ inability to get skilled labour (the main cause of the delay) an inability not due to the fault of either party, is enough to justify a finding of frustration. In approaching this question it is important to bear in mind the warning expressed by Viscount Simon in British Movietonews Ltd v London & District Cinemas Ltd, where he says ([1951] 2 All ER at p 625):

“The parties to an executory contract are often faced, in the course of carrying it out, with a turn of events which they did not at all anticipate—a wholly abnormal rise or fall in prices, a sudden depreciation of currency, an unexpected obstacle to execution, or the like. Yet this does not in itself affect the bargain they have made.”

It is no doubt for this reason that the supervening event is in general a “catastrophic event”, per Asquith LJ in Parkinson’s case, where he says ([1950] 1 All ER at p 227):

“Frustration cases differ from the present case, in so far as in many of them a catastrophic event is involved. A catastrophic event, caused by the act of neither party, intervenes, destroying some basic, though tacit, assumption on which the parties have contracted, and with that assumption destroying the contract itself.”

It is also important to bear in mind the nature and conditions of the contract itself. Where, as here, the contract conditions provide for an extension of time being granted for delay the “catastrophic event” must cause a delay so abnormal

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as to fall outside what the parties could have contemplated in the clause: see Metropolitan Water Board v Dick, Kerr & Co.

Applying these considerations, I cannot find in the facts found by the arbitrator anything sufficient to justify his finding of law. Strong reliance was, however, placed on the decision in Bush v Whitehaven Trustees which, as Cohen LJ in Parkinson’s case pointed out, involved the implication of a term that the contractor should not be bound to complete the work if the assumed state of affairs did not exist. Yet in that case there was no catastrophic event and the contract, as here, provided for what was to happen in the event of delay. It is, however, important to realise that the assumed state of affairs in that case was that the building owners, the defendants, should hand over the sites with reasonable despatch to enable the work to be completed substantially within the contract time. In the events which happened a summer contract was converted by the action of the defendants into a winter contract, and the jury found that in consequence the conditions of the contract had so completely changed as to make the special provisions of the contract inapplicable. It seems to me that where the assumed state of affairs ceases to exist by reason of the action of the defendants, as it did in that case, it is much easier to imply that the special exemption provisions, and indeed the whole contract, have ceased to be applicable. It is quite another thing to imply such a term when the assumed state of affairs hs ceased to exist through no fault of the defendants and without any catastrophic event.

I would allow the appeal and answer the first two questions in the award in the negative.

Appeal allowed. Leave to appeal to the House of Lords granted.

Solicitors: Kingsford, Dorman & Co agents for Blake, Lapthorn, Roberts & Rea, Portsmouth (for the council); Blakeney & Marsden Popple (for the contractors).

Philippa Price   Barrister.

Richard Thomas and Baldwins Ltd v Cummings

[1955] 1 All ER 285

Categories:        INDUSTRY        

Court:        HOUSE OF LORDS        

Lord(s):        LORD OAKSEY, LORD PORTER, LORD REID, LORD TUCKER AND LORD KEITH OF AVONHOLM        

Hearing Date(s):        18, 19, 20 OCTOBER 1954, 20 JANUARY 1955        

Factory – Dangerous machinery – Transmission machinery – Duty to fence – Machinery dismantled, guard removed and power cut off – “In motion” – Movement by hand – Factories Act, 1937 (1 Edw 8 & 1 Geo 6 c 67), s 13(1), s 14(1), s 16.

By the Factories Act, 1937, s 16, “All fencing or other safeguards provided in pursuance of the foregoing provisions of this Part of this Act shall be … constantly maintained and kept in position while the parts required to be fenced or safeguarded are in motion or in use, except when any such parts are necessarily exposed for examination and for any … adjustment shown by such examination to be immediately necessary … ”

The respondent, a fitter employed by the appellants, was instructed to adjust the position of a face plate of a grinding machine so that two holes could be drilled in it. The machine, when in use in the ordinary way, was driven by belts passing over pulleys. The machine had been under repair for a considerable time, the motive power had been cut off and the cover enclosing the belts and pulleys had been removed, but the belts were still in position and the pulley on the machine was still geared to the face plate. The pulleys and belts were transmission machinery or dangerous machinery which was required normally to be fenced by s 13 and s 14 of the Act of 1937. In order to do his work the respondent had to pull one of the belts by hand so that the face plate could be turned round, and, while he was doing this, his hand was injured. On the question whether the appellants were in breach of their statutory duty to the respondent in that, at the time of the accident, the fencing was not maintained,

Held – Although the pulley and belt were being moved by hand at the time of the injury, yet, on the true construction of s 16 of the Act of 1937, they were not “in motion” within the meaning of that section, which did not prohibit the removal of fencing for the purpose of repairing machinery, and, accordingly, the appeal must be allowed.

Decision of the Court Of Appeal sub nom Cummings v Richard Thomas & Baldwins Ltd ([1953] 2 All ER 43) reversed.

Notes

For the Factories Act, 1937, s 13, d 14, and s 16, see 9 Halsbury’s Statutes (2nd Edn) 1008, 1009, 1011.

Appeal

Appeal by the employers, Richard Thomas and Baldwins Ltd from an order of the Court of Appeal dated 24 April 1953, and reported sub nom Cummings v Richard Thomas & Baldwins Ltd [1953] 2 All ER 43, dismissing their appeal from an order of Pearson J at Swansea Assizes, dated 26 November 1952.

The facts appear in the opinion of Lord Oaksey.

H I Nelson QC and T G Roche for the appellants

Marven Everett QC and R Geraint Rees for the respondent.

Their Lordships took time for consideration.

20 January 1955. The following opinions were delivered.

LORD OAKSEY. My Lords, this is an appeal from an order of the Court of Appeal affirming the judgment of Pearson J in favour of the respondent for £325 and costs. The respondent’s claim was for damages for personal injuries sustained on 12 February 1951, whilst working as a fitter in the appellants’ works at Ebbw Vale, Monmouthshire. At the time of the accident, the respondent was about fifty years of age and had been employed by the appellants for about fourteen years, for the last eight to ten years of which he had been employed as a fitter and at the time of the accident was earning about £10 per week.

Page 286 of [1955] 1 All ER 285

In the appellants’ premises at Ebbw Vale is a machine known as a Waldrich grinding machine which is used for grinding large and small rollers employed in the rolling of steel sheet. The machine is about twenty-five feet long and is driven by an electric motor, whose motive power is transmitted from a pulley on the motor to a pulley on the machine by four belts riding in grooves in the pulleys. The distance between the centres of the two pulleys is three feet three inches, and the length of belting clear of the pulleys is two feet six inches. The belts and pulleys are entirely enclosed by a metal casing bolted to the floor. Photographs were put in evidence which showed the construction of the machinery. Some time prior to the accident it was decided to fix a new drive to one of the rollers of the machine. This could not be done without stripping down the machine and removing the casing. All power was, therefore, cut off from the machine, the machine stripped down and the casing removed. The machine had been in this condition and incapable of use for a period of six weeks prior to the accident.

On 12 February 1951, the respondent was instructed to drill two holes in the face plate of the machine. This was part of the work connected with the proposed alterations to the machine. This work did not involve the restoration of motive power and at no time was there any motive power connected to the machine. The respondent was assisted in his work by his mate, who was also a fitter, and another man. After setting up a pneumatic drill on a fixed pillar beside the face plate, the respondent moved the face plate into position for drilling the first hole, by pulling on the belts connecting the motor with the machine. He then drilled the first hole. After that it was necessary to move the face plate 180 degrees to bring it into position for drilling the second hole by again pulling on the belt. The respondent did the pulling while his mate watched the face plate so as to tell the respondent when the face plate was in the right position. The respondent was pulling on the top side of the belt from left to right, ie, away from the machine down towards the motor (which, of course, was not connected to any power or capable of working). He pulled several times (he did not know how often) without mishap but then, when he pulled again, his hand went too far and the fingers of his left hand became caught between the belt and the pulley wheel on the motor and the little finger of his left hand was injured, and had subsequently to be amputated above the proximal interphalangeal joint. The accident occurred because, instead of grasping the belt at the top (when he could have pulled for two feet six inches or so), he grasped it in the middle and started his pull from that point (which was, of course, nearer the bottom pulley) and did not remove his hand before it reached the bottom with the result that it was caught between the pulley and belt.

The writ was issued on 4 January 1952, and by it the respondent claimed damages for negligence and breach of statutory duty. The appellants’ premises were a factory within the meaning of the Factories Act, 1937, and the duties alleged to have been breached were those imposed by s 13, s 14 and s 16 of that Act, the material parts of which, and of s 152, it is convenient to set out.

“13. Transmission machinery.—(1) Every part of the transmission machinery shall be securely fenced unless it is in such a position or of such construction as to be as safe to every person employed or working on the premises as it would be if securely fenced …

“14. Other machinery.—(1) Every dangerous part of any machinery, other than prime movers and transmission machinery, shall be securely fenced unless it is in such a position or of such construction as to be as safe to every person employed or working on the premises as it would be if securely fenced …

“16. Construction and maintenance of fencing.—All fencing or other safeguards provided in pursuance of the foregoing provisions of this Part of this Act shall be of substantial construction, and constantly maintained

Page 287 of [1955] 1 All ER 285

and kept in position while the parts required to be fenced or safeguarded are in motion or in use, except when any such parts are necessarily exposed for examination and for any lubrication or adjustment shown by such examination to be immediately necessary, and all such conditions as may be specified in regulations made by the Secretary of State are complied with.

“152. General interpretation.—(1) … ‘Machinery’ includes any driving belt: … ‘Prime mover’ means every engine, motor or other appliance which provides mechanical energy derived from steam, water, wind, electricity, the combustion of fuel or other source: … ‘Transmission machinery’ means every shaft, wheel, drum, pulley, system of fast and loose pulleys, coupling clutch, driving-belt or other device by which the motion of a prime mover is transmitted to or received by any machine or appliance: … ”

Three questions have been argued in your Lordships’ House: first, whether the appellants were guilty of a breach of the statutory duty imposed by s 16 constantly to maintain and keep in position the fencing while the part required to be fenced was in motion or in use; secondly, whether, if not so guilty, the appellants were guilty of negligence at common law; and thirdly, whether the respondent was guilty of contributory negligence. On the second and third questions I see no reason to differ from the judgments of the courts below.

The first question is, however, a question of importance. Pearson J held that the pulley blocks and the pulley belt in between them were transmission machinery; that they were not necessarily exposed within the meaning of s 16; that they were at the time of the accident in motion unfenced, and that, therefore, the appellants were guilty of a breach of s 16. Singleton LJ agreed that the machinery was transmission machinery or, if not, dangerous machinery, and rejected the appellants’ argument that s 13 to s 16 refer only to movement by mechanical energy as opposed to movement by hand. He, therefore, dismissed the appeal. Hodson LJ agreed in the result and that the machinery was transmission machinery and that the sections in question did not refer only to movement by mechanical energy. Morris LJ dissented on the ground that the transmission machinery was not in motion because no transmission was taking place from a prime mover.

In my opinion, the appeal must succeed. Whether or not this machinery was transmission machinery when unconnected with a prime mover, it was clearly a dangerous part of other machinery within s 14 and, therefore, must be fenced. But the question, in my view, depends on the true construction of s 16, and on that I am of opinion that the belt and pulley in question were not in motion or in use at the time of this accident, within the meaning of s 16. They were not in motion or in use for the purposes for which they were intended, but for repair, and, in my opinion, s 16 does not prohibit the removal of fencing when such removal is necessary for repair. Any other construction of s 16 would prevent altogether the repair of dangerous machinery wherever such repair was not shown to be immediately necessary, unless such repair could be carried out without removing the fencing, and there must be innumerable parts of dangerous machinery which cannot be repaired without fencing being removed and without some movement being made therein.

The words of the exception in s 16 are expressly confined to occasions

“when any such parts are necessarily exposed for examination and for any lubrication or adjustment shown by such examination to be immediately necessary.”

It is not without significance that the word “repair” which had occurred in s 10(1)(d) of the Factory and Workshop Act, 1901, was omitted from s 16 of the Act of 1937, and it is clear, in my opinion, that s 16 only excepts examination and adjustment if immediately necessary whilst the machinery is in normal motion or use, but does not except repairs which are not immediately necessary and

Page 288 of [1955] 1 All ER 285

which, therefore, cannot be carried out whilst the machinery is in normal motion without the fencing. The words “in motion or in use” in s 16 do not, in my opinion, refer to such movement of machinery by hand as took place in the present case, and s 16 does not deal in any way with such movement. There is, therefore, no statutory prohibition which makes it obligatory to keep fencing in position when machinery is being repaired and is only being moved in so far as is necessary for the repair. It follows that, in my opinion, there was no breach of duty in the present case and the appeal must be allowed. The respondent must pay the costs in the courts below, but there will be no order as to costs in your Lordships’ House.

LORD PORTER. My Lords, William Cummings was an employee of the appellants as a fitter, and on 12 February 1951, in the course of that employment was injured as a result of his left hand being caught between the belts of a grinding machine and the pulleys round which they revolved. Normally, the belts and pulleys are enclosed in a complete cover which prevents any possibility of such an accident, but, on the occasion on which the accident in question happened, the machine had been dismantled and this cover had been removed in order that repairs might be effected. The belt and pulleys were installed in order to drive what is known as a face plate which is rotated in the course of the machine’s use. The machine itself, being under repair, had not been in use for some six weeks before the accident. In the course of the repair, it became necessary to turn the face plate through an angle of 180 degrees in order to drill two holes in it opposite to one another, and, in order to effect this turn, the respondent took hold of the belt and pulled the face plate round. In doing so his fingers slipped between the belt and rollers, with the result that they suffered injury.

For this injury, the respondent sued the appellants, alleging that they were negligent at common law and in breach of their statutory duty under s 13 or s 14 of the Factories Act, 1937, and of s 16 of the same Act. [His Lordship read the enactments a and continued:]

My Lords, so far as common law negligence is concerned, I am in agreement with both the courts which have already considered the case and, in common with the rest of your Lordships, am of opinion that no such negligence has been established. For many years the covers of these machines have been taken off from time to time for the purpose of effecting repairs, and no instance of a similar accident has been suggested. Nor, to my mind, would such an accident be anticipated. It has, indeed, been urged that the respondent was himself in fault, inasmuch as his injury was caused by his own negligence. Having regard to the opinion I hold, it is not necessary to decide this point, but, as at present advised, I am inclined to agree with the courts below that it was inadvertence rather than negligence on the respondent’s part which led to the accident.

The matter at issue is, accordingly, narrowed to the question whether there was a breach of statutory duty on the appellants’ part. For this purpose, it does not matter whether the machinery in question is “transmission” under s 13 or “dangerous” under s 14.

It was argued on behalf of the appellants that it was not the former because it was not being mechanically propelled at the time when the movement was made. I see no reason for so confining the expression “transmission machinery”, nor is such a limitation of meaning warranted by the wording of the definition. It was, I think, transmission machinery and, therefore, required to be fenced under s 13. Furthermore, under s 16, the fencing had to be maintained and kept in position whilst the fenced parts were in motion or use. It was not, however, contended that, at the relevant time, they were in use and, therefore,

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the only question which remains is whether, at the moment at which the accident occurred, they were in motion within the meaning of the section.

To the extent to which they were being moved they were, in a sense, in motion, but it does not follow that the words of the section include every kind of movement. Some assistance may, I think, be obtained first, by the collocation of the words “in use or in motion”. “In use” would certainly mean running as it was meant to run and doing the work it was meant to do. But provision is required for cases where it was running as it was meant to run but not doing the work it was meant to do. In such a case it would, in my view, be in motion but not in use. The addition of the words “in motion” is, accordingly, required to cover such a set of circumstances, but one would not normally say that the machine was in motion when some one turned it over by hand for the purpose of effecting a repair or some similar purpose. This view is strengthened when it is found that no provision is contained in the Act enabling fencing to be removed for the sake of repair. In such a case they may be in movement but not in motion. If it were not so, and if the judgment of the Court of Appeal were to prevail, they could be uncovered for repair only if they were kept motionless.

It is difficult to see why so complete a prohibition against uncovering the transmission machinery should be required when full working or motion are permitted in the case of examination, lubrication or adjustment. It may be that, by means of some intricate or complicated machinery, repairs might be effected though the machinery was still fenced, but such a requirement is, as I think the evidence establishes, impracticable in use and far-fetched in theory. Moreover, it has to be remembered that, by s 10(1)(d) of the Act of 1901, the necessity for maintaining the machinery whilst in motion was abrogated whilst it was under repair or under examination in connection with repair. That provision was excluded from the Act of 1937 not, I think, with the result of making repair impossible unless the machine was at rest, but because it was felt that repair should not be permitted whilst it was running in its normal manner, whether driving its ordinary load or not. In the present case, it was not working in its normal way but merely being turned over in order to effect the necessary repair. Such movement does not, in my opinion, constitute being in motion within the meaning of the statute.

Accordingly, in my opinion, the action fails and the appeal should be allowed.

LORD REID. My Lords, the respondent was injured whilst assisting in the adjustment of the position of the face plate of a grinding machine so that two holes could be drilled at a particular point on it. This machine, when in use in the ordinary way, was driven by belts passing over a large pulley on the machine and a smaller pulley on an electric motor, and the belts and pulleys were fenced by a substantial cover over them which was bolted to the floor. For a considerable time before the accident the machine had been under repair. The cover had been removed, but the belts were still in position and the pulley was still geared to the face plate, so the face plate could be turned by pulling the belts. The respondent was pulling the belts to bring the face plate into position when his fingers were caught between the belts and one of the pulleys.

I have no doubt that these belts and pulleys were transmission machinery within the meaning of s 13 of the Factories Act, 1937, and I can find no support for the appellants’ argument that the Factories Act only applies to machinery driven by mechanical power. The real question is the proper interpretation of s 16 of the Act. That section requires that fencing shall be constantly maintained and kept in position while the parts required to be fenced

“are in motion or in use, except when any such parts are necessarily exposed for examination and for any lubrication or adjustment shown by such examination to be immediately necessary, and all such conditions as

Page 290 of [1955] 1 All ER 285

may be specified in regulations made by the Secretary of State are complied with.”

The question is whether these belts and pulleys were “in motion” when the respondent sustained his injuries. If they were not, then there was no contravention of the statute. It was not argued that the machine or its parts were “in use” when the accident happened, and I do not find it necessary to determine precisely what is the meaning of those words because I do not think that that would assist the determination of the meaning of the phrase “in motion”.

Using the phrase in its ordinary sense, I do not think that one would naturally say of a man moving parts of a machine round to a required position that he had set the machine or its parts in motion. The phrase “in motion” appears to me to be more apt to describe a continuing state of motion lasting, or intended to last, for an appreciable time. But, on the other hand, it would not be a misuse of language to say that the respondent set the parts of the machine in motion. It is, therefore, necessary, in my judgment, to look at the context in which the phrase occurs to determine whether it must be held to denote any movement of the parts however small, however slow, and however caused; or to have a more limited meaning. The exception which I have quoted and which follows immediately after the words “in motion or in use” appears to me to be very illuminating. It permits exposure while the parts are in motion where necessary for examination, and for any lubrication or adjustment shown by such examination to be immediately necessary, but for no other purpose. There appears to be nothing in the Act to authorise setting exposed parts in motion for the purpose of executing repairs or of making any adjustments not immediately necessary. But there must be many occasions in the course of repairing and readjusting machinery when it is necessary to expose parts which, in ordinary use, must be fenced, and to move them to an appreciable extent. There is some dispute whether it would have been practicable to devise some means of carrying out the necessary movements in this case while the guard was in position, but, even if that could have been done in this case, there must be other cases in which it would be impracticable. I can see no answer to the argument that, if the respondent’s construction of s 16 is correct, it is practically impossible in such cases to make the necessary repairs and readjustments without committing an offence by contravening the provision of s 16. It was argued for the respondent that the statutory powers to make regulations, particularly under s 60, were wide enough to enable the Secretary of State to deal with such cases and, therefore, any unreasonable consequences of adopting the respondent’s interpretation could be avoided. But I cannot agree that these powers to make regulations were intended, or could be used, for that purpose.

The fact that the interpretation for which the respondent contends would lead to so unreasonable a result is, in my opinion, sufficient to require the more limited meaning of “in motion” to be adopted unless there is some very strong objection to it, and none was suggested. It is true that the Factories Act is a remedial statute and one should, therefore, lean towards giving a wide interpretation to it, but that does not justify interpreting an ambiguous provision in a way which leads to quite unreasonable results.

There was much argument about inferences to be drawn from a comparison of provisions in the Act of 1937 with corresponding provisions in the Act of 1901 and earlier Acts. I do not get much assistance from these comparisons but, on the whole, they appear to me to favour the appellants. The most relevant is a comparison of the exception in s 16 of the Act of 1937 with s 10(1)(d) of the Act of 1901, which required that fencing must be maintained while the parts to be fenced were in motion or use

“except where they are under repair or under examination in connection with repair or are necessarily exposed for the purpose of cleaning or

Page 291 of [1955] 1 All ER 285

lubricating or for altering the gearing or arrangements of the parts of the machine.”

The reference to repair in the exception has been omitted in the later Act. On the narrower interpretation of “in motion”, that omission is readily intelligible. It may well have been thought wrong to allow repair work involving the removal of fencing while a machine is running. But, if the wider interpretation of “in motion” were correct, it could hardly have escaped notice that this omission would give rise to the difficulties to which I have already referred, and I find it very difficult to attribute to Parliament an intention to create such difficulties. But these comparisons only confirm me in the opinion which I would have held without them.

There being no breach of statutory duty by the appellants, the respondent could only succeed by proving common law negligence on the part of the appellants. But I agree with your Lordships that the evidence falls far short of establishing negligence. I, therefore, agree that the appeal should be allowed.

LORD TUCKER. My Lords, I agree with the trial judge (Pearson J) that the evidence in this case was insufficient to warrant a finding of negligence against the respondent (the plaintiff in the action). Neither of the courts below have held the appellants guilty of common law negligence, there being no finding either way on this issue, the trial judge considering it unnecessary in view of his decision that the appellants were liable for breach of statutory duty, and the Court of Appeal not having heard any argument on the question. In this state of affairs it would, in my view, require very cogent evidence from the shorthand transcript to justify your Lordships at this stage of the proceedings in finding that the appellants were negligent by reason of their failure to take reasonable steps to provide a reasonably safe system of work, and I certainly do not consider that the evidence in the present case comes up to the required standard.

Agreeing, as I do, that a study of the Factories Acts from 1878 to 1937 lends no support to the appellants’ main contention, viz, that the Act of 1937, on its true construction, applies only to power-driven machinery, it remains to consider whether the trial judge and the majority of the Court of Appeal were right in holding that the appellants were in breach of their statutory obligation under s 13 and s 16 of the Factories Act, 1937, securely to fence the transmission machinery and constantly to maintain and keep in position such fencing while the transmission machinery was in motion.

The machinery in question being clearly “transmission machinery”, the only question is whether it was “in motion” when, the power derived from the prime mover having been cut off, the respondent was pulling the belt by hand so as to get the face plate into position for a necessary repair to be effected. “Transmission machinery” is defined by s 152(1) as

“every shaft, wheel, drum, pulley, system of fast and loose pulleys, coupling clutch, driving-belt or other device by which the motion of a prime mover is transmitted to or received by any machine or appliance.”

“Prime mover” is defined as

“every engine, motor or other appliance which provides mechanical energy derived from steam, water, wind, electricity, the combustion of fuel or other source.”

What, then, is the meaning of the words “in motion” as applied to transmission machinery with which alone this case is concerned? My Lords, on this issue I am in complete agreement with the view expressed by Morris LJ in his dissenting judgment in the Court of Appeal, when, after quoting the definitions of “transmission machinery” and “prime mover” he said ([1953] 2 All ER at p 51):

“In this case there was no motion of the prime mover, there was no

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mechanical energy, there was nothing to transmit, and no transmission was taking place.”

Accordingly, he held that the transmission machinery could not be described as “in motion”.

My Lords, I would respectfully adopt this language and reasoning which seems to me to provide the answer in the present case without requiring any decision as to the meaning of the words “in motion” as applied to other kinds of machinery or the parts of other machines.

On this ground I would allow the appeal and enter judgment for the appellants.

LORD KEITH OF AVONHOLM. My Lords, I have had the advantage of reading the opinion of my noble and learned friend, Lord Reid, in which I concur.

Appeal allowed.

Solicitors: Kenneth Brown, Baker, Baker agents for Gee & Edwards, Swansea (for the appellants); W H Thompson (for the respondent).

G A Kidner Esq   Barrister.

Government of India, Ministry of Finance (Revenue Division) v Taylor and Another

[1955] 1 All ER 292

Categories:        COMPANY; Other Company        

Court:        HOUSE OF LORDS        

Lord(s):        VISCOUNT SIMONDS, LORD MORTON OF HENRYTON, LORD REID, LORD KEITH OF AVONHOLM AND LORD SOMERVELL OF HARROW        

Hearing Date(s):        23, 24, 25, 29 NOVEMBER 1954, 20 JANUARY 1955        

Company – Winding-up – Foreign Tax – Claim by Indian government – Admissibility of proof – Companies Act, 1948 (11 & 12 Geo 6 c 38), s 302.

A company incorporated in England carried on business in India under a licence granted by the Municipality of Delhi. In 1947 the company’s undertaking was purchased by the Indian government under an option contained in the licence. In 1947 a large part, and in 1948 the balance, of the purchase price was paid and remitted to England. In May, 1949, the company went into voluntary liquidation. On 24 October 1951, the Income Tax Commissioner at Delhi served a demand notice under the Indian Income Tax Act, 1922, in respect of the year 1948–49, calling on the company to pay a large sum as capital profits tax in respect of the price paid to it on the sale of its undertaking. The Indian government claimed in the voluntary liquidation of the company the tax due under this and other similar assessments. The liquidators rejected the claim.

Held – The claim was not admissible to proof because (i) it was a well recognised rule of English law, applying equally in relation to the revenue laws of a member state of the British Commonwealth as to those of a foreign country, that the courts of this country did not enforce the revenue laws of another country (principle stated by Lord Mansfield in Holman v Johnson (1775) (1 Cowp at p 343) considered), and (ii) the “liabilities” in satisfaction of which, under the Companies Act, 1948, s 302, the liquidators were bound to apply the property of the company, were only those obligations which were enforceable in an English court.

Re Lorillard ([1922] 2 Ch 638) and Re Art Reproduction Co Ltd ([1951] 2 All ER 984) approved.

Decision of the Court Of Appeal, sub nom Re Delhi Electric Supply & Traction Co Ltd ([1953] 2 All ER 1452) affirmed.

Notes

As to Enforcement of Revenue Laws, see 7 Halsbury’s Laws (3rd Edn) 10, para 14; and for cases on the subject, see 11 Digest (Repl) 325, 16–18.

Cases referred to in opinion

King of the Hellenes v Brostrom (1923), 16 Lloyd’s Rep 167.

Re Visser [1928] Ch 877, 97 LJCh 488, 139 LT 658, 11 Digest (Repl) 323, 7.

Page 293 of [1955] 1 All ER 292

Sydney Municipal Council v Bull [1909] 1 KB 7, 78 LJKB 45, 99 LT 805, 11 Digest (Repl) 322, 6.

A-G v Lutwydge (1729), Bunb 280, 145 ER 674, 11 Digest (Repl) 322, 4.

Boucher v Lawson (1736), Lee temp Hard 85, 194(95 ER 53, 125), Cunn 144(94 ER 1116), 11 Digest (Repl) 440, 823.

Planché v Fletcher (1779), 1 Doug KB 251, 99 ER 165, 11 Digest (Repl) 325, 17.

Holman v Johnson (1775), 1 Cowp 341, 98 ER 1120, 11 Digest (Repl) 325, 16.

Lever v Fletcher (1780), 1 Park’s Marine Insurances, 8th Edn, p 507, 29 Digest 158, 1135.

Clugas v Penaluna (1791), 4 Term Rep 466, 100 ER 1122, 11 Digest (Repl) 441, 829.

Bernard v Reed (1794), 1 Esp 91, 170 ER 290, 12 Digest (Repl) 308, 2367.

Waymell v Reed (1794), 5 Term Rep 599, 101 ER 335, 11 Digest (Repl) 441, 830.

James v Catherwood (1823), 3 Dow & Ry KB 190, 11 Digest (Repl) 325, 18.

Huntington v Attrill [1893] AC 150, 62 LJPC 44, 68 LT 326, 57 JP 404, 11 Digest (Repl) 515, 1293.

A-G for Canada v William Schulze & Co (1901), 9 SLT 4.

Re Lorillard [1922] 2 Ch 638, 92 LJCh 148, 127 LT 613, 24 Digest 798, 8275.

Re Art Reproduction Co Ltd [1951] 2 All ER 984, [1952] Ch 89, 3rd Digest Supp.

Peter Buchanan Ltd v McVey (1950), 100 LJo 497.

Moore v Mitchell (1929), 30 F (2d) 600.

Ex p James, Re Condon (1874), 9 Ch App 609, 43 LJBcy 107, 30 LT 773, 5 Digest 819, 6961.

Re River Steamer Co, Mitchell’s Claim (1871), 6 Ch App 822, 25 LT 319, 22 Digest (Repl) 369, 3974.

Ralli Brothers v Compania Naviera Sota y Aznar [1920] 2 KB 287, 89 LJKB 999, 123 LT 375, 11 Digest (Repl) 435, 791.

Appeal

Appeal by the Government of India, Ministry of Finance (Revenue Division), from an order of the Court of Appeal dated 11 November 1953, and reported sub nom Re Delhi Electric Supply & Traction Co Ltd [1953] 2 All ER 1452, dismissing an appeal from a decision of Vaisey J dated 30 July 1953.

The facts appear in the opinion of Viscount Simonds.

Sir Andrew Clark QC N E Mustoe QC R R D Phillips and J H C Morris for the appellant.

Millard Tucker QC Raymond Jennings QC and O R Smith for the respondents.

Their Lordships took time for consideration.

20 January 1955. The following opinions were delivered.

VISCOUNT SIMONDS. My Lords, the respondents to this appeal are the present liquidators in the voluntary winding-up of an English company, the Delhi Electric Supply and Traction Co Ltd which was, in 1906, incorporated for the purpose of operating an electricity supply undertaking and a tramway undertaking under a licence and order granted by the Municipality of Delhi. The appellant is the Government of India, a sovereign independent republic which acknowledges Her Majesty as head of the British Commonwealth. The question for your Lordships’ decision is whether Vaisey J and the Court of

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Appeal were right in rejecting the appellant’s claim to prove in the liquidation of the company in respect of an amount of income tax due from the company to the appellant under Indian income tax law.

The relevant facts can be very shortly stated. The company, having carried on its undertakings in India until 1947, in that year sold the whole of them to the Government of India as from 2 March 1947, for Rs.82,11,580. The greater part of this sum was paid to the company in India on 1 March 1947, and was remitted to England a few days later. The balance was paid to the company in India in September, 1948, and remitted to England shortly afterwards. On 18 April 1947, the Indian Income Tax and Excess Profits Tax (Amendment) Act, 1947, was passed and, by s 6 thereof, s 12B was inserted in the Indian Income Tax Act, 1922. The opening words of s 12B are as follows:

“(1) The tax shall be payable by an assessee under the head ‘Capital gains’ in respect of any profits or gains arising from the sale, exchange or transfer of a capital asset effected after Mar. 31, 1946; and such profits shall be deemed to be income of the previous year in which the sale, exchange or transfer took place … ”

This amendment is deemed, by s 1(2) of the Act of 1947, to have come into force on 31 March 1947.

On 25 May 1949, the company went into voluntary liquidation by special resolution, and the respondent Taylor and one Lovering were appointed joint liquidators. They had previously, as directors of the company, made a statutory declaration as to the solvency of the company, and later, in their statement as to the position of the liquidation of the company, they referred to the liability for special taxation in India. They also, in March, 1951, inserted a notice in the Gazette of India calling on all creditors to prove their debts or claims, and acceded to a request by the Commissioner of Income Tax at Delhi to stay the liquidation proceedings to enable his department to prove their claim. On 24 October 1951, the Commissioner of Income Tax served a demand notice under s 29 of the Indian Income Tax Act, 1922, for the year 1948–49, calling on the company to pay Rs.16,54,945.11.0 of tax, which consisted mainly of a sum of Rs.15,62,817.3.0 representing tax on the surplus on the sale of the company’s undertakings. I need not pursue the various steps that were taken in India, appeals against the assessment, payment of a sum on account out of assets which were still in India, re-assessment of the amounts claimed to be due under the head “Capital gains”, and further demands which culminated in a claim on the surviving liquidator, Taylor, in February, 1953 (Lovering having in the meantime died), for sums of Rs.15,62,817.3.0 and Rs.13,001.10.0. The quantum of those assessments is still a matter or appeal in India, but that there is some liability in India in respect of tax for capital gains is beyond doubt, and there appears to be also an ascertained liability in respect of what I may call ordinary income tax which is not under appeal.

It was in those circumstances that the respondent Taylor, in April and May, 1953, rejected the appellant’s claims stating that no part of the company’s assets (all of which were then in England) could properly be applied in payment of any claim for taxes by a foreign government. Thereupon, the appellant applied to the High Court in England for an order reversing the rejection of its claim and, on 30 July 1953 (the respondent Hume having in the meantime been appointed joint liquidator with the respondent Taylor), Vaisey J made an order refusing the appellant’s application. From this order the appellant appealed to the Court of Appeal (Sir Raymond Evershed MR Jenkins and Morris LJJ), and that court unanimously dismissed the appeal.

The questions raised in the appeal to this House are two: (a) whether there is a rule of law which precludes a foreign state from suing in England for taxes due under the law of that state, and (b) whether (assuming the first question to be answered in the affirmative) a claim for Indian taxes is, nevertheless, a

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“liability” within the meaning of s 302 of the Companies Act, 1948, which the liquidators are bound to discharge.

The Court of Appeal agreed with Vaisey J in answering to the first question “Yes” and to the second question “No”, and I have no doubt that they were right.

