Smith and Keenan's English Law PDF

15th Edition
English Law
Smith and Keenan’s
Text and Cases
English Law 15th Edition
English Law
Text and Cases Denis Keenan
Now in its fifteenth edition, Smith and Keenan’s English Law has firmly established itself as the all-purpose introduction
to English law. Uniquely comprehensive in its coverage, it examines the English legal system and main areas of
substantive law including contract, tort, criminal, property and employment law all in one volume.
Text and Cases

The fifteenth edition provides:
l cross-referenced casebook section to enable students to read the facts and decisions of over 500 cases.
l boxed examples citing relevant cases, clearly distinguished from the main text.
l companion website containing regular legal updates and support for teachers through the Instructor’s Manual.
The new edition has been brought fully up-to-date to include:

“Here is a famous textbook… If I
l the Employment Act 2004, the Equality Act 2006, and the Work and Families Act 2006, the Age Discrimination
Regulations and the Mental Capacity Act 2006.
Denis Keenan was stranded on a desert island and
l developments in the Offences Against the Person Act 1861, including grievous bodily harm by transmission allowed one legal text, it would have
of sexually transmitted diseases. to be this favourite volume.”
l recent developments in tort law including the rule of joint vicarious liability and the Compensation Act 2006.
Review of the fourteenth edition -
l the new offence of causing or allowing the death of a child or vulnerable adult and the changes to fitness to 15th Edition The Law Teacher, 2005
plead under the Domestic Crime and Victims Act 2004.
l considerable changes within the English Legal System, including the Constitutional Reform Act 2008 and
the new rules pertaining to the legal profession and legal aid, changes in the judiciary, the new Special
Advocate system in terrorist and other security cases, and the increased role of the Lord Chief Justice,
Judicial Appointments Commission and judicial ombudsman.
Denis
l more material on all aspects of the Criminal Justice Act 2003 as it has come into force particularly in relation to
sexual offences.
Keenan
l case law developments in human rights, particularly in the area of privacy and a full update of employment case law.
Denis Keenan is a Barrister, an experienced teacher and former Head of

Department of Business Studies and Law. In addition to being author of a range
of market-leading textbooks, he is also legal correspondent for Accountancy
magazine and Editor of Accountants’ Legal Service by Tottel Publishing.
Additional student support at

www.pearsoned.co.uk/keenan
Cover image: © Getty Images
ISBN 978-1-4058-4618-9
9 781405 846189
www.pearson-books.com
9781405846189_COVER.indd 1 21/3/07 4:55:30 pm

EL_A01.qxd 3/26/07 2:00 PM Page i
Smith & Keenan’s

ENGLISH LAW
..
EL_A01.qxd 3/26/07 2:00 PM Page ii
Also available:
BUSINESS LAW
Denis Keenan and Sarah Riches

LAW FOR BUSINESS

COMPANY LAW

COMPANY LAW
WITH SCOTTISH SUPPLEMENT
Visit the English Law, fifthteenth edition Companion Website at

www.pearsoned.co.uk/keenan to find regular updates on major legal
changes affecting the book
..
EL_A01.qxd 3/26/07 2:00 PM Page iii
Fifteenth Edition
Smith & Keenan’s

ENGLISH LAW
Text and Cases
Denis Keenan
LLB(Hons) (Lond.), FCIS, CertEd
of the Middle Temple, Barrister

Formerly Head of Department of Business Studies and Law
at what is now Anglia Ruskin University
..
EL_A01.qxd 3/26/07 2:00 PM Page iv
Pearson Education Limited

Edinburgh Gate
Harlow
Essex CM20 2JE
England
and Associated Companies throughout the world.
Visit us on the World Wide Web at:

www.pearsoned.co.uk
First published in Great Britain under the Pitman Publishing imprint in 1963
Second edition published 1966
Third edition published 1969
Fourth edition published 1973
Fifth edition published 1975
Sixth edition published 1979
Seventh edition published 1982
Eighth edition published 1986
Ninth edition published 1989
Tenth edition published 1992
Eleventh edition published 1995
Twelfth edition published 1998
Thirteenth edition published under the Longman imprint in 2001
Fourteenth edition published 2004
Fifteenth edition published 2007
© Kenneth Smith and Denis Keenan, 1963, 1966

© Denis Keenan and Mrs K Smith, 1969, 1973, 1975, 1979, 1982
© Denis Keenan, 1986, 1989, 1992, 1995, 1998, 2001, 2004, 2007
The right of Denis Keenan to be identified as author of this work has

been asserted by him in accordance with the Copyright, Designs and
Patents Act 1988.
All rights reserved. No part of this publication may be reproduced, stored in

a retrieval system, or transmitted in any form or by any means, electronic,
mechanical, photocopying, recording or otherwise, without either the prior
written permission of the publisher or a licence permitting restricted copying
in the United Kingdom issued by the Copyright Licensing Agency Ltd,
Saffron House, 6–10 Kirby Street, London EC1N 8TS.
Crown Copyright material is reproduced with the permission of the

Controller of HMSO and the Queen’s Printer for Scotland
Law Commission Reports are reproduced under the terms of the Click-Use
Licence
ISBN 978-1-4058-4618-9
British Library Cataloguing-in-Publication Data

A catalogue record for this book is available from the British Library
10 9 8 7 6 5 4 3 2 1
11 10 09 08 07
Typeset by 35 in 9/12pt Stone Serif.

Printed by Ashford Colour Press Ltd., Gosport
The publisher’s policy is to use paper manufactured from sustainable forests
..
EL_A01.qxd 3/26/07 2:00 PM Page v
CONTENTS
Preface xi The Criminal Division 49

The book at a glance xiii Assistance for transaction of judicial business
Law report abbreviations xiv in the Supreme Court 52
The House of Lords 53
Table of cases xv
The Judicial Committee of the Privy Council 57
Table of statutes xl Judicial appointments and discipline 59
Removal and retirement of judges 62
PART 1 Arbitration 63
THE ENGLISH LEGAL SYSTEM Conciliation 63
Tribunals 64
1 The nature and development of
The Court of Justice of the European
English law 3
Communities 64
Classification of English law 3 The role of the European Court at
The development and sources of English Luxembourg 65
law – generally 5 The International Criminal Court 67
The common law 6 The European Court of Human Rights 67
Equity 8
Defects of the common law 8 3 Other courts and tribunals, judicial
Relationship of law and equity 11 review, human rights and legal
Legislation 12 services 69
Delegated legislation 14
Custom 14 Administrative tribunals 70
Canon law 16 Employment tribunals 71
Legal treatises 16 Alternative dispute resolution 75
Administrative inquiries 76
2 The courts of law 18 Advantages of tribunals 76
The Tribunals and Inquiries Acts 76
The Supreme Court of Judicature 18
Legal aid 78
The courts today 19
Domestic tribunals 78
Magistrates’ courts 19
Judicial control over inferior courts and
Effect of the Criminal Justice Act 2003 26
tribunals 79
Youth courts 31
Other controls on decision making 86
The county court 31
The Human Rights Act 1998 89
The Crown Court 39
Coroners’ courts 95
The Central Criminal Court 41
Legal services 98
The High Court – generally 41
Payment for legal services 101
The Commercial Court 43
The main legal professions 104
The Companies’ Court 44
Some other important judicial offices 111
The Bankruptcy Court 44
The Court of Protection 44
Technology and Construction Court 45 4 Criminal procedure 115
Restrictive practices 45 Criminal procedure – generally 115
The Court of Appeal – generally 46 The prosecutor 116
Appeals up to the Civil Division 46 Getting the accused into court 118
..
EL_A01.qxd 3/26/07 2:00 PM Page vi
vi CONTENTS
Procedure at the police station 119 Conditional fee agreements 170

The trial of criminal proceedings 123 Alternatives to a claim in court 174
Commencing the prosecution 124 The commencement of proceedings 177
Funding the defence – legal aid 126 The defendant’s response to the claim 178
Bail 127 Reply to the defence 180
Criminal trials and the Human Rights Act Requests for further information 180
1998 131 Case management and allocation of cases 180
Summary trial before magistrates (other than in Court enforcement of timetables 183
a youth court) 132 The trial 183
Proceedings in the youth court 136 Appeals 186
Trial on indictment in the Crown Court 137 Enforcing a judgment 186
Legal aid 137
What is an indictment? 138 6 The law-making process I:
Reporting 138 UK legislation 189
Alibi 138 The United Kingdom 189
Place and time of trial 139 Delegated legislation 197
The offence and indictment 140 Interpretation of statutes by the judiciary 201
Arraignment 141
Jury trial 141 7 The law-making process II: case law and
Committal to the Crown Court for the legislative organs of the European
sentence 150 Union 207
Appeal in criminal cases 151
Case law or judicial precedent 207
Contempt of Court Act 1981 151
The European Union 219
Sentencing 151
Types of Union law 222
Custodial sentences: generally 151
A EU constitution 224
Custodial sentences: the mandatory life
Application of EC law in UK cases 224
sentence 155
Monetary union – impact of the euro 224
Community orders 156
Law reform 224
Prison sentences of less than 12 months 157
Suspended sentences 157
8 Persons and the Crown 226
Deferred sentences 157
Release of offenders from custody 158 Natural persons 226
Fines 158 Juristic persons 246
Absolute discharge 159 Unincorporated associations 249
Conditional discharge 159 Limited liability partnerships (LLPs) 255
Binding over to keep the peace 159 The Crown 260
Binding over of a parent or guardian 160
Travel restriction orders 160 PART 2
Compensation orders 160 THE LAW OF CONTRACT
Anti-social behaviour orders 160
Youth crime and disorder: sentencing 161 9 Making the contract I 269
Youth community orders 161 The essentials of a valid contract 269
Restitution of property in criminal cases 163 Classification of contracts 270
Injury compensation in criminal cases 164 The formation of a contract 271
Rehabilitation of Offenders Act 1974 – Agreement 272
non-disclosure of sentence 165 Offer and invitation to treat 272
Acceptance – generally 274
5 Civil procedure 167 Termination of offer 278
Initial considerations 167 Trading electronically 281
Funding the claim – generally 168 Contract formation and call centres 282
..
EL_A01.qxd 3/26/07 2:00 PM Page vii
CONTENTS vii
10 Making the contract II 284 14 Contractual terms 330

Consideration 284 Inducements and terms generally 330
Consideration in relation to formation of a Inducements and terms distinguished 331
contract – generally 285 Conditions and warranties 333
Consideration viewed in relation to the discharge Innominate terms 334
or variation of a contract 294 Implied terms – generally 334
Common law – the rule of accord and Implied terms in consumer law – sale of goods 336
satisfaction 294 Title 336
Equity – the rule of promissory estoppel 295 Sales by description 338
Discharge of contract by performance – relevance Implied conditions as to fitness 339
of the High Trees case 297 Satisfactory quality 341
Equitable estoppel – other applications 297 Fitness and satisfactory quality 343
Intention to create legal relations 297 Sale by sample 344
Implied terms in consumer law – the supply of
11 Making the contract III 301 goods and services 345
Formalities 301 Supply of goods other than by sale 345
Capacity to contract 304 Contracts for the transfer of property in goods 345
Minors 304 Contracts for work and materials 346
Consequences of the defective contracts The terms implied 346
of minors 306 Remedies 348
Mental disorder and drunkenness 307 Exchange and barter 348
Corporations 308 Contracts for the hire of goods 349
The terms implied 349
12 Reality of consent I 311 Exclusion clauses – supply of goods 351
The supply of services 351
Introduction 311
Exclusion clauses – supply of services 352
Agreement mistake in general 311
The Sale and Supply of Goods to Consumers
Documents mistakenly signed 312
Regulations 353
Unilateral mistake 312
Bilateral identical (or common) mistake 313 15 Exclusion clauses and other unfair
Non-identical bilateral (or mutual) mistake 315 terms 356
Trading electronically 315
Exclusion clauses – the issue of
communication 356
13 Reality of consent II 316 Construction of exclusion clauses 359
Misrepresentation 316 The doctrine of fundamental breach 360
Meaning of representation 316 The approach of Parliament to exclusion
Types of actionable misrepresentation and clauses 360
remedies in general 319 Exclusion clauses applicable if reasonable 362
Compensation under the Financial Services and Reasonableness 363
Markets Act 2000 321 Provisions against evasion of liability 365
Agent’s breach of warranty of authority 322 Unfair contract terms regulations 366
Negligence at common law 322
Remedy of rescission 323 16 Illegality, public policy and
Contracts uberrimae fidei (utmost good faith) 324 competition law 370
Duress 325 Introduction 370
Undue influence and associated equitable Public policy – the contribution of the judiciary:
pleas 326 illegal contracts 371
Economic duress 328 Consequences 373
Unconscionable bargains 329 Public policy and the judiciary – void
No general rule that all contracts must be fair 329 contracts 374
..
EL_A01.qxd 3/26/07 2:00 PM Page viii
viii CONTENTS
Contracts in restraint of trade – generally 375 18 Remedies and limitation of actions 405
Voluntary contractual restraints of trade Damages generally 405
on employees generally 375 Liquidated damages 405
Contractual restraints on employees through Unliquidated damages 406
the period of notice 376 Mitigation of loss 407
Non-contractual restraints on employees: Provisional damages for personal injury 407
confidential information 378 Interest on debt and damages 408
Employee restraints arising from agreements Recovery of debt 408
between manufacturers and traders 380 EU developments 410
Restraints imposed on the vendor of a Equitable remedies 410
business 380 Claims for restitution: quasi-contract 412
Restrictions on shareholder-employees 380 Limitation of actions 413
Restrictions accepted by distributors of
merchandise 381 19 Employment rights 415
Involuntary restraints of trade 381
Recruitment and selection of employees 415
Consequences where the contract is contrary
Protection during employment 426
to public policy: severance 381
The contract of employment 426
Public policy: the contribution of Parliament 382
Pay 435
Wagering contracts: insurance and dealing in
Equal treatment in terms and conditions
differences 384
of employment as between men and
Competition law 384
women in the same employment 440
The European Community approach to restrictive
Part-time workers 443
practices 390
Workers on fixed-term contracts 444
17 Discharge of contract 393 Discrimination once in employment 445
Guarantee payments 449
Discharge by agreement 393
Suspension from work on medical grounds 449
Discharge by performance generally 394
Family-friendly provisions 450
Construction of the contract as entire 394
Flexible working 456
Substantial performance 395
Time off 457
Acceptance of partial performance 395
Insolvency of employer 459
Full performance prevented by the promisee 396
Health and safety at work 459
Time of performance 396
Trade union membership and activities 463
Tender 396
Termination of the contract of employment 465
Appropriation of payments 397
Discriminatory dismissal 479
Discharge by frustration generally 398
Redundancy 479
Contracts for personal service 398
Written statement of reasons for dismissal 486
Government interference 399
Other methods of terminating the contract of
Destruction of the subject matter of the
employment 486
contract 399
The employment contract and shop
Non-occurrence of an event 399
workers 486
Commercial purpose defeated 400
Situations in which the doctrine does
not apply 400 PART 3
The Law Reform (Frustrated Contracts) THE LAW OF TORTS
Act 1943 400
Discharge by breach 402 20 The law of torts: general principles 491
Anticipatory breach and supervening events 402 The nature of a tort 491
Effect of breach on contract 402 Damage and liability 492
Other matters relevant to breach 403 Parties in the law of torts 493
Impact of the introduction of the euro 403 Vicarious liability 500
..
EL_A01.qxd 3/26/07 2:00 PM Page ix
CONTENTS ix
Who is an employee? 501 A leasehold or a term of years 626

Rights of non-employees 505 Privity of contract 632
Nature of vicarious liability 505 Tenants’ rights to acquire the freehold of houses
Liability for torts of independent and blocks of flats 634
contractors 510 Servitudes 639
General defences 511 Restrictive covenants 644
Remedies 518 The transfer of land 646
Damages – generally 518 Personal property 650
Nervous shock 524 Mortgages of land 650
Damage after successive accidents 525 Registration of land charges 659
Cessation of liability 527 Mortgages of personal chattels 663
Mortgages of choses in action 664
21 Specific torts 532 Other forms of security 664
Lien 664
Torts affecting the person 532
Assignments of choses in action 667
Arrest and the tort of trespass to the person 536
Remedies available against false imprisonment
537 PART 5
Torts affecting property 537 CRIMINAL LAW
Wrongful interference with goods 542
Nuisance 546 23 Criminal law: general principles 673
Public nuisance 546 Crime and civil wrongs distinguished 673
Private nuisance 548 Terminology and outcome of criminal and
Negligence – generally 553 civil proceedings 673
The duty of care – generally 553 Nulla poena sine lege – no punishment unless
The duty of care – economic loss 556 by law 674
Negligence – product liability 564 Constituent elements of a criminal offence 674
Statutory product liability – claims against The actus reus 675
the manufacturer 566 Omissions or failure to act 676
Negligence – professional liability 568 The mens rea – generally 677
Negligence – occupiers’ liability 576 Mens rea in statutory offences 679
Highway authorities 580 The mental element – corporations 681
Defective Premises Act 1972 580
Negligence – of employers 581 24 Specific offences 685
Torts against business interests 584 Homicide 685
Defamation 586 Murder 685
Publication 587 Manslaughter 686
The rule in Rylands v Fletcher 603 Voluntary manslaughter 686
Involuntary manslaughter 690
PART 4 Causing death by dangerous or careless
THE LAW OF PROPERTY driving 692
Violent offences which are not fatal 693
22 The law of property 609 Assault and battery 693
The nature of property 609 Statutory offences against the person 694
Ownership 610
Possession 611 25 Age and responsibility – general
Bailment 614 defences 701
Land law 618 Liability of minors 701
Equitable interests 622 Insanity 702
Co-ownership 624 Automatism 704
..
EL_A01.qxd 3/26/07 2:00 PM Page x
x CONTENTS
Drunkenness and drugs 705 Making the contract II 745

Duress 706 Making the contract III 759
Necessity 708 Reality of consent I 762
Mistake 709 Reality of consent II 769
Consent 709 Contractual terms 779
Self-defence 710 Exclusion clauses 788
Preventing crime 711 Illegality and public policy 794
Genuine religious belief 712 Discharge of contract 804
Remedies and limitation of actions 811
PART 6 Employment rights 816
CASES AND MATERIALS Law of torts: general principles 823
Specific torts 850
The nature and development of English law 715 The law of property 881
Other courts and tribunals and legal services 717 Criminal law: general principles 894
Criminal procedure 723 Specific offences 904
The law-making process I: the UK Age and responsibility – general defences 909
Parliament 724
The law-making process II: case law and the Glossary of commonly used legal words and
legislative organs of the European Union 727 phrases 917
Persons and the Crown 729
Making the contract I 732 Index 919
Supporting resources
Visit www.pearsoned.co.uk/keenan to find valuable online resources
Companion Website for students

l Regular updates on major legal changes affecting the book
For more information please contact your local Pearson Education sales representative or visit
www.pearsoned.co.uk/kennan
..
EL_A01.qxd 3/26/07 2:00 PM Page xi
PREFACE
The major feature of this fifteenth edition is the considerable amount of updating of the text
required since the last edition was published in 2004. The volume of law that emanates from
Parliament in terms of statues and Whitehall in terms of ministerial orders and the courts
in terms of rulings in case law is enormous. A particular feature this time has been the full
inclusion of the Constitutional Reform Act 2005 which has made the biggest and most far-
reaching changes in the system of courts since Victorian times. Nevertheless my publishers
and I have tried to keep the book very broadly within the page limits of the last edition. In
regard to the problems of legal change I can only repeat what I have said in previous prefaces
that it serves to accentuate the feeling always present in those who write legal textbooks and
those who lecture in law and their students that they may diligently pursue but seemingly
never overtake the fleeting vision of the Law!
What has this publication done to alleviate the problem?
n First there has been rigorous updating of the text so that the relevant law keeps us up to
date to the end of February 2007.
n Secondly it will be noticed that as the text proceeds there is reference usually under a sepa-
rate heading to reform. Here is set out reforms imminent in say the next 12 to 18 months.
n Finally this edition will, as has been the case with previous editions, receive updating three
times a year through the companion website, details of which appear in the preliminary
pages of the text.
A further distinctive feature of the book is to be found in the extensive cases and materials
section which forms Part 6 and we have a new title ‘English Law – Text and Cases’. Why is
such an extensive treatment of case law included? The reasons are as follows:
n Long experience as a lecturer in both the public and private sectors of professional educa-
tion led me to believe that other texts might be either too sketchy or too academic in their
coverage of cases for the average student at the foundation stage of study. Far too often a
case summary describes A selling goods to B, i.e. undefined persons in an undefined place
at an undefined time (since the date of the case does not necessarily reflect the date of the
facts which gave rise to it). Such summaries are often uninteresting for the reader and
difficult to remember because there is no detailed description of the facts which may
impress themselves upon the memory. This book therefore gives students ready access to
the cases themselves.
n It was usual at one time for students to buy a leading text and a separate casebook.
However, this has become an expensive exercise for students, particularly at foundation
level where a number of legal topics must be studied at least in terms of the basic prin-
ciples. This book includes both principles and cases.
n The case summaries in this text are detailed and the relevant circumstances identified and
described, verbatim extracts from judgements often being given.
n The headnote to a case or group of connected cases also allows the student to study the
Cases and Materials section separately from the main text and, in particular, to revise from
this section when the text has been mastered.
n The extended case summaries are particularly useful where the teaching institution
does not have an extensive law library or where there is great pressure upon the library
..
EL_A01.qxd 3/26/07 2:00 PM Page xii
xii PREFACE
facilities. However, to assist in the use of a law library, the following page lists the law
report abbreviations used in Part 6. Furthermore, an extended summary of a case for the
student can represent a permissible economy of time, eliminating immaterial facts in the
longer full report. It should be remembered that, particularly in the common law subjects,
the cases are the authority for the points made in answers to examination questions and
students should try to have an appreciation at least of the major cases.
n The Cases and Materials section assists the lecturer by removing the chore of producing
case summaries of the more extended kind, allowing the lecturer to fulfil the much more
useful role of giving comment, discussion and criticism of a case.
An additional point is worth mentioning in regard to the Appendix. It is not just an appendix
of cases but also of materials. It will be noticed that many of the more discursive aspects of a
legal topic are contained in the materials surrounding the reported case. Some may ask why
these are not in the text. The reason is that throughout its life the text has been used on a
wide variety of courses pitched at different levels and with slightly differing requirements. To
facilitate the suitability of the book for this role the text is written in terms of the basic law of
the topic. This may be enough in some courses if the basic cases are read and studied. In
other courses a little more strength may be required and where this is so attention can be
directed as required to the material in the Appendix that pushes out the boundaries of know-
ledge a little more.
Finally I would like to thank Zoë Botterill, Acquisitions Editor; my Editor Elizabeth Rix and
Cheryl Cheasley, Editorial Assistant for their help. I need a lot of it! I also thank those who
set, printed and bound the book. A text with so many inevitable changes is not that easy to
cope with.
We have once more had the invaluable assistance of my wife Mary in terms of the organisa-
tion of the sources of reference of new material for inclusion. No lawyer can survive without
this service.
Naturally I take responsibility for any errors or omissions.
Denis Keenan
Maenan
1 March 2007
Courses on which this book is known to be used
AAT CIMA Foundation

ACCA Foundation Stage Edexcel Foundation Stage
AS and A2 Level Law GCSE
BA Accounting and Finance IComA
BA Business Studies ICSA
BA European Business ILEX
BA Estate Management The Chartered Institute of Housing
BA Financial Services CIPS
LLB (English Legal System)
..
EL_A01.qxd 3/26/07 2:00 PM Page xiii
THE BOOK AT A GLANCE

Part 1 THE ENGLISH LEGAL SYSTEM
1 2 3 4
The nature and The courts of law Other courts and Criminal procedure
development of – including appeals tribunals, judicial – magistrates’ court
English law review, human rights and Crown Court
– the sources and legal services
– statutory and
domestic tribunals
5 6 7 8
Civil procedure The law-making process The law-making process Persons and the Crown
– a case in the High I: UK legislation II: case law and the
Court legislative organs of
the European Union
Part 2 THE LAW OF CONTRACT

9 10 11 12 13 14
Making the Making the Making the Reality of Reality of Contractual
contract I contract II contract III consent I consent II – terms
– formation – consideration – formalities – mistake misrepresenta- – express and
and legal and capacity tion, duress implied terms
intent and undue
influence
15 16 17 18 19
Exclusion clauses Illegality, Discharge of Remedies and Employment
and other unfair public policy and contract limitation of rights
terms competition law actions
Part 3 Part 4 Part 5

THE LAW OF TORTS THE LAW OF CRIMINAL LAW
20 21
PROPERTY 23 24 25
The law of Specific torts 22 Criminal law: Specific Age and
torts: general – including The law of general offences – responsibility
principles torts against property – principles – including – general
– including the person including real including strict murder, defences
parties, and goods, and personal offences and manslaughter, – including
vicarious together with property corporate wounding, insanity,
liability and nuisance, generally, liability and sexual automatism
general negligence and landlord and offences and self-
defences defamation tenant, transfer defence
of land and
securities
Part 6 CASES AND MATERIALS
..
EL_A01.qxd 3/26/07 2:00 PM Page xiv
LAW REPORT ABBREVIATIONS
The following table sets out the abbreviations used when citing the various series of certain
Law Reports which are in common use, together with the periods over which they extend.
AC Law Reports, Appeal Cases 1891–(current).

ATC Annotated Tax Cases 1922–1975.
All ER All England Law Reports 1936–(current).
All ER (Comm) All England Law Reports (Commercial Cases) (current).
All ER (D) All England Law Reports (Direct) (online) (current).
All ER Rep All England Law Reports Reprint, 36 vols 1558–1935.
App Cas Law Reports, Appeal Cases, 15 vols 1875–1890.
BCLC Butterworths Company Law Cases 1983–(current).
B & CR Reports of Bankruptcy and Companies Winding-up Cases 1918–(current).
Ch Law Reports Chancery Division 1891–(current).
CLY Current Law Yearbook 1947–(current).
CMLR Common Market Law Reports 1962–(current).
Com Cas Commercial Cases 1895–1941.
Cr App R Cohen’s Criminal Appeal Reports 1908–(current).
Crim LR Criminal Law Review 1954–(current).
EHRR European Human Rights Reports (current).
Fam Law Reports Family Division 1972–(current).
ICR Industrial Court Reports 1972–1974; Industrial Cases Reports
1974–(current).
IRLB Industrial Relations Law Bulletin 1993–(current).
IRLR Industrial Relations Law Reports 1971–(current).
ITR Reports of decisions of the Industrial Tribunals 1966–(current).
KB Law Reports, King’s Bench Division 1901–1952.
LGR Local Government Reports 1902 –(current).
LRRP Law Reports Restrictive Practices 1957–(current).
Lloyd LR or (from Lloyd’s List Law Reports 1919–(current).
1951) Lloyd’s Rep
NLJ New Law Journal.
P Law Reports, Probate, Divorce and Admiralty Division 1891–1971.
P & CR Planning and Compensation Reports 1949–(current).
PIQR Personal Injuries and Quantum Reports.
QB Law Reports Queen’s Bench Division 1891–1901; 1953–(current).
Sol Jo Solicitors’ Journal 1856–(current).
STC Simon’s Tax Cases 1973–(current).
Tax Cas (or TC) Tax Cases 1875–(current).
WLR Weekly Law Reports 1953–(current).
..
EL_A01.qxd 3/26/07 2:00 PM Page xv
TABLE OF CASES
Note: The number of the case in Part 6: Cases and Materials is printed in bold type; the page on which
the case is cited in the main text is printed in italic type.
A (Children), Re (2000) 708, 914 Allen v Greenwood (1979) 642

A (Children) (Conjoined Twins: Medical Alliance & Leicester Building Society v Edgetop Ltd
treatment) (No 1), Re (2001) 841 (1994) 561
A v B plc (2001) 824 Alliance and Leicester plc v Slayford (2000) 654
A v Chief Constable of West Yorkshire Alphacell v Woodward (1972) 524, 680, 682,
(2003) 419 683, 901
A v DPP (2002) 716 Amalgamated Investment & Property v John
A v UK (1998) 534 Walker & Sons (1976) 809
A v United Kingdom (2002) 596 American Express Co v British Airways Board
AB v South West Water Services (1993) 521 (1983) 496
AIB Group (UK) plc v Martin (2002) 651 Anandarajah v Lord Chancellor’s Department
Abbatt v Treasury Solicitor (1969) 250 (1984) 214
Abbey National v Cann (1990) 892 Anderson Ltd v Daniel (1924) 383
Abbott v Strong (1998) 572 Anderton v Clwyd CC (2002) 178
Abouzaid v Mothercare (UK) Ltd (2000) 412a, Anisminic Ltd v Foreign Compensation
567, 866 Commission (1969) 200
Abu v MGN Ltd (2003) 600 Anns v Merton London Borough Council
Actionstrength Ltd v International Glass (1977) 554, 555, 570, 571, 868
Engineering (2002) 760 Ansell v Thomas (1974) 532
Adams v Lindsell (1818) 66, 278, 742 Appleson v Littlewood Ltd (1939) 758
Adams v Southern Electricity Board (1993) 871 Archbolds (Freightage) Ltd v Spanglett Ltd
Adams v Ursell (1913) 376, 549, 856 (1961) 383
Adamson v Jarvis (1827) 498 Argy Trading Development Co Ltd v Lapid
Ailsa Craig Fishing Co Ltd v Malvern Fishing Co Developments Ltd (1977) 392, 554, 861
Ltd (1983) 792, 793 Armhouse Lee Ltd v Chappell (1996) 794
Airedale National Health Service Trust v Bland Arnold v National Westminster Bank plc
(1993) 512, 896 (1990) 33, 218, 728
Ajayi v R T Brisco (Nigeria) Ltd (1964) 755 Arsenal Football Club plc v Reed [2003] 216
Alan (W J) Co v El Nasr Export Import Co Arthur v Anker (1995) 513
(1972) 98, 297, 755 Ashbury Railway Carriage & Iron Co v Riche
Alcock v Chief Constable of South Yorkshire (1875) 116, 308, 762
(1991) 848 Ashby v Tolhurst (1937) 462, 615, 882
Alexander v Mercouris (1979) 205 Ashby v White (1703) 493
Alexander v North Eastern Railway Co (1865) Ashton v Turner (1980) 518
438, 593, 876 Asprey & Garrard Ltd v WRA (Guns) Ltd
Alexander v Railway Executive (1951) 182, 359, (2001) 586
790, 793 Associated Provincial Picture Houses Ltd v
Alexander v Rayson (1936) 795 Wednesbury Corporation (1947) 80, 85, 86
Alexander v Rolls-Royce Motor Cars (1996) 812 AT & T Corp v Saudi Cable Co (2000) 719
Alidair v Taylor (1978) 469 Atkins v General Billposting (1909) 377
Allcard v Skinner (1887) 149, 327, 776 Atkinson v Denby (1862) 000
..
EL_A01.qxd 3/26/07 2:00 PM Page xvi
xvi TABLE OF CASES
Atkinson v Newcastle Waterworks Co (1877) 196, B&S Contracts & Design v Victor Green
411, 563, 796, 866 Publications (1984) 328
Atlas Express v Kafco (1989) 328 BT v One in a Million (1998) 586
Attia v British Gas plc (1987) 848 Babanaft International Co SA v Bassante
Attica Sea Carriers Corporation v Ferrostaal (1988) 411
Poseidon Bulk Reederei GmbH (1976) 810 Babbings v Kirklees Metropolitan Council
Attorney-General v Associated Newspapers (2004) 513
(1994) 149 Badger v Ministry of Defence (2006) 562
Attorney-General v Corke (1933) 451, 604, Baird Textile Holdings Ltd v Marks and Spencer plc
859, 880 (2001) 737
Attorney-General v Fulham Corporation Baker v TE Hopkins & Son Ltd (1959) 307, 515,
(1921) 6, 80, 81, 717 838
Attorney-General v Gastonia Coaches (1976) 371, Baker v James Bros (1921) 303, 514, 837
547, 855 Baker v Willoughby (1969) 346, 527, 849
Attorney-General for Jersey v Holley (2005) 214, Bakewell Management Ltd v Brandwood
904 (2002) 216
Attorney-General for Northern Ireland v Gallagher Baldry v Marshall (1924) 168, 340, 785
(1963) 557, 705, 912 Balfour v Balfour (1919) 101, 299, 756, 757
Attorney-General’s Reference (No 4 of 1980) Balfron Trustees Ltd v Petersen (2001) 509
(1981) 676 Bank of Baroda v Dhillon (1998) 893
Attorney-General’s Reference (No 2 of 1982) Bannerman v White (1861) 152, 332, 779
(1984) 50 Banque Bruxelles Lambert SA v Eagle Star
Attorney-General’s Reference (No 2 of 1983) Insurance (1997) 562
(1984) 568, 711, 915 Banque Keyser Ullmann SA v Skandia (UK)
Attorney-General’s Reference (No 2 of 1992) Insurance Co (1989) 324
(1993) 910 Barber and others v RJB Mining (UK) Ltd
Attorney-General’s Reference (No 1 of 1994) (1999) 430
(1995) 901 Barber v Guardian Royal Exchange Assurance
Attorney-General’s Reference (No 3 of 1994) Group (1990) 442
(1998) 899 Barber v NCR (Manufacturing) Ltd (1993) 818
Attorney-General’s Reference (No 2 of 1999) Barber v Somerset County Council (2004) 583
(2000) 682 Barclays Bank plc v Ellis (2000) 93
Attorney-General’s Reference (No 14 of 2003) 51 Barclays Bank plc v O’Brien (1993) 778, 779
Attwood v Lamont (1920) 382 Barker v Addiscott (1969) 623
Attwood v Small (1838) 319 Barker v Corus (UK) plc (2006) 526, 564
Avery v Bowden (1855) 235, 402, 810 Barnett v Chelsea and Kensington Hospital
Management Committee (1968) 331, 524, 845
B v Croydon Health Authority (1995) 535 Barnett v French (1981) 264
B v DPP (2000) 900 Bartlett v Sydney Marcus Ltd (1965) 786
BG plc v Nelson Group Services (Maintenance) Ltd Barton v Armstrong (1975) 326
(2002) 320, 770 Basildon District Council v J E Lesser (Properties)
BHP Petroleum Great Britain Ltd v Chesterfield Ltd (1985) 403
Properties Ltd (2001) 634 Bass v Gregory (1890) 486, 640, 887
BHP Petroleum Great Britain Ltd v Chesterfield Baster v London and County Printing Works
Properties Ltd (2002) 634 (1899) 486
BP Exploration Co (Libya) v Hunt (No 2) Batchelor v Marlow (2001) 888
(1982) 401 Bates (Thomas) & Son v Wyndham’s (Lingerie)
B&Q plc v Liverpool and Lancashire Properties Ltd (1981) 131, 315, 763, 768
(2000) 643 Battersea Freehold and Leasehold Property Co Ltd
BRT v SABAM (1974) 390 v Wandsworth LBC (2001) 613
..
EL_A01.qxd 3/26/07 2:00 PM Page xvii
TABLE OF CASES xvii
Beach v Freeson (1971) 442, 597, 877 Bollinger v Costa Brava Wine Co Ltd (1959) 585
Beach v Reed Corrugated Cases Ltd (1956) 238, Bolton (H L) (Engineering) Ltd v TJ Graham & Sons
406, 811 Ltd (1956) 682
Beale v Taylor (1967) 161, 338, 783 Bolton v Mahadeva (1972) 215, 394, 804
Beaman v ARTS (1949) 348, 531, 816, 849 Bolton v Stone (1951) 856
Beard v London General Omnibus Co (1900) 832 Bone v Seale (1975) 382, 550, 858
Beaulieu v Finglam (1401) 7 Boorman v Allmakes Ltd (1995) 479
Beaverbrook v Keys (1978) 252 Booth v United States (1999) 445
Bebee v Sales (1916) 271, 495, 827 Boulton v Jones (1857) 732
Beckwith v Philby (1827) 318, 517, 841 Bourhill v Young (1943) 343, 525, 554
Bell v Lever Bros Ltd (1932) 125, 314, 766, Bower v Peate (1876) 296, 510, 550, 834, 835
767, 815 Bowes v Shand (1877) 219, 396, 805
Belvoir Finance Co Ltd v Stapleton (1970) 796 Bowmakers Ltd v Barnet Instruments Ltd
Benn v Hardinge (1992) 890 (1944) 194, 373, 796
Bentley (Dick) Productions Ltd v Harold Smith Boychuk v H J Symons (Holdings) Ltd (1977) 258,
(Motors) Ltd (1965) 780 470, 481, 821
Beoco v Alfa Laval Co (1994) 813 Boys v Blenkinsop (1968) 5, 17, 716
Berg v Sadler and Moore (1937) 202, 374, 797 Brabant v King (1895) 472, 616, 884
88 Berkeley Road London NW9: Rickwood v Brace v Calder (1895) 244, 407, 814
Turnsek, Re (1971) 625 Bradbury v Morgan (1862) 72, 281, 744
Berkoff v Burchill (1996) 587, 590 Bradford Corporation v Pickles (1895) 267, 493,
Bernstein v Skyviews & General (1977) 360, 551, 826, 858
538, 853 Bradley Egg Farm Ltd v Clifford (1943) 250
Berry, Re (1936) 716 Brannan v Airtours plc (1999) 562
Best v Samuel Fox & Co Ltd (1952) 265, 493, Bratts Ltd v Habboush (1999) 890
496, 825 Bratty v Attorney-General for Northern Ireland
Beswick v Beswick (1967) 89, 215, 288, 410, (1963) 704
727, 751 Brew Bros v Snax (Ross) (1969) 388, 550, 860
Bettini v Gye (1876) 155, 331, 395, 402, 780 Bridges v Hawkesworth (1851) 854
Bigos v Bousted (1951) 197, 373, 796 Brigden v American Express Bank Ltd (2000) 362
Billings v Riden (1958) 859 Briggs v Oates (1991) 800
Binions v Evans (1972) 482, 627, 886 Brinkibon v Stahag Stahl (1982) 741
Bird v Jones (1845) 352, 535, 851 British Car Auctions v Wright (1972) 733, 734
Birkmyr v Darnell (1704) 759 British Celanese v Hunt (1969) 380, 549, 552,
Bissett v Wilkinson (1927) 318 858
Blackpool and Fylde Aero Club Ltd v Blackpool BC British Coal Corporation v Smith (1996) 440
(1990) 737 British Crane Hire Corporation v Ipswich Plant
Blake v DPP (1993) 712 Hire (1974) 357, 362
Blake v Galloway (2004) 513 British Leyland (UK) v Swift (1981) 469
Bland v Stockport Metropolitan Borough Council British Railways Board v Herrington (1972) 578
(1993) 461, 534 British Railways Board v Pickin (1974) 21, 196,
Bliss v Hall (1838) 375, 549, 551, 856 205, 724
Blyth v Birmingham Waterworks Co (1856) 556 British Reinforced Concrete Co v Schelff
Bodley v Reynolds (1846) 546 (1921) 209, 380, 801
Bogle v McDonald’s Restaurants Ltd (2002) 412b, British Steel Corporation v Granada Television
567, 866 (1980) 264
Bolam v Friern Barnet Hospital Management British Sulphur v Lawrie (1987) 469
Committee (1957) 558, 573 British Transport Commission v Gourley
Bolitho v City and Hackney Health Authority (1955) 519
(1997) 558, 573, 865 Britt v Galmoye (1928) 508, 509, 832
..
EL_A01.qxd 3/26/07 2:00 PM Page xviii
xviii TABLE OF CASES
Brogden v Metropolitan Railway (1877) 51, 274, Cambridge Water Co v Eastern Counties Leather
735 plc (1991), (1992), (1994) 603–605
Bromley London Borough Council v Greater Campbell v Paddington Borough Council
London Council (1982) 717 (1911) 278, 497, 828, 855
Brooks v Findlay Industries Ltd (2005) 422 Candler v Crane Christmas (1951) 568, 867
Brooks v Olyslager OMS (UK) Ltd (1998) 379 Caparo Industries plc v Dickman (1990) 413, 555,
Brown (B S) & Son Ltd v Craiks Ltd (1970) 169, 571, 572, 576, 867, 868, 869
342, 786 Capper Pass v Lawton (1976) 252, 442, 817
Brown v Controlled Packaging Services Carlill v Carbolic Smoke Ball Co (1893) 46, 272,
(1999) 435 274, 276, 277, 280, 286, 298, 566, 732, 740,
Brunsden v Humphrey (1884) 528 787, 790
Bryant v Lefever (1879) 888 Carmarthenshire County Council v Lewis
Buchan v Secretary of State for Employment (1997) (1955) 272, 495, 827
502, 821, 830 Carr-Glynn v Freasons (a firm) (1997) 869
Buckinghamshire County Council v Moran (1989) Carroll v Fearon (1999) 564
613 Casey’s Patents, Re Stewart v Casey (1892) 85,
Bulmer v Bollinger (1974) 65 287, 749
Bunker v Charles Brand & Son (1969) 417, 577, Cassell & Co Ltd v Broome (1972) 521
870 Cassidy v Daily Mirror Newspapers Ltd
Bunt v Tilley (2006) 588 (1929) 429, 592, 874
Burmah Oil Ltd v Governor of the Bank of England Cassidy v Ministry of Health (1951) 282, 503, 829
(1981) 329 Castle v St Augustine’s Links (1922) 372, 547, 856
Burnett v British Waterways Board (1973) 301, Caulfield v Marshalls Clay Products Ltd
513, 514, 836 (2006) 432
Burnley Borough Council v England (1978) 23, Cavalier v Pope (1906) 580
201, 725 Cavendish-Woodhouse v Manley (1984) 342, 783
Buron v Denman (1848) 319, 517, 841 Cehave NV v Bremer Handelsgesellschaft mbH
Burton v De Vere Hotels Ltd (1997) 446 (The Hansa Nord) (1975) 156, 781
Butler Machine Tool Co v Ex-Cell-O Corporation Cellulose Acetate Silk Co Ltd v Widnes Foundry
(England) (1979) 55, 275, 736 Ltd (1933) 237, 405, 811
Butt v Cambridgeshire and Isle of Ely County Central Asbestos Co v Dodd (1972) 215
Council (1969) 273, 495, 827 Central London Commercial Estates Ltd v Kato
Byrne v Boadle (1863) 406, 559, 865 Kagaku Ltd (1998) 661
Byrne v Castrol (UK) Ltd (1997) 482 Central London Property Trust v High Trees House
Byrne v Deane (1937) 427, 587, 873 Ltd (1947) 96, 12, 754
Byrne v Van Tienhoven (1880) 278, 279, 743 Central Midland Estates Ltd v Leicester Dyers Ltd
(2003) 888
CIBC Mortgages plc v Pitt (1994) 779 Centrovincial Estates v Merchant Investors
C & P Haulage v Middleton (1983) 812 Assurance (1983) 278
C v D (2006) 826 Century Insurance Co v Northern Ireland Road
C v S (1987) 494 Transport Board (1942) 285, 507, 831
Cable & Wireless plc v IBM United Kingdom Ltd Chadwick v British Railways Board (1967) 339,
(2002) 176, 736 525, 846, 847
Calderdale MBC v Gorringe (2002) 872 Chalk v Devises Reclamation Co Ltd (1999) 582
Caldwell v Sumpters (1971) 504, 665, 666, 894 Chancery Lane Safe Deposit & Offices Co Ltd
Callery v Gray (No 2) (2001) 102, 103, 171, 173 v Inland Revenue Commissioners (1966) 727
Cambiero v Aldo Zilli & Sheenwalk Ltd (t/a Signor Chandler v DPP (1962) 515, 677, 897
Zilli’s Bar) (1998) 436 Chandler v Webster (1904) 231, 401, 809
Cambridge and District Co-operative Society Ltd v Chapelton v Barry UDC (1940) 178, 357, 789,
Ruse (1993) 823 791
..
EL_A01.qxd 3/26/07 2:00 PM Page xix
TABLE OF CASES xix
Chaplin v Hicks (1911) 812 Cobb v Great Western Railway (1894) 334, 524,
Chaplin v Leslie Frewin (Publishers) (1965) 760 845, 846
Chapman v Lord Ellesmere (1932) 446, 600, Cobley v Forward Technology Industries plc
879 (2003) 472
Chappell v National Car Parks (1987) 883 Cochrane v Willis (1865) 124, 313, 765
Chappell Co Ltd v Nestlé Co Ltd (1959) 76, 285, Coggs v Bernard (1703) 616, 746
745 Cohen v Daily Telegraph (1968) 595
Charge Card Services, Re (1988) 397 Colchester Estates (Cardiff ) v Carlton Industries
Charing Cross Electricity Supply Co v Hydraulic (1984) 213
Power Co (1914) 450, 604, 880 Coldman v Hill (1919) 475, 617, 885
Chasemore v Richards (1859) 826 Coleman v Skyrail Oceanic Ltd (1981) 254, 448,
Cheah v Equiticorp Finance Group Ltd 819
(1991) 658 Colley v Corkindale t/a Corkers Lounge Bar
Cheltenham & Gloucester Building Society (1996) 481
v Grattidge (1993) 653, 654 Collins v Godefroy (1831) 80, 286, 747
Cheney v Conn (1968) 2, 13, 715 Colvilles v Devine (1969) 560
Cheshire Banking Co, Duff’s Executors Case, Re Combe v Combe (1951) 99, 297, 755, 756
(1886) 73, 281, 744, 832, 833 Commission for Racial Equality v Dutton
Cheshire v Bailey (1905) 832, 833 (1988) 233, 236
Chess (Oscar) Ltd v Williams (1957) 153, 320, Commission for Racial Equality v Imperial Society
333, 779, 780 of Teachers of Dancing (1983) 38, 236, 730
Chessington World of Adventure Ltd v Reed Condon v Basi (1985) 835
(1997) 419 Congreve v Home Office (1976) 721
Chester v Afshar (2004) 511 Conway v Rimmer (1968) 264
Christie v Davey (1893) 379, 493, 549, 857, 858 Cook v Alexander (1973) 443, 597, 877
Christie v Leachinsky (1947) 355, 536, 851 Cook v Broderip (1968) 416, 577, 870
Churchward v R (1865) 261 Cooper v Firth Brown Ltd (1963) 812
Citibank International plc v Kessler (1999) 651, Cooper v Phibbs (1867) 127, 314, 766
652 Co-operative Wholesale Society Ltd v British
City Index Ltd v Leslie (1991) 384 Railways Board (1995) 551
City of London Building Society v Flegg Corenso (UK) v Burden Group plc (2003) 717
(1987) 893 Cope v Rowlands (1836) 383
Cityland and Property (Holdings) Ltd v Dabrah Cope v Sharpe (1912) 317, 383, 516, 841
(1967) 499, 652, 892 Copeland v Smith (1999) 107
Clark Boyce (a firm) v Mouat (1993) 108 Cornelius v Manpower Services Commission
Clark v Lindsay (1903) 400 (1986) 416, 447
Clarke v Dickson (1858) 144, 324, 774 Cornish v Midland Bank (1985) 778
Clarke v Dunraven (1897) 745 Corpe v Overton (1833) 761
Clarke v Frank Seddon Ltd (2006) 432 Corporation Nacional de Cobre de Chile v
Clay Cross (Quarry Services) Ltd v Fletcher Sogemin Metals Ltd (1997) 561
(1979) 818 Corporation of London v Appleyard (1963) 854
Clay v Yates (1856) 797 Cotman v Brougham (1918) 000
Clayton’s Case (1816) 398, 806 Cotton v Derbyshire Dales DC (1994) 577
Clea Shipping Corporation v Bulk Oil International Coulthard v Neville Russell (1997) 571, 576
(The Alaskan Trader) (1984) 407, 810 Courage v Crehan (2002) 371, 383, 388, 389
Cleveland Petroleum Co Ltd v Dartstone Couturier v Hastie (1856) 123, 313, 398, 765
(1969) 213, 381, 803 Cowan v Milbourn (1867) 201, 374, 797
Clifford Davis Management v WEA Records Coxall v Goodyear GB Ltd (2003) 583
(1975) 329 Crabb v Arun District Council (1975) 640, 756
Clifton v Palumbo (1944) 734 Crago v Julian (1992) 301
..
EL_A01.qxd 3/26/07 2:00 PM Page xx
xx TABLE OF CASES
Craig (dec’d), Re (1970) 327 DPP v Smith (Michael Ross) (2006) 694, 907
Cramer v Cramer (1987) 232 DPP v Tilly (2002) 540
Craven-Ellis v Canons Ltd (1936) 247, 412, 815 DPP for Northern Ireland v Lynch (1975) 211
Credit Bank Nederland v Burch (1996) 326 DTC (CNC) Ltd v Gary Sargeant & Co (1996) 665
Cresswell v Sirl (1948) 316, 516, 840, 841 Daily Mirror Newspapers v Gardner (1968) 425,
Cricklewood Property and Investment Trust Ltd v 584, 872, 873
Leighton’s Investment Trust Ltd (1945) 230, Daniels v Walker (2000) 93
400, 808 Daniels v White and Sons (1938) 397, 557, 863
Crofter Hand Woven Harris Tweed Co Ltd v Veitch Dann v Curzon (1911) 188, 372, 373, 794
(1942) 426, 584, 873 Dann v Hamilton (1939) 304, 514, 515, 837
Crompton (Alfred) Amusement Machines v Darby v National Trust (2002) 577
Customs and Excise Commissioners (No 2) Darlington (Peter) Partners Ltd v Gosho Co Ltd
(1973) 45, 264, 731 (1964) 344
Crow v Wood (1970) 487, 640, 888 Dattani v Trio Supermarkets (1998) 218
Crouch v King’s Healthcare NHS Trus (2005) 176 Davey v Harrow Corporation (1957) 453, 881
Crown Suppliers (PSA) v Dawkins (1993) 234 Davidson v Chief Constable of the North Wales
Crowther v Shannon Motor Co (1975) 167, 340, Police and another (1994) 535
342, 785 Davie v New Merton Board Mills (1958) 581
Cuckmere Brick Co Ltd v Mutual Finance Davies v Beynon-Harris (1931) 761
(1971) 655 Davies v Collins (1945) 476, 617, 885
Cundy v Le Cocq (1884) 525, 680, 901 Davies v Health and Safety Executive (2003) 821
Cundy v Lindsay (1878) 119, 312, 763, 764, 902 Davies v Liverpool Corporation (1949) 333, 524,
Curran v Northern Ireland Co-Ownership Housing 845
Association (1987) 555 Davies v Neath Port Talbot CBC (1999) 457
Currie v Misa (1875) 284 Davis Contractors Ltd v Fareham UDC (1956) 398
Curtis v Chemical Cleaning and Dyeing Co (1951) Davis v Johnson (1978) 205, 212
176, 316, 357, 788 Davis v Rubin (1967) 447, 602, 879
Customs and Excise Commissioners v APS Samex Davis v Whitby (1974) 494, 642, 891
(1983) 66 Davstone Estates Ltd, Re (1969) 798
Cutler v United Dairies (1933) 308, 515, 838 Dawnay Day & Co Ltd v D’Alphen (1997) 376
Cutsforth v Mansfield Inns (1986) 390 Dawsons Ltd v Bonnin (1922) 145, 325, 775
Cutter v Powell (1795) 804 De Barnardy v Harding (1853) 218, 396, 805
Czarnikow v Koufos (The Heron II) (1967) 241, De Francesco v Barnum (1890) 760
406, 523, 813 Deacons v Bridge (1984) 800
Dearle v Hall (1828) 658
D v NSPCC (1977) 264 Deeley v Lloyds Bank Ltd (1912) 221, 398, 806
D & C Builders Ltd v Rees (1965) 93, 295, 296, Defrenne v Sabena (1978) 442
752, 753 Denmark Productions v Boscobel Productions
D & L Caterers Ltd v D’Anjou (1945) 276, 497, (1967) 760
590, 828 Dennis v Ministry of Defence (2003) 857
DPP v H (1997) 702 Derbyshire County Council v Times Newspapers
DPP v Harris (1994) 914 (1993) 590
DPP v Hawkins (1988) 536 Derry v Peek (1889) 141, 321, 772
DPP v Jones (1997) 540 Designers Guild Ltd v Russell Williams (Textiles)
DPP v Jones (Margaret) (1999) 541 Ltd (2001) 171
DPP v K (1990) 540, 694, 895, 906 Deutsche Bank AG v Ibrahim and others
DPP v Kent & Sussex Contractors Ltd (1944) 682 (1992) 759
DPP v L (1999) 120 Deyong v Shenburn (1946) 464, 615, 883
DPP v Majewski (1976) 554, 705, 911 Dickinson v Del Solar (1930) 275, 497, 828
DPP v Morgan (1975) 546, 699, 908 Dickinson v Dodds (1876) 69, 279, 281, 743
..
EL_A01.qxd 3/26/07 2:00 PM Page xxi
TABLE OF CASES xxi
Dickson v Combermere (1863) 261 East Suffolk Rivers Catchment Board v Kent
Diment v N H Foot (1974) 493, 642, 890 (1940) 563
Dimes v Grand Junction Canal (1852) 10, 83, 719 Eastbourne Herald Case, The (1973) 20, 138, 723
Dimmock v Hallet (1886) 316 Eclipse Blinds v Wright (1992) 472
Director-General of Fair Trading v First National Economides v Commercial Union Co plc
Bank plc (2000) 368 (1997) 776
Director-General of Fair Trading v Smiths Concrete Eden DC v Braid (1998) 706
(1991) 501 Edgington v Fitzmaurice (1885) 135, 318, 323,
Discount Tobacco and Confectionery Ltd v 769
Williamson (1993) 440 Edler v Auerbach (1950) 195, 373, 796
Dixons Ltd v J L Cooper Ltd (1970) 520 Edwards v Newland (1950) 477, 617, 885
Dolphin’s Conveyance, Re (1970) 645 Edwards v Skyways Ltd (1964) 299, 758
Donaldson v McNiven (1952) 270, 495, 827 Egger v Viscount Chelmsford (1964) 445, 598,
Donoghue v Folkestone Properties (2003) 578 878
Donoghue v Stevenson (1932) 211, 216, 361, 492, Electrochrome Ltd v Welsh Plastics Ltd
553, 554, 555, 564, 565, 569, 570, 581, 616, 784, (1968) 266, 493, 825, 862
785, 824, 825 Eley v Bedford (1971) 520
Dooley v Leyland Vehicles Ltd (1986) 482 Ellenborough Park, Re (1956) 488, 640, 888
Doorman v Jenkins (1843) 471, 616, 884 Elliot v Richard Stump Ltd (1987) 822
Douglas and others v Hello! Ltd (2003), (2005) Elliott v C (1983) 899
263a, 491, 492, 823 Elvin and Powell v Plummer Roddis Ltd
Dow Jones & Co Inc v Gutnick (2002) 588, 601 (1933) 370, 545, 855, 883
Doyle v Wallace (1998) 812 Elwes v Brigg Gas Co (1886) 854
Draper v Hodder (1972) 843 Emanuel v Greater London Council (1970) 448,
Draper’s Conveyance, Re (1967) 480, 625, 886 603, 880
Driskel v Peninsular Business Services Ltd Enderby Town Football Club Ltd v The Football
(2000) 448 Association Ltd (1971) 82
Dryden v Greater Glasgow Health Board Entores Ltd v Miles Far East Corporation
(1992) 461, 822 (1955) 63, 277, 281, 282, 740, 741
Dubai Aluminium Ltd v Salaam (2002) 509 Erlanger v New Sombrero Phospate Co (1878) 775
Dulieu v White & Sons (1901) 338, 524, 846 Errington v Errington (1952) 280
Dunlop v Higgins (1848) 741 Esso Petroleum Co Ltd v Commissioners of
Dunlop v New Garage and Motor Co Ltd Customs & Excise (1976) 733
(1915) 811 Esso Petroleum v Mardon (1976) 322, 323
Dunlop v Selfridge (1915) 87, 284, 288, 337, Esso Petroleum Co Ltd v Harper’s Garage
750, 810 (Stourport) Ltd (1967) 212, 381, 653, 802
Dunnachie v Kingston Upon Hull City Council Eugenia, The (1964) 402
(2004) 479 Euroguard v Rycroft (1993) 482
Dunnett v Railtrack plc (2000) 38, 176, 716 Evans (J) & Sons (Portsmouth) Ltd v Andrea
Dunton v Dover District Council (1977) 377, 549, Merzario Ltd (1976) 180, 333, 358, 789
857
Durham Fancy Goods Ltd v Michael Jackson F v F (1995) 372
(Fancy Goods) Ltd (1968) 100, 297, 756 Faccenda Chicken Ltd v Fowler (1986) 378
Dymond v Pearce (1972) 374, 547, 550, 856 Factortame Ltd v Secretary of State for Transport
Dyson Technology Ltd v Strutt (2005) 799 (1989) 84
Factortame Ltd v Secretary of State for Transport
Eaglehill Ltd v J Needham (Builders) Ltd (No 2) (1991) 34, 12, 13, 201, 224, 263, 724,
(1972) 279 728
Earl of Oxford’s Case (1615) 1, 11, 12, 715 Fagan v Metropolitan Police Commissioner
Easson v LNE Railway Co (1944) 404, 559, 864 (1968) 350, 534, 679, 693, 850
..
EL_A01.qxd 3/26/07 2:00 PM Page xxii
xxii TABLE OF CASES
Fairchild v Glenhaven Funeral Services Ltd and Franks Investment Management Ltd v Robertson
others (2003) 526, 564 (1996) 440
Farley v Skinner (2001) 812 Fraser v HLMAD Ltd (2006) 75
Farringdon v Leigh (1987) 876 Fraser v Thames Television Ltd (1983) 782
Federatie Nederlandse Vakbeweging v Netherlands Freeman v Home Office (1984) 533
State (2006) 431 Frenchay Healthcare National Health Service Trust
Felthouse v Bindley (1862) 61, 276, 739, 740 v S (1994) 512
Fender v St John Mildmay (1937) 370, 371, 372, Froom v Butcher (1975) 560, 561
794 Frost v Aylesbury Dairy Co Ltd (1905) 340
Fennelly v Connex South Eastern Ltd Frost v Chief Constable of South Yorkshire Police
(2001) 831 (1998) 515, 839, 848
Fercometal Sarl v Mediterranean Shipping Fulham v Newcastle Chronicle and Journal
Co Ltd (1988) 811 (1977) 433, 592, 875
Ferguson v John Dawson & Partners (1976) 283, Fuller v Stephanie Bowman (1977) 260, 481, 822
503, 830
Ferguson v Weaving (1951) 532, 681, 903 GFI Group Inc v Eaglestone (1994) 377
Ferguson v Welsh (1987) 870 GKN Bolts & Nuts Ltd Sports & Social Club
Ferrishurst Ltd v Wallcite Ltd (1998) 893 Leek and others v Donkersley and others
Fielding and Platt Ltd v Najjar (1969) 200, 374, (1982) 250
797 Gabriel v Kirklees Metropolitan Council
Financings Ltd v Stimson (1962) 71, 280, 743 (2004) 48
Finegan v Heywood (2000) 705 Galoo Ltd and others v Bright Grahame Murray
Firm of Solicitors, Re a (1991) 108 (1994) 868
Firstpost Homes v Johnson (1995) 302 Garden Cottage Foods Ltd v Milk Marketing Board
Fisher v Bell (1960) 733 (1983) 391, 411
Fitch v Dewes (1921) 207, 375, 800 Gardiner v Sevenoaks RDC (1950) 25, 204, 725
Fitter v Veal (1701) 527 Gardner v Ackroyd (1952) 681
Fitzleet Estates Ltd v Cherry (Inspector of Taxes) Garrard v Southey (1952) 279, 502, 828
(1977) 727 Gateway Hotels Ltd v Stewart (1988) 822
Fitzpatrick v British Railways Board (1991) 463, Gaumont British Distributors v Henry (1939) 526,
471 680, 902
Flannagan v Shaw (1920) 30 Geddling v Marsh (1920) 170, 343, 786
Flemyng v Hector (1836) 250 Geir v Kujawa (1970) 788
Fletcher v Budgen (1974) 205, 206 General Billposting v Atkinson (1909) 800
Fletcher’s Application, Re (1970) 88 Gibson v Manchester City Council (1979) 734
Foakes v Beer (1884) 295, 296, 747, 752, 753 Gifford v Graham (1998) 646
Foley v Classique Coaches Ltd (1934) 58, 276, Gilbert v Stone (1647) 516
738 Gilberthorpe v News Group Newspapers
Ford Motor Co (England) Ltd v Armstrong (1995) 48
(1915) 236, 405, 811 Gilchrist Watt and Sanderson Pty v York Products
Forsikrings Vesta v Butcher (1988) 403 Pty (1970) 79, 286, 746
Forster & Sons Ltd v Suggett (1918) 205, 375, Giles v Walker (1890) 453, 553, 604, 880
378, 798 Gilford Motor Co Ltd v Horne (1933) 42, 246,
Foster v Driscoll (1929) 795 731
Foster v Mackinnon (1869) 763 Gill v El Vino Co Ltd (1983) 39, 239, 240, 730
Fouldes v Willoughby (1841) 368, 545, 854 Gill & Duffus SA v Société pour L’exportation des
Fowler v Lanning (1959) 351, 535, 544, 850 Sucres SA (1985) 331, 780
Fox v Stirk (1970) 232 Glasbrook Bros Ltd v Glamorgan County Council
Francis v Boots the Chemist Ltd (1998) 470 (1925) 82, 286, 747
Franco v R (2001) 687 Global Dress Co v Boase (1966) 470, 616, 884
..
EL_A01.qxd 3/26/07 2:00 PM Page xxiii
TABLE OF CASES xxiii
Goddard v O’Brien (1880) 753 Griffiths v Peter Conway Ltd (1939) 164, 339,
Godfrey v Demon Internet Ltd (1999) 588, 590 784, 785
Godley v Perry (1960) 174, 345, 565, 787 Griffiths v Studebakers (1924) 529, 680
Godwin v Swindon BC (2002) 178 Griffiths v Williams (1995) 844
Goldsmith v Bhoyrul (1998) 590 Grigsby v Melville (1972) 490, 640
Goldsmith v Burrow Construction Ltd (1987) 890 Grist v Bailey (1966) 767
Goldsoll v Goldman (1915) 382 Grobbelaar v News Group Newspapers Ltd
Goldsworthy v Brickell (1987) 777 (2002) 879
Good v Cheesman (1831) 295, 753, 754 Gully v Dix (2004) 499
Good Challenger Navegante SA v Gwilliam v West Hertfordshire Hospital NHS Trust
MetalExportImport SA (2004) 414 (2000) 870
Goode v Harrison (1821) 761
Goodes v East Sussex County Council (2000) 872 H v H (1983) 372
Goodinson v Goodinson (1954) 203, 374, 798 H v Ministry of Defence (1991) 185
Goodwin v UK (2002) 420 HFC Bank plc v Midland Bank plc (1999) 585
Gordon v Gordon (1819) 146, 325, 776 HM Prison Service v Johnson (1997) 448
Gordon v Selico Co Ltd (1986) 317 HSBC Bank plc (formerly Midland Bank plc) v
Gorely v Codd (1966) 827 Madden (2000) 469
Gorris v Scott (1874) 412, 563, 866 Haddon v Van den Berg Foods Ltd (1999) 469
Gosling v Anderson (1972) 140, 320, 321, 772 Hadley v Baxendale (1854) 240, 406, 813
Goss v Nugent (1833) 330 Hair v Prudential Assurance (1983) 775
Gough v National Coal Board (1954) 419, 579, Hale v Jennings Bros (1938) 880
870 Haley v London Electricity Board (1964) 401,
Gould v Gould (1969) 298, 758 559, 864
Gouriet v Union of Post Office Workers Halifax Building Society v Clark (1973) 653, 654
(1977) 19, 113, 116, 723 Hall (Arthur J S) & Co (a firm) v Simons
Graff v Panel on Take-overs and Mergers (2000) 18, 107, 722
(1980) 596 Hall v Brooklands Auto-Racing Club (1933) 300,
Grant v Australian Knitting Mills Ltd (1936) 165, 512, 836
340, 564, 565, 784 Hall v Simons (2006) 558
Granville Oil and Chemicals Ltd v David Turner & Hallam Diocese Trustee v Connaughton
Co Ltd (2003) 167, 271, 413 (1996) 440, 442
Grappelli v Derek Block (Holdings) (1981) 434, Halloran v Delaney (2002) 103
592, 875 Halsey v Milton Kenyes General NHS Trust
Great Northern Railway v Witham (1873) 56, (2004) 717
275, 737 Hamblin v Field (2000) 208
Great Peace Shipping Ltd v Tsavliris Salvage Hambrook v Stokes (1925) 341, 525, 847
(International) Ltd (2002) 128, 314, 767 Hamilton v AC Fayed (2000) 595
Greatorex v Greatorex (2000) 848 Hannah v Peel (1945) 854
Greaves & Co v Baynham Meikle & Partners Hansa Nord, The (1975) 156, 334
(1974) 399, 557, 863 Harakas v Baltic Mercantile & Shipping Exchange
Greener v DPP (1996) 677 Ltd (1982) 602
Greenock Corporation v Caledonian Railway Co Harbutt’s Plasticine Ltd v Wayne Tank and Pump
(1917) 454, 604, 881 Co Ltd (1970) 792
Greenwich Healthcare NHS Trust v London Hargreaves v Bretherton (1958) 262, 492, 823
Quadrant Housing Trust (1998) 644 Harlingdon Ltd v Hull Fine Art Ltd (1990) 783
Gregg v Scott (2005) 557 Harper v National Coal Board (1974) 215
Griffin v Kingsmill (2001) 572 Harris v Birkenhead Corporation (1975) 871
Griffiths v Liverpool Corporation (1966) 422, Harris v James (1876) 386, 550, 859
580, 871 Harris v Nickerson (1873) 47, 272, 733
..
EL_A01.qxd 3/26/07 2:00 PM Page xxiv
xxiv TABLE OF CASES
Harris v Sheffield United Football Club Hilton v Barker, Booth and Eastwood (2005) 109
(1987) 748 Hinz v Berry (1970) 340, 525, 847, 848
Harrison v British Railways Board (1981) 515 Hochster v De la Tour (1853) 232, 402, 403, 809
Harrison v Festus (1998) 665 Hodgkinson & Corby v Wards Mobility Services
Harrison v Michelin Tyre Company (1985) 831, (1994) 586
832 Hodgson v Marks (1970) 150, 327, 776, 893
Harrods Ltd v Remick (1996) 446 Hoenig v Isaacs (1952) 216, 395, 804
Hart v O’Connor (1985) 114, 762 Hollier v Rambler Motors Ltd (1972) 357, 359,
Hartley v Hymans (1920) 806 789
Hartley v Ponsonby (1857) 747 Hollins v Russell (2003) 172
Harvela Investments Ltd v Royal Trust Co of Hollywood Silver Fox Farm v Emmett (1936) 381,
Canada Ltd (1985) 737 549, 858
Harvey v Facey (1893) 50, 273, 734 Holtby v Brigham & Cowan (Hull) Ltd (2000)
Hatton v Sutherland (2002) 582 525, 849
Haward v Fawcetts (a firm) (2006) 529 Holwell Securities Ltd v Hughes (1974) 65, 278,
Hay (or Bourhill) v Young (1943) 343, 848 741
Haynes v Harwood (1935) 838 Home Counties Dairies Ltd v Skilton (1970) 206,
Haystead v DPP (2000) 895 375, 799
Hayward v Challoner (1967) 458, 613, 881 Home Office v Dorset Yacht Co Ltd (1970) 554
Hayward v Thompson (1981) 876 Honeywill & Stein Ltd v Larkin Bros Ltd
Heasmans v Clarity Cleaning (1987) 833 (1934) 510
Hedley Byrne v Heller & Partners (1963) 142, 322, Horne v Midland Railway Co (1873) 242, 406,
323, 365, 569, 570, 772, 773, 778, 861, 867 814
Hegarty v Shine (1878) 518 Horrocks v Low (1972) 444, 598, 878
Heil v Rankin (2000) 519, 526 Horton v Horton (1961) 78, 286, 746
Hemmings v Stoke Poges Golf Club (1920) 363, Horton v Taplin Contracts Ltd (2003) 872
539, 853 Hotel and Catering Industry Training Board v
Henthorn v Fraser (1892) 277 Automobile Proprietary Ltd (1969) 22, 200, 724
Herbage v Pressdram (1984) 594 Houghland v R Low (Luxury Coaches) Ltd
Herd v Weardale Steel Coal and Coke Co Ltd (1962) 469, 616, 884
(1915) 353, 535, 851 Hounslow London Borough v Twickenham Garden
Herne Bay Steamboat Co v Hutton (1903) 227, Developments (1970) 362, 539, 853
399, 807 Household Fire Insurance Co v Grant (1879) 64,
Heron II, The (1967) 241, 406, 523, 813 210, 278, 741
Hewitt v Bonvin (1940) 501 Howatson v Webb (1908) 763
Hewson v Downes (1969) 520 Hubbard v Pitt (1975) 379, 549, 857
Heydon’s Case (1584) 202 Huddersfield Police Authority v Watson
Hickman v Maisey (1900) 538 (1947) 213
Hicks v Chief Constable of the South Yorkshire Hughes v Liverpool Victoria Friendly Society
Police (1992) 519 (1916) 196, 373, 796
Higgins(w) v Northampton Corporation (1927) Hughes v Lord Advocate (1963) 326, 523, 843
118, 312, 763 Hughes v Metropolitan Railway Co (1877) 295,
High Trees Case (1947) 295, 296, 297, 753, 755, 755, 756
756, 806, 861 Hulton (E) & Co v Jones (1910) 435, 592, 875
Hill v Baxter (1958) 551, 675, 704, 910 Humming Bird Motors v Hobbs (1986) 320, 772
Hill v Chapell (2002) 431 Hunger v Butler (1996) 499
Hill v J Crowe (1977) 398, 557, 863 Hunter v Canary Wharf Ltd (1997) 549
Hill v Tupper (1863) 485, 639, 887 Huntingdon Life Sciences Ltd v Curtin
Hillas v Arcos (1932) 57, 276, 757 (1997) 552
Hillesden Securities Ltd v Ryjack Ltd (1983) 546 Huth v Huth (1915) 589
..
EL_A01.qxd 3/26/07 2:00 PM Page xxv
TABLE OF CASES xxv
Hutton v Esher UDC (1973) 157, 202, 334, 725 Jeancharm Ltd (t/a Beaver International) v Barnet
Hutton v Warren (1836) 157, 14, 781 Football Club Ltd (2003) 811
Hyde v Wrench (1840) 53, 275, 735 Jenkin v Pharmaceutical Society (1921) 43, 249,
Hyett v Great Western Railway Co (1948) 309, 731
515, 839 Jepson and Dyas-Elliot v The Labour Party (1996)
Hyman v Nye (1881) 467, 616, 883 238
Hypo-Mortgage Services Ltd v Robinson Jerry Juhan Developments SA v Avon Tyres Ltd
(1997) 893 (1999) 617
Jeune v Queens Cross Properties Ltd (1973) 632
ICI Ltd v Shatwell (1964) 306, 514, 837 Jobling v Associated Dairies (1980) 345, 527, 849
IRC v Ainsworth (2005) 430 John D Wood & Co v Knatchbull (2003) 861
IRC v Bebb Travel plc (2002) 438 John Michael Design v Cooke (1987) 799
IRC v Bullock (1976) 35, 230, 729, 730 John v Mendoza (1939) 191, 372, 795
IRC v Fry (2001) 753 John v Mirror Group Newspapers Ltd (1995) 602,
IRC v National Federation of Self-Employed and 879
Small Businesses Ltd (1981) 8, 81, 84, 718 Johnson v BJW Property Developments Ltd
Ikimi v Ikimi (Divorce: Habitual Residence) (2002) 835
(2001) 231 Johnson v Timber Tailors (Midlands) (1978) 249,
Imperial Loan Co v Stone (1892) 114, 308, 762 417, 816
Inco Europe Ltd v First Choice Distribution (2000) Johnson v Unisys Ltd (2001) 479
206 Johnson v Youden (1950) 904
Ingram v Little (1961) 121, 215, 313, 764, 765 Johnstone v Pedlar (1921) 321, 517, 842
Inntrepreneur Pub Company v Crehan Jolley v Sutton LBC (2000) 844
(2006) 371, 389 Jones (A E) v Jones (F W) (1977) 625
Interbrew SA v Competition Commission and Jones v Boyce (1816) 563
the Secretary of State for Trade and Industry Jones v Cleanthi (2006) 643
(2001) 86 Jones v Lawrence (1969) 409, 561, 865
Interfoto Picture Library Ltd v Stiletto Visual Jones v Morgan (1994) 561
Programmes Ltd (1988) 357 Jones v National Coal Board (1957) 185
Irvine, Re (1928) 744 Jones v Northampton Borough Council
(1990) 250
JEB Fasteners Ltd v Marks Bloom & Co (1981) Jones v Padavatton (1969) 104, 299, 757
570, 868 Jones v Tower Boot Co Ltd (1997) 447
Jackson v Horizon Holidays (1975) 288, 291, Jones v Vernon’s Pools Ltd (1938) 106, 299, 758
750, 751 Jorden v Money (1854) 296
Jackson v Rotax Motor and Cycle Co Ltd Joscelyne v Nissen (1970) 129, 315, 767
(1910) 342 Joseph v City of London Real Property Ltd
Jackson v Union Marine Insurance Co Ltd (2005) 642
(1874) 228, 400, 808 Julian v Furby (1982) 757
Jackson Transport (Osset) Ltd (1994) 683 Junior Books Ltd v Veitchi Co Ltd (1982) 396,
Jaggard v Dickson (1980) 912 556, 565, 825, 862, 863
Jameel v Wall Street Journal (2006) 599, 879
James v Chief Constable of Kent (1986) 30 Karflex Ltd v Poole (1933) 336
James v Eastleigh Borough Council (1990) 730 Kean v McGivan (1982) 585
James & Son Ltd v Smee (1955) 530, 680, 903 Kearley v Thomson (1890) 199, 373, 797
Jameson v Central Electricity Generating Board Kearns v General Council of the Bar (2002) 877
(1999) 500 Keen v Tayside Contracts (2003) 26, 726, 848
Janes Solicitors v Lamb-Simpson (1996) 335 Keene v Muncaster (1980) 204
Jarvis v Swans Tours Ltd (1973) 239, 406, 812 Kellett v DPP (2001) 698
Jarvis v Williams (1955) 367, 545, 854 Kelly v Barrett (1924) 495, 645, 891
..
EL_A01.qxd 3/26/07 2:00 PM Page xxvi
xxvi TABLE OF CASES
Kelly v Dawes (1990) 407 Lambert v HTV Cymru (Wales) Ltd (1998) 739
Kelson v Imperial Tobacco Co (1957) 358, 538, Lambert v Lewis (1981) 173, 344, 566, 787
852 Lancashire Loans Ltd v Black (1934) 148, 327,
Kennaway v Thompson (1980) 390, 551, 856, 860 776
Kennedy v de Trafford (1897) 655 Lancaster v Bird (1999) 781
Kerr v Kennedy (1942) 591 Lane v Holloway (1967) 518
Khiaban v Beard (2003) 35 Lane v London Electricity Board (1955) 27, 204,
Khodaparast v Shad (2000) 521 726, 866
Khorasandijian v Bush (1993) 491, 857, 859 Larner v Fawcett (1950) 505, 666, 894
Kigass Aero Componants v Brown (2002) 430 Latimer v AEC Ltd (1953) 403, 559, 864
Kinch v Bullard (1998) 625 Lavender v Betts (1942) 631
King v Lewis and others (2004) 588 Law v National Greyhound Racing Club Ltd
King’s Norton Metal Co Ltd v Edridge Merrett & (1983) 78
Co Ltd (1897) 764 Law Society v Sephton & Co (a firm) (2006)
Kingcastle Ltd v Owen-Owen (1999) 217 530
Kirkham v Anderton (1990) 836 Lawal v Northern Spirit Ltd (2004) 82
Kitchen v Royal Air Force Association Lawrence v Same (1968) 135
(1958) 850 Laws v Florinplace (1981) 549
Kjell Tore Skjevesland v Geveran Trading Co Ltd Lawson v Serco (2006) 467
(2003) 82 Leaf v International Galleries (1950) 126, 314,
Klein v Calnori (1971) 295, 509, 834 323, 766, 783, 815
Kleinwort Benson Ltd v Lincoln City Council Leaman v R (1920) 262
(1998) 413 Learoyd Bros & Co v Pope & Sons (1966) 478,
Kleinwort Benson Ltd v Malaysia Mining 617, 885
Corporation Berhad (1989) 105, 299, 758 Lee v Lee’s Air Farming Ltd (1960) 284, 503, 821,
Knight v Marquis of Waterford (1844) 18 830
Knightsbridge Estates Trust Ltd v Byrne Lee v Showmen’s Guild of Great Britain
(1939) 496, 652, 891, 892 (1952) 78
Knowles v Liverpool City Council (1993) 206 Leesh River Tea Co v British India Steam
Knupffer v London Express Newspaper Ltd Navigation Co (1966) 833
(1944) 436, 593, 876 Leicester Circuits Ltd v Coates Brothers plc
Kodeeswaran v AG of Ceylon (1970) 262 (2003) 716
Koppel v Koppel (1966) 502, 663, 893 Leigh v Gladstone (1909) 516, 534
Kores Manufacturing Ltd v Kolok Manufacturing Lens v Devonshire Club (1914) 298
Co Ltd (1958) 208, 380, 801 L’Estrange v Graucob Ltd (1934) 175, 357, 362,
Kowalski v The Berkeley Hotel (1985) 481, 822 788
Kreglinger v New Patagonia Meat and Cold Storage Letang v Cooper (1964) 351, 544, 851
Co (1914) 498, 652, 891, 892 Levez v TH Jennings (Harlow Pools) Ltd
Krell v Henry (1903) 226, 399 (1999) 441
Kripps v Touche Ross (1992) 558 Lewis v Averay (1971) 120, 215, 312, 313, 324,
Kruse v Johnson (1898) 201 764
Kuddus v Chief Constable of Leicestershire Lewis v Chief Constable of the South Wales
Constabulary (2001) 520, 521 Constabulary (1991) 536, 852
Kuenyehia v International Hospitals Group Ltd Lewis v Clay (1898) 312, 763, 765
(2006) 178 Lewis v Daily Telegraph Ltd (1964) 587
Leyland Daf Ltd v Automotive Products plc
Laker Airways v Department of Trade (1977) 16, (1993) 329, 391
85, 721 Lightfoot v D & J Sporting Ltd (1996) 795
Lamb v Camden London Borough Council (1981) Limpus v London General Omnibus Co (1862)
552 286, 507, 832
..
EL_A01.qxd 3/26/07 2:00 PM Page xxvii
TABLE OF CASES xxvii
Linden Gardens Trust Ltd v Sludge Disposals Ltd McCarthy and Stone v Julian S Hodge & Co
(1993) 751 (1971) 658
Lister v Hesley Hall Ltd (2001) 284a, 506, 826, Macarthys v Smith (1980) 440, 442
830 McCausland v Duncan Lowrie (1996) 394
Littledale v Liverpool College (1900) 459, 613 McConomy v Croft Inns (1992) 730
Liverpool City Council v Irwin (1977) 158, 335, McCready v Securicor Ltd (1992) 832
782 McCullagh v Lane Fox (1995) 363, 573, 773
Lloyd Cheyham & Co v Littlejohn & Co MacDonald v Advocate General for Scotland
(1987) 573 (2002) 446
Lloyd v Grace Smith & Co (1912) 508, 833 McGeown v Northern Ireland Housing Executive
Lloyd v Singleton (1953) 716 (1994) 577
Lloyd’s TSB Bank plc v Holdgate (2002) 779 McGregor v GMBATU (1987) 818
Lloyds Bank v Bundy (1974) 151, 328, 329, 753, McGuigan v T & G Baynes (1999) 483
777, 778 McKean v Rayner Bros Ltd (Nottingham)
Lloyds v Harper (1880) 744, 750 (1942) 508
Lobb (Alec) (Garages) Ltd v Total Oil GB Ltd McKenna v British Aluminium Ltd (2002) 603
(1985) 329, 803 Mackenzie v CRS Computers Ltd (2002) 377, 378
Lockett v A & M Charles Ltd (1938) 825 McKew v Holland and Hannen and Cubitts
London and Northern Bank ex parte Jones, Re (Scotland) Ltd (1969) 336, 524, 846
(1900) 741 McLoughlin v O’Brian (1982) 342, 525, 847
London Artists v Littler (1969) 439, 594, 876 McManus v Beckham (2002) 589
London Association for the Protection of Trade v McManus v Fortescue (1907) 272
Greenlands (1916) 440, 596, 877 McNaughton (James) Paper Group v Hicks
London Street Tramways v London County Anderson (1991) 576
Council (1898) 211 McNerny v Lambeth Borough Council
Long v Lloyd (1958) 143, 324, 774 (1989) 580, 581
Loutchansky v Times Newspapers Ltd (No 2) Mahon v Rahn (No 2) (2000) 596
(2002) 445a, 598, 878, 879 Makepeace v Evans Bros (Reading) (2000) 582
Lowsley v Forbes (1996) 414 Malas (Hamzeh) v British Imex (1958) 292
Luc v R (1996) 904 Malone v Laskey (1907) 383, 550, 858
Lumbe v Allday (1831) 591 Manchester Airport plc v Dutton (1999) 537
Lumley v Gye (1853) 424, 584, 872, 873 Mandla v Dowell Lee (1983) 233
Luna, The (1920) 788 Manning v Hope (2000) 870
Lustig-Prean and Becket v United Kingdom Mapes v Jones (1974) 320
(1999) 68 Marcq v Christie Manson & Woods Ltd (trading as
Lynn v Bamber (1930) 248, 414, 815 Christies) (2002) 855
Lynn v Rokeby School Board of Governors Mareva Compania Naviera SA v International Bulk
(2001) 442 Carriers SA (1975) 411
Maritime National Fish Ltd v Ocean Trawlers Ltd
M v Home Office (1993) 263 (1935) 229, 400, 808
M v M (2002) 372 Marriage v East Norfolk Rivers Catchment Board
MB (Caesarian Section) (1997) 533 (1950) 324, 518, 842
MSAS Global Logistics Ltd v Power Packaging Inc Marshalls Clay Products Ltd v Caulfield
(2003) 394 (2003) 000
MSF v GEC Ferranti (Defence Systems) Ltd Martindale v Duncan (1973) 328, 523, 844
(1994) 483 Mash and Murrell v Joseph I Emmanuel
McArdle, Re (1951) 287, 749 (1961) 342
McCall v Abelesz (1976) 823 Massey v Crown Life Insurance (1978) 257, 466,
McCarten Turkington Breen (a firm) v Times 821
Newspapers Ltd (2000) 597 Mathew v Bobbins (1980) 326
..
EL_A01.qxd 3/26/07 2:00 PM Page xxviii
xxviii TABLE OF CASES
Matthews v Baxter (1873) 115, 308, 762 Mont ( J A) (UK) Ltd v Mills (1993) 377
Matthews v Kent and Medway Towns Fire Moorcock, The (1889) 158, 335, 782
Authority (2006) 253a, 444, 818 Moore v Bresler Ltd (1944) 682
Matthews v Ministry of Defence (2003) 263 Moore v R Fox & Sons (1956) 560
Matthews v Tarmac Bricks and Tiles Ltd Moore & Co v Landauer & Co (1921) 162, 338,
(1999) 183 784
Mattis v Pollock (t/a Flamingo’s Nightclub) Morgan v Odhams Press (1971) 430, 592, 874
(2003) 831 Morgan v T Wallis (1974) 329, 523, 844
Maynard v Osmond (1977) 83 Morgan Crucible Co plc v Hill Samuel (1990)
Meah v McCreamer (1986) 843 (1991) 414, 571, 576, 868
Mears v LSW Railway (1862) 612 Morgans v Launchbury (1972) 293, 509, 834
Mears v Safecar Security (1982) 251, 335, 436, Morley v Heritage plc (1993) 335
817 Morrells of Oxford Ltd v Oxford United Football
Meering v Grahame White Aviation Co Club Ltd (2001) 646
(1919) 354, 535, 851 Morris v Breaveglen (t/a Anzac Construction Co)
Meikle v McPhail (Charleston Arms) (1983) 259, (1993) 829
474, 475, 822 Morris v C W Martin & Sons Ltd (1965) 289, 509,
Mercantile Union Guarantee Corporation Ltd v 617, 832
Ball (1937) 111, 305, 761 Morris v Murray (1990) 837
Mercer v Denne (1905) 14 Morris v Wentworth-Stanley (1998) 754
Merrett v Babb (2001) 256 Morris Angel and Son Ltd v Hollande and Lee
Merritt v Merritt (1970) 102, 299, 757 (1993) 800
Mersey Docks and Harbour Board v Coggins and Morriss v Marsden (1952) 274, 495, 827
Griffiths (Liverpool) Ltd (1947) 280, 502, 829 Mortgage Corporation v Shaire (2001) 654
Microbeads AC v Vinhurst Road Markings Moses v Winder (1980) 704, 911
(1975) 337 Mountford v Scott (1974) 742, 745
Middlebrook Mushrooms Ltd v TGWU Mountstephen v Lakeman (1871) 108, 303, 759
(1993) 873 Mourton v Poulter (1930) 420, 579, 871
Midland Bank plc v Madden (2000) 469 Moy v Pettman Smith (a firm) (2005) 723
Midland Bank plc v Perry (1987) 778 Mugford v Midland Bank plc (1997) 483
Midtown Ltd v City of London Real Property Co Muir v Keay (1875) 29, 204, 726
Ltd (2005) 642 Mulcahy v Ministry of Defence (1996) 263
Miliangos v George Frank (Textiles) Ltd Mullin v Richards (1998) 826
(1975) 31, 211, 727 Murdoch v Glacier Metal Co Ltd (1998) 548
Millard v Serck Tubes (1969) 423, 584, 872 Murphy v Brentwood District Council
Millars of Falkirk Ltd v Turpie (1976) 343 (1990) 555, 571, 727
Miller v Harry Thornton (Lollies) Ltd Murray v Foyle Meats Ltd (1999) 480
(1978) 449 Murray v Harringay Arena Ltd (1951) 299, 512,
Miller v Jackson (1977) 856 836
Mills v Fowkes (1839) 398
Mint v Good (1951) 385, 550, 859 Nail v News Group Newspapers Ltd (2005) 600
Minter v D & H Contractors (Cambridge) Ltd Napier v National Business Agency Ltd
(1983) 866 (1951) 193, 372, 795
Mirehouse v Rennell (1833) 207 Nash v Inman (1908) 109, 305, 760
Miss Sam (Sales) Ltd v River Island Clothing Co Ltd Nash v Sheen (1953) 533
(1994) 742 National Carriers v Panalpina (Northern)
Mitchell (George) (Chesterhall) Ltd v Finney Lock (1981) 808
Seeds Ltd (1983) 187, 167, 364, 573, 793 National Coal Board v JE Evans & Co (Cavdiff ) Ltd
Moffat v Kazana (1968) 457, 612, 881 (1951) 314, 516, 544, 840
Monsanto plc v Tilly (1999) 841 National Coal Board v Galley (1958) 486
..
EL_A01.qxd 3/26/07 2:00 PM Page xxix
TABLE OF CASES xxix
National Provincial Bank Ltd v Ainsworth Oliver v Ashman (1962) 519