My Lords, I will admit that I was greatly surprised to hear it suggested that the courts of this country would, and should, entertain a suit by a foreign state to recover a tax. For at any time since I have had any acquaintance with the law I should have said, as Rowlatt J said in King of the Hellenes v Brostrom (16 Lloyd’s Rep at p 193):

“It is perfectly elementary that a foreign government cannot come here—nor will the courts of other countries allow our government to go there—and sue a person found in that jurisdiction for taxes levied and which he is declared to be liable to by the country to which he belongs.”

That was in 1923. In 1928, Tomlin J in Re Visser, after referring to Sydney Municipal Council v Bull, in which the same proposition had been unequivocally stated by Grantham J and saying that he was bound to follow it, added ([1928] 1 Ch at p 884):

“My own opinion is that there is a well recognised rule, which has been enforced for at least two hundred years or thereabouts, under which these courts will not collect the taxes of foreign states for the benefit of the sovereigns of those foreign states; and this is one of those actions which these courts will not entertain.”

My Lords, it is not seemly to weigh the pronouncements of living judges, but it is, I think, permissible to say that the opinion of few, if any, judges of the past, command greater respect than those of Lord Tomlin and Sir Sydney Rowlatt, and what appeared to one of them to be a “well recognised rule” and to the other “elementary” law cannot easily be displaced.

My Lords, the history and origin of the rule, if it be a rule, are not easy to ascertain, and there is, on the whole, remarkably little authority on the subject. I am inclined to agree with the Court of Appeal that the early cases of A-G v Lutwydge and Boucher v Lawson, to which some reference was made, do not give much help. It is otherwise when we advance a few years to the age of Lord Mansfield. That great judge, in a series of cases, repeated the formula “For no country ever takes notice of the revenue laws of another” (see Planché v Fletcher, Holman v Johnson, and Lever v Fletcher). The last-named case I find only in a text-book, Park’s Marine Insurances, which in its day ran through many editions. I am myself referring to the 7th Edn at p 359. The author, James Allan Park, himself a distinguished judge of the Common Pleas, states the rule as I have cited it from Planché v Fletcher and then proceeds:

“In another case a short time afterwards at Guildhall LORD MANSFIELD in his charge to the jury advanced the same doctrine which had been established by the whole court in the preceding case.”

He then refers to Lever v Fletcher. It is true that Lord Mansfield was not directly concerned with the case of a foreign power suing in an English court to recover revenue, but with the validity of a contract made abroad where the seller was not implicated in smuggling operations which contravened the revenue laws of this country, or with the rights of insurers where a ship which had cleared for Ostend went direct to Nantes, thereby affecting the customs dues payable abroad. But in each case he could not have reached his conclusion but for the fact that he applied the rule that no country ever takes notice of the revenue laws of another. Where Lord Mansfield led, Lord Kenyon followed, though he

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was not a judge who followed blindly. I agree with the learned Master of the Rolls that it is clear from such cases as Clugas v Penaluna, Bernard v Reed and Waymell v Reed, that Lord Kenyon accepted without qualification the broad rule which Lord Mansfield had formulated. I pass over a number of cases where the question was as to the admissibility of documents made in a foreign country and not stamped according to the law of that country, pausing only to remind your Lordships that in James v Catherwood, Sir Charies Abbott CJ (later Lord Tenterden), said (3 Dow & Ry KB at p 191):

“This point is too plain for argument. It has been settled, or at least considered as settled, ever since the time of LORD HARDWICKE, that in a British court we cannot take notice of the revenue laws of a foreign state.”

The learned chief justice went on to apply the rule in a manner that may not have been justified, but that does not detract from the importance of his unqualified assertion of it.

Here, my Lords, is a formidable array of authority. It is possible that the words “take notice of” might, if applied without discrimination, lead to too wide an application of the rule; for, as Tomlin, J, pointed out in Re Visser, there may be cases in which our courts, although they do not enforce foreign revenue law, are bound to recognise some of the consequences of that law, and, for this reason, the terms of Lord Mansfield’s proposition have been criticised. But, in its narrower interpretation, it has not been challenged, except in the three cases mentioned earlier in this opinion, and in them it was unequivocally affirmed. Nor does the matter rest there. For Sir Andrew Clark, who argued the case for the appellant with equal vigour and candour, admitted that he knew of no case in which a foreign state had recovered taxes by suit in this country, nor of any case in any foreign country in which the government of this country had done so. And, in this connection, it is worthy of note that, as my noble and learned friend, Lord Somervell Of Harrow, has by his independent researches discovered and will presently tell your Lordships, this same rule is stated in at least one French text-book of high authority. The matter is carried one step further by the fact that the rule appears to have been recognised by Parliament. For I see no other reason for the exclusion from the advantages of the Foreign Judgments (Reciprocal Enforcement) Act, 1933, of a judgment for

“a sum payable in respect of taxes or other charges of a like nature or in respect of a fine or other penalty”,

It may well be asked, then, on what grounds this appeal is founded. I think that learned counsel relied on two main grounds, first, that Lord Mansfield’s proposition, which I have more than once quoted, extended to revenue law a doctrine properly applicable only to penal law, and (I think it must be faced) that Lord Mansfield was wrong in so extending it, and everyone who has since followed him was wrong: and, secondly, that, whatever may have been the rule in the past, there ought to be, and is a trend towards, a mitigation of the rule, particularly as between states which are united by the bonds of federal union or by such looser ties as bind the British Commonwealth of nations.

My Lords, these seem to me frail weapons with which to attack a strong fortress. The suggestion that Lord Mansfield’s proposition was too wide was supported partly by the fact that, in Huntington v Attrill, the proposition was somewhat more narrowly stated, as it was also in the case of A.-G for Canada v William Schulze & Co. In those cases, the question was of enforcement of a penalty imposed by a foreign state, and the observations of the court were directed to that question. This seems to me an inadequate reason for challenging a wider statement in regard to a different subject-matter. Further, on the assumption

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which must be made that the decision in Huntington v Attrill was correct, it was conceded that it must cover, not only a penalty strictly so-called, but also any tax which could be regarded as penal or confiscatory. This seems to me to create a difficult task of discrimination, which is not made easier by the test suggested by learned counsel. “If a tax”, he said, “is the sort of tax which is recognised in this country, it is not penal”. I am little disposed to introduce so nice a refinement into a rule which has hitherto been stated in terms that are easy to understand and to apply.

Then some reliance was placed on the fact that, in earlier editions of Dicey’s Conflict Of Laws, the relevant rule was thus stated:

“The court has no jurisdiction to entertain an action for the enforcement, either directly or indirectly, of a penal law of a foreign country”,

“essential characteristic, in short, of a penal action is that it should be an action on behalf of the government or the community and not an action for remedying a wrong done to an individual”

The second branch of the argument for the appellant was directed to showing that, in the United States of America, there had been, in certain states, a disposition to relax the rigidity of the rule, and he was able to point to certain cases not cited to the Court of Appeal where the courts of one state had admitted and enforced claims for revenue by another state, notably in the States of Missouri and Kentucky. And reference was made also to the fact that, in the 1948 supplement to the well known “Restatement”, some doubt was cast on the rule. But it was conceded that this was not the trend in all states, the States of New York and of Delaware continuing to apply the old rule. My Lords, I do not think it necessary to occupy your time by an examination of the American cases. I am ever willing to get help from seeing how the law, which is our common heritage, has developed on the other side of the Atlantic, but a development which is not universal and is in any case confined to relations between state and state within the Union, can have no weight in determining what the law is in this country. Finally, it was urged that, whatever might be the position as between this country and a foreign country, it was not the same as between different members of the British Commonwealth, including those members which, though within the Commonwealth, do not acknowledge the sovereignty of the Queen. For such a distinction there is no authority, and I can see no reason. If such a change is to be made, it is not for the courts to make it. It will be the task of governments and perhaps of parliaments. I do not think that it will be an easy task.

I must add that, since writing this part of my opinion, I have learned from my noble and leaned friend, Lord Keith Of Avonholm, that he has discovered a case in the courts of Eire which confirms the view I have expressed. I come then, my Lords, to the second question and will not detain you long, for, with all deference to those who have thought otherwise, I find it an easy one to answer. We proceed on the assumption that there is a rule of the common law that our courts will not regard the revenue laws of other countries. It is sometimes, not happily perhaps, called a rule of private international law; it is at least a rule which is enforced with the knowledge that, in foreign countries, the same rule is observed. And, since it is a rule which operates equally in regard to natural and artificial persons, the company, with which we are here concerned, could not, on the day before its resolution to wind-up became effective, have been

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sued by the Indian government for the recovery of tax in the courts of this country. But it is said that, from the moment that the company went into liquidation, the situation changed, the old rule of law was abrogated, and our courts became the means of collecting the taxes of a foreign power. This may seem the more surprising when it is remembered that the winding-up of a company, whether voluntarily or by the court, is only the machinery by which an entity, which can no longer, or at least no longer usefully, carry on its business, is brought to its statutory end. It is difficult to see why such a process should create new rights in foreign powers hitherto unknown in this or any other country. But it is said that, under the Companies Act, 1948, s 302, the “liabilities” which the liquidator in a voluntary winding-up is bound to discharge include an obligation to pay tax due to a foreign state. All turns on the meaning of the word “liabilities” in this section. On the one hand, it is said by the respondents that it means only those obligations which are enforceable in an English court, and, on the other hand, that its meaning is extended—I do not know how far—but at least so far as to cover liabilities for foreign tax in respect of which the company might have been sued in the courts of the country imposing it.

My Lords, I have no hesitation in adopting the former of these meanings. I conceive that it is the duty of the liquidator to discharge out of the assets in his hands those claims which are legally enforceable, and to hand over any surplus to the contributories. I find no words which vest in him a discretion to meet claims which are not legally enforceable. It will be remembered that, so far as is relevant for this purpose, the law is the same whether the winding-up is voluntary or by the court, whether the company is solvent or insolvent, and that an additional purpose of a winding-up is to secure that creditors who have enforceable claims shall be treated equally, subject only to the priorities for which the statute provides. It would be a strange result if it were found that the statute introduced a new category of creditors to compete with those who alone, apart from it, could enforce their claims. It was urged on your Lordships that in certain other sections of the Act, notably s 278 and s 283, “liabilities” must include obligations not enforceable in this country. That may well be, but, though I accept the proposition that a word should be used in the same sense throughout a statute, it is by no means a universal rule, and I am not pressed by it in construing a section of an Act so long and complex as the Companies Act, 1948, where a word may be and, in the case of “liabilities” in fact is, used in many different contexts. I am, on the other hand, satisfied that the case of a statute-barred debt presents a very close analogy and that, in concluding that the present claim cannot be admitted, your Lordships are assisted by such cases as Re Lorillard and Re Art Reproduction Co Ltd, which were, in my opinion, rightly decided.

I would dismiss this appeal with costs.

LORD MORTON OF HENRYTON. My Lords, I had prepared some observations on the important questions which arise on this appeal, but I have formed the view that these observations add nothing of value to the speech which has just been delivered by my noble and learned friend on the Woolsack. I shall, therefore, say only that I agree with his reasoning and with his conclusion.

LORD REID. My Lords, I concur.

LORD KEITH OF AVONHOLM. My Lords, on the first issue raised in this appeal, I am in full concurrence with the opinion of my noble and learned friend, Viscount Simonds. Such additional observations as I make under this head are due to the fact that I have had access to a judgment delivered by Kingsmill Moore J in the High Court of Ireland on 21 July 1950, in Peter Buchanan Ltd v McVey. This admirable judgment, which somehow has escaped the notice of the reporters, covers all the points raised under this head of the appeal and was affirmed by the Irish Court of Appeal on 19 December 1951.

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It illustrates two propositions: (i) that there are circumstances in which the courts will have regard to the revenue laws of another country; and (ii) that in no circumstances will the courts, directly or indirectly, enforce the revenue laws of another country. We are not concerned to consider in this case the validity of the first proposition or the limits to be put on it. But it is interesting to notice how it was applied in the case cited. The plaintiff company was a company registered in Scotland which had been put into liquidation by the revenue authorities in Scotland under a compulsory winding-up order in respect of a very large claim for excess profits tax and income tax. The liquidator was really a nominee of the revenue. The defendant held ninety-nine £1 shares of the capital of the company, and the remaining share was held by a confidential cashier and book-keeper as trustee for him. These two sole shareholders were also sole directors. The defendant, having realised the whole assets of the company in his capacity as a director and having satisfied substantially the whole of the company’s indebtedness, other than that due to the revenue, by a variety of devices had the balance transferred to himself to his credit with an Irish bank and decamped to Ireland. The action was in form an action to recover this balance from the defendant at the instance of the company directed by the liquidator. The first answer of the defendant was that, as he had received the money from the company in his capacity as a shareholder in pursuance of an agreement between all the corporators, the company could not now ask to have it back. The learned judge held that the transaction was a dishonest transaction designed to defeat the claim of the revenue in Scotland as a creditor and was ultra vires the company and, accordingly, rejected the defendant’s submission. On the other hand, he held that, although the action was in form an action by the company to recover these assets, it was in substance an attempt to enforce indirectly a claim to tax by the revenue authorities of another state. He, accordingly, dismissed the action. The judgment contains an able and exhaustive examination of the authorities.

One explanation of the rule thus illustrated may be thought to be that enforcement of a claim for taxes is but an extension of the sovereign power which imposed the taxes, and than an assertion of sovereign authority by one state within the territory of another, as distinct from a patrimonial claim by a foreign sovereign, is (treaty or convention apart) contrary to all concepts of independent sovereignties. Another explanation has been given by an eminent American judge, Judge Learned Hand in Moore v Mitchell, in a passage, quoted also by Kingsmill Moore J in the case of Peter Buchanan, Ltd, as follows (30 F (2d) at p 604):

“While the origin of the exception in the case of penal liabilities does not appear in the books, a sound basis for it exists, in my judgment, which includes liabilities for taxes as well. Even in the case of ordinary municipal liabilities, a court will not recognise those arising in a foreign state, if they run counter to the ‘settled public policy’ of its own. Thus a scrutiny of the liability is necessarily always in reserve, and the possibility that it will be found not to accord with the policy of the domestic state. This is not a troublesome or delicate inquiry when the question arises between private persons, but it takes on quite another face when it concerns the relations between the foreign state and its own citizens or even those who may be temporarily within its borders. To pass upon the provisions for the public order of another state is, or at any rate should be, beyond the powers of a court; it involves the relations between the states themselves, with which courts are incompetent to deal, and which are intrusted to other authorities. It may commit the domestic state to a position which would seriously embarrass its neighbour. Revenue laws fall within the same reasoning; they affect a state in matters as vital to its existence as its criminal laws. No court ought to undertake an inquiry which it cannot

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prosecute without determining whether those laws are consonant with its own notions of what is proper.”

On either of the explanations which I have just stated I find a solid basis of principle for a rule which has long been recognised and which has been applied by a consistent train of decision. It may be possible to find reasons for modifying the rule as between states of a federal union. But that consideration, in my opinion, has no relevance to this case.

On the second question in this appeal, I have come with reluctance to the view that the distribution sections of the winding-up provisions of the Companies Act, 1948, are controlled by the same considerations. I do not find it necessary to give the word “liabilities” different meanings in the various sections. In particular, in s 278(1)(c), s 283 and s 302, it can, in my opinion, bear the same meaning. I find it impossible to hold that assessment to Indian income tax does not impose a liability on the company. From the point of view of the Indian government it obviously is a liability. If there were assets of the company in India attached or attachable for the tax no one could doubt that it was a liability. It cannot cease to be a liability because the Indian assets have all been brought to this country. It is, in my opinion, a liability within the meaning of s 302. But the section is speaking in general terms. When the liquidators come to distribute the assets in satisfaction of the liabilities they find that this particular liability is unenforceable. It is as if it were written down to zero. Let me take the position before the date of the resolution for winding-up. The company could have paid the tax if so minded. Equally, it could have refused to pay the tax. If it had been sued, the action would have been dismissed. That would not have extinguished the liability. The liability would have remained exactly as before. But if, after the dismissal of the action, the company went into liquidation, can it be that a duty then emerges on the liquidators under s 302 of the Act to pay the tax which has been successfully resisted by the company before the winding-up started? I can see no ground for so holding.

I was impressed for a time by the reference made by counsel for the appellants to the rule in Ex p James, Re Condon. Counsel stressed that he could not appeal to the rule as directly applicable, for it applied only to an officer of the court which the liquidator in a voluntary winding-up was not. But, as I understood him, the suggestion was that the court, in a compulsory winding-up, would direct a liquidator to pay the tax on the ground of honesty and fair dealing, and it would be impossible to follow one line in a winding-up by the court and another in a voluntary winding-up, a view, I may observe, taken in another connection by Wynn-Parry J in Re Art Reproduction Co Ltd). The rule, however, which is at best exercised as a discretionary power by the court, appears to have been exercised only in cases where there has been some form of enrichment of the assets of a bankrupt or insolvent company at the expense of the person seeking recoupment. No case has been brought to our notice of the application of the rule where there has been no enrichment of one party with corresponding loss to the other.

While, then, this is a liability in the sense of s 302 of the Act, it is not a liability which the liquidators were bound to pay. This, in my opinion, is not to contradict the section. The same situation could arise where there was a debt statute barred in this country, but not statute-barred in another country. If there were assets in that other country sufficient to meet the debt, a liquidator might be compelled to recognise the debt as a liability that had to be discharged. If there were no assets in that country and recovery had to be sought in this country, the liquidator could not be compelled to pay it out of assets in his hands (Re River Steamer Co Mitchell’s Claim; Re Art Reproduction Co Ltd). The reasons given in the passage already cited from Judge Learned Hand’s judgment in Moore v Mitchell, are as cogent, in my opinion, against a liquidator in this country recognising a claim for taxes demanded by a foreign country

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as they are against the enforceability of such a claim in a court of law. It is not for a liquidator to discriminate between the merits or demerits of the claim. He must allow all such claims, or none. The liquidators here could pay the Indian tax with the consent of the contributories, as there are no other creditors who could be prejudiced. But they cannot be compelled to pay it if the contributories withhold their consent.

For these reasons, I agree the appeal should be dismissed.

LORD SOMERVELL OF HARROW. My Lords, the facts and the circumstances in which the present issue came before our courts have already been stated. The first issue in the present appeal is whether a foreign state can use the courts of this country for the collection of its taxes. The statement by Lord Mansfield in Holman v Johnson (1 Cowp at p 343) “For no country ever takes notice of the revenue laws of another”, may include the present issue but goes beyond it, and is, I think, directed to a different problem. The plaintiff claimed the price of tea delivered in Dunkirk. The defendant intended as the plaintiff knew to smuggle the tea into England. Lord Mansfield uses the words cited in considering the lex loci contractus. He is stating that the courts there would, in no circumstances, have regard to any illegality arising under the revenue laws of this or any other country. He then proceeds to consider the alleged illegality under our law. The question whether today our courts would, as between parties, enforce a contract to break the revenue laws of another country has little, if any, relevance to the issue which we have to decide. In Ralli Brothers v Compania Naviera Sota y Aznar ([1920] 2 KB at p 300), Scrutton LJ in a passage cited by the Master of the Rolls, reserved that issue for consideration should it arise. I desire to make clear that I am not dealing with that issue.

There is no decision binding on your Lordships’ House and the matter, therefore, falls to be considered in principle. If one state could collect its taxes through the courts of another, it would have arisen through what is described, vaguely perhaps, as comity or the general practice of nations inter se. The appellant was, therefore, in a difficulty from the outset in that, after considerable research, no case of any country could be found in which taxes due to state A had been enforced in the courts of state B. Apart from the comparatively recently English, Scottish and Irish cases, there is no authority. There are, however, many propositions for which no express authority can be found because they have been regarded as self-evident to all concerned. There must have been many potential defendants. Tax gathering is an administrative act, though, in settling the quantum, as well as in the final act of collection, judicial process may be involved. Our courts will apply foreign law if it is the proper law of a contract, the subject of a suit. Tax gathering is not a matter of contract, but of authority and administration as between the state and those within its jurisdiction. If one considers the initial stages of the process, which may, as the records of your Lordships’ House show, be intricate and prolonged, it would be remarkable comity if state B allowed the time of its courts to be expended in assisting in this regard the tax gatherers of state A. Once a judgment has been obtained and it is a question only of its enforcement, the factor of time and expense will normally have disappeared. The principle remains. The claim is one for a tax. That fact, I think, itself justifies what has been clearly the practice of states. They have not in the past thought it appropriate to seek to use legal process abroad against debtor taxpayers. They assumed, rightly, that the courts would object to being so used. The position in the United States of America has been referred to, and I agree that the position as between member states of a federation wherever the reserve of sovereignty may be, does not help.

The following passage from Pillet’s Traité De Droit International Privé, 1924, para 674, confirms the negative result of counsel’s researches in respect of French law.

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“Les judgments rendus en matière criminelle ne sont pas les seuls qui soient soumis à la loi de la territorialté absolute. Les judgments rendus en matière fiscale ne sont eux non plus susceptibles d’aucune exécution à l’étranger, et l’on n’a même jamais songé à la possibilité de faire exécuter sur le territoire de l’un d’eux une sentence relative aux droits fiscaux de l’etat qui aurait été rendue sur le territoire d’un autre.”

The appellant is asking the English courts to do what the courts of no other country have done. In some fields this might commend the argument, but here, for the reason which I stated at the outset, it is fatal. Some tentative suggestion was made that some different principle should apply as between members of the Commonwealth. No ground which I could follow was put forward in support.

On the question of the construction and application of the Companies Act, 1948, s 302, I think the appeal also fails. For myself, assuming that the word “liabilities” should have regard to the law of the country in which the company had been doing business, I would not have regarded this as sufficient to overrule the special principle that foreign states cannot directly or indirectly enforce their tax claims here.

Appeal dismissed.

Solicitors: Stanley Johnson & Allen (for the appellants); Sanderson, Lee, Morgan, Price & Co (for the respondents).

G A Kidner Esq   Barrister.

Corporation of London v Cusack-Smith and Others

[1955] 1 All ER 302

Categories:        TOWN AND COUNTRY PLANNING        

Court:        HOUSE OF LORDS        

Lord(s):        LORD OAKSEY, LORD PORTER, LORD REID, LORD TUCKER AND LORD KEITH OF AVONHOLM        

Hearing Date(s):        16, 17, 18, 22 NOVEMBER 1954, 20 JANUARY 1955        

Town and Country Planning – Purchase notice – “Owner” of land – Person entitled to receive rackrent – Grant by freeholders of long lease – Confirmation of purchase notice – Town and Country Planning Act, 1947 (10 & 11 Geo  6 c 51), s 19(1), s 119(1).

In 1873 freehold premises were leased for eighty years at a rent of £350 per annum. In 1922 a sub-lease of the premises was granted at £1,136 per annum. In 1925 the freeholders leased the premises to the sub-lessees for seventy-five years at a rent of £750 per annum, subject to, but with the benefit of, the lease of 1873. In 1940 the sub-lease of 1922 and the lease of 1925 were transferred to H & Sons Ltd In 1942 H & Sons Ltd acquired the residue of the lease of 1873. During the war of 1939–45, the premises were totally destroyed by enemy action. in 1950 H & Sons Ltd applied to the Corporation of London, as the planning authority, for permission to develop the site by re-building the premises, and, on permission being refused, they served a purchase notice on the corporation under the Town and Country Planning Act, 1947, s 19(1), requiring the corporation to purchase their leasehold interest in the site. The Minister confirmed this notice and the leasehold interest of H & Sons Ltd was assigned to the corporation. In 1952 the freeholders applied to the corporation for permission to develop the site, and, on permission being refused, they appealed to the Minister under s 16(1) of the Act. The Minister disallowed

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the appeal, and the freeholders then served a purchase notice on the corporation under s 19(1) of the Act, requiring the corporation to purchase the fee simple.

Held – Lord Oaksey and Lord Porter dissenting): the freeholders were not entitled to serve a purchase notice as an owner of land under s 19(1) because they were not an “owner” within s 119(1) of that Act since, the land not having been let at a rackrent by the lease of June, 1925, the Corporation of London as assignees of that lease were, and the freeholders were not, the persons who would be entitled to receive the rackrent if it were so let, and the definition of owner contained in s 119(1) was not excluded by the context of s 19(1).

Decision of the Court Of Appeal, sub nom R v Minister of Housing and Local Government, Ex p Corporation of London ([1954] 1 All ER 88) reversed.

Per Curiam: whether a rent at which land is leased is a rackrent is to be determined, for the purposes of the definition of “owner” in s 119(1) of the Act of 1947, according to the circumstances at the date of the lease.

Notes

For the Town and Country Planning Act, 1947, s 19 and s 119, see 25 Halsbury’s Statutes (2nd Edn) 517, 635.

Cases referred to in opinion

Borthwick-Norton v Collier [1950] 2 All ER 204, [1950] 2 KB 594, 114 JP 375, 2nd Digest Supp.

Truman, Hanbury, Buxton & Co v Kerslake [1894] 2 QB 774, 63 LJMC 222, 58 JP 766, 30 Digest (Repl) 507, 1473.

Rawlence v Croydon Corpn [1952] 2 All ER 535, [1952] 2 QB 803, 116 JP 515, 3rd Digest Supp.

Bowditch v Wakefield Local Board (1871), LR 6 QB 567, 40 LJMC 214, 25 LT 88, 36 JP 197, 19 Digest 597, 261.

Appeal

Appeal by the Corporation of London from an order of the Court of Appeal dated 15 December 1953, and reported sub nom R v Minister of Housing and Local Government, Ex p Corporation of London [1954] 1 All ER 88, allowing an appeal from an order made by the Divisional Court on 29 April 1953, on the application of the corporation, and reported [1953] 2 All ER 80, quashing an order of the Minister of Housing and Local Government confirming a purchase notice served by the freeholders of premises in the City of London on the corporation under the Town and Country Planning Act, 1947, s 19(1).

The facts appear in the opinion of Lord Oaksey.

Harold Williams QC and D C Walker-Smith for the appellants, the Corporation of London.

Harold Heathcote-Williams QC J R Willis and O R W W Lodge for the respondents, the Jones trustees.

Rodger Winn and R J Parker for the respondent, the Minister of Housing and Local Government.

Their Lordships took time for consideration.

20 January 1955. The following opinions were delivered.

LORD OAKSEY. My Lords, in this case, the appellants are appealing from a judgment of the Court of Appeal in England, dated 15 December 1953, whereby the court allowed an appeal by the first-named respondents (hereinafter called “the Jones trustees”) from a judgment of a Divisional Court of the Queen’s Bench Division dated 29 April 1953, for an order of certiorari quashing a decision by the second-named respondent (hereinafter called “the Minister”) dated 31 December 1952, and made pursuant to the Town and Country Planning Act, 1947 (hereinafter called “the Act”).

Page 304 of [1955] 1 All ER 302

The issue in this appeal is whether the Jones trustees, who are the freeholders of certain premises known as No 69, Ludgate Hill, in the City of London (hereinafter called “the said premises”) are “owners” within the meaning of s 19(1) of the Act. The immediately relevant provisions of the Act are as follows:

“19. (1) Where permission to develop any land is refused, whether by the local planning authority or by the Minister, on an application in that behalf made under this Part of this Act, or is granted by that authority or by the Minister subject to conditions, then if any owner of the land claims—(a) that the land has become incapable of reasonably beneficial use in its existing state; and (b) in a case where permission to develop the land was granted as aforesaid subject to conditions, that the land cannot be rendered capable of reasonably beneficial use by the carrying out of the permitted development in accordance with those conditions; (c) in any case, that the land cannot be rendered capable of reasonably beneficial use by the carrying out of any other development for which permission has been or is deemed to be granted under this Part of this Act, or for which the local planning authority or the Minister have undertaken to grant such permission, he may, within the time and in the manner prescribed by regulations made under this Act, serve on the council of the county borough or county district in which the land is situated a notice (hereinafter referred to as a ‘purchase notice’) requiring that council to purchase his interest in the land in accordance with the provisions of this section …

“119. (1) In this Act, except so far as the contrary is provided or the context otherwise requires, the following expressions have the meanings hereby respectively assigned to them, that is to say: … ‘land’ means any corporeal hereditament, including a building as defined by this section, and in relation to the acquisition of land under Part IV of this Act includes any interest or right in or over land; … ‘owner’, in relation to any land, means, except in Part VI of this Act, a person other than a mortgagee not in possession, who, whether in his own right or as trustee or agent for any other person, is entitled to receive the rackrent of the land or, where the land is not let at a rackrent, would be so entitled if it were so let, and, in Part VI of this Act, has the meaning assigned to it by s. 64 of this Act; … ”

The only question in the case is whether the definition of “owner” in s 119(1) is such as to prevent a freeholder who has let the premises at less than a rackrent from serving a purchase notice in respect of his interest in the land under s 19(1).

It is, however, I think desirable to state in detail the devolution of the said premises. The Jones trustees are trustees of the real estate of Alexander Jones deceased, and they are, and they or their predecessors in office as trustees of the said real estate at all material times have been, entitled in fee simple to the said premises as trustees as aforesaid. By a lease (hereinafter called “the lease”) dated 29 September 1873, the Commissioners of Sewers of the City of London, who were then freeholders of the said premises, demised them to Thomas Treloar for a term of eighty years from the said 29 September at a yearly rent of £350. By a conveyance dated 26 May 1874, the said Commissioners of Sewers conveyed the freehold reversion in the said premises immediately expectant on the lease to the said Alexander Jones. On 13 February 1881, the said Alexander Jones died, and on 5 March 1881, probate of his will was granted out of the Principal Probate Registry to predecessors in office of the Jones trustees. By an underlease (hereinafter called “the underlease”) dated 23 May 1922, the trustees of the said Thomas Treloar deceased sub-demised the said premises to Samuel Taylor Williamson and Eric Bryan Williamson for a term of eighty years less seven days from 29 September 1873, at an annual rent of £1,136. By an assignment dated 2 October 1924, the said Samuel Taylor Williamson and Eric Bryan Williamson assigned the underlease to Eric Bryan Williamson and Cameron Matthew Walker. By a lease dated 23 June 1925 (hereinafter called “the lease of the reversion”),

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the predecessors in office of the Jones trustees demised the freehold reversion in the said premises vested in them (but subject to and with the benefit of the lease) to Eric Bryan Williamson and Cameron Matthew Walker for a term of seventy-five years from 29 September 1924, at an annual rent of £750. By an assignment dated 19 February 1940, the said Eric Bryan Williamson and Cameron Matthew Walker in consideration of the payment to them of £4,000 assigned the underlease to Hampton & Sons Ltd (hereinafter called “Hamptons”).

On 10 May 1941, the buildings comprised in the said premises were completely destroyed by enemy action. The annual rent of £750 due under the lease of the reversion was, nevertheless, duly paid until 29 November 1951. By an assignment dated 8 April 1942, the personal representatives of the last surviving trustee of the said Thomas Treloar deceased, in consideration of the payment to them of £4,000, assigned the lease to Hamptons. On and after 8 April 1942, the position was that the lease, underlease and lease of the reversion had all become vested in Hamptons, while the freehold was vested in the predecessors in office of the Jones trustees.

By a letter dated 9 February 1950, and addressed to the appellants, Messrs Gerald Eve & Co submitted an application on behalf of Hamptons as lessees for planning permission to re-build the said premises. By a letter dated 2 May 1950, addressed to Hamptons and a refusal of permission to develop enclosed therewith, the appellants refused planning permission for the said development. The reason stated for refusal was that the proposed development would prejudice the new lay-out of the area of extensive war damage in which the said premises were situated, including the provision of a roundabout at the junction of Ludgate Hill, New Bridge Street, Fleet Street and Farringdon Street.

On 17 August 1950, Hamptons served notice on the appellants under s 19(1) of the Act requiring the appellants to purchase the lease of the reversion, the appellants being, by virtue of s 114(2) of the Act, the proper recipients of such a notice. By a letter dated 9 November 1950, the Minister of Town and Country Planning confirmed the said purchase notice. On 27 November 1951, Hamptons, at the instance of the appellants, served on the Jones trustees a notice of retention under the Landlord and Tenant (War Damage) Acts, 1939 and 1941, in respect of the lease of the reversion. By virtue of s 10(1)(a), (b), of the said Act of 1939, the effect of the said notice of retention was (inter alia) that rent was no longer payable under the lease of the reversion until the said premises were rendered fit, and that there was implied in the lease of the reversion a covenant by the tenant with the landlord that the said premises should be rendered fit as soon as was reasonably practicable. By a transfer dated 19 December 1951. Hamptons, in consideration of the payment to them of £71,250, transferred the lease of the reversion to the appellants. The appellants, by the transfer dated 19 December 1951, became bound in their capacity as leaseholders to reinstate the premises although, by reason of their refusal of planning permission, the appellants well knew that there were no prospects of it becoming practicable for them as leaseholders to comply with their covenant by rendering the said premises fit.

By letter dated 24 March 1952, addressed to the appellants, Messrs Craig Hall & Co chartered surveyors, submitted on behalf of the Jones trustees, an application for planning permission to re-build the said premises. By letter dated 4 April 1952, addressed to Messrs  Craig Hall & Co and enclosing a statutory acknowledgment dated 27 March 1952, by the appellants, the appellants stated that planning permission had already been refused and a purchase notice confirmed, and that it was not proposed to take any action on the said application.

By a form of appeal dated 3 June 1952, the Jones trustees appealed to the Minister under s 16(1) and (3) of the Act and art 11(1)(c) of the Town and Country Planning General Development Order, 1950 (SI 1950 No 728), against

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the failure of the appellants to give notice of their decision within the period of two months after receipt of the said application as provided by art 5(8)(c) of the said order. The appellants agreed that the said premises had become incapable of reasonably beneficial use in their existing state. By a letter dated 22 August 1952, addressed to the solicitors to the Jones trustees, the Minister dismissed the appeal on the grounds that the proposed development would prejudice the provision of the proposed roundabout at Ludgate Circus.