(1965) 661 Oliver v Birmingham Bus Co (1932) 410, 561,
National Westminster Bank plc v Morgan (1983), 866
(1985) 778 Olley v Marlborough Court Ltd (1949) 179, 358,
Navy, Army and Air Force Institutes v Varley 789
(1977) 253, 442, 817 O’Loughlin v Chief Constable of Essex (1998) 538
Nerva v UK (2002) 438 Omega Trust Co Ltd v Wright Son and Pepper
Nettleship v Weston (1971) 312, 516, 558, 839 (1997) 574
Neuwirth v Over Darwen Industrial Co-operative Omnium D’Enterprises v Sutherland (1919) 233,
Society (1894) 466, 615, 883 402, 403, 809
New Zealand Shipping Co Ltd v Satterthwaite Open Door Counselling and Well Woman v
(1974) 181, 281, 291, 358, 508, 732, 749, 790 Ireland (1993) 85
Newell v Goldenberg (1995) 558, 573, 865 O’Reilly v Mackman (1983) 85
Newman v Bourne & Hollingsworth (1915) 465, Orman v Saville Sportswear Ltd (1960) 817
615, 883 Ormrod v Crosville Motor Services (1953) 290,
Niblett Ltd v Confectioners’ Materials Co Ltd 509, 833
(1921) 160, 336, 783 Oryx Group v BBC (2002) 601
Nichol v Godts (1854) 338 Osborn v Thos Boulter & Son (1930) 441, 596,
Nicholls v Rushton (1992) 847 877
Nichols v Marsland (1876) 315, 516, 604, 840, O’Sullivan v Williams (1992) 882
881 Ough v King (1967) 642
Nicholson v Secretary of State for Energy Overseas Tankship (UK) Ltd v Morts Dock and
(1977) 82 Engineering Co Ltd (The Wagon Mound)
Nicolene v Simmonds (1953) 60, 276, 739 (1961) 325, 212, 522, 523, 842, 844
Nissan v Attorney-General (1967) 320, 517, 842 Overseas Tankship (UK) Ltd v Miller Steamship Pty
Noakes v Rice (1902) 497, 652, 891 Ltd (The Wagon Mound (No 2)) (1966) 552,
Nordenfelt v Maxim Nordenfelt Guns and 843
Ammunition Co (1894) 210, 380, 801 Owens v Brimmell (1976) 837
Norris v Southampton City Council Owens v Liverpool Corporation (1939) 344, 525,
(1982) 223, 399, 806 849
North East Coast Ship Repairers v Secretary of State Owen (Edward) Engineering v Barclays Bank
for Employment (1978) 822 International Ltd (1978) 293
North Ocean Shipping Co Ltd v Hyundai
Construction Co Ltd (The Atlantic Baron) (1978) P v S and Cornwall County Council (1996) 419
328 PSM International and McKechnie v Whitehouse
Northumberland and Durham District Banking Co and Willenhall Automation (1992) 798
ex parte Bigge, Re (1858) 319, 770, 771 Padfield v Minister of Agriculture Fisheries and
Norton Tool Co v Tewson (1972) 479 Food (1968) 721
Norwich Pharmacal Co v Commissioners of Page v Smith (1995) 848
Customs and Excise (1973) 44, 264, 731 Page Motors v Epsom and Ewell Borough Council
Nottingham County Council v P (1992) 469 (1981) 552, 860
Nottingham v Aldridge (1971) 292, 509, 833 Paine v Colne Valley Electricity Supply Co Ltd
(1938) 581
Oakley v Lyster (1931) 369, 545, 855 Palk v Mortgage Services Funding (1993) 655
O’Brien v Robinson (1973) 484, 632, 887 Pan Atlantic Insurance Co Ltd v Pine Top
O’Connell v Jackson (1971) 560 Insurance Co Ltd (1994) 775
Office Angels Ltd v Rainer-Thomas and O’Connor Panesar v Nestlé & Co Ltd (1980) 816
(1991) 799 Pannett v McGuinness & Co (1972) 421, 579, 871
O’Leary v Islington London Borough Council Pantis v Governing Body of Isambard Brunel
(1983) 859 School (1997) 740
..
EL_A01.qxd 3/26/07 2:00 PM Page xxx
xxx TABLE OF CASES
Pao On v Lau Yiu Long (1979) 326 Pickett v British Rail Engineering Ltd (1979) 519
Paris v Stepney Borough Council (1951) 400, 559, Pickford v ICI plc (1996) 461, 582
864 Pinnel’s Case (1602) 294, 295, 296, 752
Parker v British Airways Board (1982) 365, 543, Pirelli General Cable Works Ltd v Oscar Faber &
612, 854 Partners Ltd (1983) 528
Parkinson v College of Ambulance Ltd and Pitman Training Ltd v Nominet UK (1997) 586
Harrison (1925) 192, 372, 373, 795 Pitt v PHH Asset Management (1993) 52, 275, 735
Parry v Cleaver (1969) 520 Pitts v Hunt (1990) 837
Parsons Bros v Shea (1965) 401 Platform Home Loans Ltd v Oyston Shipways
Partridge v Crittenden (1968) 49, 273, 733 Ltd (2000) 562
Paterson v Humberside CC (1995) 857 Plowman (GW) & Sons Ltd v Ash (1964) 799
Pauley v Kenaldo Ltd (1953) 503 Plummer v IRC (1988) 232
Payne v Cave (1789) 272, 278 Pocton Industries Ltd v Michael Ikem Horton
Payne v Royal and Sun Alliance Group plc (2000) 379
[2005] IRLR 848 423, 424 Poland v John Parr & Sons (1927) 507
Pearce v Brain (1929) 113, 306, 761 Polemis and Furniss Withy & Co, Re (1921) 212
Pearce v Brooks (1866) 189, 372, 373, 794 Polkey v A E Dayton Services Ltd (1988) 472, 473
Pearce v Merriman (1904) 298 Pollock & Co v Macrae (1922) 183, 359, 791
Pearson v Dublin Corporation (1907) 319 Polonski v Lloyds Bank Mortgages Ltd (1998) 656
Pearson v Lightning (1998) 840 Portec (UK) Ltd v Mogensen (1976) 214
Pearson v North Western Gas Board (1968) 408, Posner v Scott-Lewis (1986) 410
560, 865 Possfund Custodian Trustee Ltd v Victor Derek
Peck v Lateu (1973) 298 Diamond (1996) 771
Peco Arts Inc v Hazlitt Gallery Ltd (1983) 815 Post Office v Liddiard (2001) 470
Peek v Gurney (1873) 137, 319, 770, 771 Post Office v Union of Post Office Workers (1974)
Penny v Northampton Borough Council 463
(1974) 871 Poulton v London & South Western Railway Co
Penny v Wimbledon UDC (1899) 323, 518, 842 (1867) 277, 497, 828
Pepper v Hart (1993) 204 Poussard v Spiers and Pond (1876) 154, 331, 334,
Perera v Vandiyar (1953) 261, 492, 823 395, 398, 402, 780
Pereira Fernandes SA v Mehta (2006) 304 Powell v Gelstone (1916) 589, 740
Performance Cars Ltd v Abraham (1961) 347, Powell v Lee (1908) 740
527, 849 Practice Direction House of Lords Preparation of
Performing Right Society Ltd v Mitchel and Booker Case (1971) 211
(Palais de Dance) Ltd (1924) 501 Practice Direction on Law Reports Preference in
Peters v Prince of Wales Theatre (Birmingham) Ltd House of Lords and Court of Appeal (1990) 208
(1943) 456, 604, 881 Practice Note (1974) 209
Pfizer Ltd v Eurofood Link (UK) Ltd (1999) 585 Practice Note (1994) 512
Pharmaceutical Society of Great Britain v Boots Practice Note (2000) 79
Cash Chemists Ltd (1953) 48, 273, 733, 803 Practice Statement Court of Appeal and Citation of
Pharmaceutical Society of Great Britain v Dickson Unreported Cases (1996) 208
(1968) 214, 79, 381 Pratt v DPP (2001) 698
Philco Radio Corporation v Spurling (1949) 337, Preston v Wolverhampton NHS Trust
524, 846 (2000) 441
Phipps v Pears (1964) 489, 640, 888 Price v Civil Service Commission (1977) 225, 448,
Phoenix Finance Ltd v Federation International De 819
L’Automobile (Costs) (2002) 178 Pride of Derby and Derbyshire Angling Assn v
Photo Production Ltd v Securicor Transport Ltd British Celanese (1953) 527, 842
(1980) 185, 360, 791, 792, 793 Pridham v Hemel Hempstead Corporation
Pickard v Smith (1861) 510 (1970) 871
..
EL_A01.qxd 3/26/07 2:00 PM Page xxxi
TABLE OF CASES xxxi
Priest v Last (1903) 163, 339, 784 R v Broadcasting Standards Commission ex parte
Priestley v Fowler (1837) 163, 219 BBC (1999) 492
Prince of Hanover v Attorney-General R v Brown (1993) 709, 710
(1957) 3, 13, 715, 726 R v Burgess (1991) 909
Proffit v British Railways Board (1984) 578 R v Burstow (1996) 696
Provident Financial Group plc v Whitegates Estate R v Cairns ( John) (1999) 707
Agency (1989) 377 R v Caldwell (1981) 518, 678, 691, 899, 907
Prudential Assurance Co v London Residuary Body R v Cambridge (1994) 687
(1992) 887 R v Camplin (1978) 534, 688, 904
Puhlhofer v Hillingdon London Borough Council R v Chan-Fook (1994) 694, 696
(1986) 81 R v Chapman (1976) 142
Purdew v Seress-Smith (1993) 596 R v Cheshire (1991) 896
Purnell v Shields (1973) 560 R v Church (1966) 539, 691, 906
Pursell v Horn (1838) 532, 533 R v Clarence (1888) 695
R v Clarke (1972) 549, 703, 909
Qua v John Ford Morrison Solicitors (2003) 255a, R v Clegg (1995) 915
455, 819 R v Colyer (1974) 213
Quinn v Leatham (1901) 215 R v Commission for Racial Equality ex parte
Quinn v Williams Furniture Ltd (1981) 40, 239, Prestige Group plc (1983) 237
730 R v Commissioner of Police of the Metropolis ex
parte Blackburn (1973) 14, 85, 720
R v Acott (Brian Gordon) (1997) 688 R v Constanza (1997) 697
R v Adomako (1994) 678, 691, 692 R v Coroner for North Humberside and Scunthorpe
R v Alleyne (Brian Dean) (2003) 898 ex parte Jamieson (1994) 95
R v Altham (2006) 914 R v CPC (UK) (1994) 901
R v Antoine (2000) 689, 703 R v Crown Court at Maidstone ex parte Lever
R v Aspinall (1999) 116 (1995) 131
R v Bailey (1800) 566, 709, 914 R v Cunningham (1957) 517, 678, 693, 696,
R v Baker (1997) 706 902, 907
R v Barnes (2005) 710 R v Curley (1909) 510, 676, 895
R v Bedwellty UDC (1943) 84 R v Dairy Product Quota Tribunal for England and
R v Belfon (1976) 543, 696, 908 Wales ex parte Caswell (1989) 85
R v Bingham Justices ex parte Jowitt (1974) 11, R v Dalby (1982) 690
83, 719 R v Dawson (1985) 906
R v Bird (Debbie) (1985) 915 R v Deegan (Desmond Garcia) (1998) 205
R v Birmingham City Council ex parte Equal R v Dica (2003), (2004), (2005) 695
Opportunities Commission (1989) 239, 240 R v Dickie (1984) 702
R v Board of Governors of London Oratory School R v Dietschmann (2003) 705
ex parte R (1988) 82, 719 R v Drew (1985) 141
R v Board of Visitors of the Maze Prison ex parte R v Dudley and Stephens (1884) 564, 708, 913
Hone and McCarten (1988) 83 R v Dyson (1908) 533, 686, 904
R v Bollom (2004) 675 R v Exeter Crown Court ex parte Beattie
R v Bow Street Metropolitan Stipendiary Magistrate (1974) 84
ex parte Pinochet Ugarte (1998) 217 R v Fairbanks (1986) 150
R v Bow Street Metropolitan Stipendiary Magistrate R v Ford (1989) 144
ex parte Pinochet Ugarte (No 2) (1999) 217, R v Gibbins and Procter (1918) 896
719 R v Gibson (1991) 674
R v Bowen (1996) 707 R v Gittins (1984) 538, 689, 906
R v Brighton Justices ex parte Robinson R v Goldstein (2006) 548
(1973) 81, 718 R v Gotts (1991), (1992) 559, 706, 912
..
EL_A01.qxd 3/26/07 2:00 PM Page xxxii
xxxii TABLE OF CASES
R v Gould (1968) 32, 213, 728 R v Kingston (1993), (1994) 911, 912
R v Governor of Brockhill Prison ex parte Evans R v Knowsley Metropolitan Borough Council
(No 2) (2000) 535 ex parte Maguire (1992) 85
R v Graham (1982) 706 R v Lamb (1967) 691
R v Grant (Heather) (2002) 703 R v Lambert (2001) 689
R v Greater Manchester Coroner ex parte Tal R v Latimer (1886) 519, 679, 899
(1984) 213 R v Lawrence (1981) 899
R v Guildford Crown Court ex parte Siderfin R v Le Brun (1991) 900
(1989) 142 R v Lee (Dennis Percival) (2001) 709
R v Hammersmith Coroner ex parte Peach R v Lewisham Borough Council ex parte Shell UK
(1980) 95 (1988) 85, 717
R v Hancock (1986) 897 R v Lichniak (2000) 155
R v Hanratty (2002) 52 R v Lipman (1969) 553, 704, 911
R v Hanson and Others (2005) 136 R v Liverpool City Justices ex parte Topping (1983)
R v Hardie (1984) 555, 705, 911 719
R v Harrow Crown Court ex parte Perkins R v Lloyd (1989) 836
(1998) 41, 81 R v Local Commissioner for Administration for the
R v Hasan (Aytach) (2005) 707 South the West Midlands etc. (1988) 88
R v Hayward (1908) 509, 675, 895 R v London County Council ex parte
R v Hazeltine (1967) 141 Entertainments Protection Association
R v Heath (Patrick) (2000) 707 (1931) 9, 83, 718
R v Henn (1980) 66 R v Lord Chancellor ex parte Witham (1997)
R v Hennessy (1989) 548, 703, 909 718
R v Hills (2001) 698 R v Lord Chancellor’s Department ex parte Nangle
R v HM Coroner for Surrey ex parte Wright (1991) 262
(1996) 95 R v Lowe (1973) 527, 680, 691, 902
R v Hobson (1997) 689 R v Mclnnes (1971) 567, 914
R v Hood (2004) 896 R v M’Naghten (1843) 702, 703, 704, 909, 910
R v Howe (1987) 211, 706 R v Maguire (1992) 49
R v Hudson (1971) 560, 706, 913 R v Malcharek (1981) 896
R v Humphries (1995) 906 R v Maloney (1985) 516, 678, 686, 897
R v ICR Haulage Ltd (1944) 682 R v Mandair (1994) 696
R v Immigration Appeal Adjudicator ex parte Crew R v Mara (1986) 256, 463, 820
(1982) 28, 204, 726 R v Marison (1996) 693
R v Immigration Appeal Tribunal ex parte Joyles R v Marlborough Street Stipendiary Magistrate ex
(1972) 724 parte Bouchereau (1977) 30
R v Inspector of Taxes ex parte Kissane (1986) 718 R v Martin (1881) 541, 695, 907
R v Instan (1893) 512, 676, 896 R v Martin (1989) 563, 708, 913
R v Ireland (1997) 697 R v Martin (Anthony Edward) (2002) 711
R v Ishmael (1970) 51 R v Mason (1980) 144
R v James (2006) 214 R v Matthews (Darren John) (2003) 898
R v Johnson (1989) 535, 688, 905 R v Maxwell (1990) 150
R v Johnson (Anthony Thomas) (1996) 547, 697, R v McInnes (1971) 567, 711
857 R v Mellor (1996) 896
R v Jordan (1956) 895 R v Miller (1983) 514, 677, 897
R v K (2001) 900 R v Misra (2005) 692
R v Kemp (1956) 547, 703, 909 R v Morhall (1993) 904
R v Kennedy (1999) 690 R v Morris (1991) 143
R v Kennedy (2005) 690 R v Mulvihill (1990) 719
R v Kimber (1983) 565, 709, 914 R v Nedrick (1986) 897
..
EL_A01.qxd 3/26/07 2:00 PM Page xxxiii
TABLE OF CASES xxxiii
R v Northumberland Compensation Appeal R v Simpson (2003) 212

Tribunal ex parte Shaw (1952) 83 R v Skelton (1995) 693
R v O’Grady (1987) 556, 705, 912 R v Smith (1959) 511, 676, 895
R v OLL (1994) 683 R v Smith (Lance Percival) (2003) 144
R v Panel on Take-overs ex parte Datafin plc R v Smith (Leonard) (1998) 697
(1987) 79 R v Smith (Morgan James) (1999) 214, 904, 905
R v Parliamentary Commissioner ex parte Dyer R v Special Commissioner ex parte Morgan
(1994) 88 Grenfell & Co Ltd (2002) 265
R v Parmenter (1991) 542, 694, 695, 906, 907 R v Spratt (1991) 906, 907, 908
R v Pembliton (1874) 520, 679, 899 R v Stewart (1995) 688
R v Pittwood (1902) 513, 676, 896 R v Sullivan (1983) 909
R v Pommell (1995) 913 R v Swaysland (1987) 184
R v Quick (1973) 552, 704, 910 R v Tabassum (Navid) (2000) 908
R v R (1991) 544, 699, 908 R v Tandy (1987) 537, 689, 906
R v Rankine (Elliston) (1997) 148 R v Tarrant (1997) 144
R v Reading Crown Court ex parte Bello R v Thornton (1991) 536, 688, 905
(1990) 131 R v Thornton (1996) 905
R v Rimmington (2006) 548 R v Tolson (1889) 523, 680, 901
R v Roberts (1990) 904 R v Tonner (1985) 144
R v Rogers (Stephen) (2003) 690 R v Towers (1874) 508, 675, 895
R v Rose (1884) 569, 711, 915, 916 R v Uxbridge Justices ex parte Smith (1985) 135
R v Rushworth (1992) 908 R v Wandsworth Justices ex parte Read
R v Sangha (1988) 899 (1942) 30
R v Savage (1991) 678 R v Watson (1988) 148
R v Secretary of State for Employment ex parte R v Wear Valley District Council ex parte Binks
Equal Opportunities Commission (1994) 84, (1985) 82, 719
721 R v West Yorkshire Coroner ex parte Smith
R v Secretary of State for the Environment ex parte (1982) 95
Slot (1998) 719 R v Wheat and Stocks (1921) 728
R v Secretary of State for the Environment ex parte R v Williams (1923) 545, 699, 709, 908
Spath Holme Ltd (2000) 725 R v Wilson (1996) 710
R v Secretary of State for the Environment ex parte R v Wiltshire CC ex parte Lazard Bros Ltd
Spath Holme Ltd (2001) 204, 725 (1998) 80, 718
R v Secretary of State for Foreign and R v Windle (1952) 550, 704, 910
Commonwealth Office ex parte Council of Civil R v Woollin (1996), (1998) 898
Service Unions (1984) 720 R (a child) v DPP (2001) 698
R v Secretary of State for the Home Department R (on the application of Anderson) v Secretary of
ex parte Daly (2001) 85, 86 State for the Home Department (2002) 155
R v Secretary of State for the Home Department R (on the application of Countryside Alliance v
ex parte Hosenball (1977) 12, 83, 720 Attorney-general (2005) 195
R v Secretary of State for Social Services ex parte R (on the application of Factortame Ltd and
Grabaskey (1972) 15, 85, 721 others) Secretary of State for Transport,
R v Secretary of State for Transport ex parte Local Government and the Regions (No 8)
Factortame and others (1999) 729 (2002) 171
R v Seers (1984) 689 R (on the application of Fleurose) v Securities and
R v Sharp (David) (1987) 561, 707, 913 Futures Authority (2002) 94
R v Shepherd (1988) 562, 707, 913 R (on the application of Jackson) v A-G (2005),
R v Sheppard (2003) 51 (2006) 195
R v Shorrock (Peter) (1993) 547, 860 R (on the application of Kadhim) v Brent LBC
R v Shortland (1995) 708 Housing Benefit Board (2001) 216
..
EL_A01.qxd 3/26/07 2:00 PM Page xxxiv
xxxiv TABLE OF CASES
R (on the application of Pretty) v DPP (2001) 690 Rickards v Lothian (1913) 455, 604, 881
R (on the application of SB) v Headteacher Rickwood v Turnsek (1971) 625
and Governors of Denbigh High School Ridge v Baldwin (1963) 13, 83, 720
(2005) 94, 235 Rigby v Chief Constable of Northampton
R (on the application of Sunspell Ltd) v Association (1985) 841
of British Travel Agents (2000) 79 Rigby v Ferodo (1987) 468
R (on the application of Williamson) v Secretary Roake v Chadha (1983) 646, 752
of State for Education and Employment Robb v Green (1895) 378
(2005) 534 Roberts v Gray (1913) 110, 305, 760
R & B Customs Brokers Co Ltd v United Roberts v Parole Board (2005) 108
Dominions Trust Ltd (1988) 339, 360 Roberts Petroleum v Bernard Kenny (1983) 208
Race v Ward (1855) 14 Robertson v Forth Road Bridge Joint Board (1996)
Raffles v Wichelhaus (1864) 133, 315, 769 848
Rafsanjan Pistachio Producers Co-operative v Robertson v Ridley (1989) 250
Kauffmanns Ltd (1998) 738 Robertson v Turnbull (1981) 500
Rainey v Greater Glasgow Health Board Robins & Co v Gray (1895) 503, 665, 893
(1987) 818 Robinson v The Post Office (1973) 845
Rambarran v Gurrucharran (1970) 294, 509, 834 Robinson-Steele v RD Retail Services Ltd
Ramsgate Victoria Hotel Co v Montefiore (2006) 432
(1866) 70, 280, 743 Rock Refrigeration Ltd v Jones (1997) 800
Rantzen v Mirror Group Newspapers (1993) 879 Rodway v New Southern Railways Ltd (2005) 453
Ratcliff v McConnell (1999) 578 Roe v Minister of Health (1954) 405, 494, 559,
Ratcliffe v Evans (1892) 590 864
Ratcliffe v North Yorkshire County Council Rogers, Sons & Co v Lambert & Co (1891) 479,
(1995) 818 618, 886
Rayfield v Hands (1958) 74, 281, 744, 790 Rogers v Vosper Thorneycroft (UK) Ltd
Rayner v Mitchell (1877) 507 (1988) 482
Read v Coker (1853) 532 Rollinson (Linda) v Kimberly Clark Ltd
Read v J Lyons & Co Ltd (1947) 449, 603, 880 (1999) 183
Reardon Smith Line v Hansen-Tangen (1976) Rondel v Worsley (1967) 107, 558, 722
781, 784 Rookes v Barnard (1964) 520, 521
Reckitt & Coleman Products Ltd v Borden (1990) Ropaigealach v Barclays Bank plc (2000) 654
585 Roscorla v Thomas (1842) 749
Rederiaktiebolaget Amphitrite v R (1921) 261 Rose v Bouchet (1999) 242
Redgrave v Hurd (1881) 319 Rose v Plenty (1976) 287, 507, 832
Reed v Dean (1949) 468, 616, 883 Rose and Frank Co v JR Crompton & Brothers Ltd
Rees-Hough Ltd v Redland Reinforced Plastics Ltd (1925) 107, 299, 759
(1984) 365 Rose (Frederick) London Ltd v William Pim & Co
Regazzoni v K C Sethia Ltd (1958) 190, 372, 794 Ltd (1953) 130, 315, 768
Reilly v R (1934) 261 Ross v HM Advocate (1991) 558, 705, 911, 912
Resolute Maritime Inc v Nippon Kaiji Kyokai Rothermere v Times Newspapers (1973) 185
(1983) 772 Routledge v Grant (1828) 67, 279, 742
Revill v Newberry (1995) 853 Routledge v McKay (1954) 332
Reynolds v Atherton (1922) 744 Rowe v Herman (1997) 835
Reynolds v Times Newspapers Ltd (1999) 598, Rowland v Divall (1923) 159, 336, 413, 782
599, 878 Roy v Prior (1969) 263, 492, 823
Rhodes v Moules (1895) 545 Royal Bank of Scotland plc v Bannerman
Rhone v Stephens (1994) 645 Johnstone Maclay (a Firm) (2003) 574, 576
Rickards (Charles) Ltd v Oppenhaim (1950) 220, Royal Bank of Scotland plc v Etridge (No 2)
297, 396, 805 (1998) 779
..
EL_A01.qxd 3/26/07 2:00 PM Page xxxv
TABLE OF CASES xxxv
Royal Trust Co of Canada v Markham (1975) 653 Secretary of State for the Home Department v
Rylands v Fletcher (1868) 510, 603–605, 835, 840, Wainwright (2002) 533
852, 858, 859, 861, 880, 881 Secretary of State for Trade and Industry v Bottrill
(1999) 821
S, Re (1992) 512 Sedleigh-Denfield v O’Callaghan (1940) 389, 547,
SCM (UK) Ltd v Whittall & Son Ltd (1970) 394, 550, 860
556, 862 Seer Technologies Ltd v Abbas (2000) 82
Sadler v Brittania Country House Hotel Selectmove, Re (1994) 747, 753
(1993) 882 Shadwell v Shadwell (1860) 83, 286, 748, 790
Safeway Stores plc v Hachette Filipacchi Presse Shah v Barnet London Borough Council
(1999) 585 (1983) 206
Safeway Stores plc v Tate (2001) 601 Shah v Shah (2002) 302
Saif Ali v Sydney Mitchell & Co (1978) 107 Shanklin Pier Ltd v Detel Products Ltd (1951)
St Stephen Walbrook, Re (1987) 16 565, 566
Salmon v Seafarer Restaurants Ltd (1983) 870 Sharp (GF) & Co Ltd v McMillan (1998) 399
Salomon v Salomon (1897) 41, 246, 683, 730, Shaw v DPP (1961) 507, 674, 894
830 Sheldon and others v RHM Outhwaite
Salsbury v Woodland (1969) 297, 511, 835 (Underwriting Agencies) Ltd and Others (1995)
Salvesen v Simons (1994) 795 815, 816, 850
Sandhar v Department of the Environment, Sheldon v West Bromwich Corporation
Transport and the Regions (2001) 872 (1973) 887
Sarker v South Tees Acute Hospital NHS Trust Shell-Mex and BP Ltd v Manchester Garages Ltd
(1997) 809 (1971) 481, 627, 886
Sarwar v Alam (2001) 103, 173 Shenton v Smith (1895) 262
Saunders (Mayfair) Furs v Davies (1965) 474, 617, Sheriff v Klyne Tugs (Lowestoft) Ltd (1999) 448
885 Sherras v De Rutzen (1895) 902
Saunders v Anglia Building Society (1970) 117, Shipton, Anderson & Co and Harrison Brothers’
312, 762, 763 Arbitration, Re (1915) 224, 399, 807
Sauter Automation v Goodman (HC) (Mechanical Shogun Finance Ltd v Hudson (2000) 764
Services) (1987) 736 Short v J W Henderson Ltd (1946) 502
Sayers v Clarke-Walker (a firm) (2002) 572 Shove v Downs Surgical plc (1984) 519, 812
Sayers v Harlow UDC (1958) 336, 524, 846 Siboen (The) and The Sibotre (1976) 326
Scammell (G) and Nephew Ltd v Ouston (1941) Sidaway v Bethlem Royal Hospital Governors
59, 276, 738, 739 (1984) 511, 533
Schloimovitz v Clarendon Press (1973) 437, 593, Sidhu v British Airways plc (1997) 15
876 Sigsworth, Re (1935) 203
Schorsch Meier GmbH v Hennin (1975) 30, 211, Sim v Stretch (1936) 432, 592, 874
727 Simaan General Contracting Co v Pilkington Glass
Schuler (L) AG v Wickham Machine Tool Sales Ltd (1988) 863
(1973) 332 Simms v Leigh Rugby Football Club (1969) 298,
Scott v London & St Katherine Docks Co 512, 534, 835
(1865) 407, 559, 865 Simpkins v Pays (1955) 103, 299, 757
Scott v Phillips (1973) 232 Simpson v London & North Western Rail Co
Scott v Shepherd (1773) 330, 523, 844 (1876) 814
Sears v AG of New Zealand (1997) 58 Simpson v Simpson (1988) 327
Secretary of State for Education and Science v Sindall (William) plc v Cambridge County Council
Tameside Metropolitan Council (1976) 17, 87, (1993) 641
721 Sindicato de Médicos de Asistencia Pública (Simap)
Secretary of State for the Home Department v Robb v Conselleria de Sanidad y Consumo de la
(1995) 535 Generalidad Valenciana (2001) 430
..
EL_A01.qxd 3/26/07 2:00 PM Page xxxvi
xxxvi TABLE OF CASES
Siskina, The (1977) 411 Standard Chartered Bank v Pakistan National

Sisley v Britannia Security Systems (1983) 250, Shipping Corp (Reduction of Damages)
417, 816 (2001) 562
Skeate v Beale (1840) 326 Stanley v International Harvester (1983) 208
Skipton Building Society v Bratley (2000) 656 Stanley v Powell (1891) 313, 516, 840
Slazengers Ltd v Gibbs COMPARE & Co Stansbie v Troman (1948) 845
(1916) 587 Stark v Post Office (2000) 461
Smirk v Lyndale Developments Ltd (1974) 460, Starmark Enterprises Ltd v CPL Distribution Ltd
613 (2001) 212
Smith (WH) Ltd v Wyndram Investments Ltd Steedman v BBC (2001) 601
(1994) 632 Steel v Joy (2004) 717
Smith and Snipes Hall Farm v River Douglas Steen v HM Attorney-General (2001) 94
Catchment Board (1949) 90, 293, 752 Steinberg v Scala (Leeds) Ltd (1923) 112, 306,
Smith v Baker (1891) 305, 514, 837 761
Smith v Brudenell-Bruce (2002) 643 Steiner v Inland Revenue Commissioners
Smith v Eric C Bush (1987) 363, 573, (1973) 37, 232, 729
773 Stephen (Harold) & Co Ltd v Post Office
Smith v Chadwick (1884) 139, 319, 771 (1978) 496
Smith v Jones (1959) 209 Stevenson (SBJ) Ltd v Mandy (1999) 378
Smith v Land and House Property Corp (1884) Stevenson v McLean (1880) 54, 275, 735, 742
136, 318, 323, 770 Stevenson v Rogers (1999) 339, 360
Smith v Leech Braine & Co Ltd (1962) 327, 523, Stilk v Myrick (1809) 81, 286, 747
844 Stocks v Wilson (1913) 305
Smith v Mawhood (1845) 383 Stocznia Gdanska SA v Latvian Shipping
Smith v Morgan (1971) 276 (1998) 324, 412
Smith v Scott (1972) 387, 550, 859, 880 Stone v Taffe (1974) 576
Smith v South Wales Switchgear (1978) 359 Stonebridge v Bygrave (2001) 888
Smolden v Whitworth (1996) 836 Storey v Ashton (1869) 507, 591
Soleimany v Soleimany (1999) 795 Storey v Challands (1837) 591
Solle v Butcher (1950) 314, 767, 809 Storey v Fulham Steel Works (1907) 222, 399, 806
Somerset v Wade (1894) 528, 680, 902 Stott v Skipton Building Society (1999) 656
South Staffordshire Water Co v Sharman Stour Valley Builders v Stuart (1993) 753, 754
(1896) 366, 543, 612, 614, 854 Stubbings v Webb (1993) 529, 534
South Western General Property Co Ltd v Marton Sturges v Bridgman (1879) 391, 551, 861
(1982) 793 Sumpter v Hedges (1898) 217, 396, 805
Southport Corporation v Esso Petroleum Co Sweet v Parsley (1969) 522, 680, 900
(1954) 357, 538, 603, 852 Swinney v Chief Constable of Northumbria Police
Southwark LBC v Mills (1999) 631 (1996) 555
Spartan Steel & Alloys Ltd v Martin & Co Ltd Sybron Corporation v Rochem Ltd (1983) 766
(1972) 395, 556, 828, 862 Sykes (F & S) (Wessex) v Fine-Fare (1967) 738
Spencer v Harding (1870) 275, 734 Systems Reliability Holdings plc v Smith
Spice Girls Ltd v Aprilia World Science BV (1990) 211, 380, 802
(2000) 769
Spooner and others, ex parte (1987) 681, 683 Tai Hing Cotton Mill Ltd v Liu Chong Hing Bank
Spurling v Bradshaw (1956) 789 Ltd (1985) 214
St Stephen Walbrook, Re (1987) 16 Talbot v Berkshire County Council (1993) 218
Stag Line Ltd v Tyne Ship Repair Group Ltd Tarry v Ashton (1876) 373, 547, 835, 856
(1984) 365 Taylor Stuart v Croft (1998) 800, 801
Standard Chartered Bank v Pakistan National Taylor v Bowers (1876) 198, 373, 797
Shipping Corp (No 2) (2002) 321 Taylor v Caldwell (1863) 225, 399, 807
..
EL_A01.qxd 3/26/07 2:00 PM Page xxxvii
TABLE OF CASES xxxvii
Taylor v John Webster Buildings Civil Engineering Ultzen v Nicols (1894) 463, 615, 883
(1999) 73 United Bank of Kuwait v Sahib (1994) 651
Taylor v Lawrence (2002) 48 United Dominions Trust v Western
Tee v Tee (1973) 36, 232, 729 (1975) 763
Tehidy Minerals v Norman (1971) 492, 641, 643, United Railways of Havana, Re (1960) 30, 727
644, 890 Universe Tankships Inc of Monrovia v
Tesco Stores Ltd v Khalid (2001) 470 International Transport Workers’ Federation
Tetley v Chitty (1986) 859 (1982) 328
Tetra Pak II (1992) 391
Thabo Meli v R (1954) 521, 679, 900 V and another v News Group Newspapers and
Thomas v National Coal Board (1987) 818 Others (2001) 94
Thomas v Thomas (1842) 75, 285, 745 Van Lynn Developments Ltd v Pelias Construction
Thomas National Transport (Melbourne) Pty Ltd Co Ltd (1968) 667
and Pay v May and Baker (Australia) Pty Ltd Vandyke v Fender (1970) 291, 509, 833
(1966) 184, 359, 791 Vane v Yiannopoullos (1965) 531, 681, 903
Thomas Witter Ltd v TBP Industries Ltd Varley v Whipp (1900) 338
(1996) 320 Vasey v Surrey Free Inns plc (1996) 506
Thompson v LMS Railway (1930) 177, 357, Vaughan v Taff Vale Railway (1860) 322, 518,
788, 789 842
Thompson v Lohan (1987) 361, 362 Vauxhall Estates Ltd v Liverpool Corporation
Thornton v Shoe Lane Parking Ltd (1971) 789 (1932) 4, 13, 715
Three Rivers DC v Bank of England (2005) 265 Vernon v Bosley (1996) 848
Tilby v Perfect Pizza Ltd (2002) 173 Viastystems (Tyneside) Ltd v Thermal Transfer
Tinn v Hoffman (1873) 278 (Northern) Ltd (2005) 503
Tolley v JS Fry & Sons (1931) 431, 592, 874 Victoria Laundry Ltd v Newman Industries Ltd
Tomlinson v Congleton BC (2003) 578 (1949) 243, 406, 814
Tool Metal Manufacturing Co Ltd v Tungsten Videan v British Transport Commission (1963)
Electric Co Ltd (1955) 97, 295, 296, 297, 754, 310, 516, 839
755 Vine v Waltham Forest LBC (2000) 543, 544
Topp v London Country Bus (South West) Vitol SA v Esso Australia (1988) 807
(1993) 834 Vizetelly v Mudie’s Select Library Ltd
Transco plc v Stockport Metropolitan Borough (1900) 587
Council (2004) 605 Vowles v Evans (2003) 555
Treloar v Nute (1977) 613
Trenbart ( John) Ltd v National Westminster Bank W, Re (1992) 227
Ltd (1979) 852 Wadley v Eager Electrical (1986) 471
Trent Taverns Ltd v Sykes (1999) 216 Wagon Mound, The (1961) 325, 212, 522, 523,
Trotman v North Yorkshire CC (1998) 830 842, 844
Tsakiroglou v Noblee Thorl GmbH (1961) 807 Wagon Mound, The (No 2) (1966) 552, 843
Tsi Kwong Lam v Wong Chit Sen (1983) 655 Wakley v Cooke (1849) 593
Tubantia, The (1924) 364, 543, 853 Waldron-Kelly v British Railways Board
Tulk v Moxhay (1848) 91, 293, 645, 752, 810 (1981) 365
Turbervell v Savage (1669) 349, 532, 850 Walford v Miles (1992) 274
Turner v Commonwealth & British Minerals Ltd Walker v Boyle (1982) 186, 363, 792
(1999) 375 Walker v Northumberland CC (1994) 461, 582
Tweddle v Atkinson (1861) 86, 288, 749 Walker Property Investments (Brighton) Ltd v
Twine v Bean’s Express Ltd (1946) 506, 832 Walker (1947) 330
Wallis’s Caton Bay Holiday Camp v Shell-Mex &
UCB Leasing Ltd v Holtom (1987) 350 BP (1974) 613
UNIFI v Bank of Ceylon (2000) 464 Walsh v Lonsdale (1882) 483, 630, 651, 887
..
EL_A01.qxd 3/26/07 2:00 PM Page xxxviii
xxxviii TABLE OF CASES
Waltons and Morse v Dorrington (1997) 462 Whiteley v Chappell (1868–9) 203
Wandsworth LBC v Railtrack plc (2001) 855 Whittaker v P & D Watson (2002) 71
Waple v Surrey CC (1997) 596, 597 Whitwood Chemical Co v Hardman (1891) 246,
Ward v Byham (1956) 748 411, 815
Ward v Kirkland (1966) 491, 641, 889 Wilchick v Marks (1934) 384, 550, 859
Ward v Tesco Stores (1976) 865 Wilkie v London Passenger Transport Board (1947)
Warlow v Harrison (1859) 272 273
Warner Brothers Pictures Inc v Nelson (1937) Wilkinson v Downton (1897) 268, 493, 524, 533,
245, 411, 814 826
Warnink (Erven) BV v J Townend & Sons (Hull) Ltd William Hill Organisation v Tucker (1998) 376
(1979) 585 Williams v Compair Maxam (1982) 474
Warren v Henlys Ltd (1948) 506, 507 Williams v Cowell (2000) 000
Warren v Keen (1954) 632 Williams v Fawcett (1985) 212
Warren v Mendy (1989) 814 Williams v Humphrey (1975) 269, 495, 826
Watson v Gray (1998) 835 Williams v Natural Life Health Foods Ltd
Watson v Willmott (1990) 499 (1998) 256
Watt v Hertfordshire County Council (1954) 402, Williams v Roffey Bros and Nicholls (Contractors)
559, 864 Ltd (1990) 747
Watts v Times Newspapers Ltd (1996) 597, 599 Williams v Travel Promotions Ltd (t/a Voyages
Webster v Cecil (1861) 122, 313, 765 Jules Verne) (2000) 791
Weeks v UK (1987) 95, 155, 754 Williams & Glyn’s Bank Ltd v Boland (1980) 654,
Welby v Drake (1825) 295 662, 892
Welch v Cheesman (1973) 147, 326, 776 Williams-Drabble v Pathway Care Solutions Ltd
Weller & Co v Foot & Mouth Disease Research (2005) 422
Institute (1965) 393, 556, 604, 861, 862 Williamson v Secretary of State for Education and
Wells v Wells (1998) 526 Employment (2002) 534
Wembley Park Estate Co Ltd’s Transfer, Re Wilson v Brett (1843) 473, 617, 885
(1968) 645 Wilson v First County Trust (No 2) (2002) 93
Wenman v Ash (1853) 587 Wilson v Maynard Shipping Consultants AB (1978)
West Midland Co-operative Society Ltd v Tipton 214
(1986) 472 Wilson v Pringle (1986) 533
Western Bank v Schindler (1976) 653 Wilson v Rickett Cockerell & Co Ltd (1954) 171,
Westminster City Council v Clarke (1992) 886 343, 786
Wheat v E Lacon & Co Ltd (1966) 415, 576, 869 Wilsons and Clyde Coal Co v English
Wheatley v Lodge (1971) 356, 536, 851 (1938) 581
Wheeldon v Burrows (1879) 640 Wincanton Ltd v Cranny (2000) 382
Wheeler v J J Saunders (1995) 548, 549 Winkfield, The (1902) 461, 615
Whitbread & Co plc v Mills (1988) 472 Winter Garden Theatre (London) Ltd v
Whitbread plc (t/a Thresher) v Gullyes Millennium Productions Ltd (1948) 362, 539,
(1994) 468 853
White v Blackmore (1972) 302, 514, 836 With v O’Flanagan (1936) 134, 317, 769
White v Bluett (1853) 77, 285, 746, 748 Witley and District Men’s Club v Mackay
White v Chief Constable of South Yorkshire (2001) 431
(1999) 847, 848 Wood v Lectric (1932) 298, 732
White v City of London Brewery Co (1889) 500, Wood v Scarth (1858) 132, 18, 315, 768
653, 892 Woodar v Wimpey (1980) 750
White v Jones (1993) 000 Woodford v Smith (1970) 250
White and Carter (Councils) Ltd v McGregor Woodman v Photo Trade Processing Ltd
(1961) 234, 402, 407, 810 (1981) 364
Whitehouse v Jordan (1981) 557 Woodward v Abbey National plc (2006) 379, 449
..
EL_A01.qxd 3/26/07 2:00 PM Page xxxix
TABLE OF CASES xxxix
Woodworth v Conroy (1976) 665 Wybot v Faure (1986) 595

Wooldridge v Sumner (1962) 311, 516, 839 Wylie v Dee & Co (Menswear) Ltd (1978) 817
Woollerton and Wilson Ltd v Richard Costain
(Midlands) Ltd (1969) 359, 538, 852 Yachuk v Oliver Blais & Co Ltd (1949) 418, 579,
Woolmington v DPP (1935) 506, 116, 674, 894 870
Workers Trust and Merchant Bank v Dojap Yates Building Co v R J Pulleyn & Sons (York)
Investments (1993) 648 (1975) 62, 277, 740
Wormell v RHM Agriculture (East) Ltd (1986) Yaxley v Gotts (1999) 302
172, 343, 786 Yianni v Edwin Evans & Sons (1981) 561
Wren v Holt (1903) 166, 340, 785 Yorkshire Enterprise Ltd v Robson Rhodes
Wright v Redrow Homes (Yorkshire) Ltd (1998) 572
(2004) 429 Young v Bristol Aeroplane Co (1944) 212
Wright v Ryder (1995) 36 Youssoupoff v MGM Pictures (1934) 428, 591,
Wright v Tyne Improvement Commissioners 593, 873
(1968) 502, 829 Yuen Kun Yeu v AG of Hong Kong (1987)
Wyatt v Kreglinger and Fernau (1933) 204, 375, 555
798
Wyatt Co (UK) Ltd v Maxwell Batley (a firm) Zanzibar v British Aerospace (Lancaster House) Ltd
(2002) 717 (2000) 320
..
EL_A01.qxd 3/26/07 2:00 PM Page xl
TABLE OF STATUTES
Abortion Act 1967 686 British Nationality Act 1948 715

Access to Justice Act 1999 22, 40, 48, 71, 74, 78, British Railways Act 1968 724
88, 97, 98, 99, 101, 104, 105, 109, 110, 126, 127, Building Societies Act 1986 655
137, 151, 168, 170, 171
Access to Neighbouring Land Act 1992 540, 641, Carriage by Air Act 1961 531
889 Carriage of Goods by Sea Act 1971 508
Acquisition of Land (Assessment of Compensation) Celluloid and Cinematograph Film Act 1922 25,
Act 1919 715 725
Acts of Parliament Numbering and Citation Act Charging Orders Act 1979 186
1962 196 Cheques Act 1957 397
Administration of Estates Act 1925 5, 203, 619 Cheques Act 1992 292
Administration of Justice Act 1920 188 Child Abduction Act 1984 117
Administration of Justice Act 1960 43, 213 Child Support Act 1991 42, 230
Administration of Justice Act 1969 48 Children Act 1989 29, 34, 35, 227, 228
Administration of Justice Act 1970 653, 655 Children Act 2004 534
Administration of Justice Act 1973 654, 655 Children and Young Persons Act 1933 534, 902
Administration of Justice Act 1982 52, 142, 407, Children and Young Persons Act 1963 701, 716
408, 496, 498–500, 519, 825 Cinematograph Act 1909 718
Administration of Justice Act 1985 100, 108, 109, Civil Aviation Act 1949 853
648 Civil Aviation Act 1971 721
Adoption and Children Act 2002 228, 229 Civil Aviation Act 1982 538, 853
Agricultural Marketing Act 1958 721 Civil Evidence Act 1995 184
Air Guns and Shot Guns Act 1962 827 Civil Jurisdiction and Judgments Act 1982 188
Animals Act 1971 539, 841 Civil Liability (Contribution) Act 1978 262, 498,
Appellate Jurisdiction Act 1876 18, 53, 207 754
Arbitration Act 1996 43, 63, 174, 206 Civil Partnership Act 2004 35, 245, 496
Armed Forces Act 1996 262 Civil Procedure Act 1997 103, 225
Assize of Clarendon 1166 6 Clean Neighourhoods and Environment Act
Assize of Northampton 1176 6 2005 552
Assize of Novel Disseisin 6 Coinage Act 1971 397
Asylum and Immigration Act 1996 425 Commonhold and Leasehold Reform Act
Attachment of Earnings Act 1971 37 2002 34, 619–622, 634 –637
Communications Act 2003 496
Bail Act 1976 128, 130, 131 Companies Act 1948 756
Bail (Amendment) Act 1993 130 Companies Act 1985 202, 223, 254, 255, 259,
Banking Act 1979 254 290, 385, 572, 574, 619, 665, 745, 756, 867
Baths and Wash-houses Acts 1846–78 717 Companies Act 1989 291
Betting and Loans (Infants) Act 1892 304 Companies Act 2006 226, 247, 248, 270,
Bill of Rights Act 1689 595, 596 308–310, 497, 574, 575, 668
Bills of Exchange Act 1882 15, 219, 287, 292, Company Directors Disqualification Act 1986 229
667, 668, 749 Compensation Act 2006 526, 563, 564
Bills of Sale Acts 1878–82 663, 893 Competition Act 1998 45, 86, 370, 371, 383–390,
Bristol and Exeter Railways Act 1836 724 638, 646, 750, 801, 803, 804, 873
..
EL_A01.qxd 3/26/07 2:00 PM Page xli
TABLE OF STATUTES xli
Congenital Disabilities (Civil Liability) Act Criminal Justice and Police Act 2001 160
1976 494 Criminal Justice and Public Order Act 1994 49,
Consumer Credit Act 1974 93, 173, 240, 302, 121, 123, 129, 147, 448
652 Criminal Law Act 1967 150, 225, 711, 916
Consumer Credit Act 2006 37, 93, 179, 240, 302, Criminal Law Act 1977 23, 541, 674
652 Criminal Procedure (Insanity) Act 1964 702,
Consumer Protection Act 1987 566–568, 733, 703
784, 825, 866, 867 Criminal Procedure (Insanity and Unfitness to
Consumer Safety Act 1978 567 Plead) Act 1991 702
Consumer Safety (Amendment) Act 1986 567 Criminal Procedure and Investigations Act
Constitutional Reform Act 2005 19, 21, 22, 30, 1996 25, 28, 138
41, 42, 47, 48, 49, 54– 61, 111, 112, 214 Crown Proceedings (Armed Forces) Act 1987 263
Contempt of Court Act 1981 149, 151 Crown Proceedings Act 1947 261, 262, 264, 496,
Contracts (Rights of Third Parties) Act 1999 225, 882
256, 269, 287, 288–293, 358, 359, 362, 508, 513, Currency Act 1983 397
553, 565, 566, 634, 745, 751, 752, 790, 811, 863 Currency and Bank Notes Act 1954 397
Copyright Act 1956 745, 746
Copyright Designs and Patents Act 1988 37, 746 Damages Act 1996 407, 498, 526, 527
Coroners Act 1988 95, 96, 97, 186 Dangerous Dogs Act 1991 677
Corporate Manslaughter and Corporate Homicide Dangerous Drugs Act 1965 900
Act 2007 683, 684 Data Protection Act 1984 492, 824
Countryside and Rights of Way Act 2000 541, Data Protection Act 1998 87, 492
542, 579 Defamation Act 1952 590, 591, 594, 595
County Courts Act 1846 31 Defamation Act 1996 185, 517, 588, 593, 595,
County Courts Act 1984 31, 32, 33, 35, 37, 597–602, 875, 879
186, 408 Defective Premises Act 1972 205, 579–581, 632
Courts Act 1971 7, 39, 44, 62, 139 Deregulation and Contracting Out Act 1994 198
Courts Act 2003 19, 21, 22, 23, 30, 49, 112, 159 Directors’ Liability Act 1890 772
Courts and Legal Services Act 1990 22, 32, 33, 35, Disability Discrimination Act 1995 240–244, 415,
42, 53, 71, 87, 88, 96, 98, 100, 101, 102, 104, 418, 419
106, 107, 108, 109, 110, 114, 170, 236, 648, 879 Disability Discrimination Act 2005 240–244, 419
Crime (Sentences) Act 1997 155 Disability Rights Commission Act 1999 243
Crime and Disorder Act 1998 24, 27, 124, 125, Domestic and Appellate Proceedings (Restriction of
136, 154, 160, 161, 701 Publicity) Act 1968 597
Criminal Appeal Act 1968 49, 50, 51, 52 Domestic Violence, Crime and Victims Act 2004
Criminal Appeal Act 1995 30, 50, 51 676, 702, 703
Criminal Damage Act 1971 899, 911, 912 Domicile and Matrimonial Proceedings Act
Criminal Defence Service Act 2006 127, 137 1973 231, 232
Criminal Injuries Compensation Act 1995 164 Dramatic and Musical Performers Protection Act
Criminal Justice Act 1925 708 1925 902
Criminal Justice Act 1967 129, 718 Drug Trafficking Act 1994 403
Criminal Justice Act 1972 50
Criminal Justice Act 1982 129, 131, 148 Education Act 1944 722
Criminal Justice Act 1987 117 Education Act 1996 243
Criminal Justice Act 1988 51, 131, 205, 693, 823 Electronic Communications Act 2000 304, 630,
Criminal Justice Act 1991 156 646
Criminal Justice Act 2003 24 –28, 40, 41, 50, 51, Employers’ Liability (Compulsory Insurance) Act
118, 119, 120, 125, 127, 128, 129, 130, 135, 136, 1969 501, 582
141, 142, 143, 145, 146, 147, 148, 149, 151–158, Employers’ Liability (Defective Equipment) Act
161, 540, 541 1969 206, 581
..
EL_A01.qxd 3/26/07 2:00 PM Page xlii
xlii TABLE OF STATUTES
Employment Act 1989 417 Geneva Conventions Act 1957 715

Employment Act 2002 71, 76, 426, 428, 441, Government of Wales Act 1998 58, 189
451, 456, 458, 473, 479 Government of Wales Act 2006 189
Employment Protection (Consolidation) Act
1978 84, 817 Health and Safety at Work Act 1974 117,
Employment Relations Act 1999 252, 300, 457, 459 –463, 820
464, 467, 473, 478 Highways Act 1980 580, 871
Employment Relations Act 2004 457, 464, 473 Highways (Miscellaneous Provisions) Act
Employment Rights Act 1996 262, 335, 379, 393, 1961 871
424, 426, 428, 439, 449– 459, 466 – 468, 472, 473, Hire Purchase Act 1964 764
475, 477– 480, 486 –488, 817 Homicide Act 1957 686 –689, 706
Employment Rights (Dispute Resolution) Act House of Lords Act 1999 190
1998 476, 485 Housing Act 1925 715
Employment Tribunals Act 1996 63, 64, 71, 72, Housing Act 1961 887
74, 467 Housing Act 1980 628
Enterprise Act 2002 45, 366, 368, 371, 383, 384, Housing Act 1985 628, 644
386–390, 646 Housing Act 1988 34, 628, 629, 636
Environmental Protection Act 1990 173, 547, 552 Housing Act 1996 628, 629
Equal Pay Act 1970 239, 240, 419, 440 – 442 Housing Act 2004 649
Equality Act 2006 72, 91, 240, 244, 422 Human Fertilisation and Embryology Act
European Communities Act 1972 13, 14, 224 1990 42, 494
European Communities (Amendment) Act Human Rights Act 1998 12, 32, 42, 53, 54, 68, 71,
1986 65 89–92, 116, 119, 120, 131, 144, 204, 215, 253,
European Communities (Amendment) Act 492, 533, 604, 638
1998 13 Hunting Act 2004 22, 195
European Economic Area Act 1993 220
Exchange Control Act 1947 796 Immigration Act 1971 720, 726
Explosive Substances Act 1883 915 Immigration Appeals Act 1969 724
Extradition Act 1989 000 Immigration, Asylum and Nationality Act
Extradition Act 2003 29 2006 425
Income and Corporation Taxes Act 1988 730
Factories Act 1961 872 Indecency with Children Act 1960 900
Fair Trading Act 1973 387 Industrial Training Act 1964 724, 725
Family Law Act 1996 659, 661, 662 Infant Life (Preservation) Act 1929 686
Family Law Reform Act 1969 226, 227, 304 Infants Relief Act 1874 304
Fatal Accidents Act 1976 498–500, 560 Inheritance Tax Act 1984 258
Finance Act 1964 715 Innkeepers Act 1878 665
Financial Services Act 1986 384 Inquiries Act 2005 77
Financial Services and Markets Act 2000 78, 89, Insolvency Act 1986 34, 112, 229, 258, 754
92, 165, 166, 193, 247, 317, 321, 323, 325, 385, International Criminal Court Act 2001 67
637, 770, 772 Interpretation Act 1889 725
Firearms Act 1968 827 Interpretation Act 1978 202, 725
Food Safety Act 1990 28, 679
Foreign Compensation Act 1950 200 Judgments Act 1838 37
Foreign Judgments (Reciprocal Enforcement) Act Judicature Acts 1873–75 11, 18, 207
1933 188 Judicial Committee Act 1833 58
Freshwater Fisheries Act 1975 901 Judicial Committee Act 1881 58
Judicial Pensions and Retirement Act 1993 62
Gaming Act 1845 384 Judicial Proceedings (Regulation of Reports) Act
Gender Recognition Act 2004 42, 244, 419, 420 1926 597
..
EL_A01.qxd 3/26/07 2:01 PM Page xliii
TABLE OF STATUTES xliii
Juries Act 1974 141, 142, 143, 144, 148, 149, Licensing Act 1872 902
150, 186 Licensing Act 1921 903
Justices of the Peace Act 1361 159 Licensing Act 1961 903
Justices of the Peace Act 1997 22, 496 Life Peerages Act 1958 190
Limitation Act 1980 167, 287, 324, 397, 413, 414,
Land Charges Act 1925 619, 658 500, 528–531, 546, 580, 581, 612, 613, 656, 815,
Land Charges Act 1972 659, 662 850, 882
Land Drainage Act 1930 842 Limited Liability Partnerships Act 2000 255–260,
Land Registration Act 1925 619, 649, 777, 892, 575
893 Limited Partnerships Act 1907 254, 259, 260
Land Registration Act 1988 661 Local Land Charges Act 1975 642
Land Registration Act 1997 660 London Building Act (Amendment) Act 1939 626
Land Registration Act 2002 614, 647, 659–663
Landlord and Tenant (Covenants) Act 1995 293, Magistrates’ Courts Act 1980 23, 25, 26, 27, 28,
631, 632, 633, 645 30, 123, 125, 126, 131, 133, 134, 136, 138, 139,
Landlord and Tenant Act 1954 627, 629, 886 159, 718, 724
Landlord and Tenant Act 1985 631, 637, 725, 887 Magistrates’ Courts (Procedure) Act 1998 133
Landlord and Tenant Act 1988 631 Magna Carta 1215 6
Late Payment of Commercial Debts (Interest) Act Malicious Damage Act 1861 51, 899
1998 38, 408, 409 Marine Insurance Act 1906 775
Latent Damage Act 1986 528 Maritime Conventions Act 1911 302, 530
Law Commissions Act 1965 225 Married Women’s Property Act 1882 292, 495,
Law of Property Act 1925 196, 219, 227, 301, 886
396, 619, 622, 624, 625, 630, 640, 647, 650–656, Matrimonial and Family Proceedings Act 1984 34
667, 668, 741, 742, 751, 752, 777, 888, 889 Matrimonial Homes Act 1983 892
Law of Property Act 1969 645, 648 Mental Capacity Act 2005 45, 229, 246, 307, 308,
Law of Property (Miscellaneous Provisions) Act 762
1989 270, 274, 282, 301, 302, 303, 304, 394, Mental Health Act 1983 44, 535, 702, 703
630, 647, 648, 651, 734, 735, 751 Mercantile Law Amendment Act 1856 303
Law Officers Act 1997 113 Merchant Shipping Act 1988 12, 728
Law Reform (Contributory Negligence) Act Merchant Shipping (Oil Pollution) Act 1971 852
1945 262, 560, 565, 604 Merchant Shipping Act 1995 000
Law Reform (Frustrated Contracts) Act 1943 Minors’ Contracts Act 1987 304, 306, 307, 761
400 – 402, 804, 809 Misrepresentation Act 1967 320, 322, 323, 330,
Law Reform (Husband and Wife) Act 1962 495, 362, 769, 771, 772, 773, 774, 793
498 Misuse of Drugs Act 1971 914
Law Reform (Married Women and Tortfeasors) Act Municipal Corporations Act 1882 720
1935 495, 498 Murder (Abolition of Death Penalty) Act
Law Reform (Miscellaneous Provisions) Act 1965 155, 193
1934 498, 499
Law Reform (Miscellaneous Provisions) Act National Assistance Act 1948 748
1970 299, 498, 521, 749 National Health Service (Amendment) Act
Law Reform (Personal Injuries) Act 1948 219, 519 1986 264
Law Reform (Year and a Day Rule) Act 1996 689, National Minimum Wage (Enforcement Notices)
904 Act 2003 438 –440
Leasehold Reform Act 1967 34, 634, 636, 658, National Minimum Wage Act 1998 435,
659 436 –439, 466
Leasehold Reform, Housing and Urban Newfoundland Frustrated Contracts Act 1956 401
Development Act 1993 34, 634–636, 659 Noise Act 1996 552
Legal Aid Act 1988 137 Noise and Statutory Nuisance Act 1993 552
..
EL_A01.qxd 3/26/07 2:01 PM Page xliv
xliv TABLE OF STATUTES
Northern Ireland Act 1998 58 Protection of Children Act 1999 165

Nuclear Installations Act 1965 531 Provisions of Oxford 1258 9
Public Health Act 1875 842
Occupiers’ Liability Act 1957 577–580, 835, 836, Public Health Act 1936 725
844, 870 Public Interest Disclosure Act 1998 379, 466
Occupiers’ Liability Act 1984 577, 578 Public Order Act 1986 233, 448, 541, 697
Offences against the Person Act 1861 140, 141, Public Trustee Act 1906 249
148, 150, 164, 535, 579, 678, 686, 694 – 697, 705,
709, 710, 898, 901, 906, 907, 908 Race Relations (Amendment) Act 2000 235
Offences at Sea Act 1799 914 Race Relations Act 1976 233–240, 415, 421, 730
Official Secrets Acts 1911 and 1920 39 Racial and Religious Hatred Act 2006 233
Railway Fires Act 1905 842
Parliament Act 1911 194, 195 Real Property Act 1845 751
Parliament Act 1949 194, 195 Recorded Delivery Service Act 1962 741
Parliamentary and Health Service Commissioners Refreshment Houses Act 1860 726
Act 1987 87 Regional Assemblies (Preparations) Act 2003 192
Parliamentary Commissioner (Consular Rehabilitation of Offenders Act 1974 165, 166,
Complaints) Act 1981 87 594
Parliamentary Commissioner Act 1967 87, 88 Rent Act 1977 69, 628, 629
Parliamentary Commissioner Act 1994 87 Representation of the People Act 1983 232
Parliamentary Constituencies Act 1986 200 Resale Prices Act 1976 384
Parliamentary Paper Act 1840 595 Reservoirs Act 1975 604
Partnership Act 1890 187, 253, 259 Restrictive Trade Practices Act 1956 873
Party Wall etc. Act 1996 626, 889 Restrictive Trade Practices Act 1976 384
Pensions Act 1995 89, 442, 458, 466 Rights of Light Act 1959 642
Pharmacy and Poisons Act 1933 733 Rivers (Prevention of Pollution) Act 1951 901
Poisons Act 1972 733 Road Safety Act 2006 678
Police Act 1964 000 Road Traffic Act 1930 910
Police Act 1996 496 Road Traffic Act 1988 132, 134, 515, 677, 692,
Police Act 1997 165, 166, 425 693, 851
Police and Criminal Evidence Act 1984 115, 116, Road Traffic Offenders Act 1988 124, 133, 134,
119–123, 127, 128, 533, 536, 538, 852 135
Policies of Assurance Act 1867 668 Royal Assent Act 1967 196
Post Office Act 1953 723 Rules of the Supreme Court (Crown Proceedings)
Post Office Act 1969 300 Act 1947 261
Postal Services Act 2000 496, 528
Powers of Criminal Courts Act 1973 131, 164 Sale and Supply of Goods Act 1994 341–350, 395,
Powers of Criminal Courts (Sentencing) Act 781, 784
2000 4, 135, 151, 152, 153, 158–161, 163, 716 Sale of Goods Act 1893 219, 336
Prescription Act 1832 641, 643 Sale of Goods Act 1895 (South Australia) 785
Prevention of Terrorism Act 2005 164 Sale of Goods Act 1979 4, 15, 196, 219, 272, 297,
Private Security Industry Act 2001 544 304, 305, 307, 336 –345, 353, 354, 360 –365, 395,
Proceedings Against Estates Act 1970 498 412, 564 –566, 650, 665, 738, 766, 781–788, 794,
Proceeds of Crime Act 2002 163, 164, 403 806, 825
Property Misdescription Act 1991 363 School Standards and Framework Act 1998 534
Prosecution of Offences Act 1985 117, 126 Scotland Act 1998 58
Protection from Eviction Act 1977 823, 853 Senior Courts Act 1981. See Supreme Court Act
Protection from Harassment Act 1997 448, 552, 1981
697 Serious Organised Crime and Police Act
Protection of Birds Act 1954 733 2005 119, 120, 160, 536
..
EL_A01.qxd 3/26/07 2:01 PM Page xlv
TABLE OF STATUTES xlv
Settled Land Act 1925 619, 623, 624 Trade Descriptions Act 1968 206
Sex Discrimination Act 1975 202, 238 –240, Trade Marks Act 1994 586
415 – 421, 730, 817, 819 Trade Union and Labour Relations (Consolidation)
Sex Discrimination Act 1986 238 –240 Act 1992 73, 251, 290, 300, 458, 463– 465, 467,
Sexual Offences Act 1956 900 470, 471, 482, 857
Sexual Offences Act 1993 701 Trade Union and Labour Relations Act 1974 857
Sexual Offences Act 2003 161, 698 –700, Trading Stamps Act 1964 345
901, 909 Transport (London) Act 1969 717
Short Titles Act 1896 196 Transport Act 1981 842
Slander of Women Act 1891 591, 874 Transport and Works Act 1992 462
Social Security Act 1998 70 Treasure Act 1996 96
Statute of 1215 Magna Carta 6 Trial of Lunatics Act 1883 702
Statute of Frauds 1677 303, 759, 760 Tribunals and Inquiries Act 1958 76
Statute of Westminster II 1285 7, 9 Tribunals and Inquiries Act 1971 76
Statutory Instruments Act 1946 198, 199, 201 Tribunals and Inquiries Act 1992 82, 83
Suicide Act 1961 689 Tribunals of Inquiry (Evidence) Act 1921 77
Sunday Trading Act 1994 486 Truck Acts 1831–1940 439
Supply of Goods (Implied Terms) Act Trustee Act 2000 623
1973 345, 350, 355, 361 Trustee Delegation Act 1999 625, 626
Supply of Goods and Services Act 1982 345 –352, Trusts of Land and Appointment of Trustees Act
355, 364, 412, 863 1996 623, 624, 654, 893
Supreme Court Act 1981 7, 11, 19, 30, 40, 41, 42,
43, 49, 52, 54, 80, 81, 84, 114, 139, 140, 151, Unfair Contract Terms Act 1977 168, 291, 339,
185, 262, 408, 411, 715, 718 351, 352, 354, 356 –362, 367, 566, 573, 574,
Supreme Court (Crown Proceedings) Act 1947 577, 578, 617, 773, 774, 775, 788, 789, 792,
261 794, 837
Supreme Court of Judicature (Consolidation) Act Unsolicited Goods and Services Act 1971 276,
1925 18 615
Unsolicited Goods and Services (Amendment) Act
Tattooing of Minors Act 1969 227 1975 276, 615
Teaching and Higher Education Act 1998 458,
466 Water Resources Act 1991 901
Telecommunications Act 1984 496 Waterworks Clauses Act 1874 866
Terrorism Act 2000 121 Weeds Act 1959 881
Terrorism Act 2006 121 Wildlife and Countryside Act 1981 80, 226, 733
Theatres Act 1968 600 Wireless Telegraphy Act 1949 721
Theft Act 1968 121, 130, 674 Work and Families Act 2006 450, 451, 457
Third Parties (Rights Against Insurers) Act Workers’ Compensation Act 1922 (New Zealand)
1930 294 830
Torts (Interference with Goods) Act 1977
542–546, 665 Youth Justice and Criminal Evidence Act 1999
Town and Country Planning Act 1990 70 123, 147
..
EL_A01.qxd 3/26/07 2:01 PM Page xlvi
..
EL_C01.qxd 3/26/07 10:38 AM Page 1
Part 1
THE ENGLISH LEGAL SYSTEM
..
EL_C01.qxd 3/26/07 10:38 AM Page 2
..
EL_C01.qxd 3/26/07 10:38 AM Page 3
1
THE NATURE AND DEVELOPMENT
OF ENGLISH LAW
Classification of English law

The following are the main classifications of English law with which this book deals. The
areas of law mentioned will be considered in more detail as relevant in the chapters which
follow. They are given here merely as an overview of what is to come.
Private and public law

Private law is concerned with the legal relationships of ordinary persons in everyday trans-
actions. It is also concerned with the legal position of corporate bodies and associations of
persons the first of which are given a special form of legal personality. Private law includes
contract and commercial law, the law of tort, family law (e.g. divorce, adoption and
guardianship), trusts and the law of property which involves a consideration of the rights
which can exist in property and how property can be transferred from one person to another.
Public law is concerned with the constitution and functions of the many different kinds of
governmental organisations, including local authorities, such as county councils, and their
legal relationship with the citizen and each other. These relationships form the subject matter
of constitutional and administrative law. Public law is also concerned with crime which
involves the state’s relationship with the power of control over the individual.
There is also a division into criminal and civil law. Criminal law is concerned with legal rules
which provide that certain forms of conduct shall attract punishment by the state, e.g.
homicide and theft. Civil law includes the whole of private law and all divisions of public
law except criminal law.
In order to understand the various branches of substantive private law which are con-
sidered in detail later, it is necessary to be able in particular to distinguish the following:
Contract
A contract is an agreement made between two or more persons which is intended to have
legal consequences. Thus, if there is a breach of contract, the parties can go to court and
obtain a remedy. We shall see in the chapters on contract which agreements the courts will
enforce, under what conditions they are enforceable, and what remedies are available to
injured parties. It should be noted that the parties to a contract in general enter voluntarily
into their obligations; the function of the law is merely to act in an impartial way in order to
settle any disputes which may arise between the parties to the contract.
..
EL_C01.qxd 3/26/07 10:38 AM Page 4
4 PART 1 · THE ENGLISH LEGAL SYSTEM
It is, however, worth noting even at this early stage that not all contractual obligations are
undertaken voluntarily. In order to protect the consumer, certain obligations are implied into
some contracts by statute and cannot in some cases be removed, e.g. an undertaking that the
goods are of satisfactory quality in consumer sales where the Sale of Goods Act 1979 applies.
Tort
A tort, on the other hand, is a civil wrong independent of contract. It arises out of a duty
imposed by law, and not by agreement, and a person who commits a tortious act does not
voluntarily undertake the liabilities which the law imposes on him. There are many kinds of
tort with a common characteristic: injury of some kind inflicted by one person on another.
Nuisance, inflicting injury by negligence, trespass, slander and libel are well-known civil
wrongs. The typical remedy in this branch of the law is an action for damages by the injured
party against the person responsible for the injury. Such damages are designed not to punish
the wrongdoer but to compensate the injured party.
Crime
A crime is in a different category. It is difficult to define a crime, but it is basically a public
offence against the state, and, while an individual may be injured, the object of a criminal
charge is to punish the offender, not to compensate the victim, though under the provisions
of the Powers of Criminal Courts (Sentencing) Act 2000 compensation orders can be made.
Criminals are prosecuted, usually by a Crown Prosecutor, and if found guilty receive the
appropriate punishment.
Crimes and civil wrongs distinguished

The distinction does not lie in the nature of the act itself. For example, if a railway porter is
offered a reward to carry A’s case and runs off with it, then the porter has committed a crime,
that of theft, and two civil wrongs, i.e. the tort of conversion and a breach of his contract
with A. Again, a railway signalman who carelessly fails to operate the signals so that a fatal
accident occurs will have committed one crime, i.e. manslaughter, if persons are killed, and
two civil wrongs, the tort of negligence in respect of those who die and those who are merely
injured and a breach of his contract of service with the employer in which there is an implied
term to take due care. It should also be noted that in this case the right of action in tort and
the right of action in contract would be brought by different persons. However, although the
example is valid, it should be noted that an employer who has been successfully sued for
damages by those injured by the signalman’s act is unlikely in modern law to try to recoup
them from the employee by an action for breach of contract because this upsets industrial
relations and is strongly resisted by trade unions.
The distinction does depend on the legal consequences which follow the act. If the wrongful
act is capable of being followed by what are called criminal proceedings, that means that it is
regarded as a crime. If it is capable of being followed by civil proceedings, that means that it is
regarded as a civil wrong. If it is capable of being followed by both, it is both a crime and a
civil wrong. Criminal and civil proceedings are usually easily distinguishable; they are gener-
ally brought in different courts, the procedure is different, the outcome is different and the
terminology is different.
Terminology and outcome of criminal and civil proceedings

In criminal proceedings a prosecutor prosecutes a defendant. If the prosecution is successful, it
results in the conviction of what is now the offender. After the conviction the court may deal
..
EL_C01.qxd 3/26/07 10:38 AM Page 5
THE NATURE AND DEVELOPMENT OF ENGLISH LAW 5
with the offender by giving him a custodial sentence, e.g. prison; or a non-custodial sentence,
e.g. a community sentence. In rare cases the court may discharge the defendant without sentence. 1
As regards civil proceedings, a claimant sues ( brings a claim against) a defendant. If the
claimant is successful, this leads to the court entering judgment ordering the defendant to
pay a debt owed to the claimant or money damages. Alternatively, it may require the defend-
ant to transfer property to the claimant or to do or not to do something (injunction) or to
perform a contract (specific performance). Some of these remedies are legal and others equit-
able. The matter of remedies for breach of contract and for torts will be dealt with in more
detail in the chapters on those topics.
Trusts
A trust arises where one or more persons holds property, e.g. shares, for the benefit of other
persons. People often wish to provide for their children or grandchildren when they die. They
may leave some of their property on trust, particularly where, as in the case of grandchildren,
they are minors, i.e. under the age of 18 years. They can appoint trustees who will take over the
ownership of the property but they will not themselves benefit from that ownership since the
capital and/or income of the trust will be used for the benefit of the children or grandchildren
who are called the beneficiaries. It is, however, necessary to include a charging clause in the
trust instrument or will to allow payment of fees where the trustees are professional persons
or a trust corporation. Trusts may also be set up by living persons. The characteristics of a
trust are that the trustees own the trust property but the beneficiaries get the benefits.
The development and sources of English law – generally

Our present legal system began, for all practical purposes, in the reign of Henry II (1154–89).
When he came to the throne justice was for the most part administered in local courts, i.e. by
local lords to their tenants in the feudal courts, and by the County Sheriffs, often sitting with
the Earl and the Bishop, in the courts of the Shires and Hundreds. A Shire was a territorial
division of England equivalent in many ways to what we would call a county. A Hundred was
an administrative division of a Shire supposed originally to have contained 100 families.
They administered the law in their respective areas and decided the cases which came before
them on the basis of local custom. Many of these customary rules of law were the same or
similar in all parts of the country, but there were some differences. For instance, primogeni-
ture, the right of the eldest son to inherit the whole of his father’s land where there was no
will, i.e. on intestacy, applied almost universally throughout England; but in Kent there
existed a system of landholding called gavelkind tenure whereby on intestacy all the sons
inherited equally; while in Nottingham and Bristol, under the custom of Borough-English,
the property passed to the youngest son. These customs were finally abolished by s 1 and Part
IV of the Administration of Estates Act 1925, and replaced by the rule that land goes to those
administering the deceased’s estate for distribution to near relatives – in most cases spouse
and children.
A Royal Court existed called the Curia Regis (King’s Council) but this was in general avail-
able only to high-ranking persons to whom the King had granted interests in large estates.
In addition, the Curia Regis followed the person of the King and those wishing to complain
to the court had to incur the expense, delay and frustration of pursuing the King in his constant
movements about the country and abroad. It seems that one claimant followed the King
through England and France for five years before his case was heard.
..
EL_C01.qxd 3/26/07 10:38 AM Page 6
However, s 17 of the Statute of 1215, Magna Carta, provided that what is now the High
Court should not follow the King but should be held ‘in some certain place’. This turned out
to be Westminster and so what is now the High Court became centred in London. It is now
in the Strand.
Steps were also taken to ensure that royal justice would go out to the shires and be open to
all. This began with the General Eyre which also was instrumental in unifying the law. This is
considered below.
The common law

The administrative ability of the Normans began the process destined to lead to a unified
system of law which was nevertheless evolutionary in its development. The Normans were
not concerned to change English customary law entirely by imposing Norman law on
England. Indeed, many charters of William I giving English boroughs the right to hold courts
stated that the laws dispensed in those courts should be laws of Edward the Confessor, which
meant that English customary law was to be applied.
Attempts were made to ensure a greater uniformity in English law and the chief means by
which this was achieved was the introduction of the General Eyre (which simply means ‘a
journey’) whereby representatives of the King were sent from Westminster on a tour of the
Shires for the purpose of checking on the local administration. During the period of their
visit they would sit in the local court and hear cases, and gradually they came to have a judicial
rather than an administrative function and were then called the Justices in Eyre.
Henry II took steps to formalise the jurisdiction of the General Eyre by the Assize of
Clarendon (1166) and the Assize of Northampton (1176). These provided that in relation to
the criminal law there should be 12 men in every county to be responsible for presenting to
the sheriff those suspected of serious crimes. The accused were then brought before the
General Eyre when it arrived in the area. As regards the civil law, a new civil remedy called
the Assize of Novel Disseisin (lately dispossessed) was offered to persons who complained that
their land had been wrongly seized. From this remedy grew a range of civil actions which
were brought before the General Eyre. Thus, royal and more uniform justice began to come to
the country as a whole.
The General Eyre disappeared in the reign of Richard II (1377–99), but a system of circuit
judges from what is now the High Court took its place, the first circuit commission being
granted in the reign of Edward III (1327–77). The Justices in Eyre were replaced by more
formally trained lawyers over the period 1327–77. By selecting the best customary rulings and
applying these outside their county of origin, the circuit judges gradually moulded existing
local customary laws into one uniform law ‘common’ to the whole kingdom. Thus, customs
originally local ultimately applied throughout the whole of the realm. Even so, there was no
absolute unification even as late as 1389, and in a case in what is now the High Court in that
year, a custom of Selby in Yorkshire was admitted to show that a husband was not in that area
liable for his wife’s trading debts, though the common law elsewhere regarded him as liable.
Furthermore, the right to make a will of personal property, e.g. jewellery, was not universal in
England until 1724 when it finally extended to the City of London. Before that time half of
the personalty (i.e. property unconnected with land), ‘the dead man’s part’, went to the church
and the other half to the wife and children. Land could still not be left by will but descended
to the heir at law, though it later became possible, as it is today, to leave land by will.
However, many new rules were created and applied by the royal judges as they went on
circuit and these were added to local customary law to make one uniform body of law called
..
EL_C01.qxd 3/26/07 10:38 AM Page 7
‘common law’. Thus, the identity between custom and the common law is not historically
true, since much of the common law in early times was created by the judges, who justified 1
their rulings by asserting they were derived from the ‘general custom of the Realm’. Thus, in
Beaulieu v Finglam (1401) YB 2 Hen 4, f 18, pl 6, it was said that a man who by his negligence
failed to control a fire so that it spread to his neighbour’s house was liable in damages accord-
ing to ‘the law and custom of the realm’, though it is not easy to see which customary rule
the court based its decision on.
The Royal Commissions

The circuit judges from what is now the Queen’s Bench Division came eventually to derive
their authority from Royal Commissions, the granting of which marked the real beginning of
the assize system. The Commissions were:
Commission of oyer and terminer

This commission, which dates from 1329, directed the judges to ‘hear and determine’ all
complaints of grave crime within the jurisdiction of the circuit. It was given to persons by
now referred to as circuit judges.
General gaol delivery

This commission, which dates from 1299, gave the judges power to clear the local gaols and
try all prisoners within the jurisdiction of the circuit. It was originally given to the Justices in
Eyre to formalise the purpose of their visits to the Shires.
Other criminal cases were heard by Justices of the Peace either summarily or sitting in
quarter sessions (now abolished) and the circuit judges were also made Justices of the Peace so
as to increase their jurisdiction.
Commission of Assize for Civil Actions

Civil actions were usually heard at Westminster but under the Statute of Westminster II, 1285,
the Justices in Eyre and later the circuit judges heard civil cases under provisions known as
nisi prius which required the local sheriff to send a jury to London unless before the appointed
time the royal justices came to hear the case locally, which in practice they always did. Thus,
civil cases were opened in London, tried by a circuit judge and jury in the locality and the
verdict recorded in London. This lasted until the nineteenth century when a Commission of
Assize for Civil Actions was granted to assize judges on circuit.
The Courts Act 1971

The system, which lasted for many years, was brought to an end by the Courts Act 1971,
s 1(2) which provided that all courts of assize were abolished and commissions to hold any
court of assize would not be issued. This section, having achieved its purpose, was repealed by
Sch 7 to the Supreme Court Act 1981.
Stare decisis
Initially the system was held together by the doctrine of stare decisis, or standing by previous
decisions. Thus, when a judge decided a new problem in a case brought before him, this
became a new rule of law and was followed by subsequent judges. In later times this practice
crystallised into the form which is known as the binding force of judicial precedent, and the
..
EL_C01.qxd 3/26/07 10:38 AM Page 8
judges felt bound to follow previous decisions instead of merely looking to them for guid-
ance. By these means the common law earned the status of a system. Indeed it was possible
for Bracton, Dean of Exeter and a Justice Itinerant of Henry III, to write the first exposition of
the common law before the end of the thirteenth century – A Treatise on the Laws and
Customs of England. There was also an earlier treatise ascribed to Ranulph de Glanvill in 1187,
but this was not so comprehensive as the work of Bracton. Nevertheless, the number of writs
which Bracton describes as being available in the Royal Courts is much in excess of those
described by Glanvill and shows the rapid growth of the system in its first 100 years.
To sum up, the common law is a judge-made system of law, originating in ancient customs,
which were clarified, much extended and universalised by the judges, although that part of the
common law which concerned the ownership of land was derived mainly from the system of
feudal tenures introduced from Europe after the Norman Conquest. It is perhaps also worth
noting that the term ‘common law’ is used in four distinct senses, i.e. as opposed to (a) local
law; (b) equity; (c) statute law; and (d) any foreign system of law.
Equity
The growth of the common law was rapid in the thirteenth century but in the fourteenth
century it ceased to have the momentum of earlier years. As a legal profession came into
existence the judges came to be chosen exclusively from that profession instead of from a
wider variety of royal officials as had been the case in the thirteenth century. The common
law courts became more self-conscious about what they were doing and attempted to become
more systematic. There was much talk about the proper way of doing things, of not being
able to do this or that and much clever reasoning. Reports of cases in the Year Books, the
nearest we have to law reports at this time, show a considerable concern with procedural
points and niceties, a reluctance to depart from what had become established, a close atten-
tion to the observance of proper forms and much less concern with what the circumstances
of a particular case demanded if it was to be settled in an appropriate way.
Defects of the common law

As a result of this hardening up of the system, complaints were made by large numbers of
people about the inadequacy of the service provided by the courts and the defects of the
common law. The main defects were as follows:
The writ system

Writs (now claim forms) were issued by the clerks in the Chancellor’s office, the Chancellor
being in those days a clergyman of high rank who was also the King’s Chaplain and Head of
Parliament. In order to bring an action in one of the King’s courts, the party wishing to do so
had to obtain from the Chancery a writ for which he had to pay. A writ was a sealed letter
issued in the name of the King, and it ordered some person, Lord of the Manor, Sheriff of the
County or the defendant, to do whatever the writ specified.
The old common law writs began with a statement of the plaintiff’s (now claimant’s) claim,
which was prepared in the Royal Chancery (or office) and not by the claimant’s advisers as is
the statement of case today. Any writ which was new, because the claimant or his advisers
..
EL_C01.qxd 3/26/07 10:38 AM Page 9
had tried to draft it to suit the claimant’s case, might be abated, i.e. thrown out by the court.
Thus, writs could only be issued in a limited number of cases, and if the complaint could not 1
be fitted within one of the existing standard writs, no action could be brought.
For example, the writ of trespass to land was available. However, trespass is a direct wrong,
e.g. actually being on the land. Indirect activity affecting enjoyment of land was not covered,
e.g. nuisance from smelly pigs or smoky bonfires. There was at that time no writ to deal with
this type of indirect harm. The common law came to expand its writs to cover an action for
damages in this situation, but in the meantime equity had carved out a jurisdiction and had
an ideal remedy to deal with nuisance, i.e. the issue of an injunction requiring the defendant
to cease the activity or pay a fine or be imprisoned for contempt of court. Moreover, writs
were expensive, and their cost could deprive a party of justice. In some cases the cost of the
writ was more than the amount of the claimant’s claim so he did not bother to sue.
However, a practice grew up under which the clerks in Chancery provided new writs even
though the complaint was not quite covered by an existing writ, thus extending the law by
extending the scope of the writ system. This appeared to Parliament to be a taking away of its
powers as the supreme lawgiver. Further, it took much work away from the local courts into
the Royal Courts, thus diminishing the income of the local barons who persuaded Parliament
to pass a statute called the Provisions of Oxford in 1258, forbidding in effect the practice of
creating new writs to fit new cases. This proved so inconvenient that an attempt to remedy
the situation was made by the Statute of Westminster II in 1285 which empowered the clerks
in Chancery to issue new writs in consimili casu (in similar cases), thus adapting existing writs
to fit new circumstances. The common law began to expand again, but it was still by no
means certain that a writ would be forthcoming to fit a particular case, because the clerks in
Chancery used the statute with caution at first.
Procedure
Other difficulties arose over the procedure in the common law courts, because even the
smallest error in a writ would avoid the action. If X complained of the trespass of Y’s mare,
and in his writ by error described the mare as a stallion, his action could not proceed and he
would have to start again. Furthermore, some common law actions were tried by a system
called ‘wager of law ’, and the claimant might fail on what was really a good claim if a defend-
ant could bring more people to say that the claim was false than the claimant could get to
support it.
The system worked well in local courts where the witnesses (called ‘oath helpers’) knew the
parties and circumstances of the case. However, in cases brought at Westminster it fell into
disrepute because ‘oath helpers’ who would support any case could be hired outside court for
a few pence a head.
Defences and corruption