By a notice dated 1 September 1952, the Jones trustees required the appellants under s 19(1) of the Act to purchase their interest in the said premises, viz, the fee simple therein. By a letter dated 2 October 1952, addressed to the solicitors to the Jones trustees, the Minister stated his intention of confirming the said purchase notice without modification unless the interested parties desired an opportunity of being heard. By letter dated 22 October 1952, addressed to the Minister, the appellants expressed a desire to be given an opportunity of being heard by a person appointed by the Minister for that purpose, on the ground that the Jones trustees were not persons who could serve a purchase notice within s 19 of the Act. On 1 December 1952, one H F Summers, appointed by the Minister, heard representations by counsel on behalf of the appellants and by counsel on behalf of the Jones trustees. By a letter dated 31 December 1952, the Minister confirmed the said purchase notice and, in pursuance of s 19(2) of the Act, directed that the appellants should be deemed to have served a notice to treat on 31 December 1952, in respect of the interest of the Jones trustees in the said premises.

Under a notice of motion dated 16 March 1953, the appellants applied to a Divisional Court of the Queen’s Bench Division for orders of certiorari and mandamus to remove into the High Court and quash the said decision of the Minister. The applications were heard on 28 and 29 April 1953, by Lord Goddard CJ Lynskey and Parker JJ  On 29 April 1953, the judgment out of which the present appeal arises was given that an order of certiorari should go and that the said decision of the Minister should be brought up and quashed with costs against the Jones trustees. By a notice of appeal dated 13 May 1953, the Jones trustees appealed to the Court of Appeal, and on 25 and 26 November 1953, the appeal was heard by Somervell, Denning and Romer LJJ who reserved judgment. On 15 December 1953, judgment was given allowing the appeal.

It was suggested in argument in your Lordships’ House that a rent might become a rackrent, though not a rackrent when agreed on, by a change of circumstances in the premises, and that, the said premises having been destroyed in 1941, the rent of £750 per annum agreed in 1925, which was admittedly not a rackrent in 1925, became a rackrent in 1941. I cannot agree with this argument.

On the main question, however, I am of opinion that the judgment of the Court of Appeal was right. It is, I think, clear that the definition of “owner” in s 119(1) contemplates only one owner at one time, and that it contemplates that a person either holding a freehold or leasehold interest may be an owner, since a freeholder may have let at a rackrent or be entitled to do so, and so may a leaseholder, but that they cannot both have let at a rackrent at the same time. If the freeholder either lets at a rackrent or does not let at all, he must, in my opinion, be the owner within the meaning of the definition. If, on the other hand, he lets at a rent less than a rackrent, then his lessee must, in my opinion, be the owner within the meaning of the definition since, being entitled to the premises for the period of his lease which, ex hypothesi, was not let to him at a rackrent, he alone can let the premises at a rackrent. It follows, in my opinion, that there can be only one person who is an owner within the meaning of the definition at one time, but that person may be either a freeholder or a leaseholder. Section 19(1), on the other hand, cannot, in my opinion, be confined to one owner at one time since the words

Page 307 of [1955] 1 All ER 302

“any owner … may … serve … a notice … requiring that council to purchase his interest in the land”

In the present case, the appellants, who hold the property under a lease from the Jones trustees, claim to be entitled to refuse to develop or to re-instate the property and in the meantime to pay no rent. In my opinion, the words of the statute do not compel your Lordships to perpetuate such injustice. I would, therefore, dismiss the appeal.

LORD PORTER. My Lords, the facts of this case present many complexities, but the ultimate question is a narrow one. The matter in question is, I think, sufficiently adumbrated if one neglects the position at an earlier time and considers only that now existing when the first-named respondents (hereinafter called “the Jones trustees”) are owners of the fee simple of 69, Ludgate Hill, the appellants are lessees for a term of years ending in 1999, at a rent of £750 a year, and the property is conceded to be let for that period at less than a rackrent, unless the rent which could be obtained for it in its present condition is the relevant figure. The premises suffered extensive war damage and are now a bare site, and on 27 November 1951, Messrs Hampton & Sons Ltd (hereinafter called “Hamptons”), who were the predecessors of the present appellants as lessees, served on the Jones trustees a notice of retention under s 10 of the Landlord and Tenant (War Damage) Act, 1939, whereby Hamptons were relieved from the payment of rent until it should be practicable for them to reinstate the premises. After the damage had been suffered, two applications under the Town and Country Planning Act, 1947, were made for planning permission to re-build the premises, one by Hamptons, and the other by the Jones trustees. Each was refused; the former on the ground that the proposed development would prejudice the new lay-out of the area of extensive war damage in which the site is situated, including the provision of a roundabout at the junction of Ludgate Hill, New Bridge Street, Fleet Street, and Farringdon Street; the latter on the ground that redevelopment had already been refused, that a purchase notice in respect of the owner within the meaning of s 119(1) of the Town and Country Planning Act, 1947, had been confirmed by the Minister of Town and Country Planning, and that, accordingly, it was not proposed to take any action on the second application for permission to redevelop the site.

The first refusal was followed by a purchase notice under s 19 of the Act, and, inasmuch as Hamptons were, in the appellants’ view, the owners and the only owners of the site within the meaning of the Town and Country Planning Act, 1947, the appellants, acting on this view, then paid compensation amounting to £71,250 to them and took an assignment of their lease.

The Jones trustees did not accept the view that Hamptons or their successors, the present appellants, were the sole owners of the site and appealed to the Minister against the refusal of permission to develop the land. That appeal

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was dismissed. Thereupon the Jones trustees in their turn served on the appellants a purchase notice. The appellants failed to give notice of the decision to which they had come in respect of this, but passed on the notice to the Minister, who signified to both parties that, unless notified by 3 November 1952, that the Common Council of the City of London or the servers of the notice desired an opportunity of being heard, he would confirm the notice without modification. On this intimation, the appellants signified their wish to be heard by a person appointed by the Minister, and the matter was, accordingly, submitted to the consideration of Mr H F Summers.

After receiving his report, the Minister confirmed the notice, holding that he was not concerned to determine whether the Jones trustees were owners or not, but that his only duty was to consider whether the conditions mentioned in s 19 of the Town and Country Planning Act, 1947, had been fulfilled in relation to the land. Being dissatisfied with this decision, the appellants, on 16 March 1953, applied for and obtained the leave of a Divisional Court to apply for an order of certiorari to bring up and quash the decision of the Minister confirming the purchase notice. The Divisional Court granted the order but, on appeal the Court of Appeal reversed this decision. From their judgment no appeal has been taken to your Lordships’ House by the Minister, but the present appellants have appealed and added the Minister as a second respondent. In your Lordships’ House, however, the appellants were supported in argument by the Minister’s advisers, who joined with them in contending that the Jones trustees were not owners within the meaning of Part III of the Act and, therefore, were not entitled to serve a purchase notice.

The sole, but none-the-less difficult, consideration for your Lordships’ House is whether the Jones trustees are such owners or not. Before coming to grips with the matters in dispute, it is necessary to set out the wording of s 19 of the Act and the definition of “owner” in s 119(1).

“19. (1) Where permission to develop and land is refused, whether by the local planning authority or by the Minister, on an application in that behalf made under this Part of this Act, or is granted by that authority or by the Minister subject to conditions, then if any owner of the land claims—(a) that the land has become incapable of reasonably beneficial use in its existing state; and … (c) in any case, that the land cannot be rendered capable of reasonably beneficial use by the carrying out of any other development for which permission has been or is deemed to be granted under this Part of this Act, or for which the local planning authority or the Minister have undertaken to grant such permission, he may, within the time and in the manner prescribed by regulations made under this Act, serve on the council of the county borough or county district in which the land is situated a notice (hereinafter referred to as a ‘purchase notice’) requiring that council to purchase his interest in the land in accordance with the provisions of this section. (2) Where a purchase notice is served on any council under this section, that council shall forthwith transmit a copy of the notice to the Minister, and subject to the following provisions of this section the Minister shall, if he is satisfied that the conditions specified in para. (a) to para. (c) of the foregoing sub-section are fulfilled, confirm the notice, and thereupon the council shall be deemed to be authorised to acquire the interest of the owner compulsorily in accordance with the provisions of Part IV of this Act, and to have served a notice to treat in respect thereof on such date as the Minister may direct: … (3) If within the period of six months from the date on which a purchase notice is served under this section the Minister has neither confirmed the notice nor taken any such other action as is mentioned in para. (a) or para. (b) of the last foregoing sub-section, nor notified the owner by whom the notice was served that he does not propose to confirm the notice, the notice shall be deemed to be confirmed at the

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expiration of that period, and the council on whom the notice was served shall be deemed to be authorised to acquire the interest of the owner compulsorily in accordance with the provisions of Part IV of this Act, and to have served notice to treat in respect thereof at the expiration of the said period … (5) Before confirming a purchase notice, or taking any other action in lieu thereof, under this section, the Minister shall give notice of his proposed action—(a) to the person by whom the notice was served; (b) to the council on whom the notice was served; (c) to the local planning authority for the area in which the land is situated; and (d) to any other local authority whom the Minister proposes, under the foregoing provisions of this section, to substitute for the said council; and if within the period prescribed by the notice under this sub-section (not being less than twenty-eight days from the service thereof) any person or authority on whom that notice is served so requires the Minister shall, before confirming the purchase notice or taking any such other action as aforesaid, afford to those persons and authorities an opportunity of appearing before and being heard by a person appointed by the Minister for the purpose.”

By s 119(1) of the said Act, it is provided, inter alia, that—

“In this Act, except so far as the contrary is provided or the context otherwise requires, the following expressions have the meanings hereby respectively assigned to them, that is to say:— … ‘owner’, in relation to any land, means, except in Part VI of this Act, a person other than a mortgagee not in possession, who, whether in his own right or as trustee or agent for any other person, is entitled to receive the rackrent of the land or, where the land is not let at a rackrent, would be so entitled if it were so let … ”

On behalf of the appellants it was contended that the definition in s 119(1) applied to the word “owner” when used in s 19, and that the Jones trustees were not owners within that section. No one was an owner, it was said, unless he was either in receipt of a rackrent or entitled to receive it. The rent receivable by the Jones trustees, viz, £750, was not a rackrent, indeed, the land had been already let at a much enhanced figure before this sum was agreed on.

So far as I am able to ascertain, the suggestion that £750 was a rackrent when the purchase notice was served was not taken, or at any rate was not pressed, before the Minister, and I doubt if it was seriously argued in the courts below. It seems rather to have been accepted that it was not. Prima facie, having regard to the previous letting, this assumption was correct, and though, in the ramifications of letting and sub-letting which are to be found in the circumstances of the case, it is not possible to speak with absolute certainty, I do not think that, having regard to the treatment accorded to the point in the courts below, your Lordships ought to differ from their findings, or assume that it might have been a rackrent, or send back the case that the point might be determined. It is true that the bare site may have been worth no more and there is uncontradicted evidence to this effect, but, again, it was, I think, assumed below that whether a sum is a rackrent or not is to be determined, not according to the value of the land at the date of the notice to treat or to purchase, but at the time at which the letting took place. In any case, this assumption has the support of the Court of Appeal in Borthwick-Norton v Collier, a decision which, in my view, rightly expounds the law in that matter and also is in accordance with the use of the words “any owner” and not “the owner” in s 19(1).

Such an opinion necessarily leads to the conclusion that there may be more than one owner at a time and more than one rackrent, eg, A lets to B in 1900 at what is then a rackrent, and B in turn lets to C in 1910 at a much enhanced figure which by that time is the rackrent of the premises. Both A and B would

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then be owners under the definition. The appellants and the Crown, as I understood them, conceded this point, though counsel on behalf of the latter, would, were it not for earlier authority, have contended that there could only be one rackrenter, and that the last. This contention would, no doubt, simplify the matter, but I cannot, myself, think that a person who has once been a rackrenter can cease to be such because his lessee at a later date leases the property at a higher, or it may be, a lesser sum. In the present case, however, there is no person who, within the meaning of the definition, is entitled to receive the rackrent, because there is no rackrent to receive. As a result of this conclusion two questions arise—(i) Can it be said that the Jones trustees would be entitled to receive the rackrent if the premises were let at a rackrent?: and (ii) Does the definition of the word “owner” apply to s 19(1)?

So far as the second point is concerned, I am not at the moment prepared to give an assured answer. Prima facie, the definition applies, but not in a case where the context otherwise requires, and there are certain indications in s 19 itself that the definition does not fully apply. So far as the service of a notice is concerned, no doubt it would be convenient that a person who was an agent or trustee should be entitled to serve a purchase notice, but when the later provisions of the section are considered “owner” seems to be confined to a person having an actual interest himself, eg, (a) s 19(1) “requiring [the] council to purchase his [eg, the owner’s] interest in the land”; (b) s 19(2) “acquire the interest of the owner compulsorily”; (c) s 19(3) “authorised to acquire the interest of the owner compulsorily”. This phraseology does not accord well with the inclusion amongst “owners” of “trustees” or “agents”. Nor can I think that the confinement of the definition to cases where the context does not otherwise require entitles one to strike out part of the definition in one place in the same section, eg, in the places quoted above, and to retain it in others, eg, where a notice has to be given. The definition where applicable must, I think, be applicable in whole, and, to my mind, it is not legitimate to say that in some places the definition applies in part, eg, in one place it means the person entitled to a rackrent and in another that person, his trustees and agents.

But, whatever answer is given to the second question, the first raises many difficulties both in substance and phraseology and requires careful consideration. Let it be assumed that the definition applies: Who, then, are the persons who would be entitled to receive the rackrent if the property were let at a rackrent? It has been suggested by Denning LJ and, I think, is inherent in the opinions of all the members of the Court of Appeal, that the words are capable of and do bear two possible meanings and raise two questions, viz (i) If the lease retains its present form and the land were now to be let at a rackrent, who would receive the rent? and (ii) If the present lease stipulated not for the sum for which, in fact, it stipulates but for a rackrent, who would receive that rackrent?

Obviously, in the first case the appellants would receive it, and in the second the Jones trustees. The appellants, therefore, contend for the first meaning and say it is the natural one: they are in possession as leaseholders, they alone can let and receive the rent until the lease is determined. Their argument is that they are the persons who would receive the rackrent if the premises were hereafter to be let at a rackrent, on the ground that they are the only persons who, for the next forty-seven years, are entitled to let the premises and receive the rent. On the other hand, the Jones trustees maintain that the definition has in mind a lease in different terms as regards rent—ie, at a rackrent—and that, if the premises had been let at such a rent, the Jones trustees as owners would receive it.

On the face of it the language might bear either meaning or, indeed, both. I should hesitate to say it meant both were it not for the use of the expressions “any owner” in s 19(1) and “’a’ person” in the definition in s 119(1). The first indicates the existence of more than one owner, and though, no doubt,

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if, as I have indicated, there can be more than one person who has let at a rackrent, yet the article “a” person, though appropriate in the first part of the definition which deals with one in actual receipt of a rackrent, is not apposite when the second part comes under consideration, viz, “a” person who would be entitled to receive the rackrent. In the latter case, one is faced with the difficulty that, if there is only one such person, it should be the person, not a person. Therefore, just as there may be more than one person receiving a rackrent, so I see no reason why there should not be more than one person entitled to do so.

The appellants, in answer, urge the difficulty that the language appropriate to such a result is that used in s 20, s 22 and s 27, viz, those having an interest in land, and point forcibly to the definition contained in the Town and Country Planning Act, 1944, s 65(1), which is for some purposes incorporated in the present Act and in terms includes both freeholder and leaseholder within the definition of “owner”. Against this it may be pointed out that, if the premises were let by the freeholder at less than a rackrent and with a provision against sub-letting, there would be no owner within the meaning of the Act, no one who could give or receive notices and no one at the time entitled to compensation.

I agree that, whatever solution be adopted, one is faced with serious difficulties, but the interpretation which I suggest, viz, that in this case “owner” may include both freeholder and lessee, is, in my opinion, justified by the terms of the Act. On behalf of the appellants, it is said that the wording of the definition has a long history in the Public Health Acts and that it has been construed in a sense different from that which has been adopted by the Court of Appeal in the present case—see Truman, Hanbury, Buxton & Co v Kerslake. The statement is true but that case has itself been doubted in Rawlence v Croydon Corpn, and in the present case a construction which would make both the freeholder and the lessee owners within the meaning of the section, appears to me in accord with the general object of the Act. To accept the other view would be to deprive the Jones trustees possibly for many years of their rent of £750, though I agree that too much emphasis must not be laid on such a consideration, inasmuch as the hardship is occasioned rather by the Landlord and Tenant (War Damage) Act, 1939, than by the Act now under consideration. But, faced with difficulties on either hand, and with provisions which appear to have been passed without, at any rate, full appreciation of their result or apprehension of the circumstances in which they would have to be enforced, I prefer to adopt what, to my mind, is a construction at least as accurate as that contended for by the appellants and more consistent with the apparent intention of compensating those whose interests have been impaired.

I would dismiss the appeal.

LORD REID. My Lords, at all relevant times the first-named respondents (hereinafter called “the Jones trustees”) have owned the freehold of the subjects at 69, Ludgate Hill, with which this case is concerned, and these subjects have been let at a rent of £750 per annum under a lease which expires in 1999. When the buildings were destroyed by enemy action the tenants were Messrs Hampton & Sons Ltd (hereinafter called “Hamptons”). For a time they continued to pay the rent. Then they applied for planning permission to re-build. This was refused because of a proposal to use the site as part of a traffic roundabout at Ludgate Circus. Hamptons then served a notice under the Landlord and Tenant (War Damage) Acts electing to retain the lease on the terms specified in the Acts, and required the appellants to purchase their interest in the lease under s 19(1) of the Town and Country Planning Act, 1947. The appellants purchased Hamptons’ interest for a price of £71,250 and are now the tenants. By virtue of the notice served by Hamptons, the appellants are freed from payment of rent while the subjects are unfit for use, and they are bound to re-build as soon as that is practicable. But, so long as planning permission is withheld, there can

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be no re-building, so the Jones trustees are not receiving any rent at present and may not get any rent for an indefinite period.

The Jones trustees now seek to use s 19(1) of the Act of 1947 to compel the appellants to purchase their freehold, and the appellants’ reply is that the Jones trustees are not entitled to invoke s 19(1): this section is only available to “any owner of the land”, and the appellants contend that the Jones trustees are not owners of the land within the meaning of the section. They rely on definitions contained in s 119(1) of the Act which are as follows:

“In this Act, except so far as the contrary is provided or the context otherwise requires, the following expressions have the meanings hereby respectively assigned to them, that is to say: … ‘land’ means any corporeal hereditament, including a building as defined by this section, and in relation to the acquisition of land under Part IV of this Act includes any interest or right in or over land; … ‘owner’, in relation to any land means, except in Part VI of this Act, a person other than a mortgagee not in possession, who, whether in his own right or as trustee or agent for any other person, is entitled to receive the rackrent of the land or, where the land is not let at a rackrent, would be so entitled if it were so let, and, in Part VI of this Act, has the meaning assigned to it by s. 64 of this Act; … ”

The case for the Jones trustees is that they are owners of the land within the meaning of these definitions, or, alternatively, that, if they are not, then the context requires that the definition of owner should not be applied, and, this definition being excluded, they are owners within the meaning of s 19. It is, therefore, necessary first to consider what is the meaning of the definition.

Ownership within the meaning of the definition depends on whether or not a person is, or would be, entitled to receive the rackrent of the land. It is agreed that rackrent means (2 Blackstone’s Commentaries, at p 43) “a rent of the full value of the tenement, or near it”. But the letting value of land may vary greatly from time to time, and there is a dispute whether the definition requires one to look at the letting value when the lease was entered into or the value when a question arises, and the definition has to be applied to find who is an owner. Taking the ordinary meaning of the words, I think that, if land is let for a rent which is a rackrent at the date of the lease, the land does not cease to be let at a rackrent when, during the currency of the lease, the value of the land increases so that, if a new lease were then made, a higher rent could be got. I see no reason for supposing that rackrent has any different meaning in this definition. A, the freeholder, may let to B for a rent of £100 which is a rackent at the date of B’s lease, and later B may sub-let to C for a rent of £200 which is a rackrent at the date of C’s lease. It appears to me that then both A and B are entitled to receive a rackrent of the land. If this is the proper interpretation of the definition, then no one was at any relevant time entitled to receive the rackrent of 69, Ludgate Hill. The lease under which the Jones trustees are entitled to a rent of £750 was made in 1925 and in 1922 there was a sub-lease at a rent of £1,136. There is nothing to show either that the rent of £1,136 was more than a rackrent or that the letting value had diminished in the period between 1922 and 1925.

The definition has two limbs, the first dealing with the case where a person is entitled to receive the rackrent, and the second with the case where the land is not let at a rackrent. I do not find much difficulty about the first limb. There may be only one lease or there may be a chain of lease and sub-leases: if any one of the lessors is entitled to receive a rackrent, then the first limb of the definition applies, and if only one is entitled to receive a rackrent, then he and he alone is the “owner”. For example, if A, the freeholder, lets to B at less than a rackrent and B sub-lets to C at a rackrent, then it appears to me to be plain that B is an “owner” within the meaning of the definition but A is not. There is some difficulty if there are two rackrents at the same time. It was said that, in such a case, only the last rackrent comes within the definition: if, in the

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instance which I have just given, A had let to B at a rackrent, it was said that still B alone would be an “owner” and A would not. It was said that “a person … who … is entitled to receive the rackrent” indicates that only one rackrent can be taken into account and only the person entitled to receive that rackrent can be an “owner”. But the definition refers to “a person” and not “the person”, and its second limb comes into operation “where land is not let at a rackrent.” It would, in my judgment, be putting too much stress on the definite article in the phrase “entitled to receive the rackrent” to hold that this requires that there can only be one owner where the first limb of the definition is applicable, and I can find nothing else in the definition pointing to this interpretation. Moreover, this interpretation would lead to a strange result. If A lets to B at a rackrent and B either does not sub-let or sub-lets at less than a rackrent, then, undoubtedly, A is an “owner”, but this interpretation would mean that, if B sub-let at a rackrent, A would thereby lose his status of “owner”. I would only accept such a result if compelled to do so. I am, therefore, of opinion that there can be more than one “owner” under the first limb of the definition and that, if the freeholder lets at a rackrent, he is and remains an “owner” no matter what his tenant may do.

The second limb of the definition appears to me to be more obscure. It must deal with two cases: the one where the land is not let at all, the freeholder being the occupier, and the other where the land is let but the rents payable by the tenant and the sub-tenant if there is one are not rackrents. In each case it requires one to find a person who would be entitled to receive the rackrent if the land were let at a rackrent. In the case where the land is not let at all this can only mean that one must suppose that there is in existence a lease by the freeholder to a hypothetical tenant under which the rent is a rackrent. But where, as in the present case, the land is let but for less than a rackrent, the second limb is ambiguous. What has to be supposed is that the land is let at a rackrent, and one could suppose either that the rent of £750 under the existing lease was increased to what would have been a rackrent at the date of that lease, or that the land was let by the appellants to a new hypothetical tenant at what is now a rackrent. Simply taking the words of the definition, there is no very obvious reason for making the one supposition rather than the other. But the two would produce diametrically opposite results. If the first is the supposition which the definition requires, then the Jones trustees would be owners, because in this supposition they would be entitled to receive the rackrent, and the appellants would not be owners because they would only be paying rent and not entitled to receive any rent. But, on the other supposition, the appellants would be owners because they would be entitled to receive a rackrent from their hypothetical tenant, and the Jones trustees would not be owners being still only entitled to receive a rent which is not a rackrent. I cannot agree with the argument that, when anyone claims or is alleged to be an owner, each supposition must be made in turn and if, by either supposition, he would be an owner then the definition is satisfied. It appears to me that the second limb of the definition must have the one meaning or the other: it cannot have both.

My Lords, for several reasons I am of opinion that the latter is the supposition which the definition requires to be made. In the first place, as I have said, the supposition of a new hypothetical tenant paying a rackrent is the only possible one where there is no lease in existence, the freeholder being the occupier, and if the second limb of the definition requires supposition to be made in that case, it would seem likely that it requires the same supposition to be made in the other case to which it applies. Generally there is no difficulty in making this supposition: one looks for the person who, at the relevant date, would be entitled to make a new lease at a rackrent and supposes that he does so, and the only person entitled to make a new lease is the person in possession, in this case the appellants. No doubt there could be a case where the tenant or sub-tenant

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in possession of the land is effectively prohibited from sub-letting, but such a case must be unusual and I do not think it necessary to deal with it: it might, perhaps, be solved on the lines of the decision in Bowditch v Wakefield Local Board. Secondly, the other supposition would lead to a somewhat strange result. On this basis the Jones trustees would be owners, but only because Hamptons did not sub-let at a rackrent. If they had so sub-let before the relevant date, then the first limb of the definition would have applied, and I do not think that it is open to doubt that Hamptons would then have been “owners”, being in receipt of a rackrent, but the Jones trustees would not have been “owners” because they were not entitled to receive a rackrent. Indeed, in this very case, a sub-lease was in existence from 1922 to 1940, and, if that sub-lease was at a rackrent and had still existed at the relevant date, I do not see how the Jones trustees could have maintained their claim to be owners within the meaning of the definition.

No doubt it would be wrong to prefer one interpretation of the definition merely because it fits s 19 better. The word “owner” occurs in a number of other sections and, if the other interpretation fitted those other sections better that would be a very important consideration. But we were furnished by counsel with a list of the other sections and schedules where the word “owner” occurs, and I have found none where the other interpretation seems to be called for. I leave out of account those sections which refer to the owner of an interest in land or the owner of a tenancy, because the definition only applies where the word owner is used “in relation to any land”, and, with an exception which is not here material, land means a corporeal hereditament. I do not intend to decide that the definition must apply to every one of these sections, because such a question might arise in a future case. It is enough for present purposes to say that, if the definition applies, the meaning which I prefer is at least as appropriate as the meaning which I reject.

Finally, it is, I think, important to observe that, for a very long time, the definition of owner in the Public Health Acts has been in substantially the same terms as the definition in this Act, and in a case under the Public Health (London) Act, 1891, Truman, Hanbury, Buxton & Co v Kerslake, where there were a lease and a sub-lease both at rents less than rackrents, it was held that the sub-lessee was the “owner”. Where Parliament has continued to use words of which the meaning has been settled by decisions of the court, it is to be presumed that Parliament intends the words to continue to have that meaning. I do not think that, in this case, that is conclusive. Even if the case which I have cited were held to have conclusively settled the meaning of the definition in the Public Health Acts, there are slight differences in phraseology and, more important, it does not necessarily follow that, if Parliament uses the same words in quite a different context, they must retain the same meaning. But, at least, this is a consideration of some importance.

I cannot find any very solid argument to set against these considerations. It is true that one would not expect a definition of owner to exclude in many cases those who are undoubtedly owners by any ordinary meaning of the word. But, as I have said, I see no escape from the conclusion that the freeholder is excluded in cases where he has let at less than a rackrent and his tenant has sub-let at a rackrent, and, if that be accepted, it is not very surprising that such a freeholder is also excluded in cases to which the second limb of the definition applies. In my judgment, a freeholder who lets at less than a rackrent is excluded by the definition, both in cases where his tenant does not sub-let, and in cases where he does sub-let either at a rackrent or at less than a rackrent and, therefore, if the definition is applicable to s 19 the appellants must succeed.

I now turn to the alternative contention of the Jones trustees that the definition of owner does not apply to s 19. By s 119(1), the definition applies

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“except so far as the contrary is provided or provided or the context otherwise requires”,

Generally, one would be slow to attribute such an intention to Parliamet, but in this case there are two matters which I think it necessary to note before dealing with the immediate context. The Act of 1947 affords a remedy of one kind or another in a variety of cases, but in most cases that remedy is afforded expressly to every person who has an interest in the land. I need only refer to s 20, s 22, and s 27. But, in s 9 and s 19, and, so far as I can see, nowhere else, relief is given to any owner of the land. The word “owner” is not frequently used in the Act except in connection with service of notices, but an interest in land is an expression very frequently used. For example, the sections dealing with compulsory acquisition and compensation do not refer to the land or an owner, but to the acquisition of interests in land from persons having such interests. In my view, the expression “any owner of the land” must have been used deliberately in s 9 and s 19, and it must have been used because the usual expression “any person having an interest in the land” was inappropriate in these sections. And it could only be inappropriate if the intention was to exclude persons having some kinds of interest, and to restrict the benefits of these sections to some only of those having interests in the land. I would also draw attention to the fact that, in the Town and Country Planning Act, 1944, there is a different definition of owner, and that definition is set out for a limited purpose in Sch 11 to the Act of 1947. That definition includes both persons entitled to dispose of the fee simple and persons holding under a lease which has more than three years to run. So the 1947 definition, on my interpretation of it, must have been inserted with the intention of excluding from the class of “owners” persons who would have been within that class under the earlier Act.

In these circumstances, there appears to me to be a very strong presumption that the word “owner” was inserted in s 19 with the intention of excluding certain interests in the land from the benefit of the section, and with the intention

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that owners should have the meaning attributed to that word by the new definition in s 119(1). Section 119(1) enacts, inter alia, that the expressions there defined shall have the meanings there assigned to them, except so far as the contrary is provided, and it would have been easy to provide the contrary if that had been intended. Before it could be held that “the context otherwise required”, it would, in my view, be necessary to show, not only that the application of the definition leads to a result which Parliament cannot be supposed to have intended, but also that, if the definition is excluded, the result will be a more reasonable result which Parliament can be supposed to have intended. Here, if the definition is excluded, the section will only apply to “any owner” and, in the absence of a definition, I do not see how a lessee can be held to be an owner of the land, particularly when land is defined as meaning a corporeal hereditament and only as including an interest in land in relation to the acquisition of land under Part IV of the Act. And this is not in relation to such acquisition. But no one can suggest that it would be reasonable or possible to exclude from the benefit of s 19 a lessee under a ninety-nine year building lease who does not pay a rackrent to the ground landlord, but who receives a rackrent from his tenants. Yet I can see no way of including him if the definition of owner is excluded, for, as I have already said, I think it is impossible to hold that “any owner of the land” means any owner of any interest in the land.

I have not overlooked certain other arguments for the Jones trustees. It was said that the words “any owner”, in s 19(1), show that there can be two owners at the same time: that would be an argument of some weight if there could only be one owner within the meaning of the definition, but I have stated my view that there can be two owners under the first limb of the definition and, if that is right, this argument loses its force. Then it was said that, under the definition, an agent can be an “owner”, but that an agent could not be an owner within the meaning of s 19 because he has no interest in the land which he could require the local authority to purchase: but, by s 119(1) the definition applies “except so far as.… the context otherwise requires”, and, even if the context requires that the reference to an agent shall not apply as regards s 19, that does not prevent the application of the rest of the definition. So, in my opinion, the actual wording of s 19 is in no way inconsistent with the application of the definition.

On the whole matter on a consideration of the terms of the Act, from which alone I am entitled to infer the intention of Parliament, I cannot avoid the conclusion that relief under s 19 is not made available equally to all owners of interests in land who may suffer loss, and that the Jones trustees, though freeholders, do not come within the ambit of the section. The result in this case may seem unjust. Parliament may not have realised the full effect of what has been enacted. But such consideration cannot override the terms of the Act, and I am unable to construe those terms in such a way as to entitle the Jones trustees to the relief which they seek. I am, therefore, of opinion that this appeal must be allowed.

LORD TUCKER. My Lords, I think the Divisional Court came to the right decision in this case. The first question is whether or not the definition of “owner” in s 119(1) of the Town and Country Planning Act, 1947, is applicable to s 19. Section 119(1), which contains some fifty-four definitions of words and phrases occurring in the Act, is prefaced with the words

“In this Act, except so far as the contrary is provided or the context otherwise requires, the following expressions have the meanings hereby respectively assigned to them, that is to say:—”

“Owner” “in relation to any land, means, except in Part VI of this Act, a person other than a mortgagee not in possession, who, whether in his own right or as trustee or agent for any other person, is entitled to receive

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the rackrent of the land or, where the land is not let at a rackrent, would be so entitled if it were so let.”

Section 19, so far as material for present purposes, reads:

“(1) Where permission to develop any land is refused, whether by the local planning authority or by the Minister, on an application in that behalf made under this Part of this Act … then if any owner of the land claims—(a) that the land has become incapable of reasonably beneficial use in its existing state … he may, within the time and in the manner prescribed by regulations made under this Act, serve on the council of the county borough or county district in which the land is situated a notice (hereinafter referred to as a ‘purchase notice’) requiring that council to purchase his interest in the land in accordance with the provisions of this section … ”

Before discarding the definition as contrary to the requirements of s 19, it is desirable to inquire what meaning the section clearly requires to be assigned to the word “owner”. “Freeholder” is the meaning which first suggests itself, but this must be discarded since its adoption would result in manifest injustice equal to, if not greater than, that which is said to flow from the definition, since it would exclude all leaseholders whatever the duration of their leasehold interests. “The owner of any interest in the land” is the only substitute for the words “any owner” that would appear to satisfy the requirements of justice, but the legislature has deliberately chosen not to use those words which occur in other sections of the Act and to use instead the words “any owner”. It seems to me quite impossible, in these circumstances, to give to the words “any owner” the meaning “the owner of any interest in the land”. This is to re-write the section. I can, therefore, find no justification for rejecting the definition contained in s 119(1).

What, then, is the proper construction of this definition? It is, I think, helpful to notice that, by s 113 of the Act, it is provided in sub-s (6).

“In accordance with the foregoing provisions of this section, the Act of 1944 shall, as from the appointed day, have effect as set out in Sch. 11 to this Act.”

Schedule 11 contains a number of sections of the Act of 1944 which are unrepealed and are reprinted as amended by the Act of 1947. Included therein is s 65 which contains the following definition:

“’owner’, in relation to any building or land, means a person, other than a mortgagee not in possession, who is for the time being entitled to dispose of the fee simple of the building or land, whether in possession or in reversion, and includes also a person holding or entitled to the rents and profits of the building or land under a lease or agreement, the unexpired term whereof exceeds three years.”

So that, when Parliament adopted the definition of “owner” contained in s 119(1) of the Act of 1947, they had before them an alternative definition which they restricted to the re-enacted sections of the Act of 1944. It is a definition which, if applied to s 19, would give to the first-named respondents (hereinafter called “the Jones trustees”) the remedy which they seek to extract from the very different language of the definition in s 119(1), which follows very closely the familiar language of the Public Health Acts which the courts have had to construe from time to time. The definition is based on the test of rackrent—actual or hypothetical. The first limb deals with the situation where there is in existence a rackrent. The person entitled to receive it is the owner of the land. Whether there can be more than one owner, where there are several different rackrents issuing out of the same land under different leases is, I think, a question of difficulty. The words “the rackrent” favour the view that there can be only one rackrent. On the other hand, in construing the definition with reference to

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s 19, I think the words “any owner” are really decisive in favour of more than one owner where there are several rackrents. As in the present case there is no rackrent payable, unless the material date for determining whether a rent is a rackrent is the date of the purchase notice as distinct from the date of the lease, which, in the absence of authority, I cannot accept, it is necessary to consider the applicability of the second or hypothetical limb of the definition to the facts of this case. The land not being let at a rackrent, who would be entitled so to let it? There can, I think, be only one answer, viz, the tenant in possession, ie, the appellants.

It is contended that, where there are in existence more than one lease at rents less than rackrents, you should apply the hypothesis to the existing leases, and in every case where there is a rent of whatever amount, including a ground rent, deem it to be a rackrent. If this had been the intention of Parliament, it would have been perfectly simple to discard all reference to rackrents and make the right to let or receive rent the test of ownership. It is in connection with this suggested construction that the presence in the Act of the 1944 definition referred to above appears to me so significant. With this definition before them it seems to me impossible to suppose that Parliament could have adopted the contrasted language of the definition in s 119(1) if they had intended to produce the result contended for by the Jones trustees. For these reasons, I would allow the appeal.

LORD KEITH OF AVONHOLM. My Lords, the question whether s 19 of the Town and Country Planning Act, 1947, authorises the purchase notice that was served by the first-named respondents (whom I shall refer to as “the Jones trustees”) depends on whether, in the circumstances as they existed at the date of the purchase notice, the Jones trustees were “owners”, within the meaning of s 19, of the land to which the purchase notice referred. This raises another question, viz, whether the word “owner” in s 19 is to be construed by reference to the definition of “owner” in s 119(1) of the Act. The definition section requires the definition of “owner” to be applied

“except so far as the contrary is provided or the context otherwise requires.”

There is nothing in s 19 that expressly excludes the application of the definition, and it remains to ask whether the context of s 19 requires its exclusion. In considering this question, I find it easier to consider first what the definition of “owner” itself means, for the definition presents certain difficulties of construction and, until these difficulties are resolved, it is not possible, in my opinion, to approach the question whether the definition is excluded by the context of s 19.

I need not repeat the words of the definition. It plainly has in view two cases, (i) land which is let at the rackrent; and (ii) land which is not let at a rackrent, because it is let at less than the rackrent, or is not let at all. Where the land is let at the rackrent, the person who is entitled to receive that rackrent is the owner, and that finishes the matter of ownership. There is a question, however, of how the rackrent is to be ascertained. Two views may be suggested. First, that there is to be a factual inquiry as to what would be the rackrent at the material point of time if a lease of the land were given then, irrespective of the rent in the existing lease; or second, that the inquiry should be confined to the question whether the rent in the existing lease was a rackrent of the land in question when the lease was granted. In my opinion, the latter view is to be preferred. Otherwise there would be no fixity in the matter. Every time that the application of the definition arose, the matter would have to be considered afresh, with all the expense attendant on what might be a matter of skilled valuation. The task might be of frequent occurrence in view of the numerous legislative provisions in the Act to which the definition applies and occasions

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on which the provisions may have to be operated. On the other hand, if the date of the lease be the relevant date the matter is greatly simplified. If there is nothing to suggest that ordinary commercial considerations did not apply, that the rent was not a full rent fixed in the open market, and if what was let was the subjects in their present shape let by a person in actual possession, the stipulated rent could readily be assumed to be the rackrent. That it should continue to be the rackrent during the currency of the lease, at least if no underlease is later negotiated, is only reasonable, as no occasion to test the market afresh has arisen. To say that a person who was an owner by virtue of having originally let at a rackrent has ceased to be an owner merely because of a change in values, would result in administrative inconvenience and, at the lowest, great uncertainty as to who was, or was not, the owner, and as to the individual’s rights and duties. In my opinion, with one possible qualification, it can be said that once a rent is a rackrent, it is always a rackrent during the currency of the lease. Conversely, what is not a rackrent at the beginning of a lease and remains the rent throughout the lease, cannot become a rackrent during the currency of the lease. The question of a qualification arises where a lease at a rackrent has been followed by an underlease also at a rackrent. There is much to be said for the view that the underlease displaces the lease as the criterion of ownership with the meaning of the definition, and that the grantor of the underlease becomes the sole owner. He must be at least an owner. The reference in the definition to “the rackrent” and not to “a rackrent” in the first alternative limb is certainly suggestive of the fact that the definition contemplated only one owner. Whether there can be more than one owner at a time in the sense of the definition is not, however, a question that arises in the circumstances of this case, although it arises as quite a different question in considering s 19, and I would reserve my opinion on this point.

The second alternative limb of the definition does not, in my opinion, give rise to the same difficulties of construction. If the land is not let at a rackrent there is no room, in my opinion, for more than one owner at a time. I cannot agree with Denning LJ that the words “if it were so let” can be given two meanings to suit the circumstances of the case. In my opinion, for reasons which I shall elaborate later, the person who would be entitled to receive the rackrent of the land if it were let at a rackrent would be the person in possession under a lease or underlease.

To apply the definition, then, to the facts of the present case, the appellants, as assignees of Hamptons, are in possession of the land in question, and, but for the notice of retention served by Hamptons on 27 November 1951, under the Landlord and Tenant (War Damage) Acts, 1939 and 1941, would be paying a rent of £750 to the Jones trustees. The matter may be looked at as it was before 27 November 1951. Hamptons were then lessees in possession. The rent of £750 which they paid to the Jones trustees was, in my opinion, less than the rackrent. It was not seriously suggested that it was the rackrent at the date of the lease, and the fact that the land was let on an underlease, three years before, at a rent of £1,136 per annum, is practically conclusive of the matter. If, therefore, the definition is to be applied in the circumstances of this case, we have land let at less than the rackrent. As I have indicated, the owner, in my opinion, was Hamptons and is now the present appellants. They, in my view, are the only persons who would be entitled to receive the rackrent if the land were let at a rackrent. They are the only persons entitled at the moment to let the land at a rackrent. I cannot accept the view which commended itself to Denning LJ and Romer LJ that the definition can be divorced so far from actuality as to cover the case of a person who could have let the land in the past at a rackrent, if he had not chosen to let it at less than a rackrent. The natural way to construe the definition in its application to an actual case is, in my opinion, to ask, who is entitled to let the land at a rackrent as things are today? I am strengthened in

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my view by the fact that this was the construction put on a substantially similar definition in the case of Truman, Hanbury, Buxton & Co v Kerslake, and that, whereas an entirely different definition of owner was introduced into the Town and Country Planning Act, 1944, and the Acquisition of Land (Authorisation Procedure) Act, 1946, the legislature, in 1947, reverted to a definition which has appeared repeatedly in earlier legislation. It must be assumed that Parliament knew of the judicial interpretation that had been put on the old definition.

When I turn to s 19 of the Act of 1947, I find no compelling reason to think that the context of the section requires the exclusion of the definition of owner in applying that section. It is said that the definition includes an agent, and that a purchase notice served by an agent does not fit into the concept of the section. I am not satisfied that that is so. The definition refers to an “agent for any other person” and, if an agent makes a claim or serves a purchase notice under s 19(1), I assume he could only do so for his principal, and that it is his principal’s interest that would be affected by the claim and notice. On any other view, the only result would be that the context of s 19 requires the exclusion of an agent from among the persons entitled to claim as owners.

The point most strongly pressed for the Jones trustees was that the reference to “any owner” and to the purchase of “his interest” showed that more than one owner was covered by s 19 and that, accordingly, the definition did not apply. This only creates further difficulties. If the definition does not apply, what meaning is to be given to owner? There would be only one person clearly covered and that would be the freeholder. But in many cases he would be the person least affected by refusal of permission to develop the land. It is not possible, in my opinion, without the aid of a definition, to stretch the word owner to cover other interests in land, or all interests in land. I agree also that the inference from other sections of the Act in which the word owner is used in conjunction with other persons interested in the land and, particularly, s 27, is adverse to the view that owner, in s 19, can have any such extensive meaning.

In my opinion, the words “any owner” in s 19(1) can receive full effect if the definition is applied and the words are taken to refer to different owners at different times. As leases fall in, other persons who qualify as owners under the definition will become entitled to have their interest in the land purchased if permission to develop is still refused and the other conditions of the section are satisfied. In the result, I reach the conclusion that the judgment of the Divisional Court was right.

I would allow the appeal.

Appeal allowed.

Solicitors: Comptroller and City Solicitor (for the appellants, the Corporation of London); Boxall & Boxall (for the respondents, the Jones trustees); Solicitor, Ministry of Health (for the respondent, the Minister of Housing and Local Government).

G A Kidner Esq   Barrister.

Richmond (Surrey) Corporation v Robinson and Others

[1955] 1 All ER 321

Categories:        LOCAL GOVERNMENT        

Court:        QUEEN’S BENCH DIVISION        

Lord(s):        LORD GODDARD CJ, CASSELS AND STREATFEILD JJ        

Hearing Date(s):        18 JANUARY 1955        

Highway – Private street works – Apportionment of cost – Objection – Footpath – Repairable by inhabitants at large – Distinction between road and footpath – Highway Act, 1835(5 & 6 Will 4 c 50),s 5 s 23 – Private Street Works Act, 1892(55 & 56 Vict c 57), s 7 (b).

By s 23 of the Highway Act, 1835, “No road or occupation way made or hereafter to be made by and at the expense of any individual or private person … shall be deemed or taken to be a highway which the inhabitants of any parish shall be compellable or liable to repair, unless … ” certain conditions are fulfilled.

At some time after 1938 and before December, 1949, a footpath was trodden along a strip of land lying between a street and the premises now belonging to the respondents. This footpath became dedicated to and used by the public as a highway. In 1953 the appellants proposed to make a foot pavement on the site of the public footpath. In accordance with the Private Street Works Act, 1892, s 6, estimates and provisional apportionments were prepared and approved by resolution of the appellants with a view to making the pavement and charging the respondents, as frontagers, with apportioned costs. The respondents objected on the ground, provided by s 7 (b) of the Act of 1892, that the footpath was a highway repairable by the inhabitants at large.

Held – Section 23 of the Highway Act, 1835, did not apply to footpaths, and, accordingly, the footpath, being dedicated to the public as a highway, had become repairable by the inhabitants at common law, and the respondents, by virtue of s 7 (b) of the Act of 1892, were not liable to bear the costs of the proposed private street works.

Appeal dismissed.

Notes

As to Highways repairable by Inhabitants at large and the effect of the Highway Act, 1835, s 23, see 16 Halsbury’s Laws (2nd Edn) 279, para 346 (3); and for cases on the subject, see 26 Digest 361–363, 869–886.

As to the Dedication of Footpaths, see 16 Halsbury’s Laws (2nd Edn) 393.

For the Highway Act, 1835, s 5, s 23, see 11 Halsbury’s Statutes (2nd Edn) 37, 46; and for the Private Street Works Act, 1892, s 6(1), s 7(b), see ibid 184, 186.

For the Public Health Act, 1875, s 146, see 19 Halsbury’s Statutes (2nd Edn) 67.

Case Stated

This was an appeal by the Richmond (Surrey) Borough Council by way of Case Stated by the Appeal Committee of the Court of Quarter Sessions for the county of Surrey.

Prior to 1938 Petersham Road and Ham Street were connected by a highway repairable by the inhabitants at large and known as Sandy Lane. The said lane was thirty-nine feet ten inches wide. On 13 September 1938, the council made an order under the Public Health Act, 1925, s 30(1) declaring a part of Sandy Lane to be a new street for the purpose of the application of their bye-laws with respect to new streets, one of which bye-laws prescribed a width of thirty-six feet. On that date the owners of the land abutting on the south side were Park Estates, Ltd. They sold the land in plots, but by arrangement with the council the boundary fences of the plots were set back fourteen feet from the lane so as to leave a strip of land between the fences of the plot and the lane. No part of the

Page 322 of [1955] 1 All ER 321

strip was conveyed to any of the purchasers of the plot. Part of the strip nearest to the lane and eight feet in width had at all material times consisted of a hedge planted with trees and shrubs. The land, other than the strip belonging to Park Estates Ltd was divided into seventeen premises each abutting on the southern side of the strip, and belonging to the various frontagers. In course of time there was trodden down on the strip a footpath between the frontagers’ premises and the carriageway. By resolution of 21 July 1953, the Richmond (Surrey) Borough Council under the provisions of the Private Street Works Act, 1892, s 6, approved an amended estimate and provisional apportionment in respect of certain private street works to be carried out on part of Sandy Lane forming part of the length of Sandy Lane which had been declared to be a new street. All requisite steps laid down by the Private Street Works Act, 1892, were duly taken. The proposed works consisted of a foot pavement of a width of six feet on the strip between the boundary fences and the hedge. The frontagers objected to the proposed works. On 11 March 1954, a court of summary jurisdiction sitting at Richmond heard the objections (under s 8(1)) and approved the specification, estimate and provisional apportionment. The frontagers appealed to the Appeal Committee of Surrey Quarter Sessions. It was contended by the frontagers that the part of Sandy Lane in question was a highway repairable by the inhabitants at large. It was contended by the council (i) that the part of Sandy Lane in question was not a highway repairable by the inhabitants at large, (ii) that the strip of land fourteen feet wide was a street within the meaning of the Private Street Works Act, 1892, and (iii) that the original highway known as Sandy Lane did not constitute “premises” within the meaning of the Private Street Works Act, 1892. The appeal committee was of opinion that by the development of Sandy Lane a new street came into existence which was a footpath and nothing more, and was divided from the highway by a strip of land owned by Park Estates Ltd the developers, or some other persons; that the new street or footpath was in existence prior to 16 December 1949, and was a street for the purposes of the Private Street Works Act, 1892, that the whole of the new street or footpath was a highway repairable by the inhabitants at large under common law and was not removed from that class by virtue of the Highway Act, 1835, s 23, or the National Parks and Access to the Countryside Act, 1949, s 47 and s 49 and by reason of the fact that the provisions of s 50 of the Act of 1949 did not apply thereto so as to reserve to the council any right to make up the same under the provisions of the Act of 1892; the committee, therefore, allowed the appeal. The council appealed.

R Hughes for the appellants.

D G H Frank for the respondents.

18 January 1955. The following judgments were delivered.

LORD GODDARD CJ. This case raises a new and curious point under the Highway Act, 1835, and under the Private Street Works Act, 1892. The Private Street Works Act, 1892, s 6(1) enables a local authority to resolve to “sewer, level, pave, metal, flag, channel, or make good” a new street and to apportion the expenses thus incurred “on the premises fronting, adjoining, or abutting on such street”. Section 7 provides that any owner of premises liable to be charged may object to the resolution on the ground, inter alia:

“(b) That a street or part of a street is (in whole or in part) a highway repairable by the inhabitants at large.”

The facts found by the appeal committee of quarter sessions seem to be these: There is an old highway at Petersham called Sandy Lane. When Sandy Lane was ripe for development, the developers intended that between the houses and the old highway of Sandy Lane there should be a strip of land which would be used, no doubt, for access to the houses, and along which the public could walk as, indeed, they have walked. The appeal committee found, and there is ample evidence to support this finding, that this strip of land was dedicated to and

Page 323 of [1955] 1 All ER 321

used by the public and, therefore, became a highway, and it is well known that at common law as a highway it would be repairable by the inhabitants at large.

Anybody could dedicate as a highway a road or footpath or bridle path and, if the public accepted the dedication, as it was called, by using what the landowner offered, the highway became repairable at the expense of the inhabitants at large. The Highway Act, 1835, was passed because this was found to be very inconvenient. There were a great many highways in different parts of the country where no doubt building was going on and because the public found that they were saddled with the expense of repairing these highways although it might be they were only there for the convenience of two or three people. The Highway Act, 1835, was intended to provide that the mere act of dedication and acceptance of the dedication would not cast the burden of repairing the highway on the public. By s 23 the highway would only become repairable by the inhabitants at large if three months’ notice was given by the dedicator that he intended to dedicate and if, before dedication, he made the road in a substantial manner and in other respects as the section provides. That having been done the road would become repairable by the inhabitants at large in the same way as if the provisions of the Public Health Act, 1875, s 146, or the Private Street Works Act, 1892, s 6, had been carried out.

The difficulty that has arisen in the present case is that the appeal committee has found that this footpath existed as a footpath since at any rate 1938 and was, therefore, a highway. The council now, in the purported exercise of their powers under the Private Street Works Act, 1892, s 6(1), call on the frontagers to pay for the making up of this footpath. The frontagers say: “No, it is a highway which has become repairable by the inhabitants at large and, therefore, we cannot be called on under the Private Street Works Act, 1892, to pay for this work”. The question is whether or not this footpath is a highway to which the Highway Act, 1835, applies, as this would prevent it becoming repairable by the inhabitants at large merely by dedication. It may be that it was intended it should be, but it seems to me that the words of the Act of 1835 are not wide enough to catch it. In the interpretation section, s 5, it is provided:

“… the word ‘highways’ shall be understood to mean all roads, bridges (not being county bridges), carriageways, cartways, horseways, bridleways, footways, causeways, churchways, and pavements … ”

All those are highways but it will be observed that “highways” includes roads and also footpaths, so the Act is distinguishing between roads and footpaths. It says that a road can be a highway and a footpath can be a highway, but the road and the footpath are not the same things. Section 23 reads:

“When new highways are to be kept in repair by parishes.—No road or occupation way made or hereafter to be made by and at the expense of any individual or private person, body politic or corporate, nor any roads already set out or to be hereafter set out as a private driftway or horsepath in any award of commissioners under an Inclosure Act shall be deemed or taken to be a highway which the inhabitants of any parish shall be compellable or liable to repair … ”

That section applies to a road, an occupation way, a driftway or a horsepath.

The appeal committee held that footpaths were not included in s 23. If it was intended to apply to every form of highway, it would have been easy to have said: “No highway made or hereafter to be made shall be deemed to be repairable by the inhabitants at large”; but the words used obviously exclude footpaths and, therefore, if the committee find that this footpath was dedicated to the public and that the public accepted the dedication, it follows that it became a highway at common law and is repairable by the inhabitants at large and, therefore, is exempt under the Private Street Works Act, 1892, s 7 (b).

Page 324 of [1955] 1 All ER 321

I think the appeal committee were right in the conclusion to which they came, and for these reasons the appeal must be dismissed.

CASSELS J. I agree.

STREATFEILD J. I also agree.

Appeal dismissed.

Solicitors: Town clerk, Richmond (for the appellants); Caporn & Campbell (for the respondents).

F Guttman Esq   Barrister.

Note

Lane v London Electricity Board

[1955] 1 All ER 324

Categories:        INDUSTRY        

Court:        QUEEN’S BENCH DIVISION        

Lord(s):        PARKER LJ, SITTING AS A JUDGE OF THE DIVISION        

Hearing Date(s):        17, 18 JANUARY 1955        

Factory – Electricity regulations – Definition of danger – Construction – Alleged inadequate lighting to prevent danger – Regulations for the Generation, etc, of Electrical Energy, 1908 (S R & O 1908 No 1312), reg 26.

Notes

For the Electricity (Factories Act) Special Regulations, 1908 and 1944, SR & O 1908 No 1312 as amended by SR & O 1944 No 739, see 8 Halsbury’s Statutory Instruments 86.

The plaintiff, an electrician employed by the defendants, was instructed to install additional lighting in one of their sub-stations, which was being reconstructed. While moving through a passage between two pieces of equipment in the sub-station, to inspect certain machinery, his foot missed the edge of an open duct, measuring approximately twenty-one inches deep and eighteen inches wide, and he fell and sustained injuries. The plaintiff claimed damages from the defendants for breach of their common law duty towards him on the grounds that there was no grill or checker plate over the duct and that the lighting was inadequate. The plaintiff also alleged that the defendants were in breach of their statutory duty under the Electricity (Factories Act) Special Regulations, 1908 and 1944, reg 26, in that the part of the premises where the accident occurred was not adequately lighted to prevent danger. The case is reported only as regards the claim for breach of statutory duty.

Humfrey Edmunds for the plaintiff.

W L Mars-Jones for the defendants.

18 January 1955. The following judgment was delivered.

PARKER LJ having held that no breach of duty at common law was proved, continued: Lastly, there remain the regulations. The wording of the Electricity (Factories Act) Special Regulations, 1908 and 1944, reg 26, is:

“All those parts of premises in which apparatus is placed shall be adequately lighted to prevent danger.”

That, of course, is an absolute obligation, irrespective of questions which arise at common law of reasonable care.

Page 325 of [1955] 1 All ER 324

The defendants say, however, that although they admit that that regulation applied because this sub-station was working, at any rate in part, the injury to the plaintiff did not result from any danger within the meaning of that regulation. Danger is defined by the regulations in these terms:

“’Danger’ means danger to health or danger to life or limb from shock, burn, or other injury to persons employed, or from fire attendant upon the generation, transformation, distribution, or use of electrical energy.”

In my opinion the words “or other injury” must be read in this context strictly ejusdem generis with “shock or burn”, viz, as, “or other injury” due to electrical energy. The reason for this is that whenever the phrase “so as to prevent danger” and the like appear in these regulations, for example in regs 2, 3, 5, 7, 8, it is, in each case, clearly referring to danger from electricity. On the other hand there are certain regulations where that form of words is not used. For example in reg 6 which says:

“Every electrical joint and connection shall be of proper construction … ”

“Every sub-station shall be substantially constructed, and shall be so arranged that no person other than an authorised person can obtain access thereto otherwise than by the proper entrance, or can interfere with the apparatus or conductors therein from outside; and shall be provided with efficient means of ventilation and be kept dry.”

These regulations, of course, are dealing with matters quite apart from the risks from the use of electricity.

In my view the plaintiff cannot bring himself within reg 26, although, as I have said, if he could, he has not satisfied me that the lighting in this case was inadequate.

Judgment for the defendants.

Solicitors: Rowley, Ashworth & Co (for the plaintiff); Gardiner & Co (for the defendants).

A P Pringle Esq   Barrister.

Benmax v Austin Motor Co Ltd

[1955] 1 All ER 326

Categories:        ADMINISTRATION OF JUSTICE; Courts, Judiciary        

Court:        HOUSE OF LORDS        

Lord(s):        VISCOUNT SIMONDS, LORD MORTON OF HENRYTON, LORD REID, LORD TUCKER AND LORD SOMERVELL OF HARROW        

Hearing Date(s):        8, 9, 10, 11 NOVEMBER 1954, 20 JANUARY 1955        

Appeal – Judge without jury – Perception and evaluation of facts – Principles on which appellate court acts.

An appellate court, on an appeal from a case tried before a judge alone, should not lightly differ from a finding of the trial judge on a question of fact, but a distinction in this respect must be drawn between the perception of facts and the evaluation of facts. Where there is no question of the credibility of witnesses, but the sole question is the proper inference to be drawn from specific facts, an appellate court is in as good a position to evaluate the evidence as the trial judge, and should form its own independent opinion, though it will give weight to the opinion of the trial judge.

Appeal dismissed.

Notes

As to the Principles on which the House of Lords act on hearing Appeals, see 9 Halsbury’s Laws (3rd Edn) 364, para 846.

As to the Principles on which the Court of Appeal acts on hearing Appeals, see 26 Halsbury’s Laws (2nd Edn) 122, para 241; and for cases on the subject, see Digest (Practice) 769–771, 3348–3362.

Cases referred to in opinion

Montgomerie & Co v Wallace-James [1904] AC 73, 73 LJPC 25, 90 LT 1, Digest (Practice) 770, 3354.

Mersey Docks & Harbour Board v Procter [1923] AC 253, 92 LJKB 479, 129 LT 34, 36 Digest (Repl) 15, 60.

Watt (or Thomas) v Thomas, [1947] 1 All ER 582, [1947] AC 484, 1947 SC(HL) 45, [1947] LJR 515, 176 LT 498, 2nd Digest Supp.

Riekmann v Thierry (1896), 14 RPC 105, 36 Digest (Repl) 679, 313.

Appeal

Appeal by the registered proprietor of letters patent in respect of an invention from an order of the Court of Appeal dated 17 November 1953, reversing an order of Lloyd-Jacob J dated 8 May 1953. The appellant, Sydney Benmax, claimed an injunction restraining the respondents, the Austin Motor Co Ltd whether by themselves or by their agents, from infringing letters patent No 586058 dated 4 September 1944, granted to the appellant in respect of an invention for “Improvements in or relating to the upholstering of furniture”. The respondents denied that they had infringed the letters patent and alleged that they were invalid. They counterclaimed for the revocation of the letters patent and for an injunction restraining the appellant from threatening proceedings for their infringement and for a declaration that such threats were unjustifiable. Lloyd-Jacob J held that the letters patent were valid and that the claims relied on by the appellant at the trial had been infringed. The Court of Appeal held that the letters patent were invalid because the alleged invention was obvious having regard to the combined effect of three specific prior disclosures. On appeal to the House of Lords, the appellant contended, among other contentions, that the existence of an inventive step was a question of fact which the trial judge had decided in the appellant’s favour, and, therefore, the Court of Appeal should not have reversed his decision on this point, except for certain reasons, which were not present in the case. This report is confined to this point.

K E Shelley QC and J N K Whitford for the appellant.

Charles Russell QC Kenneth Johnson QC and G W Tompkin for the respondents.

Page 327 of [1955] 1 All ER 326

The House took time for consideration.

20 January 1955. The following opinions were delivered.

VISCOUNT SIMONDS. My Lords, I have had the privilege of reading the opinion which my noble and learned friend, Lord Morton Of Henryton, is about to deliver, and I agree so fully with it that I think it necessary to add nothing except on one question of general importance which has once more been raised on this appeal.

Learned counsel for the appellant urged in the forefront of his argument that the existence of an inventive step was a question of fact which had been decided by the trial judge, Lloyd-Jacob J in favour of the appellant, and, therefore, that the Court of Appeal should not have reversed his decision except for certain reasons which clearly were not present in this case. I think it convenient, therefore, to state my view on this question, though I am aware that it does not entirely agree with observations made in this House by noble Lords for whose opinion I have the highest regard. Fifty years ago in Montgomerie & Co v Wallace-James, Lord Halsbury LC said ([1904] AC at p 75):

“But where no question arises as to truthfulness, and where the question is as to the proper inferences to be drawn from truthful evidence, then the original tribunal is in no better position to decide than the judges of an appellate court.”

And in Mersey Docks & Harbour Board v Procter, Viscount Cave LC said ([1923] AC at p 258):

“The procedure on an appeal from a judge sitting without a jury is not governed by the rules applicable to a motion for a new trial after a verdict of a jury. In such a case it is the duty of the Court of Appeal to make up its own mind, not disregarding the judgment appealed from the giving special weight to that judgment in cases where the credibility of witnesses comes into question, but with full liberty to draw its own inference from the facts proved or admitted, and to decide accordingly.”

It appears to me that these statements are consonant with RSC, Ord 58, r 1, which prescribes that

“All appeals to the Court of Appeal shall be by way of re-hearing”

“The Court of Appeal shall have power to draw inferences of fact and to give any judgment and make any order which ought to have been made … ”

This does not mean that an appellate court should lightly differ from the finding of a trial judge on a question of fact, and I would say that it would be difficult for it to do so where the finding turned solely on the credibility of a witness. But I cannot help thinking that some confusion may have arisen from failure to distinguish between the finding of a specific fact and a finding of fact which is really an inference from facts specifically found, or, as it has sometimes been said, between the perception and evaluation of facts. An example of this distinction may be seen in any case in which a plaintiff alleges negligence on the part of the defendant. Here, it must first be determined what the defendant, in fact, did, and secondly, whether what he did amounted in the circumstances (which must also, so far as relevant, be found as specific facts) to negligence. A jury finds that the defendant has been negligent and that is an end of the matter unless its verdict can be upset according to well-established rules. A judge sitting without a jury would fall short of his duty if he did not first find the facts and then draw from them the inference of fact whether or not the defendant

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had been negligent. This is a simple illustration of a process in which it may often be difficult to say what is simple fact and what is inference from fact, or, to repeat what I have said, what is perception, what evaluation. Nor is it of any importance to do so except to explain why, as I think, different views have been expressed as to the duty of an appellate tribunal in relation to a finding by a trial judge. For I have found on the one hand universal reluctance to reject a finding of specific fact, particularly where the finding could be founded on the credibility or bearing of a witness, and, on the other hand, no less a willingness to form an independent opinion about the proper inference of fact, subject only to the weight which should, as a matter of course, be given to the opinion of the learned judge. But the statement of the proper function of the appellate court will be influenced by the extent to which the mind of the speaker is directed to the one or the other of the two aspects of the problem.

In a case like that under appeal where, so far as I can see, there can be no dispute about any relevant specific fact, much less any dispute arising out of the credibility of witnesses, but the sole question is whether the proper inference from those facts is that the patent in suit disclosed an inventive step, I do not hesitate to say that an appellate court should form an independent opinion, though it will naturally attach importance to the judgment of the trial judge. I ought not to conclude this opinion without saying how much I have owed in the preparation of it to certain writings by Professor Goodhart.

I would dismiss this appeal.

LORD MORTON OF HENRYTON having considered the question of the validity of the patent and concluded that the invention was obvious and involved no inventive step, having regard to the prior user of the same device and the absence of any evidence that the application of that device to upholstered material involved any inventive step, continued: My Lords, counsel for the appellant pointed out that the existence or non-existence of an inventive step is a question of fact decided in favour of the appellant by the trial judge, who had the advantage of seeing and hearing the witnesses. They suggested that your Lordships should hesitate long before overruling his decision. My Lords, this is an argument of great weight if the credibility of witnesses has come in question; but in the present case it would appear that the learned judge did not doubt the credibility of any witness, and formed his view by inference from the evidence as a whole. The Court of Appeal formed the opposite view by the same method and I agree with that court.

My last observations were prepared before I had the privilege of reading in print the speech which has just been delivered from the Woolsack. It will be apparent from these observations that my views on the subject of appellate courts in no way differ from those which have just been expressed by my noble and learned friend Viscount Simonds. I would dismiss the appeal.

LORD REID. My Lords, I have had an opportunity of reading the speech which my noble and learned friend, Lord Morton Of Henryton, has just delivered. I agree with it and I cannot usefully add anything to it. I have also had an opportunity of reading the speech of my noble and learned friend, Lord Simonds. I am also in agreement with it but, in view of the general importance of the question with which he has dealt, I think it right to express my views in my own words.

Apart from cases where appeal is expressly limited to questions of law, an appellant is entitled to appeal against any finding of the trial judge, whether it be a finding of law, a finding of fact or a finding involving both law and fact. But the trial judge has seen and heard the witnesses, whereas the appeal court is denied that advantage and only has before it a written transcript of their evidence. No one would seek to minimise the advantage enjoyed by the trial judge in determining any question whether a witness is, or is not, trying to tell what he believes to be the truth, and it is only in rare cases that an appeal court could be

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satisfied that the trial judge has reached a wrong decision about the credibility of a witness. But the advantage of seeing and hearing a witness goes beyond that. The trial judge may be led to a conclusion about the reliability of a witness’s memory or his powers of observation by material not available to an appeal court. Evidence may read well in print but may be rightly discounted by the trial judge or, on the other hand, he may rightly attach importance to evidence which reads badly in print. Of course, the weight of the other evidence may be such as to show that the judge must have formed a wrong impression, but an appeal court is, and should be, slow to reverse any finding which appears to be based on any such considerations.

The authority which is now most frequently quoted on this question is the speech of Lord Thankerton in Watt (or Thomas) v Thomas, and particularly the passage which I now quote ([1947] 1 All ER at p 587):

“I. Where a question of fact has been tried by a judge without a jury and there is no question of misdirection of himself by the judge, an appellate court which is disposed to come to a different conclusion on the printed evidence should not do so unless it is satisfied that any advantage enjoyed by the trial judge by reason of having seen and heard the witnesses could not be sufficient to explain or justify the trial judge’s conclusion. II. The appellate court may take the view that, without having seen or heard the witnesses, it is not in a position to come to any satisfactory conclusion on the printed evidence. III. The appellate court, either because the reasons given by the trial judge are not satisfactory, or because it unmistakably so appears from the evidence, may be satisfied that he has not taken proper advantage of his having seen and heard the witnesses, and the matter will then become at large for the appellate court. It is obvious that the value and importance of having seen and heard the witnesses will vary according to the class of case, and, it may be, the individual case in question.”

Watt (or Thomas) v Thomas was a consistorial case based on cruelty, and I think that the whole passage which I have quoted refers to cases where the credibility or reliability of one or more witnesses has been in dispute and where a decision on these matters has led the trial judge to come to his decision on the case as a whole. If that be right, then I see no reason to doubt anything that was said by Lord Thankerton. But in cases where there is no question of the credibility or reliability of any witness, and in cases where the point in dispute is the proper inference to be drawn from proved facts, an appeal court is generally in as good a position to evaluate the evidence as the trial judge, and ought not to shrink from that task, though it ought, of course, to give weight to his opinion. In Riekmann v Thierry, Lord Halsbury LC said (14 R P C at p 116):

“The hearing upon appeal is a re-hearing, and I do not think there is any presumption that the judgment in the court below is right.”

And later in the same speech he said (ibid):

“Upon appeal from a judge where both fact and law are open to appeal, it seems to me that the appellate tribunal is bound to pronounce such judgment as in their view ought to have been pronounced in the court from which the appeal proceeds, and that it is not within their competence to say that they would have given a different judgment if they had been the judge of first instance, but that because he has pronounced a different judgment they will adhere to his decision.”

My Lords, there may be a difference of emphasis between this view and that expressed in the quotations given by my noble and learned friend, Lord Simonds, on the one hand, and the view expressed by Lord Thankerton and by other noble Lords and learned judges to the same effect on the other hand, but I can find

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no essential difference between the two views, and, plainly, the present case is not one in which any question of credibility, even in its widest sense, can be said to arise. I, therefore, agree that the appeal should be dismissed.