In common law actions the defendant could plead certain standard defences known as essoins
which would greatly delay the claimant’s claim. For example, the defendant might say that
he was cut off by floods or a broken bridge. He might also plead the defence of sickness
which could delay the action for a year and a day. In early times these defences were checked
by sending four knights to see the defendant, but at a later stage there was no checking and
the defences were used merely to delay what were often good claims. There were also com-
plaints about the bribery, corruption or oppression of juries, the bias of sheriffs in favour
of the powerful and the inability of a successful claimant to enforce a judgment or recover
property from his more powerful neighbour.
..
EL_C01.qxd 3/26/07 10:38 AM Page 10
Remedies
The common law was also defective in the matter of remedies. The only remedy the common
law had to offer for a civil wrong inflicted on a claimant was damages, i.e. a payment of
money, which is not in all cases an adequate compensation.
For example, if A trespasses each day on B’s land, B is unlikely to be satisfied with damages.
He would rather stop A from trespassing which equity could do by its remedy of injunction.
The common law could not compel a person to perform his obligations or cease to carry on a
wrong, though it is not true to say that the common law was entirely lacking in equitable
principles, and even in early times there were signs of some equitable development; but
generally the rigidity of the writ system tended to stifle justice.
Trusts and mortgages

Furthermore, the common law did not recognise the ‘concept of the trust or use’ and there
was no way of compelling the trustee to carry out his obligations under the trust. Thus, if S
conveyed property to T on trust for B, T could treat the property as his own and the common
law would ignore the claims of B. In addition, the main right of a borrower (or mortgagor) is
the right to redeem (or recover) the land he has used as a security for the loan. Originally at
common law the land became the property of the lender (or mortgagee) as soon as the date
decided upon for repayment had passed, unless during that time the loan had been repaid.
However, equity regarded a mortgage as essentially a security, and gave the mortgagor the
right to redeem the land at any time on payment of the principal sum, plus interest due to
the date of payment. What is more important, this rule applied even though the common
law date for repayment had passed. This rule, which still exists, is called the equity of
redemption.
Many people, therefore, unable to gain access to the King’s courts, either because they
could not obtain a writ, or because the writ was defective when they got it, or because they
were caught in some procedural difficulty, or could not obtain an appropriate remedy, began
to address their complaints to the King in Council. For a time the Council itself considered
such petitions, and where a petition was addressed to the King in person, he referred it to the
Council for trial. Later the Council delegated this function to the Chancellor, and eventually
petitions were addressed to the Chancellor alone.
The Chancellor began to judge such cases in the light of conscience and fair dealing. He
was not bound by the remedies of the common law and began to devise remedies of his own.
For example, the Chancellor could compel a person to perform his obligations by issuing
a decree of specific performance or could stop him from carrying on a wrong by the issue of
an injunction. The Chancellor also recognised interests in property which were unknown to
the common law, in particular the concept of the trust (as it became known) under which
persons might be made the legal owners of property for the use or benefit of another or
others. As we have seen, the common law did not recognise the interests of the beneficiaries
under a trust, but allowed the legal owner to deal with the property as if no other interests
existed. Equity, however, enforced the beneficial interests.
In order to bring persons before him, the Chancellor issued a form of summons, called a
subpoena, which did not state a cause of action but merely told the recipient to appear in
Chancery. There were no rules of evidence and the Chancellor’s Court did not sit in a fixed
place; some hearings were even held in the Chancellor’s private house. Equity was thus not
cramped by anything like the writ system or the excessive formality of the common law.
Eventually, as new Chancellors took over, and Vice-Chancellors were appointed to cope with
the increasing volume of work, uncertainty crept into the system, and conflicting decisions
were common.
..
EL_C01.qxd 3/26/07 10:38 AM Page 11
At this stage in its development equity adopted the practice of following previous decisions
(or stare decisis) which had proved so powerful a force in unifying the diverse systems of local 1
custom under the common law. This was precipitated by the Reformation and by the
appointment in 1530 of Sir Thomas More as Chancellor. More was a common lawyer and not
a cleric. From then on non-clerical Chancellors were drawn from the ranks of the common
lawyers and naturally followed the system of precedent which they had seen used in the
common law courts. Lord Ellesmere (1596–1617) began to apply the same principles in all
cases of the same type, and later, under Lord Nottingham (1673 – 82), Lord Hardwicke
(1736–56) and Lord Eldon (1807–27), equity developed in scope and certainty.
Relationship of law and equity

Although law and equity eventually operated alongside each other with mutual tolerance,
there was a period of conflict between them. This arose out of the practice of the Court of
Chancery which issued ‘common injunctions’ forbidding a person on threat of imprisonment
from bringing an action in the common law courts, or forbidding the enforcement of a
common law judgment if such a judgment had been obtained.
Thus, if X by some unfair conduct, such as undue influence (see further Chapter 13), had
obtained an agreement with Y, whereby Y was to sell X certain land at much below its real
value, then, if Y refused to convey the land, X would have his remedy in damages at common
law despite his unfair conduct. However, if Y appealed to the Chancellor, the latter might
issue a common injunction which would prevent X from bringing his action at common law
unless he wished to suffer punishment for defiance of the Chancellor’s injunction. Similarly,
if X had already obtained a judgment at common law, the Chancellor would prevent its
enforcement by ordering X, on threat of imprisonment, not to execute judgment on Y’s
property.
However, the common law courts retaliated by waiting for the Chancellor to imprison the
common law litigant for defiance of the injunction, and then the common law would release
him by the process of habeas corpus, which was and still is a type of writ used to obtain the
release of a person who has been unlawfully detained in prison or elsewhere (see further
Chapter 21).
This period of rivalry culminated in the Earl of Oxford’s Case in 1615 when Lord Coke,
representing the common law courts, offered a direct challenge to the Court of Chancery’s
jurisdiction. The challenge was taken up and James I, on the advice of Lord Bacon, then his
Attorney-General and later Lord Chancellor, gave a firm decision that, where common law
and equity were in conflict, equity should prevail. This principle now appears in s 49 of the
Supreme Court Act 1981, having appeared in a number of earlier Judicature Acts.
After that the two systems settled down and carved out separate and complementary juris-
dictions. Equity filled in the gaps left by the common law, and became a system of case law
governed by the binding force of precedent. However, it also lost much of its earlier freedom
and elasticity. It is certainly no longer a court of conscience.
Many reforms were still to come. Equitable and legal remedies had to be sought in different
courts, but this in due course was rectified by the Judicature Acts, 1873–75, which brought
about an amalgamation of the English courts. Since then both common law and equitable
remedies have been available to a litigant in the same action and in the same court.
Before leaving the topic, a final characteristic of equity should be noted which is that
equity never says the common law is wrong but merely provides alternative solutions to legal
problems. This is illustrated by certain cases in the Law of Contract. For example, the decision
..
EL_C01.qxd 3/26/07 10:38 AM Page 12
in Central London Property Trust Ltd v High Trees House Ltd (1947) (see Chapter 10) shows how
modern equity sometimes adopts a different solution from that provided by the common
law. Equity is not, therefore, a complete system of law. It complements the rules of the common
law but does not replace them.
The Earl of Oxford’s Case, 1615 – Relationship of law and equity (1)
Legislation
In early times there were few statutes and the bulk of law was case law, though legislation in
one form or another dates from ad 600. The earliest Norman legislation was by means of
Royal Charter, but the first great outburst of legislation came in the reign of Henry II
(1154–89). This legislation was called by various names: there were Assizes, Constitutions,
and Provisions, as well as Charters. Legislation at this time was generally made by the King in
Council, but sometimes by a kind of Parliament which consisted in the main of a meeting of
nobles and clergy summoned from the shires.
In the fourteenth century parliamentary legislation became more general. Parliament at
first asked the King to legislate, but later it presented a bill in its own wording. The Tudor
period saw the development of modern procedure, in particular the practice of giving three
readings to a Bill.
From the Tudor period onwards Parliament became more and more independent and the
practice of law making by statute increased. Nevertheless, statutes did not become an import-
ant source of law until the last two centuries, and even now, although the bulk of legislation
is large, statutes form a comparatively small part of the law as a whole. The basis of our law
remains the common law, and if all the statutes were repealed we should still have a legal sys-
tem of sorts, whereas our statutes alone would not provide a system of law but merely a set of
disjointed rules.
Parliament’s increasing involvement with economic and social affairs increased the need
for statutes. Some aspects of law are so complicated or so novel that they can only be laid
down in this form; they would not be likely to come into existence through the submission
of cases in court. A statute is the ultimate source of law, and, even if a statute is in conflict
with the common law or equity, the statute must prevail. It is such an important source that
it has been said – ‘A statute can do anything except change man to woman’, although in a
purely legal sense even this could be achieved. No court or other body in the UK can question
the validity of an Act of Parliament.
However, the validity of an Act of Parliament can be challenged before the European Court
of Justice (ECJ) on the ground that it is in conflict with the Treaty of Rome. Reference should
be made to Factortame Ltd v Secretary of State for Transport (No 2) (1991) (Case 34, below) where
a successful challenge to the validity of the Merchant Shipping Act 1988 in the ECJ was suc-
cessful and resulted in the repeal by the UK government of certain sections of that Act.
It should also be noted that the Human Rights Act 1998 permits UK courts to make declara-
tions of incompatibility where a UK Act of Parliament is found to violate the European
Convention on Human Rights. However, UK courts cannot disapply Acts of Parliament on
this ground in contrast to the situation where a challenge is made on the ground of violation
of Community law.
Statute law can be used to abolish common law rules which have outlived their usefulness,
or to amend the common law to cope with the changing circumstances and values of society.
..
EL_C01.qxd 3/26/07 10:38 AM Page 13
Once enacted, statutes, even if obsolete, do not cease to have the force of law, but common
sense usually prevents most obsolete laws from being invoked. In addition, statutes which are 1
no longer of practical utility are repealed from time to time by Statute Law Repeal Acts.
Nevertheless, a statute stands as law until it is specifically repealed by Parliament. This may
take place by implication as where an earlier Act is repealed by a later one which is inconsistent
with it.
An Act of Parliament is, in general, binding on everyone within the sphere of its jurisdic-
tion, though it may not be binding if it infringes the Treaty of Rome, as the Factortame case
shows, but all Acts of Parliament can be repealed by the same or subsequent parliaments; and
this is a further exception to the rule of the absolute sovereignty of Parliament – it cannot
bind itself or its successors.
Cheney v Conn, 1968 – The court cannot in general declare a statute to be

invalid (2)
Prince of Hanover v Attorney-General, 1957 – A statute remains law until repealed (3)
Vauxhall Estates Ltd v Liverpool Corporation, 1932 – Repeal by implication (4)
Repeal of statutes and the European Communities Act 1972

As regards the power of Parliament to abolish or alter statute law by a later Act, an interesting
situation arises in connection with our membership of the European Community.
Since this is the first time we have met the expression ‘European Community’ it would
perhaps be desirable to consider whether the expression ‘Community’ or ‘Union’ should be
used. The parts of the European co-operation arrangements include: the European Commun-
ity (economic co-operation – the old EEC); the European Atomic Energy Community
(EURATOM); the European Coal and Steel Community (ECSC); and the Maastricht areas (new
areas of co-operation such as political, foreign affairs, defence and conventions (for instance,
on drugs)).
When referring to all of them, the correct legal reference is to the European Union, and
the same is true when referring only to the Maastricht area of co-operation. Otherwise, the
correct references are to the European Community or EURATOM or ECSC as the context
requires.
The European Court of Justice has no automatic jurisdiction in the Maastricht areas and so
rightly continues to call itself the Court of Justice of the European Communities, though
confusingly the Council calls itself the Council of the European Union even when passing
EC legislation! The Treaty of Amsterdam, which was agreed at the European Council in
Amsterdam in June 1997 and which was incorporated into UK law by the European Com-
munities (Amendment) Act 1998, has relevance to the legal system in that it extends the
powers of the ECJ in regard to action by the Union on asylum and immigration and co-operation
on police and judicial matters.
Those in business tend to use the term ‘Union’ at all times and there is no harm in this.
Practising lawyers would no doubt feel that they had to be precise.
The obligation of the British Parliament on entry to the European Community was to
ensure that Community law was paramount. The view of the European Court is that
Community law overrides English law where the latter is inconsistent with it. Section 3 of the
European Communities Act 1972 binds our courts to accept this principle and talks of apply-
ing the principles of Community law with the idea that it prevails. Section 2(4) of the 1972
Act states that a UK statute should be construed so as to be consistent with Community law.
However, many authorities on constitutional law see this obligation as a dilemma in the
..
EL_C01.qxd 3/26/07 10:38 AM Page 14
sense that Community law cannot be paramount when like the rest of our law the 1972 Act
is at the mercy of any future Act of Parliament which must, under the fundamental rule of
our constitution, prevail over any pre-existing law whatsoever. In other words, Community
law is paramount as the result of the European Communities Act 1972, which could be
repealed by a future Act of Parliament. It would seem to be the duty of our courts to accept
that repeal.
Delegated legislation
Many modern statutes require much detailed work to implement and operate them, and
such details are not normally contained in the statute itself, but are filled in from some
other source. For example, much of our social security legislation gives only the general
provisions of a complex scheme of social benefits, and an immense number of detailed
regulations have had to be made by civil servants in the name of, and under the authority of,
the appropriate Minister. This method of legislating is increasingly common in the field
of business law, where companies, insolvency and consumer statutes give a large number of
powers to government ministers to make rules and orders to flesh out the statute. These regu-
lations, when made in the approved manner, are just as much law as the parent statute itself.
This form of law is known as delegated or subordinate legislation.
The major difference between an Act of Parliament and delegated legislation is that the
courts can declare the latter to be invalid and inapplicable because it was made beyond the
powers given in the parent statute and/or the proper procedures were not followed in its
enactment as where consultation required by the parent statute was not carried out (see
further Chapter 6).
Custom
In early times custom was taken by the judges and turned into the common law of England,
and it is still possible, even today, to argue the existence of a local or trade custom before the
courts. Local customs consist in the main of customary rights vested in the inhabitants of a
particular place to use, for various purposes, land held in the private ownership of another:
for example, to take water from a spring (Race v Ward (1855) 24 LJQB 153) and for fishermen
to dry their nets on private land (Mercer v Denne [1905] 2 Ch 538). A local custom can also
affect the terms of a contract as is illustrated by Hutton v Warren, 1836 (see Chapter 14). As a
present-day source of law, however, custom is of little importance.
The law merchant

Mercantile law, or lex mercatoria, is based upon mercantile customs and usages, and was
developed separately from the common law. The Royal Courts did not have a monopoly of
the administration of justice and certain local courts continued to hear cases long after the
Royal Courts were established. One notable area was that involving mercantile and maritime
disputes. Disputes between merchants, local and foreign, which arose at the fairs where most
important commercial business was transacted in the fourteenth century, were tried in the
courts of the fair or borough, and were known as ‘courts of pie powder’ ( pieds poudrés) after
the dusty feet of the traders who used them.
..
EL_C01.qxd 3/26/07 10:38 AM Page 15
These courts were presided over by the mayor or his deputy or, if the fair was held as part
of a private franchise, the steward appointed by the franchise holder. The rules applied were 1
the rules of the European law merchant developed over the years from the customary practices
of merchants and the jury was often made up of merchants. The fair or borough courts were
supplemented for a time by ‘Staple Courts’ which sat in the staple towns. These towns, which
were designated by Edward III (1327–77) as the exclusive centres of trade for such commodities
as wine, wool, leather and tin, were required to hold courts to decide the trading disputes of
merchants and again the customary practices of merchants were used.
Maritime disputes were heard by maritime courts sitting in major ports such as Bristol.
These, too, applied a special European customary law developed from the customary practices
of seamen.
The common law courts were slow to show an interest in dealing with commercial matters.
In part this was due to the idea that their jurisdiction had a geographical limit and was
restricted to matters which had arisen in England between English citizens. Foreign matters,
and many of these commercial disputes did involve either a foreign merchant or a contract
made or to be performed abroad, were left to some other body, especially if it could raise
questions about the relations between the King and foreign sovereigns where the King’s
Council might be a more appropriate body. To some extent also it was due to the fact that
the common law courts and the common law had come into existence at a time when land
was the most important commodity and the procedures and concerns of the common law
courts were adapted to problems arising from disputes about the possession and ownership of
land. They were formal, slow and ill-adapted to the needs of merchants who required a speedier
justice administered according to rules with which they were familiar.
When the Court of Admiralty developed, it took over much of the work of the merchants’
courts, but from the seventeenth century onwards the common law courts began to acquire
the commercial work, and many rules of the law merchant were incorporated into the common
law. This was achieved partly by fiction. For example, to get over the fact that technically it
still lacked jurisdiction over matters arising abroad the Court accepted allegations that some-
thing that had occurred abroad had in fact occurred in England within its jurisdiction, e.g. by
using the fiction that Bordeaux was in Cheapside.
Lord Mansfield and Lord Holt played a great part in this development, in particular by
recognising the main mercantile customs in the common law courts without requiring proof
of them on every occasion. Perhaps the most important mercantile customs recognised were
that a bill of exchange was negotiable and that mere agreements should be binding as con-
tracts. In this way the custom of merchants relating to negotiable instruments and contracts
including the sale of goods became part of the common law, and later, by codification, of
statute law in the Bills of Exchange Act 1882, and the Sale of Goods Act 1979.
International conventions
Where the UK has signed up to an international convention, the convention really represents
the customary consensus of the states signing up to it in terms of rulings to be given on cer-
tain matters such as the carriage of persons and goods by sea and air. These conventions
become part of UK law and the common law cannot override them. An example is provided
by Sidhu v British Airways plc [1997] AC 430. The claimants sued the airline for damages at
common law for breach of contract and negligence following delays in their flight when the
plane they were on landed in Kuwait and the delays arose out of arrests made by the authorities
of themselves and other passengers. The House of Lords, in the eventual appeal, rejected their
claim. The matter was governed by the Warsaw Convention on International Carriage by Air
1929 which the UK had signed up to and under which only two years were allowed for a
..
EL_C01.qxd 3/26/07 10:38 AM Page 16
claim against the six years allowed by the common law. The claimants were out of time
under the Convention.
Canon law
A brief mention should be made of the ecclesiastical or church courts since prior to 1857
they dealt not only with offences against church doctrine and morality but also with other
matters such as matrimonial causes, legitimacy and the inheritance of property when a
person died. Many of the rules laid down by these courts were derived from Roman law and
were inherited by the civil courts to which these matters were eventually transferred. In 1970
the civil courts concerned were amalgamated into the Family Division of the High Court
(see Chapter 2).
The present position is that the church courts remain to deal with certain matters, e.g.
decoration, alteration and use of churches.
Since disciplinary hearings against clergy receive more publicity these days, it is worth not-
ing that the church courts only heard disciplinary matters where the clergy involved were
incumbents, i.e. those appointed to livings within the Church of England. Those who hold
appointments as priest-in-charge were not covered by these procedures but are subject to a
disciplinary hearing before a Bishop under what are called the Canons of the Church of
England. There has been reform also even in regard to disciplinary matters affecting incum-
bents where the Consistory Courts (see below) are replaced by a system of clerical tribunals
on the lines of those existing for doctors and lawyers, i.e. domestic tribunals (see p 78).
The court of first instance is that of the diocesan chancellor, called a Consistory Court. He
must be a member of the Church of England and is usually a practising barrister. Appeal lies
from him to the Court of Arches in the province of Canterbury, and to the Chancery Court of
York in the northern province. On matters concerning conduct, there is a further appeal to
the Judicial Committee of the Privy Council and on other matters, e.g. the suitability of a
Henry Moore altar in a Wren church (Re St Stephen Walbrook [1987] 2 All ER 578), there may
be an appeal to the Court of Ecclesiastical Cases Reserved. The church courts are not courts of
common law and the prerogative orders (see Chapter 3) – which operate as a valuable check
on the abuse of power by other courts and tribunals – do not apply to them.
Legal treatises
One last source remains to be considered – namely, legal treatises. Throughout the centuries
great English jurists have written books, some in the nature of legal textbooks, which have
helped to shape the law and inform the legal profession.
We have already mentioned Bracton whose Treatise on the Laws and Customs of England was
written in the thirteenth century and was probably based on the decisions of Martin de
Pateshull, who was Archdeacon of Norfolk, Dean of St Paul’s and an Itinerant Justice from
1217 to 1229, and on those of William de Raleigh who was the Rector of Bratton Fleming in
Devon and an Itinerant Justice from 1228 to 1250.
Sir Edward Coke, who lived from 1552 to 1634, is a celebrated name. His Institutes covered
many aspects of law. For example, his First Institute, published in 1628, was concerned with
land law. His Second Institute, published in 1642, was concerned with the principal statutes.
The Third Institute, published in 1644, dealt with criminal law, while the Fourth Institute, also
..
EL_C01.qxd 3/26/07 10:38 AM Page 17
published in 1644, was concerned with the jurisdiction and history of the courts, this work
containing bitter attacks on the Court of Chancery. Although at first sight ‘Institute’ may 1
seem an odd word to use to describe a legal text, it is derived from the Latin Institutio which
means ‘instruct, arrange, make order of’.
During his lifetime Coke occupied the offices of Recorder of London, Solicitor-General,
Speaker of the House of Commons, Attorney-General and finally Chief Justice of Common
Pleas.
Sir William Blackstone, who lived from 1723 to 1780, published his Commentaries on the
Laws of England in 1765. These are concerned with various aspects of law and are based on his
lectures at Oxford. He was a Judge of the Common Pleas and was also the first Professor of
English Law to be appointed in any English university.
In addition to older treatises such as those mentioned above, the works of modern writers,
sufficiently eminent in the profession, are sometimes quoted when novel points of law are
being argued in the courts.
Boys v Blenkinsop, 1968 – Textbooks as a source of law (5)
..
EL_C02.qxd 3/26/07 10:39 AM Page 18
2
THE COURTS OF LAW
The Royal Courts of Westminster developed out of the Curia Regis (or the King’s Council).
The Court of Exchequer was the first court to emerge from the Curia Regis and dealt initially
with disputes connected with royal revenues. The Court of Common Pleas was set up in the
time of Henry II to hear disputes between the King’s subjects. The Court of King’s Bench was
last to emerge and initially was closely associated with the King himself, hearing disputes
between subjects and the King.
As the system developed the Court of Chancery was added and there was also a Court of
Admiralty. The Court of Probate and the Divorce Court developed from the old ecclesiastical
courts which formerly dealt with these matters. Each of these courts had its own jurisdiction,
sometimes overlapping and sometimes conflicting. This was particularly true with regard to
the common law courts and the Court of Chancery. For example, in Knight v Marquis of
Waterford (1844) 11 Cl & Fin 653 the appellant was told by the House of Lords, after 14 years
of litigation in equity, that he had a good case but must begin his action again in a common
law court. It is useful to refer at this point to Wood v Scarth (1858) (see Chapter 12). This case
is a further illustration of the delays which resulted from the administration of law and
equity in separate courts. Anyway, this was how the English legal system entered the nine-
teenth century and it was this inheritance that the Victorians set out to rationalise into the
form with which we are familiar.
The Supreme Court of Judicature

In order to rationalise the system, the Supreme Court of Judicature was established. Under the
Judicature Acts 1873–75 the High Court was divided into five divisions: Queen’s Bench,
Common Pleas, Exchequer, Chancery, and Probate, Divorce and Admiralty, the number
being reduced to three by an Order in Council in 1881 when the Common Pleas and Exchequer
Divisions were merged into the Queen’s Bench Division. The Court of Appeal was given juris-
diction over appeals.
The House of Lords

The House of Lords was not included in the Supreme Court of Judicature by the Judicature
Acts because of Parliament’s opposition to its then hereditary character. Its jurisdiction as a
final court of appeal was established by the Appellate Jurisdiction Act 1876 which also pro-
vided the House with trained judges, i.e. Life Peers with legal training. The Judicature Acts
1873–75 were consolidated in the Supreme Court of Judicature (Consolidation) Act 1925.
..
EL_C02.qxd 3/26/07 10:39 AM Page 19
THE COURTS OF LAW 19
This Act is now repealed by the Supreme Court Act of 1981, s 1, reaffirming the previous posi-
tion by providing that the Supreme Court of England and Wales shall consist of the Court of
Appeal, the High Court of Justice and the Crown Court, and that the Lord Chancellor shall
be the President of the Supreme Court. The Employment Appeal Tribunal is not included,
2
even though it is staffed in part by High Court judges and appeals lie to the Court of Appeal.
The above material will be significantly altered when the relevant sections and Schedules of
the Constitutional Reform Act 2005 are brought into force. The reason is that the House of
Lords is renamed by that Act as the Supreme Court so that the present sets of courts currently
forming the Supreme Court cannot continue under this nomenclature. They will remain as
now but be retitled the Senior Courts of England and Wales. These moves cannot be made
until 2009 because the new Supreme Court has no place in which to conduct its hearings.
The Middlesex Guildhall in Parliament Square has been chosen but needs refurbishment,
which is scheduled to be completed by 2009.
It is also worth noting that, as the CRA 2005 comes into force, the Supreme Court Act 1981
will be renamed as the Senior Courts Act 1981.
The courts today

In recent times far-reaching changes have been made in the structure and jurisdiction of the
civil and criminal courts by various reforming statutes. The present system of courts exercis-
ing both civil and criminal jurisdiction is set out in Figures 2.1 and 2.2 respectively and the
main routes of appeal indicated.
Administration of the courts

Under s 1 of the Courts Act 2003, the Lord Chancellor is under a statutory duty to secure an
efficient and effective administration system and other services such as enforcement services
to support the current Supreme Court of England and Wales (i.e. the Court of Appeal, the
three Divisions of the High Court and the Crown Court) and also the county courts and mag-
istrates’ courts business. The Lord Chancellor chose an executive agency called Her Majesty’s
Courts Service, which began operating in April 2005. The new system brings all the courts in
the current Supreme Court and the county courts and magistrates’ courts under one adminis-
trative roof.
It is worth noting again that s 59 of the Constitutional Reform Act 2005 (CRA 2005) will,
as it comes into force, rename the current Supreme Court of England and Wales as the Senior
Courts of England and Wales, the House of Lords being then replaced by the Supreme Court
of England and Wales, with the current Law Lords constituting its judiciary (but as new
appointments are made this link will not continue).
Section 1 of the Courts Act 2003 continues in force but the statutory duty referred to will,
as the CRA 2005 comes into force, rest upon the Secretary of State for Constitutional Affairs
in consultation with the Lord Chief Justice, who becomes the head of the judiciary.
Magistrates’ courts
Although, as we shall see, the Crown Court tries the most serious criminal cases (all those in
fact which are tried on indictment with a jury), the great bulk of the criminal work of the
country is performed in the magistrates’ courts.
..
EL_C02.qxd 3/26/07 10:39 AM Page 20
Notes
1 If heard by a circuit judge.
2 If heard by a district or circuit judge.
3 If heard by a High Court judge.
Figure 2.1 System of courts currently exercising civil jurisdiction
..
EL_C02.qxd 3/26/07 10:39 AM Page 21
Figure 2.2 System of courts currently exercising criminal jurisdiction
Types of magistrates
Magistrates may be of several kinds as follows:
(a) Lay magistrates. These are appointed by the Lord Chancellor on behalf of, and in the
name of, the Queen under s 10 of the Courts Act 2003. The Lord Chancellor is required to
assign each lay justice to one or more local areas. The Lord Chancellor is currently empowered
to make rules regarding the training of magistrates.
Under the CRA 2005, as it comes into force, s 10 of the Courts Act 2003 will continue but
the assignment of lay justices becomes a matter for the Lord Chief Justice after consultation
with the Lord Chancellor. It is important here to note that s 19 of the CRA 2005 allows the
Lord Chancellor by Order to divest himself of functions to another person. Therefore, as the
CRA 2005 comes into force, the functions of the Lord Chancellor will be transferred. There
are the following options according to Orders made: to transfer mainly to the Lord Chief
Justice with the right of consultation with the Lord Chancellor retained; to transfer to the
Lord Chief Justice with consultation rights in the Secretary of State; or abolition in favour of
the Lord Chief Justice.
(b) District judges (magistrates’ courts) and deputy district judges (magistrates’ courts).
These are full-time magistrates who sit in various areas of the country. They were formerly
called stipendiary magistrates. The area to which an appointment is made is entirely a matter
for the Lord Chief Justice. From 6 April 2006 they are appointed by the Queen on the recom-
mendation of the Lord Chief Justice and must have a seven-year general advocacy
..
EL_C02.qxd 3/26/07 10:39 AM Page 22
qualification within the meaning of s 71 of the Courts and Legal Services Act 1990.
Appointments have been made, e.g. in the West Midlands, Greater Manchester, Merseyside
and in London – in courts such as Bow Street and Tower Bridge. There was a limit on these
appointments but this was removed by the Access to Justice Act 1999 with, perhaps, the
object of making more appointments in order to reduce the number of courts staffed by lay
magistrates.
The Justices of the Peace Act 1997 established a national bench of district judges (magis-
trates’ courts). The authority for appointment is now s 22 of the Courts Act 2003. The
national bench is lead by the Senior District Judge (or Chief Magistrate). A district judge is
assigned to a local justice area but may be directed by the Department for Constitutional
Affairs through the senior district judge to sit in any court in England and Wales as required.
A main difference between a district judge (magistrates’ court) and a lay justice is that the dis-
trict judge sits alone in criminal cases. District judges (magistrates’ courts) can exercise the
jurisdiction of the Crown Court (s 65 Courts Act 2003).
The Judicial Studies Board undertakes the training of district judges and gives initial and
continuing training. Some district judges (magistrates’ courts) may be designated by the
senior district judge to deal with certain kinds of specialist work, such as youth court cases,
extradition and applications for further detention under terrorism legislation. The judges are
addressed as ‘Sir’ or ‘Madam’.
Justices’ clerks and legal advisers

Section 27 of the Courts Act 2003 (as amended by Sch 4 to the CRA 2005) provides for a jus-
tices’ clerk and assistant justices’ clerks in magistrates’ courts. These individuals must have
had a right of audience in relation to all proceedings in a magistrates’ court for five years, or
be a barrister or solicitor who has served for not less than five years as an assistant to a jus-
tices’ clerk or has previously been a justices’ clerk.
The justices’ clerk manages a team of advisers who may be engaged by contract under
s 2(4) of the Courts Act 2003. Powers are delegated to the legal advisers to give legal advice
to magistrates: assistant clerks may also be engaged by contract under s 2(4). Most of the
advisers are barristers or solicitors. Magistrates are not bound to accept the advice given.
However, it is accepted practice that they should do so, otherwise the proceedings may be
appealed.
Legal advice should be given in open court. Advice given in the justices’ retiring room
which has not been discussed in open court is given on a provisional basis only. The advice
should be repeated in open court so that the parties may make representations.
There has in the past been much case law relating to situations where clerks have given
legal advice in the retiring room and not in open court and on appeal the court has said that,
in the absence of any indication or suspicion that the clerk had taken part in making the
decision, the conviction must stand. However, it is doubtful whether such convictions would
now be allowed to stand. The Human Rights Act 1998 has impacted on this area and trans-
parency of communications between magistrates and their clerks and advisers is stressed in
current Practice Directions, which are rules governing particular aspects of court procedure.
Certainly, consultations out of court must be limited so that Art 6 of the European Conven-
tion on Human Rights (the right to a fair trial) is observed.
Justices’ clerks can perform duties that are authorised to be done before one magistrate.
These include issue of summons, allowing adjournment of trials where the parties agree, and
granting criminal defence representation orders. A justices’ clerk may delegate these functions
to a legal adviser. This means that the clerk or adviser can consider the above matters while
the magistrates deal with other matters.
..
EL_C02.qxd 3/26/07 10:39 AM Page 23
Administration of magistrates’ courts

The Courts Act 2003 unifies the Supreme Court as it is currently constituted, the county courts
and the magistrates’ courts into one system called Her Majesty’s Court Service. The same Act 2
makes provision for the practice and procedure in those courts and for accommodation for
the court house and offices and staff. An important provision of the 2003 Act is to set up
Courts Boards to be concerned with Crown Courts, county courts and magistrates’ courts
based on police authority areas. The members of these Boards are:
n a judge, e.g. a district or circuit judge;

n two lay justices from the area of the Board;
n at least two members being persons who have knowledge and experience of the work of
courts in the area of the Board;
n at least two members who are representative of people living in the area of the Board.
The Board will keep under review the suitability or otherwise of the provision being made for
local justice and consider, for example, the reallocation of court houses.
Section 6 of the Courts Act 2003 abolishes the former magistrates’ courts, committees
which used to carry out administrative functions.
Classification of criminal offences

Before discussing the powers of magistrates in regard to criminal prosecutions, it is necessary
to classify criminal offences for procedural purposes. Proceedings are regulated by the
Magistrates’ Courts Act 1980 in the main. Criminal jurisdiction falls into three classes of
offence listed in the Criminal Law Act 1977 (as amended) as:
(a) offences triable only on indictment before a judge and jury;

(b) offences triable only summarily by the magistrates;
(c) offences triable either way.
Some examples
Examples of crimes which fall into the relevant categories appear below.
Offences triable only summarily

n driving without insurance;
n careless or inconsiderate driving;
n speeding;
n being drunk and disorderly in a public place.
Offences triable either way

n theft;
n burglary without violence or threat to a person;
n aggravated vehicle taking (this occurs, e.g. where after the taking a person is injured by the
driving);
n assault occasioning actual bodily harm;
n dangerous driving.
Offences triable only on indictment

n murder and manslaughter;
n robbery, which involves a taking by force;
n rape.
..
EL_C02.qxd 3/26/07 10:39 AM Page 24
The nature of proceedings

Summary offences are tried only in a magistrates’ court. Offences triable either way may be
tried by magistrates (see below). Indictable only charges cannot be dealt with at a magistrates’
court and are sent to the Crown Court under s 51 of the Crime and Disorder Act 1998. By rea-
son of s 41 of and Sch 3 to the Criminal Justice Act 2003 as it comes into force, committal
proceedings which are used to send charges of either way offences to the Crown Court will be
abolished so that all indictable and either way cases that have been allocated for Crown
Court trial will be sent to the Crown Court under amendments to s 51 of the Crime and
Disorder Act 1998.
Sending for trial

Where an adult defendant is brought before the magistrates charged with an indictable-only
offence, the magistrates must send him forthwith for trial in the Crown Court. The magistrates’
functions are only to determine whether what is charged is an indictable-only offence and
to consider legal aid. The court will set the time for the first hearing in the Crown Court
and will remand the defendant in custody or on bail to appear at the Crown Court. These
proceedings can be heard by one magistrate.
A juvenile offender (i.e. a person under the age of 18) is not liable to be sent to the Crown
Court for an indictable-only offence unless he is charged for that offence jointly with an
adult, when he or she may be sent with the adult to the Crown Court if the magistrates think
that it is in the interests of justice that he or she should be tried jointly with the adult.
The juvenile offender hearing should be before two or more magistrates and a Crown pro-
secutor must be present. The hearing will normally take place at the next available sitting of
the court after the defendant has been charged.
Offence triable either way

These offences can be tried either in a magistrates’ court or in the Crown Court before a judge
and jury. Of major importance here is the requirement to have disclosure of the prosecution’s
case to the defendant. Rule 21 of the Criminal Procedure Rules applies. The 2005 Rules
require the prosecution to supply a written statement containing the facts and matters which
the prosecutor proposes to bring in as evidence during the proceedings. This includes evidence
by video. All of this is to assist the defendant and his advisers with a decision as to the
mode of trial or whether to plead guilty or not guilty. There are the following possibilities
at the hearing:
n the magistrates may decide that the case is not suitable for summary trial. The defendant
then has no choice and the case will be adjourned to a future date so that committal pro-
ceedings may take place. In reaching their decision, the main considerations will be
whether, were there to be a conviction, the sentencing powers of the court would be ade-
quate. If not, the magistrates will not accept the case but will send it to the Crown Court;
n if the magistrates are prepared to hear the case, the defendant must make his decision:
– if he consents to be tried by magistrates and pleads guilty, his case will be dealt with
immediately;
– if he consents to be tried by magistrates and pleads not guilty, the case will be
adjourned to a later date for trial;
– if he asks for a trial in the Crown Court, he will not be asked to plead and there will be
an adjournment to a later date for committal proceedings to take place. The defendant
cannot be denied a jury trial.
..
EL_C02.qxd 3/26/07 10:39 AM Page 25
Summary trial
Disclosure by prosecution and defence
As regards the prosecution, the Criminal Procedure and Investigations Act 1996 applies.
2
Disclosure applies where the defendant pleads not guilty and the court proceeds to summary
trial. The defence is not entitled to disclosure where the defendant has pleaded guilty. The
prosecution must disclose any prosecution material which has not previously been disclosed
and which might reasonably be considered capable of undermining the case for the prosecu-
tion or assist the case for the defence.
There is also a duty under the Criminal Procedure and Investigations Act 1996 for the
prosecution to make available to the defence any unused material relating to the case on
which it does not intend to rely. This applies where there is a not guilty plea. If there is no
such material, the prosecution should confirm in writing that this is so. This could include,
e.g. material casting doubt on a confession or the reliability of a witness. Where the prosecu-
tion has made the above primary disclosure, the defence may in a not guilty plea give a
defence statement setting out in general terms the defence and disclosure of details of any
alibi. The defendant is not required to make this statement but if he does so, the prosecution
is required to make further disclosure of relevant and undisclosed prosecution material, e.g.
in the light of the defence. The prosecution has a continuing duty of disclosure until the
defendant is convicted or acquitted. It should be noted that the right to a fair trial as set out
in the European Convention on Human Rights reinforces the need for maximum disclosure
by the prosecution.
Further details of the trial procedure appear in Chapter 4, but it is enough here to note that
the magistrates’ verdict is by a majority and if the defendant is found guilty, the magistrates
will proceed to sentence. An outline of the available sentences is also given in Chapter 4.
Committal proceedings
Offences which are triable either way and not tried by the magistrates as described above are
currently the subject of committal proceedings before a magistrates’ court. The purpose of
these proceedings is to decide whether there is a case for the defendant to answer in the
Crown Court.
As already noted, under s 41 of and Sch 3 to the Criminal Justice Act 2003, as they come
into force, committal proceedings for either way cases allocated for trial in the Crown Court
will be sent for trial in the Crown Court in line with the current procedure for indictable
offences and committal proceedings will be abolished. (See further p 26.)
Types of committal proceedings

There are two types of committal proceedings as follows:
n committal without consideration of the evidence under s 6(2) of the Magistrates’ Courts
Act 1980; and
n committal with consideration of the evidence under the Magistrates’ Courts Act 1980, s 6(1).
Section 6(2) committals

The prosecution can offer the defence a committal without consideration of the evidence. This
is made in almost all cases usually by letter. The prosecution will serve the relevant bundle of
prosecution documents on the defence and the defence solicitor will consider with his client
what they contain. In most cases the defence will accept the prosecution’s offer, though it
may request a contested committal on the grounds that there is no case to answer that could
..
EL_C02.qxd 3/26/07 10:39 AM Page 26
be put to a jury. In s 6(2) committals the magistrates’ function is mainly administrative and
the proceedings will take only a few minutes since the magistrates do not at any stage read
the evidence which is in the prosecution statements. The defendant is committed for trial
to the Crown Court and a date is set for the first hearing in the Crown Court. Legal aid and
bail will also be dealt with.
Section 6(1) committals

In these cases the evidence for the prosecution is either read out aloud at the hearing or, if the
court directs, it will be orally summarised. At the end of the case for the prosecution the defence
may submit that there is no case to answer, e.g. that the case against the defendant is so unreli-
able that a jury could not convict the defendant on it. If no submission is made or if, being
made, it is rejected, the magistrates will commit the defendant for trial in the Crown Court.
If, in the very unlikely event that the magistrates decide that there is no case to answer, they
will discharge the defendant. Where the defendant is committed for trial, a date will be set
for the first hearing in the Crown Court and the matter of legal aid and bail will be considered.
It should be noted that if the prosecution requires a committal with consideration of evid-
ence, the defence has no choice and must accept, but since the prosecution can no longer use
such proceedings to test its own witnesses by requiring them to give oral evidence, it is very
unlikely to require a s 6(1) committal.
Effect of the Criminal Justice Act 2003
Before considering the substantial changes that will be made by the Criminal Justice Act 2003
as it comes into force, it should be borne in mind that s 41 and Sch 3, which carry the
changes, are not yet in force, although it is over three years since Royal Assent. Therefore, at
the present time the material referred to above is the procedure that is followed. When the
relevant parts of the 2003 Act are in force, the material set out below will take the place of the
above material in terms of the trial of each way offences. The rules under which the magis-
trates send for trial in the Crown Court forthwith in indictable offences will be covered by
the CJA 2003 procedures but these will be substantially the same as those applying at present.
The trial of each way offences will change significantly. The purpose of the changes is to
encourage defendants to accept the opinion of the magistrates that the case is more suitable
for summary trial and to achieve that result by minimising uncertainties about the sentence.
Committal proceedings as described above will be overtaken by the CJA 2003 provisions
and the current expression of ‘committal for trial’ in the Crown Court will become ‘sending
for trial’ in the Crown Court.
Allocation and transfer of offences triable either way

Section 41 of the Criminal Justice Act 2003 introduces Sch 3 of the Act and deals with the
allocation of offences triable either way and transfer of cases to the Crown Court. The magis-
trates must decide whether cases triable either way should be tried summarily or on indictment.
The provisions are aimed at ensuring that only cases that need to go to the Crown Court are
sent there. Paragraphs 5 and 6 of Sch 3 deal with the preliminary stages of an either-way case
including the defendant’s plea before venue and allocation of the case. A single justice
may hear the plea, called a plea before venue, but cannot conduct a contested case following
a plea of not guilty. He or she may hear a guilty plea but cannot impose sentence on the
defendant.
..
EL_C02.qxd 3/26/07 10:39 AM Page 27
Paragraph 5 enacts a new s 19 of the Magistrates’ Courts Act 1980 to provide the procedure
to be followed by magistrates when deciding whether a case triable either-way where the
defendant has not entered a guilty plea should be tried summarily or on indictment.
The new procedure differs from the former procedure in that the magistrates must be
2
informed about and take account of previous convictions of the defendant in assessing
whether the sentencing powers available to magistrates are adequate. The court must have
regard not only (as before) to representations made by the prosecution or defence but also to
allocation guidelines that may be issued by the Sentencing Guidelines Council under s 170 of
the 2003 Act (see further Chapter 4). These new procedures are referred to as allocation procedures.
Cases suitable for allocation for summary trial

Paragraph 6 of Sch 3 substitutes a new s 20 of the Magistrates’ Courts Act 1980 which sets
out a procedure to be followed by magistrates when they decide that a case is suitable for
summary trial. This is as follows:
n defendants will be told that they can consent to be tried summarily or if they wish on
indictment;
n when making that decision defendants (and their advisers) are likely to be influenced by
the knowledge that it is not possible for the magistrates to commit them to the Crown
Court for sentence. Once the magistrates have accepted jurisdiction to try summarily, they
cannot give a sentence beyond their powers. Under s 154 of the CJA 2003, as it comes into
force, the magistrates can impose custodial sentences of up to and including 12 months in
regard to any one offence and up to 65 weeks in regard to two or more offences to be
served consecutively. The current provisions appear on p 28. Clause 139 gave the Secretary
of State power to increase these limits by order up to 18 months in regard to any one
offence and 24 months in regard to two offences to be served consecutively. This clause
was not enacted.
n defendants have the opportunity to request an indication from the magistrates whether, if
they plead guilty at that point, the sentence would be custodial or not;
n the magistrates have a discretion whether or not to give an indication. Where an indica-
tion is given, defendants may reconsider their plea;
n where a defendant then decides to plead guilty, the magistrates will proceed to sentence.
A custodial sentence will only be available if such a sentence was indicated, and if so, the
magistrates will not have the option of committal to the Crown Court for sentence;
n where the defendant declines to reconsider his plea indication or where the magistrates do
not give a sentence indication, the defendant has the choice of accepting summary trial or
electing for trial on indictment;
n where an indication of sentence is given and the defendant does not plead guilty because
of it, the sentence indication is not binding on the magistrates who later proceed to sum-
mary trial or on the Crown Court if the defendant elects for trial on indictment.
Cases suitable for trial on indictment

Paragraph 7 amends s 21 of the Magistrates’ Courts Act 1980. Under this amendment, where
the magistrates decide that a trial on indictment would be more suitable, they will proceed
forthwith to send the case for trial in the Crown Court under s 51(1) of the Crime and
Disorder Act 1998 (see below).
There is currently no power for magistrates, having started to hear a case summarily, to
switch to committal proceedings. There is a new power in the CJA 2003 for the prosecution
to apply for an either-way case that has been allocated for summary trial to be tried on indict-
ment instead.
..
EL_C02.qxd 3/26/07 10:39 AM Page 28
Sending for trial procedure

Amendments effected by the Criminal Justice Act 2003
The sending for trial procedure will apply to either-way cases allocated for trial on indict-
ment. Furthermore, committal of defendants by the magistrates to the Crown Court will no
longer be available where the magistrates have accepted jurisdiction in an either-way offence
whether as a contested case or guilty plea. Where a guilty plea has been indicated at plea
before venue as distinct from at allocation and the magistrates deal with the case summarily,
the power to commit to the Crown Court for sentence will be available to the magistrates.
Disclosure in criminal cases to assist trial management

Part 5 of the Criminal Justice Act 2003 amends the provisions of the Criminal Procedure and
Investigations Act 1996 which govern disclosure of material. These provisions are now sub-
stantially in force, with some exceptions, and are included in the disclosure material in this
Chapter (see p 25). They are now part of the 1996 Act, which is the authority for them.
The duty solicitor

The duty solicitor scheme is concerned to provide an emergency service to defendants
appearing in magistrates’ courts who might otherwise be unrepresented. Representation is
free. A duty solicitor can make bail applications, apply for adjournments and present pleas in
mitigation. Duty solicitor schemes are staffed by local solicitors in practice who are paid
hourly rates from the Legal Aid Fund.
Magistrates – sentencing powers

Unless there is a lower maximum for a given offence, the magistrates may only impose a cus-
todial sentence on an adult of up to six months unless that adult is convicted of two or more
either-way offences. In such a case the maximum becomes 12 months. The minimum sen-
tence is five days, although there is a power to impose detention for one day as a sentence or
for non-payment of a fine (see s 135 of the Magistrates’ Courts Act 1980). The common prac-
tice is to express the sentence in months, but when the provisions of the CJA 2003 come into
force (see below), a sentence will have to be expressed in weeks. The maximum fine that can
be imposed generally is £5,000. However, in certain cases, for example, under s 35 of the
Food Safety Act 1990 for the offence of selling food not of the nature or substance or quality
demanded, the maximum custodial sentence is six months but the maximum fine is £20,000.
For individuals under 18, the maximum fine is £1,000 and for those under the age of 14
it is £250.
In addition, it should be noted that if the magistrates are trying an either-way offence sum-
marily and feel that the circumstances are such that the defendant should be given a greater
sentence than can be given in a magistrates’ court, they may transfer the defendant to the
Crown Court for sentence under s 38 of the Magistrates’ Courts Act 1980. Further details are
given at the sentencing section which appears in Chapter 4.
The Criminal Justice Act 2003, as it comes into force, increases the magistrates’ general
sentencing powers from six months to 12 months in regard to any one offence and up to
65 weeks in regard to two or more offences to be served consecutively. The Secretary of
State’s power to increase these limits by order was not in the end enacted with the Act. It is
felt that this increased sentencing power will encourage magistrates to retain and hear more
either-way cases thus keeping them out of the Crown Court and within the cheaper regime of
the magistrates’ court.
..
EL_C02.qxd 3/26/07 10:39 AM Page 29
Civil jurisdiction
The magistrates and civil debt
The magistrates have power to make an order, on complaint, for the payment of any money
2
which is recoverable as a civil debt. On making the order the court may require immediate
payment or give time for payment or allow payment by instalments. If payment is not made
as required, the magistrates may issue a distress warrant under which the bailiff service may
enter the debtor’s premises and remove goods for sale in order to pay the debt.
Family proceedings
The magistrates also have a limited civil jurisdiction which includes what are known as
family proceedings hearing applications for matrimonial relief, such as maintenance orders
sought by women for themselves and /or children who do not initially opt for divorce on
breakdown of marriage. They can also deal with questions regarding the custody of children,
and so far as parents and other relatives are concerned, they can decide the place of residence
of a child and rights of contact with him or her. There is also power to order a violent spouse
to leave the home in order to protect the other spouse and children (if any). They may also
consent to the marriage of a minor of 16 or 17 years of age who is not a widow or widower,
where other relevant consents, e.g. those of parents, are not forthcoming. These family
matters are dealt with in separate branches of the magistrates’ court known as the family
proceedings court and family panels (see the Children Act 1989, s 92 and Sch 11). The
magistrates also deal with matters relating to the enforcement of the Council Tax and VAT.
Where a foreign state wants an alleged criminal living in England and Wales to be returned,
the request for extradition is heard under the provisions of ss 67 and 137 of the Extradition
Act 2003 by a district judge (magistrates’ court).
Appeals
Appeals from the magistrates in family proceedings are to the Divisional Court of the Family
Division. As regards criminal offences, appeal may be to the Crown Court or to the High
Court as follows:
(a) Crown Court. An appeal to the Crown Court may be made by the accused only, provided
he did not plead guilty. The appeal may be against conviction or sentence on law or fact and
no permission is required. If he pleaded guilty, he may appeal against sentence only. Appeals
against conviction and/or sentence take the form of a re-hearing. Where the appeal is against
conviction, all the evidence will be heard but, if it is against sentence the prosecution will
outline the facts of the case to the court, which will decide what the appropriate sentence is
after offering the defendant an opportunity to address the court in mitigation of sentence.
The Crown Court may confirm, reverse or vary the decision of the magistrates and can give
any sentence which may be heavier or lighter than that given by the magistrates but it must
be within the powers of the magistrates, e.g. in general a custodial sentence of up to six
months or a fine of up to £5,000. Defendants should therefore be informed that an appeal to
the Crown Court may result in the sentence being increased up to the maximum sentencing
powers of the magistrates who first dealt with the case.
On appeal to the Crown Court the judge will sit with two magistrates who did not partici-
pate in the hearing in the magistrates’ court.
(b) High Court. An appeal to the High Court may be made by either the accused or the prosecu-
tion by means of case stated. This means that the magistrates must set out in writing their
findings of fact together with the arguments put forward by the parties and their decision and
..
EL_C02.qxd 3/26/07 10:39 AM Page 30
the reasons for it. The appeal questions the decision of the magistrates on the ground that
it is wrong in law (Magistrates’ Courts Act 1980, s 111). Issues of fact should not be appealed
against by way of case stated ( James v Chief Constable of Kent, The Times, 7 June 1986). It is
available to a person who has pleaded guilty. The procedure for the appeal is not a re-hearing.
The appeal is decided after hearing legal arguments put forward by the parties on the relevant
points of law. If the lower court or the House of Lords (as the Constitutional Reform Act 2005
comes into force the Supreme Court) gives leave, there may be a further appeal to the House
of Lords, (which will become the Supreme Court as the CRA 2005 comes into force) but the
lower court must certify that the case raises a matter of law of public importance.
Proceedings by way of case stated by magistrates or the Crown Court are regulated by
the Supreme Court Act 1981, s 28A (becomes the Supreme Courts Act 1981). The High Court
is now given the task of dealing with case stated proceedings and is also given the necessary
powers to amend the stated case and to make any final orders on the application. In particu-
lar, it may reverse, affirm or amend the decision of the magistrates and may order a rehearing.
As regards the constitution of the High Court, for these appeals a case stated is heard by a
Divisional Court of Queen’s Bench and at least two judges must sit on the appeal. If their
opinions are divided, the appeal fails (Flannagan v Shaw [1920] 3 KB 96).
(c) Judicial review. Whenever a court, including, obviously, a magistrates’ court, acts with-
out jurisdiction, or fails to observe the rules of natural justice (see further Chapter 3) or
makes an important procedural error (as where there is inadequacy of disclosure of material
to the defence) any person affected, and obviously a defendant, may apply to the High Court
to review the decision of the magistrates and issue a quashing order, as it is called, to make
ineffective the decision of the magistrates (see further Chapter 3). These types of defects in a
magistrates’ court must be challenged by judicial review and not by case stated (R v Wandsworth
Justices, ex parte Read [1942] 1 All ER 56).
(d) The European Court. The magistrates may refer matters to the European Court. Thus, in
R v Marlborough Street Stipendiary Magistrate, ex parte Bouchereau [1977] 3 All ER 365, the magis-
trate indicated that he proposed making a recommendation for the deportation of B, but
it was said that the magistrate had no such power since B was a migrant worker protected by
Article 39 (now 33) of the Treaty of Rome. The magistrate decided to refer the matter to the
European Court under Article 234 (now 307) of the Treaty and this was held to be in order by
a Divisional Court which decided also that legal aid legislation allows a magistrates’ court to
order legal aid for the purposes of proceedings before the European Court of Justice.
(e) Rectification of mistakes by the magistrates themselves. Section 142 of the Magistrates’
Courts Act 1980 (as amended by s 26 of the Criminal Appeal Act 1995) provides an alterna-
tive to appeal to the Crown Court or High Court. The section gives magistrates the power
to re-open a case to rectify their mistake, regardless of the plea made by the defendant at the
relevant proceedings, but only if the defendant has been found guilty, not if he has been
acquitted. The power may be used, e.g., to deal with a sentence passed in excess of the court’s
powers and also where the defendant asks for a review of his sentence on the grounds that it
is too harsh. The prosecution or the defence may institute a review and it would seem that
the magistrates may do so of their own volition. The magistrates may vary, rescind or replace
a sentence imposed at the relevant proceedings.
An inspectorate
Part 5 of the Courts Act 2003 sets up an inspectorate known as Her Majesty’s Inspectorate of
Courts Administration. The inspectorate has power to inspect the system that supports the
carrying on of the business of all magistrates’ courts, county courts and the Crown Court.
..
EL_C02.qxd 3/26/07 10:39 AM Page 31
Youth courts
The magistrates also have a part to play in regard to children over 10 but under 14 and young 2
persons who are 14 or over but have not attained the age of 18. Criminal proceedings cannot
generally be brought against a person under the age of 10. For this purpose the magistrates sit
as a youth court. This court must sit in a different building or room from that in which other
courts are held or else must sit on a different day. The court consists of not more than three
magistrates who are drawn from a special panel of persons who need no longer be under
65 years of age and it is usual for one or more female magistrates to be present. The public
is excluded from these courts and there are strict controls on press reports. In particular, the
restrictions relate to not identifying the defendant and this may also be applied to other
juveniles concerned in the case, e.g. witnesses. The court also has power to order the
juvenile’s parent or guardian to attend. This applies also in the adult court and the Crown
Court where relevant. Youth courts have a range of sentences at their disposal including
custodial measures (see further Chapter 4). In general defendants under the age of 18 must
be dealt with in a youth court (but see further p 136).
The county court
The magistrates’ courts deal with most of the less serious criminal matters in this country.
At something like the same level, but dealing exclusively with civil cases, is the county court.
County courts were created by the County Courts Act 1846, to operate as the chief lower
courts for the trial of civil disputes, and a large number of cases are heard in these courts
annually. They are now governed by the County Courts Act 1984. Section references are to
that Act unless otherwise stated.
A county court is presided over by a circuit judge. The judge usually sits alone, though,
under ss 66 and 67, there is provision for a trial by a jury of eight persons in some cases, e.g.
where fraud, libel, slander, malicious prosecution or false imprisonment is alleged. The judge
is assisted by a district judge who acts as clerk of the court and may try certain cases. A dis-
trict judge may try:
n claims with a financial value of not more than £5,000 (or a larger sum if all parties consent
to allocation to what is known as the small claims track);
n matters relating to attachment of earnings orders so that a creditor with a judgment may
receive payment directly from the debtor’s employer through the payroll;
n matters relating to the appointment of receivers so that a judgment creditor can collect
rents from the debtor’s tenants;
n the conduct of case management conferences in multi-track cases;
n the approval of settlements out of court for minors and mental patient claimants;
n undefended cases.
Cases where the claim is not for a set amount (i.e. an unliquidated sum), as in a claim for
damages for the tort of nuisance (see further Chapter 21), where, unless the claimant states in
his particulars of claim that the amount is likely to exceed £5,000, it will be regarded as worth
less than that amount and will normally be allocated to a district judge for decision. There is
a right of appeal to a circuit judge from the decision of a district judge.
Assistant district judges may be appointed for carrying out the work of the court. Deputy
district judges may also be appointed as a temporary measure to dispose of business in the
..
EL_C02.qxd 3/26/07 10:39 AM Page 32
county court. An assistant district judge and a deputy district judge have the same powers as
the district judge. District judges, assistant district judges and deputy district judges are
appointed from persons who have a seven-year general advocacy qualification within the
meaning of the Courts and Legal Services Act 1990. (See ss 6–9 of the 1984 Act (as amended
by the Courts and Legal Services Act 1990).)
Jurisdiction
Generally
Under s 15(1), the county court has a virtually unlimited jurisdiction in most contract and
tort cases. There are some exceptions including, most importantly, cases of libel and slander
unless such cases are commenced in the county court by consent of the parties or having
been commenced in the High Court a particular case is transferred to a county court from the
High Court under s 15(2). In contrast to the above common law jurisdiction, the equity juris-
diction of the county court, e.g. in regard to matters concerning mortgages, has remained at a
maximum of £30,000 for many years.
Proceedings for a specified or unspecified sum of money in regard to a claim which does
not include a claim for death or personal injury must be commenced in the county court
unless the value of the claim is more than £15,000. It is likely to be tried there, though the
High Court would also have jurisdiction in respect of it. The procedure regarding the alloca-
tion of cases is dealt with in Chapter 5. However, the claimant’s solicitor knows at least that
the claim must commence in the county court.
If the proceedings include a claim for death or personal injury, a claim for less than
£50,000 must be commenced in the county court though, again, the High Court would also
have jurisdiction and allocation will decide ultimately in terms of where the trial takes place.
There is an exception in regard to medical claims which includes claims in respect of dental
and nursing treatment. Such proceedings can be brought in the High Court even if the claim is
less than £50,000. There is thus a remaining distinction between the High Court and the county court
which is that claims should not be brought in the High Court unless the above limits are exceeded.
Human rights jurisdiction

The county court has no jurisdiction to hear applications that Acts of Parliament or statutory
instruments are incompatible with the Convention on Human Rights (s 3 of the Human
Rights Act 1998) (see further Chapter 3), and transfer to the High Court would be required if
such a point arose in a county court case. County courts do have jurisdiction in other human
rights cases such as proceedings against education authorities and the police.
Choice of court
Where, as in the case of a claim for breach of contract or in tort not involving death or per-
sonal injury the value of the claim is, say, £40,000, the claimant has the choice of issuing the
claim in the High Court or the county court. Then, by reason of a Practice Direction to Part 7
of the Civil Procedure Rules 1998 (SI 1998/3132), a claim should be started in the High Court
if because of:
n the financial value of the claim and the amount in dispute; and/or
n the complexity of the facts, legal issues, remedies or procedures involved; and/or
n the importance of the claim to the public in general;
the claimant’s solicitor believes that the claim should commence in the High Court, then he
should commence it there.
..
EL_C02.qxd 3/26/07 10:39 AM Page 33
In summary, therefore, there is a presumption of trial in a county court but this presump-
tion can be rebutted:
n by the financial value of the claim in some cases (see above); and/or 2
n by one of the grounds mentioned above, such as complexity of facts or high value of the claim.
These matters are also taken into account when the court is considering the transfer of a case
from one court to another.
Territorial limits
The territorial limits of the county court have been largely swept away, but the following
material should be noted.
A claimant in a default action may sue out of any county court he wishes regardless of the
defendant’s place of residence or business or where the cause of action arose. A default action
is one where the only relief claimed is the payment of money, e.g. a liquidated sum such as
a debt for goods sold but not paid or an unliquidated sum such as a claim for damages for
personal injury. However, if in a liquidated claim the defendant files a defence, this will gener-
ally result in the case being transferred to the defendant’s home court and the defendant has
a right to apply for a transfer to his home court in unliquidated claims. In actions in which
there is a claim for relief other than the payment of money, e.g. a possession order for land or
the recovery of goods or an injunction to restrain a nuisance, the general rule is that the
claimant must bring his action in the court of the district where the defendant dwells or
carries on business, or that for the district in which the cause of action wholly or mainly
arose, and where land is involved, the action is generally brought in the court of the district
in which the land is situated. Under s 3 of the Courts and Legal Services Act 1990 the county
court has the same jurisdiction as the High Court to grant an injunction or a declaratory
judgment setting out the rights of the parties, in respect of, or relating to, any land or the
possession, occupation, use or enjoyment of any land. This jurisdiction applies only where
the capital value of the land or interest in land does not exceed £30,000.
Apart from this, a county court can give the same remedies as the High Court although
the orders of mandamus, certiorari and prohibition (now referred to as mandatory orders,
quashing orders and prohibiting orders respectively) are available only in the High Court
(see further Chapter 3). County courts are also prohibited – patent court apart – from granting
a search order or a freezing injunction (see further Chapter 18). A freezing injunction is an
order which restrains a party from moving his assets, for example, overseas so that they are
not available to meet any judgment made against him. A search order is an order requiring
the defendant to allow his premises to be searched by the agents of the claimant for docu-
ments or property. If the injunction or the order is asked for in a county court, the matter
must be heard by a High Court judge. This involves a temporary transfer to the High Court
after which the proceedings return to the county court.
The general jurisdiction of county courts and the procedure therein are governed by the
County Courts Act 1984, the Courts and Legal Services Act 1990 and the High Court and
County Courts Jurisdiction Order 1991 (SI 1991/724 (L5) ) (as amended by the High Court
and County Courts Jurisdiction (Amendment) Order 1999 (SI 1999/1014) ) and the Civil
Procedure Rules 1998 (SI 1998/3132). The latter are in the form of delegated legislation. In
general terms, the extent of the jurisdiction apart from contract and tort, is as follows:
Other jurisdictions
(a) Equity matters, e.g. mortgages and trusts where the amount involved does not exceed
£30,000, unless the parties agree to waive the limit. Under this heading would be found
requests for repossession orders by building societies against mortgage defaulters.
..
EL_C02.qxd 3/26/07 10:39 AM Page 34
( b) Actions concerning title to land, and actions for recovery of possession of land,
where the capital value of the land or interest in land does not exceed £30,000. There is
unlimited jurisdiction in cases involving residential tenancy security issues (see, e.g., s 40 of
the Housing Act 1988), or by agreement between the parties.
Proceedings under the Leasehold Reform Act 1967, the Leasehold Reform, Housing and
Urban Development Act 1993 and the Commonhold and Leasehold Reform Act 2002 are
also covered. These Acts give tenants of leasehold houses the right, in certain circumstances,
to acquire the freehold or an extended lease while the Act of 1993 (as amended and extended
by the 2002 Act) allows flat owners collectively to enfranchise, i.e. purchase the freehold of
the block and for individual flat owners to obtain a new lease if this is required as where,
e.g. collective enfranchisement is not required by all residents in the block. (See further
Chapter 22.)
(c) Bankruptcies. Here there is unlimited jurisdiction in terms of the value of the debtor’s
estate, though not all county courts have a bankruptcy jurisdiction. The appropriate court in
which to commence proceedings is defined in the Insolvency Rules 1986.
Normally it will be the court for the district in which the debtor has resided or carried on
business for the longest period during the previous six months. In the London Insolvency
District the court will be the High Court and proceedings will be issued out of the Bankruptcy
Registry which is part of the Chancery Division. Outside London it will be a county court
which has a bankruptcy jurisdiction for the relevant area.
Under s 375 of the Insolvency Act 1986 appeal from a first instance decision whether made
in the county court or by a Registrar of the High Court now lies to a single judge of the High
Court and from the decision of that judge lies with leave of the judge or the Court of Appeal
to the Court of Appeal. There is no further appeal to the House of Lords.
(d) Company winding-up. Where the paid-up share capital of the company does not exceed
£120,000, the county court of the district in which the company’s registered office is situated
has concurrent jurisdiction with the High Court, provided that the relevant county court has
a bankruptcy jurisdiction (ss 117 and 416 of the Insolvency Act 1986). A relatively small
number of petitions are issued in the county court.
(e) Probate proceedings, where the value of the deceased’s estate is estimated to be £30,000
or less. These proceedings could include the case where the court is being asked for a decree
confirming that a will is valid or invalid where it is alleged to have been made under duress.
In addition to the £30,000 monetary limit, only county courts in places where there are
Chancery District Registries can hear a case. There are, for example, such Registries in
Birmingham, Bristol, Cardiff, Leeds, Liverpool, Manchester, Newcastle-upon-Tyne and
Preston.
(f) Admiralty matters. For the avoidance of doubt, county courts have lost their Admiralty
jurisdiction. Admiralty proceedings, such as payment for salvage cases, must now be brought
in the High Court, i.e. Queen’s Bench Division.
(g) Matrimonial and family proceedings. The jurisdiction of county courts in matrimonial
causes is derived mainly from s 33 of the Matrimonial and Family Proceedings Act 1984, and
the Children Act 1989. The Civil Procedure Rules 1998 do not apply. Family proceedings are
governed by their own rules.
A county court designated by the Lord Chancellor as a ‘divorce county court’ has jurisdic-
tion in certain matters relating to any undefended matrimonial cause, but may try such a
cause only if further designated as a court of trial. Every matrimonial cause must be com-
menced in a divorce county court and is to be heard and determined there, unless transferred
..
EL_C02.qxd 3/26/07 10:39 AM Page 35
to the High Court, e.g. under s 39 of the 1984 Act (i.e. on the application of a party or on the
court’s own motion).
Thus, the divorce process generally takes place in the divorce county court. Divorce county
courts are now divided into two, i.e. the divorce county court and the Family Hearing Centre.
2
If in a divorce case where the parties have children an application is made for an order under
s 8 of the Children Act 1989 (e.g. a residence order settling the arrangements to be made as to
the person with whom the child is to live), then the s 8 application must be dealt with at a
family hearing centre by a nominated circuit judge. Otherwise, what is referred to as the Special
Procedure is used, whereby decrees in undefended cases are pronounced without hearing oral
evidence. This is the most usual method of disposing of these cases.
As regards cases concerning children, the coming into force of the Children Act 1989 has
reinforced the philosophy that children cases should be heard by a judiciary who by reason
of their experience and training are specialists in family work. Accordingly the Lord
Chancellor has, under the Courts and Legal Services Act 1990 with the agreement of the
President of the Family Division, nominated certain circuit judges to deal with family pro-
ceedings and child care cases. There are special arrangements in London where jurisdiction is
given to nominated district judges of the Family Division.
(h) Civil partnerships. There is now a class of county courts known as civil partnership pro-
ceedings courts. These have a similar status to divorce county courts. They derive from the
coming into force of the Civil Partnership Act 2004. In brief this allows homosexual and les-
bian couples to get rights similar to those of heterosexual married couples by registering their
partnership in a civil ceremony at a register office. These partnerships can be dissolved on the
grounds of unreasonable behaviour but not until after one year. Other grounds are separation
for two years with the agreement of both parties or, failing that, separation for five years or
more. These designated county courts will deal with dissolution proceedings and children of
the civil partners either adopted or from previous heterosexual relationships.
(i) Small claims. A major jurisdiction of the county court is in regard to small claims allocated
to what is known as the small claims track. The types of claims dealt with on this track are as
follows:
n straightforward claims where the financial value is not more than £5,000 (or a greater sum
if all parties consent to a small claims track allocation);
n cases which do not require a considerable amount of preparation;
n cases that will not lead to large legal costs since, in general, no costs are recoverable by the
parties one against the other. Each side pays its own costs (but see below).
A claimant may limit the claim to bring it within the financial limits of the small claims
track even if this is less than the proper value of the claim (see Khiaban v Beard [2003] 3 All
ER 362 – a ruling of the Court of Appeal).
As regards personal injury claims, there are special rules under which the financial limit of
the whole claim must not be more than £5,000 and that part of it which is for general damages,
i.e. pain and suffering, not more than £1,000. The rest of the £5,000 claim will be made up of
what are called special damages, e.g. loss of earnings. Claims by tenants against their land-
lords for an order to carry out repairs are a maximum of £1,000 for the necessary works plus a
further £1,000 for any additional damages, e.g. for inconvenience. Fast track proceedings are
not available where the tenant complains of harassment and/or unlawful eviction.
Small claims – involvement of lawyers and experts

Very few small claims are conducted by solicitors from the beginning of the case to the end.
The procedure is designed to allow a party to conduct his own case and assistance from the
..
EL_C02.qxd 3/26/07 10:39 AM Page 36
court is available. Initial advice from a solicitor is normally required in terms of the merits of
bringing or defending a claim. Some firms of solicitors will do this for a fixed fee for, say, an
hour’s consultation or less. No form of expert evidence is allowed in a small claims hearing
unless with the permission of the court.
The court may be prepared to allow expert evidence in the form of a report where, in a
claim for breach of contract, it is necessary to decide whether an article purchased failed
because of a breach of contract by the seller/defendant or because the claimant failed to follow
the seller’s instructions. An expert’s report may also be allowed where it might lead to the
parties settling the case.
Small claims – costs

Generally speaking, only the fixed costs of issuing the claim are recoverable from the losing
party. However, the court has a discretion to order payment of court fees, experts’ fees (not
exceeding £200 per report), travelling expenses and loss of earnings for the parties and any
witnesses up to £50 a day maximum. In addition, the court may penalise a party in costs
where he has ‘behaved unreasonably’ as in Wright v Ryder [1995] CLY 3985 where the defend-
ant had lied in relation to his involvement in a road traffic accident which was the subject
of the claim.
Small claims – the judiciary

Small claims are usually tried by a district judge with appeal to the circuit judge. A circuit
judge may consent to hear a small claim, though, if he does, appeal is to a High Court judge.
Small claims – appeal grounds
There are rather few appeals against small claims judgments. The reason for this is that appeal
can only be made on the grounds that:
n there is a serious irregularity affecting the proceedings; or

n the court has made a mistake of law.
Mistakes of law are unlikely, but if the district judge failed to take into account that a
guarantee of a loan had to be evidenced in writing (see Chapter 11), this would be a ground
of appeal to the circuit judge. As regards irregularity, a party may allege that he or she was not
given adequate time to cross-examine a witness. The amount of time for cross-examination is
fixed by the court before the hearing so that it is not difficult to see whether the time laid
down has not been allowed.
Costs and representation on small claims appeals

The ‘no costs’ rule does not apply on a small claim appeal. In addition, lay representatives
have no right of audience as they have on the initial hearing, though a party can still take his
own case as he could at the initial hearing.
Small claims and counterclaims

In deciding whether a case is heard on the small claims track, the value of any counterclaim
made by the defendant must be taken into account (see further Chapter 5). Thus, if the claim
is for £3,000 but there is a counterclaim for £8,000, the case is a fast-track case unless the
parties and the procedural judge at allocation agree otherwise.
Pre-trial review
The matter of a pre-trial review to consider the final programme for the trial is now part of
the new Civil Procedure Rules 1998 which deal with the allocation of a case to a track. These
rules are considered in Chapter 5. There is power to hold a preliminary hearing in small
claims track cases, but it is unlikely to be necessary since the issues are not normally complex
and district judges can fix a simple timetable for the case.
..
EL_C02.qxd 3/26/07 10:39 AM Page 37
( j) Patents county court. Part VI of the Copyright, Designs and Patents Act 1988 provides for
the setting up of patents county courts with a countrywide jurisdiction to hear and determine
proceedings relating to patents and designs and matters ancillary thereto. Concern about the
high cost of resolving patent disputes in the High Court led the Oulton Committee in its
2
report of November 1987 to recommend the creation of specialist county courts as a solution
to the problem. The Edmonton County Court was designated as the first patents county
court. The Patents County Court (Designation and Jurisdiction) Order 1994 (SI 1994/1609)
has established a patents county court at the Central London County Court and closed the
one at Edmonton. Other than this, a patents court is set up as part of the Chancery Division
of the High Court.
( k) Miscellaneous matters. The county court derives an important part of its jurisdiction
from social legislation, e.g. adoption of children, guardianship of infants, legitimacy, claims
other than those relating to employment, under sex, race and disability discrimination, and
the enforcement of legislation concerning landlord and tenant.
(l) Exclusive jurisdiction. Although in many matters the county court has concurrent juris-
diction with the High Court, there are certain matters over which the county courts have
exclusive jurisdiction so that actions concerning them cannot be commenced in the High
Court: e.g. all regulated consumer credit agreements or hire agreements. Section 2 of the
Consumer Credit Act 2006 removes the financial limit for the regulation of consumer
credit and consumer hire agreements. Formerly, it was only where the credit provided or
the hire payments did not exceed £25,000 that these agreements were regulated. Under the
2006 Act all such agreements are regulated and the county court has exclusive jurisdiction
to hear disputes.
The earlier rules giving the county court exclusive jurisdiction to open what were called
‘extortionate credit bargains’ have been replaced under the 2006 Act by rules relating to
‘unfair relationships’ between debtors and creditors. The county court has exclusive juris-
diction in these proceedings. The court is given a number of powers to deal with unfairness,
for example to require the creditor to repay in whole or in part any sum paid by the debtor
or a guarantor by reason of the unfair relationship.
Furthermore, where the lender on mortgage is seeking to take possession of land and the
mortgage includes a dwelling house and no part of the land is in Greater London, the county
court has exclusive and unlimited jurisdiction (County Courts Act 1984, s 21, as amended).
In addition, the Attachment of Earnings Act 1971, s 1 gives the county court alone the power
to order attachment of earnings for ordinary civil debt.
Enforcement of judgments
As regards the enforcement of judgments, the High Court and County Courts Jurisdiction
(Amendment) Order 1999 (SI 1999/724) provides that county court judgments for the pay-
ment of sums of money of £5,000 or more must be enforced, e.g. by procedures leading to
execution on property, as by obtaining a distress warrant to allow bailiffs to take the defend-
ant’s moveable property in payment, in the High Court and may be enforced in the High
Court if they are for £600 or more (see SI 1996/3141). Below that they must be enforced in
the county court.
In the case of county court judgments of £600 or more but less than £5,000, the judgment
creditor can choose whether to issue execution in the High Court or the county court.
The advantage of proceeding in the High Court where there is a choice is that the judg-
ment will attract interest under the Judgments Act 1838 once it has been registered in the
High Court. Judgments for less than £5,000 do not attract interest in the county court unless
..
EL_C02.qxd 3/26/07 10:39 AM Page 38
the enforcement is in connection with a debt under the Late Payment of Commercial Debts
(Interest) Act 1998 (see further Chapter 18).
Appeal
In the usual case of a small claim the hearing will be before a district judge. There is an appeal
to the circuit judge. If the circuit judge dismisses the appeal but without an oral hearing, the
appeal from the circuit judge is to a High Court judge and there is no further right of appeal.
If the circuit judge dismisses the appeal following an oral hearing, there is a further appeal to
the Court of Appeal. This is known as a ‘second appeal’ and is granted sparingly.
Where a small claim allocated to the small claims track is heard (exceptionally) by a circuit
judge, appeal is to the High Court with a second appeal to the Court of Appeal.
What is meant by permission?