LORD TUCKER. My Lords, for the reasons which have been stated by my noble and learned friend, Lord Morton Of Henryton, I agree that this appeal should be dismissed. I also desire to state my concurrence in the observations which have been made by your Lordships with regard to the functions of your Lordships’ House and the Court of Appeal when dealing with the findings of fact of a trial judge.

LORD SOMERVELL OF HARROW. My Lords, I agree for the reasons given by my noble and learned friend, Lord Morton Of Henryton, that this appeal should be dismissed. I would wish to add a few sentences on the point dealt with by my noble and learned friend, Lord Simonds. I would, as does he, respectfully differ from those who have suggested that an appeal on fact from a judge sitting alone is the same as, or should be assimilated to, an appeal from a jury. Apart from the fact that, in the former case, the appeal is a re-hearing, juries do not, and judges in varying degree do, give reasons for their conclusions. In a negligence action, it may be clear on an appeal from a judge alone how he has found what have been conveniently called the primary facts. An appellate court must be free to consider whether the judge, who has, I will assume, found for the plaintiff, applied the standard of the reasonable man, as our law prescribes, or the standard of a man of exceptional care and prescience.

The advantages enjoyed by the trial judge have often been stated and are, I am sure, familiar to all appellate courts. The difficult cases are those where there are circumstances on which appellant and respondent can each rely. The judge has based his decision on the way in which witnesses give their evidence. Unless there is no dispute at all he always does this. On the other hand, there are sentences in his judgment which indicate very probably, but not certainly, that he did not have present to his mind an answer or document which plainly affects the accuracy of a witness he has relied on, or his general conclusion. I only refer to this in order to emphasise the impossibility, in my opinion, of laying down anything in the nature of a code as to the circumstances in which an appellate court should interfere either by reversing the trial judge or ordering a new trial. I agree that the appeal should be dismissed.

Appeal dismissed.

Solicitors: Oscar Mason & Co (for the appellant); Sharpe, Pritchard & Co agents for Ryland, Martineau & Co Birmingham (for the respondents).

G A Kidner Esq   Barrister.

Harper and Another v Secretary of State For The Home Department

[1955] 1 All ER 331

Categories:        CONSTITUTIONAL; Elections        

Court:        COURT OF APPEAL        

Lord(s):        SIR RAYMOND EVERSHED MR, JENKINS AND HODSON LJJ        

Hearing Date(s):        20 DECEMBER 1954        

Elections – Parliamentary – Redistribution of seats – Discretion of the Boundary Commission – Number of constituencies in England to be increased from 506 to 511 – Method employed in determining number of constituencies stated in report – Draft Order in Council giving effect to commission’s recommendations approved by both Houses of Parliament – Validity of report challenged by two electors – Application to restrain draft order from being submitted to Her Majesty in Council – House of Commons (Redistribution of Seats) Act, 1949 (12 & 13 Geo 6 c 66), s 2(1)(a), (5), s 3(4), Sch 2.

Crown – Relief against the Crown – Injunction against Secretary of State – Redistribution of seats in the House of Commons – Crown Proceedings Act, 1947 (10 & 11 Geo 6 c 44), s 21.

In November, 1954, the Boundary Commission for England presented a report to the Secretary of State for the Home Department and Minister for Welsh Affairs (referred to in this report as “the Secretary of State”), pursuant to the House of Commons (Redistribution of Seats) Act, 1949, s 2. In para 8 of the report, the commission, after referring to r 1 of Sch 2 to the Act, said: “… we were advised that it was unlikely that the Boundary Commissions for Scotland and Wales would find it necessary to allocate more than the existing number of seats, viz, seventy-one in Scotland and thirty-six in Wales. We thus proceeded on the basis that the number of constituencies available for distribution in England was to be not substantially greater or less than 506 and we allocated seats provisionally to administrative counties with their associated county boroughs on the basis of one seat for each complete unit of electors, the unit representing the average electorate in England, namely, 57,122, determined by dividing the total English electorate, viz, 28,904,108, by 506.” In para 9 the commission said that their aim was to create 506 constituencies, each of which would be at or near the electoral quota, without cutting across local government boundaries; that, while in some cases the task was simple, other cases called for special consideration, the choice lying between departing substantially from the quota or disregarding boundaries. Their recommendation was that the number of constituencies in England should be increased from 506 to 511, and, according to the re-arrangement recommended by them, the figures of the electorate in more than eighty per cent of the constituencies would be between forty-five thousand and sixty-five thousand, of which the electoral quota, namely 55,670, formed the mean. Pursuant to s 2(5) of the Act, the Secretary of State laid the report before Parliament, together with draft Orders in Council for giving effect to the recommendations contained in the report. Among the draft orders was one entitled “Draft Parliamentary Constituencies (Manchester, Oldham and Ashton under Lyne) Order, 1954,” which provided for the alteration of the number and boundaries of the wards of the county borough of Manchester. This draft order was approved by both Houses of Parliament. Two electors who would be affected if the order came into force obtained an ex parte injunction restraining the Secretary of State from submitting the draft order to Her Majesty in Council on the ground that the report of the commission did not comply with the rules set out in Sch 2 to the Act of 1949 and was not a report under the Act, within the meaning of s 2(5), in that the commission had misdirecred themselves. The ground of alleged misdirection was that, if the calculation of the number of constituencies required for England had been carried out in accordance with the rules in Sch 2, there should be 519 constituencies, not, 506, and that the calculation mentioned in para 8 of the report ought

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to have been made on the footing that the number of constitencies available was 519. On appeal, an injunction having been granted ex parte,

Held – On the true construction of the Act of 1949, in so far as the discretion over the division of England into parliamentary constituencies, which was conferred by the rules for the redistribution of seats in Sch 2 to the Act of 1949, was not the discretion of the Boundary Commission for England, on whom it was primarily conferred, the exercise of the discretion was a matter for Parliament, and it was not competent for the court to determine whether a particular line of approach, which commended itself to the commission, was the best; in the present case the recommendations of the commission were not manifestly at variance with the Act of 1949, the resolutions of the Houses of Parliament approving the draft Order in Council were not affected by any invalidity, and the injunction should not have been granted.

Quaere, whether, having regard to the Crown Proceedings Act, 1947, the plaintiffs were entitled to bring proceedings of this nature against the Secretary of State, and whether, having regard to s 21 of the Act of 1947, the plaintiffs could, in any event, have obtained an injunction against the Secretary of State (see p 340, letter b, post).

Appeal allowed.

Notes

This case illustrates incidentally an unusual procedural point, viz, an appeal against the granting, as distinct from the refusal, of an injunction ex parte. If an ex parte application has been refused, an application for a similar purpose may be made to the Court of Appeal under RSC, Ord 58, r 10 (compare Ex parte Fry, [1954] 2 All ER 118); but that rule does not apply to cases where the ex parte application has been granted. Section 27 of the Supreme Court of Judicature (Consolidation) Act, 1925 (5 Halsbury’s Statutes (2nd Edn) 355) confers on the Court of Appeal jurisdiction to hear appeals from orders of the High Court, subject to such restrictions as are imposed by other provisions of that Act or by the Rules of the Supreme Court, which seem not to exclude an appeal against the granting of an injunction ex parte. The circumstances of the present case were, however, exceptional; and in other circumstances, if an ex parte injunction were likely to continue for a substantial time, any application against its continuance would, presumably, be made to the High Court to discharge the injunction (see per Sir Raymond Evershed, MR, at p 334, letter b, post).

For the House of Commons (Redistribution of Seats) Act, 1949, see 8 Halsbury’s Statutes (2nd Edn) 564.

For the Crown Proceedings Act, 1947, s 21, see 6 Halsbury’s Statutes (2nd Edn) 61.

Cases referred to in judgment

Hammersmith Borough Council v Boundary Commission for England  Fulham Borough Council v Boundary Commission for England (14 December 1954), Unreported.

R v Electricity Comrs, Ex p London Electricity Joint Committee Co (1920) Ltd [1924] 1 KB 171, 93 LJKB 390, 130 LT 164, 88 JP 13, 20 Digest 197, 1.

A-G for New South Wales v Trethowan [1932] AC 526, 101 LJPC 158, 147 LT 265, Digest Supp.

R v Treasury Lords Comrs (1872), LR 7 QB 387, 41 LJQB 178, 26 LT 64, 36 JP 661, 16 Digest 303, 1160.

Appeal

Pursuant to s 2(1) of the House of Commons (Redistribution of Seats) Act, 1949, the Boundary Commission for England submitted to the Secretary of State for the Home Department their first periodical report, dated 10 November 1954, showing the constituencies into which they recommended that England should

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be divided in order to give effect to the rules set out in Sch 2 to the Act of 1949. On 18 November 1954, the Secretary of State laid before Parliament the report and draft Orders in Council giving effect to the recommendations contained therein. Among the draft orders was the draft Parliamentary Constituencies (Manchester, Oldham and Ashton under Lyne) Order, 1954, which altered, among other things, the number and boundaries of the wards of the county borough of Manchester. This draft order was approved by both Houses of Parliament. The Manchester City Council having unsuccessfully protested against the recommendations of the commission, an action against the Secretary of State for the Home Department was commenced by Richard Stevenson Harper (the lord mayor of the city of Manchester) and Forrester Lord (a councillor of the city of Manchester), as electors of wards in the city which were to be removed from their existing constituencies. By the writ, which was issued on 17 December 1954, the plaintiffs claimed: (i) a declaration that the report of the Boundary Commission for England dated 10 November 1954, was not made in accordance with and did not comply with the rules set out in Sch 2 to the Act of 1949, and that the report was not a “report under the said Act” within the meaning of s 2(5) of the Act; (ii) a declaration that the defendant, the Secretary of State, was not bound by s 3(4) of the Act to submit, and ought not to submit, to Her Majesty in Council the draft Parliamentary Constituencies (Manchester, Oldham and Ashton under Lyne) Order, 1954, giving effect to the recommendations contained in the report; and (iii) an injunction restraining the defendant from submitting the draft order to Her Majesty in Council.

On the morning of 17 December 1954, the plaintiffs applied ex parte to Roxburgh J for an interlocutory injunction in the terms of para (iii) of the writ. The learned judge adjourned the hearing of the application until the afternoon so as to give the defendant an opportunity to appear. It was, however, impossible for the defendant to be represented by counsel at the hearing that afternoon, and, owing to the urgency of the matter, Roxburgh J dealt with the matter as an ex parte application and made an order, ex parte, restraining the defendant from presenting the draft order to Her Majesty in Council until after 21 December 1954, or until further order, or until the Boundary Commission for England had reported in accordance with the Act of 1949, with liberty to the plaintiffs to serve notice of motion for 21 December 1954, together with the writ of summons. As it was inconvenient to postpone the submission of the draft order to the Privy Council to a day later than 21 December 1954, the defendant applied to the Court of Appeal to discharge the order of Roxburgh J granting the injunction.

The Attorney General (Sir Reginald Manningham-Buller, QC) and N S S Warren for the defendant, the Secretary of State.

Sir Andrew Clark QC J V Nesbitt and R L McEwen for the plaintiffs

20 December 1954. The following judgments were delivered.

SIR RAYMOND EVERSHED MR. This case comes before us in very unusual circumstances, and it is right that I should first make clear as a matter of procedure what it is that we are being called on to determine. The writ in the action was issued I think last Friday, the plaintiffs being two individuals, a Mr Harper and Mr Lord, who are electors at the moment in one of the parliamentary divisions of Manchester. The defendant as described in the writ is the Secretary of State for the Home Department. The relief sought in the writ is, first, a declaration that the report of the Boundary Commissioners dated 10 November 1954, and submitted to the defendant, that is the Secretary of State, under the House of Commons (Redistribution of Seats) Act, 1949, was not made in accordance with that Act, and was, therefore, not a report as stated in that Act. The writ proceeded to seek a further declaration that the Secretary of State was not bound to submit and ought not to submit to Her Majesty in Council a draft Order in Council giving effect to the report and then seeks an injunction.

The plaintiffs moved, as I understand, before Roxburgh J on Friday morning for an ex parte injunction; and though the learned judge, apprehending

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the seriousness of the matter, gave an opportunity so that the defendant could be before him in the afternoon, it was not in fact practicable, as may well be understood, for the defendant then to be represented by counsel. The judge accordingly dealt with the matter as an ex parte application. He made an order ex parte restraining the Secretary of State until after Tuesday (that is tomorrow) or further order, from presenting to Her Majesty in Council a draft Order in Council as intimated in the indorsement to the writ. In the ordinary course the procedure would be, I do not doubt, that if the interval before the motion came on to be heard in the ordinary way were substantial, and if at the same time the defendant thought on any sufficient ground that the ex parte injunction ought not to be continued, then he would apply to discharge the ex parte injunction. In this case, as I have intimated, the ex parte injunction only runs until tomorrow. It might, therefore, have been thought the more natural course to wait until tomorrow in order that the learned judge might hear the motion inter partes, make a decision, and then if either party were dissatisfied with that decision, there could be an appeal to this court. Through no fault or malice on anybody’s part, however, this matter has come before the court very late in the term, and the case being obviously one of substance and some urgency, to put it no higher, it has been thought proper on behalf of the Secretary of State to come today to this court to appeal against the making of the injunction ex parte. We are therefore only concerned with the question whether that ex parte injunction was rightly granted. I think it right to emphasise these procedural matters because the course which has been followed, and which learned counsel have both thought it right to pursue here, is one which owes its existence, owes the fact of its having been followed, to the special circumstances, particularly as to time, in which the court is now placed. I do not, however, forget that it is only with the ex parte injunction that the court is now concerned. Yet if we reach a conclusion that the ex parte injunction should not have been granted on grounds which affect the declarations sought in the writ, it is obvious that, as a practical matter, our decision is likely to govern what will hereafter occur on the hearing of the motion tomorrow and, I dare say, of the action itself.

After that preamble I turn to some references to the Act of 1949 which is involved. First, however, it is plain that the form of the action is an unusual one. The defendant is the Secretary of State, and, as is apparent from the indorsement, what it is sought by the plaintiffs to achieve is an injunction to restrain the Secretary of State from presenting to Her Majesty in Council a draft order which has already received the approval of both Houses of Parliament. It is therefore obvious that the court is concerned with matters which at any rate come somewhat near to touching on the relative spheres of Parliament and the courts. I shall have something later to say about the defendant and the name by which he is sued, “Secretary of State for the Home Department”; but I will first recite the necessary parts of the Act of 1949. It was an Act passed to replace an earlier Act, and as I follow it, to consolidate earlier enactments. Its long title is

“An Act to consolidate the enactments which make permanent provision for the redistribution of seats at parliamentary elections … ”

Section 1 established Boundary Commissions for the four parts of the United Kingdom of Great Britain and Northern Ireland, viz, England, Scotland, Wales and Northern Ireland. After stating how these commissions were to be constituted, s 2(1) provides:

“Each Boundary Commission shall keep under review the representation in the House of Commons of the part of the United Kingdom with which they are concerned and shall, in accordance with the next following subsection, submit to the Secretary of State reports with respect to the whole of that part of the United Kingdom, either—(a) showing the constituencies

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into which they recommend that it should be divided in order to give effect to the rules set out in Sch. 2 to this Act; or (b) stating that, in the opinion of the commission, no alteration is required … ”

We are concerned with alternative (a). I can pass over the next three subsections. Then s 2(5) provides:

“As soon as may be after a Boundary Commission have submitted a report to the Secretary of State under this Act, he shall lay the report before Parliament together, except in a case where the report states that no alteration is required … with the draft of an Order in Council for giving effect, whether with or without modifications, to the recommendations contained in the report.”

Section 3(2) provides:

“The draft of any Order in Council laid before Parliament by the Secretary of State under this Act for giving effect, whether with or without modifications, to the recommendations contained in the report of a Boundary Commission may make provision—(a) for any matters which appear to him to be incidental thereto or consequential thereon … ”

“If any such draft is approved by resolution of each House of Parliament, the Secretary of State shall submit it to His Majesty in Council.”

Before I pass to Sch 2 which sets out the rules to give effect to which, as will be recalled, s 2 provides that the recommendations be directed, I pause to re-state this fact. In the present case, the Secretary of State, having received the report, to which I shall later advert, laid it before Parliament, together with a draft Order in Council, and each of the Houses of Parliament approved that Order in Council. Prima facie, therefore, the Secretary of State must now submit the draft Order in Council to Her Majesty. I have said that the case is, therefore, a striking one, coming near (at the least) to involving the privileges and powers of Parliament; but let me say at once that the courts have never been reluctant or afraid to exercise their powers where they are satisfied that such powers reside in the courts, and that some one or more of the subjects of Her Majesty are in danger of finding their rights imperilled.

I come now to Sch 2, containing the rules which are to be the guide of the Boundary Commission in making and presenting their reports. The rules in Sch 2 are described as “Rules for redistribution of seats”. Rule 1 is:

“The number of constituencies in the several parts of the United Kingdom set out in the first column of the following table shall be as stated respectively in the second column of that table.“

Part of the United Kingdom.        No. of Constituencies.        

Great Britain                Not substantially greater or less than 613        

Scotland                Not less than 71        

Wales                Not less than 35        

Northern Ireland                12        

It is convenient to pause in order to say that (the figure for Wales having risen to thirty-six) from the figure of 613 opposite “Great Britain” one should deduct the figure of 107, so that in considering the English representation one may say for practical purposes that the figure is not to be substantially greater nor less than 506.

Rule 2 says: “Every constituency shall return a single member”. Rule 3 relates to the city of London. Rule 4 opens with the words: “So far as is practicable having regard to the foregoing rules”, and then there are provisions directing the commissioners that counties or parts of counties shall not be

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included in constituencies which are included in the whole or parts of other counties. Then there is a rule particularly directed to the inter-relations of parliamentary representations and local government. Rule 5 says:

“The electorate of any constituency shall be as near the electoral quota as is practicable having regard to the foregoing rules; and a Boundary Commission may depart from the strict application of the last foregoing rule if it appears to them that a departure is desirable to avoid an excessive disparity between the electorate of any constituency and the electoral quota … ”

Rule 6 is:

“A Boundary Commission may depart from the strict application of the last two foregoing rules if special geographical considerations, including in particular the size, shape and accessibility of a constituency, appear to them to render a departure desirable.”

Then, to complete my reading of the schedule, the phrase, “electoral quota”, used in r 5, is defined to mean, so far as Great Britain is concerned,

“a number obtained by dividing the electorate for Great Britain by the number of constituencies in Great Britain existing on the enumeration date.”

I need not take time to state what is meant by “enumeration date”.

Before I proceed to consider what has been done, I venture to draw attention to one feature of these rules which seems to me to be striking, and that is that within certain broad lines plainly a measure of latitude or of discretion is conferred. It is primarily conferred, I think, on the commission. It would be difficult to think of any other way in which such a body would work. To take examples, in r 1 a figure is mentioned “not substantially greater or less”. Then in r 4 is the phrase “so far as is practicable having regard to the foregoing rules”; and in r 5 it is stated “the electorate of any constituency shall be as near the electoral quota as is practicable having regard to the foregoing rules”, and the

“Boundary Commission may depart from the strict application of the last foregoing rule if it appears to them that a departure is desirable to avoid an excessive disparity … ”

And in r 6 again: “A Boundary Commission may depart from the strict application” if it appears to them “desirable”, and so forth. It is, however, a fact that some primacy is obviously given to the first three rules; particularly, for example, Scotland’s representation is to be “not less than 71”, and for Great Britain as a whole the number of constituencies is to be not substantially greater or less than 613. In r 2 again “every constituency shall” be a single member constituency.

I turn now to see how the commission in this case have gone about their task. The authority for the procedure adopted was stated in para 8 of their report. They said that they were advised that it was unlikely that their opposite numbers, so to speak, ie, the Boundary Commissions for Scotland and Wales, should want to add to Scottish and Welsh representation and they—now I am quoting—“proceeded on the basis that the number of constituencies available for distribution in England was to be not substantially greater or less than 506”. Pausing there, it seems impossible to suggest that the Boundary Commission have done anything so far to which anybody could take the smallest exception. They then added this sentence, which has brought on them the criticism of acting outside their proper sphere. They said:

“… we allocated seats provisionally to administrative counties with their associated county boroughs on the basis of one seat for each complete unit of electors, the unit representing the average electorate in England, namely,

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57,122, determined by dividing the total English electorate, viz, 28,904,108 by 506.”

In para 9 it was stated:

“Our aim was to create 506 constituencies each of which would be at or near the electoral quota without cutting across local government boundaries.”

They said that in some cases that would be easy enough, and then they said that in others it would require special consideration, and in those cases what they had to do was to decide between departure from quota or disregard of boundaries. After considering all those cases accordingly, their recommendation was that they would increase the number of constituencies in England from 506 to 511; but they show that their final suggested re-arrangement was such that in more than eighty per cent of the whole they did achieve a range of figures of electorate which was close to the electoral quota, the electoral quota as defined by the Act being a total of 55,670.

Now the challenge to the validity of that report (for that is what is said, and must be said) is that in the sentence which I read in para 8 referring to a provisional allocation on the basis of a unit of single member constituencies, every unit containing 57,122, there was a misdirection of themselves so fundamental as to disable all the later calculations. It is said that what they ought to have done was to work out and discover what the electoral quota was (as indeed they did), viz, 55,670, and if by that figure they had divided the total English electorate, 28,900,000 odd, they would have found out that the arithmetical answer was 519. Counsel for the plaintiff suggests that 519 could not be said to be a substantial increase above 506. They should have, therefore, started on the basis that there were going to be 519 seats. By placing far too much emphasis on the originating figure of 506 constituencies, he says, they got the whole thing wrong and have produced a report which so far departs from the authority vested in them that he, counsel, can say it is not a report at all.

On this matter I confess that I have come myself to a clear conclusion that there is no ground for saying that this report was such a substantial departure or was indeed any departure from the rules which the commission were required to have in mind. The commission plainly placed emphasis on r 1, that the number of English seats was to be not substantially greater or less than 613 minus the Scottish and Welsh; and on the rule, r 2, that they were to be single member constituencies. What they proceeded to do was to say that, if every constituency was ideally such that you had one member for an equal number of electors, then you would have 506 constituencies of 57,000 odd each; but they also said that what they aimed to do was to create 506 constituencies having a number of electors as near as possible to the electoral quota, and, that being impossible, they then had to decide according to their discretion whether the quota should give way to boundaries or vice versa. The whole method was exposed on the face of the report, and, if the method they adopted was one which Parliament itself did not like, it no doubt would have modified or rejected it.

I am, I am afraid, quite unable to accept, with all respect to him, the view which commended itself to Roxburgh J  He said:

“It is perfectly true that there is an overriding provision in r. 1 that the allocation of seats to Great Britain, excluding Northern Ireland, was not to be substantially greater or less than 613, but I think that it would be difficult to say that 626”

“was substantially greater or less than 613, and therefore it would appear

Page 338 of [1955] 1 All ER 331

to me that the Boundary Commission ought to have approached the problem in accordance with the rule along those lines.”

My reading of these rules and of the whole Act is that it was quite clearly intended that, in so far as the matter is not within the discretion of the commission, it was certainly to be a matter for Parliament to determine. I find it impossible to suppose that Parliament contemplated that on any of these occasions when reports were presented it would be competent for the court to determine and pronounce on whether a particular line which had commended itself to the commission was one which the court thought the best line or the right line—one thing rather than another to be regarded as practicable, and so on. If it were competent for the courts to pass judgments of that kind on the reports, I am at a loss to see where the process would end and what the function of Parliament would then turn out to be.

If that is the right view, then, as I think, everything else follows. Counsel for the plaintiffs indeed conceded that, unless one could say that the report was vitiated by misdirection of themselves by the commissioners so as to be in effect no report at all, then his cause of action was in limine destroyed. I find it unnecessary to say what the court would say or should do if the commission on the face of a report made recommendations which were manifestly in complete disregard of the Act of 1949 and of the rules thereunder. I find it difficult to think that Parliament would pass them by unnoticed; but, if Parliament none the less adopted them, I find it unnecessary to say what view the court might take.

In another case arising out of the same report, Hammersmith Borough Council v Boundary Commission for England, which came before Harman J where the remedy sought by representatives of certain other constituencies was against the Boundary Commission itself, not the Home Secretary, the learned judge said:

“This is not a matter in which I ought to be asked to interfere or in which any good purpose would be served by my seeking to do so. I do not think questions of jurisdiction really need be debated at this stage. I shall assume that I can, if necessary, express an opinion as to the proceedings of the Boundary Commission, without going beyond the functions of this court, but I am satisfied that I should certainly serve no useful object by doing so, and that the machinery set up under this Act does not leave any room which makes it appropriate for the court to intervene either at this or at any other stage.”

I find myself in agreement with the view that obviously commended itself to Harman J

Counsel for the plaintiffs referred us to some cases, and on those I ought to say one or two words. In R v Electricity Comrs, Ex p London Electricity Joint Committee Co (1920) Ltd the court granted a writ of prohibition or mandamus against the Electricity Commissioners. But in that case what the Electricity Commissioners were told to do was to prepare certain schemes which would become orders on their confirmation first by the Minister and later by the resolution of the House. They would always be the orders of the commissioners, and the Act which imposed on them the duty of making these schemes plainly imposed on them quasi judicial functions. In that case it was discovered that, whilst they were proceeding and before they had reached the stage of preparing and presenting an order, they had gone altogether outside the functions which were committed to them by Parliament. Atkin LJ said ([1924] 1 KB at p 210):

“If the above construction of the Act is correct the Electricity Commissioners are themselves exceeding the limits imposed upon them by the legislature, and so far from seeking to diminish the authority of Parliament

Page 339 of [1955] 1 All ER 331

we are performing the ordinary duty of the courts in upholding the enactments which it has passed.”

Younger LJ said (ibid at p 212):

“That Act in my judgment contemplates that the commissioners’ order, which, when approved by a resolution passed by each House of Parliament, is to have effect as if enacted in the Act, embodies only a scheme which under the Act the commissioners are given power either to approve or formulate. Every scheme under the Act remains the scheme of the commissioners even after it is confirmed … ”

Both Younger LJ and Atkin LJ in an earlier passage (ibid., at pp 207 et seq) had observed that the commissioners were given limited quasi judicial functions, and that it had been established that the commissioners had exceeded those functions. If the Boundary Commission had been given similar functions, and, if it had become manifest at some stage or on any occasion that they were exceeding them, it might well be that the court would think it right to make a prerogative order of prohibition or mandamus to compel them to perform their functions properly. I observe that Atkin LJ forebore from expressing any view what the court would do if, notwithstanding, Parliament had in fact approved the order which the commissioners had been restrained from proceeding to make.

The other case to which counsel for the plaintiffs referred was that of A-G for New South Wales v Trethowan, for the purpose of showing that the court will in appropriate cases grant injunctions and grant them ex parte to prevent someone in the position of a Minister from taking a bill or order, whatever it might be, to the sovereign or the sovereign’s representative for the purpose of its becoming law. But that was a case where the legislature concerned, viz, the legislature of New South Wales, had under the Australian constitution strictly limited legislative functions; and, it having been shown that the proposed Act of Parliament had disregarded the provision in the constitution which required a particular sanction on the part of the electorate, the courts in Australia (and the Privy Council affirmed them) restrained members of the legislative council, other than the plaintiffs who were suing, from proceeding to take the measure for the approval of the governnor-general. That seems to me quite a different case from the present. We are in no sense here concerned with a Parliament or legislature having limited legislative functions according to the constitution.

I have, therefore, not thought that those two cases carry counsel for the plaintiffs any further on his road. Counsel for the defendant said that, apart from the question of the effect of the report and the proposed Order in Council, the courts in any case had no more power to grant the injunctions against the Secretary of State than they would have to prevent a Minister, or whoever are the other appropriate persons concerned, from taking to the sovereign a bill that has duly passed its third reading in each of the two Houses for the royal assent; and a reference was made by him to R v Treasury Lords Comrs. I do not find it necessary to express any view on that broad proposition, save to say that in my judgment R v Treasury Lords Comrs, seems to me to be of a wholly different character from the case with which we are now concerned.

I return at the end of my judgment to the point which I mentioned earlier and on which I would say one final word, viz, the question of the defendant to this action. I have said that the defendant is “the Secretary of State for the Home Department“—sued, that is to say, by his official title as a Minister of the Crown. It is said by counsel for the plaintiffs that, since the report disregarded the rules in the Act of 1949, therefore it is not a report within the meaning of the Act, and that the Secretary of State has neither the duty to the House or to anyone else nor the power or authority to take this proposed Order in Council

Page 340 of [1955] 1 All ER 331

to Her Majesty. I am not myself satisfied that counsel for the plaintiffs is not in this respect on the horns of a dilemma. If the whole thing is a nullity and all he seeks to do is to restrain a particular individual, who happens at the moment to be the Secretary of State, I am not satisfied that he ought not to sue him in his personal capacity as for an ordinary wrong—though in that case it would not be clear to me what breach of duty to the plaintiffs he was engaged on committing. On the other hand, if he does sue him, and rightly sues him, in his capacity as Secretary of State, then I am not satisfied, though I express no final view on it, as we have not heard full argument, that the case is one which, having regard to the terms of the Crown Proceedings Act, 1947, will lie. Moreover I am not satisfied, having regard to s 21 of that Act, that on this alternative the plaintiffs could in any event obtain an injunction; but I find it unnecessary to do more than mention that caution on this point, for, in my judgment, the answer to this case is that the plaintiffs have not established a prima facie case to my satisfaction that the report which was presented and which has formed the basis of all that subsequently happened was otherwise than in accordance with the powers vested in the Boundary Commission; and more particularly that the resolutions which the Houses of Parliament passed and under which the Secretary of State has acted and is purporting to act contained in them, so to speak, any infection of invalidity. Therefore, I think that this ex parte injunction ought not to have been granted and I would allow the appeal against it.

JENKINS LJ. I agree and find nothing that I can usefully add to the reasons my Lord has given for holding that this appeal should be allowed.

HODSON LJ. I also agree.

Appeal allowed.

Solicitors: Treasury Solicitor; Sharpe, Pritchard & Co agents for Town clerk, Manchester (for the plaintiffs).

F Guttman Esq   Barrister.

Lawson v Lawson

[1955] 1 All ER 341

Categories:        FAMILY; Domestic Violence        

Court:        COURT OF APPEAL        

Lord(s):        LORD GODDARD CJ, HODSON LJ AND VAISEY J        

Hearing Date(s):        27, 28 OCTOBER 1954        

Justices – Husband and wife – Cruelty – Persistent cruelty – Sodomy with wife – Corroboration.

The wife issued a summons under the Summary Jurisdiction (Separation and Maintenance) Acts, 1895 to 1949, against the husband on the ground of his persistent cruelty to her. At the hearing she alleged that against her wish the husband on two occasions had committed sodomy on her; on many occasions had tried to force her to submit to sodomy; and on 25 November 1953, had insisted on the wife’s masturbating him. The justices directed themselves that corroboration of the wife’s evidence was desirable but not absolutely necessary and accepted the following as corroboration: (i) the wife’s evidence that after the second act of sodomy the husband told her “if she bought Vaseline it would not hurt so much”, coupled with an explanation by the husband in evidence of another reason why he told her to buy Vaseline, which explanation the justices rejected as false; (ii) a statement made by the wife in the presence of a police officer “Look what you made me do on Wednesday night before I went to my mother’s” and the husband’s reply “That is personal between us”, which the justices accepted as referring to the act of masturbation and not to a discussion about money as stated by the husband, and (iii) that the husband had offered to buy two single beds if the wife would return to him. The justices found that the husband had been guilty of persistent cruelty.

Held – If the wife had been a consenting party her evidence in support of the allegation of her husband’s persistent cruelty might not have been sufficient, in the same way as the evidence of an accomplice may not be sufficient in a criminal case, without corroboration; but in fact she was not a consenting party, and accordingly no rule for corroboration applied in the present case, and the findings of the justices, as modified by the Divisional Court, should stand.

Statham v Statham ([1929] P 131) distinguished.

Semble: the false explanation given by the husband relating to the purchase of Vaseline was capable of constituting corroboration, but the other matters found by the justices to constitute corroboration did not amount to corroboration.

Appeal dismissed.

Notes

The present case may be compared with Davidson v Davidson ([1953] 1 All ER 611), where a new trial was ordered, the justices not having referred to the question of corroboration in their reasons. The law concerning corroboration in such cases as the present was stated by Sir Boyd Merriman P in DB v WB ([1935] P at p 83) as follows—“Justices should direct themselves, just as a judge should direct a jury, that it is safer to have corroboration, if possible; but when that warning has been given and given in the fullest form, then there is no rule of law which prevents the tribunal finding the matter proved in the absence of corroboration”. In the present case there was, on the findings of the justices, no need of corroboration although they directed themselves regarding corroboration. The facts that they so directed themselves and then found corroboration wrongly in certain particulars, did not stultify their decision that the wife had proved her case (see particularly p 345, letter b, post).

As to Persistent Cruelty, see 10 Halsbury’s Laws (2nd Edn) 838, para 1339; and for cases on the subject, see 27 Digest (Repl) 699–701, 6692–6702.

Cases referred to in judgments

Statham v Statham [1929] P 131, 98 LJP 113, 140 LT 292 27 Digest (Repl) 294, 2394.

Page 342 of [1955] 1 All ER 341

Appeal

This was an appeal by the husband from a judgment of a Divisional Court of the Probate, Divorce and Admiralty Division (Lord Merriman, P., and Barnard J) confirming a decision of a magistrates’ court that the husband had been guilty of persistent cruelty to the wife.

In proceedings by the wife under the Summary Jurisdiction (Separation and Maintenance) Acts, 1895 to 1949, against the husband on the ground of his persistent cruelty the justices found that the husband: (a) in April, 1953, and June, 1953, committed sodomy on the wife against her wish; (b) on many occasions up to and including November, 1953, tried to force the wife to submit to sodomy; and (c) on 25 November 1953, had insisted on the wife masturbating him against her wish. The justices also found, as a separate finding, that the wife had not consented to the acts of sodomy or to being a party to the act of masturbation. The wife gave evidence that after the second act of sodomy the husband told her “if she bought Vaseline it would not hurt so much”, and the husband’s explanation that the Vaseline was required for some other purpose was rejected by the justices. Evidence was also given (i) that the wife said to the husband in the presence of a police officer “Look what you made me do on Wednesday night before I went to my mother’s” and the husband replied “That is personal between us” (which, the justices found, referred to the act of masturbation and not to a discussion about money as alleged by the husband); (ii) that the husband had offered to buy two single beds if the wife would return to him; and (iii) that on 28 November 1953, the day on which the wife left the matrimonial home, the husband tried to pull her upstairs. The magistrates, having directed themselves that there was a desirability but not an absolute necessity for corroboration of the wife’s evidence, accepted her evidence as true, and further accepted that the evidence as to the Vaseline and evidence set out as heads (i) and (ii), last mentioned, constituted corroboration. The husband appealed, and the Divisional Court, though differing on the question whether the evidence stated constituted corroboration, held that the magistrates were justified on the evidence in coming to the conclusion that the wife had proved her case, and dismissed the appeal. The husband appealed.

Joseph Jackson for the husband.

D R Ellison for the wife.

28 October 1954. The following judgments were delivered.

LORD GODDARD CJ stated the facts and continued: These cases are not cases in which corroboration is required as a matter of law. It is required as a matter of precaution, and a jury would always be directed, in a case of this sort, if it were a trial on an indictment, that, whether the person was or was not to be regarded as an accomplice, it would be undesirable or dangerous to convict on the evidence of that person alone, but that it was open to the jury to convict, if satisfied with the evidence.

The question of corroboration very often arises. It comes up in three different ways. First, it arises where there is the unsworn evidence of a child. Although the unsworn evidence of a child may be taken in certain cases, if a man is being tried for an offence against the child, there can be no case to go to the jury unless the evidence is corroborated. Then, of course, it is for the judge to say whether there is any evidence that can amount to corroboration, and it is for the jury to say whether they are satisfied with the evidence that is tendered as corroboration. That is the first case.

The second case where the question of corroboration arises is where the witness is an accomplice. An accomplice is a person who, in a matter of crime or in a matter of this description, is a consenting party or a participant. A jury is always directed that it is unsafe to convict on the uncorroborated evidence of an accomplice; but there again, if the jury are satisfied that the evidence of the accomplice has established the case and if they feel that they can, without doubt,

Page 343 of [1955] 1 All ER 341

trust that evidence, it is within their province to convict, and they do convict quite often.

The third case is the ordinary sexual case, where a woman complains of an indecent assault or a rape. It has been the practice of judges or many years to warn juries that they should be reluctant to convict on the uncorroborated evidence of the woman, because it is so easy to make and so extremely difficult to rebut a charge of that description.

Therefore, in substance, the warning given to a jury is the same whether it is about the evidence of an accomplice or whether it is about the evidence of a woman in a sexual case, and it makes no difference, of course, whether the act which the woman alleges had been committed is what I may call a natural act or, as it is in this case, an unnatural act.

Here, after a full and careful analysis of the evidence, the Divisional Court held that the justices were entitled to come to the conclusion that the woman’s evidence was true and that she had made out her case. Indeed, I think both judges in the Divisional Court came to the conclusion that her evidence was true. They had not seen the witnesses any more than we have, but I think it would be a very strong thing for this court now to say that, in their opinion, the evidence was not such as the justices were entitled to rely on.

Counsel for the husband, who put every conceivable point that could be put for his client, and put them very clearly, commented that it was unfortunate that the two justices in this case were both women. I do not think, myself, that that was a disadvantage in this case, because, in the first place, one of the great advantages of lay magistrates is that they live, work and act amongst the people in their district. They know their characteristics, their trials, their difficulties, and so forth, and are often in a very good position to determine whether the person with whom they are dealing is telling the truth. Women justices can often be very valuable judges of fact where they have to consider whether women are telling the truth. Very often, I think, a woman may be able to come to a better conclusion whether women are more likely to be telling the truth than a man, though there is the risk of mistakes, which cannot be helped in human justice.

In the present case the justices found that the wife was not a consenting party. That means that the wife, being forced by her husband, submitted to these acts, but that she was not a willing party. That seems to me to put her out of the category of an accomplice.

If the justices came to the conclusion that these acts had been committed on her, and if she was not a consenting party in the sense of having voluntarily allowed her husband to satisfy himself in this unnatural way, I do not see how it could be said that she was not assaulted and that she is not entitled to say that these were acts of cruelty on her, or, at any rate, attempted acts of cruelty which she resisted so that her husband could not consummate them. That, surely, would be a case of persistent assaults on her.

I do not propose to say more about the question of corroboration than this, that I think the acts here which the justices say corroborated her evidence are not very strong. Lord Merriman P thought—and, on the whole, I agree with him—that, the justices having come to the conclusion that her story about buying Vaseline was correct, that would afford some corroboration of her evidence that she complained that these acts of her husband hurt her and that he told her to go and buy Vaseline, because that would make it easier. He denied telling her that, but admitted that he did tell her to buy Vaseline. That is the point which corroborates. The justices rejected the reason which he gave for telling her to buy the Vaseline, and I think that thus this matter did amount to some corroboration.

The second matter was the statement which the husband made in front of the police officer, when the wife made what was obviously intended to be a reproach and complaint about the husband. He said: “That is personal between us”;

Page 344 of [1955] 1 All ER 341

in other words he said: “Something very private that took place between us.” The justices thought that corroborated her story about masturbation. That in itself, however, is not corroboration with regard to the masturbation, but it did enable the justices, in my opinion, to determine whether she was telling the truth in giving as one reason why she left her husband that he made her masturbate him shortly before. When she went back to the house with the police officer, she said something which could be interpreted as relating to this incident and the husband then said: “That is personal between us.” I do not think it goes any further than this, that it would enable the justices to come to the conclusion that this woman was a truthful witness; that in some of the things she said she was telling the truth and was not inventing these shocking stories. The evidence about the husband offering to buy two single beds is irrelevant, as is the allegation that he attempted to pull her upstairs; but, as I have said, corroboration, although most desirable in these cases, is not necessary in point of law. I do not think the case of Statham v Statham, to which we have been referred, lays that down. The important thing to remember about that case is that it depended on very peculiar and special facts. There is no doubt that there the husband explained to his wife what he desired to do to her and she readily consented to place her body to him in the way he wanted and thereby became a principal in the felony. That is a very different case from the present case, where the justices have expressly found, as I think that they they were well justified in finding, that the woman, although she may have submitted, was not a consenting party.

For these reasons, I can find no reason why we should disturb the decision of the Divisional Court, and, therefore, the appeal fails and must be dismissed.

HODSON LJ. agreeing, referred to the facts and continued: I think there has been some confusion of thought in this case, at any rate, in argument, because the argument has been conducted in this court on the footing that the wife was an accomplice, involving, to my mind, that she was what the justices found she was not, namely, a consenting party to the acts of sodomy and the specific act of masturbation.

I think it was open to the justices, on the evidence in this case, to find, as they did and as the Divisional Court agreed they were entitled to do, that the wife was not a consenting party and that the acts were inflicted on her against her will. In those circumstances, no particular rule relating to an accomplice applies.

The case of Statham v Statham, to which my Lord has referred, does not, however, assist the husband, because that was a case in which the wife alleged sodomy against her husband, and an insufficient direction had been given to the jury who tried the case. The facts in that case showed clearly that the husband had explained to her the exact physical act which he wished to do to her, that she consented and placed her body at his disposal for the act to be committed and that no compulsion of any kind was put on her. Her only reason for not allowing her husband to do it again was because she said it hurt her too much and she could not stand it again. That is not this case.

The law is, as I understand it, that in cases of cruelty, just as much as in other sexual cases, corroboration is looked for. That does not say that the court cannot act without corroboration. In the case of this kind of unnatural offence, one looks more anxiously for corroboration, and in the present case the justices decided, on one view, in favour of the wife without any corroboration at all. I respectfully agree with what Lord Merriman P said in his judgment in dealing with this point. He said:

“The justices having, as I think properly, directed themselves about the warning which a court must give to itself in these matters, have considered the evidence of the parties and accepted the wife’s evidence as true.”

Page 345 of [1955] 1 All ER 341

He continued:

“It is true that they have gone further; they think that it was corroborated in that way; but they were entitled to accept her evidence as true even if they had not thought that this particular matter afforded corroboration.”

Counsel for the husband has said that that will not do, because, when the justices have found sodomy and also in their findings have found corroboration where none existed, that must necessarily stultify their decision. I do not agree with that. I think that the decision based on the evidence of the wife, believing her and disbelieving the husband, can stand with a proper direction.

In the Divisional Court there was a difference of opinion as to corroboration in regard to the Vaseline. I, for my part, take the view that the story about the Vaseline told by the wife, having regard to the false explanation that the husband gave, as the justices found, is capable of constituting corroboration.

So far as the statement referring to masturbation is concerned, I think there is difficulty about that, because it is not capable of being related to the sodomy, and one has to be rather careful, in considering questions of corroboration, to see to what part of the case the corroboration is capable of being directed. It is quite true that it is capable of being used as corroboration of the act of masturbation, but I do not attach much importance to that in this case. It seems to me that this is essentially a case in which this woman was complaining of what she believed to be completed acts of sodomy, but which the Divisional Court thought more likely to have been attempts at sodomy, not completed acts. That conclusion seems to me the more probable, having regard to the careful analysis of the evidence of the wife which each of the judges gave. The finding of fact of the justices, modified as it is by the Divisional Court, is, I think, quite unassailable.

I agree that the appeal should be dismissed.

VAISEY J. I fully concur with every word that has fallen from my Lords, and I can add nothing. I agree that this appeal fails.

Appeal dismissed.

Solicitors: Craigen, Hicks & Co agents for Patrick Bennett, Maddison & Wainwright, Newcastle-on-Tyne (for the husband); Peacock & Goddard agents for Donald Harvey & Co South Shields (for the wife).

F A Amies Esq   Barrister.

McInnes v Clarke

[1955] 1 All ER 346

Categories:        PROFESSIONS; Surveyors        

Court:        QUEEN’S BENCH DIVISION        

Lord(s):        LORD GODDARD CJ, CASSELS AND STREATFEILD JJ        

Hearing Date(s):        19 JANUARY 1955        

Estate Agent – Commission – Illegal commission – Payment in consideration of supplying addresses of houses to let – Accommodation Agencies Act, 1953 (1 & 2 Eliz 2 c 23), s 1(1)(b).

By the Accommodation Agencies Act, 1953, s 1(1): “Subject to the provisions of this section, any person who, during the continuance in force of this Act … (b) demands or accepts payment of any sum of money in consideration of supplying, or undertaking to supply, to any person addresses or other particulars of houses to let … ” shall be guilty of an offence.

The appellant’s business, which was that of an estate agent, consisted substantially in the finding of furnished accommodation. On a person making an inquiry for accommodation, he would be asked his requirements and what rent he was willing to pay. He would then be told that the fee payable by him, if accommodated, was a sum equal to one week’s rent of the premises taken by him, and that a deposit of approximately half of the weekly rental which he was willing to pay would be asked for. In the event of the client being willing to pay the deposit, an agreement would be entered into and signed by both parties. Sometimes before, and sometimes after, such an agreement was signed, the client would be given a list of addresses. After a client had obtained accommodation, he would return and pay the balance of the fee due. Unsatisfied clients who asked for a return of their deposit received it back in full. Two applicants who went to the appellant both entered into such agreements, paid such deposits, were given lists of addresses, found themselves accommodation and paid further sums to the appellant which made the total amount which they each paid equal to the amount of one week’s rent of the premises which each of them took.

Held – The deposits were, in fact, paid for the addresses being supplied, and, accordingly, the appellant had accepted payment in consideration of supplying addresses to his clients, and was guilty of an offence against s 1(1)(b) of the Act of 1953.

Appeal dismissed.

Notes

For the Accommodation Agencies Act, 1953, s 1, see 33 Halsbury’s Statutes (2nd Edn) 2.

Case Stated

This was an appeal by Case Stated from one of the metropolitan magistrates sitting at West London Magistrate’s Court.

On 1 June 1954, the respondent, Stanley Clarke, preferred an information against the appellant, Douglas George McInnes, that, on 18 February 1954, at 15, Hogarth Place, London, S W 5, he accepted a cheque for £3 from Hazel Phyllis Berens, in consideration of supplying, or undertaking to supply, to her addresses or other particulars of houses to let, contrary to the Accommodation Agencies Act, 1953, s 1(1)(b); and further, that, on 1 March 1954, at 15, Hogarth Place, London, S W 5, he demanded £4 from Derick Eustace Adkins, in consideration of supplying, or undertaking to supply, to him addresses or other particulars of houses to let, contrary to s 1(1)(b) of the Act.

The information was heard on 26 July 1954, and the following facts were found. The appellant carried on the business of an estate agent at 15, Hogarth Place, S W 5, in the firm name of Douglas West, and his business was that of finding furnished accommodation. His method of business was as follows. On a person making an inquiry for accommodation, he would be asked his requirements and what rent he was willing to pay. He would then be told that the fee payable by him, if accommodated, was a sum equal to one week’s rent of the premises taken by him, and that a deposit of approximately half of the weekly

Page 347 of [1955] 1 All ER 346

rental which he was willing to pay would be asked for. In the event of the client being willing to pay the deposit, an agreement would be entered into, and signed by the client and for and on behalf of the firm. Sometimes before, and sometimes after, the agreement was signed, a list of addresses would be given to the client. After a client had obtained accommodation, he would return, and pay the balance of the fee due. Unsatisfied clients who asked for a return of their deposit received it back in full. On 18 February 1954, Hazel Phyllis Berens, being in need of somewhere to live, went to 15, Hogarth Place, and applied to the firm for accommodation. She was interviewed by one Stait, a servant or agent of the appellant, who produced a form of agreement which she read, and which was subsequently signed. She paid £3 to the firm in pursuance of this agreement as fifty per cent of the approximate weekly rental referred to in the agreement. She was then given a list of addresses, probably before the agreement was signed, and thereafter received other lists daily for two weeks, from one of which she found accommodation for herself. She received no other assistance from the firm than the delivery of the lists. Having obtained accommodation, she later, in pursuance of the agreement, paid the firm a further£3 6s, making in all £6 6s; being equal to the amount of one week’s rent of the premises taken by her. On 1 March 1954, Derick Eustace Adkins, being in need of somewhere to live, went to 15, Hogarth Place, and applied to the firm for accommodation. He was interviewed by Stait, who produced another form of agreement which was read over to him, and which was subsequently signed. Before it was signed, Stait said that a deposit would be required, and Adkins paid the firm £4 as fifty per cent of the approximate weekly rental referred to in the agreement. At some stage in the transaction, whether before or after the signing of the agreement was not clear, Adkins received a list of addresses from which he found accommodation for himself. He received no other assistance from the firm than the delivery of the list. Having obtained accommodation, he later paid the firm, in accordance with the agreement, a further £3, making in all £7, being one week’s rent of the premises taken by him. The appellant was carrying on an honest business.

It was contended on behalf of the appellant in each case that one must look at the transaction as a whole and consider whether it was within the mischief of s 1(1)(b) of the Act, and that there was every difference between evasion and avoidance of an Act of Parliament. The mischief at which s 1(1)(b) was aimed, was the demanding or accepting of money by one person in return for giving to another person addresses or other particulars of houses to let, with the result that the other person might get a list of addresses which was quite useless, and might have paid money to no purpose. On looking at the transaction as a whole, and on the proper construction of the agreements between the appellant and Berens and Adkins, respectively, the effect was that, if the appellant should obtain living accommodation for them, and if they should take a tenancy of it, they would pay the appellant, by way of commission, a sum equal to one week’s rent of the premises taken, with the further provision that they would, on the making of the agreement, pay the appellant, as a deposit, a sum equal to approximately half the weekly rent which they were willing to pay, and would pay the balance on taking the premises obtained for them. If no premises were obtained for them by the appellant, the deposit would be repayable to them. On this basis, the supplying of addresses or other particulars of houses to let was only incidental to the agreement, and was not the consideration for the demanding and accepting of the respective sums of money, the true consideration for which was the obtaining of living accommodation by the appellant for Berens and Adkins. It was contended on behalf of the respondent that the appellant was guilty of the offences with which he was charged, in that, as the payment of money was a condition precedent to the supplying of lists of accommodation, the money demanded and accepted in each case was in consideration

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of the supplying, or undertaking to supply, addresses or other particulars of houses to let.

The magistrate was of opinion that it was clear that, unless the sums described as deposits were first paid, neither applicant could obtain any list of addresses, and that the only assistance given by the appellant to the applicants was the delivery of the lists of addresses from which they had to seek accommodation for themselves, and that, therefore, the transactions were contrary to s 1(1)(b) of the Act. He found the appellant guilty, and the appellant now appealed.

Melford Stevenson QC and R B Willis for the appellant.

J C Phipps for the respondent.

19 January 1955. The following judgments were delivered.

LORD GODDARD CJ. This is a Case Stated by a metropolitan magistrate, before whom the appellant was summoned for breaches of the Accommodation Agencies Act, 1953. Section 1(1) of that Act provides:

“Subject to the provisions of this section, any person who, during the continuance in force of this Act,—(a) demands or accepts payment of any sum of money in consideration of registering, or undertaking to register, the name or requirements of any person seeking the tenancy of a house; (b) demands or accepts payment of any sum of money in consideration of supplying, or undertaking to supply, to any person addresses or other particulars of houses to let … ”

[His Lordship stated the facts and continued:] The two agreements show that what the appellant did was to say this to a person:

“If you give me a deposit of approximately half the week’s rent I will send you some names and addresses, particulars of houses, and if you take one of them you have to pay me the rest of the sum, which is to be equivalent to a week’s rent. If I cannot satisfy you, I will give you your deposit back.”

When I have read those facts and when I have read the section, I should have held that it was unarguable, though I am sure that no case is ever unarguable if counsel for the appellant is instructed to argue it, because it seems to me that what the appellant has clearly done is to accept payment in consideration of supplying addresses or other particulars of houses to people who have applied to him. That he has also undertaken to give back the money which has been deposited if the transaction does not result in the client getting anything, does not seem to me to be material. The statute might have made some provision for the position of a man who is honestly conducting a business, but the statute has not done that. What s 1(1)(b) says is that a man must not demand or accept payment of any sum of money in consideration of supplying, or undertaking to supply, to any person addresses or other particulars of houses to let. The appellant did this. That was why he received the deposit, and the deposit was to be treated as part payment if the person took one of the houses supplied. I do not think there is any doubt about it. I think the magistrate was right and this appeal fails and must be dismissed with costs.

CASSELS J. I agree. Evidently the practice which has been adopted by the appellant, in order to avoid the application of the Act to his method of carrying on his business, is to require a commission from the client who is seeking accommodation. That commission is said to be a sum equivalent to the first week’s rent. Then he further requires that there shall be a deposit of one half, and, as soon as the client has put down the deposit of one half, the appellant agrees to supply the client with a list of addresses. In one of these cases it is said that the person should get a daily list for every working day for the next eighteen days. What was the consideration for that? Payment of the money,

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the payment of half of the first week’s rent, not to be credited against the rent, but to be credited against the demand which was being made by the appellant. Section 1(1) of the Act distinctly says:

“… any person who, during the continuance in force of this Act,—(a) demands or accepts payment of any sum of money in consideration of registering, or undertaking to register, the name or requirements of any person seeking the tenancy of a house; (b) demands or accepts payment of any sum of money in consideration of supplying, or undertaking to supply, to any person addresses or other particulars of houses to let … ”

shall be guilty of an offence.

It seems to me that, so far from avoiding this Act, this particular practice was within it, and that any client who had approached the appellant and had walked out with a list of addresses would not be far from telling the truth if, in answer to an inquirer’s question, “What have you paid for them?”, that is for the list of addresses, the client had said “I have paid £3”. Yet, in the ordinary way of business, if one goes into a house agent’s office and asks him if he has any houses, one expects to walk out with particulars of those houses on his books, and does not expect to walk out minus a sum of money.

I think the magistrate came to the right conclusion on the facts, and I agree that the appeal fails.

STREATFEILD J. I agree. I have only to add that, in view of the finding of the magistrate that, unless the sums described as deposits were paid, neither of the applicants could obtain any list of addresses, which, in fact, was the only assistance which the appellant afforded them it seems to me idle to contend that the wording of these contracts in which the consideration is expressed to be a client accepting accommodation, can be regarded as other than a colourable evasion or attempted evasion of this Act of Parliament. I think that, in view of the finding of the magistrate, it is quite clear that the real consideration, looking at the facts of the case, was that this money was paid in consideration of the supply of addresses to these clients. In those circumstances, I agree that that is within the mischief aimed at by this Act of Parliament, and this appeal must fail.

Appeal dismissed.

Solicitors: Willis & Willis (for the appellant); Director of Public Prosecutions (for the respondent).

G A Kidner Esq   Barrister.

Watson v Murray & Co

[1955] 1 All ER 350

Categories:        TORTS; Trespass: CIVIL PROCEDURE        

Court:        QUEEN’S BENCH DIVISION        

Lord(s):        HILBERY J        

Hearing Date(s):        22, 23, 24, 25, 26, 29 NOVEMBER, 6, 7 DECEMBER 1954, 11 JANUARY 1955        

Execution – Writ of fieri facias – Seizure of goods – “Walking possession” agreement – Excessive seizure – Exclusion of debtor from own premises – Sale on debtor’s premises without permission – Trespass.

Trespass – Sheriff – Writ of fieri facias – Seizure of goods – Excessive seizure – Exclusion of debtor from own premises – Sale on debtor’s premises without permission.

Detinue – Sheriff – Writ of fieri facias – Seizure – Sale on debtor’s premises – Goods lost during view – Negligence of sheriff in leaving goods unattended during view.

On 7 January 1952, the defendants, who were sheriff’s officers, having received a writ of fi fa in respect of a judgment debt due from the plaintiff, attended by their agent, M at the plaintiff’s shop and M informed the plaintiff that he must take charge of everything in the shop. The plaintiff protested, and M produced, and the plaintiff signed, a printed form of “walking possession” agreement. M then left the shop. Under the agreement the plaintiff undertook, in consideration of the defendants not keeping their agent in close possession of the goods seized, to allow him to re-enter the shop at any time, using force if necessary. The value of the contents of the shop was greatly in excess of the amount required to satisfy the debt. The same procedure was followed by the defendants in relation to each of a series of writs of fi. fa. issued against the plaintiff between January and June, 1952. Some of the debts in respect of which the writs were issued were paid off, but on 21 June 1952, the defendants instructed an auctioneer to attend at the plaintiff’s premises to prepare an inventory for the purposes of the sale of sufficient of the plaintiff’s stock to meet the debts. The auctioneer tried to arrange for the sale to take place at certain auction rooms, but could not do so. On 24 June 1952, the defendants’ representative attended at the plaintiff’s premises and prepared lots for sale. On leaving the shop he locked it and took possession of the keys, so excluding the plaintiff from her own premises. On 2 July 1952, posters announcing the sale were exhibited on the windows of the shop, despite the plaintiff’s protests. On 3 July 1952, the defendants kept the shop open to permit the goods to be viewed. The defendants’ representatives did not keep a continuous watch on the goods during the view, and it was subsequently found that two garments, value £18, were missing. After the viewing, the defendants locked the shop and retained the keys. On 4 July 1952, the shop was opened by the defendants for the purposes of the sale, but the necessary money was paid on the plaintiff’s behalf and no sale was held. The plaintiff sued the defendants for damages for trespass to the land and goods and in detinue or conversion for damages to the value of the two lost garments.

Held – (i) The procedure for walking possession adopted by the defendants through their agent on 7 January 1952, amounted in law to a seizure, the sheriff retaining notional possession by virtue of the walking possession agreement.

Dictum of Bramwell B in Gladstone v Padwick (1871) (L R 6 Exch at p 212) applied.

(ii) when the defendants by their agent took walking possession, the seizure was excessive, but no damage resulted therefrom to the plaintiff.

(iii) the defendants were negligent in leaving the plaintiff’s goods unattended at times during the view on 3 July 1952, and the plaintiff was entitled to recover the value of the goods which subsequently were missing.

(iv) the defendants had committed a trespass on 24 June 1952, in taking

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exclusive possession of the shop by locking it against the plaintiff and taking possession of the key.

(v) the defendants, in the circumstances of the present case, committed trespass when they did acts on the plaintiff’s premises solely for the purpose of holding a sale there and were liable in damages for the consequential loss.

Per Curiam: it may be that, if a sheriff can show that it was not possible to sell the goods except on the debtor’s premises, it would be lawful for him to sell them there (see p 360, letter d, post).

Notes

As to Seizure under a Writ of fieri facias, see 14 Halsbury’s Laws (2nd Edn) 47, 65, paras 86, 111. As to Sale by Sheriff, see 14 Halsbury’s Laws (2nd Edn) 67, para 115; and for cases on these subjects, see 21 Digest 471, 472, 475–480, 513–531, 556–595.

As to the Liability of the Sheriff for the Acts of his Officers, see 30 Halsbury’s Laws (2nd Edn) 138, para 266; and for cases on the subject, see 41 Digest 108, 652 et seq.

Cases referred to in judgment

Bissicks v Bath Colliery Co Ltd (1877), 2 ExD 459, 46 LJEx 611, affd CA, (1878), 3 ExD 174, 47 LJQB 408, 38 LT 163, 42 JP 708, 21 Digest 609, 1979.

Mortimore v Cragg (1878), 3 CPD 216, 47 LJQB 348, sub nom  Re Surrey, Sheriff, Mortimore v Cragg, 38 LT 116, 21 Digest 609, 1977.

Gladstone v Padwick (1871), LR 6 Exch 203, 40 LJEx 154, 25 LT 96, 21 Digest 476, 564.

Lumsden v Burnett [1898) 2 QB 177, 67 LJQB 661, 78 LT 778, 21 Digest 510, 857.

Gawler v Chaplin (1848), 2 Exch 503, 18 LJEx 42, 13 JP 154, 154 ER 590, sub nom Gwaller v Chaplin, 11 LTOS 68, 21 Digest 523, 966.

Ash v Dawnay (1852), 8 Exch 237, 22 LJEx 59, 20 LTOS 103, 17 JP 183, 155 ER 1334, 21 Digest 508, 843.

Reed v Harrison (1778), 2 Wm Bl 1218, 96 ER 717, 21 Digest 508, 840.

Re Purcell (1884), 13 LR Ir 489, 21 Digest 612, c.

Action for damages for trespass to goods and land of the plaintiff and also for detinue or conversion of goods, the property of the plaintiffThe facts appear in the judgment.

Leonard Caplan QC and W Frankel for the plaintiff.

Sir Frank Soskice QC and Michael Lee for the defendants.

Cur adv vult

11 January 1955. The following judgment was delivered.

HILBERY J. This is a claim for damages for alleged trespasses to goods and land of the plaintiff by the defendants acting as officers of the Sheriff of Surrey, coupled with a claim for £18 as damages for detinue or conversion of two women’s dresses, the property of the plaintiff, alleged to be of that value. The alleged trespasses complained of by the plaintiff were all acts said to have been done by the defendants acting as sheriff’s officers in the course of executing writs of fi fa delivered to them. The plaintiff alleges that in January, 1952, in March, 1952, and in May 1952, there were excessive seizures by the defendants when executing writs of fi  fa and that the defendants thereby trespassed on the plaintiff’s goods. Next, the plaintiff alleges and complains that in the course of executing the writs the defendants took possession of her shop and excluded her from the control thereof on two occasions, viz, on 15 January and 16 January 1952, and on 25 June and during part of 1 July and 2 July and the whole of 3 July 1952.

The material facts, in outline only, are as follows. In March, 1951, the plaintiff bought the business of a ladies’ and children’s outfitter then being carried on

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under the name of Augusta at 48, High Street, Camberley, Surrey, for £7,014, made up of £2,000 for the lease and goodwill, £4,514 for stock and £500 for fittings, etc  The living premises over the shop were included in the lease and the plaintiff went there to live and lived there until the business was finally closed. The plaintiff was without any previous experience in the ownership and control of such a business and by January, 1952, through overbuying of stock, she was beginning to be in grave financial difficulties. On 2 January a firm called Seton Cotterall signed judgment against her for £393 2s 6d  On 5 January the plaintiff executed a bill of sale on a large number of the articles comprising the stock of her shop to secure a loan of £500, the lender of the £500 being Mr Mitchener. On 7 January the defendants, having received a writ of fi fa in respect of the judgment debt and costs, called at the plaintiff’s shop, by Mr May their employee and representative, to demand payment of the amounts due or failing payment to levy execution. Whether what took place amounted to a seizure by the sheriff and, if so, whether such seizure was excessive, are matters which are in issue and fall to be decided.

The plaintiff signed a form of “walking possession” agreement offered for her signature by the defendants’ representative, Mr May. Taking this “walking possession” agreement so signed by the plaintiff with him, Mr May left the plaintiff’s premises. On Wednesday, 16 January at about 1.45 pm Mr Mitchener, the holder of the bill of sale, paid the amount then demanded by the defendants as representatives of the sheriff. On 20 February 1952, a firm called Portenay signed judgment against the plaintiff for £235 5s 2d, and £13 costs. Having received a fi fa in respect of this judgment and costs, on 3 March the defendants sent their same representative, Mr May, to the plaintiff’s premises for the same purposes as on the occasion of his call in January. Again the plaintiff signed the same form of walking possession contract as she had signed in January with the same result, viz, that the sheriff’s man did not remain on the premises. On 18 March the defendants removed 120 garments from the plaintiff’s stock for sale by auction. On 24 March the money required by the sheriff was found and paid by the plaintiff. Again whether there was a seizure on this occasion and, if so, whether such seizure was excessive, are questions which fall to be decided.

On 15 May a firm called Hubert Gowns Ltd obtained judgment against the plaintiff for £132 10s  On 16 May having received a writ of fi fa in respect of this judgment, the defendants again sent their representative, Mr May, for the same purpose as on the previous occasions and again the plaintiff signed the same form of walking possession agreement. Exactly similar calls were made by the defendants’ representative, Mr May, on 27 May 10 June 13 June and 20 June the defendants having received prior to each of such calls writs of fi fa in respect of judgments against the plaintiff for £210 1s 6d, £60 11s, £102 8s 6d and £51 6s respectively, making a total of indebtedness on the judgments of £556 17s in addition to which there were sums for costs and sheriff’s fees, charges and expenses.

On 24 June or 25 June the defendants put “lot” tickets on a number of articles in the plaintiff’s shop with a view to holding an auction sale thereof at the plaintiff’s shop. It is now conceded that they locked the shop, excluding the plaintiff therefrom, from about 4.30 of 24 June until the morning of June 25. The defendants prepared and published posters advertising this proposed sale and advertised it in the press. The poster and the advertisements announced that the sale was to be without reserve at 48 High Street, Camberley, on 4 July and was to be a sale of “the valuable stock of a high class costumier and ladies’ outfitter”. Then followed a list of what was announced for sale concluding with a statement that the articles were to “be sold by auction by Messrs H W Smith & Moon on the premises as above on Friday, 4 July 1952, at 12 o’clock noon”.

The defendants posted more than one of these posters on the window of the

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plaintiff’s shop. They were found in that position when the plaintiff returned from London during the afternoon. Mr Bond’s evidence was that on 2 July when he and Mr Greer left the premises the shop was again locked up for the night. The plaintiff’s evidence was that the defendants’ representatives had been at the premises all day on 1 July and had closed the shop during that day. I think the plaintiff has here been confused about the exact sequence of events because Mr Bond’s evidence, and I thought him reliable, was that he was not in fact at the premises between 24 June and 2 July and could not therefore have been one of the defendants’ representatives there on 1 July as the plaintiff asserted. On 2 July he and Mr Greer, the sales foreman, who was with him, found that forty-eight of the lot numbers which had previously been put on various garments, were missing. They had obviously been removed by the plaintiff. Mr Bond and his colleague then re-lotted the selected garments while the plaintiff continued her business in the shop. Four rails of garments were lotted and put aside as also were the garments in one show case. Mr Bond saw the plaintiff interfere with the first rail of garments which they had so re-lotted. The next day, 3 July the defendants opened the premises again, this being the day advertised for viewing the goods which were to be sold.

I cannot accept the plaintiff’s evidence that Mr Moon was at the premises on Thursday, 3 July in face of his denial that he was there on 2 and 3 July. It is the fact that on 3 July the defendants were exercising complete control over the premises and the goods which had been lotted, and were inviting viewers to come in and inspect the goods which were in the catalogue for the sale. On 4 July the day fixed for the sale, the defendants’ own evidence given by Mr Moon was that their posters were outside the premises and that there were people arriving for the sale at 11.15. However, Mr Moon, at the premises, was informed by his partner Mr Coombs by telephone that all moneys due had been been paid and that the sale must be stopped. It was announced to those outside the shop, who were there waiting for the sale to begin, that the sale would not take place. The plaintiff asserts that Mr Moon then stood outside the shop, and when asked why there would be no sale said “she has paid her debts”. Mr Moon denied that he ever said this and I am not satisfied that these were the words that were used. After the sale was stopped it was found that two of the garments which had been included in the catalogue were missing. It is clear not only from the evidence of the plaintiff but also in my view from the evidence given by Mr Moon that the plaintiff at all times objected, and made it clear to the defendants that she objected, to their holding a sale on her premises.

The first question to be considered is whether what took place when Mr May went to the premises on 7 January armed with the writ of fi fa, amounted in law to a seizure of the plaintiff’s goods. Mr May is now dead, but his report on his visit is in evidence. He states that on calling he informed the plaintiff of the nature of his visit and was told by her that there was a bill of sale on all the stock and fittings in the shop in favour of Mr Mitchener; she stated that her solicitor had tried evidently unsuccessfully to arrange for payment of the debt by instalments and that she was not in a position to pay anything on account that day. Mr May reported that it was a very good class shop and fairly well stocked with ladies, dresses, suits, gloves, stockings, etc  The plaintiff’s evidence was that Mr May came at about 10.30 am on Monday, 7 January handed the plaintiff the defendants’ card showing that they were sheriff’s officers and he was their representative, and said that he must take charge of everything in the shop; that she said she did not want him in the shop and asked what right he had to stay there, that Mr May then produced a printed form and said that if she signed it and guaranteed to pay him the money which she took, except whatever was required for staff wages, he need not stay all the time. Thereupon the plaintiff signed the printed form which the defendants regularly use and which is known as a “walking possession” agreement. It is in the following terms:

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“Dated (Blank) To the Sheriff of the County of Surrey and to Messrs. Murray & Co., his officers. (Blank) v. (Blank). In consideration of your not keeping the man in charge of the goods seized herein in close possession, and allowing him to leave each night and attend each day (or as may be arranged) I hereby authorise and empower you and your representative to re-enter my house and premises, No. (blank) [address] at any time you may think proper, under a writ of fi. fa. in the above action dated (blank) and if necessary to use force for that purpose, and I also undertake not to remove, or allow to be removed, any of the goods in the meantime, and to pay the possession money day by day.”