Permission may be granted either by the lower court at the hearing at which the decision to
be appealed was made or by the appeal court. If the appeal court refuses an appeal without an
oral hearing because no sufficient ground is shown in the notice of appeal, a request may be
made for an oral hearing. If at that oral hearing the appeal court refuses permission to appeal,
then no further right of appeal exists and that brings the matter to a close.
Alternative dispute resolution (ADR)

The Civil Procedure Rules specifically recognise the advantages of ADR. This will receive a
more extended treatment in Chapter 5. Mechanisms include mediation where a neutral inter-
mediary encourages the parties to reach a settlement using a kind of ‘shuttle diplomacy’
between the parties. There is also conciliation which is similar but the conciliator is more
pro-active and may put forward the terms of a possible settlement. Under the Civil Procedure
Rules the court will encourage ADR and may stop proceedings for this to be considered but
cannot enforce ADR on the parties unreasonably. If one of the parties to the dispute declines
unreasonably to co-operate, the court may take this into account when awarding costs.
Dunnett v Railtrack plc, 2000 – Rejection of ADR: costs refused to successful

party (5A)
Online court service: money claims online (MCOL)

A website introduced by the Court Service allows undefended debt claims to be processed
online without the claimant or defendant having to appear in court.
The site can deal with claims of up to £100,000 for all kinds of debt repayment from
rent arrears and hire purchase payment to suppliers of goods and services who have not
been paid.
Under the system the claimant registers initially by creating a password and typing in
details of the money owed. The court fee is automatically calculated and can be paid online
by credit card.
The claimant can then check the progress of the case and whether the defendant has filed a
defence at any time. The claimant need not at any stage collect the forms from the court or
even download them from the court website. Any defence of a claim has to be filed in person
or by post which will then lead to a trial.
..
EL_C02.qxd 3/26/07 10:39 AM Page 39
The website can be accessed at www.hmcourt-service.gov.uk/mcol/index-htm, where

you can set out your claim to start the process in not more than 1,080 characters including
spaces and punctuation.
Fortunately the MCOL screen has a character counter. The claim is issued through the
2
county court at Northampton.
Failure to submit a defence leads to judgment in favour of the claimant without trial so that
the judgment can be enforced through the bailiff service (see Chapter 5: enforcing a judgment).
The Crown Court
The Crown Court is a superior court of record created by the Courts Act 1971. The Crown
Court system replaced Courts of Assize and Quarter Sessions. It deals in the main with crim-
inal work.
Classification of Crown Court business

For the purposes of trial in the Crown Court, offences are classified as follows:
Class 1 (main offences): (a) treason; (b) murder; (c) genocide; (d) torture and hostage taking;
(e) offences under the Official Secrets Acts; (f ) manslaughter; (g) soliciting, incitement,
attempt or conspiracy to commit any of the above offences.
Class 2. In summary, these are rape, including oral penetration, and various forms of sexual
abuse of children under 13 or with mental disorders, and family sex (formerly incest), such as
sexual intercourse between a father and his daughter, though the definition is wider than this
and covers intercourse between blood relatives and adoptive parents and those they have
adopted.
Class 3. These are all other offences not listed in classes 1 or 2, e.g. wounding or causing
bodily harm.
The Class 2 and 3 offences include soliciting, incitement, attempt or conspiracy to commit
the main offence.
Allocation of business to judges

Cases in Class 1 can only be tried by a High Court judge, or a circuit judge or deputy circuit
judge, provided that in all cases, except attempted murder, such judge is authorised by the
Lord Chief Justice to try murder cases or in the case of attempted murder to try murder or
attempted murder cases and also that the presiding judge (see Chapter 3) has released the
case for trial by such a judge.
Cases in Class 2 can be tried by a High Court judge, a circuit judge or deputy High Court
judge or deputy circuit judge or a recorder, provided that in all cases such judge is authorised
by the Lord Chief Justice to try Class 2 offences and the case has been assigned to the judge
by or under the direction of the presiding judge.
Cases in Class 3 can be tried by a High Court judge or, in accordance with guidance given
by the presiding judge, a circuit judge, a deputy circuit judge or a recorder. A case in Class 3
should not be listed for trial by a High Court judge except with the consent of the presiding
judge. The functions of a recorder can be carried out as required by an assistant recorder.
..
EL_C02.qxd 3/26/07 10:39 AM Page 40
Involvement of magistrates on appeals from magistrates’ courts

Appeals to the Crown Court from magistrates’ courts are heard by a circuit judge or an experi-
enced recorder or deputy circuit judge approved by the presiding judge for the purpose. In
addition, between two and four magistrates sit with the judge or recorder. Where a judge of
the High Court, circuit judge, or recorder, sits with magistrates, he or she presides and:
(i) the decision of the Crown Court may be a majority decision; and
(ii) if the members of the court are equally divided, the judge of the High Court, circuit
judge, or recorder shall have a casting vote (Supreme Court Act 1981, s 73(3) , which
becomes the Senior Courts Act 1981 as the CRA 2005 comes into force).
Section 79 of the Access to Justice Act 1999 removes the former provision in the Supreme
Court Act 1981 (see above) that where the Crown Court sits on the hearing of committal pro-
ceedings for sentence from the magistrates’ court the court must be composed of magistrates
as well as the Crown Court judge. Now a judge can deal with a committal for sentence without
magistrates, and administrative overheads are reduced and time to make appointments with
magistrates is saved. The main situation in which magistrates will sit with a Crown Court judge
is thus where that court hears an appeal following a trial and conviction in a magistrates’ court.
Appeal from the Crown Court: defendant

In the case of a trial on indictment, there is an appeal by the defendant only against convic-
tion and/or sentence, though leave of the Court of Appeal (Criminal Division) is required
before that court will hear the appeal, unless the trial judge has, in each case, issued a
certificate of fitness for appeal. The Attorney-General may ask the Court of Appeal to clarify
a point of law in a case and may refer cases to the Court of Appeal where the sentence is
unduly lenient. These matters are further considered when dealing with the Court of Appeal.
Where the Crown Court has heard an appeal from magistrates, there is a further appeal to the
High Court by way of case stated by either the prosecutor or the defendant on a point of law
or excess of jurisdiction.
Appeal from the Crown Court: prosecution

The Criminal Justice Act 2003 gives the prosecution a right of appeal to the Court of Appeal.
The defendant has a right of appeal at the end of the trial and sentence (as described above)
but the prosecution had no equivalent right of appeal against the decision of a judge to stop
the trial. Part 9 (ss 57–74) of the CJA 2003 corrects the imbalance by introducing a prosecu-
tion right of appeal against a ruling of a Crown Court judge that has the effect of terminating
the trial either at a pre-trial hearing or during the trial at any time up to the conclusion of the
prosecution evidence. Such a ruling could be that there is no case to answer.
The judge or the Court of Appeal must give leave to appeal. The judge will decide, accord-
ing to the circumstances of the case, whether the appeal will follow an expedited route and
if so adjourn the trial until the appeal is concluded or a non-expedited route in which
case where any jury has been empanelled it may be discharged. In any case the judicial ruling
terminating the trial or a decision to acquit the defendant will not take place while the prose-
cution is considering an appeal or if an appeal is required until the conclusion of the appeal
or its abandonment. When making an appeal the prosecution must agree to the acquittal of
the defendant for the offence(s) concerned should the appeal not proceed or the outcome is
that the proceedings against the defendant should not continue.
The Court of Appeal may confirm, reverse or vary the ruling that is the subject of the
appeal and can order the acquittal of the defendant on the offence(s) involved. If it reverses
..
EL_C02.qxd 3/26/07 10:39 AM Page 41
or varies the judge’s ruling, the Court of Appeal may, if it is thought to be in the interests of
justice, order that the proceedings in the Crown Court should continue or order a fresh trial.
The prosecution and the defence may appeal to the House of Lords (Supreme Court from 2009,
as the CRA 2005 comes into force) on a point of general public importance.
2
The CJA 2003 provides for reporting restrictions on the proceedings relating to the appeal
and the appeal itself until the trial is concluded. The object is to ensure that if the appeal is
successful matters prejudicial to the trial are not reported. Failure to observe the restricted
reporting rules is a criminal offence punishable by fine.
Judicial review
Decisions taken at a trial on indictment in the Crown Court are not subject to judicial review
(R v Harrow Crown Court, ex parte Perkins [1998] Current Law 96).
Jurisdiction
All indictable offences are triable in the Crown Court, as are either-way offences committed
(currently) for trial by magistrates. An indictment is a formal statement of a serious crime
prepared for a trial by jury. The Court also determines questions of bail and legal aid, and
hears appeals from magistrates and committals for sentence from the magistrates (see p 28).
It also hears appeals from youth courts and for this purpose forms a youth appeals court. This
consists of a circuit judge plus two magistrates drawn from the youth court panel and chosen
so that one is a man and one a woman.
Judge-only trials
Sections 44–50 of the Criminal Justice Act 2003 make provision for trials on indictment
without a jury. The Act permits the prosecution in the Crown Court to apply to the court to have
the trial heard by a judge sitting alone. The prosecution may make an application to the court
for a judge-only trial where the case is likely to be affected by jury tampering, which is a real
and substantial risk. Further details of judge-only trials appear in Chapter 4: Criminal procedure.
Section 43, which provides for judge-only trials in complex fraud cases, will not now be
brought into force but the government is, at the time of writing, contemplating further
legislation.
The Central Criminal Court

Before leaving the subject of the Crown Court, special mention should be made of the
Central Criminal Court, otherwise referred to as the ‘Old Bailey’. This court continues as a
Crown Court sitting in the City of London. The judiciary is the same as that found in any
other Crown Court, with the addition of the Recorder of London and the Common Serjeant,
which is a special judicial office for London.
The High Court – generally

Under s 4 of the Supreme Court Act 1981 (as amended by Sch 4, para 117 of the CRA 2005,
which is in force) the High Court consists of the Lord Chief Justice, the President of the
..
EL_C02.qxd 3/26/07 10:39 AM Page 42
Queen’s Bench Division, the President of the Family Division, the Chancellor of the High
Court and not more than 108 justices known as puisne judges (pronounced ‘puny’). The
puisne judges of the High Court are styled ‘Judges of the High Court’. The number of puisne
judges may be increased by Order in Council, the latest being SI 1999/3138 which increased
the number of puisne judges from 98 to 106, mainly in anticipation of the increase of
work expected to come from the Human Rights Act 1998. Appointment is from those with
a 10-year High Court qualification, i.e. from those who have had a right of audience (or
advocacy) in relation to all proceedings in the High Court for at least 10 years. Also eligible are
circuit judges who have held that office for at least two years (s 10(3) of the 1981 Act as
amended by s 71 of the Courts and Legal Services Act 1990).
The CRA 2005, Sch 11, para 1 will, as it comes into force, rename the Supreme Court
Act 1981 as the Senior Courts Act 1981.
The Queen’s Bench Division has the largest staff, generally between 60 and 70 puisne
judges. The court is presided over by the President of the Queen’s Bench Division. As regards
jurisdiction, every type of common law civil action, e.g. contract and tort, can be heard by
the Queen’s Bench Division at the Royal Courts of Justice in the Strand. In addition, the
judges of this division staff the Crown Court and sit in the Court of Appeal (Criminal
Division) as well as the Divisional Court of Queen’s Bench and the Central Criminal Court.
Admiralty business is now assigned to a separate court called the Admiralty Court within the
Queen’s Bench Division. The same is true of commercial business which is heard by a separ-
ate court called the Commercial Court within the Queen’s Bench Division. The Commercial
Court also provides an arbitration service (see below).
The Chancery Division currently has 17 puisne judges and is presided over by the
Chancellor (a new post under the CRA 2005). Company business is assigned to a separate
court called the Companies Court within the Chancery Division. Apart from company work,
the Chancery Division deals with partnership matters, mortgages, trusts, revenue matters,
rectification of deeds and documents, the administration of estates of deceased persons and
contentious probate. The bulk of the bankruptcy work of the Chancery Division is performed
by Registrars in Bankruptcy who deal with cases arising in the London insolvency district,
provincial bankruptcies being dealt with by the local county court. The Patents Court forms
part of this Division and deals with cases which are outside the jurisdiction of the patents
county court.
The Family Division currently has 19 puisne judges and is presided over by the President of
the Family Division. The court deals with all aspects of family law including family property
and children in terms for example of adoption, guardianship and wardship. A more recent
acquisition of jurisdiction arises under the Human Fertilisation and Embryology Act 1990
where the Family Division may, e.g., make an order providing for a child to be treated in law
as the child of the parties to a marriage if the child has been carried by a woman other than
the wife as a result of the placing in her of an embryo (s 20). All High Court business under
the Child Support Act 1991 goes to the Family Division.
The Family Division has acquired jurisdiction under the Gender Recognition Act 2004. This
Act aims to provide transsexual people with legal recognition in their acquired gender. This
recognition follows from the issue of a full gender recognition certificate by the Gender
Recognition Panel. The Panel consists of legal members and medical members. Before issuing
a certificate, the Panel must be satisfied that the applicant has, or has had, gender dysphoria
and has lived in the acquired agenda throughout the preceding two years and intends to con-
tinue to live in that gender until death.
An applicant may appeal to the Family Division under s 8 of the 2004 Act on a point of law
where the Panel has rejected the application.
..
EL_C02.qxd 3/26/07 10:39 AM Page 43
Divisional courts
Each of the three divisions of the High Court has divisional courts. These are constituted by
not less than two judges. 2
(a) Divisional Court of Queen’s Bench. This court has a supervisory jurisdiction under
which it exercises the power of the High Court to discipline inferior courts and to put right
their mistakes by means of judicial review through mandatory orders, prohibiting orders and
quashing orders (formerly the orders of mandamus, prohibition and certiorari). When dealing
with applications for these orders, the court is designated the Administrative Court.
Under s 28A of the Supreme Court Act 1981, the court has jurisdiction in cases stated and
habeas corpus applications to the High Court and in some cases these functions may be car-
ried out by a single judge of that court.
( b) Divisional Court of the Chancery Division. This court hears appeals in bankruptcy
cases from county courts outside London, the Bankruptcy Court of the Chancery Division
hearing bankruptcy appeals from London.
(c) The Divisional Court of the Family Division. This court hears appeals from magistrates’
courts in family proceedings.
The Commercial Court

Since 1964 the High Court has operated a Commercial Court. Section 6 of the Supreme Court
Act 1981 now constitutes, as part of the Queen’s Bench Division, a Commercial Court for the
trial of causes of a commercial nature, e.g. insurance matters. The judges of the Commercial
Court are such High Court judges as the Lord Chief Justice may, after consulting the Lord
Chancellor, from time to time nominate to be Commercial judges. They are, in practice,
drawn from those who have spent their working lives in the commercial field.
They combine the general work of a Queen’s Bench Judge with priority for commercial
cases. The Act merely continues formal independence to the Commercial Court. Commercial
litigation has since 1895 been dealt with in the Queen’s Bench Division on a simplified pro-
cedure and before a specialist judge, the intention being to overcome the reluctance of those
in business, who prefer the privacy of arbitration, to resort to the machinery of the courts.
Two specific steps were proposed in the Administration of Justice Bill 1970 to attract such
customers: first a power was to be taken to allow the court to sit in private and to receive
evidence which would not normally be admissible in an ordinary court, and second, High
Court judges were to be allowed to sit as arbitrators. The first of these proposals was rejected
by the House of Commons at the Report Stage but the second was passed into law and is now
to be found in s 93 of the Arbitration Act 1996 which enables a judge of the Commercial
Court to take arbitrations. Before doing so he must obtain clearance from the Lord Chief
Justice. However, given their court commitments it is unlikely that a commercial judge would
be made available. Arbitrators are most often experts familiar with the industry or commer-
cial area in which the dispute has arisen.
Thus, although in theory the court has no wider power than other courts of the Queen’s
Bench Division, there is, in practice, a general discretion for departures in procedure and
admission of evidence where the parties consent or where the interests of justice demand it
or where it is necessary to expedite business. The power to hold hearings in private is
restricted, but s 12 of the Administration of Justice Act 1960 gives a power which could be
..
EL_C02.qxd 3/26/07 10:39 AM Page 44
used if, for example, trade secrets were involved. Commercial cases may be tried by a judge
alone, or by a judge and a jury. It was once a special jury in that it consisted of persons who
had knowledge of commercial matters. An ordinary jury is now used since s 40 of the Courts
Act 1971 abolished special juries.
Where a judge of the Commercial Court is acting perhaps rarely as an arbitrator, he sits in
private and in any place convenient to the parties. There is no requirement for such arbitra-
tions to take place in the law courts. The conduct of the hearing should be as informal as any
other arbitration. In addition, the award is made privately to the parties and not published
like a judgment.
The Commercial Court sits in London and there are separate mercantile lists in Bristol,
Birmingham, Cardiff, Leeds, Manchester, Liverpool and Newcastle for cases involving com-
mercial transactions. The Commercial Court publishes a ‘Guide to Commercial Court
Practice’ which gives guidance on matters of practice in that court.
Practice Statements encourage the use of alternative dispute resolution in commercial
cases, particularly where the costs of conventional litigation are likely to be wholly dis-
proportionate to the amount at stake. The Clerk to the Commercial Court keeps a list of
individuals and bodies that offer mediation, conciliation and other ADR services (see further
Chapter 5).
Additionally, of course, the Civil Procedure Rules 1998 encourage the use of ADR in all civil
disputes.
The Companies’ Court

This is really a court of the Chancery Division where company matters are tried before a
single judge whose special concern is with company work. The work of the court is divided into
company liquidation proceedings, and other company matters.
The Bankruptcy Court

The bulk of the bankruptcy work of the Chancery Division is performed by Registrars in
Bankruptcy who deal with cases arising in the London insolvency district, provincial
bankruptcies being dealt with by those county courts with bankruptcy jurisdiction.
The Court of Protection

The present Court of Protection is concerned to protect and administer the property and
effects of those who are by reason of mental disorder not able to manage these matters for
themselves. In practice, the Public Trustee’s Office carries out the administrative functions of
the Court of Protection.
Part VII of the Mental Health Act 1983 deals with Court of Protection matters. The judges
of the Chancery Division are nominated under s 93(1) to act. There is also a Master and two
Assistant Masters nominated under s 93(4) who carry out the work of protection matters.
Very little work is in practice referred to a nominated judge.
The usual remedy is to appoint a receiver to look after the patient’s property and affairs.
It is usual for a near relative, e.g. a spouse, to apply and be appointed.
..
EL_C02.qxd 3/26/07 10:39 AM Page 45
Reform
Section 45 of the Mental Capacity Act 2005 will, as it comes into force, set up a new superior
court also called the Court of Protection. It has been given a comprehensive jurisdiction over 2
the health, welfare and financial affairs of those who lack capacity. The new court has been
given the same powers, rights, privileges and authority as the High Court. The existing Court
of Protection, which dealt only with the patient’s property and affairs, is abolished by the
2005 Act. The new court may make decisions on behalf of the patient and where a more gen-
eral supervision of a patient’s affairs is required may appoint persons called deputies. The
appointment of receivers is abolished by the 2005 Act.
The jurisdiction of the court will be exercised by one judge who is either:
n the President of the Family Division;

n the Chancellor of the High Court;
n a puisne judge of the High Court; or
n a circuit judge or district judge.
There will be a President of the Court of Protection and a Senior Judge of the Court of
Protection, the latter having administrative responsibilities.
Technology and Construction Court
This court was formerly known as the Official Referees’ Court. A claim before the court is
one which involves matters that are technically complex, e.g. cases involving civil or
mechanical engineering, building, other construction work and professional negligence
claims in those fields. Allocation to this court is equivalent to allocation to the multi-track
and there is no need for normal allocation procedures (see further Chapter 5). The judges are
circuit judges who sit as judges of the High Court. It is comparable in importance with the
Commercial Court.
Restrictive practices
The Restrictive Practices Court was abolished by the Competition Act 1998 which came into
force on 1 March 2000. Further details of enforcement of the current competition laws con-
tained in the Competition Act 1998 and the Enterprise Act 2002 appear in Chapter 16.
However, for enforcement of domestic (UK law) infringements the Office of Fair Trading
and trading standards departments of local authorities have power to ask the High Court or
county court for an enforcement order against the trader to stop the infringement. If the
trader fails to do so, he or she is in contempt of court and can be fined or imprisoned for
up to two years. Those suffering loss from a prohibited practice can make a claim to the
Competition Appeals Tribunal (CAT) for damages. Claims by way of class actions can be
brought on behalf of two or more consumers by, e.g., consumers’ associations. Appeal from
the CAT is to the Court of Appeal (Civil Division).
A new s 58A of the Competition Act 1998 (inserted by the Enterprise Act 2002 s 20) makes
clear that there may also be proceedings before a civil court in which damages may be
claimed, e.g. in relation to a breach of the prohibitions in the 1998 Act.
..
EL_C02.qxd 3/26/07 10:39 AM Page 46
The Court of Appeal – generally

The Court of Appeal consists of two divisions:
(a) the Civil Division which exercises the jurisdiction formerly exercised by the former
Court of Appeal; and
(b) the Criminal Division which exercises the jurisdiction formerly exercised by the Court
of Criminal Appeal.
Appeals up to the Civil Division

Consideration has already been given to the route of appeal in small claims cases. It is conveni-
ent to consider the route of appeal in fast-track and multi-track and specialist cases in terms
of the track and the judiciary involved bearing in mind that what are referred to as ‘second
appeals’ are much restricted.
Appeals from fast-track claims

n Where the decision is made by a district judge the circuit judge is the appeal court.
Permission to appeal is required for such an appeal. It should be noted that when permis-
sion to appeal is used in this text it means that permission may be given by the court
against whose decision the appeal is to be made or to the court to which the appeal will be
made. Permission of the court making the decision should be asked for first, and if there is
failure to do this or that court refuses permission, the permission of the court to which the
appeal will be made should be sought.
n Where a circuit judge dismisses an appeal at a hearing the Court of Appeal is the appeal
court. Such an appeal is a ‘second appeal’. Where a circuit judge refuses permission to
appeal to him without a hearing, a request may be made for an oral hearing. It at the
oral hearing the circuit judge refuses permission to appeal to himself, no further right of
appeal exists.
n Where a circuit judge hears a fast-track appeal from a district judge, an appeal from the
circuit judge is to the Court of Appeal. Permission is required and such an appeal is a
‘second appeal’.
n Where a circuit judge himself hears a fast-track claim, appeal is to a High Court judge.
Permission is required for such an appeal. Where the High Court refuses permission with-
out a hearing, a request may be made for an oral hearing. If at the oral hearing permission
is refused, no further right of appeal exists.
n Where a High Court judge hears a fast-track appeal from a circuit judge, the Court
of Appeal is the appeal court. Permission is required but such an appeal is a
‘second appeal’.
Appeal in multi-track claims and specialist proceedings, e.g. patents court

business
n Where a district judge or circuit judge in a county court or a master (see Chapter 3) or a
High Court judge in the High Court gives a final decision in a multi-track claim, the Court
of Appeal is the appeal court. A final decision is one that disposes of the issue in the case
..
EL_C02.qxd 3/26/07 10:39 AM Page 47
or part of it, e.g. as by deciding liability or the assessment of damages or both of these
matters. The same route of appeal applies in specialist proceedings such as patents, com-
mercial court business, Technology and Construction Court business and proceedings
under legislation relating to registered companies. Permission is required for these appeals.
2
n Where the decision is not final as where e.g. it relates to costs or a case management deci-
sion or a claim to strike out an action so that a trial will not take place the route of appeal
depends upon the judge whose decision is being appealed as follows:
Note: under the CRA 2005, as it comes into force, the second appeal from a decision of a High Court
judge will be to the Supreme Court.
Permission is required for the above appeals. Furthermore, if the appeal court refuses per-
mission without a hearing, a request may be made for an oral hearing. If there is refusal at
that hearing, no further right of appeal exists. Where the appeal is to the Court of Appeal,
permission to appeal is only from the Court of Appeal itself. A strict test must be satisfied, i.e.
that the Court of Appeal considers that the second appeal raises an important point of legal
principle or practice or that there is some other compelling reason for the Court of Appeal
to hear it.
Family proceedings
The circuit judge is the appeal court where the decision was made by a district judge sitting in
a county court. The Court of Appeal is the appeal court where the decision is that of a circuit
judge sitting in the county court. The same is true where the decision is that of a High Court
judge or a circuit judge or High Court judge on appeal from a district judge.
Insolvency proceedings
A single High Court judge is the appeal court from a bankruptcy or other insolvency decision
by a district judge or a circuit judge in a county court and permission is not required. Appeal
from the single judge lies to the Court of Appeal with the permission only of the Court of
Appeal. Where the decision is by a High Court judge but not on appeal, the Court of Appeal
is the appeal court. Permission is required either from the High Court judge or the Court
of Appeal.
..
EL_C02.qxd 3/26/07 10:39 AM Page 48
Leapfrog appeals
Under ss 12 and 13 of the Administration of Justice Act 1969 an appeal from a High Court
judge may be made to the House of Lords (under the CRA 2005, as it comes into force, the
Supreme Court), if all the parties consent and the judge gives a certificate to the effect that
the case raises a point of law of public importance relating wholly or mainly to a statute or
statutory instrument. The House of Lords (going forward the Supreme Court), must also give
leave. This procedure is most often used in tax and patent appeals where the meaning of
statutes is often very involved.
Appeals from tribunals

The Court of Appeal hears appeals from a number of tribunals, e.g. the Employment Appeal
Tribunal and the Lands Tribunal (see further Chapter 3). It also hears appeals from the Com-
petition Appeal Tribunal in matters arising from competition law (see further Chapter 16).
Permission to appeal
As we have seen, the main test for granting permission to appeal is whether the appeal has
any real prospect of success. This would not necessarily apply to leapfrog appeals where
matters of public importance are involved.
What the Court of Appeal may do

The court may, on appeal, uphold or reverse the judge below or substitute a new judgment.
Exceptionally, it may order a new trial as it did, e.g. in Gilberthorpe v News Group Newspapers
[1995] 2 CLY 3885 where fresh evidence had become available. A retrial was also ordered
in Gabriel v Kirklees Metropolitan Council (2004) The Times, 12 April, where on appeal from
the county court in a case of alleged negligence it appeared that the judge had not made
thorough findings of fact, so that her judgment for the defendants was flawed.
Hearing the appeal

Under the provisions of the Access to Justice Act 1999 the Court of Appeal (Civil Division)
may consist of any number of judges depending on the importance and complexity of the
case. Where there are two judges and they cannot agree, the case may have to be re-argued
before a new court of three or the original two plus a third. Some appeals are heard by a
single judge.
Reopening a final judgment

The Court of Appeal ruled in Taylor v Lawrence (Appeal: Jurisdiction to Reopen) (2002) The
Times, 8 February that it had a power to re-open appeal proceedings in order to avoid real
injustice in exceptional circumstances. Lawrence asked the Court of Appeal to re-open an
appeal relating to a boundary dispute which he had brought and which had been dismissed.
He alleged bias in a judge where the solicitor for the claimant Taylor had, it later appeared,
been engaged to amend a will for the judge the day before judgment was announced. The
court ruled that it had jurisdiction to re-open the appeal but declined to do so in this case
because it did not accept that the judge would have been influenced by this.
Comment We are here considering the rehearing of the appeal and not the ordering of a
fresh trial.
..
EL_C02.qxd 3/26/07 10:39 AM Page 49
The judiciary
The work of the Civil (and Criminal) Division is currently carried out by a maximum of 37
Lords or Lady Justices of Appeal (SI 2002/2837). This number can be increased by statutory 2
instrument. The court is presided over by the Master of the Rolls, who is appointed by the
Prime Minister, who is in turn advised by the Lord Chancellor. The qualification for a Lord
or Lady Justice of Appeal is a 10-year High Court qualification, i.e. having had a right of
audience in relation to all proceedings in the High Court for at least 10 years or having
been a puisne judge (which is the normal route) (Supreme Court Act 1981 (going forward the
Senior Courts Act 1981), s 10(3)(b), as amended). It should be noted that also included in the
judiciary in the Civil Division are, under s 2 of the Supreme Court Act 1981 (going forward
the Senior Courts Act 1981) (as amended by the CRA 2005), any person who was Lord
Chancellor before 12 June 2003, the Lord Chief Justice, the Master of the Rolls, the Presidents
of the Queen’s Bench Division and the Family Division and Chancellor of the High Court.
Currently, the Law Lords are included (going forward Judges of the Supreme Court). The Lord
Chief Justice may also request judges of the High Court to sit. However, under s 56 of the
Supreme Court Act 1981 (to be renamed (see above)) a judge may not sit on an appeal to the
Court of Appeal if he sat at the hearing of the case in the lower court. This applies to both
civil and criminal cases.
The Criminal Division
The work of the Criminal Division is carried out by the Lord Chief Justice and the same Lord
and Lady Justices of Appeal, who also sit in the Civil Division. It should also be noted that
the Lord Chief Justice may ask any judge of the High Court to sit in the Criminal Division.
The normal court consists of three judges but sometimes, though rarely, a full court of five
will sit if the case is a difficult one. Under s 55 of the Supreme Court Act 1981 (to be renamed
(see above)) a court of two may sit to deal with appeals against sentence. A single judge may
carry out some functions, e.g. grant leave to appeal against conviction or sentence (Criminal
Procedure Rules 2005, rule 68). The success rate in terms of the ordinary prisoner seeking
leave to appeal against conviction is negligible, though thousands of appeals against sentence
are heard annually.
As regards the Criminal Division, it should be noted that following the bringing into force
of s 52 of the Criminal Justice and Public Order Act 1994 senior circuit judges may sit as
judges of that division but not of the Civil Division. Only one circuit judge can sit as part of a
full court. Circuit judges cannot act as single judges and could not sit as part of a court
reviewing a case tried by a High Court judge in terms of conviction or sentence. This restric-
tion is removed by Sch 10 to the Courts Act 2003. The request to sit is made by the Lord
Chief Justice.
Jurisdiction – generally
The Criminal Division hears appeals from the Crown Court against conviction and sentence
and may dismiss or allow the appeal or order a new trial. Further details appear in the section
on the Crown Court. In addition, the Home Secretary could refer a case to the Criminal
Division under s 17(1)(a) of the Criminal Appeal Act 1968. An example is to be found in R v
Maguire [1992] 2 All ER 433. All the appellants had, following an IRA bomb attack on a
Birmingham pub, been convicted of knowingly having in their possession or under their
..
EL_C02.qxd 3/26/07 10:39 AM Page 50
control an explosive substance namely nitro-glycerine, under such circumstances as to give

rise to a reasonable suspicion that it was in their possession or control for an unlawful object.
Following a reference to the Court of Appeal by the Home Secretary, the convictions were
quashed, on the ground that they were unsafe and unsatisfactory because the possibility of
innocent contamination of the appellants’ hands could not be excluded. An expert prosecution
witness had failed to disclose this at the trial.
Now that the Criminal Cases Review Commission (see below) has been set up, s 17 of the
1968 Act is repealed by s 3 of the Criminal Appeal Act 1995 and this abolishes the Home
Secretary’s power to refer cases to the Court of Appeal. Instead, under s 5 of the 1995 Act, the
Court of Appeal is enabled to commission investigations to be carried out by the Com-
mission, which will report its findings to the court. Under s 14 of the 1995 Act (and rule
68.25 of the Criminal Procedure Rules 2005), a reference regarding a conviction, verdict
finding or sentence may be made to the Commission with or without an application by the
person to whom it relates.
Furthermore, the Attorney-General may refer for an opinion on a point of law arising from
a charge which resulted in an acquittal (Criminal Justice Act 1972, s 36(1) and rules 69.1 and
69.5 of the 2005 Rules). An example is to be found in Attorney-General’s Reference ( No 2 of
1982) [1984] 2 WLR 447, where two directors, A and B, were alleged to have committed theft
of the company’s property leaving it without funds to pay its creditors. They were also the
only shareholders. Since theft requires a taking from some other person without that person’s
consent, the trial judge held that the offence of theft had not been committed and A and B
were acquitted. On the reference of the Attorney-General, the Court of Appeal held that since
a company was a separate person at law (see further Chapter 8), A and B could steal from it.
Furthermore, although the consent of the directors would often be imputed to the company,
it was irrational to do so here when A and B were alleged to be acting dishonestly in relation
to the company. The Court of Appeal was of the opinion that A and B could be legally
charged with theft. It should be noted that the Court of Appeal’s opinion has no effect upon
the outcome of the original trial. The acquittal stands.
Jurisdiction – retrial for serious offences

The Criminal Justice Act 2003 sets out the cases that may be retried under the evidence
exception in the Act to the normal rule against double jeopardy. The procedure is contained in
Part 10 of the Act. There is provision for retrial of ‘qualifying offences’. These include murder,
rape, armed robbery and causing explosions, drugs offences and a variety of terrorist offences
and conspiracy. The provisions apply where new evidence comes to light after a first acquittal
which strongly indicates that the person acquitted is guilty and it is right in all the circum-
stances to hold a second trial.
The Director of Public Prosecutions must consent to a suspect being re-investigated. The
prosecution must then apply to the Court of Appeal Criminal Division for the original acquittal
to be quashed. Only one application in regard to a particular person can be made and there-
fore only one retrial is possible.
The problem presented by this removal of the double jeopardy rule is in the main that a
person whose original acquittal is overturned may find that the presumption of his innocence
in the retrial is affected so that it may well be difficult for the alleged offender to get a fair trial.
The government made a declaration under Art 55 of the Schengen Convention which
allows an exception to the normal rule against double jeopardy within member states of the
EU where the offence took place in the home state. This will ensure that the Act is compatible
with the Convention. The above provisions will assist further trials now that DNA evidence
is available.
..
EL_C02.qxd 3/26/07 10:39 AM Page 51
Appeals in cases of death

Section 7 of the Criminal Appeal Act 1995 inserts a new s 44A into the Criminal Appeal Act
1968 under which the Court of Appeal may approve an application to conduct an appeal on 2
behalf of a convicted person who has died. This is particularly important where the deceased
has been fined and has died before an appeal could be heard. Before the enactment of this
section his estate would have had to pay the fine even though if there had been an appeal the
court may have quashed the conviction and the fine.
Power to increase sentence

Section 36 of the Criminal Justice Act 1988 allows the Attorney-General to refer a case for
increased sentence if it appears that the judge in the Crown Court has been too lenient. The
section applies only to trials on indictment. The Court of Appeal must give leave before the
reference can be heard and has power on hearing the reference to give any sentence which
the original court could have given. Thus the sentence may be increased or reduced. The section
is an attempt to deal with public disquiet over lenient sentences.
It should be noted that the Court of Appeal is not bound to give leave to refer and did refuse
leave in Attorney-General’s Reference (No 14 of 2003), R v Sheppard (2003) The Times, 18 April,
where Nicola Sheppard had pleaded guilty in Bristol Crown Court to a charge of laundering
the proceeds of criminal conduct. She was sentenced by the recorder to a community punish-
ment order of 120 hours. The Court of Appeal refused the Attorney’s reference because
it did not take into account mitigating circumstances pleaded before the recorder on Ms
Sheppard’s behalf.
New trials
The court may order a new trial under s 7 of the Criminal Appeal Act 1968 as amended by s 54
of the Criminal Justice Act 1988. The power is quite extensive and a retrial can be ordered if
the Court of Appeal is satisfied that it is in the interests of justice to do so. It is intended in
the main to prevent unmeritorious defendants from escaping justice because of some technical
mistake at the original trial. It does not cover retrials on new evidence (see above).
There is also a power to order a new trial at common law where there has been a fundamental
defect in the trial so that it was a nullity. Thus, in R v Ishmael [1970] Crim LR 399, the accused
had been sentenced to life imprisonment having pleaded guilty at his trial to an offence
under s 3 of the Malicious Damage Act 1861 (arson of buildings, punishable by life imprison-
ment) thinking he was charged with an offence under s 7 of the 1861 Act (arson of goods,
punishable by 14 years’ imprisonment). The Court of Appeal held that he must be tried again.
These provisions survive the provisions of the Criminal Justice Act 2003. The power is not
restricted to the qualifying offences of the 2003 Act. It is a procedure that the court can per-
haps adopt instead of dismissing an appeal. Retrial is ordered when an appeal is made to the court
which may allow the appeal but because of the circumstances order also a retrial. The
Criminal Justice Act 2003 applies even when all appeal procedures have been exhausted.
Criminal Cases Review Commission

Sections 8 to 25 of the Criminal Appeal Act 1995 provide for a body to investigate and report
on cases of possible wrongful conviction or sentence. The Commission consists of not less
than 11 persons one-third of whom must be legally qualified. The other two-thirds must have
knowledge or experience of some aspect of the criminal justice system. Cases are referred to
..
EL_C02.qxd 3/26/07 10:39 AM Page 52
the Commission by the Court of Appeal and it is to that court that the Commission’s report
is made. In addition the Commission may, with or without an application by the person to
whom it relates, investigate and refer to the Court of Appeal any conviction or sentence in
any case which has been tried summarily or on indictment in England and Wales.
Where the Criminal Cases Review Commission refers a case to the Court of Appeal, the
Criminal Appeal Act 1968, s 23 allows the court to receive fresh evidence, e.g. DNA evidence
that was not adduced at the trial. Although DNA evidence may be adduced by the offender to
point to another person as guilty, it may be brought in by the Crown as showing the guilt of
the offender.
The Crown is not restricted to adducing fresh evidence under s 23 only in order the rebut
fresh evidence adduced by the defendant on appeal. Thus in R v Hanratty [2002] 3 All ER 534
the prosecution, i.e. the Crown, was allowed to adduce DNA evidence proving conclusively
that H was guilty of the crime of murder for which he had been convicted and hanged, on an
appeal brought in an attempt to clear his name, even though the DNA evidence did not
address the grounds of the appeal that there were alleged procedural defects in the investiga-
tion and at the trial. The court did not accept that the investigation or trial was flawed or that
the conviction was unsafe.
Vice-presidents
Under s 3(3) of the Supreme Court Act 1981 (Senior Courts Act 1981 going forward) (as
amended) the Lord Chief Justice may, after consulting the Lord Chancellor, appoint one of
the ordinary judges of the Court of Appeal as Vice-President of both Divisions of that court,
or one of those judges as Vice-President of the Criminal Division and another of them as
Vice-President of the Civil Division. The Vice-President will preside in the absence, for example,
of the Lord Chief Justice (Criminal Division) or the Master of the Rolls (Civil Division).
Assistance for transaction of judicial business

in the Supreme Court
Section 9 of the Supreme Court Act 1981 (becomes Senior Courts Act 1981) brings together a
number of provisions enabling assistance to be given by judges, former judges and deputy
judges in terms of the business of the Supreme Court at the request of the Lord Chief Justice.
A judge of the Court of Appeal is competent to act on request in the High Court and the
Crown Court. A person who has been a judge of the Court of Appeal is competent to act in
the Court of Appeal, the High Court and the Crown Court. A puisne judge of the High Court
is competent to act in the Court of Appeal. A person who has been a puisne judge of the High
Court is competent to act in the Court of Appeal, the High Court and the Crown Court. A
circuit judge is competent to act in the High Court.
By reason of s 58 of the Administration of Justice Act 1982, a recorder is competent to act
in the High Court.
Under s 9(4) of the Supreme Court Act 1981, if it appears to the Lord Chief Justice that it is
expedient as a temporary measure to make an appointment in order to facilitate the disposal
of business in the High Court or the Crown Court, he may appoint a person qualified for
appointment as a puisne judge of the High Court to be a deputy judge of the High Court
during such period or on such occasions as the Lord Chief Justice thinks fit.
Where there is a vacancy in the office of Lord Chief Justice or he or she is unable for any
reason to fulfil the above roles, they will be carried out by the Master of the Rolls.
..
EL_C02.qxd 3/26/07 10:39 AM Page 53
The House of Lords
Current constitution 2
The court is constituted by the Lords of Appeal in Ordinary (or Law Lords). There are at any
one time between nine and 12 Law Lords, two of whom normally come from the Scottish
judiciary. The Law Lords are life peers and each of them is appointed by the Queen on the
Prime Minister’s advice, who is in turn advised by the Lord Chancellor, from among persons
who have a Supreme Court qualification, i.e. a right of audience in relation to all proceedings
in the Supreme Court. No number of years is stated. (See Appellate Jurisdiction Act 1876, s 6,
as amended by the Courts and Legal Services Act 1990, Sch 10.) Normally the appointments
are made from the Lords Justices of Appeal. A minimum of three law lords is required to con-
stitute a court, but in practice five normally sit to hear an appeal. The decision is by majority
judgment.
Jurisdiction
(a) Civil. On the civil side the House of Lords hears appeals from the Court of Appeal (Civil
Division), the Court of Session in Scotland, when one or two Scottish Law Lords sit, and the
Supreme Court of Northern Ireland when a Law Lord from Northern Ireland sits. In all cases
the lower court must certify that a point of law of general public importance is involved and
either the lower court or the Appeal Committee of the House of Lords consisting of three Law
Lords must give leave. In addition, there is a direct appeal from the High Court to the House
of Lords by what is referred to as the ‘leapfrogging method’. This phrase is used because the
appeal goes straight to the House of Lords and not through the Court of Appeal. As we have
seen all parties must consent and the appeal must raise a point of law of public importance
relating wholly or mainly to a statute or statutory instrument. The trial judge must certify the
importance of the case and the House of Lords must give leave. This ‘leapfrogging’ procedure
is most likely to be used in revenue appeals and patent matters where construction of statutes
is often very involved.
( b) Criminal. On the criminal side the court hears appeals from the Court of Appeal
(Criminal Division) and the Queen’s Bench Division of the High Court under the case stated
procedure. In both cases the lower court must certify that a point of law of general public
importance is involved and either the lower court or the Appeal Committee of the House of
Lords must give leave. The House of Lords is not a final appellate tribunal for Scotland in
criminal matters, but the Scottish Court of Criminal Appeal is.
Attorney-General’s references, including those on sentence, may reach the House of Lords.
The proceedings in the House of Lords are surprisingly informal. The Law Lords are not robed
but sit in dark suits generally in panels of five at a table in one of the committee rooms in the
Houses of Parliament at Westminster.
Effect of the Human Rights Act 1998

The House of Lords has played a vital part in the development of UK law on human rights
(see further Chapter 3) where, as the final appeal court in the UK, it may sometimes clash
with government by ruling that an Act of Parliament operates contrary to the Act and
requires amendment. The former Lord Chief Justice, Lord Bingham, was appointed to head
the 12 Law Lords. As senior Law Lord, the person involved is influential in deciding the com-
position of the panels of judges who hear appeals. This could be helpful in dealing with the
..
EL_C02.qxd 3/26/07 10:39 AM Page 54
potentially difficult relationship between the government and the judiciary as the 1998 Act
continues to bite. The post of Lord Chief Justice was filled by the Master of the Rolls and that
appointment was filled by a Lord Justice of Appeal. Further judicial appointments were made
at the more junior level of judiciary in preparation for the Act and wide-ranging training of
the judiciary was instigated.
Reform: the Supreme Court

The Constitutional Reform Act 2005 includes the creation of a new Supreme Court to
replace the House of Lords Judicial Committee (the Law Lords), which currently fulfils
the role of highest appeal court. The Supreme Court will be the highest appeal court in
the UK. The provisions of the Constitutional Reform Act 2005 (CLRA), which are described
below, will not be fully in force until 2009. The problem has been the setting up of
the Supreme Court courthouse. The matter has been resolved and the Middlesex Guildhall
in Parliament Square, London has been chosen. It is undergoing refurbishment and will
not be ready until 2009. At that time the other courts formerly constituting the Supreme
Court of which the House of Lords Judicial Committee is not a part will be categorised as
the Senior Courts under the Senior Courts Act 1981, as described in material earlier in this
Chapter.
However, other changes have been made: for example, the Lord Chief Justice is President of
the Courts in England and Wales in place of the Lord Chancellor. The office of Lord
Chancellor is not abolished, as originally proposed, but is being modified. The Lord
Chancellor is no longer head of the judiciary or a judge and is no longer the Speaker of the
House of Lords. It is no longer necessary for him or her to be a member of the House of Lords
or a lawyer.
The Supreme Court

(Section references are to the CRA unless otherwise stated.)
Under s 23 the Supreme Court will consist of 12 judges appointed by the Queen on the rec-
ommendation of the Prime Minister, but the Prime Minister can only recommend a person
notified to him or her by the Lord Chancellor following selection by a selection commission
set up by the Lord Chancellor. The Prime Minister has no discretion (s 26).
The number of judges may be increased by Order in Council. The Queen may appoint by
letters patent one of the 12 judges to be President of the Court and one to be Deputy
President of the Court. Recommendation is again by the Prime Minister, who can only
recommend a person notified to him or her by the Lord Chancellor following selection by a
selection commission. Other judges are called Justices of the Supreme Court.
First members of the court

Under s 24, and when s 23 is brought into force, persons who were immediately before that
commencement Lords of Appeal in Ordinary (Law Lords) become Justices of the Supreme
Court and the Senior Lord of Appeal in Ordinary becomes President of the Court. The person
who immediately before the commencement is the second senior Lord of Appeal in Ordinary
becomes the Deputy President.
Judiciary: qualifications for appointment

To be qualified for appointment as a judge of the Supreme Court, a person must under s 25
have:
..
EL_C02.qxd 3/26/07 10:39 AM Page 55
n held high judicial office for at least two years; or

n been a qualifying practitioner for at least 15 years; in other words a person who has had a
right of audience in relation to all proceedings in what becomes known as the Senior
Courts, e.g. Court of Appeal and High Court.
2
High judicial office will include the senior courts of Scotland and Northern Ireland. Those
who have practised before those courts as advocates for at least 15 years are also included. In
practice, members of the Supreme Court are likely to be appointed from the Court of Appeal
in England and Wales and from the top judiciary in Scotland and Northern Ireland.
Selection of members of the court: selection commissions

Schedule 8 deals with these commissions, which must be convened by the Lord Chancellor
when a vacancy is required to be filled in the Supreme Court judiciary. A selection commis-
sion consists of the following members:
n the President of the Supreme Court;

n the Deputy President of the Supreme Court and one member of each of the following bodies:
– the Judicial Appointments Commission;
– the Judicial Appointments Board for Scotland;
– the Northern Ireland Judicial Appointments Commission.
A selection commission is dissolved when the Lord Chancellor notifies a selection made by
the commission to the Prime Minister for appointment.
Process of selection
Section 27 requires a commission to consult:
n senior judges who are not members of the commission and are not willing to be consid-
ered for selection;
n the Lord Chancellor;
n the First Minister in Scotland;
n the Assembly First Secretary in Wales;
n the Secretary of State for Northern Ireland.
Selection must be on merit (which is not defined). The commission must have regard to any
guidance by the Lord Chancellor as to matters to be taken into account in making a selection
and only one person can be selected.
Report
Having completed the selection process, the commission must submit a report to the Lord
Chancellor stating who has been selected and state the senior judges consulted under s 27.
The commission must supply any further information required by the Lord Chancellor. On
receipt of the report, the Lord Chancellor must consult with those required to be consulted
by the selection commission except, of course, himself or herself.
The report: Lord Chancellor’s options

Under ss 30 and 31, the Lord Chancellor may:
n reject the person selected;

n the commission cannot put that person forward again;
n ask the commission to reconsider a person’s selection;
..
EL_C02.qxd 3/26/07 10:39 AM Page 56
n if after that reconsideration the commission puts forward the same person as before, the
Lord Chancellor may notify or reject that person and that decision to reject is final and
binding on the commission;
n if after reconsideration the commission selects a different person, the Lord Chancellor can
notify for appointment that person or the person whom he or she asked to be reconsidered.
This effectively amounts to a power to correct his request for reconsideration which has
led to non-selection.
Terms of appointment
At an early date after appointment, members of the Supreme Court must take an oath of alle-
giance to the Queen and the judicial oath, which in summary is to the effect that they will do
right by all manner of people after the laws and usages of the realm without fear or favour,
affection or ill will.
As regards tenure of office, s 33 provides that a judge of the Supreme Court holds office dur-
ing good behaviour but may be removed at the request of both Houses of Parliament. Salaries
are determined by the Lord Chancellor with the agreement of the Treasury. The President,
Deputy President and judges of the Supreme Court can resign at any time by giving written
notice to the Lord Chancellor (s 35). There is also power for the Lord Chancellor to dismiss
on the grounds of incapacity (s 36).
Acting judges
At the request of the President, a person who holds office as a senior territorial judge may act
as a judge of the Supreme Court. A senior territorial judge is an appeal court judge in England
and Wales, Scotland and Northern Ireland. In addition, a member of the supplementary
panel may act (s 38). The supplementary panel contains members of the Judicial Committee
of the Privy Council and those who ceased to be members of the Privy Council in the last five
years and members of the House of Lords who have held high office in the last five years but
no longer do so and have not reached the age of 75 years (s 39).
Jurisdiction of the Supreme Court

Section 40 and Sch 9 define the jurisdiction of the Supreme Court as follows:
n Appeals from the Court of Appeal (Civil and Criminal Divisions) in England and Wales but
only with permission of the Court of Appeal or the Supreme Court.
n Appeals from the Scottish Court of Session in civil matters. The Supreme Court is not a
final appellate court for Scotland in criminal matters but the Scottish Court of Criminal
Appeal is.
Schedule 9 transfers the ‘leapfrog’ appeal arrangements from the House of Lords to the
Supreme Court and the case stated appeal arrangements described on page 29. The Supreme
Court will take appeals from Northern Ireland from the Court of Judicature of Northern
Ireland (renamed and not in the future to be called the Supreme Court of Judicature of
Northern Ireland) and takes over the devolution jurisdiction of the Judicial Committee of the
Privy Council. These issues will arise from matters concerned with the devolution of certain
central government functions to Scotland, Wales and Northern Ireland. When appeals are
heard from Scotland and Northern Ireland, the President of the Supreme Court will normally
request a judge or judges from the relevant appellate court in the relevant country to sit as
acting judge or judges which they are qualified to be.
As before, appeal to the Supreme Court must involve a matter of public importance and be
certified as such by the Supreme Court or the appellate court from which the case comes.
..
EL_C02.qxd 3/26/07 10:39 AM Page 57
The composition of the Supreme Court

Under s 42 the Supreme Court is duly constituted when:
n the court consists of an uneven number of judges; 2
n there are at least three judges;
n more than half of the judges are permanent judges and not acting judges.
The quorum of three is to avoid a vote equal on each side: casting votes would be inappropriate.
The above provision means that, where there are three judges, two must be permanent judges
of the Supreme Court.
Specially qualified advisers

Under s 44, if the Supreme Court thinks fit, it may hear and dispose of the proceedings wholly
or partly with the assistance of one or more specially qualified advisors appointed by it. The court
will decide on the advisor’s remuneration and this will form part of the costs of the proceedings.
The advisor is a new concept and has implications for counsel instructed by the parties,
since the matter before the court can be disposed of wholly or partly with the assistance of
the advisor.
Photography
Section 47 is important because photography is currently banned in the courts of England
and Wales and Northern Ireland. Section 47 indicates that the Supreme Court will be
excluded from the general prohibition. This could lead to the ban being removed in general.
Chief executive
Section 48 provides for the Supreme Court to have a chief executive to undertake the non-
judicial functions of the court under the direction of the President of the court. The President
appoints other court officers and staff with the number of these to be decided by the Chief
Executive with the agreement of the Lord Chancellor.
Accommodation and other resources

The Lord Chancellor must ensure that the Supreme Court is provided with a courthouse and
offices and other accommodation as are appropriate for the carrying out of its business.
This has been a major problem and has delayed the coming into force of the Supreme
Court provisions. The Middlesex Guildhall has now been chosen, but refurbishment is
required, with completion by 2009.
Annual report
At the end of each financial year the chief executive is required by s 84 to prepare an annual
report about the business of the Supreme Court during that year. The Lord Chancellor must
lay a copy of the report before Parliament. A copy is also to be sent to the First Minister in
Scotland and in Northern Ireland and to the First Secretary of the Welsh Assembly.
The Judicial Committee of the Privy Council

The Privy Council is a lineal descendant of the ancient King’s Council, and was originally
a sort of cabinet advising the Crown. The Judicial Committee, which is not part of the
Supreme Court, is a final court of appeal in civil and criminal matters from the courts of
..
EL_C02.qxd 3/26/07 10:39 AM Page 58
some Commonwealth and Colonial territories, but the changes which have taken place in
the Commonwealth have restricted the number of cases coming before it, many
Commonwealth countries preferring to hear appeals within their own judicial systems.
However, some aspects of this jurisdiction survive. For example, Malaysia and New
Zealand retained the Privy Council as a final appeal court, in spite of their constitutional
independence. The Australia Act Commencement Order of 1986 abolished appeals to the
Privy Council from Australia. In October 2003 MPs in New Zealand voted in legislation to
abolish appeals to the Privy Council. Under this legislation, which came into force in July 2004,
the New Zealand Supreme Court of five judges became the country’s final court of appeal.
Even in those countries where a general right to appeal to the Privy Council exists, a particular
statute in that country may exclude appeal. Specific words are not necessary. The expression
in a statute that an appeal to a national court ‘is final’ rules out appeal to the Privy Council
(see Sears v AG of New Zealand (1997) The Times, 4 November).
The court is still the final court of appeal on criminal and civil matters from the Channel
Islands and the Isle of Man, and also from those islands and colonies, such as Gibraltar and
Belize, whose independence is not a viable proposition. There is strictly speaking no right of
appeal, but it is customary to petition the Crown for leave to appeal. It is also the final court
of appeal from English ecclesiastical courts, and here it is assisted by the Archbishops of
Canterbury and York who, as assessors, advise on ecclesiastical matters. It also hears appeals
from disciplinary bodies for dentists, opticians and professions relating to medicine.
The Judicial Committee of the Privy Council has jurisdiction under the Northern Ireland
Act 1998, the Scotland Act 1998 and the Government of Wales Act 1998 to decide the com-
petence and functions in a legal sense of the Scottish Parliament and the Northern Ireland
and Welsh assemblies. A question of the legal competence of those bodies to make laws
within the powers given to them would be raised before the Judicial Committee.
Composition
The Judicial Committee (or the Board as it is called) is comprised of the Lord President of the
Council, the Lord Chancellor, the Lords of Appeal in Ordinary, Lords Justices of Appeal (if
Privy Councillors) and all Privy Councillors who have held high judicial office in the United
Kingdom, together with Commonwealth judges who have been appointed members of the
Privy Council. It does not actually decide cases, but advises the Crown which implements the
advice by an Order in Council. This advice used to be unanimous, but since March 1966 dissent-
ing members of the Privy Council who were present at the hearing of the appeal may express
their dissent, giving reasons therefor. The court is not bound by its own previous decisions.
Reform
It has already been noted that the functions of the Privy Council in matters arising from devolu-
tion of some central government powers to devolved governments or assemblies in Scotland,
Wales and Northern Ireland will be transferred to the Supreme Court as it comes into being.
Other jurisdiction as described above will be taken over by a newly constituted court called, as
before, the Judicial Committee of the Privy Council, which will be governed by Sch 16 to the
CRA 2005 and the law relating to the Judicial Committee will be confined to that Schedule.
The Judicial Committee is in effect reconstituted by Sch 16, which substitutes a new s 1 to the
Judicial Committee Act 1833. It will comprise holders and former holders of high judicial
office who are also privy councillors. High judicial office includes former membership of the
Supreme Court, membership or former membership of the Court of Appeal in England and
Wales and membership or former membership of the appellate courts in Scotland and
Northern Ireland. The Judicial Committee Act 1881 will be repealed by the CRA 2005.
..
EL_C02.qxd 3/26/07 10:39 AM Page 59
Judicial appointments and discipline
The Judicial Appointments Commission and Ombudsman 2

The following materials relate to the appointment of the judiciary and the role of the Judicial
Appointments Commission and the provisions relating to the setting up of a Judicial
Appointments and Conduct Ombudsman to hear complaints of maladministration by the
Judicial Appointments Commission or the Lord Chancellor. All of the following sections and
schedules are in force unless otherwise stated.
The Judicial Appointments Commission

Section 61 introduces Sch 12 to the CRA 2005, which is about the commission and estab-
lishes the commission. The JAC is a body corporate. The membership is a lay chairman and
14 other commissioners. There are five judicial members plus a tribunal member and a lay
justice, together with two professional members and five lay members. They are appointed by
the Queen on the recommendation of the Lord Chancellor. The commission will normally
work through selection panels having four members.
Appointments
General provisions
Section 63 states that selection for membership of the judiciary must be solely on merit.
Further, a person must not be selected unless the selecting body, be it the JAC or a panel of
the JAC, is satisfied that the person is of good character. There is no definition of ‘merit’.
Section 64 goes on to state that the selecting body must have regard to the need to encourage
diversity in the range of persons available for selection for judicial appointments. Section 64
is subject to s 63, which means that diversity should be achieved without diluting the prin-
ciple of merit. Sections 65 and 66 give the Lord Chancellor power to issue guidance about
procedures for the performance by the commission or a selection panel of its functions.
Selection of Lord Chief Justice and Heads of Divisions

Section 67 gives the detail by providing that ss 68–75 (see below) apply to a recommendation
for appointment to one of the following offices:
n Lord Chief Justice;
n Master of the Rolls;
n President of the Queen’s Bench Division;
n President of the Family Division;
n Chancellor of the High Court.
Duty to fill vacancies

Section 68 states that the Lord Chancellor must make a recommendation to fill any
vacancy in the office of Lord Chief Justice (LCJ) and any other vacancy listed in an office
listed above. However, the section allows the LCJ to keep a Head of Division vacant by agree-
ment with the Lord Chancellor. The Lord Chancellor’s recommendation for appointment
is to the Queen, who makes the appointment. There is no longer any involvement of the
Prime Minister.
Request for selection for appointment to the s 67 offices

The Lord Chancellor may request the commission for a person to be selected for recommenda-
tion for appointment but there must be consultation with the LCJ. Thus, the section leaves
..
EL_C02.qxd 3/26/07 10:39 AM Page 60
the initiative for a selection to the Lord Chancellor. The Lord Chancellor may withdraw or
modify the request for selection, but only if the LCJ agrees. The JAC does not have to respond
to a withdrawal if the Lord Chancellor has already accepted a selection. The Lord Chancellor
must give reasons for withdrawing a request.
The selection process

On receiving a request, the JAC must appoint a selection panel. A panel is a committee of the
JAC. The panel has four members: normally a senior Supreme Court Judge (currently a Law
Lord); the LCJ; the Chairman of the JAC; and a lay member (i.e. two judicial members and
two lay members, the Chairman of the JAC being a lay person).
Panel report
The selection panel submits a report to the Lord Chancellor stating who has been selected
(s 72). The Lord Chancellor then has the following options:
n to accept the selection;

n to reject it;
n ask the selection panel to reconsider the selection (the selection panel must be given the
Lord Chancellor’s written reasons for rejecting or requiring reconsideration of a selection).
Where the Lord Chancellor has asked for reconsideration the panel may select the same person
or a different person, but where there has been a rejection and a request for reconsideration
the panel may not select the person rejected.
Where the Lord Chancellor has asked for a reconsideration and the panel puts forward
another person, the Lord Chancellor must accept that person unless he or she selects the per-
son whose selection the panel had been asked to reconsider rather than the different person
the panel has put forward. In other words, there may be a change of mind.
Selection of Lords Justices of Appeal

Sections 76 to 84 apply. The procedures follow a similar pattern to those listed above for Lord
Chief Justice and Heads of Division.
Selection of puisne (High Court) judges

Sections 85 to 94 apply similar procedures to those listed above in connection with the Lord
Chief Justice and Heads of Divisions, and Lords Justices of Appeal, with a major exception
which is that when the Lord Chancellor gives the JAC notice of a request for the selection
of a High Court judge, the Commission must seek to identify persons it considers would be
suitable in advance of any judicial or other recommendation.
Other appointments
These can be filled by advertisements placed by the JAC as follows.
Circuit judge
Appointment is by the Queen on the recommendation of the Lord Chancellor following
selection by the JAC. Qualification is a 10-year Crown Court or county court advocacy
qualification.
Recorder
This is a part-time appointment by the Queen on the recommendation of the Lord
Chancellor following selection by the JAC from those with a 10-year Crown Court or county
court advocacy qualification.
..
EL_C02.qxd 3/26/07 10:39 AM Page 61
Assistant recorders
There are also part-time but are appointed by the Lord Chancellor following selection by the
JAC from persons with a 10-year Crown Court or county court advocacy qualification.
2
Common Serjeant (City of London Old Bailey)
Appointment is by the Queen on the recommendation of the Lord Chancellor following selec-
tion by the JAC. The qualification is the same as that for recorders and assistant recorders.
District judges (county courts)

selection by the JAC from persons with a seven-year general advocacy qualification.
Deputy district judges (county courts)

Appointment and qualifications follow the same pattern as for a district judge.
District judges (magistrates’ courts)

selection by the JAC.
Deputy district judges (magistrates’ courts)

Appointment is by the Lord Chancellor following selection by the JAC from those with a
seven-year general advocacy qualification.
The advertisements of the JAC always make clear that selection is on merit by open competition
and that the JAC encourages a wide variety of applicants to satisfy the diversity principle. An
application pack is issued to applicants, who are required to submit a essay indicating why
they are suitable for the relevant post.
The main function of the Lord Chief Justice in these appointments is consultation by the
Lord Chancellor with the Lord Chief Justice. Importantly, as head of the judiciary in England
and Wales the Lord Chief Justice allocates the appointee to particular courts in particular areas.
Complaints about appointments

Section 62 provides for the appointment of a Judicial Appointments and Complaints
Ombudsman. Under s 125, a complaint is one of maladministration by the JAC or a committee
of the JAC by a person who claims to have been adversely affected as an applicant for selec-
tion or as a person selected by the maladministration complained of. Complaints can be made:
n to the Commission;
n to the Lord Chancellor; or
n to the ombudsman.
The Lord Chancellor may refer a complaint to the Ombudsman.

Where the complaint or reference is to the Ombudsman, he or she must make a report.
This may uphold the complaint in whole or in part or not uphold it. He or she may make
recommendations including the payment of compensation where there is loss.
A copy of the draft report is sent to the JAC and the Lord Chancellor and to the complainant.
Under s 105, the JAC and the Lord Chancellor must provide the Ombudsman with such
information as may reasonably be required for the investigation of the complaint.
Discipline
Disciplinary powers over the judiciary are given to the LCJ and/or the Lord Chancellor.
A power of suspension from office is included. The LCJ exercises his powers only with the
..
EL_C02.qxd 3/26/07 10:39 AM Page 62
agreement of the Lord Chancellor. The latter, who need no longer be a Lord or a lawyer, can
act alone and may veto the disciplinary acts of the LCJ.
Applications for review and references

Application may be made to the Ombudsman by an interested party for a review of the exer-
cise of a regulated disciplinary function on the grounds of failure to follow proper procedures
or some other form of maladministration. ‘Interested party’ obviously includes the judge
being disciplined but apparently also any person who has made a complaint under prescribed
procedures. The complaint must be made within 28 days beginning with the latest failure or
other maladministration alleged by the applicant.
The Ombudsman has power to recommend payment of compensation or set aside a deci-
sion of the LCJ or Lord Chancellor.
The Lord Chancellor or the LCJ may make a reference to the Ombudsman relating to a dis-
ciplinary matter.
Reports on reviews
The Ombudsman must send a draft copy of a conduct report to the Lord Chancellor and in
this case also to the LCJ. The report must state the Ombudsman’s proposed response to the
review. The Lord Chancellor and the LCJ may make proposals and the Ombudsman must
consider whether to change the report to give effect to the proposal or not. The final report
goes to the Lord Chancellor and the LCJ and to the applicant but the applicant’s report must
not contain information relating to an identified or identifiable individual other than the
applicant nor must the applicant’s copy contain information that would be a breach of
confidence.
The Ombudsman is also required to make a report where the investigation has been made
on a reference by the Lord Chancellor or the LCJ.
Removal and retirement of judges

Section 17(4) of the Courts Act 1971 (as amended) contains the only formal power to remove
a judge. The power relates to circuit judges and states that the Lord Chancellor may, if he
thinks fit, and if the Lord Chief Justice agrees, remove a circuit judge from office on the
ground of incapacity or misbehaviour. Recorders, assistant recorders, and magistrates are
governed by similar provisions. Other judges can only be removed by a motion approved by
both Houses of Parliament.
As regards retirement, the Judicial Pensions and Retirement Act 1993 imposes a general obliga-
tion on the judiciary at all levels to retire at 70. Those who were appointed before the Act
may retain their former retirement age, which is 75 for judiciary in the High Court and above
and 72 below High Court level, e.g. circuit judges and recorders. Removal by the
Parliamentary procedure has never been used for an English judge since its creation in 1701.
The power to remove circuit judges was exercised by the Lord Chancellor, Lord Hailsham,
who removed Judge Campbell after he had admitted smuggling whiskey and cigarettes into
this country. Judges who have been convicted of drink-driving can expect to be removed.
High Court judges, who are rarely removed, are persuaded to resign by the Lord Chancellor
and/or the appeal judiciary. This happened in 1998 when Mr Justice Jeremiah Harman was
persuaded to resign after his intolerable delay in producing a judgment.
..
EL_C02.qxd 3/26/07 10:39 AM Page 63
Arbitration
Arising from contract 2

Not uncommonly commercial contracts, for example contracts of insurance, contain a provision
under which the parties agree to submit disputes arising under the contract to an arbitrator
who need not be a lawyer but might in, say, a building dispute, be a surveyor who has know-
ledge and experience of the subject matter of the dispute.
Arbitration proceedings differ from court proceedings in two main ways: first, they are private
in that there need be no publicity (e.g. a public hearing followed by a law report), and second,
the arbitrator will have special experience of the particular trade or business which a judge
would not have. Privacy is usually the determining factor in the choice by the parties of com-
mercial arbitration rather than litigation.
Arbitration is no longer cheap since experienced arbitrators can command daily fees of
several hundred pounds, and the lawyers who appear before the arbitrators charge the same
fees as for litigation in the courts. There is no guarantee of a quick resolution because it may
be several months before the parties can agree upon the identity of the arbitrator(s) and also
the parties are dependent in arranging the arbitration on the availability of the arbitrator,
whose diary may be as full as the waiting lists in the ordinary courts.
The Unfair Terms in Consumer Contracts Regulations 1999 (SI 1999/2083) apply in regard
to the possible abuse of clauses which businesses may put into their contracts with con-
sumers. The Arbitration Act 1996, s 89 (as amended by SI 1999/2167) applies the provisions
of the regulations to arbitration clauses and an unfair clause cannot be enforced against a
consumer who may, therefore, use the civil court system where there is, say, a breach of con-
tract by a supplier, provided the amount involved is £5,000 or less. Section 90 of the 1996 Act
applies the rules relating to unfair arbitration clauses to cases where the consumer is a com-
pany. The 1999 Regulations are considered further in Chapter 15.
Other arbitrations
Arbitration also occurs under codes of practice prepared by various trade associations with
the assistance of the Office of Fair Trading. The arbitration service for a particular code of
practice is usually provided by the Chartered Institute of Arbitrators. The trade associations
concerned, e.g. the Association of British Travel Agents and the Motor Agents Association,
make a substantial contribution to the cost of administration but the consumer has to pay a
fee. This is normally refunded if the consumer is successful.
Arbitration in the High Court

Arbitration in the Commercial Court, which is part of the High Court, has already been
considered. There are now no arbitration arrangements in the county court, claims of £5,000
or less being referred to the small claims track.
Conciliation
Sometimes a dispute is settled following an initiative by an outside agency. For example, the
Advisory, Conciliation and Arbitration Service (ACAS) is, under ss 18 and 19 of the Employment
..
EL_C02.qxd 3/26/07 10:39 AM Page 64
Tribunals Act 1996, given a role in settling matters which are, or could be, the subject of pro-
ceedings before an employment tribunal.
When a complaint or claim is presented to an employment tribunal, say, for equal pay or
sex discrimination, a copy is sent to the conciliation officer. It is his duty to try to settle the
dispute so that it need not go to an employment tribunal. He must do this if asked to by the
person making the complaint or the person against whom it is made, but may do so on his
own initiative where he thinks there is a good chance of a settlement.
During the course of conciliation the parties can speak freely with the conciliation officer
because anything which is said to the conciliation officer during the course of an attempted
settlement is not admissible in evidence if the matter goes to an employment tribunal unless
the person who made the statement agrees.
Tribunals
These are considered in detail in Chapter 3, which is concerned with tribunals and legal
services.
The Court of Justice of the European Communities

This court, which is often referred to as the European Court, sits in Luxembourg, and is charged
with ensuring that Community law is observed in regard to the interpretation and imple-
mentation of the Treaties. Its decisions must be accepted by the courts of member states and
there is no right of appeal. The major decisions of the court are disposed of by a full court
though the court can sit as a Grand Chamber of 13 judges.
At present the court consists of 25 judges, one from each member state. There is a Registry
in Luxembourg, and there are information offices in Luxembourg, London, Cardiff,
Edinburgh and Belfast. The court is assisted by a number of Advocates-General who give an
unbiased Opinion of the case for consideration by the court. The members of the court are
appointed by the unanimous agreement of the governments of the member states. They serve
for six years, although the appointment is renewable. There is no requirement of professional
law practice and the court consists of professional judges, academic lawyers and public
servants. A judge may be removed during a period of office only by unanimous decision of
the other judges.
Procedure
There is more emphasis upon submissions in writing rather than oral argument. The proceed-
ings are more inquisitorial and the judges play a more active role in terms of asking questions
during hearings.
As we have seen, there are a number of Advocates-General. They assist the court and they
give an independent view of the proceedings before the publication of the decision of the
court. The court does not always follow the opinion of the Advocates-General.
The court gives a single judgment and no dissenting views are given. Enforcement of judg-
ments is through the national courts of member states.
An important function of the court is under Article 234 of the Treaty of Rome to hear refer-
ences from national courts for a ruling on the interpretation of provisions of Community
..
EL_C02.qxd 3/26/07 10:39 AM Page 65
law. The court is mainly concerned with actions alleging failure to fulfil the obligations of the
Treaty by member states in terms of the free movement of goods, equal pay and sex and disabil-
ity discrimination, and free movement of persons, which includes recognition of professional
qualifications and diplomas obtained in one state of the EC as entitling the holder to practise
2
a profession in another. The Treaty of Amsterdam extends the jurisdiction (see p 221).
Under various other Articles of the Treaty of Rome the court may deal with the following
types of actions:
(a) actions by the Commission against member states for failure to fulfil Treaty obligations
(Art 249);
(b) actions by one member state against another for failure to fulfil Treaty obligations (Art 227);
(c) actions by a member state or an individual or company against the Council or
Commission for acting in breach of the Treaty (Art 230);
(d ) actions by a member state against the Council or Commission for failure to act (Art 233).
Enforcement of judgments
Where a member state fails to comply with a judgment, infringement proceedings may be
brought against it by the Commission (see further Chapter 7) before the court under Art 228.
Therefore, the burden of ensuring that a judgment is complied with falls mainly on the
Commission. However, the Commission succeeds in most cases in persuading the member
states to comply without bringing court proceedings.
Court of First Instance

The European Communities (Amendment) Act 1986 was the UK Parliament’s ratification of
the Single European Act under which a new court of first instance was set up by a decision
of the Council of Ministers of the EC in 1988. It consists of 25 judges, one from each member
state, and deals with certain categories of case to relieve pressure on the Court of Justice, in
particular, appeals against Commission Decisions in competition cases (see further, Chapter
16) and disputes between the Community and its employees. Appeal is to the European
Court on a point of law only.
The judges of the court are appointed for a period of six years by unanimous agreement
of the member states. There are no Advocates-General appointed to the court but judges can
be asked to act as Advocates-General and, if so, must not participate in the deliberations of
the court.
The role of the European Court at Luxembourg

It was decided by the Court of Appeal in Bulmer v Bollinger [1974] 2 All ER 1226 that the High
Court and the Court of Appeal have a jurisdiction to interpret Community law and that they
are not obliged to grant a right of appeal to the European Court of Justice. However, if the
case goes to the House of Lords (going forward the Supreme Court) on appeal, the House of
Lords (going forward the Supreme Court) is bound to refer the matter to the European Court
of Justice if either or both of the parties wishes this. The decision in Bulmer was based upon
an interpretation of Art 234 of the Treaty, which provides, in effect, that although any court
or tribunal of a member state may ask the European Court to give a ruling, only the final court
of appeal, in our case the House of Lords (becomes the Supreme Court) is bound to ask for a rul-
ing if a party requests it.
..
EL_C02.qxd 3/26/07 10:39 AM Page 66
In the case Bulmer had marketed products for many years under the name of ‘Champagne
Cider’ and ‘Champagne Perry’. Bollinger claimed that this was contrary to an EC regulation
which restricted the use of the word ‘champagne’ to wine produced from grapes grown in the
Champagne district of France. The Court of Appeal decided that since cider was made from
apples and perry was made from pears, there was no infringement of the regulation. The
court also refused to refer the matter to the European Court.
In the course of his judgment Lord Denning, MR laid down certain guidelines to assist
judges in deciding whether to refer a case to the European Court or not. The main guidelines
are as follows:
(a) The time to get a ruling. The length of time which may elapse before a ruling can
be obtained from the European Court should always be borne in mind. It is important to
prevent undue protraction of proceedings. The English judge should always consider
this delay and the expense to the parties. However, in Customs & Excise Commissioners v
APS Samex [1983] 1 All ER 1042, Bingham, J, while accepting that a reference should not
be made in, say, the High Court, simply because if it was not made one of the parties
would go on making appeals, it might be that if the High Court did make the reference,
thus preventing further appeals to English courts, it would be cheaper for the parties in the
long run.
(b) The European Court must not be overloaded. Thus, if there are too many references,
the court would not be able to get through its work. However, in more recent times practi-
tioners have appeared happier with the performance of the senior court, though there have
been significant delays at the Court of First Instance level.
(c) The reference must be on a question of interpretation only of the Treaty. It is a matter
for the national courts to find the facts and apply the Treaty, though the way in which the
national court has interpreted the Treaty can then be a matter for reference.
(d) The difficulty of the question of Community law raised. Lord Denning was of opinion
that unless the point raised was ‘really difficult and important’ it would be better for the
English judge to decide it himself. However, in APS Samex (above) Bingham, J took the view
that in some cases, even though the point raised might not be of great difficulty, the
European Court should receive a reference because it was in a better position, among other
things, to make the sort of decision which would further the orderly development of the
Community. These statements by Bingham, J (who is now the Lord Chief Justice), in this case
are to be welcomed because they show a greater willingness in the judiciary to take matters to
Luxembourg and not to make too many decisions themselves thus to some extent shutting
out the European Court.
In regard to criminal matters, a circuit judge presiding over a criminal trial on indictment
has a discretion conferred on him by Art 234 of the Treaty of Rome to refer any question of
interpretation of the Treaty to the European Court. It was held by the House of Lords in R v
Henn [1980] 2 All ER 166 that it can seldom be a proper exercise of the presiding judge’s dis-
cretion to seek a preliminary ruling before the facts of the alleged offence have been ascer-
tained, since this could result in proceedings being held up for several months. It is generally
better, said the House of Lords, that the judge should interpret the Treaty himself in the first
instance and his interpretation can be reviewed thereafter if necessary through the hierarchy
of the national courts, any of which may refer to the European Court.
In general terms, therefore, the House of Lords (becomes the Supreme Court) has an obliga-
tion to make a reference under Art 136. Lower courts may do so but if they think that the
relevant Community law is sufficiently clear to be applied to the case straightaway they will
not refer. This is known as the doctrine of acte clair. The provision of European law must,
..
EL_C02.qxd 3/26/07 10:39 AM Page 67
however, be directly applicable as is the case with Art 141 (Equality of Treatment) which is
often applied in equal pay cases (see Chapter 19).
2
The International Criminal Court
This court came into being on 1 July 2002. All the European Union members are among the
73 nations that have ratified the Rome statute of 1998 that forms the basis of the court.
Its jurisdiction and staff is as follows:
n the court will try persons accused of genocide, war crimes, crimes against humanity and
(when defined) crimes of aggression; those who are heads of state as well as soldiers and
civilians may be tried;
n the cases taken by the court will be cases that have not been tried or investigated by the
country of the person accused and only crimes committed after 1 July 2002 can be tried;
n there are 18 judges elected by those countries that have ratified the Rome statute. They are of
different nationality and they together with a chief prosecutor serve for a term of nine years;
n cases can be referred by:
– any country that has ratified the Rome statute and has had crimes committed within its
territory by foreigners or its own nationals;
– the court prosecutor following approval by a panel of three judges;
– the United Nations Security Council.
The ICC will make a difference since for the first time persons will be held criminally
responsible for crimes against humanity. The ICC will complement existing national jurisdic-
tions and will be able to prosecute where states are unwilling or unable to do so.
International Criminal Court Act 2001

This UK Act gives effect to the Statute of the International Criminal Court and makes provi-
sion for e.g. the arrest and delivery up of persons in the UK to the jurisdiction of the ICC,
together with enforcement of sentences of imprisonment in the UK under orders of the ICC.
The European Court of Human Rights

This court, which sits in Strasbourg, was set up by the Convention for the Protection of
Human Rights and Fundamental Freedoms to ensure the observance of the engagements
undertaken by contracting states under the Convention. The United Kingdom is one of the
states which have accepted the court’s jurisdiction. The jurisdiction of the court in con-
tentious matters extends to all cases concerning the interpretation and application of the
Convention. The court can now be approached directly by the person alleging a human
rights violation, by bringing an action against the state responsible. A panel of three judges
then decides whether the case should be heard. If so, a ruling is given by a chamber of seven
judges with an appeal to a Grand Chamber of 17. Since its creation in 1959 it has dealt with a
wide variety of problems, including compulsory sex education in state primary schools in
Denmark, where it was found that there was no violation of the Convention, and punishment
by birching in the Isle of Man, where one or more breaches of the Convention were found to
exist. More recently, the court decided against Britain by regarding the caning of schoolchildren
..
EL_C02.qxd 3/26/07 10:39 AM Page 68
against the wishes of their parents as a breach of the Convention. The court has power to
grant ‘just satisfaction’ of a pecuniary nature to the injured party.
The court has decided that certain members of the UK armed forces who were discharged
because of their homosexuality had been subjected to a violation of their human rights under
the European Convention (see Lustig-Prean and Beckett v United Kingdom (1999) The Times,
11 October). The decision meant that the armed forces had to revise their policy on homo-
sexuals, but the case has no binding effect on private business, only on ‘emanations of the
state’. The ruling is not directly applicable to business, but it is binding on public authorities.
It will, of course, be influential in terms of future legislation on discrimination.
The Human Rights Act 1998 incorporates the Convention into UK law, enabling enforce-
ment of Convention rights by UK residents in UK courts.
Since the most usual channel of complaint under the Act will be against public authorities
by way of judicial review, the Act is considered in more detail in Chapter 3.
..
EL_C03.qxd 3/26/07 10:39 AM Page 69
3
OTHER COURTS AND TRIBUNALS,
JUDICIAL REVIEW, HUMAN RIGHTS
AND LEGAL SERVICES
All of the famous writers on constitutional theory have drawn attention to the dangers of any
system which takes away from the citizen, in his dealings with government and other
officials, the protection of the law functioning in its traditional setting, i.e. the courts of law,
which were considered in a previous chapter.
However, one of the most significant developments of this century is the considerable
increase in what might be called broadly administrative justice dispensed in special courts
outside of the ordinary system.
This has arisen from the great extension in the functions of government which has taken
place over the years. For example, the government pays pensions to various classes of persons
and a wide variety of social security benefits, and in order to further schemes of social welfare,
it is often necessary for a public body to acquire land by compulsory purchase.
Obviously, disputes arise between individuals and the state. People may claim benefits to
which the state suggests they are not entitled, and landowners are often aggrieved by the
compulsory purchase of their land. Tenants complain about increases in rent and other
charges by landlords. The settlement of such disputes might have been given over to the
ordinary courts of law, but instead increasing use has been made of an administrative court of
one kind or another.
Lord Denning, in Freedom under the Law, has said of these tribunals:
They are a separate set of courts dealing with a separate set of rights and duties. Just as in
the old days there were ecclesiastical courts dealing with matrimonial cases and the admin-
istration of estates and just as there was the Chancellor dealing with the enforcement and
administration of trusts so in our day there are the new tribunals dealing with the rights
and duties between man and the State.
It should not be assumed, however, that all administrative tribunals are concerned with
disputes between a person and the state. Some deal with disputes between individuals. The
Rent Assessment Committees set up under the Rent Act 1977 to deal with rent and other
questions arising under statutory provisions relating to the letting of houses, are an example
of a situation in which the government has provided a specialised court to deal with certain
disputes between landlord and tenant rather than give the particular jurisdiction to the ordin-
ary courts of law.
Furthermore, administrative justice is not always meted out in a permanent independent
tribunal. For example, the local planning authority may grant planning permission with or
..
EL_C03.qxd 3/26/07 10:39 AM Page 70
without conditions or may refuse permission or fail to notify their decision within the period
laid down. In the case of a grant with conditions, or a refusal to grant, or delay in
notification, the applicant may appeal to the Secretary of State through the Department of
the Environment. The decision of the Secretary of State is final, though there may be an
appeal by the authority or the applicant to the High Court on the grounds set out in s 288(1)
of the Town and Country Planning Act 1990, e.g. that the order is not within the provisions
of that Act.
We shall now consider in more detail the way in which certain of these tribunals work.
Administrative tribunals
It is not appropriate in a book of this nature to deal with all the tribunals in this field but
consideration will be given to some important ones as examples.
Social Security Tribunals – the Appeals Service

The procedure is governed by the Social Security Act 1998 and previous arrangements have
been wound-up. Where the payment of social security benefits is refused, appeal is to an
appeals tribunal.
The members of the tribunal

The members of the relevant appeal tribunals are made up from a panel of doctors, lawyers,
those with experience of disability and those with financial specialisms, e.g. accountants.
One of the members of the tribunal must be legally qualified and will normally act as the
chair of the tribunal.
Rules made under the Social Security Act 1998 apply and the following types of tribunals
are available to hear appeals as appropriate:
n a three-member tribunal being a lawyer, a doctor and a person with experience of disability
hears appeals for disabled persons’ tax credits, disability living allowance, and attendance
allowance;
n a two-member panel, i.e. a lawyer and a doctor, hears appeals regarding incapability to work;
n a two or three-member tribunal, i.e. a lawyer and one or two doctors, hears appeals regard-
ing industrial injuries or severe disablement. Where the appeal involves difficult financial
issues, a financial specialist, e.g. an accountant, is substituted for one of the doctors.
Appeals
There is an appeal to the Social Security Commissioner if the tribunal has made an error of
law as where the tribunal misunderstood a particular benefit rule or where there is a breach of
natural justice as where the tribunal refuses to postpone a hearing even though the appellant
had a good reason for not being able to attend and told the tribunal about it. This would
offend against the rule that the appellant had a right to be heard.
There is a further appeal to the Court of Appeal from the Commissioner only on a error of
law. Leave of the Commissioner or the Court of Appeal is required. It is also possible in some
cases to challenge the decisions made by judicial review, such as on a refusal to give a right of
appeal by a tribunal chair. The above rights of appeal are possessed also by the provider of the
benefit, e.g. a local authority.
..
EL_C03.qxd 3/26/07 10:39 AM Page 71
OTHER COURTS AND TRIBUNALS, JUDICIAL REVIEW, HUMAN RIGHTS AND LEGAL SERVICES 71
Human rights
Arguments based on the Human Rights Convention can be raised throughout the above
procedures.
Valuation and use of Lands Tribunal

3
Another important tribunal is the Lands Tribunal which deals with disputes arising over the
valuation and compensation payable on compulsory acquisition of land by public authorities
under a variety of statutes, together with appeals from local valuation courts on the value of
property for various purposes. An important function of the Lands Tribunal is that it can dis-
charge or modify restrictive covenants over land. These normally restrict the use to which the
land can be put and are not always welcomed by business developers. An application to the
Lands Tribunal may be made in these circumstances. It does not follow that the Lands
Tribunal will discharge or modify a particular covenant (see further Chapter 22).
The tribunal has a President, who is either a person who has held high judicial office or a
person who holds a seven-year general qualification within s 71 of the Courts and Legal Services
Act 1990, and other members, of the same standing, or persons experienced in the valuation
of land. The jurisdiction of the tribunal may be exercised by any one or more of its members.
Procedure is governed by rules made after consultation between the Lord Chief Justice and
the Lord Chancellor and these are published by statutory instrument. The tribunal ordinarily
sits in public and travels round the country, and there is a right of audience and legal represen-
tation. The decisions of the tribunal are written and reasoned, and appeal lies to the Court of
Appeal on points of law. Either party can require the tribunal to state a case for consideration
by the Court of Appeal. Legal representation is available in respect of proceedings in the
Lands Tribunal. Legal aid is not available (see Sch 2 of the Access to Justice Act 1999).
Employment tribunals
These consist of employment tribunals from which there is an appeal to the Employment
Appeal Tribunal. Neither the Employment Appeal Tribunal nor an employment tribunal has
the jurisdiction to decide whether legislation is incompatible with the Convention on
Human Rights since neither tribunal falls within the definition of a ‘court’ within s 4(5) of
the Human Rights Act 1998 (see Whittaker v P & D Watson (2002) The Times, 26 March).
Employment tribunals
Employment tribunals are constituted under the Employment Tribunals Act 1996 and the
Employment Tribunals (Constitution and Rules of Procedure) Regulations 2004 (SI 2004/1861).
Some changes were made by the Employment Act 2002 but these were by way of changes in the
1996 Act.
The jurisdiction of these tribunals includes, for example, disputes arising out of the con-
tract of employment or unfair dismissal, redundancy, equal pay and sex, race and disability
discrimination. (See further Chapter 19.)
Tribunals, which usually consist of a chairman, and two lay members one from each panel
(see below), are drawn from three panels as follows:
n a chairman who is appointed by the Lord Chancellor following selection by the Judicial
Appointments Commission and who must have a seven-year qualification. Appointments
may be full-time or part-time;
.. ..
EL_C03.qxd 3/26/07 10:39 AM Page 72
n persons appointed by the Secretary of State for Trade and Industry after consulting repres-
entatives of employers; and
n persons so appointed after consultation with organisations representative of employees.
Members drawn from the two lay panels immediately above are referred to as ‘lay members’
and all serve part-time. The tribunals sit at suitable centres throughout the United Kingdom.
A full tribunal consists of a member from each panel. However, certain types of proceed-
ings must be heard by a tribunal consisting of a chairman sitting alone unless a chairman,
who need not necessarily be the same person who is to hear the case, directs to the contrary
(ETA 1996, s 4). Some important categories of case are:
n applications for unlawful deductions from wages;
n applications regarding written particulars of employment and itemised pay statements,
guarantee payments and redundancy payments;
n proceedings where the parties have given written consent to a hearing before the chairman
alone whether or not consent was subsequently withdrawn;
n proceedings where the defendant or all defendants, if more than one, did not contest the
claim at first or later.
These claims are explained in Chapter 19.
If a sum of money awarded by a tribunal is not paid over to the claimant, he can apply to
the county court for a warrant of execution (see Chapter 5).
Legal aid is not available for a lawyer to represent a claimant before a tribunal, but legal
advice may be given in respect of employment matters. This can include the drafting of docu-
ments in relation to the proceedings and assistance with the way in which the case is to be
presented to the tribunal. A legal aid lawyer can attend the tribunal hearing with his client
but cannot speak or argue on his behalf. If legal representation is required at the hearing, the
party concerned must take responsibility for payment subject to recovery of costs, which are
only exceptionally awarded (see below).
An applicant to a tribunal may be able to obtain legal assistance including representation
in the tribunal from a variety of sources, e.g. a trade union or from the Equal Opportunities
Commission (in sex discrimination claims) or the Commission for Racial Equality (in race
discrimination claims) and the Disability Rights Commission (in disability discrimination
claims). Under the Equality Act 2006 the above Commissions will, over a period of time, be
brought together under the single Commission for Equality and Human Rights. Small
employers responding to claims may also seek assistance from the Commissions and this may
also be provided by a trade association.
The claim form for a case to be heard by an employment tribunal is ETl. It can be obtained from
job centres and most advice centres or from the tribunals’ website www.employmenttribunals.
gov.uk. In England and Wales the claim should be presented to the tribunal office in the postal
district where the claimant is or was employed. The claim can be delivered by hand, sent by
post, or fax or completed online at the above website or by other means of electronic commun-
ication, such as email.
The person against whom the claim is being made will receive a copy of the claim from the
tribunal secretariat. If he or she wishes to defend the claim, a response form (ET3) must be
completed and returned within 28 days of the date on which the copy of the claim was sent.
The response must be in writing.
Employment tribunals have power to request the parties to give each other particulars of
the grounds which are relied upon and to grant disclosure of documents.
Hearings before employment tribunals normally take place in public, though there may be
a private hearing where, in the opinion of the tribunal, this would be appropriate, as where
evidence is to be presented which relates to national security.
..
EL_C03.qxd 3/26/07 10:39 AM Page 73
As regards costs, an employment tribunal does not normally make an award but may do
so, for example, where in its opinion a party to any proceedings has acted frivolously or
vexatiously, as where an employer or employee refuses to take any part in the proceedings, or
has acted abusively or disruptively – so the parties must behave!
The only situation in which a tribunal has a duty to make a costs order is when in an unfair 3
dismissal complaint the employee claimant has expressed a wish to be reinstated or re-
engaged and has told the employer this at least seven days before the hearing and yet the
hearing has had to be postponed because the employer has failed, without special reason, to
adduce reasonable evidence as to the availability of the job from which the employee was
dismissed or of comparable or suitable employment where he can be re-engaged. Under
the 2004 regulations a tribunal can now also make a preparation time order where either the
claimant or the defendant makes a payment in respect of the preparation time of the other.
Such an order may be made where the party who receives payment was not legally repre-
sented at the hearing or where the proceedings were determined without a hearing. An
hourly rate of £26 per hour is applied from 1 April 2006 and goes up by £1 an hour every
year. A maximum of £10,000 can be awarded. The provision may help, for example, small
employers who may face claims from employees who are backed by trade unions and the
employer deals with his or her own defence. These payments do not depend upon who suc-
ceeds at a hearing.
Also under the 2004 regulations a tribunal may make a wasted costs order against a person
representating either party where the representative’s unreasonable or negligent act or omis-
sion has affected the conduct of the proceedings. These orders can be applied to lawyers and
other representatives such as trade unions, employers’ associations and law centres.
The decision is made by a majority and is given orally at the hearing or, if necessary,
reserved and given at a later date. In any case it is recorded in a document which is signed by
the chairman and contains reasons for the decision. The parties each receive a copy. It should
also be noted that where an employee has died tribunal proceedings may be started or
continued by his personal representatives.
An employment tribunal can review and change its decision afterwards where, for example,
new evidence has become available which could not have been known of or foreseen at the
original hearing.
The Employment Appeal Tribunal (EAT)

Appeal from an employment tribunal lies only on questions of law. The determination of the
facts by an employment tribunal cannot be challenged on appeal and it is, therefore, most
important that the facts are properly presented to the tribunal at the hearing. In this connec-
tion an EAT decision serves as a warning to employers who fail to turn up at tribunal hear-
ings. The EAT has ruled that evidence that was not placed before an employment tribunal
because the employer decided not to attend the hearing could not be raised on appeal (see
Taylor v John Webster Buildings Civil Engineering [1999] ICR 561). Under s 9 of the Trade Union
and Labour Relations (Consolidation) Act 1992 it will also hear an appeal from the ACAS
Certification Officer by a trade union aggrieved by his refusal to issue it with a certificate that
it is independent. The major legislative privileges are given to those trade unions which are
independent of the employer and not, for example, to employer-dominated staff associations.
The Certification Officer adjudicates upon the matter of independence under s 6 of the Trade
Union and Labour Relations (Consolidation) Act 1992.
The Employment Appeal Tribunal is a superior court of record with an official seal.
Although the central office of the tribunal is in London, it may sit at any time and in any
place in Great Britain. It may also sit in one or more divisions.
.. ..
EL_C03.qxd 3/26/07 10:39 AM Page 74
Appeals are usually heard by a judge of the High Court or a circuit judge or a recorder and
either two or four appointed members who do not belong to the judiciary but have special
knowledge or experience of industrial relations, either as representatives of employers or
workers. The reason why the judge will usually sit with either two or four appointed members
is so that in either case there are an equal number of persons whose experience is as repres-
entatives of employers and of workers. The decision need not be unanimous but may be by
a majority. Each member of the court, including the judge, has a vote so that the judge
could be outvoted, but this is extremely rare. Exceptionally, if the parties to the proceedings
consent, a case may be heard by a judge and one or three appointed members. Legal aid for
advice and representation is available to individuals for appeals from employment tribunals
(see Access to Justice Act 1999, Sch 2).
Appeals to the Employment Appeal Tribunal are commenced by serving on the tribunal
within 42 days of the date on which the document recording the decision or order appealed
against was sent to the person appealing, a notice of appeal. The appropriate form is set out
in the Employment Appeal Tribunal Rules.
The hearing will normally take place in public but the tribunal may sit in private to hear
evidence where, for example, it relates to national security or could cause substantial injury
to an organisation appearing before it, as where a company’s trade secrets might be revealed.
The EAT usually consists of a High Court judge and two lay members. A practice has developed
under which circuit judges or recorders sit in the EAT regularly. For cases of major importance
the EAT may be composed of a presiding judge with four lay members maintaining the
balance between employer representatives and those of workers. There may be one or three
lay members if the parties consent.
The Employment Appeal Tribunal may review and change any order made by it on a
similar basis to the provisions already mentioned in regard to employment tribunals. Appeal
lies on any question of law, decision, or order of the Employment Appeal Tribunal, either
with leave of the Tribunal or of the Court of Appeal to the Court of Appeal. Legal aid would
be available on such appeal according to the usual rules. There may then be a further appeal
to the House of Lords (becomes Supreme Court) under the usual rules.
Section 28 of the Employment Tribunals Act 1996 provides that EAT proceedings in an
appeal against the decision of an employment tribunal consisting of a chairman sitting alone
are to be heard by a judge sitting alone, unless he or she directs otherwise.
Reporting restrictions
Sections 11, 12, 31 and 32 of the Employment Tribunals Act 1996 (ETA) allow employment
tribunals and the EAT to make restricted reporting orders in cases involving sexual misconduct
(e.g. sexual harassment) and disability cases. These orders prevent those who make or are
affected by such allegations from being identified in media reports of the case. Persons have
in the past been put off bringing such cases before tribunals because of the publicity which
they attracted.
Contractual breach
Section 3 of the ETA 1996 and SI 1994/1623 (made under previous legislation) give the
employment tribunals power to hear and determine claims for damages for breach of the
contract of employment, in addition to their usual jurisdiction for breach of employment
rights. It is now possible to claim unfair dismissal and damages for wrongful dismissal, i.e.
dismissal without due notice, before the same tribunal. Formerly, the wrongful dismissal
aspect of the claim would have had to be carried on in a county court or the High Court.
These courts are still available for those who wish to pursue a claim for wrongful dismissal in
..
EL_C03.qxd 3/26/07 10:39 AM Page 75
them. The employment tribunal limit on damages is £25,000 and the claim must be brought,
if a tribunal is used, within three months from the date the employment ceased. The main
disadvantage of bringing wrongful dismissal claims in employment tribunals is that legal aid
is not available, whereas it may be in the ordinary civil courts. Furthermore, the limitation of
claims in the ordinary courts is six years and not the shorter period of three months allowed 3
for tribunal claims.
Claims for statutory unfair dismissal must be brought before an employment tribunal. As
noted above, contractual claims for wrongful dismissal can also be brought before an employ-
ment tribunal but the damages are capped at £25,000, even when the claimant’s loss is
known to be greater.
What is the position where a tribunal hears a case for wrongful dismissal and while accept-
ing that the claimant’s loss is greater, makes an award of £25,000 being governed by its cap?
Can the claimant proceed with a claim in the county court or the High Court for the balance
between the capped award and the actual loss?
The Court of Appeal dealt with this situation in Fraser v HLMAD Ltd [2006] IRLR 687. F was
dismissed by the administrative receivers of HLMAD Ltd, which was insolvent. F claimed
unfair dismissal and wrongful dismissal before a tribunal. In his claim initiating proceedings
in the tribunal he stated that he reserved the right to pursue a claim in the High Court for
damages in excess of the £25,000 cap.
Later, F commenced an action for the alleged wrongful dismissal in the High Court but did
not withdraw the wrongful dismissal claim from the tribunal, which went on to make an
award for unfair dismissal and £25,000 for the wrongful dismissal. HLMAD Ltd, through its
administrative receivers, asked the High Court to strike out F’s claim for wrongful dismissal,
which it did. F appealed to the Court of Appeal, which agreed with the High Court and
affirmed the striking out.
The civil procedure rule of merger applied. The effect of a judgment for the claimant
absorbs any claim which was the subject of that action into the judgment so that
the claimant’s rights are then confined to enforcing the judgment. The claim for the
excess over £25,000 was not a separate cause of action and could not be split into two causes
of action, one for damages up to £25,000 and another for the balance. A claimant who
expected to recover more than £25,000 should bring the claim in the ordinary courts. Merger
of the claim in this case was not prevented by the express statement made in the tribunal
claim form that F reserved his right to bring High Court proceedings for the excess over
£25,000.
Appeals in health and safety matters