It was argued for the defendants—these being the facts, and I think the plaintiff’s evidence here is substantially accurate—that there was no seizure: that all that Mr May did and said only amounted to an explanation by him of what the legal situation would be if the plaintiff did not either satisfy the judgment debt or sign the walking possession agreement and that as the plaintiff thereupon signed the agreement no seizure was made and the defendants contented themselves with the notional possession which resulted from the agreement. I am unable to accept this contention.

On the subject of what is sufficient to constitute a levy or seizure by the sheriff in execution of a writ of fi fa there is fortunately some authority. In Bissicks v Bath Colliery Co Ltd, where the sheriff’s officer went to the plaintiff’s premises and told him he had a warrant to execute a writ of fi fa for £28 7s 2d and that he required immediate payment, otherwise further proceedings would be taken and the man must remain in possession, the plaintiff paid the sums demanded, including poundage and levy fees, the court held that the sheriff was entitled to both these items. Cockburn CJ said (2 Ex D at p 462): “We must look to see if the writ has been virtually executed”, and Cleasby B said (ibid): “… I think in this case there was in substance an actual levy … ” On appeal from that decision Bramwell LJ said (3 Ex D at p 175):

“The question is whether, upon the facts, there was a seizure … upon the whole I think there was a seizure, for the officer did threaten to leave a man in possession.”

Brett LJ said (ibid):

“I agree that there must be a seizure; but upon the facts I think there was a seizure. The sheriff’s officer went to the plaintiff’s house with a man, he obtained entry into the house, and whilst he was there the plaintiff’s goods were under his control; he spoke as if he had made a seizure, and he treated what he was doing as if it was a seizure … ”

In addition it has been expressly stated by Brett LJ in Mortimore v Cragg (3 C P D at p 219) that

“… Where an execution issues the transaction may be divided into four parts: 1. The delivery of the writ to the sheriff: 2. Seizure: 3. The possible payment of money after seizure: 4. If no payment, sale.”

There can be no doubt that Mr May went on each occasion armed with a warrant for the purpose of executing a writ of fi fa. When he says in his report that he informed the plaintiff of the nature of his visit, and the plaintiff, as I believe, asked what right he had to stay there and expressed her objection to his staying, and when I find that he took an agreement in the form in which he did take it, I am satisfied that there was what amounted to a seizure. The opening words of the

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agreement are “in consideration of your not keeping the man in charge of the goods seized herein in close possession”. Those are words chosen and put forward by the defendants themselves. They are only consistent with the fact that goods have been seized. Furthermore, by the concluding words of the agreement the plaintiff undertook “not to remove, or allow to be removed, any of the goods in the meantime, and to pay possession money day by day”. Again, those words are only consistent with there having been a seizure. In Gladstone v Padwick, one of the questions was whether what was done by the sheriff’s officer on a certain date amounted to an actual seizure, and Bramwell B said in the course of his judgment (L. R 6 Exch at p 212):

“It is admitted, and it is clear, that it is not necessary for the sheriff to lay his hand on a single article … I am of opinion that, where property is all one holding, as it was here, if the sheriff goes and makes known … that he is come to seize, and does, so far as words and intention can go, seize all the goods on that holding, he has done enough … ”

Those words are applicable to what took place on each of the occasions in January, March, May and June when Mr May called at the plaintiff’s shop and premises to execute the several writs of fi fa which figure in this case.

It was urged for the defendants that the position of the sheriff which resulted from what was done and said on each of the occasions when Mr May called on the plaintiff, and entered her premises for the purpose of executing the writ, was not that the defendants as sheriff’s officers had seized, but that they had obtained contractual rights under the several walking possession agreements which the plaintiff signed the result of which was to give them a notional possession. It is true that in Lumsden v Burnett, A L Smith LJ spoke of such an agreement as giving only a constructive possession and Chitty LJ spoke of it as giving a possession merely constructive or notional. In that case, the court held that the existence of such an agreement was strong evidence to show that the officer leaving the premises in the terms of such an agreement was not abandoning possession. In that case, as in this, after leaving the premises having obtained the walking possession agreement, the officer paid a subsequent visit or visits to the premises to see that the goods were not being removed. I think it is right to say that after seizure the sheriff may continue in possession either actually by leaving a man in the premises or notionally under such a walking possessing agreement as was obtained on each occasion from the plaintiff in this case.

Since therefore in my view there was on each occasion a seizure, it becomes necessary to consider whether in January and March or in May and June the seizures were excessive so as to give rise to an action on the case against the sheriff. That an excessive seizure gives such a cause of action was decided in Gawler v Chaplin. In that case the first alleged breach of duty on the part of the sheriffs was that they had wrongfully seized goods of the plaintiff of greater value than sufficient to pay the debt, interest, poundage and expenses, although they well knew part would be sufficient. On motion in arrest of judgment after verdict the question was whether that alleged breach was good in law. It was held that it was. In giving the judgment of the court Parke B said (2 Exch at p 507):

“… in the first instance, the duty of the sheriff is confined to seizing goods that would be reasonably sufficient, if sold, to pay the sum endorsed on the writ—that is, the debt, interest upon the debt, poundage, and expenses; and if the sheriff seizes more prima facie he is a wrongdoer … ”

There can be no doubt on the evidence that the stock in the plaintiff’s shop was far more extensive than it was necessary to seize to satisfy the judgment debt in respect of which either of the writs of fi fa in hand in January and February was issued even including the other charges enumerated by Parke B.

There was therefore in my judgment a seizure on each occasion which was excessive; but it resulted in no damage to the plaintiff. She was allowed to carry on her business as before and did so until the sheriff was paid. With regard to the alleged seizure in March on the fi. fa. issued in respect of the Portenay judgment for £235 odd and £13 costs, I am satisfied that when May called to

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execute the writ of fi fa substantially the same course was followed, and that there was therefore what amounted in law to a seizure in the first place of all the plaintiff’s stock at her shop, and this was an excessive seizure. Again, however, there was an exactly similar walking possession agreement signed by the plaintiff and again she was allowed to carry on her business without interruption and with power to dispose of any of the items which formed part of the stock by way of sale until 18 March. On 18 March however, the defendants took actual possession of 120 dresses and removed them for sale, and it was conceded in the course of the case that this actual seizure and removal was not excessive. The only claim therefore which remains is for the technical seizure of the whole stock, prior to the selection and removal of the 120 garments made on this occasion when the defendants’ man Mr May called to execute the writ of fi fa on 3 March. True that general seizure was in law effective until the particular seizure of the 120 garments only was made on 18 March but again it resulted in no damage to the plaintiff inasmuch as she was left by agreement with power to deal with the whole of that stock in the ordinary course of her business. The sale of the goods so collected and removed was arranged for 25 March at the auction rooms of Messrs E Reeves Ltd at 114, Church Street, Croydon, but on 24 March the execution was paid out and the sale was abandoned.

I turn now to the happenings in May and June. On 16 May the defendants having received a writ of fi fa in respect of judgment for £132 10s obtained against the plaintiff, sent their representative Mr May to the plaintiff’s shop to execute the writ. Once again, from the plaintiff’s evidence and Mr May’s written report, I find that substantially the same procedure was gone through between Mr May and the plaintiff as on the previous occasions and I am satisfied that he then made what amounted in law to a seizure of the contents of the shop. That the defendants themselves regarded what Mr May did on that date as a seizure there can be no doubt for there is a letter from them to the judgment creditors’ solicitors dated 28 May headed “Hubert Gowns Ltd v Watson” which begins: “We duly seized under this execution on the 16th instant”. On 26 May being in possession of a writ of fi fa in respect of a judgment for £210 1s 6d obtained by a firm called Stafford Ltd the defendants again sent Mr May to execute the writ. Mr May’s written report as to what passed, using the same language as before, says that he informed the plaintiff of the nature of his visit. Again, I can only conclude that he purported to make a seizure.

On 27 May through her solicitor the plaintiff pleaded with the defendants to defer action, saying there were funds due to the plaintiff which he hoped would become available to satisfy the two executions. By a letter of 30 May Mr Mitchener, the holder of the bill of sale, wrote that with regard to these two executions he made no claim against “their goods”, whatever that may mean. It was apparently taken to mean that he abandoned any claim he might have under the bill of sale. On 10 June there was a third execution in respect of a judgment obtained by Lennox Knitwear Ltd for £60 11s. On 13 June there was another execution in respect of a judgment obtained by Sidney J Lindsay Ltd for £102 8s 6d. Again in his reports Mr May uses the same language as before to describe what passed between him and the plaintiff when he called to execute each of the writs of fi fa issued in respect of these two judgments.

On 20 June the defendants received yet another writ of fi fa in respect of a judgment obtained by Wallace Thorn Ltd for £51 6s and armed with the appropriate warrant Mr May called on the plaintiff and informed her, as he reported, of this judgment. Again, I think that he intended what he did when he called as execution of the writ of fi fa and there is no doubt that the plaintiff regarded and accepted it as such. In view of what subsequently transpired, it is not unimportant to notice that in response to the plaintiff’s solicitors’ plea to them to defer the actual sale of the plaintiff’s goods to satisfy the executions of 16 May and 26, the defendants not only delayed action for the seven days asked

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for but agreed by a letter of 3 June to refrain from taking any steps towards auction until 6 June and that the plaintiff’s solicitor wrote on 4 June in reply that he appreciated their consideration in these matters. The plaintiff’s solicitor, Mr Barnes, in a telephone conversation on 10 June agreed that, if the necessary money was not forthcoming by 11 June the defendants must proceed with a sale. Again on 11 June by which time there were, as I have pointed out, these several executions current, Mr Barnes was writing that funds were expected and would undoubtedly come into his hands very shortly, but that he appreciated that the defendants could not refrain from carrying through the executions indefinitely and must therefore proceed.

In addition to being a partner in the defendant firm Mr Moon owns and conducts the business of an auctioneer under the name of H W Smith & Moon. Mr Coombs, who is Mr Moon’s partner in the defendant firm, had all the executions in question in his hands. On 21 June writing in the name of the defendant firm, he instructed H W Smith & Moon, that is to say Mr Moon, his partner, in his capacity as the auctioneer, to attend at the plaintiff’s premises as soon as possible to make an inventory and catalogue of sufficient effects to realise the sum of £608 plus 8s 6d per day after 23 June and Mr Moon’s charges. He informed Mr Moon in the same letter that there was no claim being made any longer by Mr Mitchener. He then concluded the letter as follows:

“We leave it to you as to whether it is best to either remove for sale or sell upon the premises. If the latter course is decided upon by you we must ask you to hold the sale at the very earliest moment, in any event not later than 2 or 3 July, next. Furthermore, if the sale is being conducted on the above premises, particular care must be taken to safeguard the effects and stock, that is, the premises must be closed and the keys held. If there is any risk of goods being disposed of by the [plaintiff], they had better be removed for sale.”

On receipt of that letter Mr Moon by telephone tried to arrange as before with Reeves Ltd for auction rooms for a sale of whatever articles he decided must be taken from the plaintiff’s stock to satisfy the current executions and charges. Reeves Ltd however, refused facilities for the sale. On 23 June they wrote giving their reasons, saying:

“Our auction rooms are open for the reception of goods for absolute sale at any convenient time, but where goods have to be withdrawn after the sale has been advertised and prepared it entails not only pecuniary loss as on the last occasion, but upsets the timing of the sale of other lots besides putting us in disfavour with the trade.”

Pursuant to his instructions Mr Moon attended to prepare for a sale, deciding in his own mind that in the circumstances the sale must be held on the premises. I am satisfied that he decided he must hold the sale on the premises in good faith, and not with any malice towards the plaintiff. By the delays which the defendants had conceded, they were in danger so far as the several judgment creditors were concerned. It was urgently necessary that they should sell and satisfy the several writs and executions then in hand before what had occurred constituted an act of bankruptcy on the part of the plaintiff. From experience they knew that it would be most difficult to find any auctioneer with an auction room which could accommodate the goods for sale who would be willing to hold the sale. From experience they knew that any such auctioneer would make the same objection as Reeves Ltd had made when refusing to undertake the sale, more especially as all auctioneers knew that the remuneration allowed them on a sheriff’s sale was much less than that which they ordinarily charged and received. Any auctioneer would know that he might be allowed only seven per cent if the sheriff’s bill was taxed, as against their ordinary remuneration of twelve and a half per cent  The defendants had delayed selling the plaintiff’s goods at the

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request of the plaintiff to give the plaintiff time to get in hand the moneys which her solicitor was saying were expected and which would enable her to pay out the executions. The consequence was that the selling of the goods had become a matter of extreme urgency. It was for these reasons that Mr Moon decided to sell on the premises. He attended at the premises on 23 June and went over the whole stock intending to sell something of everything to an extent which would provide the amount required and to leave stock which would enable the business to be carried on. He prepared a posting bill and sent it to the printers that day in order to announce the sale as soon as possible. He informed the plaintiff that he intended to hold the sale on the premises. That the plaintiff objected there is no doubt, and that Mr Moon knew that she objected I have no doubt.

On 24 June Mr Moon again attended all day at the shop and lotted for catalogue purposes about 280 lots. He made a rough assessment of what they might fetch under the hammer. He calculated that they might make an overall average of 50s. a lot. That afternoon, when he left, he caused the shop to be locked up thereby excluding the plaintiff from her own premises because, he said, he felt an element of risk. If there was an element of risk the duty of the sheriff was to leave a man in possession or to remove the goods which he intended to sell. It is no answer to say that today he cannot obtain a man who will do this at the scale fee allowed to a sheriff for a man in possession. In my view it was a trespass on the plaintiff’s property to put himself into exclusive possession of her premises by locking them against her and taking possession of the keys. Either on that day or on 25 June 1952, the defendants kept the shop locked all day.

On 2 July posters were stuck on the windows of the shop on the defendants’ instructions. On 3 July some of the defendants’ men were at the premises keeping the premises open for viewing but allowing the plaintiff to carry on her business so far as she could in such circumstances. The goods for sale which were there to be viewed were put at the back of the shop and in one show case. The defendants’ representatives did not keep a continuous watch on the viewers and the goods which they had thus lotted and separated. It was admitted by the defendants that they left the premises for meals. The result was that the next day after the executions had been satisfied and the proposed sale abandoned it was found that two of the lotted garments were missing. Apparently they had been stolen. There is no evidence that the plaintiff had sold them, and I am satisfied that the plaintiff is not dishonest and would not have insisted as she did on having a written acknowledgment by the defendants’ man on the premises that these two garments were missing if she had been conscious that she had herself taken them and sold them. Even if, as it was argued for the defendants, the plaintiff can only recover the value of these lost garments if she proves that they were lost through the defendants’ negligence, I am of opinion that she has shown that. If the defendants were keeping the shop open for anyone to come in and view the garments lotted for sale and taken by them into their possession and control, they were guilty of negligence if they left those garments unattended. The plaintiff’s claim for £18, the value to her of these lost garments, is, therefore, in my view well founded.

After the viewing was over the defendants again locked up the premises and kept the keys. On 4 July the premises were opened by the defendants for the holding of the sale but it was stopped, and no sale took place because the necessary moneys were paid on the plaintiff’s behalf.

The questions which have to be decided in connection with these happenings in June and July are first, did the defendants trespass by preparing for this sale on the premises and by using the premises for their preparations for the sale and by posting the bills announcing the sale on the plaintiff’s premises without her permission and in spite of her objection of which they knew, and second, did

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the defendants on this occasion make an excessive seizure in taking for sale what appears in the catalogue.

On the second question there was much evidence on both sides. The plaintiff’s contention that the seizure was excessive is mainly based on evidence that at such a sale you might ordinarily expect to realise a certain fraction or percentage of the retail prices of the articles and on the fact that at a later date the fixtures which were included in the catalogue sold for a comparatively large sum and the other articles realised, when sold by tender, about twenty-five per cent of their retail price. On the other hand the defendants’ evidence and contention was that it is in the highest degree uncertain what such goods will fetch under hammer, much depending on whether there is a good or a poor attendance at the sale: that a sale such as this will be likely to realise less if held in the country than if held in a London auction room; that such a sale largely depends on the weather and on the trade buyers attending, and that the sheriff must always allow a margin as he has a duty to the execution creditors to execute the writ so as to make of the goods sufficient to satisfy the executions.

I am satisfied that the defendants, in lotting and cataloguing what they did, acted in good faith, and I am not satisfied, having regard to the hazards attending such a sale, that there was an excessive seizure. It must be remembered that most of the goods in question were seasonal and fashion goods. Moreover, it by no means follows that anything like all the lots would necessarily have got a bid at all.

The serious question which remains is the question whether the defendants had any right in law to insist on using the plaintiff’s premises as they did for the purposes connected with holding this sale there. It is clear that the writ of fi fa does not require or authorise the sheriff to seize the land or premises of a debtor. It requires him to make of the goods of the debtor sufficient to satisfy the execution creditors’ judgment debt. It gives the sheriff a right to remain on the debtor’s premises for a reasonable time and no longer (see Ash v Dawnay), and it empowers him to sell sufficient of the debtor’s goods to satisfy the debt in respect of which the writ was issued. Reed v Harrison is authority for saying, as the headnote to that case expresses it, that on attachment of goods, the officer cannot legally continue in possession of the defendant’s house, or keep the goods therein for a long and unreasonable time, but must remove them to a place of safe custody: else he is a trespasser ab initio.

At common law the sheriff’s duty is to remove the goods to some place where they can be safely kept until they are sold, but I cannot find any English authority which decides that he can, if he chooses, use the debtor’s premises for the purpose of holding a sale there. It does not appear to me that in this case it is established that it was impossible to hold the sale anywhere else than on the plaintiff’s premises. It was no doubt extremely difficult in the particular circumstances to arrange for it elsewhere, and no doubt the defendants decided that it was expedient to hold the sale at the plaintiff’s shop, but the plaintiff objected and they knew that she objected. They must in those circumstances, it seems to me, show that they had a legal right to do what they did notwithstanding the plaintiff’s objection.

In Mather On Sheriff And Execution Law (3rd Edn at p 126) there is reference to an Irish case in which, it is said, it was held that a sale should as a rule take place on the execution debtor’s premises (Re Purcell), but the learned editor immediately goes on to say:

“It would certainly be better that the sheriff should obtain the debtor’s licence to hold the sale upon his premises, as there appears to be some doubt as to his authority to use the premises for the purpose of a sale.”

In my view an examination of the facts and the judgment in the Irish case shows that the statement that it was there held that a sale should as a rule take place

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on the execution debtor’s premises is an over-statement. That opinion was expressed passim by Miller J when he said (13 LRIr at p 496):

“… he (the sheriff) does not allege that he made any attempt whatever to make any sale of the goods upon the premises of the execution debtor, which was his primary duty: … ”

This statement was made in a part of his judgment when the learned judge was commenting on the sheriff’s claim to his expenses in removing and returning goods of the debtor to the debtor’s premises, but after he had already decided that the sheriff could recover only the fees and expenses which were provided for him by the Act 6 Anne c 26, s 16 and s 23, and by the Act 43 Geo 3 c 46, s 5, and that these expenses of removal and of return of the goods were not provided for the sheriff by those statutes. The case is not, therefore, in my view a direct authority for the proposition that it is the duty of the sheriff to sell the debtor’s goods on the debtor’s premises. Counsel before me in this case have not found nor have I been able to find) any authority which decides that such is the duty of the sheriff acting under a writ of fi fa. The defendants’ evidence in this case shows that the practice is to remove and sell in an auction room such goods as were here seized. It may be that if the sheriff can show that it was not possible to sell the goods except on the debtor’s premises, it would be lawful for him so to do. Part of his duty is to sell the goods so as to make of them sufficient to satisfy the debt which is the subject of the writ of fi fa which he has to execute and the law will not require of him that which is impossible. But the defendants in this case have not established that it was impossible to remove and sell the goods away from the plaintiff’s premises. They have shown that by the concessions they had made to the plaintiff it had become extremely difficult for them so to do before an act of bankruptcy by the plaintiff was committed, but their evidence does not amount to more than this.

There were, therefore, in my view trespasses on the plaintiff’s property committed by them when they did those acts which were solely done for the purposes of and incidental to the holding of the sale on the plaintiff’s premises. The acts which in my view were such trespasses were the locking of the plaintiff’s premises so as to exclude her therefrom when they had lotted the goods; the opening of the plaintiff’s premises to the public for the viewing of the goods catalogued and the admission by them to the plaintiff’s premises of all who chose to come in for the ostensible purpose of viewing the goods; and the posting of their posters on the plaintiff’s premises.

What damage the plaintiff suffered in consequence it is difficult to say, but the poster certainly was in terms which would convey to anyone reading it that the plaintiff’s stock and the fixtures in her shop were being sold, and anyone reading it might reasonably have concluded that the business life of the shop was ended. The result was said to have been that the plaintiff’s takings thereafter were so prejudicially affected that she was obliged finally to sell up and close down. That her takings afterwards were trifling compared with what they formerly had been was shown by the accounts of the business, but to what extent this would inevitably have been the case owing to her grave financial difficulties it is not possible to decide. But I do not think it can be doubted that the posting on the premises of such bills as were put there must have been damaging to her chances of making a business recovery. Moreover the fact that the bills were there on the viewing day and on the morning of the day of the intended sale in spite of her protests and in spite of the fact that she had once before then abated the trespass by removing the poster bills amounted to conduct which aggravated the damage and which may properly be taken into consideration. I assess the damages for these trespasses, therefore, as more than nominal and award £300.

Judgment for the plaintiff.

Solicitors: Harold Kenwright & Cox (for the plaintiff); Wigan & Co (for the defendants).

A P Pringle Esq   Barrister.

Baxter v Keldon

[1955] 1 All ER 361

Categories:        LEISURE AND LICENSING        

Court:        QUEEN’S BENCH DIVISION        

Lord(s):        LORD GODDARD CJ, CASSELS AND STREATFEILD JJ        

Hearing Date(s):        18 JANUARY 1955        

Gaming – Betting house – Assisting in conducting the business of a betting house – Money and betting slips received in street and delivered at betting house – Betting Act, 1853(16 & 17 Vict c 119), s 3, s 4.

The respondent received money and betting slips in the street as agent for the keeper of a betting house. He delivered the money and slips at the betting house but took no part in the work done inside the betting house. The respondent was charged with assisting in conducting the business of the betting house, contrary to s 3 of the Betting Act, 1853.

Held – If the respondent had committed an offence, his offence was against s 4 of the Act of 1853, and he was not guilty of an offence against s 3.

Dicta of Lord Maugham LC in Milne v Comr of Police for City of London ([1939] 3 All ER at p 403) applied.

Appeal dismissed.

Notes

As to Offences under the Betting Act, 1853, see 15 Halsbury’s Laws (2nd Edn) 512, para 918; and for cases on the subject, see 25 Digest 442–447, 361–399, and Digest Supps.

For the Betting Act, 1853, s 3, s 4, see 10 Halsbury’s Statutes (2nd Edn) 763, 765.

Cases referred to in judgment

Milne v Comr of Police for City of London  Leonard v Same  Boundford v Same [1939] 3 All ER 399, [1940] AC 1, 108 LJKB 625, 161 LT 65, 103 JP 299, 2nd Digest Supp.

Case Stated

This was an appeal by way of Case Stated from the decision of a metropolitan magistrate sitting at Lambeth.

On 14 November 1953, an information was preferred by the appellant against the respondent that he on divers days between and including 14 October and 29 October 1953, did assist in conducting the business of a certain place situate at 354 Kennington Road, London, S E 11, which was then being used by one Thomas Brindle for the purpose of money being received on his behalf as the consideration for an undertaking to pay thereafter money on events and contingencies relating to horse or dog races, contrary to s 3 of the Betting Act, 1853. The information was heard on 23 February 1 March 24 March and 21 April 1954, and the following facts were found.

During the whole of the relevant period one Thomas Brindle, a brother-in-law of the respondent, was conducting a betting business at 354 Kennington Road, S E 11, and in the course thereof was using that place for the purpose of money being received on his behalf as the consideration for an undertaking to pay thereafter money on events and contingencies relating to horse and dog races. Money and betting slips were accepted on Brindle’s behalf by his agents at a number of different sites (known as “pitches”) in the streets, brought to the office at 354 Kennington Road, and there sorted and recorded in a set of books. On 14, 15, 16 and 17 October 1953, the respondent was at one of the said pitches, that at Summer Street, S E 1, with two other men for between one and a half and two hours, leaving on each occasion a few minutes after 2 pm. On each occasion the respondent received from men money and betting slips. At other times when the respondent was not present one of the other two men accepted money and betting slips. In accepting the money and betting slips, the respondent was acting on behalf of Brindle and in the course of the latter’s betting business. On leaving the pitch the respondent drove on each occasion in his van to the office for the purpose of delivering the money and betting slips to Brindle. The respondent went inside the office and remained there for periods

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of fifteen minutes and upwards. He was also at the office on 28 October and 29 October arriving in his van a few minutes after 2 pm. He never took any part in the work done inside the office.

It was contended by the appellant that the respondent, by assisting in the carrying on of Brindle’s betting business, was assisting in conducting it. The respondent contended that, in accepting money and betting slips on behalf of Brindle, he had offended against s 4 and not against s 3 of the Betting Act, 1853. The metropolitan magistrate was of opinion that the contention of the respondent was right and, accordingly, dismissed the information.

H F Cassel (E J P Cussen with him) for the appellant.

J M G Griffith-Jones for the respondent.

18 January 1955. The following judgment was delivered.

LORD GODDARD CJ. stated the facts and said: This case is a striking instance of the curiously unsatisfactory state in which the betting laws are. No one blames or would think of blaming the police for having brought this prosecution under s 3 of the Betting Act, 1853, but, in my opinion, the point taken by the respondent is perfectly good, though he has really no merits. If the respondent has committed an offence, it is under s 4 of the Act.

The point arises in this way. First, it is made an offence under s 1 of the Betting Act, 1853, to keep a house for ready-money betting. Then s 3 of the Act imposes a maximum penalty of £100, or six months’ imprisonment, on the owner or occupier of a betting house. That section provides:

“Any person who being the owner or occupier of any house, office, room, or other place, or a person using the same, shall open, keep, or use the same for the purposes hereinbefore mentioned [i.e., ready-money betting]; and any person who being the owner or occupier of any house, room, office, or other place shall knowingly and wilfully permit the same to be opened, kept, or used by any other person for the purposes aforesaid, or either of them; and any person having the care or management of or in any manner assisting in conducting the business of any house, office, room, or place … shall, on summary conviction thereof … ”

“… any person acting for or on behalf of any such owner or occupier or … in any manner assisting in conducting the business thereof, who shall receive, directly or indirectly, any money … as a deposit on any bet … ”

The matter is put beyond doubt by the speech of Lord Maugham LC in Milne v Comr of Police for City of London, where the Lord Chancellor analysed these two sections with great care. After analysing with care what persons could commit an offence under s 3, he dealt with s 4 and said ([1939] 3 All ER at p 403):

“Some points on these somewhat artificial provisions are worth noting.

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  Section 1 deals with the user of the place for one of two defined purposes, and the user is made a common nuisance and illegal. The sanctions are in s. 3 and s. 4, and they both refer to the user of the place for one or other of the purposes mentioned, but the sanctions are more severe under s. 3 than under s. 4. It may be noted in passing that, under s. 3, the persons mentioned in six of the categories above-mentioned (the owner, occupier, keeper, the person using, the person managing, and the person conducting the business) are made liable, but it omits the persons procured, and the persons employed on behalf of the owner, etc., and the agent of the manager. Section 4 inflicts the lower penalty on all the nine classes or categories who receive money, etc., as a deposit or on a promise to pay, or who give an acknowledgment or receipt.”

That seems to me to show that, in the opinion of the House of Lords in that case, the two sections, s 3 and s 4, are quite distinct, and if the acts which are relied on as a breach of the statute in the present case, namely, the acts of receiving money on behalf of the owner of the house, are proved, then the respondent has committed an offence under s 4, and not under s 3. For these reasons I think that the magistrate was perfectly right in the decision to which he came, and this appeal is dismissed.

CASSELS J. I agree.

STREATFEILD J. I also agree.

Appeal dismissed.

Solicitors: Solicitor, Metropolitan Police (for the appellant); Henry I Sydney & Co (for the respondent).

F Guttman Esq   Barrister.

Worrall v Reich

[1955] 1 All ER 363

Categories:        CIVIL PROCEDURE        

Court:        COURT OF APPEAL        

Lord(s):        JENKINS AND MORRIS LJJ        

Hearing Date(s):        11 JANUARY 1955        

Discovery – Production of documents – Documents relating solely to defendant’s case – Medical reports – Order for exchange – Validity – RSC, Ord 30, r 6(1), (4).

Practice – Medical reports – Order for exchange – Validity – RSC, Ord 30, r 6(1), (4).

On a summons for directions in an action for damages for personal injuries, the master has no power under RSC, Ord 30, r 6(1), to order the parties to exchange medical reports, since the medical report obtained by a party is a document privileged from disclosure and so is excluded from the operation of the rule by para (4) thereof.

On a summons for directions in an action for damages for personal injuries, the master made an order “that medical reports be exchanged and if not agreed the medical evidence be limited to two witnesses for each party.”

Held – The order should be varied to read that “A medical report be agreed, if possible, and that, if not, the medical evidence be limited to two witnesses for each party”, following RSC, appendix K, form 3A, para 23.

Appeal allowed.

Notes

As to Documents relating solely to the Case of the Party, see 10 Halsbury’s Laws (2nd Edn) 400, para 482; and as to the Powers of a Master on a Summons for Directions, see 26 Halsbury’s Laws (2nd Edn) 51, para 83; and for cases on the subject, see 18 Digest 148, 149, 983–990, and Digest (Practice) 506–508, 1795–1816.

Page 364 of [1955] 1 All ER 363

Appeal

The defendant appealed against an order of Glyn-Jones J dated 13 December 1954, dismissing an appeal from an order of Master Clayton dated 3 December 1954, on a summons for directions in an action for damages for personal injuries, ordering:

“That medical reports be exchanged and if not agreed the medical evidence be limited to two witnesses for each party.”

The defendant contended that his medical report was a document privileged from disclosure and so excluded from the operation of RSC, Ord 30, r 6(1) by virtue of r 6(4).

J Ritchie for the defendant.

I F Reuben for the plaintiff.

11 January 1955. The following judgments were delivered.

JENKINS LJ. This is an appeal by the defendant in an action for personal injuries, with leave obtained from the learned judge, from an order of Glyn-Jones J dismissing an appeal from the order for directions made by the master. The sole matter in issue in the appeal is whether the second paragraph of the order was rightly made by the learned master in the form in which it was made. That part of the order follows the terms of para 23 of the summons for directions. The summons is based on form 3A in appendix K to the Rules of the Supreme Court, but para 23 has been altered in this way. The paragraph as printed reads:

“A medical report be agreed, if possible, and that, if not, the medical evidence be limited to witnesses for each party.”

In the present summons the words “A medical report be agreed, if possible, and that, if not,” are struck out and in lieu thereof these words are inserted:

“Exchange medical reports if not agreed the medical evidence be limited to two witnesses for each party”,

The order under appeal was made under the new Ord 30, which deals with summonses for directions, and was adopted in 1954 a to give effect to the recommendations of the Evershed Report. There is no doubt that the order gives ample powers to the master with a view to saving expense and delay in the trial of actions. For the present purpose I think I need refer only to r 6 of the order, which so far as material provides as follows:

“(1) No affidavit shall be used on the hearing of the summons for directions except by the leave or direction of the court or judge, but, subject to the provisions of para. (4) of this rule, it shall be the duty of the parties to the action and their advisers to give all such information and produce all such documents to the court or judge on any hearing of the summons as it or he may reasonably require for the purposes of enabling it or him properly to deal with the summons. The court or judge may, if it appears proper so to do in the circumstances, authorise any such information or documents to be given or produced to the court or judge without being disclosed to the other parties but, in the absence of such an authority, any information or documents given or produced under this paragraph shall be given or produced to all the parties present or represented on the hearing of the summons as well as to the court or judge … (3) If the court or judge on any hearing of the summons for directions requires a party to the

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action or his solicitor or counsel to give any information or produce any document and that information or document is not given or produced, then, subject to the provisions of para. (4) of this rule, the court or judge may—(a) cause the facts to be recorded in the order with a view to such special order, if any, as to costs as may be just being made at the trial; or (b) if it appears to the court or judge to be just so to do, order the whole or any part of the pleadings of the party concerned to be struck out, or, if the party is plaintiff or the claimant under a counterclaim, order the action or counterclaim to be dismissed upon such terms as may be just.”

The object of these provisions clearly is to ensure so far as possible that the parties (to use a colloquialism) put all their cards on the table, so that the real issues between them emerge and the amount of evidence necessary to be given, whether documentary or oral, may be limited to matters which are really in issue and seriously contested by the parties. But r 6 is subject to this important limitation in para (4), which, as will be seen, is expressly referred to in its earlier provisions. Paragraph (4) is in these terms:

“Notwithstanding anything in the preceding provisions of this rule, no information or documents which are privileged from disclosure shall be required to be given or produced under this rule by or by the advisers of any party otherwise than with the consent of that party.”

Counsel for the defendant says that the second paragraph of the order on the summons for directions in the form in which it now stands is in direct conflict with the express provisions of para (4) of r 6, inasmuch as medical reports made on behalf of either party on the advice of their legal advisers and for the purpose of preparing their case for trial are privileged documents, and as such are within the exception contained in that paragraph and cannot properly be made the subject of an order for exchange. He says, further, that an order for directions in this form is a new departure in that it, in effect, compels a party to commit himself in advance to calling a particular witness, inasmuch as it compels him to put in evidence a document amounting to the proof of the evidence which a particular medical adviser will give on his behalf.

In my view, the objection on the ground that medical reports such as these are privileged from discovery is a valid objection, and if follows that the order should not have been made in this form, but should follow the printed form of summons which asks that

“A medical report be agreed, if possible, and that, if not, the medical evidence be limited to [two] witnesses for each party.”

Accordingly, although I can see that in some circumstances it may be desirable from the practical point of view that medical reports should be exchanged, and although it may be highly expedient that the parties should by agreement adopt that course in many cases, it does not seem to me that it can properly be made the subject of an order. For these reasons I would allow this appeal and modify the order under appeal in the way I have indicated.

MORRIS LJ. I am of the same opinion. Having heard the arguments on both sides, I am persuaded that the view which my Lord has just expressed is the correct one. When an order is made in terms that a medical report be agreed if possible, doubtless certain difficulties may arise. For example, if the plaintiff submits his medical report and asks that it be agreed, the medical advisers of the defence may take a more serious view of the plaintiff’s injuries than the plaintiff’s medical advisers; perhaps because they have appreciated certain matters overlooked by the plaintiff’s medical advisers. In such a case the defence might well agree the medical report submitted to them, with the possibility, if the plaintiff established the defendant’s liability, of an unjust result in that the plaintiff might receive damages of less amount than the medical facts would have warranted, if they had been fully appreciated.

Page 366 of [1955] 1 All ER 363

The plaintiff might say that he would submit his medical report or reports, provided the defendant at the same time submitted his. I think that would be a desirable state of affairs, since in cases of personal injuries it is proper and desirable that medical reports should be exchanged to the greatest possible extent. But if a plaintiff does refuse to submit his report unless the defendant at the same time submits his, the deadlock may result in medical witnesses being called on both sides, although in the event it emerges that there is little difference between the respective medical opinions. In such a situation it would be unfortunate if costs were incurred, and the time of medical men was spent in court when their services might have been insistently required in the performance of their professonal duties. All these considerations indicate that it is helpful and desirable that medical reports should be exchanged. The language of Ord 30, r 1(1), particularly in sub-para (b), indicates the correct approach in these matters:

“(1) … the plaintiff shall, with a view to providing an occasion for the consideration by the court or a judge of the preparations for the trial of the action, so that—(a) all matters which must or can be dealt with on interlocutory applications and have not already been dealt with may so far as possible be dealt with; and (b) such directions may be given as to the future course of the action as appear best adapted to secure the just, expeditious and economical disposal thereof … ”

The words “just, expeditious and economical” give clear guidance as to the way in which the court expects parties to proceed in the preparation of their cases.

It may happen that some medical reports contain views, comments or statements which, though linked to the medical aspects of the case, are not entirely limited to those aspects, and such reports might not conveniently be the subject of exchange. Moreover, though I have indicated my personal view that it is helpful that the parties should to the greatest possible extent exchange medical reports, the question that arises on this appeal is whether it was possible for the learned master to make a compulsory order that they should be exchanged. There is merit in the procedure under Ord 30, r 6(1), under which the court can ask one side for a document and then examine it without that document being necessarily shown to the other side. But that procedure is subject to, and limited by, the express provision of Ord 30, r 6(4):

“Notwithstanding anything in the preceding provisions of this rule, no information or documents which are privileged from disclosure shall be required to be given or produced under this rule by or by the advisers of any party otherwise than with the consent of that party.”

This shows that the protection which relates to privileged documents is not affected. Hence, I can see no warrant for ordering that medical reports be exchanged if those medical reports are privileged documents. Once they qualify as privileged documents in accordance with well-recognised principles, I cannot see that there is power to order that they be compulsorily exchanged. I think, therefore, that this appeal must succeed.

Appeal allowed. Order of Glyn-Jones J varied.

Solicitors: Barlow, Lyde & Gilbert (for the defendant); Bryan O’connor & Co (for the plaintiff).

F A Amies Esq   Barrister.

Note

Cowlishaw v Chalkley

[1955] 1 All ER 367

Categories:        CIVIL PROCEDURE        

Court:        QUEEN’S BENCH DIVISION        

Lord(s):        LORD GODDARD CJ, CASSELS AND STREATFEILD JJ        

Hearing Date(s):        20 JANUARY 1955        

Case Stated – Procedure – Desirability of submitting justices’ draft to parties.

Case Stated by Middlesex justices

On 20 July 1954, at a magistrate’s court sitting at Harrow, an information was preferred by the appellant, John Cowlishaw, a police sergeant, against the respondent, Donald Edward Chalkley, that he did drive a motor vehicle on a road (i) in a manner dangerous to the public contrary to the Road Traffic Act, 1930, s 11(1), (ii) without due care and attention contrary to the Road Traffic Act, 1930, s 12(1). The information was heard on 6 August 1954. After the evidence for the prosecution had been given the respondent went into the witness-box. After he had taken the oath but before he had given any evidence the justices stated that in their opinion no case had been made out by the prosecution and they dismissed the information. At the request of the appellant they stated a Case, but they did not submit the draft to the parties. In the Case the justices set out the alleged contentions of both parties. It was admitted, however, before the Divisional Court that in fact no contentions had been put forward by either party, nor had the respondent submitted that there was no case to answer.

Paul Wrightson for the appellant.

C G L Du Cann for the respondent.

20 January 1955. The following judgment was delivered.

LORD GODDARD CJ. stated the facts and said: As counsel for the appellant agrees that the Case is improperly stated, we have decided that the only thing to do is to send the Case back with a direction that it be re-heard before other justices than those who stated the Case. We also desire to say that as a rule it is better practice, though it cannot be insisted on, that where justices agree to state a Case, if they state it themselves or cause their clerk to draft it, it should be submitted to both parties, and in case of any complication it should be left to the parties themselves to draft the Case and submit it to the justices for their consideration, and then a point like this would not arise. We make no order as to costs.

Appeal allowed. Case remitted.

Solicitors: Solicitor, Metropolitan Police (for the appellant); Pierron & Morley (for the respondent).

F Guttman Esq   Barrister.

Note

R v Rossi

[1955] 1 All ER 368

Categories:        CRIMINAL; Sentencing        

Court:        COURT OF CRIMINAL APPEAL        

Lord(s):        CASSELS, STREATFEILD AND SLADE JJ        

Hearing Date(s):        24 JANUARY 1955        

Criminal Law – Sentence – Corrective training – Preventive detention – Need for date of prisoner’s birth in police reports and prison reports.

Appeal against sentence

The appellant, Robert Rossi, was convicted at Middlesex sessions of shop breaking and was sentenced to three years’ corrective training. He had previously been convicted in 1939 of larceny and in 1943 of receiving. Evidence was put before the court that he was aged thirty-one years but, in fact, he was aged thirty-two years.

J Yahuda for the appellant.

H F Cassel for the Crown.

24 January 1955. The following judgment was delivered.

CASSELS J. delivering the judgment of the court, said that, in the circumstances of the case, the sentence would be reduced to one of eighteen months’ imprisonment, and that there was one other observation which the court desired to make: Where age was of importance for the consideration of the court, it was necessary that, in police reports or prison reports which were presented to the court, the date of the birth of the prisoner should be stated least any mistake should be made in calculating what was the age of the prisoner at the time when he received the necessary qualifying conviction. If the date of the birth was not stated, but merely his age, which, in this case, was stated to the court to the thirty-one years, it was very easy for the court to make a mistake in calculating what his age really was at a particular time. This seemed to the court to be of great importance, as the Criminal Justice Act, 1948, made provision for many different types of sentences to be passed, many of which depended on the actual age of the prisoner at the time of sentence. They, therefore, suggested that, in future, no report about a prisoner should omit the date of his birth if the prisoner was being put before the court as one requiring a sentence either of corrective training or preventive detention.

Sentence reduced.

Solicitors: Registrar, Court of Criminal Appeal (for the appellant); Solicitor, Metropolitan Police (for the Crown).

G A Kidner Esq   Barrister.

Sterling Engineering Co Ltd v Patchett

[1955] 1 All ER 369

Categories:        INTELLECTUAL PROPERTY; Patents        

Court:        HOUSE OF LORDS        

Lord(s):        VISCOUNT SIMONDS, LORD PORTER, LORD REID, LORD TUCKER AND LORD SOMERVELL OF HARROW        

Hearing Date(s):        2, 6, 7, 8, 9 DECEMBER 1954, 20 JANUARY 1955        

Patent – Employee’s inventions – Patents registered in name of employer and employee – Understanding as to payment to employee but no agreement – Apportionment of benefits of inventions – Patents Act, 1949 (12, 13 & 14 Geo 6 c 87), s 56(2).

Master and Servant – Invention of servant – Right of master to benefit of invention – Understanding but no agreement.

In January, 1942, the respondent entered the employment of the appellant company, who, at that time, were exclusively employed on armaments. In December, 1941, before any contract of service was made, there was an exchange of views between the parties in regard to any patentable inventions the respondent might make while in the appellant company’s employment, but no arrangement was made, and the respondent took up his duties without any written service agreement. In 1942, after the respondent had designed a paragun in the course of his employment, an agreement was entered into whereby, where the respondent was primarily responsible for any inventions which were patentable, patents should be applied for in the names of the respondent and of the appellant company, and the appellant company would pay the respondent a royalty. In 1943, another agreement was made on terms more favourable to the respondent than those of the 1942 agreement. In 1944, the respondent having made more patentable inventions in respect of the paragun, a further agreement was made providing that these and any further inventions made by the respondent in relation to machine carbines should be comprised in the 1943 agreement, and cancelling the 1942 agreement. In 1947 the respondent took over the department concerned with the design and development of domestic electrical appliances. Between 1947 and 1950, in the course of his employment, he made six inventions in connection with domestic appliances, in respect of which patents were applied for in the joint names of the respondent and the appellant company. The respondent demanded some payment from the appellant company in respect of these inventions, but the company refused to make such payments. The respondent sued the company for a declaration of his title to a royalty for these inventions and, by his reply in that action, claimed alternatively that the benefit of the inventions should be apportioned under the Patents Act, 1949, s 56(2).

Held – (i) The ordinary rule governing the relationship of master and servant, that, if an employee’s invention was patented in the joint names of the employer and employee, the employee held his interest as trustee for the employer, could only be excluded by an express agreement that it should be varied and some other legal relationship should be created; and in the present case, the ordinary rule had not been displaced.

(ii) in the words in s 56(2) of the Patents Act, 1949, “unless satisfied that one or other of the parties is entitled, to the exclusion of the other,” to the benefit of an employee’s invention, the word “entitled” refers to legal right, and, as in the present case the court was satisfied that the appellant company was legally entitled to the exclusion of the respondent, s 56(2) had no application.

Appeal allowed.

Notes

For the Patents Act, 1949, s 56, see 17 Halsbury’s Statutes (2nd Edn) 690.

Case referred to in opinions

Adamson v Kenworthy (1931), 49 RPC 57.

Page 370 of [1955] 1 All ER 369

Appeal

Appeal by the company from an order of the Court of Appeal, dated 14 December 1953, discharging an order of Danckwerts J dated 27 April 1953, made in favour of the company on their counterclaim. The claim in the action by the respondent was dismissed by Roxburgh J on 18 December 1952. The facts appear in the opinion of Viscount Simonds.

K E Shelley QC and G T Aldous for the appellant company.

R O Wilberforce QC and E I Goulding for the respondent.

Their Lordships took time for consideration.

20 January 1955. The following opinions were delivered.

VISCOUNT SIMONDS. My Lords, this appeal is brought by the Sterling Engineering Co Ltd whom I will call “the company”, from an order of the Court of Appeal which reversed an order of Danckwerts J. The respondent is George William Patchett, and the appeal relates to six inventions made by him while in the employment of the company, which were the subject of patents registered in their joint names. The respondent, in January, 1942, entered the employment of the company as a production engineer at a salary of £1,200 a year. The company was then, and for some time afterwards, engaged exclusively on armaments. In December, 1941, before any contract of service was made, there was an exchange of letters and an interview between the parties in regard to any patentable invention that the respondent might make while in the company’s employment. It is clear that no agreement was made, but, throughout the proceedings, which have culminated in an appeal to this House, it has been constantly alleged that an “understanding” was reached, and it is on that understanding that the respondent has relied for the relief refused to him by Danckwerts J but granted by the Court of Appeal. At the outset, I must admit that I find it difficult to appreciate how an understanding, which is, admittedly, not an agreement, can be made a ground of claim, though it may, I dare say, in certain circumstances, be a shield. But the facts of the present case are so unusual and the course which the action took so remarkable that I must closely examine what this understanding was.

On 11 December 1941, after a previous exchange of letters and an interview to which I need not refer, the respondent wrote a letter to the company in which the following passage occurred:

“Patents. This is always a delicate problem between employer and employee and I suggest the following two methods of dealing with this question: (A) Any invention for which I am responsible will be provisionally patented by me and be transferred to you for a sum payment to be mutually arranged at the time. (B) Any invention for which I am responsible will be patented by you in the name of the firm and myself. A sum to be paid as royalty will be fixed and a minimum yearly royalty decided on. In the event of the minimum royalty not being paid I shall be free to exploit the patent. Any exploitation of such patent will entail a participation of the proceeds by both patentees. This participation will also apply in any case where the manufacturing rights are granted to other persons”

“Patents: I agree that this is always a problem but feel confident when we next meet we shall have no difficulty in making a mutually satisfactory arrangement.”

It does not appear that any further letters passed between the parties, and it is certain that, when they next met, no arrangement of any kind was made. On

Page 371 of [1955] 1 All ER 369

1 January 1942, the respondent took up his duties as production engineer without any written service agreement. That no arrangement was made nor, as I think, in the meantime discussed, is clear from the next letter to which I refer, for, on 31 July 1942, the respondent, having designed a gun in the course of his employment, which came to be called a “paragun”, wrote to the chairman of the company as follows:

“… This gun was designed by me without any instructions from the company and I think certain features are patentable. Before joining the company the question of patents was discussed but no definite arrangement made. I think this is a suitable opportunity for some arrangement to be arrived at.”

The company accepted this suggestion and, after an interview on 5 August 1942, an agreement, which has conveniently been called the 1942 agreement, was made. Its terms were contained in two letters of 5 August and 12, and provided (inter alia) that, where the respondent was primarily responsible for any inventions which were patentable, patents should be applied for in the two names (ie, of the respondent and the company), and that the company should pay the respondent a royalty of half per cent on the sale price of any articles made by them which used any such patent. This agreement was general in its scope, and extended beyond the invention which had been its immediate cause. In 1943 the respondent invented an automatic trigger mechanism for the purpose of the paragun, and, in regard to the patent for this invention, a specific agreement, known as the 1943 agreement, was made. I think it unnecessary to say more about it than that its terms were more favourable to the respondent than those of the 1942 agreement.

In 1944, yet another agreement was made. The respondent had made eight more patentable inventions in connection with the paragun, and the new agreements, in effect, provided that these inventions, and any further inventions which the respondent might make during the term of his employment in relation to machine carbines, should be comprised in the 1943 agreement. It also contained a term which, as will be seen, came to be of great importance, that the 1942 agreement should be cancelled and of no further effect.

Some modification of the 1943 agreement was made in 1945, but no other arrangement was made and there the matter rested, when, in 1947, the company, having turned to the arts of peace, the respondent was offered and accepted the leadership of the department concerned with the design and development of domestic electrical appliances. It was not disputed that, in this capacity, it was his duty to put his inventive faculty and skill at the service of the company. Between 1947 and 1950, the respondent, in the course of his employment, made six inventions in connection with domestic appliances (which I will call “the domestic inventions”), in respect of which patents were applied for in the joint names either of the respondent and the company or of the respondent and a company controlled by the company, a variation which can, for the purpose of this appeal, be disregarded. The applications were made at the expense of the company, but the respondent, as the inventor, was, until the Patents Act, 1949, came into force, a necessary party. The 1942 agreement had been cancelled, the later agreements did not cover the domestic inventions and, in these circumstances, the company refused the reiterated demands of the respondent that some payment should be made to him in respect of them.

The respondent, accordingly, commenced the action out of which this appeal has arisen, and I must trouble your Lordships with some details of the pleadings in the action and consequent counterclaim, for the form that they have taken has not been the least of the causes of trouble in this litigation.

The statement of claim (which was amended and re-amended) opened with a plea that, at the time of his employment, it was “understood and agreed” between the respondent and the company that he should receive reasonable

Page 372 of [1955] 1 All ER 369

remuneration in respect of all inventions made by him while in the employment of the company which should be used by the company. It then set out the agreements of 1942, 1943 and 1944. It specifically stated the cancellation clause in the 1944 agreement to which I have referred, and alleged that this clause was inserted by mutual mistake. In his formal claim, the respondent claimed a royalty of half per cent on the selling price of all articles in which any of his inventions were made use of (other than those subject to the 1943 or 1944 agreements) or, alternatively, reasonable remuneration or royalties in respect thereof, and, in the further alternative, rectification of the 1944 agreement so as to exclude the cancellation clause or rescission of that agreement. This is a puzzling plea: for what is meant by an “understanding and agreement”? What is the efficacy of an understanding without an agreement, or what added force an understanding gives to an agreement, I do not understand. But the action was allowed to go forward in this fashion after an ineffectual attempt had been made to discover, on an application for particulars, what was the understanding, what the agreement.

The company duly put in its defence, denying any such understanding or agreement as had been alleged, and further denying that there had been such a mistake as to justify rectification or rescission of the 1944 agreement. It also put in a counterclaim alleging that the domestic inventions had been made by the respondent in the course of his employment and, that the company was, accordingly, entitled to have the respondent’s interest in the relevant patents transferred to it and claiming the appropriate declaration and order.

By his reply and defence to counterclaim, the respondent challenged the plea that he was employed to make inventions in connection with domestic appliances. This was clearly contrary to the fact and does not appear to have been pursued. He further alleged that, in regard to any inventions other than those comprised in the 1943 or 1944 agreements, it was the “intention of the parties that the 1942 agreement should continue to operate or alternatively should not be governed by any agreement and should accordingly remain the property of” the respondent. He further pleaded that the domestic inventions were not made in the course of his employment, a plea clearly incapable of being sustained. Further pleas were made by amendment but I do not mention them yet, for the pleadings were in the form that I have outlined when the case came on for hearing before Roxburgh J. Before that learned judge the case took a most unfortunate course, for, owing to the exigencies of time or for some other reason, it was found possible only to dispose of the action, the counterclaim being left over for hearing after the immediately ensuing vacation. So far as the action was concerned, an order was made whereby it was dismissed with costs, and that was all. And it is clear that, whatever else your Lordships may look at in the event of a plea of res judicata being raised, you are at least entitled to know what were the issues raised in the pleadings in the action and you know, therefore, that the respondent failed to establish his right to remuneration under any heading of claim, or to rectification of the 1944 agreement. This order was duly drawn up, and the respondent did not appeal from it. I will only add here, since some reliance has been placed on it and certainly some confusion has arisen out of it, that, in the course of his judgment, Roxburgh J said:

“At the time of his engagement it was understood between the plaintiff and the defendant company that the plaintiff should receive a reasonable remuneration in respect of all inventions made by him while in the employment of the defendant company which should be used by the defendant company. I have used the word ‘understood’ advisedly. There is a counterclaim, with which I am not in a position to deal, and I have used that vague word in order not in any way to prejudice the position with regard to the counterclaim.”

The learned judge having decided that there was no agreement for the payment

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of remuneration, it is difficult to see what effect in the law is to be found in an understanding—particularly where the only plea had been of an “understanding and agreement.”

Unfortunately, Roxburgh J had other duties in the following term and it fell to Danckwerts J to hear the counterclaim. In the course of the hearing before him, the defence to counterclaim was allowed to be amended by pleading once more the understanding and agreement alleged in para 1 of the statement of claim and, by this final plea which found favour with the Court of Appeal,

“In the alternative to the contentions herein set out the plaintiff will claim that the benefit of the inventions referred to in the counterclaim be apportioned under s. 56(2) of the Patents Act, 1949.”

This amendment was, as I say, allowed, and it is too late to protest that it should not have been pleaded by way of defence to counterclaim but, if raised at all, should have found a place in the statement of claim.

It is convenient at this stage to set out s 56(2), which was for the first time introduced into the patent laws by the Act of 1949. It provided as follows:

“In proceedings before the court between an employer and a person who is or was at the material time his employee, or upon an application made to the comptroller under sub-s. (1) of this section, the court or comptroller may, unless satisfied that one or other of the parties is entitled, to the exclusion of the other, to the benefit of an invention made by the employee, by order provide for the apportionment between them of the benefit of the invention, and of any patent granted or to be granted in respect thereof, in such manner as the court or comptroller considers just.”

The task of disentangling the real issues from these pleadings is not made easier by the plea strenuously urged by the company that the doctrine of res judicata applied to bar the respondent’s defence to the counterclaim. I will dispose of this matter very shortly, for I do not think that any decision on it is necessary for the determination of this appeal. I am glad to think so, for, in a case like this, where the whole matter in dispute, whether arising on claim or counterclaim, should and would, but for an unfortunate accident, have been disposed of at one and the same time, and where the learned judge who heard the action made certain reservations with a view to their further consideration on the counterclaim, I should be very reluctant to apply the ordinary rules of res judicata. I am not aware of any case in which such a thing has happened before and may be permitted to hope that it will not happen again. It is unnecessary to say more, because it became clear to me, as the case proceeded, that the counterclaim must succeed, and that the same considerations which secured its success were fatal to a claim under s 56(2) of the Patents Act, 1949.

The patents in question stand in the joint names of the company (or the company which it controls) and the respondent, ie, in the names of employer and employee. It is elementary that, where the employee in the course of his employment (ie in his employer’s time and with his materials) makes an invention which it falls within his duty to make (as was the case here), he holds his interest in the invention and in any resulting patent as trustee for the employer, unless he can show that he has a beneficial interest which the law recognises. Here, the respondent first asserted the “understanding and agreement” to which I have so often referred. It was for reasonable remuneration and nothing else. It failed: there was no “agreement”, and “understanding” meant nothing. If it had succeeded, it would still have afforded no defence to the counterclaim, though it might have supported a claim for other relief. Then it was pleaded that the 1942 agreement still governed the situation. This plea, too, failed, nor, had it succeeded, would it have afforded a defence. Next it was pleaded that it was the intention that the inventions should remain the sole property of the respondent: this plea was wholly inconsistent with the first plea of an agreement

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for remuneration, and does not appear to have been pressed at any stage of the proceedings. Then it was pleaded that the inventions were not made by the respondent in the course of his employment, a plea clearly unsustainable. In this bewildering medley of pleas I find nothing to justify the view that the respondent was not a trustee for the company of his interest in the patents. Ultimately, I think, the argument resolved itself into the proposition that the so-called understanding, though it did not create any legal obligation, yet was sufficient to exclude any term of the employment by which inventions made by the employee would belong to the employer. It was not clear what the result of this would be, but, as there is no ground for suggesting that the inventions were to be the exclusive property of the respondent, I can only suppose there would be a deadlock until the parties could come to some agreement. But I think that this argument is based on a radical fallacy. It is true enough that the rule that inventions made by an employee belong to the employer is sometimes spoken of as an implied term of the contract of service.

In a sense, no doubt, it is an implied term in that it is not written out in the contract of service, but it is a term which, given the conditions which are here present, viz, inventions made by the employee in the course of his employment which it was part of his duty to make, the law imports into the contract. It appears to me that it is only an implied term in the same sense that it is an implied term, though not written at large, in the contract of service of any workman that what he produces by the strength of his arm or the skill of his hand or the exercise of his inventive faculty shall become the property of the employer. If the employment is of a designer, that which he designs is thus the property of the employer which he alone can dispose of. If it is patentable, it is for the employer to say whether it shall be patented, and he can require the employee to do what is necessary to that end. And if it is patented in their joint names, the employee holds his interest as trustee for the employer (see Adamson v Kenworthy). If this is, as I think it clearly is, the law, it can only be excluded by an express agreement that it shall be varied and some other legal relationship created. I will not go through the story again, but it appears to me impossible to rely on an understanding, which, vague enough in 1941, had, after it had been superseded by the sound agreements of 1942, 1943, 1944 and 1945, and after, in 1947, the respondent had substantially changed the area of his employment, become so tenuous as to be little more than an aspiration of the respondent that he would receive some recognition beyond his salary for the work that he was paid to do. I find nothing in all this which would justify the court in holding that the ordinary rule governing the relation of master and servant was displaced. I am, therefore, of opinion that the counterclaim should succeed, subject only to what may be said about s 56(2) of the Patents Act, 1949.

I turn, then, finally to that section. It may be said, if it has any application to the present case, to afford a defence in this limited sense. It would be a work of supererogation to require the respondent to transfer his interest in the patents to the company if the next step was to be an apportionment involving perhaps a retransfer; but, in my opinion, the sub-section has no application. I will assume that the present action and counterclaim were proceedings before the court between an employer and employee, in which its new and special jurisdiction might be invoked. That jurisdiction, however, only arises if the court is not satisfied that one or other of the parties is entitled to the exclusion of the other to the benefit of an invention. The word “entitled” refers to legal right. The court must, therefore, determine the legal rights, just as it must determine them in any other case, and, if the issue is, as it is here, whether one party is entitled to the exclusion of the other, it must decide that question “Aye” or “No” and, having decided it in the affirmative, it is not for the court to say that it is not satisfied. So here, having examined every plea which has been adduced to support the contention that the respondent has some beneficial interest in the patents and rejected them all, the court must declare itself satisfied

Page 375 of [1955] 1 All ER 369

that the company is entitled, to the exclusion of the respondent, and decline the jurisdiction conferred by the sub-section.

It was urged that this construction of the sub-section reduces its operation to negligible proportions. This was denied by counsel for the company, who gave your Lordships examples of cases where, he said, the section might still operate. I am not concerned to examine this question, for the scope of the section may be a matter of further debate and I would not prejudice any view of it. It is sufficient to determine, as I do, that it can have no operation in the present case. If, in the result, its scope is less wide than may have been expected, that is not the affair of the courts. I may add that the construction which I have adopted of sub-s (2) is strongly supported by sub-s (1), which refers to the “rights”, meaning thereby the legal rights, of the parties.

In the result, I move that the appeal be allowed and the order of the Court of Appeal discharged, except so far as it relates to costs, and the order of Danckwerts J be restored. In accordance with the condition imposed on the granting of leave to appeal, the company will pay the respondent’s costs of this appeal.

My Lords, my noble and learned friend, Lord Porter, who is unable to be here, has asked me to say that he concurs in my opinion and in the motion which I make.

LORD REID. My Lords, s 56 is a new section in the Patents Act, 1949. It begins by providing a relatively cheap and speedy method for determining disputes between employer and employee. It is, I think, clear that, under sub-s (1), what has to be determined is the legal right of the parties and that this sub-section confers no power to override legal rights or to substitute for a decision on legal rights a determination of what may be thought just or fair in all the circumstances; but it was argued for the respondent that sub-s (2) does confer a power to do this.

Sub-section (2) cannot be applied at all if the court or comptroller is

“… satisfied that one or other of the parties is entitled, to the exclusion of the other, to the benefit of an invention made by the employee … ”

but, if the tribunal is not so satisfied, then it has power to apportion the benefit of the invention. The ordinary meaning of the word “entitled” is entitled as a matter of legal right, and, even if the word could, in some contexts, be held to mean fairly of justly entitled in all the circumstances, some very cogent reason for so construing it would be required to justify an inference that Parliament intended to take the very unusual course of subordinating the legal rights of the parties to the discretion of the court or the comptroller—particularly as there is no indication of any considerations to which the tribunal should have regard in exercising its discretion. In the sub-section I can see no more than a faint indication that such might have been the intention. To say that a court must be satisfied of something is more appropriate with regard to a matter of fact or opinion than with regard to a matter of legal right. The phraseology creates no real difficulty, however, if the sub-section is held to refer to legal rights alone. The only real difficulty is that, on this basis, the scope of the sub-section is very limited. In the absence of agreement, I do not see how there can be a case where the one party is not entitled to the whole benefit to the exclusion of the other and, if that be right, the sub-section can only come into operation if there has been some agreement, express or implied, to share the benefit. If there is such an agreement and the sub-section gives no authority to override legal rights, the sub-section cannot be used to give either party more or less than that to which the agreement entitles him. It is, I suppose, possible that the apportionment authorised by the section might, in some cases, afford a convenient method of working out the terms of the parties’ agreement “in such manner as the court or comptroller considers just”, but that is such a small matter that one is tempted to guess that Parliament had some wider intention. What that intention may

Page 376 of [1955] 1 All ER 369

have been cannot, in my judgment, be found by any method of construction or interpretation which is open to us. Even if it could be shown that there is no case to which, on this interpretation, the sub-section could apply in practice, I would still find myself unable to discover any other meaning which could properly be given to it.

Accordingly, before the respondent can invoke this sub-section he must point to something which would prevent the court from being satisfied that the legal right to the benefit of the inventions with which this case is concerned belongs to the appellant company. No doubt the respondent was the inventor and, in the ordinary case, the benefit of an invention belongs to the inventor. But, at the time when he made these inventions, he was employed by the company as their chief designer and it is, in my judgment, inherent in the legal relationship of master and servant that any product of the work which the servant is paid to do belongs to the master: I can find neither principle nor authority for holding that this rule ceases to apply if a product of that work happens to be a patentable invention. Of course, as the relationship of master and servant is constituted by contract, the parties can, if they choose, alter or vary the normal incidents of the relationship but they can only do that by express agreement or by an agreement which can be implied from the facts of the case. The question in the present case, therefore, is whether there is anything to justify a finding that the parties agreed to alter the normal incidents of the respondent’s contract of employment, for it was not disputed that, if the ordinary rule applies, the patents in question belong wholly to the company.

There are cases where it has been said that the employer’s right to inventions made by an employee in the course of his employment arises from an implied term in the contract of employment. Strictly speaking, I think that an implied term is something which, in the circumstances of a particular case, the law may read into the contract if the parties are silent and it would be reasonable to do so: it is something over and above the ordinary incidents of the particular type of contract. If it were necessary in this case to find an implied term in that sense, I should be in some difficulty. But the phrase “implied term” can be used to denote a term inherent in the nature of the contract which the law will imply in every case unless the parties agree to vary or exclude it. I think that it has probably been used in that sense in the cases founded on by the respondent, and I am of opinion that it is only in that sense that the company’s right in this case can be said to arise from an implied term.

The respondent, therefore, could only succeed if he could establish some agreement—express or to be implied—by which the ordinary incidents of his contract of employment were altered. But all that he has to rely on is a so-called “understanding”. I do not think that it can be put more favourably for the respondent than that he and the company agreed to try to reach agreement about this matter as soon as possible. And, in fact, they did reach such an agreement in 1942: they agreed that the respondent should receive a “royalty”, the patents themselves remaining the property of the company. But that agreement was cancelled in 1944, and the new agreement for royalties which was then made did not cover the patents now in question; it only applied to certain other patents. I cannot find any basis for any implied agreement which would give to the respondent any rights in respect of the patents now in question. It appears to me that, after the 1942 agreement was cancelled, the position with regard to anything not covered by the 1944 agreement was that the ordinary rule inherent in the parties relationship of master and servant must apply, and, therefore, the patents in question belong to the company and the respondent has no defence to their counterclaim. I, therefore, agree that this appeal should be allowed.

LORD TUCKER. My Lords, I am in complete agreement with the opinion that has just been delivered by my noble and learned friend on the Woolsack,

Page 377 of [1955] 1 All ER 369

and would desire to add only a word or two about the judgment of the Court of Appeal.

That court held that the “understanding” of December, 1941, contemplated that any arrangement made would recognise the appellant company’s right to the benefit of any invention, or patent granted in respect thereof, subject to payment of a sum to be agreed by the company to the respondent for its use or exploitation, but that, as no agreement was ever reached as to the amount or nature of the payment to be made, the company—apart from s 56 of the Patents Act, 1949—would be entitled in accordance with the ordinary implication to the benefit of the inventions and patents without any obligation to make any payment in respect thereof to the respondent, since the court—apart from s 56—could not impose on the parties terms to which they had never agreed. The court, however, reached the conclusion that s 56 gave them this jurisdiction. They said:

“It seems to us that the language of the sub-section necessarily implies that there may be cases in which the court may not be satisfied that the benefit of a disputed invention belongs to one of the parties to the exclusion of the other, although there is no agreement between them defining the proportions or manner in which such benefit is to be shared.”

For the reasons which have been stated by my noble and learned friend, I am unable to accept an interpretation of s 56 which would enable the court—in the absence of express agreement—to vary the terms which the law imports into the contract of service between master and servant.

LORD SOMERVELL OF HARROW. My Lords, I agree.

Appeal allowed.

Solicitors: Cosmo Cran & Co (for the appellant company); Gedge, Fiske & Co (for the respondent).

G A Kidner Esq   Barrister.

Woolmer v Delmer Price Ltd

[1955] 1 All ER 377

Categories:        CONTRACT        

Court:        QUEEN’S BENCH DIVISION        

Lord(s):        MCNAIR J        

Hearing Date(s):        11, 12, 13 JANUARY 1955        

Contract – Exception clause – “All goods left at customer’s risk” – Fur coat delivered for storage – Failure to re-deliver – Coat lost – No satisfactory explanation how loss occurred.

Bailment – Storage – Condition excluding liability – Failure to re-deliver article to owner – No satisfactory explanation of loss.

The plaintiff left her fur coat with the defendants for them to store it during the summer months. They failed to return it on demand and the plaintiff sued them for the return of the coat or for its value. The defendants alleged that they had re-delivered the coat to the plaintiff shortly after it had been left with them. This plea was rejected and the defendants could offer no other explanation how the coat had disappeared, but relied on a term in the contract which stated that all goods were left at customer’s risk.

Held – The defendants did not escape liability unless they established either that the loss occurred in some way not involving their negligence, or that the loss did occur by their negligence, in which case they would be protected by the term in the contract that all goods were left at the customer’s risk; as the defendants had failed to show how the loss had occurred, and as it might have been caused in a way not covered by the “customer’s risk” clause, the clause did not protect them and the plaintiff was entitled to recover damages.