Where a health and safety inspector has served an improvement notice requiring improve-
ments to be made in the procedures of a business, or a prohibition notice under which activity
must cease, appeal is to an employment tribunal and from that tribunal to a Divisional Court
of Queen’s Bench and not the EAT.
Alternative dispute resolution
The work of tribunals has increased greatly and, in line with the movement in the ordinary
courts towards more ADR, the Report of the Tribunal System Taskforce, issued in 2002, recom-
mended a greater emphasis on the resolution of disputes by the Advisory, Conciliation and
Arbitration Service (ACAS), following experiments through pilot schemes.
.. ..
EL_C03.qxd 3/26/07 10:39 AM Page 76
It is also relevant to mention here that s 32(2) of the Employment Act 2002 states that a
claimant cannot put a claim before a tribunal if he or she has not followed paras 6 or 9 of
Sch 2 to the 2002 Act. These provisions are designed to reduce tribunal applications by requir-
ing would-be claimants to raise a grievance internally before going to a tribunal. Problems
have emerged with this legislation, which receives further treatment in Chapter 19.
Administrative inquiries
As we have seen in some areas of administrative action, e.g. planning, there is in general no
right of appeal from the initial decision of the government or a local authority to an independ-
ent tribunal. The relevant Acts of Parliament normally provide for an opportunity to put a
case against the decision at a public inquiry conducted before an inspector who is normally
a Ministry official. The inspector makes a report to the Ministry concerned and the decision is
made by the Minister himself or a senior civil servant on his behalf.
Advantages of tribunals
As a method of deciding disputes tribunals and administrative inquiries have advantages.
For example, the tribunals and inquiries generally specialise in a particular field, and can thus
acquire a detailed knowledge of disputes in that field. The procedure of tribunals is simple
and informal, and it is often suggested that this puts those appearing before them at ease
so that they are better able to present their case. Certainly such justice is cheaper and
there are in general no court fees and costs, though if the assistance of a lawyer is required
he will have to be paid and there is no legal aid in this field except in the Employment
Appeal Tribunal.
However, appellants who are not represented by lawyers may take full advantage of the
rights of appeal given, though sometimes this results in references to tribunals which are
frivolous by nature. Generally speaking, administrative tribunals and inquiries give quick
decisions, and appellants are not subjected to the delays which are sometimes met with in
ordinary courts of law. Tribunals and inquiries are usually local by nature; they are, therefore,
able to acquaint themselves with local conditions, and can carry out inspections of property
and sites where this would assist them in their decision.
The Tribunals and Inquiries Acts

Criticism of administrative tribunals led to the setting up of a Committee on Administrative
Tribunals and Inquiries under the chairmanship of Sir Oliver Franks which reported in 1957.
The main areas of disquiet were that tribunals did not give reasons for their decisions and
furthermore that those decisions were not subject to appeal to the High Court on a point
of law.
The majority of the proposals of the Franks Committee were accepted by Parliament and
enacted in the Tribunals and Inquiries Act 1958. This Act, together with certain changes and
additions in subsequent legislation was re-enacted as the Tribunals and Inquiries Act 1971.
This was later consolidated into the Tribunals and Inquiries Act 1992.
..
EL_C03.qxd 3/26/07 10:39 AM Page 77
The implementation of Franks led to the following main changes:
(a) A Council on Tribunals now gives advice to the Lord Chancellor on the working of
tribunals and reports to Parliament from time to time on its work.
(b) The chairmen of the various tribunals are selected by the Ministers in whose fields
they work from a panel of persons appointed by the Lord Chancellor. The chairmen are
3
usually lawyers.
(c) A tribunal must normally allow a party who wants it to have a lawyer to represent him.
(d) All material facts are disclosed to all parties before a tribunal hearing and the hearing is in
public unless, e.g., public security is involved.
(e) Reasons for decisions are given if requested.
(f ) Appeals lie from most tribunals to the Divisional Court of Queen’s Bench.
Unfortunately, governments have often set up new tribunals without proper consultation
with the Council on Tribunals to see whether an existing tribunal might take on the work.
This has resulted in a proliferation of tribunals with a bewildering multiplicity of separate
jurisdictions. That apart, the implementation of most of the Franks’ Committee recommenda-
tions means that there are no longer any major reasons for dissatisfaction with the powers and
duties of tribunals.
There are those who have argued for appeal to a special Administrative Division of the
High Court and, as we shall see as the chapter proceeds, control of administrative tribunals
by means of judicial review is exclusively within the jurisdiction of the High Court and
claims are heard by an Administrative Court within the Queen’s Bench Division.
Reform
The former Lord Chancellor’s Department that now has the title of Department of Con-
stitutional Affairs is poised for a huge expansion to involve the takeover of tribunals
in England and Wales which are now scattered among several departments as is revealed
by the above materials. The proposals contained in the Leggatt Report of 2001 bring under
the Department the tribunals now split between such departments as Employment, Social
Security and the Inland Revenue (see Tribunals for Users: Report of Sir Andrew Leggatt published
in August 2001). The Report is the culmination of a 10-month review of the tribunal system,
the first since the Franks Committee reported 44 years before. Ministers are looking to
2006/07 for unification of the tribunals service.
Inquiries Act 2005

This Act is included for the sake of completeness but is not concerned with the solving of dis-
putes between the citizen and the state as the above material is. The Act replaces the little
used Tribunals of Inquiry (Evidence) Act 1921, which applied where both Houses of
Parliament had resolved that it was expedient that a tribunal be established for inquiring into
a matter of urgent public importance. The 2005 Act now covers these situations and the
power to establish an inquiry is vested in ministers of the various departments of state that
are relevant to the problem.
The Act provides a useful framework for the conduct of future public inquiries but it does
contain provisions that are potentially inimical to the conduct of an independent and free
inquiry, in that it reserves to the relevant minister the power to stop the inquiry or publish
only a limited report.
The inquiry is undertaken by a chairman alone or with other members of an inquiry panel
appointed by the relevant Minister in writing.
.. ..
EL_C03.qxd 3/26/07 10:39 AM Page 78
Legal aid
Legal aid in tribunals has been reviewed from time to time but it was felt appropriate to
recommend that it should be available only for proceedings in the Lands Tribunal and the
Employment Appeal Tribunal. In fact, advocacy before the Lands Tribunal is no longer the
the subject of legal aid, having been excluded by Sch 2 of the Access to Justice Act 1999. Legal
aid is still available for proceedings before the Employment Appeal Tribunal. Many still
regard the present position as unreasonable.
In particular, it is felt that legal aid is appropriate in cases heard before, e.g. the Social
Security Commissioners. In addition, there is no reason why legal aid should not be extended
to some of the domestic tribunals, e.g. in respect of hearings before the Professional
Standards Committees of the Institute of Chartered Accountants in England and Wales (see
below). Extension of legal aid to these proceedings is unlikely for the present at least.
Domestic tribunals
Another area in which persons or groups of persons or other public agencies exercise judicial
or quasi-judicial functions over others is to be found in the system of domestic tribunals.
These are, in general, disciplinary committees concerned with the regulation of certain
professions and trades, some having been set up by statute and others merely by contract
between members and the association concerned. Examples of tribunals regulating profes-
sions are what might be referred to broadly as the disciplinary committees of the General
Medical Council, Architects’ Registration Council, The Law Society, the Professional
Standards Committees of the ICAEW, and the Inns of Court. As regards the regulation of the
investment industry and the City of London, there is the Financial Services Authority operat-
ing under the Financial Services and Markets Act 2000 and the Panel on Take-overs and
Mergers, together with recognised investment exchanges, e.g. The London Stock Exchange.
Because domestic tribunals are not public authorities but private associations based on con-
tract, the courts cannot control the decisions which these tribunals make by the process of
judicial review leading to the issue of a mandatory order, a prohibiting order or a quashing
order (Law v National Greyhound Racing Club Ltd [1983] 3 All ER 300).
At one time members were bound by the rules of these tribunals no matter how unreason-
ably or unfairly they might operate. For example, if the rules allowed expulsion there was no
remedy against this even though a person so expelled might be unable to work if he was not
a member of the association.
The breakthrough came in the decision of the Court of Appeal in Lee v Showmen’s Guild of
Great Britain [1952] 1 All ER 1175 which brought domestic tribunals under the control of the
courts. Mr Lee ran a roundabout. He occupied the same pitch each year at Bradford Summer
Fair. Another Guild member, Mr Shaw, claimed the pitch and a committee of the Guild
found that Mr Shaw was entitled to have it and that Mr Lee was guilty of unfair competition.
It fined Mr Lee £100. He then brought an action claiming a declaration that the committee’s
decision was invalid. The Court of Appeal upheld Mr Lee’s claim in the main because it was at
last accepted that the contract associations could not by that contract rule out the jurisdiction
of the court because no contract intended to bind the parties to it could oust that jurisdiction
(see further Chapter 16).
Since that time the courts have intervened to see that the rules of these associations are
correctly interpreted and that the principles of natural justice are observed. They have
..
EL_C03.qxd 3/26/07 10:39 AM Page 79
developed a jurisdiction to redress wrongful expulsion; wrongful refusal to admit to member-

ship; refusal to admit women and restrictive activities in terms of what members can do.
Thus, in Pharmaceutical Society of Great Britain v Dickson [1968] 2 All ER 686 the House of
Lords decided that the Society could not by its rules restrict chemists in terms of what they
sold in their shops. 3
In R v Panel on Take-overs, ex parte Datafin plc [1987] 1 All ER 564, the Court of Appeal
decided that having regard to the public consequences of non-compliance with the code, e.g.
that a bid by one company for another could be declared invalid if the procedures of the code
were infringed, application for judicial review of Panel decisions would be available in an
appropriate case. This represents a considerable extension of the law to allow judicial review
of domestic bodies where their decisions have effect upon the non-member public. However,
it is doubtful whether the Datafin decision could be extended to purely domestic tribunals,
e.g. the disciplinary bodies of the various professions whose proceedings affect only their
members and not to any significant effect the public who are not members.
The Datafin decision was distinguished in R (On the application of Sunspell Ltd) v Association
of British Travel Agents [2000] All ER (D) 1368. The High Court ruled that unlike the Panel the
government did not seek to regulate the travel industry through ABTA. The power that ABTA
possessed arose entirely from the truly voluntary submission of its members to its authority.
It was not a public or governmental body in its nature.
A person aggrieved by the decision of a domestic tribunal can, however, ask the court for
the remedy of a declaration of his rights or an injunction. These have proved quite powerful
remedies as a means of controlling purely domestic tribunals.
Judicial control over inferior courts and tribunals

We must now consider what control the ordinary courts of law have over administrative
action as expressed in the decisions of tribunals and inquiries and what methods are used to
exercise that control.
Control by the judiciary is exercised as follows:
(a) by statutory rights of appeal from the tribunal;

(b) by application of the doctrine of ultra vires;
(c) by the use of the principal administrative law remedies, i.e. injunctions, declarations, and
the prerogative orders of certiorari, prohibition, and mandamus, through an application
under the Civil Procedure Rules for judicial review. The application to the court may
additionally include a claim for damages. Claims are dealt with by the Administrative
Court in London or Cardiff (where the matter relates to a public authority in Wales).
These methods of control will now be considered in more detail. However, before proceeding
further it should be noted that by reason of a Practice Note issued by the Lord Chief Justice
(see [2000] 4 All ER 1071), an order for mandamus is now known as a mandatory order, an
order for prohibition is known as a prohibiting order and an order of certiorari is known as a
quashing order.
Statutory right of appeal

Where, as in the case of the Lands Tribunal, the Act of Parliament setting up or controlling
the tribunal gives a right of appeal to the ordinary courts of law, the courts are entitled to re-hear
the whole case and are not limited to a consideration of the reasons given by the tribunal for
.. ..
EL_C03.qxd 3/26/07 10:39 AM Page 80
its decision. The court can consider the whole matter afresh, and can substitute a new decision
for that of the tribunal.
It should be noted that the existence of a right of statutory appeal does not necessarily
prevent a successful application for judicial review. Thus, in R v Wiltshire CC, ex parte Lazard
Bros Ltd [1998] CLY 95 the local authority resolved to make an order under the Wildlife and
Countryside Act 1981 designating a road through a village as a by-way open to all traffic.
Lazard Bros, who were owners of a farm in the village, successfully applied to the High Court
for an order quashing the resolution. The court said that the fact that there was a statutory
remedy of public inquiry and statutory appeal thereafter did not negate the court’s jurisdic-
tion to entertain an application for judicial review.
Ultra vires
No public authority may lawfully make a decision and take action on it unless it is authorised
by law to do so or the act is construed as being reasonably incidental to its authorised activit-
ies. An act which does not conform with the above is treated by the courts as void under the
doctrine of ultra vires (beyond the powers of ).
The doctrine applies to bodies and individuals such as Ministers exercising judicial, quasi-
judicial, legislative or administrative functions, including local authorities, tribunals, government
departments and other public authorities, though Parliament’s legislative powers are unlimited
(see Chapter 1).
Typically, the ultra vires method of control is used where the decision taken is unauthorised
by the powers given to the authority. However, even when the authority acts within its
powers, the court can review the decision if it is unreasonable to a high degree (Associated
Provincial Picture Houses Ltd v Wednesbury Corp [1947] 2 All ER 680). Subsequent case law has
moved away from the ‘reasonableness’ test in favour of saying that the decision is dispropor-
tionate to the result to be achieved (see p 85).
Attorney-General v Fulham Corporation, 1921 – The ultra vires method of

control (6)
Prerogative orders and judicial review

Where no right of appeal is given, it may be possible to challenge the decision of an inferior
court or public tribunal by having recourse to the supervisory jurisdiction of the High Court.
The procedure is available in civil and criminal matters.
This jurisdiction is exercised exclusively by the High Court by means of the orders known
as mandatory orders, prohibiting orders and quashing orders. These orders, which are not avail-
able as of right but at the discretion of the court, were formerly prerogative writs, which a
subject might obtain by petitioning the Crown.
The Sovereign has no such power today, the control being exercised by the Administrative
Court as part of the Queen’s Bench Division, the former writs being now called orders
(Supreme Court Act 1981, s 29: becomes Senior Courts Act 1981).
A person cannot normally invoke the supervisory jurisdiction of the High Court if other
more appropriate procedures for appeal exist.
Order 53 of the Rules of the Supreme Court (becomes Senior Court Rules) which is
attached as a schedule to the Civil Procedure Rules 1998 Part 50, introduces a comprehensive
system of judicial review. A statutory basis for this procedure also appears in s 31 of the
Supreme Court Act 1981 (becomes Senior Courts Act 1981). It allows an application to cover
..
EL_C03.qxd 3/26/07 10:39 AM Page 81
under one umbrella, as it were, all the remedies of mandatory orders, prohibiting orders and
quashing orders, and also declaration and injunction. There is no need to apply for one of
these remedies individually. Any combination of them is available under the one claim for
judicial review. Damages may also be claimed on an application for judicial review (1981 Act,
s 31(4)). No application for judicial review may be made without leave. Application is made 3
for this to a single judge in what was called the Crown Office, but which is now called the
Administrative Court. This is to eliminate frivolous claims. As regards the title of the action,
proceedings are taken in the name of the Crown as in criminal proceedings. Thus, there is the
citation as, e.g., R v Barchester County Council, ex parte Bloggs (since July 2000 the citation is e.g.
R (On the application of Bloggs) v Barchester County Council). If permission to apply for judicial
review is obtained from the single judge, the application is made in a criminal cause or mat-
ter to the Divisional Court of Queen’s Bench and in a civil cause or matter to a single judge
of the High Court. These applications are not governed by the track allocation procedures
under the Civil Procedure Rules 1998 (see further Chapter 5).
There have been difficulties in the past as to whether a person had the necessary locus
standi, i.e. interest, to bring an action for one of the administrative remedies. Locus standi is
dealt with in Order 53 and s 31(3) of the 1981 Act which lay down a simple test which is that
the applicant must have ‘a sufficient interest in the matter to which the application relates’.
The test is, of course, rather vague, but Lord Denning, in discussing the remedy of judicial
review in The Discipline of Law, states:
The court will not listen to a busybody who is interfering in things which do not concern
him, but it will listen to an ordinary citizen who comes asking that the law should be
declared and enforced, even though he is only one of a hundred, or one of a thousand, or
one of a million who are affected by it. As a result, therefore, of the new procedure, it can
I hope be said that we have in England an actio popularis by which an ordinary citizen can
enforce the law for the benefit of all – as against public authorities in respect of their
statutory duties.
However, it should not be assumed that judicial review is available to redress any decision
which might be regarded in a broad sense as ‘unfair’. The House of Lords made it clear in
Puhlhofer v Hillingdon LBC [1986] 1 All ER 467 – an attempt to challenge a decision not to
house the applicant – that persons seeking judicial review must base their case on one of the
accepted principles of review, e.g. ultra vires or procedural irregularity.
As we have seen, decisions taken at a trial on indictment in the Crown Court are not subject
to judicial review (see R v Harrow Crown Court, ex parte Perkins [1998] Current Law 96).
R v Brighton Justices, ex parte Robinson, 1973 – Judicial review not generally

available where appropriate procedures for appeal exist (7)
IRC v National Federation of Self-Employed and Small Businesses Ltd, 1981 – Judicial
review: the need for locus standi (8)
Grounds on which a quashing order lies

The only grounds on which such an order lies are as follows:
(a) Want or excess of jurisdiction. This exists where the inferior court or body has adjudicated
on a matter which it had no power to decide, i.e. where it is acting beyond its powers (ultra vires).
A quashing order is not the only remedy which may be used to control ultra vires acts.
Note, for example, the use of an injunction in the ultra vires situation seen in A-G v Fulham
Corporation, 1921 (Case 6).
.. ..
EL_C03.qxd 3/26/07 10:39 AM Page 82
( b) Denial of natural justice. The principle is that, although a tribunal should not be
required to conform to judicial standards, but should be free to work out its own procedures,
nevertheless it must observe the rules of natural justice, i.e. there must be no bias and both
sides should be heard.
(i) Bias. This may be pecuniary bias but other forms of bias are relevant as where, for
example, the chairman of magistrates states that he always prefers the evidence for the
prosecution given by the police. It was held in Seer Technologies Ltd v Abbas (2000) The
Times, 16 March that it was inconceivable that any legitimate objection could be taken
against a judge purely on grounds of religion, ethnic or national origin, gender, age or
sexual orientation. This is obviously right, since it would allow the issue of bias to be
brought in many cases particularly as women and black lawyers begin to be appointed to
the judiciary. A defendant cannot be allowed to say, e.g., ‘The judge was biased. He is
black and I am white’, or ‘The judge is a woman and I am a man’. The situation would,
of course, be different if actual bias could be shown as where a female or black judge was
shown to have a pecuniary interest in the outcome of a case.
The Court of Appeal ruled in Kjell Tore Skjevesland v Geveran Trading Co Ltd [2003] 1 All
ER 1 that the requirement that judges be free from bias may not always apply to advo-
cates. The petitioner was not entitled to a retrial of bankruptcy proceedings on the
ground that his barrister had been acquainted with the wife of the debtor for six years.
However, the House of Lords did find procedural bias in Lawal v Northern Spirit Ltd
[2004] 1 All ER 187, where a barrister who had previously sat as a part-time judge in the
Employment Appeal Tribunal appeared for the employer on appeal by the claimant to
the EAT in a situation where one of the lay members of the EAT had previously sat with
the barrister when he was taking appeals as a part-time judge. L contended that this
could have been instrumental in the loss of his claim for racial discrimination. The
House of Lords agreed that there was procedural bias.
(ii) The right to be heard. There is no inherent right to an oral hearing; written evidence may
be acceptable. However, the right to be heard (audi alteram partem) implies that notice of
the hearing or other method of stating one’s case must be given together with notice of
the case which is to be met (see R v Wear Valley DC, ex parte Binks (1985) and R v Board
of Governors of London Oratory School, ex parte R (1988) at p 687). In addition, though the
law is not entirely free from doubt, it is the better view that a reasonable opportunity to
cross-examine witnesses is part of the audi alteram partem principle. Thus, in Nicholson v
Secretary of State for Energy (1977) 76 LGR 693, the right of cross-examination at a public
inquiry into the siting of an opencast mine was upheld on the basis that the denial of
that right was a breach of natural justice.
Legal representation is also part of the audi alteram partem principle. Public tribunals under
the Tribunals and Inquiries Act 1992 will normally allow a party who wants it to have a
lawyer to represent him. As regards a domestic tribunal, the Court of Appeal in Enderby Town
Football Club Ltd v The Football Association Ltd [1971] 1 All ER 215 laid down the following
broad principles:
(1) If the rules of the organisation say nothing about it, the matter is basically within the
discretion of the tribunal.
(2) If the case involves difficult points of law, it is better for the parties to use the ordinary
courts and get a declaratory judgment setting out their rights. If, however, a tribunal is
used, legal representation should be allowed and the court will intervene on the grounds
of public policy to see that it is.
(3) A rule forbidding legal representation altogether is probably invalid. A tribunal should
always be given a discretion.
..
EL_C03.qxd 3/26/07 10:39 AM Page 83
However, it seems that in disciplinary cases where it is necessary to reach decisions quickly,
it might well be appropriate to refuse legal representation. Thus, in Maynard v Osmond [1977]
1 All ER 64, the Court of Appeal held that natural justice did not require that a police con-
stable should have legal representation at a hearing before the chief constable on a disciplinary
matter involving an allegation that a sergeant had falsely stated that PC Maynard had been 3
asleep while on duty. Furthermore, the House of Lords decided in R v Board of Visitors of the
Maze Prison, ex parte Hone and McCarten [1988] 1 All ER 321 that a prisoner charged with a dis-
ciplinary offence is not entitled, as of right, to legal representation at the disciplinary hearing.
Whether a decision is judicial, quasi-judicial or administrative, or disciplinary, the rules of
natural justice need not necessarily be applied if national security is involved.
(c) Effect of failure to comply with rules. In recent times the courts have made it clear that
anything done by a tribunal in breach of natural justice (or ultra vires) is void. If action has
been taken on the decision of a tribunal which is void that action is also void. If the decision
was merely voidable action taken on it prior to the court quashing it would be valid.
(d) Error of law on the face of the record. A quashing order lies to quash a decision the record
of which discloses an error of law. According to Lord Denning in R v Northumberland Com-
pensation Appeal Tribunal, ex parte Shaw [1952] 1 All ER 122, the record consists of ‘the document
which initiates the proceedings, the pleadings (if any), and the adjudication, but not the evid-
ence or the reasons unless the tribunal chooses to incorporate them’. As we have seen, the
Tribunals and Inquiries Act 1992 requires reasoned decisions in cases coming before tribunals
and inquiries so that there should now normally be a record giving reasons which will assist
the High Court in exercising its supervisory jurisdiction. In addition, if a reasoned decision is
required by the 1992 Act a mandatory order lies to compel the tribunal or inquiry to give one.
However, the above provisions do not apply to magistrates’ courts. If an order of a magistrates’
court does not contain reasons for the making of the order, then, provided the magistrates
have stayed within their jurisdiction and observed the rules of natural justice, a quashing
order does not lie on the order under this heading.
R v London County Council, ex parte Entertainments Protection Association

Ltd, 1931 – Quashing orders and ultra vires (9)
Dimes v Grand Junction Canal, 1852 – Monetary bias (10)
R v Bingham Justices, ex parte Jowitt, 1974 – Other bias (11)
R v Secretary of State for Home Department, ex parte Hosenball, 1977 – Natural
justice and national security (12)
Ridge v Baldwin, 1963 – Effect of failure to comply with rules of natural justice and
ultra vires (13)
A prohibiting order lies to prevent an inferior tribunal from exceeding its jurisdiction, or
infringing the rules of natural justice. It is governed by similar principles to a quashing order,
except that it does not lie once a final decision has been given (a quashing order is then the
appropriate order). The object of a prohibiting order is to prevent an inferior tribunal from
hearing and deciding a matter which is beyond its jurisdiction. A prohibiting order and a
quashing order are available against the Crown and public authorities but not against private
persons or bodies, e.g. the big industrial conglomerates and trade unions.
Applications for quashing and prohibiting orders are often brought together, e.g. to quash
a decision already made by a tribunal, and to prevent it from continuing to exceed or abuse
its jurisdiction.
A prohibiting order may be issued to any person or body (not necessarily an inferior court,
since it might be issued to a local authority). It commands him or them to carry out some
public duty. Once again, it is not available against private persons or bodies.
.. ..
EL_C03.qxd 3/26/07 10:39 AM Page 84
It might be used to compel an administrative tribunal to hear an appeal which it is refusing

to hear, or to compel a local authority to carry out a duty lying upon it, e.g. to produce its
accounts for inspection by a council tax payer (R v Bedwellty UDC [1943] 1 KB 333). A mand-
atory order lies to compel the exercise of a duty and of a discretionary power, though in the
case of the latter not in a particular way.
It is not available against the Crown itself, but it may issue against Ministers or other
Crown servants to enforce a personal statutory duty.
The High Court has power to issue the above orders under s 29(3) of the Supreme Court Act
1981 (becomes Senior Courts Act 1981) in respect of all decisions of the Crown Court (with
the exception of matters relating to trial on indictment) where such orders are normally
appropriate, e.g. where an error of law appears on the face of the record in, say, a licensing
decision as where the Crown Court appears to have misinterpreted statutory provisions (R v
Exeter Crown Court, ex parte Beattie [1974] 1 All ER 1183). Appeals from trials on indictment
are to the Court of Appeal, Criminal Division.
Injunction and declaratory judgment

The High Court can also exercise control over the decisions of inferior tribunals by grant-
ing, at its discretion, an injunction to prevent, for example, the implementation of a
decision made by an inferior tribunal which does not observe the rules of natural justice.
The remedy is not normally available against the Crown (Factortame Ltd v Secretary of State
for Transport [1989] 2 All ER 692), but see Chapter 8. Defiance of an injunction amounts
to contempt of court. In many ways the remedy is like a prohibiting order. However, it is
rarely used against public tribunals. It is more commonly brought into play against domestic
tribunals.
A declaratory judgment may be asked for by a person aggrieved by the decision of an inferior
tribunal so that the High Court can state the legal position of the parties. Defiance of a
declaratory judgment is not a contempt of court and there is no method by which it can be
enforced, but parties usually observe it. However, disobedience could lead to a later action for
an injunction or damages in which the law would already have been decided leaving only the
facts to be proved. A declaration by the court that an administrative act was ultra vires will
make it void and of no effect. It is particularly useful in respect of complaints against the
actions of government departments and Ministers.
It is important to note here that in R v Secretary of State for Employment, ex parte Equal
Opportunities Commission, 1994 (see Chapter 19) the House of Lords gave a declaratory judg-
ment to the effect that UK employment law on part-time working was incompatible with the
Treaty of Rome and the EC Equal Pay Directive. In doing so they were, in effect, saying that
what was then the government’s Employment Protection (Consolidation) Act 1978 was not
correct. Their Lordships also made two decisions of great importance as follows:
(a) that the judicial review procedure is available to deal with defects in the government’s
interpretation of EC employment law. This is a much quicker way of sounding out the
possible application of EC law than a reference to the European Court of Justice;
(b) that the Equal Opportunities Commission had the necessary locus standi (right to be
heard) in this case. In other words, the EOC was qualified to act on behalf of a group
of workers, i.e. part-timers. This principle was previously in doubt and the House of
Lords did not feel that it was prevented from making this decision by IRC v National
Federation of Self-Employed and Small Businesses Ltd, 1981 (see Case 8), though the case was
not overruled. The decision strengthens the power of pressure groups, as does the judicial
review ruling.
..
EL_C03.qxd 3/26/07 10:39 AM Page 85
Damages
Although a public authority has acted unlawfully in the sense of being ultra vires, a person
affected, such as Shell UK in R v Lewisham BC, ex parte Shell UK (see Case 6: Comment (ii)),
cannot recover damages against the wrongdoer unless he can base his claim on breach of
contract, or a tort, or alleges infringement of a property right (O’Reilly v Mackman [1983] 2
3
AC 237). It was held in R v Knowsley Metropolitan Borough Council, ex parte Maguire (1992) The
Independent, 19 June (High Court) that there was no general right to damages against a local
authority for maladministration.
Where on an application for judicial review it appears that there is a case, e.g. a breach of
contract, for which damages might be available, the court may, instead of refusing the
application, order the proceedings to continue as if begun by claim form under the Civil
Procedure Rules 1998 and may give directions either allocating the proceedings to a case
management track or providing for allocation questionnaires or an allocation hearing (see
further Chapter 5).
R v Commissioner of Police of the Metropolis, ex parte Blackburn, 1973 –

Mandatory orders and discretionary powers (14)
R v Secretary of State for Social Services, ex parte Grabaskey, 1972 – Mandatory
orders may be issued against Ministers (15)
Laker Airways v Department of Trade, 1977 – Declaratory judgments: actions of
government departments and Ministers (16)
Judicial review – delay

It was decided in R v Dairy Produce Quota Tribunal for England and Wales, ex parte Caswell [1989]
3 All ER 205 that if application for judicial review was not made promptly or within three
months at the latest as prescribed by Order 53 of the Rules of the Supreme Court, the judge
had to refuse leave to continue an action unless the applicant had a good reason for the delay.
Judicial review and infringements of human rights

When reviewing the decision-making powers of public authorities the court has sometimes
used the Wednesbury reasonable test (see p 80) under which the court has quashed the deci-
sion of a public authority not on the basis that it did not have the power to make it but that
it was an unreasonable decision. The court is saying in effect that no reasonable decision-
maker could have made the decision that the court is being asked to review.
However, where the decision is also an infringement of an individual’s human rights the
House of Lords in R v Secretary of State for the Home Department ex parte Daly [2001] 2 WLR
1622 has substituted a test of ‘proportionality’. Thus in a human rights case the court will not
ask whether it would have made the decision (a merits-based test) nor whether the decision
was so unreasonable that no reasonable decision-maker could have made it (Wednesbury).
Instead the test will be proportionality. This means that the court needs to look at the legiti-
mate decision of a public authority in terms of whether there is a fair balance between the
protection of individual rights and the interests of the public at large.
The proportionality test has always been the approach of the European Court of Human
Rights and an example from that court is to be found in Open Door Counselling and Well
Woman v Ireland [1993] 15 EHRR 244 where the court found that an injunction preventing
the publicising of information about abortion was disproportionate to the aim of protecting
.. ..
EL_C03.qxd 3/26/07 10:39 AM Page 86
morals because it was framed as an absolute ban, i.e. it prevented information being given
even where there might be serious medical need.
Although the proportionality test has arisen in connection with human rights claims
there have been statements by the senior judiciary that it should be recognised in all cases of
judicial review. It will obviously be difficult to combine the Wednesbury reasonable test with
the test of proportionality and it is likely that the proportionality test will take over from
Wednesbury.
In the Daly case the Home Secretary had introduced a blanket policy allowing cell searches
in prisons and examination of correspondence between the prisoner and his lawyers in the
prisoner’s absence. The House of Lords ruled that the policy infringed the prisoner’s right to
legal professional privilege at common law and was contrary to the Human Rights Convention,
Art 8 (right to privacy). The infringement was greater than could be shown to be justified by
the aim, e.g. of revealing and prosecuting crime successfully. In other words, the House of
Lords was saying that the policy was disproportionate.
There is some difference between the tests, the proportionality test being more objective.
The Wednesbury test does involve the court in saying that no reasonable decision-maker could
have made it and yet as we know some religious groups are opposed to abortion and some of
them are decision-makers. Indeed, some governments are pro-life and yet have been elected
by a wide franchise. Are all the decisions of such a government to be declared unreasonable
where they follow pro-life policies? The proportionality test is more objective and less personal
in its approach though it will often produce the same effect as Wednesbury.
Judicial review – a commercial context

The remedy of judicial review has traditionally operated mainly in the field of public law in
terms, for example, of the review of decisions made by local and central government or
Ministers. More recently the remedy has been extended into a more commercial context.
Thus in Interbrew SA v Competition Commission and the Secretary of State for Trade and Industry
[2001] All ER (D) 305 the Belgian brewer Interbrew had tried to acquire Whitbread the
UK brewer but the Competition Commission exercising powers under the Competition
Act 1998 had decided that in view of the fact that Interbrew had already acquired Bass
Brewers, the makers of Carling and Tennants lager, the acquisition of Whitbread would be
contrary to the public interest as creating abuse of a dominant position in terms of supply.
The Commission ruled that if Whitbread was acquired Interbrew must sell off Bass. Interbrew
claimed that the Commission had not given it a fair hearing in terms of other solutions put
forward to it by Interbrew, but the Secretary of State had followed the decision of the
Commission. The Administrative Court found for Interbrew and quashed the decision of the
Secretary of State.
Other controls on decision making

Ministers of the Crown and the courts
Sometimes an Act of Parliament places a Minister in a supervisory role over, for example, the
decisions of local authorities, and where this is so he must act judicially and not administra-
tively in respect of that supervisory role. If he does not exercise the supervisory role in the
way envisaged by the Act which gave it to him, the Minister’s directions are themselves sub-
ject to review by the court. This is, of course, in addition to the parliamentary question and
the rule of ministerial responsibility to Parliament.
..
EL_C03.qxd 3/26/07 10:39 AM Page 87
Secretary of State for Education and Science v Tameside Metropolitan

Borough Council, 1976 – Courts can examine executive action (17)
3
The Ombudsman
It has become a popular idea to give the citizen safeguards against maladministration which
are in addition to the traditional ones of application to a court or tribunal, by the setting up
in various areas of administration of Ombudsmen, so called because the system is modelled
upon the Scandinavian office of Ombudsman. Some examples appear below.
The Parliamentary and Health Service Commissioner

A further check on abuse of power by government departments was created by the appoint-
ment of the Parliamentary Commissioner for Administration (or ‘Ombudsman’) (now the
Parliamentary and Health Service Commissioner) under the provisions of the Parliamentary
Commissioner Act 1967 (whose jurisdiction has been extended by the Parliamentary
Commissioner Act 1994). The Commissioner is appointed by the Crown and has the same
security of tenure as a judge of the Supreme Court. He is also a member of the Council on
Tribunals. His function is to investigate complaints relating to the exercise of administrative
functions. However, investigation of central government departments is made only at a
Member of Parliament’s request and a citizen who wishes to have a complaint investigated
must first bring it to the MP’s notice.
Unfortunately, the Commissioner is very often limited to a consideration of the administrat-
ive procedures followed and is powerless to act if the correct procedure has been followed even
though the decision is bad. Furthermore, he cannot investigate personnel matters.
Nevertheless, each year sees a steady rise in the number of complaints referred to him,
though the Commissioner and his functions are still not well enough known and he is at the
present time less effective than his counterparts in other countries. In fact, Britain is alone
among the countries with national ombudsmen in not allowing the Ombudsman to initiate
his own investigations. Most of the complaints involve government departments in constant
contact with the public, more complaints being levied against the Department of Social
Security, followed by the Inland Revenue, than any other department. In this connection,
there is now a Revenue adjudicator to whom taxpayers can complain. Those who are not
satisfied with the adjudicator’s decision may still ask their MPs to take up the complaint with
the Parliamentary Ombudsman.
The Commissioner’s jurisdiction under the Act of 1967 is limited to certain aspects of
Central Government administration but the Parliamentary Commissioner (Consular
Complaints) Act 1981 extends the jurisdiction of the Parliamentary Commissioner to com-
plaints about the conduct of United Kingdom consular officers abroad. The Parliamentary
and Health Service Commissioners Act 1987 extends the jurisdiction of the Parliamentary
Commissioner to non-departmental bodies etc. listed in Sch 1, e.g. the Information Com-
missioner under the Data Protection Act 1998. Section 110 of the Courts and Legal Services
Act 1990 extends the jurisdiction of the Commissioner to administrative acts of the administrat-
ive staff of courts and tribunals. This does not include review of the acts of the judiciary or
tribunal members.
There is also a Health Service Commissioner for England and Wales to investigate com-
plaints about certain aspects of the National Health Service. The Commissioner is the
Parliamentary Commissioner who, therefore, combines the two offices and takes the title of
Parliamentary and Health Service Commissioner.
.. ..
EL_C03.qxd 3/26/07 10:39 AM Page 88
Under the Act of 1967 the Parliamentary Commissioner is given discretion whether to
investigate a complaint or not. It was held in R v Parliamentary Commissioner, ex parte Dyer
[1994] 1 All ER 375 that there was nothing in either the Commissioner’s role or statutory
framework which placed him beyond judicial review, but because of the largely discretionary
nature of his duties the court would not readily interfere with his exercise of those discre-
tions. In consequence, a prohibiting order will not issue to him since he has no duty to hear
a complaint (Re Fletcher ’s Application [1970] 2 All ER 527). Furthermore, there is no way of
enforcing the findings of the Ombudsman and there are those who feel that it would
improve matters if the courts had power to enforce these findings. Judicial review is available
against the decisions of local commissioners (see R v Local Commissioner for Administration for
the South, the West, the West Midlands, etc. [1988] 3 All ER 151).
Commissions for Local Administration

In addition, there are two Commissions for Local Administration in England and Wales each
consisting of Local Commissioners appointed by the Secretary of State plus the Parliamentary
Commissioner. A Local Commissioner may investigate a written complaint made by a member
of the public who claims to have sustained injustice in consequence of maladministration in
connection with action taken by or on behalf of a local authority, joint board, police authority
or water authority, being action taken in the exercise of administrative functions. The complaint
will normally be made in writing either through a member of the local authority complained
against or with evidence that a member has been asked to refer it but has not done so. Further-
more, it must be made within a time limit of 12 months. Any one of the Local Commis-
sioners has the same powers as the High Court to require the attendance of witnesses and
production of documents when he is conducting an investigation. He must report the results
of any investigation to the person who referred the complaint to him, to the complainant
and to the authority concerned which must make copies available for public inspection. If he
finds that injustice has been caused, the authority concerned must consider his report and
notify him of what action they have taken. The greatest number of complaints relates to
activities of local housing and planning authorities. Certain matters, such as the conduct of
legal proceedings, action taken to prevent crime, or action concerning the giving of instruc-
tion or discipline in schools, are excluded from the jurisdiction of a Local Commissioner.
Legal Services Ombudsman

Sections 21–26 of the Courts and Legal Services Act 1990 set up the office of Legal Services
Ombudsman. The object is to help people who have a genuine cause for complaint against
members of the legal profession but have not been able to sort their problems out. The
Ombudsman has power to investigate the handling of complaints by the Law Society, the
Bar Council and the Council for Licensed Conveyancers, reinvestigate the complaints and
recommend remedies. He reports annually to the Lord Chancellor and Parliament.
Under s 49 of the Access to Justice Act 1999 the powers of the Ombudsman are widened
and binding awards of compensation can be made, but the jurisdiction does not extend to
alleged overcharging as such. Bad work is a main ground of complaint. Under the provisions
of s 50 of the 1999 Act the Lord Chancellor can require the relevant professional bodies to
pay contributions to the Ombudsman’s expenses, which goes some way to making the
ombudsman scheme self-funding.
Other Ombudsmen
The Financial Services Authority has set up a company called The Financial Services
Ombudsman Scheme to operate an arrangement capable of resolving disputes between, e.g.
..
EL_C03.qxd 3/26/07 10:39 AM Page 89
independent financial advisers regulated by the FSA and consumers. The Financial Services
Ombudsman has appointed three ombudsmen to deal with banking, insurance and invest-
ment services. Compensation up to £100,000 (currently) can be awarded with an additional
£1,000 where the complainant has suffered distress and inconvenience. If a regulated firm
has not dealt with a consumer’s complaint within eight weeks, the consumer can go to the 3
Ombudsman. These complaints can, of course, be brought in the ordinary courts since they
will usually be based on negligence and/or breach of contract. Section 225 of the Financial
Services and Markets Act 2000 contains the necessary powers for the FSA to set up an
ombudsman service.
Sections 150–160 of the Pensions Act 1995 provide for a Pensions Ombudsman to adju-
dicate in disputes between an individual and a pension scheme or provider. In addition, the
Institute of Chartered Accountants in England and Wales has appointed an ombudsman
called the ‘Receiver of Complaints’ to review complaints against its members.
Under Article 195 of the EC Treaty, the European Parliament is enabled to appoint an
ombudsman to investigate maladministration by Community institutions including the
non-judicial functions of the EC courts. The Ombudsman may be approached directly or
through an MEP, or may investigate of his own motion. He holds office for the duration of the
Parliament and can only be dismissed by the European Court at the request of the Parliament.
The Human Rights Act 1998

The materials discussed so far in this chapter have been concerned with the operation of
various controls on authority of one sort or another. The Human Rights Act 1998 (HRA)
which came into force on 2 October 2000 represents the most massive vehicle for control of
authority, whatever called, in its day-to-day activities. The following is an outline of its effects
upon English law.
New legislation
Under s 19 the HRA provides that, in respect of new legislation, the Minister in charge of it
must make a statement that the relevant Bill is compatible with the rights of the European
Convention on Human Rights, most of which it incorporates into UK law. This statement,
which must be made before the Second Reading of the relevant Bill, also appears on the front
of the Bill and on the Explanatory Notes and Financial Memorandum which accompany it.
The object is to concentrate the mind of government on the matter of compatibility. It also
informs Members of Parliament that human rights are relevant in debates on the Bill. Finally,
it reminds the judiciary of the need to give the Bill, when it passes into law, a compatible
interpretation, although s 3 requires this anyway. If a Bill is not compatible with the
Convention, the appropriate Minister must give reasons during Parliamentary debate.
A new rule of statutory interpretation

Section 3 provides that so far as it is possible to do so, Acts of Parliament and delegated
legislation must be interpreted in a way which is compatible with Convention rights. This
introduces a new rule of construction (see further Chapter 6) and has a significant effect on
the rule of precedent in that for example a Crown Court could be obliged to refuse to follow a
previous decision of the Court of Appeal or even the House of Lords on the meaning of an
Act of Parliament if this was required to give effect to Convention rights. Thus, if a piece of
.. ..
EL_C03.qxd 3/26/07 10:39 AM Page 90
legislation can be interpreted in two ways, one compatible with the Convention and one not,
the court is required to choose the compatible interpretation. Nevertheless, the section makes
clear that if the only possible interpretation is contrary to the Convention, it must be applied
and remains valid.
Section 3 applies to past as well as future legislation. This rule of construction is not unique
in that our courts and tribunals are already required to interpret the provisions of English
domestic law in order to be compatible with European law.
Method of interpretation
Under s 2 UK courts must take into account relevant case law of the European Court of
Justice and the Commission of Human Rights when determining a question of human rights,
but the relevant decisions are not binding on UK courts. The UK courts will, in having regard
to Convention cases, have to use Convention techniques of interpretation. Since the general
theme of the European approach is that human rights are always developing and that the
Convention is a ‘living document’ a practical effect will be that UK courts will be less inclined
to have regard to older UK case law. Nevertheless, it is only the Convention that binds UK
courts and not the interpretive case law. Clearly the UK Human Rights Act 1998 must be
interpreted in a way compatible with Convention rights.
Declaration of incompatibility
Under s 4 where a ‘designated court’, e.g. the House of Lords, the Judicial Committee of the
Privy Council, the Court of Appeal or the High Court, is satisfied that primary or secondary
legislation is incompatible with Convention rights and cannot be interpreted to be otherwise,
it may (not must) make a declaration of ‘incompatibility’. This does not affect the validity of
the provision nor is it binding on the parties to the case in which it is made and it operates
only as a notification to Parliament that a measure has been found incompatible.
The ability to make a declaration of incompatibility in the case of subordinate legislation
applies where the primary legislation under which it was made prevents the removal of that
incompatibility. If not, delegated legislation can be struck down by the court or merely dis-
applied. This is not possible with primary legislation (see s 3(2)). This is a major extension of
the ultra vires rule discussed earlier in this chapter.
It should be noted that common law case law has no protection under the HRA as has
legislation, particularly primary legislation. The common law must be developed in a way
compatible with the Convention.
Public authorities
Section 6 provides that it is unlawful for a public authority to act in a way which is incompat-
ible with Convention rights. There is no full definition of ‘public authority’. It was felt by
Parliament to be better to leave this to the courts as cases came before them. However, s 6
expressly excludes both Houses of Paliament and expressly includes courts and tribunals.
Beyond that, it includes ‘any person certain of whose functions are functions of a public
nature’.
Proceedings against public authorities

Section 7 provides that anyone who claims that a public authority has acted or proposes to
act in a way incompatible with rights in the Convention may:
..
EL_C03.qxd 3/26/07 10:39 AM Page 91
n bring proceedings against that authority; or

n join in proceedings brought by someone else where the person joining the proceedings is a
‘victim’, e.g. a person whose Convention rights have been violated.
Freedom of expression 3
Section 12 applies and was inserted into the HRA at a late stage. The main object is to protect
the freedom of the press.
Freedom of thought, conscience and religion

Section 13 was also a late amendment inserted mainly to deal with problems posed by reli-
gious groups which felt that the Act might lead to interference with doctrinal matters, such as
requiring churches to marry homosexual couples.
Remedial orders
A remedial order is by reason of s 20(1) a statutory instrument. The provision relating to such
order is contained in s 10. These orders amend legislation in order to remove any incompat-
ibility with Convention rights. When faced with a judicial declaration of incompatibility
Parliament will generally legislate to remove it. There are three major safeguards on the use of
the power as follows:
n there must be a finding of incompatibility by the judiciary;

n the Minister involved must feel that there are ‘compelling reasons’ for making a remedial
order; and
n there must be Parliamentary approval in line with Sch 2.
A Minister may infer incompatibility from a decision of the European Court of Human
Rights, but it must be a decision containing a judgment against the UK and, therefore, binding
on the UK in international law. Judgments against other contracting parties to the Conven-
tion will not suffice, even though they reveal incompatibility in UK legislation.
Commission for Equality and Human Rights

However, the Equality Act 2006, which received the Royal Assent on 16 February 2006, will
set up the Commission for Equality and Human Rights (CEHR). The Commission will take
over the existing duties of the Equal Opportunities Commission, the Commission for Racial
Equality and the Disability Rights Commission. It will promote equality and combat unlawful
discrimination also in the new areas of sexual orientation, religion or belief and age, and it
will promote understanding of human rights and encourage public authorities to comply
with the Human Rights Act 1998.
The CEHR will be established in October 2007 for areas other than racial equality. This area
transfers by March 2009.
Further details of this legislation appear in Chapter 19.
Remedies
Section 8 gives the court a general discretion as regards remedies and an award of damages
is included. However, the court must have power to award damages so that criminal courts
cannot make such an award. They may, however, quash a conviction. As regards action
.. ..
EL_C03.qxd 3/26/07 10:39 AM Page 92
against public authorities, the court could quash a decision made by such an authority, or
award damages. In a criminal matter, the court may also order the exclusion of evidence. Loss
of earnings is recoverable and awards of damages have been made by the ECHR (European
Court of Human Rights) for ‘permanent and deep anxiety’ caused by violation of Convention
rights as where civil proceedings have been unduly prolonged. High awards of damages
have been made for police misconduct and wrongful detention and for unfair trials, e.g. non-
attendance of the claimant’s lawyer after a decision to let the trial proceed. High awards have
also been made for interference with rights of privacy and in child care cases where a parent
has been denied contact with a child. Environmental issues, as where pollution has caused
illness, distress or inconvenience, have also received high awards.
Limitation period
Under s 7(5) the limitation period for bringing claims against public authorities is one year
from the doing of the act complained of. Otherwise, no limitation period is imposed by the
HRA. In addition, of course, a court may find that an over-short limitation period is a viola-
tion of human rights.
Companies
Although the Convention rights are seen initially at least as a tool for the relief of individuals
against arbitrary acts of the state, the HRA does not preclude claims by companies if they are
victims of human rights abuse. It is also worth noting that the City Panel on Take-overs and
Mergers which operates self-regulatory controls in company take-over situations is a public
body and potentially within human rights law as is the Financial Services Authority which
controls, under the statutory authority of the Financial Services and Markets Act 2000, almost
the whole of the financial services industry.
The EU experience
It is not possible in a book of this nature to go into the detail of Convention case law so far.
However, the following headings indicate the main areas involved.
n The right to a fair trial in civil proceedings. This has included unfair arbitration clauses,
short limitation periods, legal aid and admissibility of evidence, burden and standard of
proof, expert witnesses who are over-biased in favour of a client and are sometimes
referred to as ‘hired guns’. Enforcement of judgments and rights of appeal are included.
n The right to life and physical integrity. Here are included abortion, euthanasia, the death
penalty, torture, and medical care and access to health information.
n Police powers. This includes fingerprinting, search and seizure, entrapment, arrest and
detention and discrimination.
n Mental health. This includes detention and the right of periodic review.
n Family life. This includes adoption, embryology and surrogacy, lesbian and gay couples
and transsexuals, divorce and separation, and domestic violence.
n Children. This concerns parental control, corporal punishment, detention and abuse.
n Freedom of expression. This includes defamation proceedings and access to information.
n Workplace rights. This covers the right to form a trade union and the right to join or not
to join one, industrial action and privacy at work, including security vetting.
There have also been rulings in the fields of immigration and asylum, prisoners’ rights,
education, housing planning and the environment, welfare benefits, protest and public order,
property rights, thought, conscience and religion, and discrimination.
..
EL_C03.qxd 3/26/07 10:39 AM Page 93
The UK experience
Many cases in which the Convention has been raised have come before UK courts and it is
therefore reasonable to expect students to be able to quote some of these as examples of the
use of the Articles of the Convention by claimants. As an introduction, however, it has
emerged from the case law that if a human rights point is taken it should be taken properly
3
and not thrown into the case as a makeweight. Advocates wishing to rely on the Convention
are under a duty to the court to make available any material in terms of decisions of the
European Court of Human Rights on which they could rely or that might assist the court (see
Barclays Bank plc v Ellis and Another (2000) The Times, 24 October).
An advocate should also consider carefully whether the 1998 Act and Convention add
anything to the argument (Daniels v Walker [2000] 1 WLR 1382) and should not use court
hearings as an international seminar on human rights (Williams v Cowell [2000] 1 WLR 187).
Finally, although the Court of Appeal has found certain of the provisions of the Consumer
Credit Act 1974 incompatible with the Convention (see below), the impact of the Act of 1998
to date has not been as far-reaching as some commentators said it would be. This is hardly
surprising. It would be rather odd if UK law was found to be full of serious deficiencies. What
we have seen is many challenges to substantive law by reference to the Act and Convention.
This process is likely to continue.
Case law Art 6: right to a fair trial of disputes

Wilson v First County Trust (No 2) [2002] QB 74
In this case the Court of Appeal held the absolute bar on the enforcement of a consumer
credit agreement in s 127(3) of the Consumer Credit Act 1974 which provides that such an
agreement is unenforceable if it fails to contain the terms prescribed under s 61 of the 1974 Act,
infringed the trader’s rights for the purposes of Art 6. He was unable to recover a loan and
interest simply because the agreement had misstated the amount owing in the loan agreement.
The court made a declaration of incompatibility of the relevant sections of the 1974 Act.
The above ruling of the Court of Appeal was reversed by the House of Lords in Wilson v
First County Trust (No 2) (2003) The Times, 11 July. The House of Lords ruled that although
s 127(3) of the Consumer Credit Act 1974 led automatically and inflexibly to a ban on a court
making an enforcement order if a regulated agreement did not comply with the statutory
requirements about the form and content of the agreement, it was open to Parliament to
decide as a matter of social policy that despite the severity of its effect that was an appropriate
way to protect consumers. Therefore, s 127(3) was compatible with the Human Rights
Convention.
Comment The Consumer Credit Act 2006 repeals s 127(3) of the Consumer Credit Act 1974
but not the whole section. The result is that, for the future, the previous bars to a court grant-
ing an enforcement order in respect of an agreement that is improperly executed have gone.
The court is left with a discretion under s 127(1) to refuse an enforcement order if it considers
it just to do so and according to the degree of prejudice to any party or person. This is in line
with the thinking in the House of lords in Wilson because their Lordships may well have
regarded s 127(3) as contrary to the Convention if all credit agreements were non-regulated.
At the time of the action, a credit agreement was non-regulated only if the credit exceeded
£25,000. Section 2 of the 2006 Act removes the limits so that all agreements for credit or
hire will be regulated under the 1974 Act though there are exemptions, e.g. credit over £25,000
to large businesses. In future, situations like Wilson would be decided under the just and
equitable principle of s 127(1) and there would be no absolute bar to the court granting
an enforcement order so that the 1974 Act, after amendment by the 2006 Act, is not contrary
to Art 6.
.. ..
EL_C03.qxd 3/26/07 10:39 AM Page 94
R (on the application of Fleurose) v Securities and Futures Authority [2002] IRLR 297
Here the House of Lords held that it was justifiable for the SFA to require stock market traders to
answer its questions and that the traders could not invoke the privilege against self-incrimination
(a general rule in legal proceedings) because this would prevent the SFA from carrying out its
duty to protect the public against infringements of the Authority’s rules. In this case those
involved had been manipulating prices in the stock market to make a profit. The Financial
Services Authority took over from the SFA at the end of November 2000 with similar powers
and protection by this case.
Case law Art 9: freedom of thought, conscience and religion

The Court of Appeal has ruled against a high school which sent home a pupil Shabina Begum
for wearing a jilbab, i.e. a gown covering the whole of her body except her hands and face.
R (on the application of SB) v Headteacher and Governors of Denbigh High School
[2005] 2 All ER 396
The relevant provision of the Convention on Human Rights reads as follows:
Article 9: Freedom of thought, conscience and religion

(1) Everyone has the right to freedom of thought, conscience and religion; this includes
freedom to change his (or her) religion or belief and freedom either alone or in com-
munity with others and in public or private to manifest his (or her) religion or belief in
worship, teaching, practice and observance.
(2) Freedom to manifest one’s religion or beliefs shall be subject only to such limitations as
are prescribed by law and are necessary in a democratic society in the interests of public
safety for the protection of public order, health or morals or for the protection of the
rights and freedoms of others.
The Court of Appeal ruled that the school had infringed Miss Begum’s freedom to manifest
her beliefs by taking the view that a shalwar kameez was acceptable for the majority of
Muslims and that she accept this garment which showed more of the body.
Lord Justice Scott Baker said: ‘Every shade of religious belief if genuinely held is entitled to
due consideration under Art 9.’
Comment The school could have considered whether a limitation of Miss Begum’s right was
justified under Art 9(2) (above), but since it had not done so, it was impossible to conclude what
the result would have been. The House of Lords reversed this decision (see [2006] 2 All ER 887).
Case law Art 10: freedom of expression

Steen v HM Attorney-General (2001) The Times, 30 March
In this case the Court of Appeal ruled that the proviso to an injunction preventing disclosure
of any information obtained by any member of the Security Service in the course of his
employment that required a person wishing to publish material within the terms of the
injunction to get clearance from the Attorney-General was a restriction on the freedom of the
press out of proportion to any public interest and was thus ineffective as being contrary to
Art 10.
V and Another v News Group Newspapers Ltd and Others [2001] 1 All ER 908
This case may well be the most well-remembered case to date on human rights law. Jon
Venables and Robert Thompson who were convicted of murder at the age of 11 took action
against Newsgroup Newspapers and Associated Newspapers for an injunction to protect
..
EL_C03.qxd 3/26/07 10:39 AM Page 95
information that might lead to them being identified on release from detention. The High
Court upheld their claim. In exceptional circumstances individuals who were seriously at risk
of death or injury if their identity or whereabouts became public knowledge could be pro-
tected by an injunction as an exception to the defendant’s right to freedom of expression.
3
Coroners’ courts
These courts, which commenced in 1194, are amongst the oldest English courts still in exist-
ence. Their chief function is to inquire into cases of violent, unnatural or suspicious death,
including suicide, together with cases of sudden death without apparent cause. They also
inquire into deaths in prison.
A coroner has jurisdiction to hold an inquest on a body lying within his jurisdiction even
though the death and cause of death have not occurred in England and Wales. Thus, in R v
West Yorkshire Coroner, ex parte Smith [1982] 3 All ER 1098 the Court of Appeal decided that
the coroner was obliged under what is now s 8 of the Coroners Act 1988 to hold an inquest
into the death of a nurse who had died in Saudi Arabia but whose body had been brought
back to this country. However, the coroner faces special difficulties in such a case because he
cannot summon witnesses from abroad or request the production of documents (see further
Chapter 5).
The procedure is that of an inquest or inquiry; it is not a trial. The object is to find out the
identity of the deceased, the cause of his death, and where the death took place. It is not the
purpose of an inquest to apportion blame (R v Coroner for North Humberside and Scunthorpe,
ex parte Jamieson (1994) The Times, 28 April). The coroner’s officer, a serving police officer,
collects evidence before the inquest begins. All witnesses are under oath, but the rules of
evidence are not applied as strictly as they are in other courts. The coroner decides what
constitutes relevant and admissible evidence, and has much discretion at all stages of the
investigation.
The coroner’s jury

In cases such as suspected murder or death in prison, the coroner may summon a jury of
from seven to 11 persons, and he may accept the verdict of the majority so long as there are
not more than two dissentients. He is required to summon a jury under s 8(3) of the Coroners
Act 1988 where the death with which he is concerned occurred in circumstances the continu-
ance or possible recurrence of which is prejudicial to the health or safety of the public or any
section of the public. An example from earlier legislation is the decision of the Court of
Appeal in R v Hammersmith Coroner, ex parte Peach [1980] 2 All ER 7, where it was held that
the suspicious or unauthorised use by a police officer of a lethal weapon was a matter coming
within s 8, and accordingly it was compulsory to have a jury. Section 8(3) also requires a
coroner to summon a jury where the deceased was in police custody or death resulted from
an injury caused by a police officer in the purported exercise of his duty.
Section 9 of the 1988 Act provides that a person is not qualified to serve as a juror at an
inquest held by a coroner unless he is for the time being qualified to serve as a juror in the
Crown Court, the High Court, and the county court (see further Chapter 4). The Act also pro-
vides criminal penalties for evasion of service on a coroner’s jury.
The coroner can require a post mortem, and the attendance of medical and other witnesses
who may be examined on oath. He can also invite an expert to sit with him (R v HM Coroner
for Surrey, ex parte Wright (1996) The Independent, 5 July).
.. ..
EL_C03.qxd 3/26/07 10:39 AM Page 96
If the court finds that a death was a result of murder, manslaughter or infanticide, this does
not operate to convict the person said to be responsible, and a coroner can in no case charge
a person with those offences.
It may happen that before the end of the inquest a person is charged with an offence, e.g.
murder or manslaughter, in connection with the death of the deceased. On being informed
of this by, e.g., a clerk to magistrates, the coroner must adjourn the inquest until after the
conclusion of the relevant criminal proceedings and if he has summoned a jury he may, if he
thinks fit, discharge them. This is to prevent inquests turning into, in effect, murder trials as
they sometimes did in the 1920s.
After the conclusion of the relevant criminal proceedings the coroner may resume the
adjourned inquest if, in his opinion, there is sufficient cause to do so. If he does resume an
inquest, the finding of the inquest as to the cause of death must not be inconsistent with the
outcome of the relevant proceedings (Coroners Act 1988, s 16(7)).
Under s 1 of the Coroners Act 1988 coroners are appointed for each coroner’s district in
a Metropolitan County or Greater London and for each Non-Metropolitan County and for
the City of London by the relevant Councils. Appointment is from persons with a five-year
general qualification within s 71 of the Courts and Legal Services Act 1990 or legally qualified
medical practitioners who have had at least five years in practice.
Section 6 of the 1988 Act provides that every coroner must appoint a deputy coroner and
may appoint an assistant deputy provided in each case that the approval of the Chairman of
the relevant Council is obtained. This is to ensure continuity in the office where a coroner
dies or retires. The qualifications for a deputy or assistant deputy are as for a coroner himself.
All the appointments referred to above are generally part-time and there can be dismissal for
inability or misbehaviour. The Lord Chief Justice and the judges of the High Court are by reason
of holding that office also coroners ex officio as it is referred to.
Reform
The Home Office independent review group that reported in 2003 recommends that mandat-
ory inquests into suicides, deaths at work and road accidents should be abolished. This says
the report would respect the sensitivities of families in these cases. The report recommends
that the circumstances of death should be settled administratively in private and without
publicity and with respect for family privacy. Legislation will be required to effect the
reforms.
At the time of writing there has been no implementation of the above proposals.
Treasure
The jurisdiction of coroners referred to in s 30 of the Coroners Act 1988 is exercisable in rela-
tion to anything which is treasure for the purposes of the Treasure Act 1996.
Treasure is any object which when found is at least 300 years old and if not a coin has a
metallic content of silver or gold of at least 10 per cent by weight. This applies to coins which
are at least 300 years old if they are one of at least two coins which taken together have the
above percentage of gold or silver. Furthermore, if a coin is at least 300 years old and is one of
at least 10 coins in the same find, it is treasure regardless of its metallic composition. A coin
found on its own is not treasure.
Objects which are part of the same find whether found at the same time or earlier are also
treasure so, for example, the pot (or whatever) in which the treasure is found is also treasure.
The Secretary of State has a power to designate other types of objects as treasure, provided
they are at least 200 years old. The power is exercisable by statutory instrument. Ownership
..
EL_C03.qxd 3/26/07 10:39 AM Page 97
of treasure will in general terms vest in the Crown. This ownership applies without regard to
the place where it was found or the circumstances in which it was left. The Act removes the
need to establish that the relevant objects were hidden with a view to their being later recovered.
A new criminal offence of non-declaration of treasure is created. The finder must notify the
coroner within 14 days from the date of the find or from the date when the finder believes 3
or has reasonable grounds to believe that the object is treasure. The coroner’s inquest held
to decide whether what has been found is treasure may be held without a jury. If it is not
treasure the finder, and not the Crown, acquires a good title to it.
If it is treasure (and so vests in the ownership of the Crown) and is to be transferred to
a museum, the Secretary of State must decide whether a reward is to be payable by
the museum prior to transfer. Under the old law a reward if payable was paid only to the
person who found the treasure – often a person with a metal detector who made the dis-
covery as a trespasser. The 1996 Act gives landowners and occupiers a right to a share and a
right to be informed of finds which have been reported and are on their land. There is to be
a code of practice which will deal among other things with how rewards will be paid and
shared.
In the spring of 2006 the government issued a consultation paper containing proposals to
speed up treasure handling by transferring administration of the process from the Department
for Culture, Media and Sport to the British Museum. Currently, those finding treasure have to
deal with both institutions at different stages of the process. The DCMS will retain its function
to decide on valuations after being advised by the Treasure Valuation Committee. The consulta-
tion paper is entitled Amendments to the Treasure Act 1996 Code of Practice and can be accessed
at www.culture.gov.uk.
Reform
The government has announced its intention to reform the law relating to treasure.
The reform is aimed at clamping down on treasure hunters and dealers who sell items
recovered without asking the landowner’s consent to the excavation. Previous attempts
have failed because of lack of parliamentary time. There is still no implementation of the
above proposals.
Adjournment in event of judicial inquiry

Under s 17A of the Coroners Act 1988 (as inserted by s 71 of the Access to Justice Act 1999)
coroners’ inquests will normally be adjourned where a public inquiry is to be held which, in
the opinion of the Lord Chancellor, will adequately investigate the death. At the end of the
public inquiry the Lord Chancellor is required to inform the coroner, who will certify the
facts ascertained at the inquiry as if they had been found at the inquest. The section reduces
the possibility that inquests and inquiries may lead to conflicting findings of fact or lead to
problems of self-incrimination.
Reform
The coroners’ system is set for considerable reform under a draft Coroner Reform Bill. The
main change relates to the families of the deceased person who is the subject of the inquest.
Families will have the right to ask the coroner for a ‘second opinion’ on a death certificate
about which they have concerns, together with a right to challenge coroners’ rulings. A com-
plaints system will be established.
All coroners will have to be legally qualified and will be given new powers to call evidence.
The Department for Constitutional Affairs has stated that this means that no more solely
.. ..
EL_C03.qxd 3/26/07 10:39 AM Page 98
medically qualified coroners will be appointed but the changes will not be retrospective and
doctors without legal qualifications already in post will continue to act.
The right to seek a review of coroners’ decisions will be easy to access and will not require
the hiring of lawyers.
There will be a Chief Coroner for England and Wales to provide leadership and guidance to
coroners in much the same way as the Lord Chief Justice does for the judiciary. The Chief
Coroner will hear appeals against coroners’ rulings, oversee their training and bring in judges
to deal with complex matters. The Chief Coroner will be supported by a Coronial Advisory
Council, which will act as a further check on standards and will advise on what service and
strategic issues may require further scrutiny.
In addition, all coroners will be full-time appointments. Co-ordination between coroners
will be improved and a ‘Coroners’ Charter’ will be published, laying down the standard of
service that bereaved family members can expect.
A suggested flaw in the draft Bill is that it does not provide legal aid to families to have
legal representation at inquests. Thus, in a complicated inquest the coroner will have the
benefit of advice from legal counsel and medical advice but the family will not have these
benefits legally aided.
Legal services
Generally
Under the current regulatory system there are, for our purposes, six forms of legal service that
are subject to statutory control mainly under the Courts and Legal Services Act 1990 as
amended by Part III of the Access to Justice Act 1999. These services are:
n The right to conduct litigation. This is in the main the function of solicitors and legal
executives.
n The right of audience. This is the right to be heard on a client’s behalf by a judge.
Barristers, solicitors and legal executives have these rights, with some restrictions on legal
executives.
n Certain probate services. e.g. the right to draw up or prepare any papers in regard to the
obtaining or opposing of the grant of probate of a will or letters of administration where
there is no valid will. Probate or letters are necessary to effectively administer the estate of
a deceased person.
n The preparation of the documents required to convey land from the ownership of one
person into that of another.
n Notorial services. This is explained below.
n Acting as a commissioner for oaths, where the law requires that to validate a particular
document a person must swear an oath before a commissioner as to its truth.
As regards the fitness of individuals to act in the above areas, this is left to authorised bodies,
such as the Bar Council and the Law Society, which are concerned, in addition to other func-
tions, with the education and training of those who are called to the Bar as barristers or
entered on the Rolls as a solicitor or admitted to membership of the Institute of Legal
Executives. There are a number of higher level regulators over the professional bodies, such as
the Secretary of State for Constitutional Affairs (formerly the Lord Chancellor), the Master
of the Rolls, who may refuse entry on the Rolls, and the Office of Fair Trading in regard, for
..
EL_C03.qxd 3/26/07 10:39 AM Page 99
example, to anti-competitive practices by the primary regulators such as the Bar Council and
the Law Society.
Rights of audience
3
In order to understand current arrangements, it is necessary only to know that barristers have
for many years been advocates presenting cases in court, whereas solicitors have been
engaged, so far as actions in a court of law were concerned, in pre-trial work and briefing
barristers to appear in court to present the case – something which they could not, in general
do, at least at the level of the High Court and above. In today’s environment, advocacy is still
the work of barristers, but since the 1990 Act pre-trial work is called litigation and has been,
and is, carried out by solicitors.
The position today is that, subject to satisfying the rules of the Bar Council (barristers) and
the Law Society (solicitors), solicitors and barristers can appear and be advocates in all pro-
ceedings in every court and solicitors retain their function as litigators. However, the Bar
Council has set up a scheme known as BARDIRECT under which, from 2003, people needing
legal services including other professionals are able to bypass solicitors and engage a barrister
direct. The barrister will then do both the litigation and advocacy elements of the case. The
move is in response to threats from the Office of Fair Trading to stop restrictive practices that
are not in the public interest.
A further and important development for users of legal services has resulted from the
approval by the Secretary of State for Constitutional Affairs of a change in the Bar Council’s
code of conduct under which barristers who have been called to the Bar for at least three
years and have practised for that time are able to liaise directly with the public without the
need for a solicitor to act as intermediary. Before barristers can accept any direct access
instructions, they must have attended a training course designated by the Bar Council. The
move will cut costs in the more straightforward cases. In complicated claims, clients may still
need the services of a solicitor.
Employed lawyers of either profession who are qualified as advocates can appear in court
for their employers, but not for clients or customers of their employers.
The Institute of Legal Executives may make regulations under which legal executives, who
are in general employed by solicitors, may conduct litigation, i.e. pre-trial work and advocacy,
having a right of audience in civil and family proceedings in county counts and magistrates’
courts. There is a proposal to extend their advocacy rights in criminal proceedings in the
magistrates’ and youth courts.
Overriding duties of advocates and litigators

These are as follows:
n to act with independence in the interests of justice; and
n to comply with rules of conduct.
Rights of audience and the employees of the Crown Prosecution Service

This is a special case because of the problems of impartiality. Nevertheless, the Crown
Prosecution Service can now put its own advocates into court instead of, e.g., briefing barris-
ters at the Bar at some expense. The CPS is now able to train its own employed advocates
and put them into trials in the Crown Court and above. The hope is that they will not be
swayed by a need for higher conviction rates. The reforms take effect under the Access to
Justice Act 1999.
.. ..
EL_C03.qxd 3/26/07 10:39 AM Page 100
Conveyancing services
Sections 34–52 of the Courts and Legal Services Act 1990 are concerned to develop legal ser-
vices by providing a wider choice of persons who may practise conveyancing which involves
the preparation of the document (conveyance) which transfers a freehold interest in land
after sale and the necessary documentation involved.
A sole regulatory body is set up by the 1990 Act. It is called the Authorised Conveyanc-
ing Practitioners Board and it is given the task of authorising, supervising and disciplining
practitioners authorised for conveyancing work. Previously such work was restricted to
solicitors, barristers and licensed conveyancers. They now face competition from authorised
conveyancing practitioners.
A conveyancing ombudsman scheme to investigate complaints against authorised practi-
tioners is set up and rules regulating the scheme are made by the Board. The Ombudsman
can make compensation orders against practitioners including sums of money to represent
inconvenience and distress as well as loss.
There is also the Council for Licensed Conveyancers which was set up under the
Administration of Justice Act 1985, Part II to grant licences to practitioners of conveyancing
services. This continues under the regulator, the Authorised Conveyancing Practitioners
Board, but s 53 of the 1990 Act extends the powers of the Council so that it can extend the
licences given to licensed conveyancers to allow them to undertake probate work, i.e. to get
formal proof of a will, which must be applied for when the person making the will dies, or to
get letters of administration to wind up the estate when there is no will, and to grant some
rights of audience and rights to conduct litigation.
Probate services
Formerly, it was an offence for any person other than a solicitor or barrister to draft or prepare
for payment the papers leading to a grant of probate or letters of administration. However,
under ss 54 and 55 there is machinery by which bodies may apply for approved status under
which their members could become ‘probate practitioners’ (s 55) (as the Institute of
Chartered Accountants in England and Wales has already successfully done). The employees
of banks, building societies and insurance companies can also do so under s 54.
Administration of oaths and the taking of affidavits

It is sometimes necessary for a person to make a statement on oath as to the truth of what is
said in a document. If the statement in the document is false to the knowledge of the person
giving the oath, that person commits the crime of perjury and can be prosecuted and may be
fined or imprisoned. Every solicitor with a practising certificate can administer oaths and take
affidavits (see below), but now s 113 provides that in the interests of competition authorised
litigators and advocates may do so and may use the title ‘Commissioner for Oaths’, as can
Licensed Conveyancers.
The Commissioners for Oaths (Prescribed Bodies) Regulations 1995 (SI 1995/1676)
empower members of the Institute of Legal Executives to administer oaths and take affidavits
(i.e. where the oath is administered in connection with the verification of the contents of a
document) (and see also the notary public, at p 110).
Legal services: business structures

There are currently some statutory restrictions on the type of business structures through
which legal services may be provided. These include a prohibition on lawyers entering into
..
EL_C03.qxd 3/26/07 10:39 AM Page 101
partnership with non-practising lawyers, other types of lawyers and non-lawyers, e.g. account-
ants. There are also restrictions on unregulated persons being formally involved in the man-
agement of a regulated legal practice and also on unregulated persons having a stake in the
ownership of a legal practice. Thus, in general terms neither different types of lawyers, e.g.
barristers and solicitors, nor lawyers and non-lawyers can work together in legal partnerships. 3
Legal services: consumer complaints
A complaint by a consumer of legal services must first of all be taken up with the legal prac-
tice concerned. Where the complaint is not resolved by the practice, the consumer can con-
tact the relevant regulator, e.g. the Law Society. If the complaint is not resolved, the
consumer may refer the complaint to the Legal Services Ombudsman. The Ombudsman will
investigate the way in which the regulator handled the complaint and the response from the
professional body. If the Ombudsman is not satisfied that the complaint has been handled
properly, then he or she will recommend that the professional body look at the matter again.
Reform: the Legal Services Bill

Following a review of the provision of legal services by Sir David Clementi in 2004/05, the
government has published the Legal Services Bill. It will be put before Parliament in the
session 2006/07. Its main provisions are:
n To enable different types of lawyers and other professionals such as accountants to work
together to provide legal and other services.
n To allow external investment in businesses offering such services.
n To create a Legal Services Board to regulate the legal profession. The majority of the Board
will consist of non-lawyers. This new regulator will provide consistent oversight of the
front-line regulators, such as the Bar Council and the Law Society with power to devolve
day-to-day regulatory responsibilities to them subject to their competence and governance
arrangements.
n To set up an Office for Legal Complaints to carry out independent investigation of
complaints.
n To establish a consumer panel to represent consumer interests to the Legal Services Board.
Several companies, including the Co-op and the AA, have stated that they will set up pro-
vision of legal services once the Bill becomes law.
Payment for legal services

Conditional fees
In the past any form of contingency fee arrangement between a lawyer and a client, e.g. to
give the lawyer a share of the damages or an increased fee if successful but nothing on failure,
was unenforceable in English law. The position is now governed by ss 58, 58A and 58B of
the Courts and Legal Services Act 1990 (as inserted by the Access to Justice Act 1999). These
sections authorise:
n no-win, no-fee arrangements for lawyers and their clients; and

n discounted fee arrangements where a case is lost; and
n similar arrangements for those who fund litigation.
.. ..
EL_C03.qxd 3/26/07 10:39 AM Page 102
These arrangements are available for all claims except family cases, cases relating to chil-
dren and criminal cases. The relevant agreements must be in writing.
At the present time the law allows a conditional fee arrangement under which the lawyer
involved receives no fee if the client loses the case, but receives a fee enhanced by a success
fee of up to a further 100 per cent if the client wins (see the Conditional Fee Agreements
Order 1995 (SI 1995/1674)).
When a client approaches a solicitor for a conditional fee arrangement, it will be discovered
that before an action can be commenced, a single premium after the event insurance policy
must be entered into by the client to pay the other side’s costs if the client loses and the
client’s court fees, though obviously the client will not have to pay the lawyer. In this con-
text it should be noted that for, e.g., a personal injury claim of an estimated £100,000 the
one premium insurance could be quite high, and this and the success fee were not recover-
able from the other side even where the client won the case.
Under amendments made to the Courts and Legal Services Act 1990 as indicated above, the
success fee is now recoverable from the losing side as is the insurance premium.
With regard to discounted fee arrangements, there is no element of success fee here. The
lawyer takes his normal fee if the client wins but agrees to, say, discount the fee by 30 per
cent if the case is lost. The lawyer’s normal fee is, of course, recoverable from the losing party
as costs in the normal way.
Regarding conditional fees, the initial premium remains a problem for some claimants even
though it is recoverable if the case is won. However, it may be possible to negotiate with an
insurance company so that the premium is only paid if the claimant wins. If the case is lost,
the insurance company merely pays the agreed costs and the other side’s claim where the
insurance is, in addition to a cost insurance, a liability insurance as well, though it need not
be a liability insurance. In the above situation, the insurance company is, in effect, working
on a ‘you pay only if you win’ basis.
Costs funded by non-parties

In many cases the cost of legal representation of one party, be it the claimant or the defend-
ant, may be funded by a non-party, e.g. a trade union or an insurance company, especially in
road accident cases. If the case is lost, the non-party pays the costs. If the claim or defence
succeeds, the non-party will be able to recover the usual full reasonable costs.
Callery v Gray (2001) and other case law

Now that legal aid for personal injury claims (except clinical negligence) has been abolished,
the risk of losing a claim is borne either by after the event insurance (ATE) and the claimant’s
solicitors or by before the event insurance (BTE). Case law is now beginning to give guidelines
as to what is involved.
The case law is arising because the insurers of the losing party have become involved in
actions where they have disputed the size of the premium on the other party’s ATE or BTE
insurance that they are having to pay as part of the costs. The following cases are illustrative.
Callery v Gray (No 2) (2001) The Times, 24 October is a decision of the Court of Appeal. It
was a straightforward claim for damages arising out of a road accident – a whiplash injury, in
fact. Damages were agreed but costs were not, hence the litigation. The claimant’s solicitors
argued for a success fee of 98 per cent and the recovery of a premium of £350 for ATE insur-
ance. The defendant’s insurers appealed against recovery of these sums particularly because
the matter never came to trial because the defendant settled by admitting liability within the
three-month Pre-Action Protocol period. The Court of Appeal ruled that the ATE premium
..
EL_C03.qxd 3/26/07 10:39 AM Page 103
was recoverable because ‘it did not seem unreasonable in terms of the service it offered’.
However, as regards the success fee in a straightforward case such as this settled out of court,
a 20 per cent success fee was all the court would allow.
Personal injury lawyers were not too pleased with this ruling but were less pleased with the
ruling of the Court of Appeal in Halloran v Delaney (2002) 146 Sol Jo 815 where the court 3
ruled that in a straightforward road traffic case involving personal injury and settled out of
court a success fee of only 5 per cent was appropriate. The judgment in Halloran was delivered
by Brooke LJ who sat in the Callery case.
Sarwar v Alam [2001] 4 All ER 541 is also instructive. It decided that a claimant could
recover an ATE premium even though he had a BTE insurance as part of his motor insurance,
because the ATE insurance gave additional service. Nevertheless, the Court of Appeal advised
solicitors involved in this type of litigation to see whether the client had BTE insurance and
as to its adequacy. Failure to do this said the court could lead to ATE insurance taken out in
addition being disallowed as a head of costs.
Intervention of the Civil Justice Council

The ruling in Halloran, in particular, had affected the willingness of lawyers to take on the
large number of road traffic injuries cases where settlement without trial is common.
The Civil Justice Council, set up by s 6 of the Civil Procedure Act 1997 to keep the civil
justice system under review, then brokered a deal with the legal profession for road
accident cases that are settled out of court for up to £10,000. Lawyers handling these
cases will receive a basic fee of £1,400 plus an additional fee on a sliding scale, examples
of which are as follows: £1,000 for a case settling for £1,000, £1,200 for a case settling
for £2,000 and £1,950 for a case settling for £6,000. The Civil Justice Council consists of the
Master of the Rolls, judges, lawyers, consumers of legal services to give lay advice and litigant
representatives.
Advocates’ fees
What is said above relates to the fees of the solicitor and court fees. If it is thought that the
services of a barrister will be required, further negotiations will be expected with a member of
the Bar. There is no compulsion for members of the Bar (or solicitors) to enter into conditional
fee arrangements. Since September 1999, all barristers and solicitors have acquired full rights
of audience on call to the Bar or admission to the Rolls (of solicitors), subject to satisfying the
Bar or Law Society requirements. Thus, it may not be necessary to brief a barrister but to use a
solicitor/advocate throughout the case. It may be necessary to seek the services of a barrister
in a difficult case and in such cases the barrister is not likely to be prepared to enter into con-
ditional fee arrangements.
Conditional fees – rights of defendant/claimant

The claimant must disclose the amount of the success fee to the defendant within seven days
of entering into such an agreement or the commencement of proceedings. The conditional
fee agreement may, of course, be entered into later than the commencement of proceedings.
The basic fact of the claimant’s insurance but not its details must also be disclosed to the
defendant within seven days of commencement of the claim or of entering into the insur-
ance (if later). The defendant (through his insurance company) can challenge the cost of the
insurance on final assessment of costs. The above rules apply to disclosure and challenge by a
claimant to a defendant where the latter has entered into a conditional fee agreement.
.. ..
EL_C03.qxd 3/26/07 10:39 AM Page 104
Payment of solicitors by hourly rates

Section 98 of the Courts and Legal Services Act 1990 provides for agreements between a solic-
itor and client relating to the hourly rate which the solicitor will charge. The agreement must
be in writing and the court may set it aside if it is unfair or unreasonable. The intention here
is to widen the number of situations in which a solicitor will agree the terms of business in
advance with a client.
Legal aid
The availability of state-funded legal aid for litigation and legal advice in criminal and civil
proceedings is considered in the chapters on Procedure. However, under the Access to Justice
Act 1999 the Community Legal Service replaces the civil Legal Aid Scheme in the provision of
funding for civil cases. It is administered by the Legal Services Commission which replaces
the Legal Aid Board. CLS funding will not normally be available in cases that could be
financed by a conditional fee agreement and will, in any case, not be available for personal
injury claims, except for clinical negligence. The result of these changes will be a decrease
in the number of cases where a party to a civil claim has the benefit of representation by
state-funded legal aid.
It is worth noting here that more than 300 barristers including 60 QCs (see below) have
agreed to offer their services free to the public through a scheme launched by the Bar. It is
called the Bar Pro Bono Unit and will help people who have what are described as ‘deserving’
legal problems and who cannot afford legal advice. A register has been compiled of barristers
willing to offer up to three free days on such a case.
The Bar Pro Bono Unit (alternatively called the Free Representation Unit) has extended its
field of operation to litigants at the Employment Appeal Tribunal, in general to employees.
Incidentally, the Lord Chief Justice Lord Woolf suggests that the expression pro bono should
be rendered ‘law for free’. The translation is ‘for the public good’ ( pro bono publico).
The main legal professions
Although the changes in the provision of legal services effected by the Courts and Legal
Services Act 1990 are immense the main participants in such provision will continue to be
barristers and solicitors, the latter being assisted by legal executives. The nature of these
professions is considered in outline below.
Barristers
Barristers conduct cases in court, and generally draft the statement of case which outlines
the manner in which the case is to be conducted. They also give opinions on difficult legal
problems.
There is, of course, nothing to stop a party presenting his own case, though when it comes
to an appeal to the House of Lords, unless leave has been granted by the Court of Appeal, it is
necessary for two Queen’s Counsel to certify that it is reasonable to bring the case to appeal.
Call to the English Bar is the prerogative of the four Inns of Court – Lincoln’s Inn, Gray’s
Inn, the Inner Temple and the Middle Temple. The Inns of Court are unincorporated societies
governed by Masters of the Bench (benchers), who are judges or senior barristers, and call to
the Bar is by the benchers.
..
EL_C03.qxd 3/26/07 10:39 AM Page 105
Education and training

There are three parts to the course of training to be a barrister as follows:
n The academic stage. Most students complete this stage by studying for a law degree. Some
may prefer to take other degrees and must then take a one-year conversion course in law
called the Common Professional Examination course. This is offered by the Inns of Court
3
School of Law in London and at a number of teaching institutions throughout the coun-
try. Possession of a degree with at least lower second class honours plus the Common
Professional Examination, where appropriate, constitute the minimum requirement for
entry to the vocational stage which is not easy to achieve.
n The vocational stage. This involves completion of a one-year full-time Bar Vocational
Course at an approved institution which gives practical training in the special skills and
knowledge required by a barrister. This training is provided by the Council of Legal
Education and by some universities. After successfully completing the vocational course
students are called to the Bar by their Inn.
n Pupillage. Those intending to practise as a barrister in independent practice or to exercise
rights of audience as an employed barrister are required to do pupillage for an aggregate of
12 months, six months of which must be spent in the chambers of a private practitioner
(but see below). This period is non-practising. For the remainder of the period of 12
months, the pupil can do some practising work but not as part of an independent practice.
A final certificate is given after 12 months which allows the barrister to enter independent
practice.
Students who enter employment may undergo the whole period of pupillage as an employee.
All practising barristers are required to undertake continuing professional development
courses.
With effect from September 2008, pupillage will become mandatory not only for the pur-
poses of practising but also to obtain the professional qualification and title of barrister. It is
not easy to find a pupillage and, from 2008, those who have completed the Bar Vocational
Course (which continues) but have failed to find a pupillage will not be able to benefit from
the title of barrister. In other words, if you have completed pupillage you are a barrister, if
you have not you go away without a professional qualification in a netherworld of part-
qualification. The shortfall in pupillages in relation to BVC graduates will deter applicants.
Legal Services Consultative Panel

Section 35 of the Access to Justice Act 1999 puts in place the Legal Services Consultative
Panel. This panel advises the Secretary of State for Constitutional Affairs on various issues
including the education and training and conduct of lawyers in general.
Employed barristers
Provided an employed barrister has complied with the conditions set out above, he or she
may appear in court but only for the employer.
Circuits
After call, a barrister intending to practise generally will join what was known as a Circuit but
is now called a Region and will then practise within that Region though cases may be taken
on others. There were six Circuits in England and Wales, i.e. Midland; North Eastern;
Northern; South Eastern; Wales and Chester; and Western.
The structure of HM Court Service has changed and the six Regions are currently: Midland,
North East, North West, London and South East, Wales and Cheshire, and South West.
.. ..
EL_C03.qxd 3/26/07 10:39 AM Page 106
There are no partnerships at the Bar, and one barrister cannot employ another, but it is usual
though not essential for counsel to group together by taking a tenancy in chambers and employ
a clerk who is responsible for the administration of the chambers, fees, appointments and
instructions. There is, however, no objection to what is called ‘purse-sharing’ under which a
particular chamber pools all its fees and each barrister draws the same monthly ‘salary’. From
the end of 2002 all pupil barristers are entitled to a minimum annual payment of £10,000 per
year plus travelling expenses. This scheme received the statutory approval of the Lord
Chancellor and is a step towards opening the Bar to a wider range of entrants regardless of
their financial support from other sources, e.g. family. Vacancies must now be advertised.
Under a Bar Council code of conduct barristers are allowed to advertise, work without
clerks and open chambers where they like. They are no longer restricted to setting up cham-
bers in or near the Inns of Court.
Queen’s Counsel
Experienced barristers may apply to ‘take silk’, i.e. to become Queen’s Counsel which gives
the entitlement to wear a silk gown in court. There is now a new appointments procedure
for the appointment of QCs. A selection panel oversees and selects from applicants those
whom the Queen will appoint as QCs. The Lord Chancellor has no power of veto on who is
selected. Applications are invited once a year. The selection panel has legal and lay members.
Applicants must outline how they meet a set of competencies and provide referees from the
legal profession to back up the competencies. Applicants must pay a processing fee and a fur-
ther appointment fee if they are successful. After appointment as Queen’s Counsel, a barrister
will not, in general, appear without a junior, i.e. another barrister who is not a QC, and his
practice henceforth tends to be restricted to the more important cases requiring two counsel,
i.e. a junior to deal with less difficult but time-consuming procedural matters and the drafting
of pleadings, leaving the QC to concentrate on advocacy.
Until 1977 the rules of conduct laid down by the Bar prevented a QC from working without
a junior. The rule was dropped following a report by the Monopolies Commission that the
practice was contrary to the public interest. However, most QCs still claim that they need the
assistance of a junior, and the scheme to avoid duplication of service appears to have failed.
There is, in general, no need to employ a QC, though only a QC can lead for the defence in
a trial for murder.
Solicitor-Advocates may also apply to take silk.
Briefing and negligence

A barrister can, but will not always, deal directly with a client and will often be briefed by
a solicitor, and then he cannot sue for his fees, though a solicitor who fails to pay over to
counsel fees received from a client is liable to disciplinary action, and indeed under an
arrangement between the Law Society and the Bar a briefing solicitor is personally liable,
except in legal aid cases, to pay counsel’s fees even if the solicitor has not received them from
the client. However, s 61 of the Courts and Legal Services Act 1990 now allows a barrister to
enter into a contract with a client for the provision of services and payment of fees. As we
have seen more recently, the Bar Council has approved proposals which allow direct access to
barristers by other professions, e.g. accountants and the public. Thus the usual route through
a solicitor need not always be followed.
As regards fees, barristers are entitled to a ‘brief fee’ which covers preparation of the case
plus the first day of the trial (if any). Added to this is a sum called a ‘refresher’ payable for the
second and each subsequent day of the trial for however long it continues. The costs of one
side for a week in court on, say, a contested personal injury case with a QC can run into
..
EL_C03.qxd 3/26/07 10:39 AM Page 107
several thousands of pounds on top of which fees are also payable to the firm of solicitors
involved in preparatory work.
As regards the liability of advocates, both barristers and solicitors, an ancient principle of
the common law had in its developed state prevented advocates from being sued in neglig-
ence. The case of Rondel v Worsley [1969] 1 AC 19 upheld the immunity on considerations of 3
public policy and confined it to acts closely concerned with the conduct of litigation in court.
In Rondel the House of Lords thought that the possibility of claims being brought against
advocates might undermine their willingness to carry out their duties to the court. A later
case of Saif Ali v Sydney Mitchell & Co [1980] AC 198 confirmed the Rondel rule and applied
the immunity to solicitors when acting in court as advocates. This development of immunity
ended with the decision of the House of Lords in Arthur J S Hall & Co (a firm) v Simons [2000]
3 WLR 543. Section 62 of the Courts and Legal Services Act 1990 gave statutory confirmation
of the common law position but, since the common law position is now changed, the effect
of the Act is spent.
Hall v Simons, 2000 – Advocates: liability in negligence (18)
Conduct
In matters of conduct, counsel is under an obligatory duty to pursue his case in a proper
manner. He must inform the court of all the relevant statutes and precedents, and, where a
legal authority is against his argument, he must not suppress it, though he may attempt to
distinguish or criticise it. In Copeland v Smith (1999) The Times, 20 October the Court of
Appeal reaffirmed the importance of an advocate being aware of and bringing to the atten-
tion of the court all recent authorities and to be familiar with the Weekly Law Reports and
the All England Reports but not necessarily others. The statement of Lord Justice Brooke in
this regard is of interest. He said: ‘By “recent authority” I am not necessarily referring to
authority which is only to be found in specialist reports, but authority which has been
reported in the general law reports. If a solicitors’ firm or a barristers’ chambers only take one
set of the general reports, for instance the Weekly Law Reports as opposed to the All England
Law Reports (or vice versa) they should at any rate have systems in place which enable them
to keep themselves up to date with cases which have been considered worthy of reporting in
the other series.’ He must also ensure that his client has a fair hearing. If a prosecuting coun-
sel in a criminal case is aware of facts which support the case for the accused, or lessen the
gravity of the offence, he must state them. Counsel may not plead guilty for a client, but may
persuade him to do so if it is in the client’s interest.
In addition, barristers are required to act for any client whether legally aided or not in any
field in which they profess to practise. This is called the ‘cab-rank’ rule which is referred to in
s 17(3)(c) of the Courts and Legal Services Act 1990 as a matter for consideration in approving
an application by, e.g., a professional body for authorisation of its members as advocates.
Special advocates
In cases involving national security, it is the practice to use lawyers as special advocates to
present to the court secret evidence which is not made available to the defendant or his
lawyers. The evidence is put before the court at a closed hearing. The object is to allow disclo-
sure where the public interest and the interests of those supplying the information are at risk
but only to the court through the special advocate.
In a major departure from previous practice, the House of Lords has ruled in favour of the
appointment of a special advocate in a case not affecting national security.
.. ..
EL_C03.qxd 3/26/07 10:39 AM Page 108
In Roberts v Parole Board [2005] 2 AC 738, Harry Roberts, a police killer, was sentenced to
life imprisonment in 1966. The term required to satisfy that sentence was 30 years. This had
expired but he had not been released because an informant had alerted the authorities as to
his involvement in drug dealing in prison. Roberts asked for parole. The witness statement of
the informant in terms of the drug dealing was regarded as secret evidence and was not made
available to Roberts’ lawyers. It was presented to the Parole Board by an appointed special
advocate and heard by the Board in closed session.
The House of Lords ruled by a majority of three to two that this evidence could be used by
the Board to deny Roberts parole and keep him in prison.
The ruling has been criticised. The reform group JUSTICE intervened in the case on the
ground that the use of the special advocate procedure was contrary to Art 5(4) of the
Convention on Human Rights (the right for a prisoner to have detention fairly reviewed).
Nevertheless, the House of Lords ruling stands.
Solicitors
The profession of solicitor is derived from three former branches of the legal profession.
The early stages of litigation in the King’s Bench and Common Pleas was conducted by
attorneys; in the Court of Chancery by solicitors, so called because cases in Chancery could
go on for years and the only way of getting the case moving was to employ a person to
‘solicit’ or cajole the court into action, and in the Ecclesiastical Courts and Admiralty
by proctors. These three branches fused in 1831 to form the Law Society, though their
functions were not fused under the one name of solicitor until 1875. The Law Society is
responsible for prescribing the qualifications and setting the examinations, issuing practis-
ing certificates and preserving minimum standards of behaviour. It also runs a compensa-
tion fund for those who have suffered from the wrongful acts and defaults of solicitors,
supervises the charges made by solicitors for their work and provides a complaints system
through the Office for the Supervision of Solicitors that reports to the Council of the
Law Society.
Today a solicitor is in some respects a businessperson who advises his clients on legal,
financial and other matters. His work is not all of a legal nature, but most of it requires legal
training. Much of the work of a solicitor is concerned with property. He investigates title to
land, prepares contracts of sale, conveyances and wills, and often acts as executor and trustee.
He also assists promoters in company formation. As we have seen, since the passing of the
Administration of Justice Act 1985 and the Courts and Legal Services Act 1990 practising
solicitors no longer have a monopoly of conveyancing, which may now be done also by
licensed conveyancers who need not be qualified as solicitors.
There is a Practice Rule under which a solicitor should not, in general, act for both parties
to a transaction though there are exceptions, e.g. where both parties are established clients. A
solicitor is also entitled to act for both parties, even where their interests may conflict, if they
consent after being fully informed of the difficulties that may emerge (Clark Boyce (a firm) v
Mouat (1993) 143 NLJ 1440). In addition, it was decided by the Court of Appeal in Re a firm of
Solicitors (1991) 141 NLJ 746 that a firm of solicitors will not be allowed to act for a present
client against a former client if it was reasonable to anticipate that there was a danger that
information gained by the firm while acting for a former client would be used against that
former client.
The House of Lords has ruled that a solicitor does have a duty to disclose information to a
later client which was obtained during the course of working for another client where this
was likely to and has caused loss to the later client. A solicitor may be held liable in damages
for breach of contract for the loss.
..
EL_C03.qxd 3/26/07 10:39 AM Page 109
Thus, in Hilton v Barker, Booth & Eastwood [2005] 1 WLR 567, H engaged the defendants to
act for him in the purchase of a development site on which he was to build flats and then sell
the developed property to another client of the defendants. The defendants did not disclose
that they were lending the client the deposit for the purchase, nor that the client/purchaser
had been declared bankrupt and convicted of fraud. The bankrupt client failed to complete 3
the purchase and the property was sold by a bank which had also lent the purchaser money
on mortgage. The claimant’s business collapsed and the court found that if the claimant had
known of the matters which were not disclosed he would not have become involved in the
transaction. The amount of damages was left to be assessed by a judge if the claimant and the
defendants could not agree on the amount.
Their Lordships remarked that in such a situation it would be best for the solicitor not to
act for the later client but advise that other solicitors be used.
In future the distinction between solicitors and barristers in the matter of advocacy in court
will not be so marked as it has been in the past. As we have seen under arrangements set up
by the Courts and Legal Services Act 1990 (as inserted by the Access to Justice Act 1999),
solicitors, who wish to do so, are able to acquire wider rights of advocacy before our courts.
However, many will continue to follow their traditional role as litigators involved in pre-trial
work where their functions will be to prepare the case, ascertain the facts, arrange for the
presence of the necessary witnesses and any documents which may be required, and conduct
any disputes over costs which have been awarded after judgment.
Solicitors who have had experience in advocacy, either as part-time judges or as having
formerly practised as barristers, are allowed to appear in the higher courts immediately; but
most solicitors are required to complete Law Society training courses before being able to
appear in the Crown Court, High Court, the Appeal Courts and the House of Lords. The Lord
Chancellor has, however, ordered that they cannot wear wigs.
A number of solicitors have been given rights of audience in the Crown Court and High
Court and beyond to the higher civil and criminal courts. In addition, these solicitor-
advocates have been allowed to apply to be appointed Queen’s Counsel and some have been
appointed. Appointments have also been made to the High Court bench, and Court of Appeal
positions which were formerly the prerogative of members of the Bar.
The normal route of qualification as a solicitor is a law degree followed by a one-year Legal
Practice Course. Non-law graduates and mature entrants must follow a one-year educational
stage before embarking on the LPC. This is followed by a two-year period as a trainee with a
firm of solicitors. Under current proposals of the Law Society all training will be done in the
practice thus cutting out the Legal Practice Course provided by various educational establish-
ments and organisations. After this application must be made to the Law Society for admis-
sion as a solicitor, and admission must be approved by the Master of the Rolls, since a
solicitor is an officer of the court. A person may then practise alone, or as a member of a part-
nership, and every practising and some employed solicitors must take out an annual practis-
ing certificate. Section 9 of the Administration of Justice Act 1985 allows solicitors to form
incorporated practices. A number of solicitors are employed in local and central government
departments and by commercial firms.
Lawyers’ practising certificates

Section 46 of the Access to Justice Act 1999 gives the Bar Council the power to require barris-
ters to hold a practising certificate in order to practise and the power to require payment
by applicants for these certificates. The money received by the Bar Council is expended on
education and training, as under s 47 is part of the money raised by the issue of solicitors’
practising certificates.
.. ..
EL_C03.qxd 3/26/07 10:39 AM Page 110
Disciplining the legal profession

Under s 48 and Sch 7 of the Access to Justice Act 1999, the powers of the Law Society to
discipline solicitors and investigate misconduct are extended. For example, the Law Society
is given further powers to examine a solicitor’s files or require details of bank accounts
connected with the practice or of any trust of which he is or was a trustee.
Sections 51 and 52 set up the office of Legal Services Complaints Commissioner to oversee
the handling of complaints against the legal profession. The power will be used if the Lord
Chancellor feels that the relevant professional body e.g. the Law Society is not handling
complaints against its members effectively. The Commissioner has power to investigate
complaints, make recommendations as to how to handle them and ask the professional body
to produce a plan to deal with complaints. If the professional body fails to do this, or to deal
with a complaint as requested, the Commissioner may impose a fine.
Legal executives
The Institute of Legal Executives which was established in 1963 gives professional status to
the unadmitted staff employed, e.g. in solicitors’ offices. There are two examinations: the first
leads to Associate membership of the Institute and the second, which is of higher standard,
leads to Fellowship. Legal executives frequently carry heavy responsibilities in connection
with the business of the firm. A great deal of the routine work in connection with, e.g., con-
veyancing also falls on them. Under arrangements put in place by the Courts and Legal
Services Act 1990 (as amended by the Access to Justice Act 1999) legal executives are able to
acquire wider rights in terms of (a) audience in our courts, and (b) pre-trial work as litigators.
In this connection, some legal executives have qualified as advocates under the 1990 Act
having passed appropriate tests and received advocacy certificates approved by the ILEX
Rights of Audience Committee. Those concerned have extended rights of audience in civil
and matrimonial proceedings in county and magistrates’ courts. Legal executives are also
approved persons to give legal advice to a worker who is entering into a compromise with an
employer to compromise, e.g. an unfair dismissal claim (see further Chapter 19).
The Commissioners for Oaths (Prescribed Bodies) Regulations 1995 (SI 1995/1676)
empower members of the Institute to administer oaths and take affidavits (i.e. where the oath
is administered in connection with the verification of the contents of a document). This adds
to the scope of their activities and means that solicitors and notaries are not the only persons
who can administer oaths.
Notary public
A notary public is an officer of the law who is appointed by the Court of Faculties of the
Archbishop of Canterbury. He is a civil lawyer empowered to verify, e.g., the signature of
documents and authenticate the contents of documents. He may also administer oaths and
declarations. In other words, his main function is to substantiate evidence of human activ-
ities. A notary will often also be a solicitor but this is not essential since there is a separate
professional body called The Notaries Society.
Community justice centres: the community judge

The United Kingdom’s first judge to sit in what are called community justice centres was
appointed in October 2004. The appointee is a district judge and a former solicitor. He sits in
the pilot ‘one-stop justice centre’ in Liverpool and deals with cases of anti-social behaviour and
..
EL_C03.qxd 3/26/07 10:39 AM Page 111
low level crime. He also monitors the progress of offenders and oversees rehabilitation pro-
grammes. The centre is based on successful New York models and is a joint initiative between
the Home Office, the Department of Constitutional Affairs and the Crown Prosecution Service.
Law centres
3
Since 1970 when the North Kensington law centre was set up there has been a growth in
such centres which are sources of legal advice. They employ lawyers and some supporting lay
staff and are funded by the local authority for the area in which they are situated and by legal
aid income and sometimes by private donations. They work mainly in the fields of housing,
employment and immigration. In recent times they have been desperately under-funded and
some have closed. Nevertheless, where they do exist, they provide a vital legal service in some
of our poorer communities.
A further development is the setting up of two legal advice centres by the College of Law in
London. The centres are staffed by students supervised by lecturers of the College. It is hoped
that this type of centre will extend to other parts of the country with staffing by lecturers and
students from the university law schools.
Information and advice from non-lawyers

Those in business can obtain information and advice on legal matters from non-lawyers.
Accountants are highly competent in the law of taxation and also in company law.
Government departments can be helpful – for example the Department of Work and
Pensions is prepared to advise on employment legislation, as HM Revenue and Customs is on
tax and VAT regulations. There are also government-sponsored organisations which provide
information and advice such as the Equal Opportunities Commission on sex discrimination.
Those in business may also obtain useful information and advice from a relevant trade associ-
ation and, of course, from their own professional institutes and associations. Advice on social
matters such as rent reduction, security of tenure of property and social benefits can be
obtained from Citizens’ Advice.
Some other important judicial offices
The Lord Chancellor

The Office of Lord Chancellor continues to exist, but with radical changes effected in the
main by the Constitutional Reform Act 2005. The object was to achieve what is known as the
separation of powers, Montesquieu’s French concept, which he thought was a characteristic
of the British Constitution in the early eighteenth century but in fact was not.
This involves the separation of the judiciary from the executive and the legislature. The fol-
lowing are the consequences of that objective:
n On 12 June 2003 the Lord Chancellor’s Department was renamed the Department for
Constitutional Affairs. The Lord Chancellor, Lord Falconer, remained in that office but was
also appointed by the Queen as Secretary of State for Constitutional Affairs. It was also
announced that the Lord Chancellor would not sit as a Law Lord, nor would he hold office
as the Speaker of the House of Lords and in fact a new Speaker has been elected by the
Lords, i.e. Baroness Hayman.
.. ..
EL_C03.qxd 3/26/07 10:39 AM Page 112
n The Lord Chancellor will not in future be a member of the Cabinet. It so happens that in
the transistional period Lord Falconer is holding the office of Lord Chancellor and is also a
minister, in that he is the Secretary of State for Constitutional Affairs, and in that capacity
can carry on Cabinet service.
Qualifications
Under s 2 of the Constitutional Reform Act 2005, a person may not be recommended for
appointment as Lord Chancellor unless he appears to the Prime Minister to be qualified by
experience. In this sense, the Prime Minister may take into account any of the following:
n experience as a Minister of the Crown;

n experience as a member of either House of Parliament;
n experience as a qualifying practitioner, i.e. a practitioner who has the 10-year senior
courts’ qualification to appear in the High Court, Court of Appeal and House of Lords
(becomes Supreme Court) in relation to all proceedings, or an advocate or a solicitor in
Scotland entitled to appear in the Court of Session and the High Court of Justiciary, or a
member of the Bar of Northern Ireland, or a solicitor of the Court of Judicature of
Northern Ireland;
n experience as a teacher of law in a university;
n other experience the Prime Minister considers relevant.
Under s 3 of the CRA 2005, the Lord Chancellor, other ministers of the Crown, and all with
responsibility for matters relating to the judiciary or otherwise in the administration of
justice must uphold the continued independence of the judiciary.
Functions
The Lord Chancellor has an important part to play, along with the Judicial Appointments
Commission, in the appointment of the judiciary (see p 59). The Lord Chancellor is also
responsible for a very large number of appointments of Presidents and members of tribunals,
e.g. the President and members of the Lands Tribunal. The Lord Chancellor also retains the
function of custody and use of the Great Seal of the United Kingdom. The Lord Chancellor
retains functions under the Insolvency Act 1986, including the power to exclude a county
court from having a jurisdiction to wind up companies and in connection with the making
of insolvency rules which govern practice and procedure. There are still a number of func-
tions in relation to judicial appointments where the appointment is made by the Lord Chief
Justice but after consultation with the Lord Chancellor. An example is the appointment of
members, judicial and lay, of the Employment Appeal Tribunal. The full list, which is much
too long to be reproduced here, is set out in Sch 7 to the Constitutional Reform Act 2005.
Head and deputy head of civil justice

Section 62 of the Courts Act 2003 (as inserted by the Constitutional Reform Act 2005) states
that there is to be a Head of Civil Justice who is the Master of the Rolls or, if the Lord Chief
Justice appoints another person, that person. The Lord Chief Justice may also appoint a
Deputy Head of Civil Justice. In the case of the Lord Chief Justice’s appointments, consulta-
tion with the Lord Chancellor is required and the persons appointed by the Lord Chief
Justice must be either the Chancellor of the High Court or an ordinary judge of the Court of
Appeal. The Lord Chief Justice can delegate the above function to a senior judge, e.g. the
Master of the Rolls or a Lord Justice of Appeal. It has been recognised that there is a need for
a Head of Civil Justice to provide an overview of the system and give it consistency.
..
EL_C03.qxd 3/26/07 10:39 AM Page 113
The Attorney-General and the Solicitor-General

The Attorney-General and the Solicitor-General are known as the Law Officers. The appoint-
ments are political and change with the government. As a rule, the Law Officers are not
members of the Cabinet. 3
The Attorney-General
The Attorney-General is appointed by Letters Patent under the Great Seal, and is usually
a member of the House of Commons. He represents the Crown in civil matters and can
prosecute in important criminal cases. He is the Head of the English Bar, and points of pro-
fessional etiquette are referred to him. He also advises government departments on legal
matters, and advises the court on matters of parliamentary privilege. He can institute litiga-
tion on behalf of the public, e.g. to stop a public nuisance or the commission of a crime
and to enforce or regulate public charitable trusts, because he acts on behalf of the public as
a whole. Individuals do not have sufficient interest (or locus standi) to bring actions in
these cases.
Where a person does not have sufficient locus standi to initiate proceedings himself, he
may ask the Attorney-General to take proceedings. If the Attorney-General does act at the
relation of a private individual, the action is known as a ‘relator action’ and the relator is
responsible for the costs incurred. If the Attorney-General refuses to act, no court can compel
him to do so.
The Solicitor-General
The Solicitor-General is the subordinate of the Attorney-General, and sometimes gives a joint
opinion with him when asked by government departments. In spite of his title, he is a mem-
ber of the Bar and he need not, strictly speaking, be in the House of Commons. His duties are
similar to those of the Attorney-General and he is in many ways his deputy. Both Law
Officers are precluded from private practice. The Law Officers Act 1997 provides that any
functions authorised or required to be discharged by the Attorney-General may be discharged
by the Solicitor-General.
The reason that the Solicitor-General is a barrister is merely a constitutional convention
based on the fact that formerly only barristers had a right of audience in the higher courts.
Since this is no longer the case, a future appointment may be of a solicitor with advocacy
rights.
Gouriet v Union of Post Office Workers, 1977 – Law Officers: Attorney-General’s

enforcement of the law in the public interest (19)
Masters
Many matters arise for decision between the time of issue of the claim form and the trial of
the action, e.g. what documents must be shown by one side to the other; what time should
be allowed for putting in the statements of case and defences. In summary, a master is con-
cerned with the management of a case pre-trial. Case management matters are, under the
Civil Procedure Rules 1998, conducted at the appropriate Civil Trial Centre (see Chapter 5).
These conferences are generally dealt with by a master (or district judge) particularly in multi-
track cases (see further Chapter 5).
.. ..
EL_C03.qxd 3/26/07 10:39 AM Page 114
Taxing officers
These are salaried officers of the Supreme Court. They fix the costs which one party is
directed to pay to the other. ‘Taxation’ of costs is an old expression, and the function of the
taxing officer is described in the Civil Procedure Rules as the detailed assessment of costs.
The title of taxing officer is retained.
The Official Solicitor and Public Trustee

The Official Solicitor is an officer of the Supreme Court who acts in litigation to protect the
interests of persons suffering under mental disability. He is also concerned to protect the
interests of children in adoption matters and those of persons imprisoned for contempt
of court.
As the title suggests, the Official Solicitor and Public Trustee will also act as a trustee for
those wishing to set up trusts during their lifetime or after death by will.
The Official Solicitor must have a 10-year general advocacy qualification but the right to
act as a litigator is preserved by s 90(3A) of the Supreme Court Act 1981 (as inserted by the
Courts and Legal Services Act 1990). Section 54 of the 1990 Act also makes clear that the
Official Solicitor can apply for probate.
Circuit Administrators
The Royal Commission on Assizes and Quarter Sessions (Beeching Commission) recom-
mended the appointment of a Circuit administrator in each of the six Circuits (now Regions)
into which England and Wales is divided. A legal qualification is not essential. Their function
is to a large extent managerial and they took over from Clerks of Assize, Clerks of the Peace,
and other officers of the numerous different courts who previously had to try to provide the
public and the legal profession with a court service. There is now one person entitled
Regional Director at each High Court and Crown Court Centre to whom all involved can
turn in respect of administrative problems.
Presiding Judges
Under s 72 of the Courts and Legal Services Act 1990 the Lord Chief Justice with the agree-
ment of the Lord Chancellor appoints 12 High Court judges, known as Presiding Judges, who
are assigned to each of the six Circuits (now Regions) in England and Wales. They spend sub-
stantial periods of time in the area and have general responsibility for the local High Court
and Crown Court Centre. They see to the convenient and efficient distribution of judges in
the area, and give support and guidance to the Circuit administrator on these matters.
Under the same section the Lord Chief Justice also appoints a Lord Justice as a Senior
Presiding Judge to oversee all the Circuits. His function is to provide the Presiding Judges
with a Senior Lord Justice to whom they can turn for advice rather than to the Lord Chief
Justice himself, and to relieve the Lord Chief Justice of some of the administrative work in
which he would otherwise be involved both in and out of London.
..
EL_C04.qxd 3/26/07 10:40 AM Page 115
4
CRIMINAL PROCEDURE
Having described the system of major criminal courts and tribunals existing in England and
Wales, we shall now consider the procedure in the major courts which leads to a prosecution
and conviction for crime.
Criminal procedure – generally

The system of trial in this country is accusatorial in that a trial is a contest between two per-
sons. As regards crime, these persons are normally the Queen (on behalf of the community)
and the person accused of the crime.
Advocates representing the prosecution and the defence each put forward evidence to the
court so that a decision may be made on the question before the court which is, did the
accused commit the offence with which he is charged?
It should also be noted in particular that a person accused of crime is presumed innocent
until proved guilty and is given certain protections in regard to the proof of his guilt as follows:
(a) The Code of Practice on the Detention, Treatment and Questioning of Suspects by
the Police (Code C). This code is prepared by the Home Office under powers given by s 66
of the Police and Criminal Evidence Act 1984 (PACE). The codes are revised from time to
time, the latest version came into force on 1 January 2006. The code ensures that a person
cannot be trapped by questioning into an admission of guilt. A main safeguard of the code
is the caution. A caution must be given to a suspect by a police officer as follows:
You do not have to say anything. But it may harm your defence if you do not mention
when questioned something which you later rely on in court. Anything you do say may be
given in evidence.
Where a person is questioned without a caution where one should have been given, any
admissions made by that person are likely to be inadmissible in evidence.
Basically, a caution has to be given to a person in respect of whom there are grounds to sus-
pect of an offence before any questions or further questions are put. In addition a caution is
required:
n on or immediately before arrest;
n when detention is authorised by a custody officer;
n before an interview; and
n following a break in questioning if there is any doubt as to whether the suspect realises
that he or she is still under caution.
..
EL_C04.qxd 3/26/07 10:40 AM Page 116
At any subsequent trial, anything said by a suspect or indeed his or her silence may be used
for or against his or her case.
A person need not be cautioned if the questions are just to establish the ownership of a
vehicle or the person’s identity or in the furtherance of a proper and effective conduct of a
search, provided that the questions do not relate to the person’s involvement in a criminal
offence.
Under the revised code it is not now generally permissible to conduct interviews and
questioning except at a police station or other authorised place of detention once a decision
to arrest has been taken. Tape recording of interviews is then a requirement under s 60 of
PACE, except in cases concerning purely summary offences, e.g. driving without insurance.
In practice, it is usual for all interviews to be tape recorded, even though it is not technically
required. If an interview is conducted at a place other than a police station, which it may be
on the ground of ‘necessity’ (mainly on the ground of non-co-operation), the suspect must be
asked to verify the notes of the interview ‘unless it is impracticable’. The police also have a
duty to keep a record of any unsolicited comments and ask the suspect to verify these as well.
The suspect should write his agreement on the relevant record as soon as is practicable.
Where legal advice has been requested, verification should await the arrival of a solicitor.
In addition, where legal advice has been asked for by a suspect, he or she may not be
interviewed or continue to be interviewed until he /she has received legal advice. Follow-
ing charge, no further questions relating to the offence may be put except, e.g. if these are
necessary to clear up an ambiguity in a previous answer or statement.
The above matters are considered in further detail later in this chapter.
(b) The Human Rights Act 1998. The Human Rights Act 1998 makes it even more important
to comply with PACE and its codes of practice. The ruling in R v Aspinall [1999] 2 Cr App
R 115 is to the effect that a breach of Code C is fundamental in affecting the fairness of any
evidence obtained.
(c) The burden of proof. Once in court, the prosecution must prove its case beyond all
reasonable doubt. The magistrates or jury need not be certain of the accused’s guilt, but they
must in effect be sure that he has committed the crime (and see Woolmington v DPP (1935)
(Case 506)).
The prosecutor
Here we are concerned in effect with the parties to the prosecution of a criminal offence.
Attorney-General
We have already considered the part played by the Attorney-General in Chapter 3. In par-
ticular, he/she appoints the Director of Public Prosecutions (see below) who acts under
the superintendence of the Attorney-General. He/she can also bring prosecutions where no
member of the public would have locus standi (no right to be heard) (see Gouriet v Union of
Post Office Workers (1977), Case 19)).
In addition, some criminal charges require the consent of the Attorney-General before a
prosecution can be commenced. Examples are:
n conspiracy; and
n contempt of court where the contempt is in a publication such as a newspaper.
..
EL_C04.qxd 3/26/07 10:40 AM Page 117
CRIMINAL PROCEDURE 117
Director of Public Prosecutions

The duties of the Director (DPP) are to be found in s 3 of the Prosecution of Offences Act
1985. Major duties are:
n to institute and conduct criminal proceedings because of the importance or difficulty of
the case;
n to appear for the prosecution if the court so directs in appeals from the Crown Court to 4
the Court of Appeal (Criminal Division) and from there to the House of Lords and appeals
from the High Court to the House of Lords in criminal cases;
n to consent or refuse consent to a prosecution where an Act of Parliament states that a pro-
secution may not proceed without it.
Some offences requiring the consent of the DPP are:
n under s 38 of the Health and Safety at Work etc. Act 1974 prosecutions relating to health
and safety offences, e.g. by employers: an inspector of the Environment Agency may give
consent instead of the DPP; and
n child abduction under the Child Abduction Act 1984.
Crown Prosecution Service

The CPS was set up by the Prosecution of Offences Act 1985. The DPP is its head. The Service
is divided into areas coinciding with the boundaries of the various police forces. The CPS
London covers the Metropolitan Police and the City of London Police. The CPS is not subject
to instruction by the police but takes over prosecutions from the police by deciding whether
proceedings should be instituted or, if already instituted, discontinued. The CPS also deter-
mines what charges should be preferred.
Serious Fraud Office

The Serious Fraud Office was put in place by the Criminal Justice Act 1987. Its head is the
Director who is appointed by and works under the superintendence of the Attorney-General.
The SFO’s functions are to investigate suspected offences appearing to involve serious or
complex fraud and to initiate and conduct criminal proceedings that relate to such fraud.
The SFO may also take over existing prosecutions. The major difference between the SFO and
the DPP is that the former has investigatory powers whereas the CPS has not. In addition, the
staff of the SFO includes fraud investigators and accountants in contrast to the CPS which is
staffed by lawyers only.
Other bodies involved in prosecutions

The following are important in terms of business:
n the Department of Trade and Industry, for breaches of company legislation;
n the Inland Revenue for cases of tax evasion;
n Customs and Excise for VAT frauds; and
n the Information Commissioner for breaches of data protection legislation.
Private prosecutions
Individuals may bring private prosecutions but the DPP may take these over and having done
so may discontinue them but not where there is evidence to support the prosecution. Where
..
EL_C04.qxd 3/26/07 10:40 AM Page 118
in a private prosecution the accused is committed for trial the police can be required to make
available all statements and exhibits which they have.
Getting the accused into court

It is obviously necessary to the success of a criminal prosecution that the law provides a
method for getting the accused before the court. The following materials are relevant:
Arrest
The accused may be arrested without a warrant and charged with the offence at the police
station and released on police bail to attend a magistrates’ court on a specified date to answer
to the charge. Where there is no bail the defendant comes before the court to answer the
charge while still in police custody.
Laying an information
If there is no arrest, the prosecution is currently initiated by the laying of an information
before a magistrate or a magistrates’ clerk. The information must be laid by a named person
who disclosed his or her identity. Often informations are laid by the police in the name of
the Chief Constable or a senior officer. The information will ask for a summons to be issued
requiring the attendance of the defendant to appear before magistrates to answer the charge
or a warrent for arrest so that the defendant can be brought before the magistrates to answer
the charge.
The information process differs from the arrest and charge because the individual against
whom the information is laid is at liberty and is not detained at a police station while the
charge is investigated and drawn up. The information is to secure the attendance of the indi-
vidual at court. An information is laid when it is received by the justices’ chief executive for
the relevant area.
Issue of summons
The magistrate before whom the information was laid has power to issue a summons which is
usually served upon the defendant by post.
Issue of a warrant
The magistrate before whom an information is laid has power to issue a warrant for the arrest
of the person named in it provided in this case that the information is made on oath and the
offence is an indictable offence or punishable by imprisonment or the defendant’s address is
not well enough established to serve a summons.
Since many offences carry a power of arrest without warrant, it is not usual to issue warrants
in the way described above.
Reform
A major reform effected by s 4 of the Criminal Justice Act 2003 is to enable the immediate
grant of bail from the scene of arrest if there is no immediate need to deal with the person
..
EL_C04.qxd 3/26/07 10:40 AM Page 119
arrested at a police station. The police have a discretion to decide when and where an
arrested person should attend a police station for interview. This type of bail is referred to as
‘street bail’.
At the time of writing, s 4 of the 2003 Act was not in force.
New method of instituting proceedings 4

Section 29 of the Criminal Justice Act 2003 provides for a new method of instituting criminal
proceedings which is available to a public prosecutor as defined in subsection (5). This
method replaces the laying of an information and issue of a summons. Public prosecutors
include the police, the CPS and the Director of the Serious Fraud Office. In practice, prosecut-
ing lawyers from the CPS are taking over the job of charging suspects because of evidence
that this reform could reduce the number of trials that collapse. The procedure consists in the
issue to the person to be prosecuted of a written charge together with a written requisition for
him or her to appear before a magistrates’ court to answer to the charge. The written charge
and the requisition must be served on the person named and copied to the court. Subsection
(4) prohibits public prosecutors from laying an information for the purpose of obtaining the
issue of a summons. They may still do so, however, for the purpose of obtaining the issue of a
warrant (see above). Section 31 removes the need for warrants to be substantiated on oath.
At the time of writing, ss 29 and 31 were not in force.
Procedure at the police station

At the beginning of criminal proceedings a person is a suspect and this section deals, among
other things, with the law relating to the detention, treatment and questioning of a suspect
by the police. References in this section are, unless otherwise indicated, to the Police and
Criminal Evidence Act 1984 (PACE).
Arrestable and serious arrestable offences: abolition

This text up to the 14th edition used to refer to arrest without warrant for an arrestable or a
serious arrestable offence. An arrestable offence was one punishable with a maximum of five
years’ imprisonment or more. It became a serious arrestable offence if it led to the death of
any person or serious injury or serious financial loss and that which was done was intended
or likely to lead to the relevant result. Sections 24 and 116 of PACE applied.
Radical changes have been made to PACE by the Serious Organised Crime and Police Act
2005 and new PACE Code G. Powers of arrest have been completely overhauled to give
the police the power to arrest for any offence subject only to a necessity requirement.
Additionally, the concepts of ‘arrestable offence’ and ‘serious arrestable offence’ have been
abolished. The effective date for the abolition of these pre-conditions for the exercise of
police powers was 1 January 2006.
Thus, all offences are arrestable and certain other police powers other than arrest which
applied only where a serious arrestable offence had taken place (e.g. the power to set up road
blocks) now apply only to the committal of indictable offences.
The above powers do represent, as Code G states, an obvious and significant interference
with the right to liberty guaranteed by the Human Rights Act 1998 and the Convention on
Human Rights Art 5. The Code does, however, stress that the use of the power must be fully
justified and those exercising the power should consider if the necessary objectives can be
..
EL_C04.qxd 3/26/07 10:40 AM Page 120
achieved by other less intrusive means and that arrest must never be used simply because it
can be used.
Attendance at a police station

Let us now follow the progress of John Doe through the relevant procedures. He has stolen
£500 from an elderly pensioner who was leaving a building society having threatened her
with a knife. He is known to the police for this kind of street crime. There are two ways in
which John may arrive at a police station:
n As a volunteer, assisting the police with their inquiries following a call at his home by
police: in this situation s 29 applies and John must be allowed to leave at will unless he is
arrested and informed that this is so. Arrest may occur if police questioning gives rise to a
reasonable suspicion that John may be guilty of the offence.
n By being arrested away from the police station, in which case, under s 30 he must be taken
to a police station as soon as is reasonably practicable after arrest. The 1984 Act requires
that prisoners who will be detained, or are likely to be detained, for more than six hours
must be taken to a ‘designated’ police station. Such a police station is one designated by
the Chief Officer of Police as having enough facilities to detain arrested persons. Those
who come to the police station following arrest must be taken before a custody officer who
must hold at least the rank of sergeant. Under s 37 the custody officer is required to see
whether there is enough evidence to charge John, and he may detain him for such period
as is necessary to be able to make that decision. Except, perhaps, in those cases where a
suspect has been caught in the act before witnesses, which is not the case here, there is
unlikely to be enough evidence to charge John at this stage.
Incidentally, in DPP v L [1999] Crim LR 752 the Divisional Court of Queen’s Bench ruled
that a custody officer is not required to inquire into the legality of the arrest and if it is found
subsequently to have been unlawful the decision to detain will not be invalidated. Where the
custody officer knows that the arrest has been unlawful he or she should consider whether
detention can be justified especially in view of the Human Rights Act 1998.
John will, therefore, be released with or without bail, though the custody officer may keep
him at the police station without being charged in order to get more evidence, e.g. (1) by
searching John’s premises, or (2) to take samples in, e.g., alleged sex offences or, (3) as is most
often the case, to carry out further questioning. John may, therefore, be detained for the first
or third reasons in the circumstances of our case. A custody record must be kept by the cus-
tody officer and a legal representative attending the suspect can inspect it and a copy must be
given to the suspect or his legal representative, on request, when the suspect goes before a
court or is released from the police station.
Detention without charge

The basic detention periods without charging John are as follows:
n The general maximum period is 24 hours from arriving at the police station or from arrest
whichever is the earlier.
n Where there is an indictable offence, as John’s offence would seem to be, further detention
of up to 36 hours from arrival can be authorised by a superintendent under s 42.
Section 7 of the Criminal Justice Act 2003 (as amended by the Serious Organised Crime
and Police Act 2005, Sch 7) extends the time for which a person may be detained without
charge under the authority of a superintendent, from 24 to 36 hours for any indictable
..
EL_C04.qxd 3/26/07 10:40 AM Page 121
offence. This will assist the police in dealing effectively with offences such as robbery
(seemingly robbery under s 8 of the Theft Act 1968) from a bank or building society with
or without the use of a firearm or imitation firearm. These cases are sometimes extremely
difficult or impossible to complete in terms of the necessary investigation processes within
24 hours.
n Detention beyond 36 hours requires that the offence is an indictable offence and the grant
of a warrant of further detention by a magistrates’ court under s 43. The grounds for grant- 4
ing an extension up to and beyond 24 hours – either by a superintendent or the magis-
trates – are that detention is necessary to secure or preserve evidence or obtain evidence
through questioning (which is the most common ground) or that the investigation is
being conducted diligently and expeditiously.
n A magistrate’s warrant may initially be granted for a period not exceeding 36 hours, but
can be extended by further periods until 96 hours from arrival at the police station have
expired. This is the maximum period for detention without charge except in cases of terrorism.
n A different regime applies to terrorism investigations. The periods of time differ, i.e.
48 hours instead of 36 hours for initial detention, 14 days instead of 96 hours for the
maximum period, and the authority for detention beyond the initial period is given by a
‘designated judicial person’, e.g. a district judge (magistrates’ courts), rather than by magis-
trates (Terrorism Act 2000). The above periods are changed by the Terrorism Act 2006. The
initial period becomes seven days from arrest, the period of 14 days becomes 28 days, but
any extension beyond 14 days must be authorised by a High Court judge and the deten-
tion must be supervised by a High Court judge.
Detention review
An inspector (or a rank above) must carry out a detention review within six hours of the
first authorisation and thereafter at intervals of nine hours. The purpose is to ensure that
the grounds for initial detention still apply. The custody record must give details of these
reviews.
Bail after charge

We will assume that John has been charged. If there are no reasons relating to the investiga-
tion for detaining him further, s 38 provides that he be released from police detention either
on police bail or without bail, unless there are grounds for detention after charge. These are,
e.g., that the suspect’s name and address have not been ascertained or it is reasonably
thought that he may have given a false name and address or that he may not be at that
address long enough for a summons to be served or that he may not answer to bail or may
commit an offence while on bail (s 38). The bail decision is taken by the custody officer.
Section 25 of the Criminal Justice and Public Order Act 1994 provides that bail cannot
be granted where a person is charged with murder, manslaughter, rape or attempted rape,
if he/she has been convicted of any of these offences, unless there are exceptional circumstances.
Rights in connection with legal advice

The position is as follows:
n Volunteers. These have an absolute right to legal advice in private or to get in touch with
anyone outside the station at any time. These rights are conveyed to the suspect by a
notice which is given to him on arrival. The duty solicitor can give this advice if the
suspect requires it.
..
EL_C04.qxd 3/26/07 10:40 AM Page 122
n Those under arrest. The basic provision is to be found in s 58 of PACE, which states that a
person arrested and held in custody at a police station or other premises is entitled, if he so
requests, to consult a solicitor privately at any time. Code C para 6 states that detainees
may consult and communicate with a solicitor in person or in writing or by telephone and
that free independent legal advice is available from the duty solicitor. A revision of the
Code adds a Note 6J, which states that this right to consult or communicate in private is
fundamental. These suspects then are informed by the custody officer that they have a
right to free legal advice and to have a person informed of the arrest and of the right to
consult the PACE codes of practice. These rights are set out in a notice given to the suspect.
The suspect then signs the custody record to indicate whether or not he requires advice.
Advice may be from his own solicitor if available or alternatively the duty solicitor.
Duty solicitor
The duty solicitor scheme operates throughout all areas of the country and ensures that a
solicitor is available on a 24-hour basis to go to police stations to advise suspects who are
being detained. The advice is free, regardless of the suspect’s means, and the solicitor is paid
at a fixed hourly rate by the Criminal Defence Service, which is an arm of the Legal Services
Commission.
As regards competence, this is a matter for the Legal Services Commission’s accreditation
scheme. In broad terms, accreditation requires that duty solicitors must be competent to do
the relevant work and have relevant experience. In addition, they must have attended both
an advocacy course and a course for police station advisers.
The LSC has introduced a new method of delivering police station duty solicitor services
through CDS (Criminal Defence Service) Direct. Under the scheme, a request for a duty soli-
citor goes to CDS Direct unless the offence is indictable only or the time at which the suspect
will be interviewed is known. The CDS will give initial advice and decide whether attendance
by a duty solicitor is required. If so, the case goes to a solicitor providing criminal defence ser-
vices. In addition, where the service is for telephone only advice, all duty solicitor services are
handled by CDS Direct.
Denying access to advice

Where the suspect is in detention for an indictable offence, the right to legal advice may be
suspended for up to 36 hours if a superintendent authorises it. The period in the case of ter-
rorism is 48 hours. Those who have not committed such offences have an unqualified right
to advice (s 58). A superintendent may authorise suspension where, for example, there are
reasonable grounds to believe that the suspect or another person has benefited from the crim-
inal conduct (aimed mainly at drug trafficking) and the recovery of the value of the property
constituting that benefit will be hindered (as where, perhaps, the pensioner’s money has not
been recovered). There are also grounds for delay with terrorism suspects, where, for example,
there are reasonable grounds for believing that it will interfere with the gathering of informa-
tion relating to terrorist activities. The right to have a friend or relative notified of the arrest
may be delayed for the same reason.
Interviews – generally
All interviews at police stations other than those relating to purely summary offences, e.g.
driving without insurance, should be tape-recorded. Two tapes are used. One is sealed and
..
EL_C04.qxd 3/26/07 10:40 AM Page 123
signed by the suspect or interviewing officer. The other tape is a working copy to which the
defence has a right of access. Interviews other than at the police station may be off-tape.
Normally the suspect must be given the chance to read the record and to sign it as correct or
to indicate any parts which he thinks are incorrect.
The 2006 revision of Code E alters all references to ‘tape’ to ‘recording’ and adds a new
definition of recording media as ‘any removable, physical audio recording medium (such as
magnetic tape, optical disc or solid state memory) which can be played and copied’. It would 4
now be permissible to refer to this procedure as audio recording.
Interviews – suspect protection

There are the following main safeguards for the suspect:
n the suspect must be reminded of the availability of free legal advice;

n a caution must be given. This is set out at the beginning of this chapter;
n the suspect must not be unfit through drink or drugs so that he cannot appreciate the
significance of the questions;
n a juvenile, i.e. a person under 17, must have an ‘appropriate person’ at the interview. This
may be a parent or guardian of the juvenile or if one is not available or is unsuitable, as
where that person is also involved in the offence, a social worker, solicitor or duty solicitor
at the station may act.
The right to silence restricted

Section 34 of the Criminal Justice and Public Order Act 1994 deals with the failure by a sus-
pect to mention facts when questioned or charged. Provided the suspect was under caution,
charged or officially informed that he/she may be prosecuted at the time, the court at his sub-
sequent trial can draw adverse inferences from the failure to disclose. So in John’s case, if he
does not answer a question relating to his whereabouts at the time of the offence but at the
trial raises a defence of alibi, i.e. that he was at home at the relevant time, the court can draw
adverse inferences from the fact that John did not mention this in answer to the question.
Essentially, it means that the court may not believe John and think that the alibi has been
made up after the event.
Under s 58 of the Youth Justice and Criminal Evidence Act 1999 inferences from silence are
not permissible where the defendant has not had prior access to legal advice.
The trial of criminal proceedings

There are some preliminary considerations as follows.
Time-limits
n Summary offences. The magistrates cannot deal with the prosecution of a case if the
information (see below) is laid more than six months after the alleged offence was com-
mitted. An information is laid when it is received at the court office by an authorised
officer (s 127, Magistrates’ Courts Act 1980).
n Indictable offences (including offences triable either way). There are no statutory time
limits for commencing criminal proceedings (s 127, MCA 1980). Defendants have, however,
..
EL_C04.qxd 3/26/07 10:40 AM Page 124
a common law right to be protected against undue delay and a court may dismiss proceedings
for undue delay amounting to an abuse of the process of the court. The defendant must
normally show unjustifiable delay or the prosecution’s bad faith. Both are, in fact, difficult
to establish.
n Some road traffic offences, such as dangerous driving and careless or inconsiderate driv-
ing, cannot proceed to conviction unless a notice of intented prosecution is served on the
defendant within 14 days of the offence (s 1, Road Traffic Offenders Act 1988).
This does not apply where, in addition to the nature of the driving, an accident has
occurred of which the driver was aware.
Commencing the prosecution
There are two ways to commence a prosecution, i.e. by charge or by summons.
Charge
There are two possibilities as follows.
n Where the defendant has been charged and bailed. Here a Crown Prosecution Service
lawyer at the police station will after a police officer has signed the charge sheet look
into the police files and decide how the matter will be heard. There are two possibilities
as follows:
(a) a simple guilty plea hearing: here the defendant admits all the elements of the offence
and the offence does not involve complex issues which means in general that there are
not more than two defendants and three key witnesses. These pleas will be listed
before a full bench so that the defendant can be sentenced that day though the case
can be adjourned for pre-sentence reports. The prosecution is conducted by a non-
qualified CPS representative.
Where the offence is a summary offence for which the defendant cannot be sent to
prison for more than three months, the ‘statement of facts’ procedure may be used.
The appropriate summons will have been served on the defendant with a ‘statement of
facts’ and a form of explanation allowing the defendant to plead guilty and make a
plea in mitigation in his or her absence. The clerk will inform the prosecution of the
guilty plea and on proof of service on the defendant the statement of facts and the
plea in mitigation is read out in court. No further facts of evidence may be given;
(b) an early administrative hearing: where a not guilty plea is expected, the defendant’s first
appearance before the magistrates will be at an early administrative hearing under s 50
of the Crime and Disorder Act 1998. Except in the case of indictable-only offences, the
hearing may be before a single justice or the justices’ clerk. The prosecutor is a lawyer
from the CPS. The EAH will deal with legal aid and make arrangements for the defend-
ant to consult a solicitor. Where the offence is an either-way offence arrangements
can be made for the advance disclosure of the case for the prosecution. The case will
then be adjourned. The single justice may remand the defendant on bail or in custody.
The clerk cannot remand in custody and will, therefore, take ‘bail’ hearings. Legal rep-
resentation is allowed at both simple guilty plea and EAH proceedings by the defend-
ant’s own solicitor or the duty solicitor in either case free of charge. Following the EAH
the defendant will be remanded to a pre-trial review (see below) or to the appropriate
mode of trial, i.e. summary or on indictment.
..
EL_C04.qxd 3/26/07 10:40 AM Page 125
For guilty pleas the expectation is that the case will be dealt with on first appearance
before magistrates.
n Where the defendant has been charged and detained. In this situation the defendant will
remain in custody and be taken before a magistrates’ court as soon as is practicable. In this
connection, s 57 of the Crime and Disorder Act 1998 provides for the use of live television
links at preliminary hearings where the accused is detained in custody. This reduces delays
in proceedings and the number of escapes on the way to and from court. The magistrates’ 4
court will decide how the case will proceed.
Summons
As regards less serious offences, such as careless or inconsiderate driving, where there will not
normally have been an arrest, the prosecution will lay an information. This tells a magistrate
or the clerk of the offence alleged and asks for the issue of a summons. An information is usu-
ally in writing. A summons is normally served by posting it to the defendant’s usual or last
known address. An example of a summons appears later in this chapter. As regards the com-
mencement of the prosecution, this is done by the person who lays the information. The
prosecution will then normally be taken over by the relevant prosecuting body, which in the
case of police officers will be the Crown Prosecution Service. Under the Criminal Justice Act
2003 (as it comes into force) this procedure is replaced by the written charge and requisition
though an information can still be laid for a warrant to arrest.
Pre-trial reviews
These are provided for by s 49 of the Crime and Disorder Act 1998. They can be conducted by
one justice or the clerk. The object is to provide better management of cases through the
court. They provide an opportunity for the prosecution to amend the charges; the defence to
enter different pleas; the issue to be identified; there may be clarification as to witnesses who
need to attend and an estimate of the time the trial will take.
These reviews are not compulsory but magistrates will normally hold such procedures
before trial. The decision whether or not to hold a review is for the members of the court.
The duration of remands

There are three possible situations as follows:
n Remand before conviction or committal for trial. Here the general rule is that the defend-
ant may not be remanded in custody for more than eight clear days at a time, i.e. eight
days excluding the day on which the remand was made and the day on which it ends. If
remand is on bail, and subject to the defendant’s consent, there is no time limit (s 128,
Magistrates’ Courts Act 1980). If there are successive remands in custody, the defendant
need only be brought to court on every fourth remand if he has given and not withdrawn
his consent, and has a solicitor acting for him – who need not be present in court (MCA
1980, s 128(3A)). A court can under s 128A, MCA 1980 remand the defendant in custody
for up to 28 days if it has previously remanded him in custody for the same offence and he
is in court, and can remand him to the next stage in any proceedings, and this may be
within the 28-day period.
It should also be noted that magistrates have power to remand a person who has been
charged with offences to police custody for up to three days the purpose being to allow
questioning about other offences (see s 128(7) of the Magistrates’ Courts Act 1980).
..
EL_C04.qxd 3/26/07 10:40 AM Page 126
n Remand after conviction. Here s 10(3) of the MCA 1980 applies and states that a magis-
trates’ court may for the purpose of enabling inquiries to be made, e.g. medical reports,
before sentence adjourn after convicting the defendant for a successive period of four
weeks if on bail, but if in custody for not more than successive periods of three weeks.
n Remand following committal to the Crown Court. The defendant if committed to the
Crown Court for trial or sentence is remanded on bail or in custody until the case is due to
be heard.
Time limits for the trial to commence

The Prosecution of Offences Act 1985 enables the Home Secretary to make regulations impos-
ing time limits for the completion of various stages in the criminal process as follows:
n Magistrates’ courts: the Prosecution of Offences (Custody Time Limits) (Amendment)

Regulations 1999 (SI 1999/2744) provide for a maximum magistrates’ court custody time
limit from first appearance to the start of the trial of 56 days in regard to those charged
with summary offences. In the case of an offence triable either way, the maximum period
of custody between the accused’s first appearance and the start of summary trial or the
time when the court decides whether or not to commit the accused for trial in the Crown
Court is 70 days. If the court decides to proceed to summary trial, it must do so within
56 days. In the case of the trial of indictable-only offences, the maximum period of cus-
tody between first appearance and the decision to commit for trial in the Crown Court is
70 days.
n Crown Courts: the Prosecution of Offences (Custody Time Limits) (Amendment) Regulations
2000 (SI 2000/3284) provide for a maximum Crown Court custody time limit of 182 days
less any period previously spent in custody of a magistrates’ court for the offence.
n Youth courts: the Prosecution of Offences (Youth Court Time Limits) Regulations 1999
(SI 1999/2743) provide for the following time periods in regard to the three stages of youth
court proceedings:
– persons must be brought to trial within 99 days (the overall time limit) of the date of
first appearance;
– where they have been arrested, persons must first appear in court within 36 days (the
initial time limit) of the date of arrest;
– persons convicted should be sentenced within 29 days of the date of conviction.
The above regulations have a procedure under which the prosecution may apply for the
overall and the initial time limits to be extended.
Funding the defence – legal aid
Part I of the Access to Justice Act 1999 applies. It sets up the Legal Services Commission, the
members of which are appointed by the Lord Chancellor. The Commission administers the
Community Legal Service (for civil legal aid, see Chapter 5) and the Criminal Defence Service
(CDS) for legal aid in criminal cases. There is power in the Act to make these bodies separate
and self-managing.
As regards the repayment of aid provided in criminal cases, an assisted individual may not
be required to make any contribution except where aid is provided in the Crown Court and
the judge orders payment to be made.
..
EL_C04.qxd 3/26/07 10:40 AM Page 127
Franchising
As regards solicitors, only those firms who have contracts with the CDS and fulfil quality of
service criteria are able to represent assisted clients. Defendants in criminal cases have a right
to choose among firms who have contracts. Following the granting of a contract, there will
be quality monitoring of firms through the Commission and a charge is made upon the firms
for this purpose. Private solicitors may undertake publicly funded criminal defence work only 4
if they have a contract with the Criminal Defence Service.
All advocacy assistance before magistrates’ courts is currently granted without reference
to financial resources, so there is no means test.
The Criminal Defence Service Act 2006, ss 1– 4 will, as it comes into force, re-introduce
means testing and the Legal Services Commission will become responsible for administering
payments (see further p 104).
Payments to lawyers
Payments to solicitors are made under their contract arrangements but the Access to Justice
Act provides for rules to be made by the Lord Chancellor under which the Commission may
make payments to non-contracted persons. This deals with payments to barristers who,
by tradition, do not contract for their services. There have been statements by the Lord
Chancellor that barristers should consider offering services by contract franchising.
Criteria for the grant of a right to representation

The following are the main factors that will be taken into account when deciding whether
representation is in the interests of justice (see Access to Justice Act 1999, Sch 3):
n whether the individual concerned would, as a result of the proceedings, be likely to lose
his liberty or livelihood or suffer serious damage to his reputation;
n whether the determination of any matter arising in the proceedings may involve considera-
tion of a substantial question of law;
n whether the individual may be unable to understand the proceedings or state his
own case.
Bail
The place of bail as part of the pre-trial process has already been considered. More detail on
the somewhat complex matter of bail appears below.
(a) Bail elsewhere than at a police station. Section 4 of the Criminal Justice Act 2003 as
it comes into force amends s 30 of PACE to allow police officers to grant bail to persons
following their arrest without the need to take them to a police station. This gives the police
more flexibility and allows them to remain on patrol if there is no immediate need to take
the person concerned to a police station. However, the CJA 2003 makes clear that the basic
principle set out in PACE remains and that a person arrested by a police officer must be
taken to a police station as soon as practicable. The arresting officer is required to release
a person he has arrested and is taking to a police station where the officer is satisfied that
there are no grounds for keeping him under arrest or releasing the person under the street
bail arrangements.
..
EL_C04.qxd 3/26/07 10:40 AM Page 128
A police officer can delay taking an arrested person to a police station or releasing him on
street bail if that person’s presence elsewhere is required for the purposes of investigation.
The reasons for the delay must be recorded on eventual arrival at a police station or at the
time of release on street bail. Where a constable is taking a person arrested to a police station
that person may be released before arriving at the station and released on bail but must be
required to attend a police station at a later time. No other conditions may be imposed on
the person as a condition of bail.
A person who is street bailed must be given a notice prior to release stating the offence for
which he was arrested and the police station the person is to attend and when. The grounds
for arrest must also be included in the notice. The CJA 2003 makes clear that a person
released on street bail may be rearrested if new evidence comes to light. Those who fail to
attend at a police station as the notice requires may be arrested without warrant.
(b) Bail at a police station (police bail). Under s 47 of PACE the custody officer (see above)
must, after charges have been laid, consider whether the detention conditions (see above)
apply. If not, he must order the release of the accused on bail in accordance with the Bail
Act 1976 (see below) or without bail. An accused who is not released must be brought before
the magistrate as soon as practicable (see above). Under s 3A of the Bail Act 1976 a custody
officer who has granted bail (or another custody officer at the same police station) may vary
the conditions of the bail at the request of the person to whom it was given. Under Part IV of
PACE a constable may arrest without warrant a person who has failed to answer to police bail.
(c) By magistrates. When an accused person comes before magistrates, e.g. on committal
proceedings, the magistrates have to decide at the end of the proceedings whether to remand
the accused in custody, in one of the remand prisons for persons awaiting trial, or release him
on bail.
Under s 154 of the Criminal Justice Act 1988 the magistrates are obliged to consider bail on
each successive remand but are not obliged to hear argument in support of a bail application
unless there are new circumstances or circumstances not previously brought before them.
They are not obliged to review matters previously considered. They are, however, obliged to
hear argument in support of bail at the first hearing and at the next if they have refused bail
at the first.
The granting of bail is covered by the Bail Act 1976, which is applied also to those in cus-
toms detention by s 150 of the Criminal Justice Act 1988. Section 4 of the 1976 Act contains
a statutory presumption in favour of granting bail, though this does not apply in breach of
bail and ‘no-bail’ cases (see below). Under the section a person accused of crime must be
granted bail unless:
n he is charged with, or convicted of, an offence which is punishable with imprisonment

and the court is satisfied there are good grounds for believing that, if released on bail, he
would fail to appear at a subsequent hearing or commit an offence while on bail or
obstruct the course of justice by intimidating witnesses; or
n the court is satisfied that he ought to remain in custody for his own protection or, if he is a
juvenile, for his own welfare; or
n there has not been enough time to obtain information about the defendant for the court
to reach a decision; or
n the defendant has been convicted of an imprisonable offence and remanded for enquiries
or, say, a medical report, and it seems to the court that it is not practical to complete the
enquiries or make the report unless the defendant is kept in custody;
n where the defendant is on bail at the time of the alleged offence, that is a mandatory
ground to refuse bail. Under the CJA 2003 where a defendant was on bail in criminal
..
EL_C04.qxd 3/26/07 10:40 AM Page 129
proceedings on the date the alleged offence was committed, particular weight can be given to
this fact when the court is deciding release on bail. There is no longer a mandatory bar.
This provision applies where the present offence, the offence for which the defendant was
already on bail, or both are imprisonable;
n the defendant is in custody under the sentence of a court;
n having been released on bail in connection with proceedings for the offence, he has been
arrested for absconding or breaking conditions of bail; 4
n drug users restrictions. Under s 19 of the CJA 2003 an alleged offender charged with an
imprisonable offence will not be granted bail – unless the offender can demonstrate that
there is no significant risk that he or she will commit an offence while on bail – where the
following conditions exist:
– there is evidence from a drug test that the person has a specified Class A drug, e.g.
cocaine, in his or her body;
– the court is satisfied that there are substantial grounds for believing that the misuse of a
specified Class A drug caused or contributed to that offence or provided its motivation;
and
– the person does not agree to undergo an assessment as to dependency upon or propen-
sity to misuse specified Class A drugs or has undergone such an assessment but does not
agree to participate in any follow-up offered.
If an assessment or follow-up is proposed, it will be a condition of bail that they
be accepted, provided that appropriate assessment and treatment facilities are available in
the area.
Section 25 of the Criminal Justice and Public Order Act 1994 provides that there is to be no
bail, other than in exceptional circumstances, for a person charged with murder, attempted
murder, rape, attempted rape or manslaughter, where the person concerned has a previous
conviction for any of those offences and, in the case of a previous conviction for manslaugh-
ter, was sentenced to imprisonment or detention. It is not necessary that the previous convic-
tion be for the same offence as the current charge before the court.
The prosecutor may ask the court to reconsider its decision to grant bail on the basis of new
information which was not available to the court or the police (in the case of police bail)
when the original decision was taken.
Where the defendant is charged with, or convicted of, an offence which is not punishable
with imprisonment, the grounds for refusing bail are much more restricted. However, such a
person can be refused bail if he has previously failed to answer bail and if the court believes,
in view of that failure, that he will again fail to surrender to custody if released on bail.
Conditions may be imposed on the granting of bail, e.g. the handing in of a passport or
regular reporting to the police.
Appeals against refusal of bail

As regards appeals, an unconvicted defendant could, under s 22 of the Criminal Justice Act 1967,
appeal to a High Court judge against a refusal by the magistrates or the Crown Court to grant
bail. Under s 60 of the Criminal Justice Act 1982 he could, as an alternative to the High Court
judge, go to a Crown Court judge in chambers for bail. Section 17 of the CJA 2003 abolishes
the duplicate appeal to the High Court so that appeal is now to the Crown Court only from a
magistrate’s refusal of bail, and there is a consequent repeal of s 22 of the 1967 Act. Appeals
from a Crown Court refusal are to the High Court. Section 29 of the 1982 Act gives the Crown
Court the power to grant bail pending an application to the Court of Appeal for leave to
appeal against sentence, or pending an appeal to that court against conviction on indictment.
..
EL_C04.qxd 3/26/07 10:40 AM Page 130
In addition, under the Bail (Amendment) Act 1993 the prosecution may appeal against a
magistrates’ decision to grant bail. Appeal is to a judge of the Crown Court. The accused must
be charged with or convicted of taking a vehicle without consent, or aggravated vehicle
taking under ss 12 and 12A of the Theft Act 1968, or an offence punishable with imprison-
ment or, in the case of a child or young person, be so punishable if it had been done by an
adult (but see below). Bail must have been opposed initially.
Power to appeal to the Crown Court

Section 16 of the CJA 2003 creates a new right of appeal to the Crown Court against the
imposition by magistrates of certain conditions of bail. The conditions that may be chal-
lenged are requirements relating to residence, provision of a surety (see below), or giving a
security, curfew or electronic monitoring or non-contact with a particular person or persons.
Such an appeal can only be made where application to vary has been made to the magistrates.
This complements the removal by s 17 of the former power of the High Court to entertain
such appeals.
Section 18 of the CJA 2003 amends the Bail (Amendment) Act 1993 so that the prosecu-
tion’s right of appeal to the Crown Court against a decision by magistrates to grant bail is
extended to cover all imprisonable offences.
Surrender to bail and sureties

Section 3 of the 1976 Act imposes a duty upon a person granted bail to surrender to custody.
This duty is enforceable by the creation of the offence of absconding in s 6. Security for sur-
render into custody and sureties may not be required nor conditions imposed on the grant
of bail except as provided by s 3. Thus, for example, a deposit of a sum of money or a surety
or sureties may be required if it is believed the person will abscond. A previous restriction
that security or surety could be required if it was thought the person would leave the country
has gone. The court may ask for sureties other than the defendant to provide an additional
guarantee to secure the defendant’s surrender to custody. As regards conditions, the section
makes it plain that these are only to be imposed to ensure the defendant’s surrender to cus-
tody, that he does not commit a further offence while on bail, that he does not interfere with
the course of justice, as by intimidating witnesses, and that he makes himself available for the
purposes of enabling enquiries or a report to be made. The section also provides for the par-
ent or guardian of a juvenile to stand as surety in a sum not exceeding £50 to ensure that the
juvenile complies with the requirements attached to the grant of bail.
Section 6 also creates the offence of failing, without reasonable cause, to surrender at the
time and place appointed. The offence is punishable in a magistrates’ court by a maximum of
three months’ imprisonment and/or a fine, and in a superior court, such as a Crown Court, if
committed for sentence by the magistates after conviction, with 12 months’ imprisonment
and/or a fine. Section 7 provides for the arrest of a defendant who fails to surrender himself
to custody at the appointed time and place or who breaches any of the conditions attached
to the grant of bail.
Suitability of sureties and indemnities

If the court requires sureties under s 3, s 8 provides for the first time in statutory form some
matters which should be taken into account in deciding the suitability of sureties. The list,
which is neither mandatory nor exhaustive, relates to the financial resources, character
(including previous convictions) and proximity to the defendant (in terms of blood
..
EL_C04.qxd 3/26/07 10:40 AM Page 131
relationship, dwelling, or otherwise) of the proposed surety. In addition, the section enables a
person who is not accepted as a surety to apply to a court to have the matter reconsidered.
Section 9 creates the offence of agreeing at any time and regardless of whether or not a per-
son in fact becomes a surety, to indemnify that person against his liability as a surety. Thus, if
A asks B to stand as a surety for C and tells B that he (A) will pay to B any sum which B has to
pay into court because C absconds, then A commits this s 9 offence. The penalties for this
offence are the same as those for the offence of absconding. No proceedings may be insti- 4
tuted under this section without the consent of the Director of Public Prosecutions.
Where a person who has stood surety for a defendant’s bail cannot be blamed for his failure
to surrender, as where the surety has not been told when the defendant was required to
appear, then the surety should not forfeit his recognisance (R v Reading Crown Court, ex parte
Bello (1990) The Times, 10 December). However, the matter is at the discretion of the court and
lack of blame on the part of the surety will not necessarily mean that there will be no forfeiture
though the court may reduce the amount payable if there has, e.g., been police negligence
(R v Crown Court at Maidstone, ex parte Lever [1995] 2 All ER 35).
Funding is available for defendants who wish to be represented in actions relating to
whether they are entitled to bail or not.
Bail hostels
Before leaving the subject of bail, the provision of bail hostels is worthy of consideration.
These hostels, often run by the probation service, give an accused person an address so that
he need not necessarily be remanded in custody because he has no fixed abode, which is still
a ground under s 1(4) of the Magistrates’ Courts Act 1980, though persons of no fixed abode
are not bound to be refused bail. The Secretary of State is given power to approve bail hostels
and to provide a system of inspection under s 49 of the Powers of Criminal Courts Act 1973
(as amended by the Criminal Justice Act 1982, Schs 11 and 16). Before this statutory measure
there was only a limited number of such hostels provided by voluntary organisations.
On granting bail the court may impose a condition that the defendant reside at a bail
hostel and abide by its rules so that a remand in custody can result if the defendant misbehaves
(Criminal Justice Act 1988, s 131, amending Bail Act 1976, s 3).
Criminal trials and the Human Rights Act 1998

Before considering trial procedure, the effect of the Human Rights Act 1998 must be briefly
looked at. In this connection the Act does not require Convention issues to be taken into
consideration at any particular stage of criminal proceedings. However, under the
Convention the charge or indictment could be challenged before trial, and at the trial
attempts may be made under the Convention to exclude evidence allegedly obtained in
breach of the Convention or questioning the drawing of adverse inferences from the silence
of the defendant. On appeal the defence may ask that a conviction be quashed where it is
alleged that it was obtained in breach of the Convention. Since the court itself is a public
authority required to comply with the Convention, it may of its own volition take points
relating to breaches of the Conventions. Articles 5 and 6 of the Convention are especially
applicable. The former deals with rights in relation to criminal proceedings, while the latter is
concerned with the right to a fair hearing.
The law relating to arrest involves Art 5, which provides that everyone has a right to lib-
erty and security of the person. Article 5 is also relevant to detention. If the conditions of
..
EL_C04.qxd 3/26/07 10:40 AM Page 132
detention amount to inhumane or degrading treatment there could be a breach of Art 3, i.e.
freedom from torture or inhumane or degrading treatment.
Summary trial before magistrates (other than in a youth court)

Since the majority of summary trials before magistrates relate to motoring offences, such an
offence has been chosen as an example of the form of summary trial.
The position in regard to the disclosure of the prosecution’s case, which is not a legal right
in summary trials and the disclosure of unused material together with the defence statement,
have been considered in Chapter 2, but should be looked at again by way of revision.
The alleged offence

Let us suppose that on 29 March 2007 Freda Jones was driving her car along George Road,
Barchester, and that her attention was distracted by the sun so that she ran into the back of a
stationary delivery van which was parked at the kerbside in an area where there were no park-
ing restrictions.
Freda is to be prosecuted under s 3 of the Road Traffic Act 1988 for careless or inconsiderate
driving. This offence is classified as summary only. The maximum penalty is a fine of £2,500
with discretionary disqualification and an obligatory endorsement of three to nine penalty
points. The offence is defined as driving ‘. . . a mechanically propelled vehicle on a road or
other public place without due care and attention, or without reasonable consideration for
other persons using the road or place . . .’.
The summons
Freda will receive a summons containing the following materials. The content of a summons
is set out in Rule 7.7 of the Criminal Procedure Rules 2005 as follows:
1. It is addressed to Freda Jones and must be signed by the magistrate issuing it or state his
or her name and if it does the latter the signature must be authenticated by the signature
of the clerk to the magistrates’ court.
2. The summons requiring a person to appear before a magistrates’ court to answer an informa-
tion or complaint must state shortly the matter of the information or complaint in
Freda’s case as follows:
That you on 29 March 2007 at George Road, Barchester drove a motor vehicle with-
out due care and attention contrary to section 3 of the Road Traffic Act 1988.
Note: Rule 7.2 states that an information is sufficient if it describes the offence with which
the defendant is charged. It is not necessary for it to state all the elements of the offence.
3. Rule 7.7 requires a summons to state the time and place at which the defendant is
required to appear before the court as follows:
You are hereby summoned to appear on 7 May 2007 at 10 a.m. before the Magis-
trates’ Court at The Law Courts, High Street, Barchester to answer the information.
4. The summons is dated.
Note: Rule 7.7(4) states that where a signature is required an electronic signature incor-
porated into the document will suffice.
The summons will be accompanied by (1) a notice explaining the guilty plea procedure and
(2) a statement of the facts of the offence (but see below) as follows:
..
EL_C04.qxd 3/26/07 10:40 AM Page 133
IF YOU INFORM THE CLERK TO THE MAGISTRATES COURT that you wish to plead guilty to the
offence set out in the summons, without appearing before the Court, and the Court proceeds
to hear and dispose of the case in your absence under s 12 of the Magistrates’ Courts Act 1980,
the following Statement of Facts will be read out in open Court before the Court decides
whether to accept your plea. If your plea of guilty is accepted the Court will not, unless it
adjourns the case after convicting you and before sentencing you, permit any other statement
to be made by or on behalf of the prosecutor with respect to any facts relating to the offence.
4
STATEMENT OF FACTS
On 29 March 2007 at 10.00 hours you were the driver of a Suzuki Vitara car reg. no FJ 123,
travelling north on George Road, Barchester. On approaching the junction with Marks Road
you collided with a Ford delivery van N113 PJC which was parked at the kerbside. When asked
by the Police Reporting Officer what had happened you said: ‘I had the sun in my eyes. I did
not see the van.’
Signed Peter Green
(on behalf of the Prosecutor)
Freda will be advised that under s 8 of the Road Traffic Offenders Act 1988 her driving
licence must be at the court by the date of the hearing and that failure to comply could lead
to the suspension of the licence and a fine.
Freda is unlikely to get legal aid for a lawyer to defend her (see criteria earlier in this
chapter). Many magistrates are reluctant to give legal aid in motoring offences. This contrasts
with persons pleading not guilty in the Crown Court. They are likely to get legal aid whatever
the offence.
Effect of the Magistrates’ Courts (Procedure) Act 1998

When considering summary trial before magistrates (other than in a youth court), the provi-
sions of the Magistrates’ Courts (Procedure) Act 1998 should be addressed. It amends the
Magistrates’ Courts Act 1980. The Act revises the procedure of pleading by post. Previously
many defendants did not respond to the summons. In other words, they did not take the
opportunity to plead guilty by post which the summons gives. Where guilt was not admitted
in this way, the case had to be adjourned in order that the Crown Prosecution Service could
obtain detailed statements from witnesses or make arrangements for them to attend the
court. The 1998 Act contains provisions under which the police may prepare witness state-
ments rather than a mere statement of the facts and serve these with the summons. The wit-
ness statements are then admissible as evidence, provided the defendant does not object.
Thus, where a defendant does not plead guilty by post and does not attend court to plead not
guilty, the magistrates can try the defendant in his or her absence and the prosecution may
base its case on the witness statements which have been served on the defendant as described
above. As the example given in the text indicates, the procedure of pleading guilty by post is
usually used for certain driving offences. In this connection, the 1998 Act makes provision
for the Driver and Vehicle Licensing Agency to supply a printout, which is admissible as evid-
ence of the defendant’s previous convictions, and there is no need to give the defendant
advance notice of the intention to refer to previous convictions.
The trial
Freda could plead guilty by letter since the offence is summary only and imprisonment
is not involved (Magistrates’ Courts Act 1980, s 12). In fact, as we have seen, it is punishable
..
EL_C04.qxd 3/26/07 10:40 AM Page 134
only by a fine (subject also of course, to discretionary disqualification and penalty points).
If Freda does plead guilty by letter she must, under s 8 of the Road Traffic Offenders Act 1988
give notification of her date of birth and sex. However, on the assumption that Freda is to
attend court and plead not guilty, the main aspects of the procedure are as set out below.
The charge. Freda appears in answer to the summons and the first thing that happens is that
the clerk to the magistrates or a legal adviser identifies Freda as the defendant and then reads
out the offence with which she is charged and asks her if she pleads guilty or not guilty.
Election to trial by jury. This does not arise in Freda’s case because the offence of careless or
inconsiderate driving under s 3 of the Road Traffic Act 1988 cannot be tried on indictment
before a jury. However, if the police had decided to charge her with dangerous driving under
s 2 of the Road Traffic Act 1988, the question of trial on indictment would have arisen
because the offence is triable either way.
Attendance of defendant. We shall assume that Freda having refused to plead not guilty
by letter will actually attend court to plead not guilty. If she does not and has not given a
reasonable explanation for her absence, the matter may be heard without her attending. If
there is a reasonable explanation, the case is adjourned.
Freda’s plea. Since Freda’s case will be dealt with summarily by the magistrates, the clerk or
legal adviser will, as we have seen, ask her whether she pleads guilty or not guilty. If Freda
pleads guilty, such a plea in itself constitutes a conviction and the magistrates have the power
to sentence her without hearing evidence, though they also have the power to decide that
even on a guilty plea it is desirable in the circumstances to hear evidence on oath.
The plea of guilty must be unambiguous, i.e. ‘guilty’. The court sometimes receives an
equivocal plea, e.g. in a trial for theft the defendant may answer, ‘Guilty but I had no inten-
tion of stealing’. Since this strikes at the heart of the offence, because intention is required,
the defendant should be advised to make an unequivocal plea. If he still does not do so, the
magistrates can enter a plea of guilty on the defendant’s behalf.
The prosecution’s case. Since we know that Freda will plead not guilty, the prosecution
will have to prove its case. If the prosecution opens the case, the prosecutor will give a suc-
cinct outline of the facts and a succinct summary of the law, particularly if a technical
defence is expected. The prosecution will then call its evidence, which may be oral evidence
and/or written evidence. If oral evidence is called, the prosecution asks questions of witnesses
(called examination-in-chief ). It is then open to Freda or her solicitor to cross-examine the
witnesses for the prosecution and the prosecution may re-examine them.
The defence. When the case for the prosecution has been presented the defence may:
(a) submit that there is no case to answer; or

(b) proceed to open the case for the defence.
The choice in (a) above could be taken where, for example, the prosecution has failed to
establish a main ingredient of the offence, or where the prosecution’s evidence is so weak
that the court could not reasonably convict Freda on it. Freda’s solicitor may support his sub-
mission of no case to answer by a speech in which he may draw the attention of the court to
inconsistencies and omissions in the prosecution’s case. Since these are matters of law, the
prosecution may reply.
The court will then consider the submission and may retire in order to do so. Should the
court accept the submission the case is dismissed. If it finds that there is a case to answer, the
defence proceeds. On the assumption that the court does not accept the submission of no
case to answer, defence witnesses may be called or their statements admitted in the same
..
EL_C04.qxd 3/26/07 10:40 AM Page 135
way as the prosecution evidence was. If oral evidence is given by witnesses for the defence
and by the defendant, they may be examined by the prosecution and may be re-examined by
the defence. The defence may make the closing speech provided that the defence has not
opened the case which the defence rarely does because then the right to make a closing
speech is lost. The prosecution does not make a closing speech as such but may reply on dis-
puted points of law raised by the defence in the closing speech, but the defence will always
address the court last. 4
Decision and sentence. When the case for the defence is closed, the court must consider
whether to convict the defendant or dismiss the information. In general, a magistrates’ court
has no power to return a verdict of not guilty as charged in the information but guilty of a
lesser offence (Lawrence v Same [1968] 2 QB 93). There are exceptions under s 24 of the Road
Traffic Offenders Act 1988 where, e.g. the offence charged is dangerous driving an alternative
verdict is careless or inconsiderate driving. The court decides by a majority and lay justices do
not normally give reasons for their findings, though some district judges (magistrates’ courts)
do. There is no need for unanimity and if magistrates are equally divided a new trial is
ordered. The justices may ask their clerk to give them advice privately on matters of law (and
see R v Uxbridge Justices, ex parte Smith (1985), Chapter 2), but they must not ask for or listen
to the views of the clerk on issues of fact, and it is certainly improper for them to ask the
clerk to retire with them when no issues of law arise in the case.
If the magistrates decide to convict, they will then enquire whether the accused has any
previous convictions or breaches of court orders recorded against her and may hear both the
prosecution and the defence as to her character. The matter of previous convictions is gov-
erned by s 151 of the Powers of Criminal Courts (Sentencing) Act 2000, which provides that
in considering the seriousness of any offence the court may take into account any previous
convictions of the offender or any failure to respond to a previous sentence, e.g. probation.
The defendant may ask the court to take into account other offences with which he or she
has not been charged but wishes to confess to and be sentenced for. This does not arise in
Freda’s case. The defence may also address the court in what is called mitigation. This could
consist, for example, of an address outlining the defendant’s domestic stress, perhaps in
Freda’s case, that her boyfriend had recently been severely injured in a road accident. The
court will then decide upon the sentence and announce it. Once the court has done this, or
has dismissed the summons, it will not normally change its decision. However, as we have
seen, magistrates’ courts are given the power to re-open a case to rectify a mistake in any
order they have made within 14 days. The court on the second occasion must be constituted
in the same way as it was on the first occasion or with a majority of the same justices. This
procedure could be used, for example, where the magistrates had omitted to order the
endorsement of a defendant’s driving licence. (See also Chapter 2.)
If Freda’s defence has failed, the magistrates can fine her. They have a discretion as to
whether to disqualify her from driving, though an endorsement of her licence is obligatory
(Road Traffic Offenders Act 1988, Sch 2).
Section 152 of the Act of 2000 gives the court a discretion to impose a lesser sentence
where the defendant has pleaded guilty and saved a trial particularly but not only where
there was an early guilty plea. If the court gives a reduction it must say so in open court.
There is no obligation on the court to say what the sentence might otherwise have been.
This discretion does not apply in Freda’s case because she pleaded not guilty.
Admissibility of previous convictions and bad character evidence

Although s 151 of the Powers of Criminal Courts (Sentencing) Act 2000 remains in force,
the CJA 2003 in Chapter I of Part 11 gives the prosecution power to bring evidence to show
..
EL_C04.qxd 3/26/07 10:40 AM Page 136
that the defendant has committed the offence such as evidence of previous convictions
before the court finds the defendant guilty or not (see s 98). The 2003 Act also abolishes the
restrictions on the admissibility of previous convictions before verdict that were contained
in the common law (see s 99). The same procedure can be used by the prosecution in regard
to witnesses. In the case of the defendant such evidence can be excluded by the court if
it thinks that the adverse effect it would have on the fairness of the proceedings requires
this and as regards witnesses the permission of the court is required. Evidence as to ‘bad
character’ is also admissible before verdict and is also provided for by the CJA 2003 under
similar provisions. There are provisions preventing admission of pre-age 14 offences.
In R v Hanson and others [2005] 1 WLR 3169 the Court of Appeal stated that since the object
of the 2003 Act was to assist in the evidence-based conviction of the guilty without putting at
risk those who were not guilty it was to be hoped that the prosecution would not routinely
make application to admit bad character and previous conviction evidence.
Costs
Freda may also be ordered to pay all or part of the costs of the prosecution. A court order will
specify the sum.
Proceedings in the youth court

Apart from the specific exceptions listed below, no charge against a person who is under 18
(i.e. between 10 and 17) can be heard anywhere other than in a youth court. In consequence,
juveniles are not given the option of electing to be tried by a jury. The public does not have
access to youth courts and there are restrictions on press reporting. For this reason, a news
story may carry a piece that says that the defendant or another person, e.g. a parent, cannot
be identified ‘for legal reasons’.
Under s 24 of the Magistrates’ Courts Act 1980 there are the following instances where a
person under the age of 18 years must be tried in the Crown Court on indictment or where
the magistrates have a discretion to deal with the juvenile or commit him or her for trial:
n if the juvenile is charged with homicide, i.e. murder or manslaughter, the trial must be on
indictment in the Crown Court;
n if a juvenile is charged with an indictable offence, e.g. causing grievous bodily harm, and
the youth court or magistrates’ court considers that its sentencing powers are insufficient,
it may commit the juvenile for trial on indictment;
n if a juvenile is charged jointly with an adult who is to be tried on indictment, the magis-
trates may, if it is in the interests of justice, commit the juvenile for trial with the adult.
Sentences in a youth court

The sentences available to a youth court, both custodial and non-custodial, appear in the sec-
tion of this chapter devoted to that subject (see p 151 and subsequently).
Youth Justice Board

Section 41 of the Crime and Disorder Act 1998 sets up the Youth Justice Board. The Board has
the duty, among other things, of monitoring the system of youth justice and is, therefore,
concerned with the proceedings in youth courts. The Board consists of between 10 and 12
..
EL_C04.qxd 3/26/07 10:40 AM Page 137
members appointed by the Secretary of State for the Home Department. The members have
extensive experience of the system of youth justice and are appointed for a fixed period of
five years. They may be re-appointed but the total length of service cannot exceed 10 years.
Trial on indictment in the Crown Court 4

Defendants will have reached the Crown Court for trial on indictment by a jury in two ways
as follows:
n by being sent for trial by the magistrates where the offence is triable only on indictment
e.g. murder (there are no committal proceedings for indictable offences); or
n by being committed for trial by the magistrates where the offence is triable either way.
Reference should be made to the relevant material in Chapter 2 for further details.
Obviously, the accused will have appeared before the magistrates and may have been
remanded in custody or on bail. Issues of bail or no bail will have been decided and the
accused will have been instructed how to apply for legal aid and given the necessary form.
The usefulness of the duty solicitor at this stage has already been described.
Legal aid
Legal aid in criminal proceedings is given only to those charged with offences and is not
available to persons wishing to bring a prosecution.
The Criminal Defence Service Act 2006 will, by reason of ss 1–3, set up a new regime for the
funding of Criminal Defence Services. It makes changes in the arrangements for the public
funding for representation in criminal cases. Under the old system of legal aid in criminal
cases, which was established by the Legal Aid Act 1988, legal aid was granted only by follow-
ing a means test to decide whether a person was eligible and also whether he or she should
make any contribution towards the cost. This scheme was abolished by the Access to Justice
Act 1999. This meant that there was no means test and legal aid was granted as of right in
criminal cases.
The 2006 Act provides for the power to grant rights to representation to be conferred on the
Legal Services Commission instead of the court. The Act also introduces a test of financial elig-
ibility for the grant of funding and where there is eligibility contributions based on means.
The Commission manages the Criminal Defence Service and Criminal Defence Solicitors
must work within the general criminal contract in order to carry out CDS functions. The Act
gives the Lord Chancellor power to make regulations giving precise schemes for eligibility but
these had not been approved at the time of writing. However in a Framework Document
issued in 2005 there were proposals for a means test based on gross income as follows:
n any defendant with a gross income of £27,500 or more will be automatically ineligible;
n any defendant with a gross income of £15,000 or less will be eligible;
n between £15,000 and £27,500 there will be allowances made for any partner, dependants
and housing costs;
n there is no test of capital assets in the scheme;
n any defendant receiving income support, job seekers allowance or pension credit will qual-
ify automatically with no further assessment.
Court staff under contract to the Commission will process applications.
..
EL_C04.qxd 3/26/07 10:40 AM Page 138
What is an indictment?
An indictment is a document setting out a list of charges (or one charge) made against the
defendant to which he must plead guilty or not guilty. The alleged offences are set out separ-
ately in what are called counts and each count must allege only one offence. An indictment
is usually drafted by the prosecution. It is then delivered to the Crown Court where it is
signed by an officer of the Crown Court. Until the indictment is signed, it is called a bill of
indictment. Delivery to the Crown Court is known as preferment of a bill of indictment.
Reporting
There are restrictions on the reporting of adult committal proceedings. There are also restric-
tions on reports of proceedings in which children or young persons up to 18 are concerned.
Matters such as name, address and school cannot be published. There are also restrictions on
the publication of the name of the complainant in rape trials.
Although committal proceedings usually take place in open court and the press may be pre-
sent, any report in adult proceedings is restricted by s 8 of the Magistrates’ Courts Act 1980
to the formal part of the proceedings, i.e. the names of the defendants and witnesses,
the offence charged and the result of the proceedings. The object of these restrictions is to
prevent a jury from being prejudiced by anything it may read in the newspapers so that in
the Crown Court the jury will have to decide the case on the evidence presented to it there. It
is for this reason that the press is not allowed to report the evidence given at committal pro-
ceedings. A defendant or any one of several defendants can require the reporting restrictions
to be lifted and may do this, for example, if publicity may lead to the tracing of a vital wit-
ness whose identity is not known. An example of the infringement of the above restrictions is
provided by The Eastbourne Herald Case (see below).
The Eastbourne Herald Case, 1973 – Criminal proceedings: excessive reporting (20)
Alibi
Section 5 of the Criminal Procedure and Investigations Act 1996 is designed to prevent the
use of ‘sprung’ or late alibis which were once so widespread in criminal trials. The section
provides that, in general, notice of alibi must be given in advance of a trial on indictment.
This is not required in summary trials, though it may appear in the defence statement,
because of the ease with which the prosecution can ask for an adjournment where the defend-
ant ‘springs’ an alibi on the prosecution at the last moment.
It must be made clear by a warning to the defendant that he will not be allowed to bring in
evidence of an alibi, i.e. that he was somewhere else when the offence was committed, unless
notice of it is given to the solicitor for the prosecution either as part of the committal pro-
ceedings or within seven days of the end of them.
Although this warning need not be given if it seems unnecessary having regard to the
nature of the offence charged, it should as a general rule be given where there is any doubt,
because the Act provides that failure to give it will allow the defendant to introduce a last-
minute alibi at his trial.
..
EL_C04.qxd 3/26/07 10:40 AM Page 139
There is a discretion in the trial judge to allow alibi evidence to be heard even though
particulars of it were not given within seven days, provided the prosecution has been given
time to investigate the alibi before the trial started (R v Sullivan [1970] 2 All ER 681). It is
unusual for the defence to give notice of an alibi at the committal proceedings.
4
Place and time of trial
Under s 7 of the Magistrates’ Courts Act 1980 a magistrates’ court transferring proceedings for
trial in a Crown Court has to specify the Crown Court centre at which the accused is to be
tried and in selecting that centre must have regard to:
(a) the convenience of the defence, the prosecution and the witnesses;
(b) the expediting of the trial;
(c) any directions regarding the distribution of Crown Court business given by the Lord
Chief Justice or by an officer of the Crown Court with the concurrence of the Lord
Chancellor under s 4(5) of the Courts Act 1971.
Under s 76 of the Supreme Court Act 1981 (becomes Senior Courts Act 1981) the Crown
Court may alter the place of any trial on indictment by substituting some other place for the
place specified by the magistrates or in a previous decision on the matter by a Crown Court.
Under the 1981 Act the defendant or the prosecutor, if dissatisfied with the place of trial as
fixed by the magistrates or by the Crown Court, may apply to the Crown Court to vary the
place of trial. The Crown Court may deal with the application as it sees fit. An application
under the 1981 Act must be heard in open court by a High Court judge.
The above materials relate to the place of trial but when committing an either-way case for
trial in the Crown Court, the magistrates will fix a date for what is known as a plea/directions
hearing in the Crown Court. The hearing must take place:
(1) within four weeks of committal where the defendant is in custody; or

(2) within six weeks of committal if the defendant is on bail.
The defendant will be required to plead to the charge(s) at the hearing. If he pleads
guilty, he may be sentenced at the hearing. If he pleads not guilty, the judge will require
certain information to enable him to set a date for the trial. This includes the number of
witnesses together with a summary of the issues involved, any facts which are admitted
and any alibi, the estimated length of the trial and the date of availability of witnesses
and advocates.
When sending an indictable-only offence and defendant to the Crown Court for trial, the
first hearing is called a preliminary hearing and allows a defendant to apply to the Crown
Court for bail and allows the judge, following consultation with the prosecution, to set a
date by which the prosecution should serve its case on the defence and to set the date for
a plea and directions hearing as above. In this case, the first Crown Court appearance must
take place:
n within eight days of the receipt of a notice from the magistrates specifying the charges on
which the defendant is sent for trial;
n within 28 days of receipt of the above notice where the defendant is given bail.
The magistrates’ notice must be given within four days of sending for trial.
The above provisions are designed to bring an accused person to trial as quickly as possible.
However, the prosecutor and the accused and his advisers must be given time in which to
..
EL_C04.qxd 3/26/07 10:40 AM Page 140
prepare the case properly. Accordingly, s 77 of the Supreme Court Act 1981 (as amended)
(becomes Senior Courts Act 1981) provides for the laying down under Crown Court Rules
of the minimum period from the date of committal when the trial shall commence. These
minimum periods cannot be shortened without the consent of the accused and the prosecutor
or lengthened without an order of the Crown Court.
The offence and indictment

Let us suppose that Jim Green has recently and successfully objected to the granting of plan-
ning permission to Fred Brown, his neighbour, which has prevented Fred from using part of
his land for car-breaking. Let us also suppose that on the evening of 25 February 2007, Jim
left home for work and shortly afterwards in a lane not far from his home he was attacked by
Fred who was wearing a black balaclava over his head and had, on the evidence to be called,
planned the attack. Fred attacked Jim with a knife. Jim suffered serious injuries requiring
five stitches in his cheek, six on his right hand, and 16 in his stomach. Jim was detained in
hospital for several days.
Fred is now to be tried on indictment for the offence. An indictment is a printed accusa-
tion of crime made at the suit of the Queen and read out to the accused at the trial. In
Fred’s case the main contents of the indictment will state the court of trial and be set out
as follows:
INDICTMENT
No. 123456
The Crown Court at Barchester
The Queen – v – Frederick Brown
FREDERICK BROWN
IS Charged as follows:
COUNT 1 STATEMENT OF OFFENCE

Wounding or Causing Grievous Bodily Harm with Intent contrary to s 18 of the
Offences Against the Person Act 1861.
PARTICULARS OF OFFENCE
Frederick Brown on the 25 February 2007 wounded James Green with intent to
cause grievous bodily harm.
Signed J. Bloggs
Officer of the Court
In this case there is only one offence, but if there had been more, each would have
appeared in a separate paragraph. Each paragraph is referred to as a ‘count’.
There may be a motion by the defence to quash the indictment. This is quite rare because
such a motion is appropriate only where there is an error apparent on the face of the indict-
ment. A possible ground to quash the indictment is that a count set out in it is bad for
duplicity, as where assault and theft are charged in the same count.
..
EL_C04.qxd 3/26/07 10:40 AM Page 141
Arraignment
When the day of Fred’s trial arrives the clerk of the court will confirm Fred’s identity, read out
the indictment and ask Fred whether he is guilty or not guilty. This is called the arraignment.
If Fred pleads guilty, counsel for the prosecution will give the court a summary of the
evidence together with details of Fred’s background and record. The defence will put in a plea 4
for mitigation of sentence and sentence will then be passed. In this situation, it will not be
necessary to empanel a jury to hear the evidence.
Fred may, while intending to plead ‘not guilty’ to the s 18 offence, be prepared to plead
‘guilty’ to a lesser offence which is not on the indictment. In this case Fred may be prepared
to plead guilty to unlawful wounding under s 20 of the Offences Against the Person Act 1861.
This carries a maximum period of five years’ imprisonment, whereas the s 18 offence carries
a maximum term of imprisonment for life. This is known as ‘plea-bargaining’. The proper
practice in such a case is for the defence lawyer to tell the prosecution in advance of Fred’s
intention or willingness to plead guilty to the lesser offence not appearing on the indictment.
If the prosecution accepts the plea, the lawyers concerned in the case must explain to the
judge why they think this course of action is appropriate, and the judge must approve the
course of action proposed.
If the prosecution (or the judge) refuses to accept the plea to the lesser offence, the trial will
continue, and if Fred is acquitted, he cannot be sentenced on the basis of his guilty plea to
the lesser offence (R v Hazeltine [1967] 2 All ER 671) which is regarded as withdrawn if not
accepted by the prosecution or judge. It should be noted that a trial judge may allow a defend-
ant to change his plea to not guilty at any time before sentence is passed, even though a formal
verdict of guilty has been returned by the jury on the direction of the judge after the trial has
begun (R v Drew [1985] 1 WLR 914).
Some persons may, of course, be too mentally disordered to plead at all. This is referred to
as ‘unfitness to plead’ and is further considered in Chapter 25.
We will assume that Fred pleads not guilty and in this case a jury must be sworn in.
Jury trial
The membership of the jury

As regards membership of a jury, s 321 of and Sch 33 to the Criminal Justice Act 2003 sub-
stitutes new provisions into the Juries Act 1974 under which every person is qualified to serve
as a juror in the Crown Court, the High Court and county courts and is liable to attend for
jury service if summoned if:
n they are registered as a parliamentary or local government elector and not less than 18 nor
more than 70 years old;
n they have been ordinarily resident in the UK, the Channel Islands or the Isle of Man for
any period of at least five years since attaining the age of 13;
n they are not mentally disordered persons; and
n they are not disqualified for jury service.
The definition of mentally disordered persons appears in a new Sch 1 to the Juries Act
1974. It includes persons suffering from mental illness, psychopathic disorder, mental handi-
cap or severe mental handicap and who are resident in hospital or other institution or are
..
EL_C04.qxd 3/26/07 10:40 AM Page 142
under treatment by a medical practitioner or under guardianship or subject to a receivership

order made by a judge of the Court of Protection.
Persons disqualified are set out in the new Sch 1 and are:
n persons who have at any time been sentenced in the UK, the Channel Islands or the Isle
of Man:
– to imprisonment for life, detention for life, imprisonment for public protection, an
extended sentence under s 227 of the CJA 2003 or to a term of imprisonment, youth
custody or detention of five years or more; or
– to be detained during Her Majesty’s pleasure or during the pleasure of the Secretary of State.
n persons who at any time in the last 10 years have in the UK or the Channel Islands or the
Isle of Man:
– served any part of a sentence of imprisonment, youth custody or detention; or
– been detained in a young offender institution; or
– had passed on them or (as the case may be) made in respect of them a suspended sen-
tence of imprisonment or order for detention; or
– had made in respect of them a community service order, a community punishment
order or community order as defined in s 160 of the CJA 2003.
n persons who at any time in the last five years have in the UK or the Channel Islands or the
Isle of Man had made in respect of them a probation order or a community rehabilitation
order.
The various sentences are considered later in this chapter.

There are also provisions under which full-time serving members of the Forces may be
excused on a certificate from the appropriate commanding officer that their absence would be
prejudicial to the efficiency of the service.
Many well-known previous exemptions, e.g. for lawyers, are repealed.
The court has power to excuse a person from jury service where it is felt that the particular
juror would not be able to perform the duties properly as where a person has a conscientious
objection to jury service. (See R v Guildford Crown Court ex parte Sinderfin [1989] 3 All ER 7.)
Furthermore, since the widening of the base for jury service, a Practice Direction has been
issued by the Lord Chief Justice stating that with more professionals and others with public
service commitments being available judges should be alert to excuse or discharge a juror
should the need arise.
The Juries Act 1974 also provides for exemptions to be granted administratively for prior
jury service; previously only the trial judge could grant exemption. Under s 5 of the Juries Act
1974 the defence has a right to see the names, and in London the addresses as well, of the
jury panel. This could assist ‘jury nobbling’ but it remains a right at the present time (but see
below).
Under s 61 of the Administration of Justice Act 1982 questions may be put to a prospective
juror to ascertain whether he is qualified for jury service at any time, and not just when he
attends following a jury summons. If a juror refuses without reasonable excuse to answer, or
knowingly or recklessly gives a false answer to the questions which are customarily set out in
the jury summons, he will commit an offence punishable with a fine. This applies also to a
juror who pretends to have a disqualification which he does not have in order to try to avoid
jury service.
As regards disabilities, the 1974 Act provides that the court may also exclude anyone from
jury service because physical disability or insufficient understanding of English makes his
ability to act effectively as a juror doubtful. However, s 18 provides that no judgment after
verdict should be reversed by reason, amongst other things, that any juror was unqualified or
unfit to serve. Thus, in R v Chapman (1976) 63 Cr App R 75 where, after a trial at which both
..
EL_C04.qxd 3/26/07 10:40 AM Page 143
defendants had been found guilty by a unanimous verdict, it was discovered that one juror
had been deaf so that he was unable to follow the proceedings, it was held that that did not
make the verdict unsafe or unsatisfactory and was a situation covered by the Juries Act 1974,
s 18. However, a judge has a discretion to discharge a juror during the trial, e.g. for bias, as
where on a charge of shoplifting from a store a juror reveals that she is employed by that
store (R v Morris (1991) The Times, 24 January).
Under s 3 of the 1974 Act the responsibility for summoning jurors is placed upon the Lord 4
Chancellor. The court’s administration at each centre acts as summoning officer. However,
selection from the electoral register is now effected randomly by computer at the Central
Summoning Bureau at Blackfriars in London. Juries are paid travelling and subsistence
allowances and are compensated for loss of earnings and other expenses.
Advantages and disadvantages of jury trial

Some take the view that the verdict of a jury is more acceptable to the public than the verdict
of a judge, and certainly the jury system gives ordinary persons a part to play in the adminis-
tration of justice. It is perhaps better that lay men and women should decide matters of fact
and the credibility of witnesses. The jury system also tends to clarify the law, in that the
judge has to explain the more important points arising at the trial in clear and simple terms,
so that the jury may arrive at a proper verdict.
On the other hand, juries may be too easily swayed by experienced advocates and the
random method of selection sometimes produces a jury which is not as competent in intel-
lectual terms as it might be in weighing the evidence and following the arguments presented.
It has been suggested that trial by, say, three judges would be better, particularly where
difficult issues are involved.
There is also the possibility that a member or members of a jury may be subjected to threats
by organised crime or by delinquent associates of the accused or his family to achieve an
acquittal. Therefore, the prosecution will, in some cases, ask for police protection of the jury,
which the judge may grant. The prosecution’s application is not made in court but to the
judge in the presence of the defendant and his lawyer(s).
Indictable offences are triable before a jury of 12 persons. A panel of more than 12 jurors is
brought into court and the clerk will select 12 jurors by a ballot.
Challenge
The names of the jury as selected by the clerk’s ballot are called out on selection and each
person goes into the jury box to be sworn. Under s 118 of the Criminal Justice Act 1988 the
right to challenge jurors without cause (reasons), in proceedings for the trial of a person on
indictment, is abolished.
Now a challenge must be supported by reasons. The defence may, before a potential juror
is sworn, say ‘Challenge for cause’ in order, e.g., to challenge the inclusion of a man who has
published anti-semitic articles where the defendant is of the Jewish faith. The cause should
not be stated in the presence of the potential juror and the other potential jurors who are
waiting to be sworn: they should be excluded from the court while the matter is argued
before the judge. Jurors may also be challenged because they know the defendant.
The prosecution can also challenge for cause. However, it has, in effect, a right to challenge
without cause under the ‘stand by’ procedure. The prosecution may call on a juror to ‘stand
by for the Crown’, i.e. to be excluded unless it is impossible for a jury to be empanelled with-
out calling on him. In practice, such persons are not called again. This right should not be
used to ensure a pro-prosecution jury.
..
EL_C04.qxd 3/26/07 10:40 AM Page 144
Jury vetting
Following judicial decisions, particularly perhaps that of the Court of Appeal in R v Mason
[1980] 3 All ER 777, that it was not only lawful but necessary and a ‘commonsense’ precau-
tion, for the police to vet jurors’ criminal records and pass information to the prosecution so
that challenge could be made, the Attorney-General has issued guidelines on jury checks.
In the first place, the guidelines state that a person will in general be disqualified or ineligible
for a jury only as provided by the Juries Act 1974 (as amended). However, where the case
involves national security and part of the evidence is likely to be heard in camera (i.e. the
court closed to the public and the news media), or in terrorist cases, extra precautions may be
necessary. However, no check on the records of police special branches will be made except
on the authority of the Attorney-General following a recommendation from the DPP.
Furthermore, checks involving so-called strong political motives will not be made except in
terrorist cases or where national security is involved and the court is expected to sit in camera.
There is, of course, no reason why routine police checks on criminal records for the purpose
of ascertaining whether or not a jury panel includes any person disqualified under the Juries
Act 1974 should not continue.
It was held in R v Ford [1989] 3 All ER 445 that fairness in the composition of a jury was best
achieved by random selection and a trial judge had no power to interfere with the make up of
a jury in order to get a racially mixed jury on the trial of a black defendant charged with reck-
less driving. The Court of Appeal also ruled in R v Smith (Lance Percival) (2003) The Times,
3 March that judges cannot influence the racial composition of juries and that the Juries Act
1974 is not incompatible with the Human Rights Act 1998 because it fails to provide for multi-
racial juries. Mr Smith, who is a black man, appealed against his conviction by an all-white jury
for causing grievous bodily harm with intent and possessing a firearm with intent in an incid-
ent at a night club in a town where almost all of the residents were white. His appeal failed.
Again, in R v Tarrant ( James Nicholas) (1997) The Times, 29 December Tarrant appealed
against his conviction of conspiracy to possess cannabis resin with intent, contending that
his trial was a nullity because the judge, who thought that jurors might be intimidated, had
ordered that the jury be selected from outside the area. The appeal to the Court of Appeal
succeeded because the jury had not been randomly selected.
The oath
The 12 persons who survive the selection procedure are then sworn, by each holding a Bible
in his right hand and reading the following oath:
I swear by Almighty God that I will faithfully try the defendant and give a true verdict according to
the evidence.
Christians are sworn on the New Testament and those of the Jewish faith on the Old
Testament. Other faiths may be sworn upon a holy book of their choice. For example, Hindus
are sworn on the Vedas, and Muslims are sworn on the Koran.
The affirmation which jurors may select if non-Christian or of no religion or belief is as
follows:
I do solemnly, and sincerely and truly declare and affirm that I will faithfully try the defendant
and give a true verdict according to the evidence.
All jurors must take the oath in the presence of each other. The jury is then addressed by
the clerk who explains the charges and tells the jurors that having heard the evidence they
must decide whether the defendant is guilty or not, and the trial begins officially at this point
(R v Tonner [1985] 1 All ER 807).
..
EL_C04.qxd 3/26/07 10:40 AM Page 145
Juror personation
It may be that a person who receives a jury summons will get someone to stand in for them.
This is known as juror personation and there are legal consequences. A notice is included in
all jury summonses. It says:
Impersonation of Jurors: It is an offence for any person to impersonate a juror and serve on
a jury on his or her behalf. As a matter of routine, court staff may need to verify the iden-
4
tity of a juror. Those attending for jury service are therefore requested to have with them
some form of personal identification.
Trials on indictment without a jury

Part 7 of the Criminal Justice Act 2003 sets out (ss 43–50) the circumstances in which a trial
on indictment may take place in the Crown Court before a judge sitting alone.
Defendant’s application
Defendants being tried in the Crown Court may make an application to the court to have
the trial heard by a judge sitting alone instead of by a judge and jury. Unless other defend-
ants also being tried object to the application (or any one of them does) or there are exceptional
circumstances applying leading the judge to believe that a trial before a jury would be in the
interests of justice or necessary in the public interest, the judge must make an order granting
trial by a judge alone. The Act does not specify what are to be regarded as ‘exceptional
circumstances’.
Prosecution application
The prosecution can apply for a judge-only trial on the following grounds:
n The length or complexity of the trial. The case must be so long or complex (or both) that the
trial would be burdensome upon the jury to the extent that it is necessary in the interests
of justice to conduct the trial without a jury, or the trial would be likely to place an excess-
ive burden on the life of a typical juror. The trials that come to mind are those concerning
business fraud where transactions and/or records of a financial or commercial nature or
relating to property are involved. However, consideration must be given, always, to ways
in which steps could be reasonably taken to reduce the length and complexity of the trial
to allow it to be conducted before a jury. (Fraud trial provision not enacted.)
n The real and present danger of jury tampering so that the trial should be conducted without a
jury or continued without a jury and the jury discharged. The court must be satisfied that
the level and duration of police protection that would be required for the jury would be
excessively burdensome to a typical juror or that jury tampering would remain a high
threat even if maximum possible police protection was given so that it is in the interests of
justice to conduct a judge-only trial. In trials already in progress where the jury has been
discharged because of tampering the trial will continue without a jury unless the judge
thinks it is necessary in the interests of justice to terminate the trial. In such a situation the
judge may order a retrial and has the option of ordering that the retrial will take place
without a jury.
The issue as to whether there should be a jury or whether the trial should continue without
a jury or retried without a jury will be considered at a preparatory hearing or a separate hearing.
There are rights of appeal to the Court of Appeal for both prosecution and defence against
the decision of a court on application for a judge-only trial and against a court order to
..
EL_C04.qxd 3/26/07 10:40 AM Page 146
continue a trial in the absence of a jury or to order a retrial without a jury because of jury
tampering.
Where a trial is conducted or continued without a jury and a defendant is convicted the
court must give its reasons for conviction.
Judge-only trials: present position

There were problems over the provisions of Part 7 of the CJA 2003 when the Bill was before
Parliament. Trial by jury is a major feature of the legal system in England and Wales and
many MPs felt strongly that it should be retained and available in trials on indictment. In
order to get the Bill through Parliament, a compromise was reached and the 2003 Act regard-
ing complex issues such as fraud trials was not enacted. The only judge-only trials under the
2003 Act are in relation to cases involving threats to and intimidation of juries. The govern-
ment has said, however, that it will try to legislate again in the future on the complex fraud
trial issue.
The judge
Criminal offences are divided into three classes for the purpose of trial in a Crown Court. The
classifications are set out on p 39 and should be referred to. Fred’s offence is in Class 3 and
can be tried by a High Court judge, a circuit judge, a deputy circuit judge or a recorder or
assistant recorder. As will be seen from the material at p 39, it is unlikely to be a High Court
judge and will probably be a recorder or assistant recorder.
Trial and evidence

The advocate appearing for the prosecution will make an opening speech outlining the case
to the court and will then call witnesses to confirm the facts. However, before doing so he
must tell the jury that the burden of proof rests on the prosecution to establish that the
defendant is guilty beyond a reasonable doubt. A witness will first take the oath appropriate
to his religion or affirm if he has no religious belief. The Christian oath is most often used. It
is: ‘I swear by Almighty God that the evidence I shall give shall be the truth, the whole truth
and nothing but the truth.’ Contrary to popular belief, it does not end with ‘so help me God’.
Leading of witnesses and hearsay evidence

During the examination-in-chief, counsel for the prosecution must not lead his witnesses,
i.e. must not suggest a particular answer to his question. Thus, counsel for the prosecution
cannot ask one of his witnesses, say, a police officer, ‘Did the defendant punch you when you
arrested him?’ He must instead say, ‘What happened when you arrested the defendant?’
Also, in examination-in-chief counsel must not contradict his own witness by referring to a
prior inconsistent statement made in, say, committal proceedings, unless the witness
becomes ‘hostile’, i.e. as where he is now showing bias against the person calling him. In
addition, hearsay evidence is not admissible. A witness must give evidence only as to what he
himself saw or heard. Thus, evidence given by a witness either for the prosecution or the
defence in the form: ‘Alice told me that she saw Bill in the pub on Wednesday’ would be
inadmissible, unless the provisions of s 114 of the Criminal Justice Act 2003 are satisfied, e.g.
that the court has given leave that the evidence be admitted where the court is satisfied that
it would not be contrary to the interests of justice to admit the evidence even though there is
some difficulty in challenging the statement since Alice is not present.
..
EL_C04.qxd 3/26/07 10:40 AM Page 147
After counsel for the prosecution has carried out his examination-in-chief of a witness,
counsel for the defence can cross-examine the witness. In this situation he can lead and say,
for example, ‘My client was upset by the circumstances of his arrest, wasn’t he? There was no
need to have called him a lying swine, was there?’ Counsel for the defence can also refer to
prior inconsistent statements of the witness.
When the prosecution has called all its witnesses, the defence will present its case and call
witnesses to support it. These witnesses are examined-in-chief, cross-examined, and some- 4
times re-examined. More rarely, defence counsel may, before calling his witnesses, try to
bring the trial to an end by endeavouring to persuade the judge that there is no case to
answer, e.g. that the prosecution has not produced sufficient evidence to warrant the trial
proceeding. This argument takes place without the jury. If the judge agrees with defence
counsel, he will call the jurors back and tell them to give a formal acquittal. Otherwise the
trial proceeds.
Bad character evidence and evidence of previous convictions

Part 11 of the Criminal Justice Act 2003 removes previous common law rules regarding the
admission before verdict of evidence of bad character of the defendant and any previous
convictions. The new rules apply also to non-defendants such as witnesses. The permission
of the court is required before such evidence can be given. This provision has led to some
concern in that it may encourage the police to focus investigations on those with previous
convictions, past acquittals or a history of arrests.
The defendant’s evidence: defendant’s silence

The defendant may give evidence on oath or by affirmation on his own behalf, though he is
not obliged to give evidence at all. This is affirmed by s 35 of the Criminal Justice and Public
Order Act 1994. However, under s 35 of that Act the silence of the accused at a trial allows
the judge or jury in determining guilt to draw such inferences as appear proper from the fail-
ure of the accused to give evidence at all or to answer a particular question or questions,
unless there is good cause. Under s 34 of the Act the same is true of the failure to answer
police questions when a suspect, but police officers must tell suspects that silence could go
against them in court and then repeat the question. For example, John is arrested on suspi-
cion of theft having been found by the police standing near a broken shop window from
which items of jewellery are missing. The police, suspecting that John has been involved
(probably with others) in the theft, ask him to account for his presence near the shop
window. John does not reply. He is told this may go against him but still does not reply.
The court may draw the inference that John is guilty on the grounds that if he could
have explained his presence in terms that he was not guilty of the theft he would have
done so.
Under the Youth Justice and Criminal Evidence Act 1999 inferences from silence are not
permissible where the defendant has not had prior access to legal advice provided that the
accused was at an authorised place of detention, such as a police station, at the time of failure to
answer questions or a particular question. The provision is to be found in s 34(2A) of the
1994 Act as inserted by the 1999 Act. The inferences that may be drawn where there is a fail-
ure to answer questions at a trial apply only where the trial is of a person who has attained
14 years of age (s 35 Criminal Justice and Public Order Act 1994).
Home Office Reports state that the provisions of the 1994 Act, before the passing of which
the court could not draw adverse inferences from the defendant’s silence, have not led to
more convictions.
..
EL_C04.qxd 3/26/07 10:40 AM Page 148
Section 72 of the Criminal Justice Act 1982 abolishes the right of an accused person to
make an unsworn statement from the dock without being subject to cross-examination.
However, the accused may address the court or jury if he has no legal representation and may
make a statement in mitigation of sentence without being sworn. If he gives evidence on
oath in the ordinary way, he may be cross-examined but there can be no cross-examination
where a mere statement is made, though the making of a statement in this way often leads to
the suggestion that the defendant has something to hide.
After the defence witnesses have been heard, the prosecution makes its closing speech, fol-
lowed by the defence, which always has the last word.
Summing up
The judge will then explain his role to the jury. He will say that he will tell them what the
law is and that the law is a matter for him but that they are the only judges of the facts in the
case. He will repeat that it is for the prosecution to prove guilt. The judge will then sum up
the evidence on both sides and will define the law of the offence. If he misleads the jury on
this, the accused may well have grounds for a successful appeal. The judge will also explain
that although Fred is charged under s 18 of the Offences Against the Person Act 1861 of
wounding with intent to cause grievous bodily harm, the jury may acquit him of that offence
and yet find him guilty of the lesser offence of unlawful wounding under s 20 of the Offences
Against the Person Act 1861. The judge may then explain to the jury that it must endeavour
to reach a unanimous verdict (but see below), though whether he does so or not is a matter of
discretion (R v Watson [1988] 1 All ER 897). The judge will then leave the court and the jury,
escorted by a bailiff, will retire to a jury room where it will try to reach a verdict. If a verdict is
not reached on the day the jury retires, the jurors may be taken to a hotel to spend the night.
However, under s 13 of the Juries Act 1974 (as substituted by s 43 of the Criminal Justice
and Public Order Act 1994), if on the trial of any person for an offence on indictment the
court thinks fit, it may at any time (whether before or after the jury has been directed to
consider its verdict) permit the jury to separate.
In this connection, R v Rankine (Elliston) [1997] CLY 1330 is of interest. In that case
Rankine appealed against a conviction for unlawful wounding on the ground that the judge
should not have invited the jury to consider its verdict without retiring. The Court of Appeal
held that, as a matter of law, it was permissible for a judge to ask a jury if it wished to con-
sider its verdict without retiring, and that an appeal court should intervene only if it felt that
this put pressure on the jury to reach a verdict. Rankine’s appeal on the retirement point failed.
The verdict
If the jury is unanimous in finding Fred guilty, it will tell the jury bailiff that it is ready to
come back into court. The judge and counsel return and the jury files in. A court usher will
ask the foreman of the jury what their verdict is. We assume that the jury has found Fred
guilty of the s 18 offence; the foreman says so.
At this stage Fred’s previous convictions, if any, will be handed to the judge who may refer to
some of them openly in court. It will be appreciated that under the Criminal Justice Act 2003
evidence of previous convictions and bad character would already have been given in evidence
if the court had permitted this (see p 147). Counsel for the defence will then normally put in
a plea in mitigation, saying, perhaps, that Fred has not been in trouble before or at least not
for some time, according to his record, in the hope that this plea will lead to a lighter sentence.
The judge will then address the defendant and pass sentence, which, in view of the viol-
ence involved in Fred’s case, is likely to be a term of imprisonment.
..
EL_C04.qxd 3/26/07 10:40 AM Page 149
Majority verdicts
The Juries Act 1974 provides for majority verdicts of juries in criminal proceedings. Section 17
provides that the verdict of the jury in criminal proceedings need not be unanimous if:
(a) in a case where there are not less than eleven jurors, ten of them agree on the verdict. In
the case of an ordinary jury of 12, this means that the judge can accept a verdict of 11 to
one or 10 to two; and 4
(b) in a case where there are ten jurors, nine of them agree on the verdict. If there are only
nine jurors, the verdict must be unanimous (see below).
A court must not accept a majority verdict of guilty unless the foreman of the jury has
stated in open court the number of jurors who respectively agreed to and dissented from the
verdict. No such statement is required if the verdict is one of not guilty so that it will not be
known that a verdict of not guilty was by a majority.
Furthermore, a court must not accept a majority verdict unless it appears to the court that
the jury has had not less than two hours’ deliberation or such longer period as the court
thinks reasonable, having regard to the nature and complexity of the case.
The judge cannot accept a majority verdict after less than two hours’ deliberation and if the
jury is not unanimous after two hours, he should send it back, at least once more, to try to
reach unanimity. If the jury still cannot, he should send the jurors back to see if they can
reach a decision by the necessary majority, having directed them on the law relating to
majority verdicts.
When the jury returns to the courtroom, the judge will ask whether the required majority
has agreed on a verdict. If so, the verdict is accepted provided, according to a Practice
Direction, that at least two hours and ten minutes have elapsed between the time at which the
last juror left the jury box to go to the jury room and the time when the judge asked whether
the jury had reached a verdict by the required majority.
Before the judge asks whether the jury has reached a majority verdict, the senior officer
of the court present must announce the deliberation time which the jury has had. The extra
10 minutes was added in order to reduce the number of appeals made to the Court of Appeal
on the ground that majority verdicts had been accepted, although the deliberation time had
been less than two hours, as for example where the jury had returned to put a question to the
court during the deliberation period.
The majority provision is, of course, a controversial one because the principle of the unanim-
ous decision was an old and much-respected feature of English law, indeed the requirement
for a jury to be unanimous first appeared in a case in 1367. The main reason for the change
was the growing problem of deliberate corruption or intimidation of jurors to secure an
acquittal. The majority of 10 to two was chosen because it was felt that it would be difficult
to find more than one or two who were susceptible to bribery or intimidation, particularly in
view of the fact that those with criminal records are excluded from jury service under the
Juries Act 1974 (as amended by the Criminal Justice Act 2003). It should be noted that what
happens in a jury room is not supposed to be disclosed. This is reinforced by s 8 of the
Contempt of Court Act 1981. This makes it an offence for a juror to reveal the discussions in
the jury room and for a newspaper or any other organisation or person to try to find out by
interviewing a juror.
Thus, in AG v Associated Newspapers [1994] 2 WLR 277 the House of Lords found the Mail
on Sunday newspaper, through its editor and publisher, to be in contempt of court for reveal-
ing the deliberations of a jury in a criminal trial. The informant was also in contempt.
It should be noted that in cases where jury tampering is present a trial could, under the
Criminal Justice Act 2003, be conducted or be carried on by a judge alone. This procedure is
more effective than majority verdicts in appropriate cases.
..
EL_C04.qxd 3/26/07 10:40 AM Page 150
Alternative verdicts
The common law, as restated by s 6(3) and (4) of the Criminal Law Act 1967, provides for
alternative verdicts, which means that a jury can convict an accused of an offence other than
the one with which he is charged. Although the wording of s 6 appears wider than the com-
mon law rule, subsequent cases seem to indicate that a jury cannot convict of an offence
different in character from the offence charged. The power is limited to a conviction for an
offence involving the same criminal act but with a lesser degree of aggravation. As we have
seen, in Fred’s case it would have been possible for the jury to bring in a verdict of unlawful
wounding under s 20 of the Offences Against the Person Act 1861, although the charge was
wounding with intent to cause grievous bodily harm under s 18 of the 1861 Act.
Where there exists an alternative and less serious offence to the one charged, the judge
must direct the jury on the lesser offence if there is evidence to support it (R v Fairbanks
[1986] 1 WLR 1202), but not apparently if the main offence is very serious and the alternative
offence is trifling. So in a case of robbery, the judge is not bound to direct the jury on the
alternative offence of theft (R v Maxwell [1990] 1 All ER 801).
Victims’ advocate
The government has outlined plans for the introduction of victims’ advocates and is carrying
out pilot schemes in England and Wales. A victims’ advocate will be able to address the court
before sentence in a murder or manslaughter case. The advocate could be a family member or
a third party and while the address is not intended to impact on sentence, it will give the
advocate the chance to highlight how the crime has affected those close to the victim.
Numbers of jurors
The number of jurors will normally be 12 unless the number has been reduced in accord-
ance with s 16 of the Juries Act 1974. The section provides for the continuation of criminal
trials where a juror dies or is discharged by the court, whether through illness or for any other
reason.
If the number of members of the jury is not reduced below nine, the trial may proceed and
the verdict may be given accordingly.
However, in a trial for any offence formerly punishable with death, e.g. treason, this rule
only applied if assent in writing was given by or on behalf of both the prosecution and the
accused, or each of the accused if there were more than one. The rule is now obsolete.
Moreover, the court has discretion in any criminal trial to discharge the jury if it sees fit to
do so when its numbers are depleted.
Committal to the Crown Court for sentence
As we have seen, there are times when the Crown Court sits to sentence persons convicted of
offences before the magistrates. This happens where the magistrates have found a particular
defendant guilty and have had access to his previous convictions showing, shall we
say, a very bad record, and feel that the defendant should receive a greater sentence than
they can give. In such a situation they will commit the defendant to the Crown Court for
sentence. The Crown Court may then deal with the defendant as if he had been convicted on
indictment.
..
EL_C04.qxd 3/26/07 10:40 AM Page 151
The Crown Court may sit solely for the purpose of sentencing and if so consists of a judge
(either a High Court judge or circuit judge or recorder). Under s 74 of the Supreme Court Act
1981 (as amended by s 79 of the Access to Justice Act 1999) magistrates do not, as before, sit
with the judge or recorder in sentencing cases. The judge or recorder deals with sentencing
appeals by himself.
Under the Criminal Justice Act 2003 there is a limited power for magistrates to commit to
the Crown Court for sentence. This will occur where a defendant is charged with a number 4
of either-way offences and pleads guilty to one of them at plea before venue and is sent by
the magistrates for trial in the Crown Court on the others. In such a case if the magistrates
feel that having accepted jurisdiction on the guilty plea there are circumstances in which the
defendant should be sent to the Crown Court for sentence then the magistrates may do so
under s 4 of the Powers of Criminal Courts (Sentencing) Act 2000.
Appeal in criminal cases

A person who has been convicted and sentenced by a criminal court has rights of appeal.
These have already been considered in Chapter 2.
Contempt of Court Act 1981

Under s 4 of the 1981 Act the trial judge may make an order imposing restrictions on the
reporting of a trial in, e.g., newspapers. The section gives the court power to order the post-
ponement of publication of reports of a trial or part of a trial where it appears necessary to
avoid a substantial risk of prejudicing that trial or other proceedings pending or imminent, as
where witnesses or potential witnesses might be intimidated.
Section 11 gives the court power to prohibit the publication of any name or other matter in
connection with the proceedings where the court has allowed the name or other matter to be
withheld from the public when the proceedings were before the court.
Sentencing
The matters to be taken into account in sentencing and the purposes of sentencing are set
out in ss 142–146 of the Criminal Justice Act 2003.
n Matters to be taken into account are the purposes of sentencing (see below), the seriousness
of the offence, whether the defendant pleaded guilty and whether the offence was aggrav-
ated by race or religion.
n The purposes of sentencing that are set out in statute for the first time are, punishment,
public protection, crime reduction and reparation.
Custodial sentences: generally

The courts are given power to impose custodial sentences. Before doing so the courts must be
satisfied that the circumstances are such, in terms particularly of the seriousness of the
offence, that only a custodial sentence will suffice.
..
EL_C04.qxd 3/26/07 10:40 AM Page 152
A custodial offence is:
n a sentence of imprisonment;
n a sentence of detention; and
n a detention and training order.
General restrictions on imposing custodial sentences

Section 152 of the CJA 2003 states that a court cannot impose a custodial sentence except
where the offence, taken in combination with any past offences, merits it. Section 152(1)
excludes from the above principle those offences which are punishable under ss 225 to 228 of
the CJA 2003. These are:
n Life sentence or imprisonment for public protection for serious offences (s 225). This
sentence of life (or unspecified term of imprisonment) can be passed by a court only if the
offender is convicted of a sexual or violent offence specified in Sch 11, e.g. rape or wound-
ing with intent to cause grievous bodily harm, carrying a sentence of 10 years or more and the
court considers that the offender is in its opinion a significant risk to members of the public.
Where the offence carries a maximum sentence of life imprisonment, as wounding with
intent to cause grievous bodily harm does, the court must pass a life sentence if the offence
is serious enough to warrant it. In other cases s 228(1) requires the court to impose a sentence
of imprisonment for public protection if it considers that no other sentencing options are
adequate to protect the public.
n Serious offences committed by those under 18 (s 226). This section applies the above
principles to those aged under 18 as are applied to adults except that the sentence is not
imprisonment but detention, in such place as the Secretary of State or a person authorised
by him may decide.
n Extended sentence for certain violent and sexual offences: persons 18 or over (s 228).
This section makes provision for an extended sentence for sexual and violent offenders.
The offender must have committed a sexual or violent crime specified in Sch 15. It must
carry a maximum sentence of less than 10 years, e.g. assault occasioning actual bodily harm
(where the maximum sentence is five years) and the offender must be judged by the court
to pose a significant risk of serious harm to the public. The sentence is in two parts, the first
part being ‘the appropriate custodial term’, and the second part being an ‘extension period’.
The custodial period reflects the seriousness of the offence and must be at least 12 months.
During the second half of the custodial period the offender may be released on the recom-
mendation of the Parole Board. The court must also specify an ‘extended period’ of super-
vision on licence to be added to the custodial period to protect the public. The extension
period may be up to five years for violent offenders and nine years for sexual offenders.
The total of the extended sentence must not be more than the maximum sentence for the
offence in question. In the example given above the maximum extended period following
a custodial sentence for assault occasioning actual bodily harm would be five years.
n Extended sentence for certain violent or sexual offenders: persons under 18 (s 228). This
section applies the extended sentence regime to those aged under 18 in the same way as
for adults but the appropriate custodial term is limited to 24 months.
Also excluded are the offences in ss 110 and 111 of the Powers of Criminal Courts
(Sentencing) Act 2000. These are:
n Minimum of seven years for third class A drug trafficking offence (s 110). This section
requires a court to pass a custodial sentence of at least seven years if the offender is aged 18
or over and has been convicted of a least two previous and separate class A drug trafficking
..
EL_C04.qxd 3/26/07 10:40 AM Page 153
offences. The court is not required to pass a seven-year sentence if there are particular
circumstances that would make this unjust.
n Minimum of three years for third domestic burglary (s 111). Under these provisions the court
has a statutory duty to impose a custodial sentence of at least three years on a person who has
been convicted of domestic burglary and who has been convicted on two previous occasions
of domestic burglary unless there are particular circumstances that would make this unjust.
Section 152(2) of the CJA 2003 states that a custodial sentence must only be imposed if the
4
offence is so serious that neither a fine nor a community sentence would be adequate punish-
ment for it.
Section 152(3) makes clear that this does not prevent a court from passing a custodial sen-
tence on an offender who does not consent to requirements imposed as part of a community
sentence where consent is required or if he refuses to provide samples for the purposes of
drug testing.
Length of discretionary custodial sentences: general provision

(s 153, CJA 2003)
This section directs the court to impose the shortest term of custody that is commensurate
with the seriousness of the offence. There are exceptions where the sentence is fixed by law,
i.e. as in the case of an offence such as murder that carries a mandatory life sentence, and for
the case of the new sentences for dangerous offenders in ss 225 to 226 (see above).
Restrictions where offender not legally represented (s 83, POCC(S)A 2000)

Under this section the court cannot impose a sentence of imprisonment on an offender who
has not been legally represented at some time after being found guilty and before sentence is
passed, unless representation has been offered and refused or withdrawn because of conduct
or there has been failure to apply.
The pre-sentence report

Section 156 of the CJA 2003 deals with pre-sentence reports for community and custodial
sentences. Where the court is considering whether to impose a discretionary custodial sen-
tence and if so what its duration should be or whether to impose a community sentence and
what restrictions to impose on the liberty of the offender as part of the sentence it must
obtain a pre-sentence report (PSR). These reports are, in the case of adults, written by the pro-
bation service and are based on interviews with the offender and his or her history of offend-
ing and needs. The report contains advice as to punishment and what rehabilitative work
would be likely to reduce the risk that the offender will re-offend. The court need not obtain
a PSR if it thinks that it is unnecessary to do so in an individual case. Where the offender is
under 18, the court must not decide that a PSR is unnecessary unless it has access to a report
that relates to the offender. No sentence is invalid because the court did not obtain and con-
sider a PSR even in the case of custodial and community sentences (see above).
Where an offender appeals, a PSR must be obtained unless the appeal court believes that
the lower court was justified in not obtaining one. On appeal by offenders under 18, a PSR is
required and the appeal court cannot decide that the lower court was justified in not obtain-
ing a PSR or that a PSR is not necessary unless there is a previous PSR regarding the offender
and the appeal court has access to it.
There are special provisions in s 157 CJA 2003 for reports on mentally disordered offenders. A
qualified medical practitioner must be consulted to give a medical report unless a custodial
..
EL_C04.qxd 3/26/07 10:40 AM Page 154
sentence is fixed by law, i.e. a mandatory life sentence for murder where the court has no
choice as to sentence.
Under s 158, CJA 2003 the PSR for an adult is, as we have seen, made by an officer of the
local probation board. Where the offender is under 18 the PSR may be made by a probation
officer, social worker or member of a youth offending team (see p 161).
Under s 159, CJA 2003 copies of the PSR go to the offender or his legal representative and
the prosecutor though the court may consider that it is not appropriate for the prosecutor to
have one. Where an offender is under 17 and is not legally represented the court may give
the PSR to his or her parent or guardian if present in court.
Under s 160, CJA 2003 other reports that are not PSRs can be given to the offender and his
legal representative or as set out above to a parent or guardian and the court. These will be
designed to help the court to determine the appropriate sentence and will have been written
by the probation service or a youth offending team.
Pre-sentence drug testing

Section 161, CJA 2003 provides that pre-sentence drug testing is available to assist the court
when considering a community sentence.
Financial circumstances
Under s 162, CJA 2003 the court can before sentence make a financial circumstances order
under which the offender must report his financial circumstances to the court. There are
penalties for failure to make a report or to render a false report.
Is the offence serious?

Section 143, CJA 2003 gives certain principles that the court must follow when required to
determine whether an offence is serious. The court must consider:
n the offender’s culpability in committing the offence and the harm (or risk of harm) caused
by the offence (or intended to be caused by the offence);
n any previous convictions, if recent and relevant, should be regarded as an aggravating
factor that should increase the severity of the sentence;
n the fact that the offence was committed while the offender was on bail should also be
regarded as an aggravating factor.
Reduction in sentence for guilty pleas

Section 144, CJA 2003 makes provision for the reduction of sentences for early guilty pleas.
This is designed to encourage offenders who are guilty not to take up court time and trouble
victims and witnesses unnecessarily.
Increase in sentence for racial or religious aggravation

Section 145, CJA 2003 provides that the court must treat the fact that the offence was reli-
giously or racially aggravated as increasing the seriousness of the offence and must say so in
court. There is an exception in the case of racially or religiously aggravated assaults because
under the Crime and Disorder Act 1998 these offences already have a racial or religious ingre-
dient and carry special penalties for this.
..
EL_C04.qxd 3/26/07 10:40 AM Page 155
Human rights concerns

Article 3 of the European Convention on Human Rights (freedom from torture or inhuman
or degrading treatment) has relevance in that an exceptionally severe sentence may raise an
issue under the Article. This is implicit in the judgment of the European Court of Human
Rights in Weeks v UK (1987) 10 EHRR 293 where it was ruled that to sentence a person of 17
to life imprisonment for robbery (which is the maximum sentence) for punitive reasons would 4
potentially raise the issue of violation of Art 3. Article 7 (protection from any retrospective
effect of the criminal law) may also be raised in an appropriate case in that no heavier penalty
shall be imposed than the one applicable when the offence was committed bearing in mind
that there is in general no limitation of actions where prosecution for crime is concerned.
Custodial sentences: the mandatory life sentence

We have already considered the discretionary life sentence for public protection in violent or
sexual offences under s 225 of the CJA 2003. The following material is concerned with the
mandatory life sentence for murder. An offender aged 21 or over who is convicted of murder
must be sentenced to imprisonment for life under s 1(1) of the Murder (Abolition of the
Death Penalty) Act 1965. There is no right of appeal against this sentence.
The Home Secretary has statutory power under s 29 of the Crime (Sentences) Act 1997 to
intervene and fix a tariff going beyond the recommendation of the court even to the extent of
a whole life sentence. The House of Lords ruled in R v Lichniak [2000] UKHL 47 that the imposi-
tion of a mandatory life sentence for murder was not contrary to the Convention on Human
Rights. However in R (on the application of Anderson) v Secretary of State for the Home Department
[2002] 4 All ER 1089 their Lordships ruled that the Home Secretary’s power to intervene and
set tariffs was incompatible with Art 6(1) of the Convention (right to have sentence imposed
by an independent tribunal). The Home Secretary was not independent of the executive. The
House of Lords declared s 29 of the 1997 Act incompatible with the Convention.
The Home Secretary accepted the judgment but introduced sentencing principles into the
Criminal Justice Act 2003 as follows:
n Whole-life terms: offender will die in jail (adults). Multiple murderers (two or more) with
a high degree of premeditation or murders of a child involving abduction or involving sex-
ual or sadistic conduct, terrorist murder, offenders with a previous conviction for murder.
n Sentence of 30 years (adults). Murder of a police or prison officer in the course of duty,
murder involving the use of a firearm or explosive, killing done for gain, burglary, robbery
or contract killing, murder with a racial, religious or sexual motive, single sadistic or sexual
murder of an adult, multiple murders not covered by the whole-life category.
n Sentence of 15 years. All other murders.
n Murderers aged 10 to 17 have a 15-year starting point and murderers aged 18 to 20 have a
starting point of 15 or 30 years.
The sentences described above, other than, obviously, the whole-life sentence are starting-
point sentences on which the judge can build to give an appropriate sentence.
Sentencing Guidelines Council

Sections 167 to 173 of the CJA 2003 set up the Council in March 2004 that produces a set of
sentencing guidelines for all criminal courts and also guidelines on the allocation of cases
between courts (see p 146). The guidelines will be starting points on which the court can
..
EL_C04.qxd 3/26/07 10:40 AM Page 156
build to give an appropriate sentence in a particular case. Further, legal practitioners and the
public will know what the starting point for a given offence is. The existing Sentencing
Advisory Panel continues and will give its advice to the Council from time to time. The
courts are obliged to take the Council’s guidelines into account when deciding on a sentence.
The members of the Council are drawn from the police, probation and prison services,
victims of crime and the legal profession and those responsible for sentencing in magistrates’
courts, Crown Courts and the Court of Appeal.
Further information on the Council and the Guidelines can be accessed at www.sentencing-
guidelines.gov.uk.
Reasons for sentence

Section 174 of the CJA 2003 provides for a duty upon the court to provide reasons for the
sentence and explain it in ordinary language. The court must refer to relevant guidelines
when giving its reasons. Section 175 expands the existing duty on the Home Secretary in s 95
of the Criminal Justice Act 1991 to publish information on the effectiveness of sentencing.
Community orders
Sections 177–180 of the CJA 2003 provide for community orders for offenders aged 16 or
over. Previously there were various different community orders, e.g. community rehabilitation
orders. The CJA 2003 creates a single community sentence that combines all of the requirements
previously available under the different and separate community sentences.
The requirements that may be placed on a community sentence are:
n compulsory (but unpaid) work;
n participation in specified activities;
n programmes aimed at changing offending behaviour;
n prohibition from certain activities;
n curfew;
n exclusion from certain areas as specified in the order;
n residence requirements;
n mental health treatment (where the offender consents);
n drug treatment and testing (with the consent of the offender);
n alcohol treatment (if the offender consents);
n supervision, e.g. by a member of the local probation service or a member of the youth
offending team;
n attendance centre requirements, i.e. attendance at a specified centre at specified times to
take part in specified activities (for under 25s).
Restrictions on imposing a community sentence

Section 148 makes provision in regard to when it is appropriate to impose a community sen-
tence. Where the offence or the history of offending is not serious enough for a community
sentence a fine or conditional or absolute discharge would be appropriate. The requirements
of the community order must be suitable for the offender and restrictions on liberty, as by
curfew, must be in line with the seriousness of the offence.
An exception will be provided by s 151 when in force where the offence does not in itself
merit a community sentence but where the offender has committed several similar offences
..
EL_C04.qxd 3/26/07 10:40 AM Page 157
in the past. Under the section an offender aged 16 or over who has been fined on at least
three previous occasions for similar offences may receive a community sentence even though
the current offence does not in itself merit it. Of course, the previous convictions may lead the
court to impose a custodial sentence if they go to the seriousness of the current offence. The
section does not interfere with the courts’ power in this regard.
Under s 149 where a community sentence is passed on an offender who has been
remanded in custody the time on remand counts towards the length of the community sen- 4
tence as does the time spent considering the appropriate form of community sentence in
terms of its restrictions.
Under s 150 community sentences are not available where the sentence is fixed by law nor
in respect of dangerous offenders (see ss 205 to 208 above).
Prison sentences of less than 12 months

Section 181 carries provisions to ensure that in general terms all prison sentences of less than
12 months will consist of a short period of custody followed by a longer period on licence during
which time the offender must comply with requirements fixed by the court as part of the
sentence. The length of the custodial period must be between two and 13 weeks and the
licence period at least 26 weeks. There is provision for sentences to run consecutively where
the total period of imprisonment must not exceed 15 months. The licence conditions may
include electronic monitoring.
Under s 183 where the sentence is under 12 months the court may give a sentence of inter-
mittent custody where the offender serves a period of time in custody and a period of time on
licence. These periods are predetermined by the court when giving the sentence.
Suspended sentences
A custodial sentence can be suspended for between one and two years provided that the
offence merits custody and the suspension is justified by the exceptional circumstances of the
case. A suspended sentence can be combined with a fine or compensation order but not with
a community sentence though a supervision order can be attached. The custodial sentence is
activated by the committal of another imprisonable offence. Sections 189 to 193 of the CJA
2003 create a new form of suspended sentence as an addition to the above procedure. The
court may suspend a short custodial sentence (see s 181 above) for between six months
and two years on condition that the offender undertakes activities in the community.
These activities are chosen by the court from the community sentence list. Commission of
a further offence during the whole period of the suspended sentence will count as a breach
and the court will deal with the suspended sentence when sentencing the offender for the
new offence.
Deferred sentences
Here the court does not sentence the offender. It defers the passing of sentence on the basis of
the good behaviour of the offender if the offender consents and the court believes that a
..
EL_C04.qxd 3/26/07 10:40 AM Page 158
deferred sentence is in the interests of justice. If the offender commits another offence during
the period of deferment the court will deal with both offences at the same time. Under
sections 1–1D of the Powers of Criminal Courts (Sentencing) Act 2000 more is required of an
offender on a deferred sentence. The court may impose requirements as to his conduct and
he may have to complete tasks in the community as set by the court including reparation to
the community. This aspect of the sentence is monitored, e.g. by the probation service (now
supplied by the National Offender Management Service) with a view to a report to the court
for early sentence if the report is unsatisfactory. The commission of a further offence during
the deferred period activates the deferred sentence and both offences can be dealt with in
terms of sentence.
Release of offenders from custody

Sections 244 to 253 of the CJA 2003 provide for the release of offenders from custody. Under
this framework offenders serving sentences of 12 months or more are released automatically
on licence at the half way point of their sentence. The licence period is subject to conditions a
general one being good behaviour and specific ones such as curfew and electronic monitor-
ing. Breach of the licence conditions may result in recall to prison. Supervision is by the
probation service and that service plus the prison service will make the recall not the Parole
Board as formerly. The offender may appeal against recall to the Parole Board and the Board
scrutinises the decisions to recall.
Fines
The imposition of a fine is the most common penalty in the criminal courts and is in effect
an order requiring the offender to pay a sum of money to the state. The fine should reflect
the seriousness of the offence.
The main principle is a requirement to investigate and take into account the financial
circumstances of the offender and as we have seen the court may order a statement as to the
offender’s financial circumstances. There are penalties for failing to provide a statement or
providing a false one.
There is a standard scale of maximum fines for summary offences (see s 37(2) of the
Criminal Justice Act 1982) as follows:
Level Amount
1 £200
2 £500
3 £1,000
4 £2,500
5 £5,000
Where the offender is under 18 the fine must not exceed £1,000 (s 135, POCC(S)A 2000) and
if under 14 must not exceed £250 (s 135(2) ). The court may order a parent or guardian
of a person under 18 to pay the offender’s fine, costs or compensation to the victim (s 137,
POCC(S)A 2000) and may order a statement as to the financial circumstances of the parent
or guardian.
..
EL_C04.qxd 3/26/07 10:40 AM Page 159
Fines: reform
The Courts Act 2003 in ss 36 and 37 deals with the problems created by the fact that for
some time large numbers of fines imposed by the courts have remained uncollected. The
Act provides for the Lord Chancellor to designate fines officers whose role will be to manage
the collection and enforcement of fines. Schedule 2 of the Act specifies new powers avail-
able to the courts and fines officers to enforce payment of fines. The following are some 4
examples:
n persons struggling to pay fines may contact the fines officer with a view to a variation of
payment terms before payment is due and afterwards, in favour of the person required to
pay the fine;
n on the other hand, in appropriate cases, a fine may be increased on payment default as an
incentive for offenders to pay their fines promptly;
n in regard to fines for illegally parked cars that have been clamped the court will have
power to order that on failure to pay the relevant vehicle be sold and the fine deducted
from the selling price. This type of action may be appropriate for persistent offenders.
Absolute discharge
Section 12 of the POCC(S)A 2000 gives the court power to grant an absolute discharge.
This procedure may be used in all criminal courts irrespective of the age of the offender.
When used it normally reflects the trivial nature of the offence, the circumstances in which
the offender came before the court or some special factors regarding the offender himself
or herself.
Conditional discharge
Section 12 also applies and this procedure may be used in all criminal courts regardless of the
age of the offender. There is only one condition which is that the offender does not commit
any further offences for which he is convicted by a court in Great Britain, during the period
of the discharge that the court has fixed. This period must not exceed three years. Where
there is a relevant conviction, the court may sentence the offender for the original offence
(s 13(6), POCC(S)A 2000).
Binding over to keep the peace
Section 1 of the Justices of the Peace Act 1361 gives power to bind over to be of good
behaviour to magistrates, the Crown Court and the Court of Appeal. Section 115 of the
Magistrates’ Courts Act 1980 and the common law give the magistrates power to bind over
to keep the peace or be of good behaviour. The court involved may take a recognisance in
its discretion. This involves the payment of a sum of money on failure to comply. The court
cannot impose a custodial sentence for failure to comply.
..
EL_C04.qxd 3/26/07 10:40 AM Page 160
Binding over of a parent or guardian

Section 150 of the POCC(S)A 2000 applies and here a recognisance may be imposed on a
parent or guardian of a child or young person for up to three years or until the offender has
reached 18 whichever is the shorter. The recognisance comes into effect and the sum payable
under it becomes payable if the parent or guardian fails to take proper care and control over
the offender or ensure that he or she complies with a community sentence.
Travel restriction orders

Section 33 of the Criminal Justice and Police Act 2001 allows the court to make a travel
restriction order where an offender receives a sentence for drug trafficking of four years
or more. The order may be imposed for a minimum period of two years from release from
custody. Surrender of a UK passport may also be ordered.
Compensation orders
Section 130 of the POCC(S)A 2000 applies and empowers a court before which a person is
convicted of an offence to make a compensation order requiring the offender to pay com-
pensation for any ‘personal injury, loss or damage’ resulting from the offence or any offence
that is taken into consideration. A compensation order may be made in addition to any other
form of sentence or as the only sentence for the offence. If a court does not make a com-
pensation order where it has power to do so it must give reasons.
Anti-social behaviour orders

A court including a youth court may make an anti-social behaviour order (ASBO) where
an offender is convicted of an offence. (See s 1C of the Crime and Disorder Act 1998, as
amended by the Serious Organised Crime and Police Act 2005). The 1998 Act in this regard
came into force at the end of 2002.
The court must consider that the offender has acted in a manner likely to cause harassment,
alarm or distress to one or more persons not of the same household as the offender. The court
must also take the view that an ASBO made on conviction is necessary to protect persons in
any place in England and Wales from further anti-social acts committed by the defendant.
The order is in fact a civil order but the criminal standard of proof ( beyond a reasonable
doubt) applies in satisfying the above criteria. Although it is a civil order there are criminal
penalties if it is breached. The order may take effect immediately or be suspended, e.g. until
the offender completes a custodial sentence. The order must last for a minimum of two years,
although it can be discharged earlier by the court if, for example, the Director of Public
Prosecutions consents. It contains only prohibitions, i.e. things the defendant must not do
rather than positive requirements. The maximum period for an order is five years.
As regards penalties, if the offender does any of the things forbidden by the order, the
offender is guilty of an offence triable summarily and punishable by imprisonment up to a
maximum of six months or a fine up to the statutory maximum (currently £5,000) or both.
..
EL_C04.qxd 3/26/07 10:40 AM Page 161
Youth crime and disorder: sentencing

In terms of the sentencing of youth offenders the following materials are relevant:
Custody of young offenders

4
Three forms of custodial sentence are available as set out below.
Detention during Her Majesty’s Pleasure

This is restricted to cases of murder and s 90 of the POCC(S)A provides for a mandatory
sentence in this form for an offender who is under 18 at the time of the offence. A person
receiving this sentence will be detained at a place and under such conditions as directed or
arranged by the Home Secretary (s 92(1), POCC(S)A 2000).
Detention for a specified period

Section 91 of the POCC(S)A 2000 applies and relates to persons under 18 who are convicted
of serious offences listed in s 91.
An example is provided by the offence of sexual assault on a female or a male under s 3 of
the Sexual Offences Act 2003 which is a triable either way offence, imprisonment following
trial on indictment being for a maximum of 10 years.
Under s 91(3) the offender may be detained for such period not exceeding the max-
imum term of imprisonment for the offence if there is no other suitable way of dealing with
the case.
Detention and training orders

Section 100 of the POCC(S)A 2000 applies. It provides for custodial sentences for offenders
aged between 10 and 18. The period of such an order can be 4, 6, 8, 10, 12, 18 or 24 months.
The period of detention and training is half the period of the order, the other half being
a supervision and training arrangement. Supervision is by an officer of the local probation
board or a social worker or a member of the youth offending team. A youth offending team
consists of at least one of the following, namely, a probation officer, a social worker, a police
officer, a person nominated by the local health authority and a person nominated by the
chief education officer of the relevant local authority. These teams are set up by the Chief
Constable and probation service under powers given in the Crime and Disorder Act 1998.
Under s 104(1) and (3) of the POCC(S)A 2000 failure to comply with the requirements of
the supervision section of the order leads to an appearance before a youth court and the court
may order detention for a period not exceeding the shorter of three months or the remainder
of the term of the order or a fine not exceeding level 3 on the standard scale.
Youth community orders

Under the CJA 2003 a ‘Youth Community Order’ means any of the following orders.
Curfew order
As we have seen, these orders may be made in regard to an offender of any age but where the
offender is on conviction under 16 the maximum period of the order is three months as
opposed to six months in other cases. The order requires the offender to remain for the
..
EL_C04.qxd 3/26/07 10:40 AM Page 162
period specified at a specific place usually his or her home. The period must be not less than
two hours a day and not more than 12 hours a day.
Attendance centre order

These orders are available for offenders who are at least 10 years old and under 25. The order
requires attendence at a specified attendence centre to take part in specified activities. An
order may be made for example requiring attendance at a centre for say three hours on a
number of Saturday afternoons resulting in deprivation of peak leisure time. Consent of the
offender is not required.
The aggregate number of hours for which an offender may be required to attend at an
attendance centre must not be less than 12 nor more than 36. A child under 14 may be
ordered to attend for less than 12 hours if the court is of the opinion that 12 hours would be
excessive and in any case such persons cannot be required to attend for more than 12 hours.
Supervision order
These orders may be made where the offender is under 18. In essence, they are the
equivalent for children and young persons of the old probation order. The offender’s con-
sent is not required. No minimum period is specified and the maximum period is three
years. Supervision is by an officer of the local authority or of the local probation service or
by a member of a youth offending team. The offender may be required to live at a specified
place or places and there may be a night restriction for not longer than 10 hours on any
one night. Breach of the order may lead to a fine of up to £1,000 or a curfew order. The
court may also revoke the supervision order and deal with the offender for the offence
committed.
Action plan orders

These can be applied to offenders aged 10 to 17 inclusive. Under the provisions the offender
must comply with a three-month action plan placing him or her under the supervision of
an officer of the local probation board, a social worker or a member of the youth offending
team. An action plan is essentially an intensive programme of work with the offender and the
parents to tackle the causes of offending at an early age. The plan imposes requirements
regarding the offender’s whereabouts and behaviour. Youth offending teams and their
membership have already been considered (see p 161).
The order cannot be made if the court proposes to impose a custodial sentence or an
attendance centre order or supervision order or referral order (see below).
Reparation order
These orders require the offender to make reparation for the offence other than by the pay-
ment of compensation. They may be made in respect of an offender under the age of 18. The
court may make the order along with other orders, e.g. a fine. Reparation may consist, for
example, of writing a letter of apology or apologising in person or removing litter or graffiti.
Reparation of up to 24 hours in all must be made within three months of the making of the
order. The period of reparation is supervised, e.g., by an officer of the local probation board.
For breaching an action plan order or a reparation order or a curfew order or an attendance
centre order, the penalties are a fine not exceeding £1,000. A major sanction for the court is
to discharge the order and deal with the offender in regard to the offence committed.
..
EL_C04.qxd 3/26/07 10:40 AM Page 163
Referral orders
This involves referral to a youth offender panel and is intended to trigger an inquiry into the
reasons for the offending behaviour and to impose on the offender, who must be under 18, the
principle of restorative justice. This involves making restoration to the victim and reintegra-
tion into the law-abiding community and taking responsibility for the consequences of the
offending behaviour. The panel concerned with a referral draws up a programme entitled a 4
‘youth offender contract’ that gives effect to the above objectives and with which the
offender must comply. A court making the order can make a parenting order to run alongside
the referral order. Where the court decides to make a parenting order with a referral order,
the court must obtain a report by a probation officer, or a social worker or a member of the
youth offending team. The report will indicate what the requirements of the parenting
order might include with reasons. If the offender is under 16, information about the family’s
circumstances and the likely effect of the order on those circumstances is included.
A youth offender panel must be distinguished from a youth offending team. A youth offender
panel is set up under a referral order for that particular offender, and consists of a member of
the local youth offending team and two members who are not from that team but are volun-
teers from the local community. In regard to referral orders, the youth offending team is
responsible for providing administrative support, accommodation and other facilities required
by the youth offender panel. The team also arranges for the supervision of the youth offender
contract and the member of the team who is on the panel keeps records of compliance or
non-compliance.
Parenting orders
A parenting order requires the parent(s) to comply for a period not exceeding 12 months
with such requirements as are specified in the order and to attend for a concurrent period not
exceeding three months and not more than once in any week such counselling and guidance
sessions as may be specified by the responsible officer, i.e. an officer of the local probation
board, or a social worker or a person appointed by the chief education officer or a member
of the youth offending team. The requirements shall as far as practicable avoid conflict with
the parents’ religious beliefs and with their normal working times. The requirements of the
order are in general terms to involve the parents in the supervision of the child with the aim
of preventing a recurrence of criminality or truancy. Breach of a parenting order can result on
prosecution to a fine not exceeding level 3 on the standard scale i.e. £1,000.
Restitution of property in criminal cases

Restitution orders
Restitution orders may also be made in regard to property which is the object of an offence
under ss 148 and 149 of the Powers of Criminal Courts (Sentencing) Act 2000. Restitution
orders may also be made in respect of an offence which the accused asks to have taken into
consideration. A restitution order and a compensation order may be made in respect of the
same goods if recovered in a damaged condition.
Restitution and money-laundering legislation

As part of the law relating to restitution in criminal cases note should be taken of the
Proceeds of Crime Act 2002. This is the most important of the legislative measures for
..
EL_C04.qxd 3/26/07 10:40 AM Page 164
business in terms of its wide scope and effect on commercial undertakings though there are
measures covering particular areas, e.g. the Prevention of Terrorism Act 2005.
The money-laundering provisions of the 2002 Act are as follows:
n it creates the Assets Recovery Agency to investigate and recover wealth that has been
obtained through criminal conduct;
n it gives a right of recovery at civil law which enables the Agency to recover property that
was obtained through criminal conduct, including the right to recover property from third
parties not involved in the criminal conduct. The Agency is only required to prove its case
on the civil standard of proof, i.e. that the property was ‘probably’ the result of crime, and
can apply to the High Court for an interim freezing order in regard to suspect property to
prevent the movement of the property which will be managed by a receiver;
n the Agency has a right to exercise the functions of the Inland Revenue and tax the sus-
pected proceeds of a crime without identifying the source of the income as the Revenue
must do;
n it creates new powers of investigation including customer information orders. These
require banks and other financial institutions to identify accounts that are held by persons
connected with an investigation. There is also power to monitor accounts. A code of
practice provides guidance on how these functions are to be exercised;
n it creates new obligations to report where there are reasonable grounds to know or suspect
that a person is engaged in money laundering.
Some concerns have been expressed in regard particularly to the civil burden of proof and
that offences can be committed even where money laundering, e.g. by a customer, is suspected
or where it should have been suspected. It is now essential that firms, particularly those involved
in financial services, review their procedures especially the ‘know your customer’ procedures
to ensure that they do not commit, by mere negligence, a money-laundering offence.
Injury compensation in criminal cases

The compensatory awards set out above are ineffective if the offender is never caught or if
when caught he has no money or property with which to pay compensation. In consequence,
there is, under the Criminal Injuries Compensation Act 1995, a scheme of state compensation
operated by the Criminal Injuries Compensation Authority under a Scheme Manager.
The Authority may make discretionary payments to those suffering personal injury which
is attributable to certain criminal offences, e.g. rape and assault under s 47 of the Offences
Against the Person Act 1861. Payments are not made for offences against property unless it
was a physical aid to the victim, e.g. glasses, a hearing aid or a wheelchair. Dependants of a
person who dies as a result of a relevant crime may claim. There are rights of appeal to
Adjudicators appointed by the Secretary of State. The Authority can, having made an award,
seek to reimburse itself by a claim against the offender. Those who cannot show the need for
this sort of compensation may, of course, make an application under s 130 of the Powers of
Criminal Courts Act 1973 if possible. Compensation is based on a tariff or scale of payments
up to £500,000 together with additional payments for special expenses and loss of earnings
for those who are incapacitated for at least 28 weeks.
The government issued a consultation paper in 2005 in which it is proposed that the cur-
rent maximum payment of £500,000 be increased for serious injuries but no compensation
for less serious injuries, only more practical and emotional support. It seems clear that there
will be no extra money for victims of crime.
..
EL_C04.qxd 3/26/07 10:40 AM Page 165
Rehabilitation of Offenders Act 1974 – non-disclosure

of sentence
The provisions of this Act are an attempt to give effect to the principle that when a person
convicted of crime has been successful in living down that conviction and has avoided fur-
ther criminal activities, common justice demands that his efforts should not be prejudiced by 4
the unwarranted disclosure of that earlier conviction.
All sentences are subject to rehabilitation except imprisonment for life and custodial
sentences of more than 30 months. After the expiry of certain defined periods the offender is
rehabilitated as follows:
n an absolute discharge 6 months

n a conditional discharge 1 year or for the period of the order if longer
n an attendance centre order 1 year after the order expires
n a fine or community sentence 5 years
n a custodial sentence up to 6 months 7 years
n a custodial sentence between 6
and 30 months 10 years
In the case of those who were under 18 at the date of conviction, the rehabilitation periods
are halved.
So far as the employment of persons with previous convictions is concerned, it should be
noted that any questions seeking information as to a person’s pervious convictions shall be
treated as not relating to spent convictions and any obligation on any person to disclose
matters shall not require him to disclose a spent conviction, and a spent conviction or failure
to disclose a spent conviction is not a proper ground for dismissing or excluding a person
from or prejudicing him in any occupation or employment. There is an exception (see SI
1986/1249) where the employment allows contact with persons under 18, e.g. in care, leisure
and recreational activities. Here questions can be asked designed to reveal spent convictions
particularly those with a sexual connotation. Such spent convictions are a ground for dis-
missal which will not, for that reason alone, be unfair.
In this connection, the Protection of Children Act 1999 makes changes to the law with the
object of creating a framework for identifying people who are unsuitable for work with chil-
dren and to compel or, in some cases, to allow employers to access a single point for checking
the names of people they propose to employ in a post involving the care of children. This
involves the check of names against criminal records and two lists of people considered
unsuitable for work with children. The Department of Health and the Department of Work
and Pensions maintain the lists to be made available via the Criminal Records Bureau under
Part V of the Police Act 1997. These disclosures, via the records and lists, provide exceptions
to the Rehabilitation of Offenders Act 1974. The above procedures are a response to the
increasing number of cases involving the employment of paedophiles in local authority and
other children’s homes.
Another exception occurs under the Financial Services and Markets Act 2000. One of the
primary purposes of the Act is to protect the public from the activities of unscrupulous and
dishonest people who may find their way into the investment business. For example, those
who are authorised to conduct investment business are under a duty to take reasonable care
not to employ or continue to employ unsuitable persons. In this connection, the Act of 2000
provides that the 1974 Act does not apply to a spent conviction for fraud or dishonesty or
to an offence under companies legislation such as insider dealing or under legislation
relating to building societies, friendly societies, insurance, banking or other financial services,
..
EL_C04.qxd 3/26/07 10:40 AM Page 166
insolvency, consumer credit or consumer protection. There exceptions are now contained in
the Police Act 1997 (see below).
The Police Act 1997 provides for access to criminal records for the purposes of employment
and spent convictions are not to be included in the conviction certificate. However, spent
convictions can be shown under the Financial Services and Markets Act 2000 where the con-
viction is, e.g., for fraud or dishonesty and where the certificate is required by an individual
who will be working on a regular and unsupervised basis with children or is seeking appoint-
ment as a judge or magistrate.
Further exceptions are made from time to time by statutory instrument. For example, the
Rehabilitation of Offenders Act 1974 (Exceptions) (Amendment) Order 2002 (SI 2002 /441)
adds to the exceptions where disclosure is required to those seeking employment with
Customs and Excise, those who wish to be involved with work concerning vulnerable adults
and those concerned with monitoring Internet communications for the purposes of child
protection.
In addition, certain employees are excluded from the 1974 Act and their convictions can be
disclosed. Included are doctors, chartered accountants and chartered certified accountants,
insurance company managers and building society officers (see SIs 1975/1023 and
1986/2268).
..
EL_C05.qxd 3/26/07 10:40 AM Page 167
5
CIVIL PROCEDURE
In this chapter we shall consider the way in which a civil action is brought and concluded in
the High Court.
For the purposes of our High Court claim, we shall consider a case of alleged breach of con-
tract on the lines of the case of Mitchell (George) (Chesterhall) Ltd v Finney Lock Seeds Ltd (1983)
(see below Case 187).
The claim is for breach of contract by reason of the supply by the defendant company of
defective cabbage seed. The amount of the claim is an estimated alleged loss of £100,000. The
defendant will defend the claim mainly on the basis of an exemption clause in the contract.
Initial considerations
The following matters will be considered by the claimant’s solicitor before a claim form to
commence the claim is served.
Time-bars
The Limitation Act 1980 (as amended) sets out a number of fixed periods of time for issuing
a claim form to commence proceedings. In cases of our kind, i.e. breach of contract, the
claimant has six years from the date on which the claim accrued, i.e. when the defective
seed was delivered, or (as in our case, where there was latent damage not emerging until the
defective seed had grown) there is a period of three years from knowledge of the defect if this
period expires after the six-year period. It is unlikely that our claimant has left his claim for
so long and limitation of claims rules should not affect him.
Cutting short liability

The Court of Appeal has ruled in Granville Oil and Chemicals Ltd v David Turner & Co Ltd
[2003] 1 All ER (Comm) 819 that when a business is dealing with another business, but not a
non-business consumer, the six-year period for contract claims can be reduced by a term in
the contract. This leads to earlier ascertainment of potential liability. The facts were briefly
that it was a standard condition of a freight forwarder’s contract that the freight forwarder
would be discharged of all liability arising if a claim in respect of alleged liability was not
commenced by the customer within nine months of the provision of the relevant service.
The condition could equally have been applied to alleged liability in respect of goods.
..
EL_C05.qxd 3/26/07 10:40 AM Page 168
The condition was challenged in the Court of Appeal on the basis that it was an unfair term
and unreasonable under the Unfair Contract Terms Act 1977. However, the Court of Appeal
ruled that the condition was not void under the Act of 1977 after taking into account the fact
that the parties had equal bargaining strength and that the condition had been brought to
the attention of the customer. Furthermore, it was practical to commence a claim in that
time since any damage could be ascertained on delivery of the goods by the carrier.
Comment The Court of Appeal stressed the value of the Act of 1977 to consumers and their
protection and would not it seems have decided the case as it did unless both parties were in
business and of equal bargaining strength. The court was not, however, so keen to allow the
Act of 1977 to intrude into contracts between commercial parties such as these. They should,
said the court, be capable of reaching agreements of their own choosing and should expect to
be bound by them.
Defendant’s finances
There is no point in making a claim against an individual who is insolvent nor against a
company which is in a terminal insolvency procedure, such as liquidation. A search of the
company’s file at Companies’ House, Cardiff, which is online, should be made. For individuals,
the matter is not so straightforward and may require the services of an inquiry agent.
The cost effectiveness of the claim

Consideration should be given to the cost of the claim and the possibility of a successful
outcome must be discussed, i.e. does the claim merit the bringing of civil proceedings which
cannot be guaranteed to be successful?
Alternative approaches
These could include arbitration where the contract contains an arbitration clause or alternat-
ive dispute resolution.
The remedy
There is a variety of remedies which a claimant may ask for from the court. These are considered
as we proceed through the chapters on substantive law, e.g. contract and tort. However, in
our case, the claimant will be asking for damages on the ground that the defendant has
caused loss by reason of his failure to perform his obligations under the contract. The object
of the damages in this situation is to put the claimant in the position he would have been in,
at least financially, if the contract had been properly performed. In our case, where the remedy
sought is money damages, the court may award interest on the sum outstanding. The rules are
further considered in Chapter 18. It is enough to say here that a claimant suing for interest
must claim it specifically in the statement of case, which gives particulars of the claim.
Funding the claim – generally

Under the Access to Justice Act 1999 the Community Legal Service (CLS) replaces the former
civil Legal Aid Scheme in regard to the provision of funds for civil cases. The CLS is adminis-
tered by the Legal Services Commission (LSC), which replaced the Legal Aid Board.
..
EL_C05.qxd 3/26/07 10:40 AM Page 169
CIVIL PROCEDURE 169
The two levels of service which are of most importance are:
n initial advice and assistance referred to as legal help; and

n representation in the court should litigation ensue referred to as help at court.
The above categories of aid are available subject to what is said below to claimants and
defendants. However, the matter of the success or failure of the claim is relevant in the grant-
ing of aid for representation.
In broad terms, it will be available:
5
n where the prospects of success are very good (80 per cent or more) – that the damages are
likely to exceed the estimated cost;
n where there is a good chance of success (between 60 per cent and 80 per cent) – that the
applicant expects to recover a sum at least three times the likely costs; and
n where the case has only a moderate chance of success (between 50 per cent and 60 per
cent) – that the applicant expects to recover a sum of at least four times the likely costs.
By way of explanation of the above, the point is that if the claim is more risky in terms of
success, the LSC will not finance it unless it will produce considerable funds if it is successful.
The following points should also be noted:
n funding by the CLS will not normally be available where the case could be funded by a
conditional fee agreement; and
n it is not available for personal injury cases, except those for medical negligence.
Since personal injury claims were a large part of the state funding arrangements and since
these claims lend themselves to conditional fee arrangements, the amount of state aid for
civil matters has considerably decreased.
Financial eligibility
The solicitor involved will assess financial eligibility. The position for individuals is set out
below.
Legal help
Income. The solicitor will take the actual gross income in the past month of the client and
partner if any. If this exceeds £2,288 the client will not be eligible. A higher limit applies if
there are more than four dependent children in the client’s family for whom child benefit is
received. Where the gross income is £2,288 or less, the solicitor will calculate the disposable
income (see below) and if the disposable income exceeds £632 per month the client is not
eligible.
Capital. The solicitor will work out the client’s and any partner’s disposable capital and if
this exceeds £8,000 the client is not eligible.
Clients who are in receipt of income support, income-based jobseekers’ allowance or guar-
antee state pension credit will be eligible on income and capital.
Where the client qualifies, it is not necessary for him or her to pay a contribution from
income or capital.
Legal representation
Income. If the gross monthly income of the client and any partner exceeds £2,288, the client
will not be eligible for funding. The rule regarding four or more children, however, applies
(see above). If the gross monthly income is £2,288 or less, the solicitor will assess disposable
.. ..
EL_C05.qxd 3/26/07 10:40 AM Page 170
income (see below) and if this is £632 or less, the client will qualify on income for all types of
representation.
Capital. If the client’s and any partner’s disposable capital is £8,000 or less, the client
qualifies for all types of legal representation on capital.
Even when a client qualifies, it may be necessary to pay a contribution to costs e.g. where
the monthly disposable income is £273–£400 the contribution is one-quarter of income in
excess of £268.
As will be seen, the provision of legal aid is irrelevant in the normal commercial case such
as ours and the figures are only included to give a flavour of the paucity of the state provision
in this area for non-business clients. In this connection, government consultation papers and
statements suggest that matters relating to financial provision will get worse rather than better.
Family cases
Since these are not subject to conditional fee arrangements in terms of their suitability, they
continue as state-aided civil matters. In fact, as a broad generalisation, it may be said that in
the developed future only family lawyers will be doing civil legal aid work to any degree. In
this connection funding is available for family mediation and general family help until the
solicitor’s fees have reached a certain level the highest in mediation being £350 and in family
help £1,500.
Franchising of firms of solicitors

Additionally, legal aid work can be carried on only by those firms of solicitors which are
accredited by the Legal Services Commission as being competent to provide the relevant service.
The Commission also monitors the accredited firms to see that the appropriate range of experi-
ence is maintained, with the resulting withdrawal of some firms from legal aid capacity.
Reform
Following proposals outlined in Lord Carter’s initial review of legal aid published in February
2006, the Legal Services Commission has consulted on a national preferred supplier scheme,
which will radically change the way in which it administers legal aid. Approved suppliers will
have to meet stringent entry requirements and will have to deliver consistently good quality
advice to clients and take greater responsibility for managing their own performance.
Solicitors and advice agencies can expect to benefit from greater autonomy, simpler processes
and lower transaction costs. Ultimately, the LSC will be working with fewer larger organisa-
tions by the time the proposals are fully implemented in 2009.
These arrangements are seen as a move forward from the franchising scheme outlined
above.
Conditional fee agreements

Under these arrangements, the client’s solicitor will receive no payment if the client’s claim
fails. However, usual or higher than usual fees are payable where the client succeeds. Section 27
of the Access to Justice Act 1999 applies, together with statutory instruments made to support
it. The section inserts ss 58 and 58A into the Courts and Legal Services Act 1990. Section 29
of the 1999 Act allows the recovery of insurance premiums from the losing side (see below).
..
EL_C05.qxd 3/26/07 10:40 AM Page 171
CIVIL PROCEDURE 171
These agreements can be made in regard to any civil litigation matter, but matrimonial
cases are excluded. No such agreement can be made if the client is legally aided.
CFA with success fee

If the fees are to be higher than usual if the client is successful, as is the case with a condi-
tional fee agreement, the maximum permitted percentage increase is 100 per cent. The Access
to Justice Act 1999 allows recovery of the normal fees and the success fee by a successful
client against his opponent.
5
In Designers Guild Ltd v Russell Williams (Textiles) Ltd [2003] 1 Costs LR 128 the House of
Lords granted a success fee of 100 per cent in a case where leading counsel had advised that
the chances of success were no more than evens. The claimant had succeeded at first instance
but had lost in the Court of Appeal. The case is important because it gives an example of a
dispute in which a 100 per cent success fee was merited and also because previously it was
doubtful whether CFAs were permissible in the House of Lords since the Civil Procedure Rules
do not specifically apply to proceedings in the Lords. This case rules that they are because,
said the House of Lords, CFAs are authorised by the Courts and Legal Services Act 1990 and
do not derive validity from the Civil Procedure Rules.
In effect, in this sort of agreement the maximum fees payable to the solicitor comprise two
parts: the base or normal fee usually calculated by reference to hourly rates in terms of time
spent on the case, and a success fee expressed as a percentage of the base or normal fee. In the
case therefore of a 100 per cent success fee, the solicitor’s fees would be double the base or
normal fee. Therefore and in general terms, a client who loses will pay no fees and a client
who wins will pay both the base or normal fees and the success fee. The defendant may be
ordered to pay the fees as part of costs awarded against him including the success fee. If there
is an appeal on the matter of costs, the appeal court can reduce the success fee (see Callery v
Gray [2001] 1 WLR 2112 and 2142).
Contingency fees (or CFA without success fee)

The 1999 Act provides also for a contingency fee agreement, i.e. one where there is no success
fee but either all or part of the solicitor’s fees are payable only if the client wins the case and
not at all if he loses. An example would be a fee reduction of 30 per cent if the case is lost and
the usual fee if it is won.
It is still unlawful for a contingency fee to provide for the recovery by the lawyer of a per-
centage of any damages awarded to the client, e.g. ‘There will be no fee if you lose but if you
win I shall take 40 per cent of your damages’. Such an agreement is contrary to public policy
(see Chapter 16) as being champertous. Champerty is the maintenance of any person in a
legal claim upon condition to have part of the property or money recovered. The statutory
provisions for conditional and contingency fees are, of course, exceptions to the common
law rule.
Contingency fees in assessment of damages

Agreements to receive a percentage of damages by those who have assisted a client in ascer-
taining the size of the claim AFTER liability has been established in court do not necessarily
fall foul of the public policy rules mentioned above. Thus in Regina (Factortame Ltd and Others)
v Secretary of State for Transport, Local Government and the Regions (No 8) (2002) The Times,
9 July, the accountants Grant Thornton were paid 8 per cent of the final settlement in
this case under an agreement with the claimant and this was not, said the Court of Appeal, a
.. ..
EL_C05.qxd 3/26/07 10:40 AM Page 172
void agreement as contrary to public policy and was recoverable by the claimant against the
defendants as costs. The Court of Appeal did however stress the following points as relevant
in arriving at their ruling:
n when the agreement was made the claimant had already succeeded on the issue of the
defendant’s liability; and
n the accountants had not played any part in the proceedings leading to the establishment
of that liability.
Comment The decision is of importance to experts such as accountants who are often
engaged to provide back-up services of this kind in litigation.
Insurance
Obviously, the law does not allow a person to proceed with a claim against another under
conditional or contingency arrangements unless he can pay the other side’s costs if he loses.
Therefore, a solicitor will always ask whether a client has an insurance policy covering litiga-
tion. This type of insurance may be purchased separately or may be part of a household policy.
This is called ‘before the event’ insurance. It may well be possible to purchase ‘after the event’
insurance. The premium payable will be related to the strength of the applicant’s case, a more
difficult case to win attracting a higher premium. As we have seen, this premium may be
recovered from the losing party (but see below). The payment of what may be a large initial
premium for a personal injury claim worth, say, £100,000 can be a problem, but it may be
possible in a claim which is likely to succeed to negotiate with an insurance company so that
a client only pays the premium if he wins. If the client loses, the insurance company pays the
costs of the other side and the smaller share of costs of the claimant and that is that. Clearly,
there are no lawyers’ fees to pay for the client’s side.
The role of the insurance company

It is important that clients understand the role of the insurance company and its interest in
the case. The claimant’s insurer, like his lawyer, is only interested in whether the case is won.
If it is, the lawyer gets the success fee and the insurer will have received a premium and not
had to pay out. In the insurance deal, therefore, it will be a requirement of the insurer that
the solicitor inform the insurance company if the defendant makes an offer to settle or makes
a payment into court. These matters are explained later in this chapter but, as an example, if
the claim is for £20,000 and the defendant offers to settle by a payment of £16,000, the insur-
ance contract may require the claimant to accept the offer to avoid possible loss of the case if
it goes to trial with consequent expense to the insurer. Failure to accept an offer, if required
by the insurer, can, under the contract of insurance, lead to withdrawal of cover so that the
claimant who wishes to try for more money may have to do so at his own expense.
Payment by insurers
The system of conditional fees has suffered because of the tactics of insurance companies
who having entered into insurance commitments have used tactics such as arguing in court
over the way in which fees have been calculated and even whether the conditional fee provi-
sions are valid, all to delay payment. However, in a number of cases such as Hollins v Russell
(2003) 147 Sol Jo 602 the Court of Appeal gave a firm ruling that technical challenges on
compensation by insurers should not in general be allowed. Brooke LJ referring to the ‘trench
warfare’ that had broken out between solicitors and insurers said that provided there was no
serious breach of the legal rules and a claimant was not adversely affected the no-win, no-fee
agreement plus insurance was valid and would be enforceable.
..
EL_C05.qxd 3/26/07 10:40 AM Page 173
CIVIL PROCEDURE 173
It is also worth noting here that the Court of Appeal decided in Callery v Gray [2001] 1 WLR
2112 and 2142 that the cost of after the event insurance was recoverable even when as in this
case proceedings were only in contemplation and in fact never took place.
Sarwar v Alam [2001] 4 All ER 541 is also worth noting because in it the Court of Appeal
allowed, as part of recovery of costs, the premium on an after the event insurance even
though the claimant had before the event insurance (which was recoverable) because the ATE
insurance provided additional benefits in that it was custom built for the particular road
traffic claim. However, the court warned that all solicitors conducting these no-win, no-fee
claims should inquire after and investigate the adequacy of any BTE insurance before advising
5
ATE insurance. This could involve asking the client to bring in any relevant motor policy.
Failure to take advantage of an adequate BTE insurance could result in the ATE premium
being disallowed as a head of recoverable costs.
Finally, an attempt by the defendant’s insurer to refuse to pay an ATE insurance premium
as costs in the cause because the premium was not payable at the time the ATE was entered
into but only on conclusion of the case if the claim was successful (which it was) was a
credit agreement and was void because the formalities of the Consumer Credit Act 1974
had not been observed failed. The ATE was an insurance contract not falling within the
statutory framework applicable to credit agreements (see Tilby v Perfect Pizza Ltd (2002) 152
NLJ 397).
Other disbursements
It is also important that clients understand that, in addition to the insurance premium, there
are other ‘up-front’ payments that will have to be made and which will only be recovered if
they win. These include medical reports, experts’ fees, accident reports and court fees, which
may run into a few hundred pounds. Where the claim has a very good chance of success, the
solicitor may cover these payments, but is in no way obliged to do so.
Environmental Protection Act 1990 cases

Conditional fee agreements are available for proceedings under the 1990 Act, s 82 which
allows those aggrieved by a statutory nuisance to ask the court for an order to put that
nuisance right. An example would be the failure of a landlord to maintain rented housing in
a habitable condition. It should be noted, however, that there is no success fee here. The
lawyer gets his usual fee if he wins the case for the client but no more and, of course, nothing
if he loses.
Formalities
Conditional and contingency agreements between clients and solicitors must be in writing
and signed by both parties. Importantly, also an agreement for a success fee must briefly set
out the reasons for setting the percentage increase at the level stated. Regulations also require
a conditional fee agreement to include a term that a solicitor may not recover from a client
any part of the success fee disallowed by the court (see below).
Costs
When it comes to recovery of the success fee from the losing side, it should be borne in mind
that the court in assessing costs may reduce it on the ground that it was set at an unreason-
able level, given the level of risk of failure of the client’s case. The amount of the success fee
.. ..
EL_C05.qxd 3/26/07 10:40 AM Page 174
in the agreement is thereby also reduced so that the client does not pay the balance up to the
original success fee. An unreasonably high insurance premium might also be reduced where
better terms might reasonably have been obtained. Here the client will have to pay the balance
of the premium from his own funds.
Barristers and their involvement

It should be noted that the above materials relate to the fees of the solicitor in the case. The
terms agreed between solicitor and counsel may be on conditional fee terms either with or
without success fees. If not on such terms the solicitor is personally liable to pay counsel’s
proper fees whether or not the proceedings are successful and whether or not the solicitor has
been put in funds by the client. If it is thought necessary to brief a barrister, negotiations will
be required with the barrister. There is no compulsion upon members of the Bar (or solicitors
for that matter) to enter into conditional or contingent fee agreements. However, since
September 1999, all barristers and solicitors have acquired full rights of audience on call to
the Bar or admission to the Rolls, subject to meeting the requirements of the Bar Council or
Law Society. Thus, it may not be necessary to brief a barrister, the solicitor/advocate carrying
the case right through. A barrister may be required in a difficult case where, of course, it is
unlikely that the barrister will be prepared to enter into conditional or contingency fee
arrangements.
Alternatives to a claim in court
There are three major alternative procedures to a claim before a court of law as set out below.
Arbitration
Where the dispute relates to a contract, it may be found that the contract contains an arbitra-
tion clause requiring the parties to submit any dispute to an arbitrator rather than to a court
of law. In other cases the parties must first agree to proceed by arbitration and then choose an
arbitrator. The procedure has already been considered in Chapter 2, to which reference
should be made. The procedure is useful where money awards are required, but certain equit-
able remedies, such as an injunction, are not available if this route is chosen.
The party who obtains an award can apply to the High Court under s 66 of the Arbitration
Act 1996 for leave to enforce the award as if it were a judgment of a court. The various methods
of enforcing a judgment appear at the end of this chapter. It is currently a defect of the alterna-
tive dispute resolution procedures described below that there is no such enforcement of the
solution reached if a party does not comply with it.
Alternative dispute resolution (ADR)

Generally
ADR consists in the resolving of disputes by using an independent third party. The object is
to help the parties reach their own solution since the third party cannot, as a judge can,
impose a solution upon them. The parties can withdraw from the process at any time and
they do not have to accept the solution to the problem that was reached.
..
EL_C05.qxd 3/26/07 10:40 AM Page 175
CIVIL PROCEDURE 175
When ADR is inappropriate

The ADR procedure should not be considered in the following situations:
n where an injunction is required;
n where there is no dispute between the parties, as in a case where a debt is owed. In these
cases the creditor should issue a claim form (see later in this chapter) or, if the debt is
unlikely to be paid in full, consider insolvency proceedings;
n where the law is unclear, so that a ruling by a court is required.
5
Types of ADR
Mediation and conciliation. In a mediation (also referred to as conciliation) a third party
whom the parties have accepted as mediator will receive written statements from the parties
and after that the mediator will discuss the case with the parties. The mediator will not dis-
close confidential matters which one or other party may reveal to him. The discussions are on
a ‘without prejudice’ basis, which means that the matters discussed cannot be raised before a
court, should the case end up there on the mediation failing. The discussions do not have to
take place at a meeting but may be dealt with in correspondence or by telephone. The pur-
pose of the discussions with the mediator is for the parties to reach a satisfactory solution to
the problem without resort to a court. In some types of conciliation, the conciliator may be
more pro-active and put forward his own solutions to the parties’ disagreement.
Mediation-arbitration. Here the parties agree to submit a dispute to mediation but agree also
to refer the matter to arbitration if the mediation is unsuccessful. The parties may agree to
use the mediator as an arbitrator should the mediation fail. However, this may not be desir-
able since the mediator may have confidential information that was supplied to him by the
parties and this may compromise him as an arbitrator. The agreement for ‘Med-arb’, as it is
called, should, therefore, contain a right in both parties to object to the mediator taking on
the role of arbitrator, should the mediation fail.
Structured settlement procedure

This is sometimes referred to as a mini-trial. The parties appoint a representative each to sit
with a neutral chairman. The tribunal will hear or read the submissions of both parties and
the representatives will agree a solution with the assistance of the neutral chairman.
Other methods
The most important of these are set out below:
n Judicial appraisal. The Centre for Dispute Resolution in London provides a scheme under
which former members of the judiciary and senior barristers are available to give a speedy
initial view on the legal position having heard the parties’ representations. The parties may
or may not accept the conclusions.
n Expert determination by contract. Here the parties select an expert and agree to be bound
by his ruling. If a party fails to accept the ruling, he can be sued for breach of contract, so
there is a sanction. In view of the contract, the expert will have a duty of care to each party
and can, therefore, be sued in negligence if his award is affected by negligence.
n Employment disputes. ADR has been available for some considerable time in employment
disputes. The Advisory, Conciliation and Arbitration Service (ACAS), which was set up in
1974, has as its objectives the prevention and resolution of disputes, conciliation in actual
and possible complaints to employment tribunals, the provision of information and advice
and the promotion of general good practice.
.. ..
EL_C05.qxd 3/26/07 10:40 AM Page 176
Contractual ADR
What has been considered above is a situation in which the parties have reached the point of
litigation before deciding to try ADR first. It makes sense, however, to include a provision in
a contract that in the case of any dispute it should be resolved by a form of ADR. This is
particularly the case where the contract already contains an arbitration clause. In such a case,
the contract could provide that ADR be undertaken before proceeding to arbitration if, and
only if, ADR has failed to provide an acceptable solution.
In this connection, the Commercial Court has ruled that an agreement to use ADR is bind-
ing and enforceable by the courts. In the ruling which was given in Cable & Wireless plc v IBM
United Kingdom Ltd [2002] 2 All ER (Comm) 1041 the court rejected the claimant’s argument
that an agreement to refer disputes to ADR was simply an agreement to negotiate. The court
saw no difference between the reference to ADR and an agreement to arbitrate both of which
could be enforced by staying the court proceedings so that the parties could proceed with
ADR or arbitration.
ADR and the Civil Procedure Rules

Before leaving the topic of ADR, it is worth noting that under the Civil Procedure Rules 1998,
enacted post-Woolf, the courts actively encourage parties to resolve their disputes by some
form of ADR and may refuse a party some of his costs even when he wins his case in court if he has
previously and unreasonably refused to embark upon an ADR procedure.
In this connection, reference could usefully be made to the case of Dunnett v Railtrack plc
(2002) and the cases appearing in the Comment at p 716.
Offers to settle and Part 36 payments in

A defendant (or a claimant where there is a counterclaim, see later in this chapter) may make
an offer to settle the claim. Part 36 of the Civil Procedure Rules 1998 applies. The matter is
best dealt with by an example. Suppose that our defendant makes an offer to settle the claim
for £80,000 believing that our claimant will not be able to prove damage to his business of
£100,000. Let us further suppose that our claimant refuses to accept that offer or any other
offer that the defendant might make and issues proceedings. Our defendant should then pay
the sum of £80,000 into the court office under Part 36 of the Rules. This gives our claimant a
problem. If he proceeds to a full trial and does not get more than the offer (a penny would
do), he will be likely to have to pay his costs and the defendant’s from the time of payment
in. The claimant’s representatives are informed of the payment in at the time it is made so
the possible problems as to costs are known. The judge, in making an award of damages, is
unaware of the amount of the payment in. The same is true if the claimant decides to accept
the payment in before the trial begins or before its termination. Once again, the claimant will
have to pay the costs of both sides from payment in to the date of his acceptance of the offer.
Permission of the court is required prior to the acceptance of a payment in. The above rules
would apply also to the defendant if he had made a counterclaim (see below) and the
claimant had made an offer on this. The moral is to accept an offer when it is made if there is
a reasonable doubt about a party being able to recover in full his alleged loss.
Written offers
In Crouch v King’s Healthcare NHS Trust [2005] 1 All ER 207 the Court of Appeal ruled that if a
written offer is genuine and contains all the relevant information and the defendant is ‘good
..
EL_C05.qxd 3/26/07 10:40 AM Page 177
CIVIL PROCEDURE 177
for the money’ at the time the offer is made, the written offer should be treated in the same
way as a payment into court under Part 36 of the Civil Procedure Rules. There is no need
to support the written offer by a payment. In this connection the Department for
Constitutional Affairs has consulted on changes to be made to Part 36 to allow a written
offer from certain defendants, e.g. NHS Trusts, in a money claim to be treated as a payment
into court.
5
The commencement of proceedings
If we now assume that our claimant has sufficient funds to proceed with the claim or has
arranged a conditional fee funding and is not prepared to accept ADR, the dangers in terms of
recovery of costs having been explained to him, and that no offer of settlement has been
made or is acceptable, then our claimant will proceed to trial.
The claim form

A party wishing to issue proceedings must complete a claim form (formerly called a writ or
a summons). This should be taken or sent to the court office. These forms are issued by the
Court Service and the appropriate court office is stated on the form. The relevant offices are
county courts designated as civil trial centres – there are some 58 of them in England and
Wales or feeder county courts which, in relation to multi-track claims, will transfer the case
to a civil trial centre after allocating to track (see later in this chapter) and giving case manage-
ment directions.
Contents of the claim form

The claim form states:
n the name of the claimant;
n the name of the defendant (or defendants) and the address;
n brief details of the claim and the remedy sought;
n the value of the claim.
The value of the claim is necessary in order to assist the court in deciding to which track to
allocate the case. Allocation is considered later in this chapter but, as we saw in Chapter 2,
claims which are not worth more than £5,000 will usually be allocated to the small claims
track; claims worth more than £5,000 but not more than £15,000 will be allocated to the fast
track; and claims for more than £15,000 will be allocated to the multi-track. Also, a fee is
payable on issue of the claim form, and this is based on the value of the claim.
Particulars of claim
On the back of the claim form is a section for particulars of the claim. This gives a concise
statement of the facts on which the claimant relies. In our case we shall be claiming that the
seed supplied was not of satisfactory quality or fit for the purpose, and we shall give particu-
lars of what happened, e.g., the cabbages had no heart and so on, as the details in Case 187
show. The consequences to our claimant will be described and the particulars of loss and
damage stated. A claim for interest on the sum involved will be made.
Where the particulars of the claim are not included in or with the claim form, they will be
served separately.
.. ..
EL_C05.qxd 3/26/07 10:40 AM Page 178
Statement of truth
The particulars of claim conclude with a statement of truth. This states: ‘I believe the facts
stated in these Particulars of Claim are true’. It is signed by the claimant or his solicitor and
the address of the firm of solicitors involved is given.
Business claims – the parties

n Sole traders. A sole trader must sue in his or her own name and not a business name.
A sole trader can be sued in his or her own name or a business name.
n Partnerships. A partnership may sue in the firm name or in the names of individual partners.
A partnership may be sued in the firm name or the names of individual partners.
n Companies. A company can sue in its corporate name, and can be sued in its corporate
name.
Service of claim form

If the court serves the claim form on the defendant, it will normally use first-class mail and
delivery is deemed effective on the second day after posting. The court will send the claimant
a notice which includes the date when the claim form is deemed to be served. If the claimant
serves the claim form, he must file a certificate of service with the court within seven days of
deemed service of the claim form. If no such certificate of service is filed, there can be no
judgment in default (see later in this chapter).
Service may be personal service where the claim form is left, e.g., at the principal place of
business of an organisation or, in the case of a registered company, at its registered office or a
branch of the company at which, e.g., the contract under dispute was made.
Where, as is usual, a solicitor is authorised to accept service on behalf of his client, the
claim form must be served on the solicitor.
It is important to note that it is proper procedure for the claimant to send the defendant a
letter of claim or other form of advanced warning of his or her involvement in litigation.
Failure to do so may result in a penalty in terms of the costs awarded in the case (see Phoenix
Finance Ltd v Federation International De L’Automobile (Costs) (2002) The Times, 27 June).
Furthermore, the deemed date of delivery mentioned above is not rebuttable by evidence that
the defendant did not in fact receive the claim form on the deemed date (see Anderton v
Clwyd CC [2002] 8 Current Law 70). In addition, the court has power under the Civil
Procedure Rules to dispense with service of a claim form in appropriate circumstances
(Godwin v Swindon BC [2002] 1 WLR 997).
The consent of the defendant or his representative is required before service by fax is effec-
tive (see Kuenyehia v International Hospitals Group Ltd (2006) The Times, 17 February).
The defendant’s response to the claim

The defendant will also receive what is called a ‘Response Pack’ with Notes. These explain
how the defendant may deal with the claim form. There are five possibilities as listed below.
n Acknowledging service. If the defendant is not ready to file a defence, he must acknow-
ledge service of the claim form within 14 days of service. If the claimant has chosen to
send his particulars of claim separately, acknowledgement is within 14 days of receipt of
the particulars.
..
EL_C05.qxd 3/26/07 10:40 AM Page 179
CIVIL PROCEDURE 179
n Filing a defence. Where the defendant wishes to defend the claim, he must file a defence
within 14 days of service of the particulars of claim or, where service has been acknow-
ledged, within 28 days of service of the particulars of claim. The forms which the defendant
can use form part of the Response Pack. Where a solicitor is being used, a defence is norm-
ally prepared as a separate document. The time for filing a defence can be extended by
agreement between the parties by a further period of up to 28 days, but the court must be
informed. Our defendant company will deny that it is in breach of contract and will say
that the seed supplied was of satisfactory quality and fit for the purpose. As regards the
exclusion clause, a phrase such as the following might be used:
5
Further or alternatively, if (which is not admitted) the Claimant has suffered the loss
and damage claimed it is within the Defendant’s exclusion clause in paragraph X of the
contract.
n Example. If the defendant is served with particulars of claim on Monday, 3 September and
is ready to file a defence he or she must do so by Monday, 17 September. Defendants wish-
ing to acquire time must file an acknowledgement by that date. These defendants will then
have until Monday, 1 October to file a defence.
n Filing an admission. An admission may be for the full amount of the claim, in which case,
the claimant will ask the court for judgment. There may also be an admission for part only
of the claim. In this case, the claimant may reject what is, in effect, an offer and proceed
with the full claim. Alternatively, he may accept the offer and ask for judgment.
As regards service and timing, an admission of the claim where the claim is for
a specified sum of money is sent to the claimant. In other cases, e.g. admission of part
of the claim, the form of admission is sent to the court. An admission of claim must be
made to the claimant or the court as the case may be within 14 days of service of the claim
form if it has on it or accompanying it particulars of claim. Where particulars of claim
are served later, an admission may be made within 14 days of service of the particulars
of claim.
n Defendant fails to respond – the default judgment. If, following service of proceedings,
the defendant fails to acknowledge the same or to file a defence within the time scales
allowed, the claimant may ask the court for a judgment in default against the defendant.
Such a judgment will be obtained without a trial of the issues involved. There are several
situations in which default judgments cannot be obtained, e.g., in claims for delivery of goods
under a Consumer Credit Act 2006 regulated agreement, such as a hire-purchase agree-
ment and mortgage claims. The court will need to be satisfied that the claim form and par-
ticulars of the claim have been served on the defendant and that he has not made a
response. A defendant against whom a default judgment has been made can apply to the
court to have it set aside.
n Counterclaim. The defendant may make a counterclaim against the claimant. This will
not arise in our case, but if our claimant had not paid in full for the cabbage seed but
merely paid a deposit, the defendant may well claim for the balance of the purchase
price. Particulars of a counterclaim may be filed with the defence. Where this is done,
the permission of the court to file a counterclaim is not required. It will be required
if the counter-claim is made after the defence has been filed. The claimant need
not acknowledge a counterclaim, but must file a defence within 14 days. This may
be extended by agreement of the parties to 28 days over and above the initial 14-day
period.
A counterclaim is a statement of case and must be prepared as such. Furthermore, if the
claim is in the county court a statement of value must be included to ascertain the whole
value of the claim and counterclaim.
.. ..
EL_C05.qxd 3/26/07 10:40 AM Page 180
Reply to the defence

The claimant is not under an obligation to reply to the defence and, if he does not do so, it is
not to be taken as admitting anything which is raised in the defence. The most usual reply to
a defence is a counterclaim and this may also include a reply as where the claimant wishes
to allege facts in answer to the defence which were not contained in the particulars of claim.
In general, therefore, a reply should be limited to a statement of new facts the claimant
intends to prove to defeat the defence.
Requests for further information

If the information given by a party about his case is unclear, a request for further information
can be made under Rule 18 of the Civil Procedure Rules 1998. The request can be made:
n by the court if the court feels the need for more information;
n by a party. Initially, a party should make the request in writing to the other party, but, if a
satisfactory reply is not forthcoming, the party aggrieved should apply to the court for an
order. Failure to comply with a request by the court is a contempt punishable by fine or
imprisonment.
Statements of case
The above materials starting with the claim form and going through to the Request are
referred to in the Civil Procedure Rules of 1998 as ‘statements of case’. Before 1998 the docu-
ments described were known as ‘pleadings’ and doubtless this expression will continue in use
by practitioners for some time to come. It will be appreciated that the main purpose of plead-
ings or statements of case is to enable the court and the parties to define and identify the
issues in dispute before a trial begins.
Case management and allocation of cases

Throughout the following section we shall be referring to what ‘the court’ may do. Which
court is concerned? Case management and track allocation is a matter for designated civil trial
centres across England and Wales. These centres will also be the venue for multi-track trials
and a portion of fast-track trials. They are, in fact, county courts which operate as civil trial
centres. Other county courts are designated as feeder centres and will normally transfer multi-
track claims to a civil trial centre after allocating the case to track and giving case manage-
ment instructions. Multi-track cases may also be heard in the High Court. Those where the
value of the claim is £50,000 or more will be held there. Cases where the value is less than
£50,000 are also likely to be held in the High Court if they are in the following list:
n professional negligence claims (see Chapter 21);
n fatal accident claims (see Chapter 20);
n fraud or undue influence claims (see Chapter 13);
n defamation claims (see Chapter 21);
n claims for malicious prosecution or false imprisonment (see Chapter 21);
n claims against the police, and where a will is contested.
..
EL_C05.qxd 3/26/07 10:40 AM Page 181
CIVIL PROCEDURE 181
Our claimant will, because of the size of the claim and the possible complexity of expert
evidence, normally be heard in the High Court as a multi-track case.
Striking out
Before proceeding to the mechanics of allocation, it should be noted that the court has power
to strike out a claim (or a defence) rather than allocate it for trial. Rule 3 of the Civil
Procedure Rules 1998 applies and, for example, all or part of a statement of case (or defence)
can, if it discloses no reasonable grounds for bringing or defending the claim, be struck out.
5
If, e.g., the claim is that Fred gave his friend Freda bad advice on the purchase of investments
while they were having a drink in the local pub, a claim by Freda in negligence will normally
be struck out because it is unlikely that in the casual circumstances of the case there is a duty
of care owed by Fred to Freda. This is essential if a claim in negligence is to have a chance of
success, and represents a common reason for striking out. The requirement of a duty of care is
considered in detail in Chapter 21. Equally, a defence prepared without legal advice which
said merely ‘I deny I owe the money’ would be struck out.
The court may, itself, strike out or it may do so on the application of a party. Where a
claim is struck out, the claimant will either abandon his claim or see if it can be based on
some other principle(s) of law. Where a defence is struck out, the claimant can apply to the
court for judgment, though he may have to wait for up to three days if the court gives the
defendant time to submit a full defence.
Allocation – generally
This next stage of case management begins where a defence has been filed. On receipt of a
defence, the court serves each party with an allocation questionnaire. The parties must return
it within 14 days and pay a fee. It is desirable that the parties’ lawyers co-operate in the com-
pletion of the questionnaires.
The allocation form

The form will ask the parties whether they wish for a stay of proceedings (for up to one
month) to try to settle the case without an action in court. The general principle of the Civil
Procedure Rules 1998 is for out of court settlement wherever possible. The court will extend
the time if any of the parties so requests for a period of four weeks, but further extensions
may be granted.
The parties are then asked under the questionnaire which track they consider to be the
most suitable for the case. As we have seen, the value of the claim is an important factor. In
this connection, where there is a counterclaim, the highest of the value of the claim and
counterclaim is taken. Thus, where the claim is for £12,000 but there is a counterclaim for
£25,000, the value of the counterclaim governs the case.
Where the allocation questionnaire is not filed

The position is broadly as follows:
n If all parties fail to file. Here the judge will, after the 14-day filing period, order that all
claims and counterclaims be struck out unless the questionnaires are filed within three days.
n If some only of the parties fail to file. Here the court will allocate on the information
available, or will call an allocation hearing where more information is required and then
allocate the case. A party not attending the allocation meeting may be required to meet
the costs of any party who has attended it.
.. ..
EL_C05.qxd 3/26/07 10:40 AM Page 182
Allocation to track
Claims not exceeding £5,000 will normally be allocated to the small claims track. They will
normally be heard in the county court by a district judge, with appeal only where there is a
serious irregularity affecting the proceedings, to a circuit judge unless a circuit judge hears the
case when there may be an appeal to a High Court judge. A serious irregularity could exist
where the district judge had, e.g., failed to allow a party to cross-examine a witness.
Claims over £5,000 but not exceeding £15,000 will normally be allocated to the fast track
where the trial will take place within 30 weeks of allocation. The length of the trial will be no
more than one day and there is a cap on lawyers’ advocacy costs.
Where the claim is over £15,000, it will normally be allocated to the multi-track.
However, the track allocation is not purely a matter of the size of the claim and a request
can be made at the allocation stage for allocation to a track that is not the normal one. A
request for a different allocation may be made by the lawyer representing a party where, e.g.,
he or she submits that the trial will last for two days because of a counterclaim and the need
for oral expert evidence on the matter of liability. This could move a claim for more than
£5,000 but less than £15,000 from the fast track to the multi-track.
The case management conference

Where the case has been allocated to the multi-track, the court:
n may give directions as to the management of the case and set a timetable for the various
stages to be completed before the trial;
n alternatively, it may fix a case management conference or a pre-trial review or both to
consider matters such as which documents should be disclosed and what expert evidence
can be reasonably required. The court will fix a trial date or a period of time in which it is
to take place. There is no restriction of 30 weeks as in the fast track cases.
Pre-trial review
A pre-trial review will be necessary in multi-track cases if they deal with complex matters
involving numerous parties and/or are likely to last for a significant period of time, to
ensure that all conference issues have been dealt with. The judge (usually the trial judge) will
consider the updated cost estimates and set a budget and a final programme for the trial,
including parameters for its length.
Pre-action protocols
These are, in effect, codes of practice for various types of claim and, in general, they provide for
more contact and discussion between the parties from the beginning of the dispute so that
they can better cope in general and more quickly with, e.g., the case management conference.
Up to now, protocols have been issued for guidance, for example, in personal injury cases and
medical negligence, construction and engineering disputes, defamation and professional neg-
ligence (see p 568), but others will follow. A feature of the first protocols is that a joint expert
acceptable to the parties should be instructed. This saves much time (and sometimes confusion)
which can be the case where a number of experts appear to give evidence for the parties.
Allocation of track and court for our case example

Because our case example, in terms of claim and defence, involves the law of contract, particu-
larly the sale of goods and exclusion clauses, it is not on the list of cases suitable for the High
..
EL_C05.qxd 3/26/07 10:40 AM Page 183
CIVIL PROCEDURE 183
Court, but the value of the claim, i.e. £100,000, takes it to the High Court in the Queen’s
Bench Division.
Court enforcement of timetables

Two recent cases indicate in relation to experts and their availability, that the courts are
stressing the need to keep to timetables when fixing cases for hearing and that the expert
5
witness, who is a professional person, owes an overriding duty to the court and not merely
to his client. In Linda Rollinson v Kimberley Clark Ltd [1999] 7 Current Law 37 the claim
was for damages for an injury sustained at work. The defendant sought to change the
dates fixed for the trial because one of its expert witnesses was not available. The Court
of Appeal dismissed the application. It was wholly inappropriate, said the court, for a
solicitor to instruct an expert without regard to the expert’s availability. Again, in Matthews v
Tarmac Bricks and Tiles Ltd [1999] 7 Current Law 55 the defendant had caused difficulties
by failing to give details of when expert witnesses would be available. The matter was,
nevertheless, listed for trial. The Court of Appeal dismissed an appeal by the defendant.
Lord Woolf’s judgment includes a further point: that those holding themselves out as expert
witnesses should be prepared to arrange or rearrange their affairs to meet the requirements
of the court.
The trial
The parties and their witnesses will assemble for the trial.
Attendance of witnesses
As regards witnesses (except expert witnesses), it is not wise to assume that they will attend
voluntarily, and their attendance should be encouraged by service on them of a witness sum-
mons. This is issued by the court and it requires a witness to attend court and give evidence
or produce documents to the court. It should be served at least seven days before attendance
is required. Failure to comply with a witness summons is a contempt of court punishable by
fine and/or imprisonment.
Trial bundles and skeleton arguments

Except where the court rules otherwise, the claimant must prepare and file in court a trial
bundle not more than seven days nor less than three days before the start of the trial. The
bundle will include the documents relevant to the trial such as the claim form and state-
ments of case and witness statements, together with a case summary indicating what points
are or are not in issue and the nature of the argument on disputed matters. This summary is
referred to in some courts, such as in the Chancery Division, as a skeleton argument.
The contents of the bundle should be agreed between the parties and if agreement cannot
be obtained on all of the contents, a summary of points of difference should be included. Either
party may, e.g., not agree on the inclusion of a document or documents. Bundles should be
supplied for the trial judge, all the parties and for the use of witnesses. The advocates can
then refer to the contents of the bundle as required during the trial.
.. ..
EL_C05.qxd 3/26/07 10:40 AM Page 184
Order of proceedings
Counsel for the claimant may, if allowed by the judge or the timetable for the case, make an
opening speech giving the background to the case and the facts which are in issue. If such an
opening speech is allowed at all, it must be very concise. The court may, however, proceed with
the evidence, and, if so, the case begins with the claimant and his witnesses giving evidence.
The court requires that evidence be given on oath (or affirmation by a person who objects
to swearing on the Bible). Documentary evidence such as a letter is not normally admissible
and the writer must be called and give evidence on oath unless it is difficult or impossible to
call him.
As in a criminal trial counsel for the claimant cannot ask his own witnesses ‘leading ques-
tions’. A leading question suggests the answer, and, in our case, could consist of asking the
claimant ‘Did the defendant supply you with seed which was not of satisfactory quality or fit
for the purpose?’ An acceptable question to elicit facts would be: ‘Tell the court the condition
of the seed supplied to you by the defendant.’ Nor is hearsay evidence admissible unless the
provisions of the Civil Evidence Act 1995 are followed, which involves giving the other party
notice of the intention to introduce hearsay evidence and, if requested, giving particulars
of it. Hearsay evidence may be an oral or written statement made outside of court which
is repeated by a party or a witness in order to prove that it is true. Thus, in our case, if the
claimant were to say in evidence: ‘My neighbour, Joe Bloggs, bought seed from the defend-
ants and he told me he had the same problems as I did’, this evidence should be given by
Joe Bloggs since, if it is not, there is no chance for the defendant’s advocate to cross-examine
Joe Bloggs as he is not there. After the examination-in-chief the witnesses for the claimant
may be cross-examined by counsel for the defence, the object being to discredit their
evidence. After cross-examination counsel for the claimant may re-examine a witness.
Sometimes a witness will give an account of events which is totally different from that in
the statement he gave to the claimant’s solicitors; counsel for the claimant is not allowed to
discredit his own witness unless the judge gives leave as he may do if he feels that the witness
is prejudiced against the person who called him. Such a witness is called a hostile witness and
his examination-in-chief is more like a cross-examination since it is designed to discredit his
evidence.
At the end of the claimant’s case it is the turn of counsel for the defence to produce
evidence to refute it. The claimant does not have to prove his case beyond a reasonable
doubt, as the prosecution in a criminal trial does, but must show that what he alleges is prob-
ably the right version, i.e. proof on a balance of probabilities. The court must be satisfied that
it is more likely than not (or more probable than not) that the relevant fact is established (R v
Swaysland, The Times, 15 April 1987).
The defence need not necessarily produce evidence. If the claimant’s case is weak the
defence may submit to the judge that there is no case to answer. In practice such a submission
would very rarely be made because the court will usually ‘put the defendant to his election’.
This means that the judge will only hear the submission of no case to answer if the defendant
elects not to call evidence to support his case. The judge is not forced to do this and may hear
a submission of no case to answer; if he finds that there is a case to answer he may allow the
defence to continue its case. Otherwise, the judge may allow the defence to make its submis-
sion of no case to answer and if the judge agrees, he will enter judgment for the defendant. If
he does not, then, in effect, the claimant succeeds and will have judgment entered in his
favour. Counsel for the defence can ask the judge to clarify the position before proceeding or
not proceeding with the reasons why it is alleged there is no case to answer.
If there is no submission of no case to answer, the defence will call its witnesses who will be
examined, cross-examined and re-examined.
..
EL_C05.qxd 3/26/07 10:40 AM Page 185
CIVIL PROCEDURE 185
Counsel for the defence then makes a closing speech showing how in his view the claimant’s
case has failed. The claimant’s counsel then presents his view. Both will give an indication of
what they think the damages should be. Either party may make a final Response, as it is
called. This is on a matter of law only and may be with leave of the judge or by his invitation.
Thus, a party may say, ‘My learned friend referred to the case of Bloggs v Snooks on which
I have not addressed you. I would be grateful if you would allow me to address you on that
point.’ Sometimes the judge will say to a party, ‘What do you say about [a point raised by the
other party in closing his case], Mr Taylor [counsel]?’
The judge will have remained largely silent during the trial, though he may have asked for
5
an obscure point to be clarified. In fact a judge should not be too ‘active’ and interfering and
if he is his decision may be overturned in an appeal court. The classic statement of the trial
judge’s function was given by Lord Denning in a civil appeal, Jones v National Coal Board
[1957] 2 All ER 155 where he said:
The judge’s part in all this is to hearken to the evidence, only himself asking questions of
witnesses when it is necessary to clear up any point that has been overlooked or left
obscure; to see that the advocates behave themselves seemly and keep to the rules laid
down by law; to exclude irrelevancies and discourage repetition; to make sure by wise inter-
vention that he follows the points the advocates are making and can assess their worth;
and at the end to make up his mind where the truth lies.
The statement is not confined to civil trials though in a criminal trial ‘the truth’ is a matter
for the jury.
After the closing speeches, the judge considers the evidence and will then give judgment stat-
ing the grounds on which it is based, though if a judge requires more time to consider the case
he may reserve judgment and give it at a later date. The judge will also decide the amount of
damages unless there is a jury as there may be in an action for defamation (see below).
Civil jury
Section 69 of the Supreme Court Act 1981 (becomes Senior Courts Act 1981) gives the court
discretion with regard to juries in civil cases, though a jury must be empanelled at the request
of the defendant where fraud is alleged, or at the request of either party in cases of libel, slander,
malicious prosecution and false imprisonment. If the trial is likely to involve long and
detailed examination of documents or accounts or scientific evidence, the court has the
discretion to refuse a jury trial even in these cases. There is also an exception in the case of
libel and slander under the Defamation Act 1996 which introduces a summary (or fast track)
procedure which gives sweeping powers of disposal to the court and provides for assessment
of damages by a judge without a jury whether or not the parties consent (see further Chapter
21). Not all defamation cases are suitable for disposal by this ‘fast track’ method and trials
for libel and slander in front of a jury will continue in those cases. In particular, libel actions
involving issues or persons of national importance should be tried with a jury, even if com-
plex documents are involved (Rothermere v Times Newspapers [1973] 1 All ER 1013). The
percentage of jury trials in civil actions is very small and outside of the above areas the
court is not likely to exercise its discretion to allow a jury. In H v Ministry of Defence (1991)
The Times, 1 April, for example, the Court of Appeal held that it was normally inappropriate
to order trial by jury for the assessment of damages in actions for personal injuries since
the damages were based on consideration of conventional scales of damages known to the
judiciary but not to a jury.
Juries are not used in Admiralty cases but there is a power to summon a jury in the
Chancery Division. This power is, in practice, neglected.
.. ..
EL_C05.qxd 3/26/07 10:40 AM Page 186
A civil jury consists of 12 persons, though the parties may, in a particular case, agree to pro-
ceed with less. There is a right, under s 66 of the County Courts Act 1984, to ask for a jury of
eight persons in a county court, where the case is an appropriate one, as where, for example,
fraud, or malicious prosecution, or false imprisonment are alleged. These rights are rarely
exercised. In addition, a coroner must, under s 8(3) of the Coroners Act 1988, summon a jury
of 7 to 11 persons in some cases, e.g. where the deceased was in police custody, or death was
the result of an injury caused by a police officer in the purported execution of his duty, and
may accept the verdict of the majority if the dissentients are not more than two. Where there
is no jury the judge determines the facts as well as the law.
Apart from a coroner’s jury, a civil jury formerly had to be unanimous. However, under
s 17 of the Juries Act 1974, the verdict of the jury in civil proceedings in the High Court need
not be unanimous if:
(a) where there are not less than 11 jurors, 10 of them agree on the verdict; and
(b) where there are 10 jurors, nine of them agree on the verdict.
The verdict of a jury of eight persons in a county court need not be unanimous if seven of
them agree on the verdict. The two hours’ deliberation necessary for a criminal jury before a
majority verdict is permissible is not required for a civil jury. It is enough if it appears to the
court that the jury had such period of time for deliberation as the court thinks reasonable,
having regard to the nature and complexity of the case. In civil cases the court may accept a
verdict by any majority so long as both parties consent (s 17(5) of the 1974 Act).
Appeals
Consideration has already been given in Chapter 2 to the rights of appeal in civil cases.
Enforcing a judgment
Let us assume that the judge has given judgment to our claimant on his claim for a sum of
money thought appropriate in the circumstances of the case. Let us suppose that the defend-
ant is not prepared to pay these sums. How can a party to an action get the money the court
has awarded him? Some of the more important methods available to judgment creditors are
set out below.
(a) Execution. A claimant can ask the High Court to institute execution, which orders the
sheriff’s officer of the county in which the debtor’s goods are located to seize through bailiffs
the defendant’s goods and sell them by public auction in order to pay the claimant. In the
county court there is a similar procedure but it is based upon a warrant of execution issued to
the court bailiff.
( b) The charging order. The court may make such an order over, say, the defendant’s
land or other property such as shares. If the money is not paid the claimant can have the
property sold and recover his damages from the proceeds of sale. The Charging Orders Act
1979 defines the type of property in respect of which a charging order may be made. The
1979 Act widened the scope of property which may be made the subject of an order so
that, for example, a charging order may now be made over a debtor’s beneficial interest
under a trust.
..
EL_C05.qxd 3/26/07 10:40 AM Page 187
CIVIL PROCEDURE 187
(c) The garnishee order (now called a third-party debt claim for procedural purposes). If
the creditor knows that the debtor is owed money by a third party – where, for instance,
there is a credit balance on the debtor’s bank account or building society account – the cre-
ditor may wish to divert the payment away from the debtor to himself. This can be done
by applying to the court for a garnishee order nisi. The order is addressed to the third party,
e.g. the bank, forbidding it to pay the debt to the debtor and requiring a representative to
attend before the court to show why the money (or part of it) should not be paid over to the
judgment creditor.
The order is served at least seven days before the next court hearing on the matter and if at
5
that hearing no cause has been shown as to why payment should not be made to the judg-
ment creditor, the court can make a garnishee order absolute, requiring payment by the bank
to the judgment creditor.
(d) Attachment of earnings. Where the defendant is in employment the claimant can
obtain an attachment of earnings order through the county court. Under such an order the
defendant’s employer is required to deduct a specified sum from the defendant’s wages or
salary and pay the money into court for the claimant. The court sends the money to the
claimant. Attachment is not available against the profits of the self-employed.
It will have been noted that, so far as (a) to (d) above are concerned, each of the ways of
enforcing the judgment is aimed at a different aspect of the defendant’s finances, that is:
(i) goods owned (order and warrant of execution);

(ii) wages or salary (attachment of earnings);
(iii) savings (garnishee order);
(iv) property (charging order).
Details of a defendant’s finances can be obtained by what is known as ‘oral examination’

through the court.
(e) Equitable execution. The court may appoint a receiver where, for example, the defendant
owns property. The receiver can take over income such as rent and apply it in order to pay
the claimant. The judgment creditor of a person who is a partner can, under s 23 of the
Partnership Act 1890, obtain an order charging that partner’s interest in the partnership
property and profits with payment of the judgment debt. If the judgment creditor feels that
he will experience difficulty in getting the firm to pay over, e.g. the profit share of the partner
concerned, he can ask for the appointment of a receiver.
The enforcement of a non-money judgment, such as an injunction, is by means of the
offence of contempt of court. If a defendant fails to obey an injunction, he is in contempt of
court and the court may, if the claimant applies, punish him. It may make, for example, an
order for committal under which if the defendant still refuses to comply with the injunction,
he may be imprisoned. Alternatively, the court may issue a writ of sequestration. This writ,
which is directed by the court to commissioners, usually four in number, commands them to
enter the lands and take the rents and profits and seize the goods of the person against whom
it is directed. Thus, the court can in effect take control of the defendant’s property until the
defendant has complied with the court’s order.
(f ) Bankruptcy or insolvency proceedings. Where as here the debt exceeds £750, bank-
ruptcy or company insolvency proceedings could be considered. This would at least ensure
that an insolvency practitioner (generally an accountant) would be put in charge of the
debtor’s assets and ensure a fair and legal distribution of the assets between creditors as well
as effectively preventing the debtor from dealing with them. These procedures are not avail-
able to a person who has registered a charging order because by so doing he has made himself
.. ..
EL_C05.qxd 3/26/07 10:40 AM Page 188
a secured creditor and only unsecured creditors can petition for bankruptcy or company
winding-up.
Insolvent individuals and companies may try to avoid bankruptcy or liquidation by
proposing to creditors, who must agree by a majority of three-quarters in value, a voluntary
arrangement. This will not get the creditor all his money but will get him at least some of it.
The arrangement operates under a supervisor who is usually an accountant and allows for so
many pence in the pound to be paid over an agreed time span.
Enforcement outside of the UK

In these days of global trade, a claimant may wish to enforce an English judgment abroad.
There are two situations as follows:
n Enforcement within the EU. Article 26 of the Brussels Convention of 1968 was incorpor-
ated into English law by the Civil Jurisdiction and Judgments Act 1982. The Convention
requires all member states to recognise and enforce the judgments of other member states.
n Enforcement outside the EU. The Administration of Justice Act 1920 and the Foreign
Judgments (Reciprocal Enforcement) Act 1933 apply to the countries covered, which are
mainly Commonwealth states. Elsewhere as, e.g., in the USA, it is a matter for the courts of
the country where enforcement is sought.
Enforcing a judgment – reform

In March 2003 the government published a White Paper entitled Effective Enforcement that is
designed to introduce in due course legal rules to improve the process for recovering civil
debt. The proposals include most importantly:
n a new court order known as a data disclosure order that would oblige debtors to give their
creditors personal information such as their full real name, address and credit details. The
government feels that this will make it easier for creditors to track down those who go
missing when ordered to pay their debts. The orders will strike a balance between the
interests of creditors and respect for individuals’ privacy;
n in regard to attachment of earnings, the system for recovery from pay packets is to be made
faster, fairer and more effective, though there will be no application of a similar remedy to
operate against the incomes of the self-employed. There will be powers for the courts to
track down and redirect the orders against those who change their jobs;
n there are also proposals to clean up the image of the civil enforcement industry by licensing court
bailiffs and freelance operators who should be able to offer debtors advice on court orders
and discuss repayment options rather than operating as ‘hired heavies’ as some do;
n there are proposals to streamline charging orders and to protect vulnerable individuals who
suffer anxiety from believing that their homes will of necessity be repossessed.
There is no timescale for any required legislation.
..
EL_C06.qxd 3/26/07 10:41 AM Page 189
6
THE LAW-MAKING PROCESS I:
UK LEGISLATION
The word ‘source’ has various meanings when applied to law. One may treat the word
‘source’ as referring to the historical or ultimate origins of law and trace the development of the
common law, equity, legislation, delegated legislation, custom, the law merchant, canon law
and legal treatises, as we have done in Chapter 1. But on the other hand, one may treat the
word ‘source’ as referring to the methods by which laws are made or brought into existence, and
consider the current processes of legislation, delegated legislation, judicial precedent and, to a
limited extent, custom. In this chapter we shall be concerned with the methods by which laws
are made, i.e. the active or legal sources of law and in particular the laws which are made by
the Westminster Parliament and how they are interpreted by the judiciary.
The United Kingdom

There are within the United Kingdom two parliaments and two assemblies. However, for our
purposes, there is one parliament and one assembly to consider. This text is concerned with
the law of England and Wales and so no reference is made to the powers of the Scottish
Parliament or the Northern Ireland Assembly.
The Welsh Assembly

The Government of Wales Act 1998 provides for an Assembly for Wales. It creates for the first
time an all-Wales elected government. It has 60 members sitting in Cardiff. Elections are held
every four years on a basis of proportional representation. Forty members are elected from
Welsh Westminster parliamentary seats with a top-up of 20 from five electoral regions, four
from each. The Assembly has a budget of several billion pounds (though only about one-half
of the Scottish budget) and there are no taxing powers. Its legislative powers are currently con-
fined to subordinate legislation for Wales. The Government of Wales Act 2006 will from May 2007
give the Assembly power to make statutes for Wales which, if approved by Parliament, will
become part of the statute book. The First Minister will be appointed by the Queen following
nomination by the Assembly. The Queen will also approve the First Minister’s choice of other
ministers, bringing the governance of Wales more into line with the Westminster model.
It has control over:
n health and education;
n training policy;
..
EL_C06.qxd 3/26/07 10:41 AM Page 190
n local government and social work;

n housing and planning;
n economic development and financial assistance to industry;
n tourism;
n some aspects of transport;
n environment and national heritage;
n agriculture, forestry and fisheries;
n food standards;
n the arts.
The members of the Assembly are called Assembly Members (or AMs).
The Westminster Parliament

The Westminster Parliament consists of two chambers: the House of Commons and the
House of Lords.
The House of Commons

This consists of 659 members, called MPs, who meet in London at Westminster. Elections are
held at least every five years and all MPs are elected on a first-past-the-post basis. There is,
in theory, a five-day week, but for MPs with constituencies outside London it is, in effect, a
four-day week to allow them to return to those constituencies to conduct, e.g., surgeries for
constituents. Most business is conducted between 11am and 7pm, except on certain days
when debates start at 9.30am. The Commons sits for between 30 and 35 weeks a year and has
a budget well in excess of £300 billion. Perhaps obviously, it has taxing powers limited only
by the sanction that the electorate would not return a Parliament which adopted draconian
taxing policies.
The House of Lords

This is the Second Chamber of Parliament and used to consist, in the main, of hereditary
peers, though under the Life Peerages Act 1958 there has been added a number of persons
from various walks of life who hold life peerages but whose descendants have no right to a seat
when the life peers die, as the descendants of hereditary peers have. These peers are called the
Lords Temporal. Then there are the Lords Spiritual, e.g., the Archbishops of Canterbury and
York and certain other bishops of the Church of England. From 2009, when the Supreme
Court becomes effective, the Law Lords will become the first judges of the Supreme Court but
subsequently the link between that court and the House of Lords will end. In the meantime,
the Law Lords do not take part in the legislative functions of the House of Lords.
Reform of the House of Lords

The system of hereditary peers was deemed to be undemocratic in that these peers followed
on taking a seat in the Lords by inheritance, and were never subjected to election. There are
also some arguments to suggest that the life peerage system is undemocratic in that it has
been used by prime ministers to elevate to a life peerage certain of those who have lost an
election, in some cases where they have lost a subsequent by-election or, in one classic case,
where the life peer had as prospective MP lost two subsequent by-elections! In other words,
having been rejected by the people once or even twice or three times, the ex-MP returned to
the legislature via a life peerage.
The House of Lords Act 1999 received the Royal Assent on 11 November 1999. It effects
the removal of the right of hereditary peers to sit and vote in the Lords. For the time being,
..
EL_C06.qxd 3/26/07 10:41 AM Page 191
THE LAW-MAKING PROCESS I: UK LEGISLATION 191
75 have been elected by their peers to remain until further reforms are agreed. The
Conservatives won 42 seats, the crossbenchers 28, the Liberal Democrats three and Labour
two. The proposals of the Royal Commission under Lord Wakeham were:
n a new 550-member (there are currently some 700) mainly nominated, partly elected second
chamber;
n three options for the number of elected members – 65, 87 or 195;
n election through a regional voting system on the basis of proportional representation;
n an appointments commission to select suitable figures and maintain the political balance
n
of the chamber;
a minimum 20 per cent of independent crossbenchers;
6
n members to receive a daily attendance rate rather than expenses;
n increased powers to delay secondary legislation, e.g. statutory instruments, and to oversee
constitutional legislation;
n the chamber’s link with the peerage to end;
n representation from all Christian denominations and non-Christian faiths;
n the Law Lords will continue to sit in the chamber.
The above proposals have not been implemented but a committee of MPs and peers was
formed and charged by the Prime Minister to put together a further compromise on Lords’
reform. However, the committee reached the conclusion that there was no point in continuing
its complicated work after the Prime Minister expressed his preference for a fully appointed
second chamber. Accordingly, the committee decided to wind itself up. In July 2003 the gov-
ernment stated its intention to put in place a fully appointed (not voted) second chamber. The
government has committed itself to removing the remaining hereditary peers and keeping
the rest of the chamber much as it is. The government statement is as follows:
There is no consensus about the best composition for the second chamber. For the time
being the Government will concentrate on making the House of Lords work as effectively
as possible in fulfilment of its important role. It remains the Government’s policy, as set
out in its White Paper in November 2001, that the remaining hereditary peers should be
removed from the House.
The Department for Constitutional Affairs has undertaken to reform the Appointments
Commission that handles new peerages and look again at the matter of how long a peer
should serve in the House.
The Westminster Parliament has control of:
n foreign policy;
n defence and national security;
n the civil service;
n stability of fiscal economic and monetary system;
n border control;
n drug policy;
n common markets for UK goods and services;
n electricity, coal, oil, gas and nuclear energy;
n transport safety and regulations;
n social security policy and administration;
n employment legislation;
n abortion;
n broadcasting;
n equal opportunities.
..
EL_C06.qxd 3/26/07 10:41 AM Page 192
The Westminster Hall debates

The House of Commons has another chamber sited in the Grand Committee Room off
Westminster Hall. It sits in the morning and is designed to be non-confrontational and a
forum for a reasoned discussion on select committee reports and to allow MPs to raise issues
relating to their constituencies by seeking to get them on the agenda. Instead of the face-to-face
arrangement of the Commons benches, this parallel chamber seats MPs in a semi-circle. The
proceedings are presided over by the deputy speaker and the quorum is three. About
one-and-a-half hours are given to a topic and cover such subjects as police numbers and
issues of law and order in rural areas, together with ancient woodlands and tourism. The list
is potentially endless.
The Westminster Hall debates have become more popular in recent times and sometimes there
are more MPs at these debates than in the Commons chamber which of course is seldom well-
attended except where matters such as the Budget are considered and for Prime Minister’s
Questions or where an international crisis is looming. In particular, debates have been initiated
by the opposition parties and in terms of business MPs have used the system to initiate
debates on, e.g. the government’s action in putting Railtrack into the insolvency procedure of
administration – somewhat hurriedly some thought, to the disadvantage of its shareholders.
From now on, in this and other chapters of the text, a reference to ‘Parliament’ means the
Westminster Parliament.
Future developments
The Regional Assemblies (Preparations) Act 2003 received the Royal Assent on 8 May 2003.
It makes provision for the holding of referendums about the establishment of elected
assemblies for regions of England (except London). It implements the first stage of the White
Paper, Your Region, Your Choice: Revitalising the English Regions, May 2002. It could lead to the
setting up of assemblies in e.g. the North-East, the West Midlands and the South-West, among
other regions. The Act does not itself permit the creation of elected regional assemblies. This
will require further legislation.
Types of Bills
A session of Parliament normally lasts for one year commencing in October or November.
During that time, a large number of Bills become law, most of which are government Bills. An
Act of Parliament begins as a Bill, which is the draft of a proposed Act. The government is
formed by the parliamentary party having an overall majority, or at least the greatest num-
ber, of members in the House of Commons, or more rarely by a formal coalition of, or more
informal arrangement between, two or more parties who between them can command such a
majority. The government is led by a Prime Minister who appoints a variety of other Min-
isters, such as the Chancellor of the Exchequer, the Home Secretary, the Foreign Secretary,
and others to manage various departments of state. A small group of these Ministers, called
the Cabinet, meets frequently under the chairmanship of the Prime Minister and formulates
the policy of the government. An important part of this policy consists of presenting Bills to
Parliament with a view to their becoming law in due course. Such Bills are usually presented
by the Minister of the department concerned with their contents.
Queen’s Speech
The legislative intentions of the government are given in outline to Parliament at the com-
mencement of each session in the Queen’s Speech. This is read by the Queen but is prepared
..
EL_C06.qxd 3/26/07 10:41 AM Page 193
by the government of the day. Most government Bills are introduced in the House of
Commons, going later to the House of Lords and finally for the Royal Assent. However, some
of the less controversial government Bills are introduced in the House of Lords, going later to
the Commons and then for the Royal Assent. Money Bills, i.e. those containing provisions
relating to finance and taxation, e.g. the annual finance Bill, and other Bills with financial
clauses must start in the Commons.
Private members’ Bills

Members of either House whether government supporters or not have a somewhat restricted 6
opportunity to introduce private members’ Bills. Such Bills are not likely to become law unless
the government provides the necessary parliamentary time for debate. Some, however, survive
to become law – for example, the Murder (Abolition of Death Penalty) Act 1965. Those that
are lost usually fail to be debated fully because influential and anonymous objectors work
behind the scenes to ensure that they are taken towards the end of the session when parlia-
mentary time is at a premium. In addition, the severe restriction of debating time for private
members’ Bills makes such time as is available an ideal stamping ground for the determined
filibuster who wishes to talk the Bill out. In spite of all this, many more private members’
Bills have reached the statute book in recent times.
Prorogation and its effect

A session of Parliament is brought to an end by the Monarch by prorogation and a Bill which
does not complete the necessary stages and receive the Royal Assent in one session will lapse.
It can be introduced in a subsequent session but must complete all the necessary stages again.
This lapse is not, however, inevitable since there is a procedure under which the government
of the day can by negotiation with the Opposition allow a Bill to carry on with its remaining
stages in the next session. This procedure was used, e.g., with the Financial Services and
Markets Act 2000 when it was at the Bill stage. The Bill was of great length and dealt with
fundamental changes in the regulation of the financial services industry and the City of
London as a financial market. By agreement it was carried over after the end of the 1998/9
session to the 1999/2000 session in order to complete its stages. Bills also lapse when
Parliament is dissolved prior to a General Election. The above provisions do not apply to private
Bills (see below) which because of the costs involved in promotion can complete their remain-
ing stages in a new session. The sittings of Parliament within a session are divided by periods
of ‘recess’. Bills do not lapse when Parliament goes into recess.
Public and private Bills

Bills are also divided into public and private Bills. Public Bills, which may be government or
private members’ Bills, alter the law throughout England and Wales and extend also to
Scotland and Northern Ireland unless there is a provision to the contrary. Private Bills do
not alter the general law but confer special local powers. These Bills are often promoted by
local authorities where a new local development requires compulsory purchase of land for
which a statutory power is needed. Enactment of these Bills is by a different parliamentary
procedure.
The Speaker of the House of Commons rules whether a Bill is public or private if there
is doubt as where, e.g., the Bill might affect areas beyond that of the local authority
concerned, as would be the case if a seaport authority forbade the export of live animals
from the port.
..
EL_C06.qxd 3/26/07 10:41 AM Page 194
Enactment of Bills
A public Bill and a private members’ Bill follow the same procedure in Parliament. These Bills
may be introduced in either House, though, as we have seen, a money Bill, which is a public
Bill certified by the Speaker as one containing provisions relating to taxation or loans, must
be introduced in the Commons by a Minister and not a private member. The following pro-
cedure relates to a public or private members’ Bill introduced in the Commons.
The various stages

On its introduction the Bill receives a purely formal first reading. Only the title of the Bill
is read out by the Clerk of the House. The purpose of this stage is to tell members that the
Bill exists. It is then printed and published. Later it is given a second reading, at which
point its general merits may be debated, but no amendments are proposed to the various
clauses it contains. There is an alternative procedure for the second reading stage of
Public Bills in the Commons, which is designed to save parliamentary time. A Minister may
move that the Bill be referred to a Standing Second Reading Committee of between 30 and
80 MPs. They report to the Commons recommending with reasons whether or not the
Bill should be read a second time. The report of the Committee must be put to the House
for a vote without debate or amendment. This procedure does not apply if 20 Members rise
in their seats to object. Private members’ Bills are automatically referred to the Second
Reading Committee.
The Second Reading Committee procedure has saved a lot of parliamentary time and
assisted the passing of many non-controversial Bills for which the government would other-
wise have had to find debating time. There is also a rule limiting speeches in second reading
debates in the Commons to 10 minutes which also saves time.
Having survived the second reading, the Bill passes to the Committee stage. Here details
are discussed by a Standing Committee chosen in proportion to the strength of the parties in
the House of Commons. The number of members varies but is in general between 20 and 30.
Amendments to the clauses are proposed, and, if not accepted by the government, are voted
on, after which the Bill returns to the House at the Report stage. The Committee mentioned
may be a Committee of the Whole House, if the legislation is sufficiently important. Certain
Bills in the Commons may be sent to a Special Standing Committee which is given power to
hear evidence from outsiders, thus following to some extent the procedure for private Bills
(see below).
At the Report stage the amendments may be debated, and the Bill may in some cases be
referred back for further consideration. It is then read for the third time, when amendments
may strictly speaking be moved but in practice only verbal alterations are taken.
After passing the third reading, the Bill is said to have ‘passed the House’. It is then sent
to the House of Lords where it goes through a similar procedure and must pass through
all stages successfully in the same session of Parliament. If the Lords propose amendments,
the Bill is returned to the Commons for approval. At one time the House of Lords had the
power to reject Bills sent up by the Commons. Now, under the provisions of the Parliament
Acts 1911 and 1949, this power amounts to no more than an ability to delay a public Bill
(other than a money Bill) for a period of one year; a money Bill may be delayed for one
month only (and see below). The supremacy of the Commons stems from the fact that it is
an elected assembly, responsible to its electors and coming periodically at intervals of not
more than five years before the public for re-election. The Lords may veto a private Bill and
have retained the power to reject a Bill which attempts to extend the duration of Parliament
beyond five years.
..
EL_C06.qxd 3/26/07 10:41 AM Page 195
Parliament Acts 1911 and 1949 – the procedure

The procedure involved where the Commons wishes, in effect, to pass legislation without the
consent of the Lords is as follows:
Money Bills. Where a money bill has passed the Commons, it shall receive the Royal Assent
without the approval of the Lords unless it has been passed by the Lords within one month
of being sent to the Lords, provided that the Bill was sent to the Lords at least one month
before the end of the relevant session.
Other public Bills. If a Bill has been passed by the Commons and then rejected in the Lords,
and in the next session of Parliament it is again passed by the Commons but the House of Lords 6
does not pass it without amendments (except those that are approved by the Commons),
the Commons has the power to send the Bill for the Royal Assent, despite the opposition by
the Lords. However, it is also provided that at least one year must have elapsed between the
second reading of the Bill in the Commons in the first session and the third reading in the
Commons in the second session.
As we have seen, the power of the Lords to veto any Bill which attempts to extend the life
of Parliament beyond five years remains.
Parliament Acts 1911 and 1949 – a challenge

A challenge to the validity of the Hunting Act 2004, which banned hunting with dogs,
reached the House of Lords, where an instructive judgment was given on the validity of Acts
passed into law without the consent of the Lords. The Hunting Act 2004 did not receive the
consent of the Lords (see R (Jackson and others) v Attorney-General [2005] 2 WLR 866).
The government contended that the 2004 Act was valid, since it was passed under pro-
cedures laid down in the Parliament Act 1911, as amended by the Parliament Act 1949. The
1911 Act was passed by the Lords largely because the King promised he would create, if neces-
sary, sufficient new peers who would support its passage through the Lords.
As we have outlined, s 2(1) of the 1911 Act provided that, after a period of two years had
elapsed, a Bill that had still not received the consent of the Lords, being a public Bill other
than a money Bill or a Bill to extend the maximum duration of a Parliament beyond five
years, could become an Act of Parliament without being passed by the Lords. The 1949 Act
amended the 1911 Act by reducing the period of two years to one year. The provisions of the
Parliament Act 1911 as amended were used to enact the 1949 Act.
The claimants seeking to make void the ban on hunting with dogs under the Hunting Act
2004 said that the 1911 Act was passed by the Lords and could only be lawfully amended
with the consent of the Lords. Thus, since the 2004 Act was passed under the amended 1911
Act, and since the amending Act of 1949 was unlawful, the 2004 Act was also unlawful.
Their Lordships did not agree. The basis of their ruling that the 2004 Act was valid was
based in the main on the fact that the Parliament Act 1949 was valid because it did not
fundamentally change the relationship between the Commons and the Lords. A Bill could,
as before, under the 1911 Act, be enacted without the consent of the Lords. It was merely
that the period in the procedure had been reduced from two years to one year. The Lords’
delaying power was maintained, but for a shorter period.
Other challenges to the Hunting Act 2004 were made in R (on the application of Countryside
Alliance and others) v Attorney-General (2005) The Times, 3 August (judicial review) and in the
House of Lords on appeal from a failed judicial review in the Divisional Court of Queen’s Bench
and the Court of Appeal in R (on the application of Jackson) and others v Attorney-General [2006]
1 AC 262. The claimants failed in both hearings and the Hunting Act 2004 remains valid.
..
EL_C06.qxd 3/26/07 10:41 AM Page 196
Private Bills – a judicial stage

The main difference between the enactment of a private Bill and a public Bill is that the com-
mittee stage of a private Bill may be judicial. Any person whose interests are specifically
affected by the Bill, normally in relation to property or business interests, may lodge a peti-
tion against the Bill in accordance with the procedure set out in Standing Orders. In such a
situation the Bill is referred to an Opposed Committee consisting of four MPs of all parties
appointed by the House. They must be entirely disinterested in a material sense, in the
matters with which the Bill is concerned. The Committee hears both the petitioner and the
promoter, who usually appear by counsel. If the petition succeeds the Bill is amended to take
account of it. There is no appeal against the decision of the Committee. Since this is a some-
what lengthy procedure, some statutes allow Ministers to grant special powers to local
authorities by what is called a Provisional Order. Such an order does not take effect unless
and until it is embodied (usually along with others) in a Provisional Order Confirmation Bill
which is passed by Parliament and given the Royal Assent. There are also radical proposals to
change the Private Act of Parliament procedure because the parliamentary timetable is
becoming clogged up by the number of these Bills, many of which are concerned, e.g., with
new powers for docks and harbours. The suggestion is that power of approval be given to
local authorities and/or public inquiries followed by a parliamentary debate only. This could
well be an improvement since public inquiries are more accessible than the Private Bill pro-
cedure though the above proposals have not, as yet, been taken further.
Royal Assent
When a Bill has passed through both the Commons and the Lords, it requires the Royal
Assent. It is not customary for the Monarch to consent in person, and in practice consent is
given by a committee of three peers, including the Lord Chancellor. The Royal Assent Act 1967
provides that an Act is duly enacted and becomes law if the Royal Assent is notified to each
House of Parliament, sitting separately, by the Speaker of that House or the acting Speaker.
The former Bill is then referred to as an Act or a statute, and may be regarded as a literary as
well as a legal source of law. However, an Act may specify a future date for its coming into
operation, or it may be brought into operation piecemeal by ministerial order. The courts
have no power to examine proceedings in Parliament in order to determine whether the pass-
ing of an Act or delegated legislation has been obtained by means of any irregularity or fraud.
British Railways Board v Pickin, 1974 – The courts and parliamentary

proceedings (21)
Short title – numbering and citation

It should be noted that, as well as having a title setting out what its objects are, each Act has,
under the provisions of the Short Titles Act 1896, a short title to enable easy reference to be
made. Each Act has also an official reference. The Law of Property Act 1925, is the short title
of an Act whose official reference is 15 & 16 Geo 5, c 20, which means that the Law of
Property Act 1925 was the twentieth statute passed in the session of Parliament spanning the
fifteenth and sixteenth years of the reign of George the Fifth.
The Acts of Parliament Numbering and Citation Act 1962 provides that chapter numbers
assigned to Acts of Parliament passed in 1963 and after shall be assigned by reference to the
calendar year and not the session in which they are passed. For example, the official reference
of the Sale of Goods Act 1979 is 1979, c 54.
..
EL_C06.qxd 3/26/07 10:41 AM Page 197
Statute law and case law distinguished

The essential differences between statute law and case law are apparent from the definition of
a statute. It is:
an express and formal laying down of a rule or rules of conduct to be observed in the future
by the persons to whom the statute is expressly or by implication made applicable.
Thus a statute openly creates new law, whereas a judge would disclaim any attempt to do so.
Judges are, they say, bound by precedent and merely select existing rules which they apply to
new cases (but see Chapter 7). A statute lays down general rules for the guidance of future
conduct; a judgment merely applies an existing rule to a particular set of circumstances. A
6
judgment gives reasons and may be argumentative; a statute gives no reasons and is imperative.
Delegated legislation
Modern statutes may require much detailed work to implement and operate them. In such a
case the Act is drafted so as to provide a broad framework, the details being filled in by
Ministers by means of delegated legislation. For example, much of our social security legisla-
tion gives only the general provisions of a complex scheme of social benefits and an immense
number of detailed regulations have had to be made by civil servants in the name of and
under the authority of the appropriate Minister. These regulations when made in the
approved manner are just as much law as the parent statute itself. This form of law is known
as delegated or subordinate legislation.
Advantages
A number of advantages are claimed for delegated legislation as follows.
(a) It saves Parliamentary time in that Ministers are left, with the civil service, to make the
detailed rules, Parliament concerning itself solely with the broad framework of the legislation.
(b) Speed. The Parliamentary procedure for enacting Bills is slow whereas rules and orders
can be put more rapidly into law, particularly in a time of national emergency.
(c) Parliament cannot foresee all the problems which may arise after an Act has become
law. Delegated legislation can deal with these if and when they arise.
(d) Delegated legislation is less rigid in that it can be withdrawn quickly by another stat-
utory instrument if it proves impracticable.
(e) The aptitude of the legislature is limited and experts in the departments of state can
better advise a Minister on the technicalities of a certain branch of law. It would be difficult
to give this kind of advice to the Lords or Commons as a whole.
Disadvantages
However, there are disadvantages as follows.
(a) Parliamentary control over legislation is undoubtedly reduced. However, the power to
make delegated legislation must be given by an Act of Parliament (sometimes referred to as
the enabling statute) and so Parliament is to that extent in broad control because it must pass
the enabling statute.
..
EL_C06.qxd 3/26/07 10:41 AM Page 198
Beyond that much depends upon what the enabling statute says about reference to
Parliament when instruments are made. There are different requirements and the inclusion of
one rather than another in an enabling statute does not appear to be based upon any
detectable principle.
The enabling Act may require:
(i) that the instrument be merely laid before Parliament. Where this is so, MPs and Peers
have no right to change it but laying before Parliament does, at least, inform them that
the instrument exists, and in any case there is a scrutiny committee. In some cases the
instrument is already in force. However, Members may ask Parliamentary questions
about instruments laid for information only;
(ii) that Parliament may annul the instrument, e.g. within 40 days of laying. Where this is
so a resolution of either House to annul the instrument is effective, but if there is no
such resolution the instrument passes into law. However, whether there is a debate lead-
ing to a resolution to annul, the instrument is entirely dependent upon the initiative of
an MP or Peer to engineer the debate since the government is not obliged to find time
for it;
(iii) that each House of Parliament must pass a resolution approving the instrument. Where
this is so, the government must obviously find time for a debate and a resolution approv-
ing the instrument must be made in each House, otherwise it will not become law;
(iv) that the instrument be laid in draft before Parliament and may only be issued if an
affirmative resolution is passed by each House in its favour;
(v) that the instrument be laid in draft without reference to affirmative resolutions, in
which case by s 6 of the Statutory Instruments Act 1946 it may be made law after a
period of 40 days if no resolution is passed during that period by either House against it.
It should be noted that if it is essential that an instrument comes into operation before
copies of it can be laid before Parliament, then it may do so provided notification is sent to
the Lord Chancellor and the Speaker of the House of Commons explaining why copies could
not be laid before the instrument came into operation.
There is a special procedure for what are called Deregulation Orders. Part I of the
Deregulation and Contracting Out Act 1994 gives power to amend or repeal by ministerial
order primary legislation, i.e. Acts of Parliament, that impose an unnecessary burden on busi-
ness. This somewhat extraordinary power is exercisable only after special scrutiny procedures
have been followed. The 1994 Act provides a two-stage process for the parliamentary scrutiny
of deregulation orders. A document containing the proposal is laid before Parliament under
s 3(3) of the Act in the form of a draft of the order, together with explanatory material; and
the Deregulation Committee in the Commons and the Select Committee on the Scrutiny
of Delegated Powers in the Lords have 60 days in which to consider and report on it. The
government then lay under s 1(4) of the 1994 Act a draft order, either in its original form or
amended to take account of the views of the two Committees, for approval by resolution of
each House. In the Lords a motion to approve a draft order can only be moved after the Lords
Committee has made a second report on it. Thus, although the power to repeal or amend an
Act of Parliament in this field rather than the requirement elsewhere to use another Act of
Parliament seems to some a potentially dangerous and undemocratic process, the controls as
listed above are very strict.
There are also other controls both by the judiciary and by Parliament itself (see below).
The 1994 Act has not been as successful as it might have been in removing red tape from
business, because the Act provides that proposed changes to simplify procedures must not
impose fresh burdens of any kind. If, therefore, it was decided to simplify an employment law
procedure currently not applying to, say, employers with 20 or fewer employees, then if the
..
EL_C06.qxd 3/26/07 10:41 AM Page 199
proposal to simplify would only work if the simplified proposals were extended to all employers
to save the complication of dealing with some employers as exceptions, it would not be pos-
sible to make the change because a new burden, albeit a simplified one, would be placed on
the relevant small employers. Parliament has expressed an intention to remove the restriction,
but it requires primary legislation and none is, as yet, forthcoming.
While on the matter of red tape, note can be taken of the Better Regulation Task Force that
was set up in 1997 and published its initial programme of work at the end of that year. The
task force is an independent advisory body appointed by a government Minister and the
Chancellor of the Duchy of Lancaster. Its terms are to advise the government on improving
the effectiveness and credibility of government regulation by ensuring that it is necessary, 6
fair, affordable and simple to understand and administer, taking particular account of small
businesses and ordinary people.
(b) It is said that there is too much delegated legislation so that it is difficult to know what
the law is, particularly in view of the fact that little publicity is given to statutory instruments
whereas most important Acts of Parliament are referred to at one time or another in the press.
The difficulty is that a defendant’s ignorance of the law is no excuse, though s 3(2) of the
Statutory Instruments Act 1946 protects a person in respect of a crime contained in a stat-
utory instrument if the instrument has not been published, unless it is proved that reasonable
steps have been taken for the purpose of bringing the content of the instrument to the notice
of the public or of persons likely to be affected by it or the person in fact charged. The section
does not protect if the instrument has been published but a particular defendant does not
know of its existence.
A way of dealing with the mass of delegated legislation is to introduce ‘sunset’ clauses into
regulations so that they would have to be reviewed or die after a specified period. This
method is used in the United States with some degree of success and the UK government is
looking at it and may introduce it here.
(c) The dangers of sub-delegation are on occasions quite real. One can find in some cases a
pedigree of four generations of instrument emanating from a statute as follows:
(i) regulations made under the statute;

(ii) orders made under the regulations;
(iii) directions made under the orders;
(iv) licences issued under the directions.
When this happens it does reduce very seriously the control by Parliament of the making of
new laws since Parliament would only see the parent statute and the first set of regulations.
Types of delegated legislation

In modern statutes delegated powers are exercisable by four main vehicles as follows:
(a) Statutory instruments. Most powers conferred on Ministers in modern statutes are
exercisable by ministerial or departmental regulations or orders, called collectively statutory
instruments.
( b) Orders in Council. Powers of special importance relating to constitutional issues, e.g.

emergency powers, are conferred on the Queen in Council. These powers are in fact exercised
by the Cabinet who are all Privy Councillors by means of an order in council.
(c) By-laws of local authorities. These are made by local authorities under powers given to
them in Acts of Parliament and require the approval of the appropriate Minister.
..
EL_C06.qxd 3/26/07 10:41 AM Page 200
(d) Rules of the Supreme Court and County Court. These are made by Rules Committees set
up by statute specifically to make rules concerning the practice and procedure of the courts.
The Rules Committees are made up of judges and senior members of the legal profession.
Judicial control
Delegated legislation takes effect as if it were part of the enabling statute. Therefore, it has
statutory force and, as we have seen, the courts cannot declare a statute ultra vires. However,
delegated legislation does not acquire statutory force unless it is intra vires, i.e. properly made
in accordance with the terms of the enabling Act. The courts can declare delegated legislation
ultra vires in this sense. There are two approaches to the ultra vires rule as regards delegated
legislation as follows:
(a) Substantive ultra vires. This means that the Minister has exceeded the powers given to
him in the parent statute. If a Minister is authorised to make regulations as to road traffic,
clearly if he purports to make regulations under the same parent statute concerning rail
traffic, they would be held by the courts to be ultra vires and invalid.
(b) Procedural ultra vires. This means that the instrument is invalid because the Minister
has failed to follow some mandatory procedural requirement specified in the parent Act. For
example, much social security legislation requires the Minister to consult various advisory
bodies before making rules and orders. If a rule or order was made without the necessary
consultation, then it would be ultra vires in procedural terms and invalid.
Hotel and Catering Industry Training Board v Automobile Proprietary Ltd,

1969 – Delegated legislation and ultra vires (22)
Henry VIII (or ouster) clauses

Sometimes a section of an Act will give a Minister or the Queen in Council very wide powers
so that it is difficult to say that any instrument made or decision taken under it is ultra vires.
These are referred to as ‘Henry VIII Clauses’ after the way in which that monarch used to leg-
islate in arbitrary fashion by a proclamation. A more modern expression is an ‘ouster clause’,
i.e. a clause attempting to prevent a decision being reviewed by the court. For example, s 4(7)
of the Parliamentary Constituencies Act 1986 provides that ‘The validity of any Order in
Council purporting to be made under this Act . . . shall not be called in question in any
legal proceedings whatsoever.’ It was at one time thought that the courts were powerless to
intervene to review any order made under such a provision. However, in more recent times
the courts have taken power to overcome ouster clauses by saying, in effect, that if the exer-
cise of such a power is not in accordance with the law, as where it is, e.g., ultra vires or made
by misinterpreting the power given, the Minister or tribunal has lost jurisdiction and the
court can intervene. In other words, the jurisdiction is to decide correctly but not incorrectly.
An illustration is provided by the decision of the House of Lords in Anisminic Ltd v Foreign
Compensation Commission [1969] 1 All ER 208. A Ltd applied to the Commission for compensa-
tion for property seized by Egypt in 1956 at the time of the Suez crisis relating among other
things to the blocking of the Suez canal. The Foreign Compensation Act 1950 was relevant. It
said that decisions of the Commission ‘shall not be called into question in any court of law’.
The Commission decided that A Ltd was not entitled to compensation but in doing so misinter-
preted the statute. This said the House of Lords made the decision ultra vires and void. It was,
..
EL_C06.qxd 3/26/07 10:41 AM Page 201
therefore, not a ‘decision’ and the court could question it. Being merely asked to say what the
law was the court gave a declaratory judgment that the decision was void.
Parliamentary control
The main Parliamentary control is through a Joint Committee on Statutory Instruments
between the House of Commons and the House of Lords. The Joint Committee is appointed
to consider statutory instruments with a view to determining whether the special attention of
Parliament should be drawn to the legislation on various grounds. The grounds, briefly, are
that the legislation: 6
(a) imposes a tax on the public;
(b) is made under an enactment containing specific provisions excluding it from challenge
in the courts;
(c) purports to have retrospective effect where there is no express authority in the enabling
statute;
(d ) has been unduly delayed in publication or laying before Parliament;
(e) has come into operation before being laid before Parliament and there has been
unjustifiable delay in informing the Speaker of the delay under s 4(1) of the Statutory
Instruments Act 1946;
(f ) may be beyond the powers given by the parent statute or makes some unusual or
unexpected use of those powers;
(g) calls for better explanation as to its meaning.
As regards law coming from the European Union, there is also a system of three standing
committees consisting of 10 MPs to examine the proposals of the Union in terms of legal
matters and to question Ministers about them. There are also Commons debates before the
twice-yearly EU summit meetings to give MPs a chance to air their views on the agendas for
the summit meetings.
By-laws of local authorities

These must be intra vires, i.e. within the powers given to the local authority in the enabling
statute, and also reasonable. Thus, in Kruse v Johnson [1898] 2 QB 91 a local authority by-law
making it an offence to sing within 50 yards of a dwelling house was upheld but the court
decided that unreasonableness could be a ground for invalidating by-laws.
Burnley Borough Council v England, 1978 – By-laws: challenge in court (23)
Interpretation of statutes by the judiciary

The main body of the law is to be found in statutes, together with the relevant statutory
instruments, and in case law as enunciated by judges in the courts. But the judges not only
have the duty of declaring the common law, they are also frequently called upon to settle
disputes as to the meaning of words or clauses in a statute.
Parliament is the supreme lawgiver, and the judges must follow statutes (but see Factortame Ltd v
Secretary of State for Transport (No 2) (1991) 1 All ER 70). Nevertheless, there is a considerable
..
EL_C06.qxd 3/26/07 10:41 AM Page 202
amount of case law which gathers round Acts of Parliament and delegated legislation since
the wording sometimes turns out to be obscure. Statutes were at one time drafted by practis-
ing lawyers who were experts in the particular branch of law of which the statute was to be a
part. Today, however, statutes are drafted by parliamentary counsel to the Treasury, and,
although such persons are skilled in the law, the volume of legislation means that statutes are
often obscure and cases continue to come before the courts in which the rights of the parties
depend upon the exact meaning of a section of a statute. When such a case comes before a
judge, he must decide the meaning of the section in question. Thus even statute law is not
free from judicial influence.
The judges have certain recognised aids to interpretation, and these are set out below.
Statutory aids
Judges may get some guidance from statute law.
(a) The Interpretation Act 1978, which is itself a statute, defines terms commonly used in
Acts of Parliament, e.g. that ‘person’ includes a corporation as well as a human being.
(b) A complex statute will normally contain an interpretation section, defining the terms
used in the particular Act, e.g. ss 735–744A of the Companies Act 1985 define, among
other things, ‘accounts’ and ‘director’, and the judges have recourse to this.
(c) Every Act of Parliament used to have what was known as a preamble, which set out at the
beginning the general purpose and scope of the Act. The preamble was often quite
lengthy and assisted the judge in ascertaining the meaning of the statute. Modern public
Acts do not have this type of preamble, but have instead a long title which is not of so
much assistance in interpretation. For example, the Sex Discrimination Act 1975, which
contains 87 sections and a number of schedules, says merely: ‘An Act to render unlawful
certain kinds of sex discrimination and discrimination on the grounds of marriage, and
establish a Commission with the function of working towards the elimination of such
discrimination and promoting equality of opportunity between men and women gener-
ally; and for related purposes.’ All private Acts must have a preamble setting out the
objects of the legislation, and this preamble must be proved by the promoters at the
Committee stage in the House of Lords. So far as private Acts are concerned the preamble
may be of assistance.
Hutton v Esher UDC, 1973 – Statutory interpretation and the Interpretation

Act (24)
General rules of interpretation evolved by judges

There are a number of generally recognised rules or canons of interpretation, and some of the
more important ones are now given.
The mischief rule

This was set out in Heydon’s Case (1584) 3 Co Rep 7a. Under this rule the judge will look at
the Act to see what was its purpose and what mischief in the common law it was designed to
prevent.
Broadly speaking, the rule means that where a statute has been passed to remedy a weakness
in the law the interpretation which will correct that weakness is the one to be adopted.
..
EL_C06.qxd 3/26/07 10:41 AM Page 203
The literal rule

According to this rule, the working of the Act must be construed according to its literal and
grammatical meaning whatever the result may be. The same word must normally be con-
strued throughout the Act in the same sense, and in the case of old statutes regard must be
had to its contemporary meaning if there has been a change with the passage of time.
The Law Commission, in an instructive and provocative report on the subject of interpreta-
tion (Law Com 21), said of this rule that ‘to place undue emphasis on the literal meaning of
the words of a provision is to assume an unattainable perfection in draftsmanship’.
The rule, when in operation, does not always achieve the obvious object and purpose of
the statute. A classic example is Whiteley v Chappell (1868–9) 4 LRQB 147. In that case a 6
statute concerned with electoral malpractices made it an offence to personate ‘any person
entitled to vote’ at an election. The defendant was accused of personating a deceased voter
and the court, using the literal rule, found that there was no offence. The personation was
not of a person entitled to vote. A dead person was not entitled to vote, or do anything else
for that matter. A deceased person did not exist and could therefore have no rights. It will be
seen, however, that the literal rule produced in that case a result which was clearly contrary
to the object of Parliament.
The golden rule

This rule is to some extent an extension of the literal rule and under it the words of a statute
will as far as possible be construed according to their ordinary plain and natural meaning,
unless this leads to an absurd result. It is used by the courts where a statutory provision is
capable of more than one literal meaning and leads the judge to select the one which avoids
absurdity, or where a study of the statute as a whole reveals that the conclusion reached by
applying the literal rule is contrary to the intentions of Parliament.
Thus, in Re Sigsworth [1935] Ch 89 the court decided that the Administration of Estates Act
1925, which provides for the distribution of the property of an intestate amongst his next of
kin, did not confer a benefit upon the person (a son) who had murdered the intestate (his
mother), even though the murderer was the intestate’s next of kin, for it is a general principle
of law that no one can profit from his own wrong.
The ejusdem generis rule

This is a rule covering things of the same genus, species or type. Under it, where general
words follow particular words, the general words are construed as being limited to persons or
things within the class outlined by the particular words. So in a reference to ‘dogs, cats, and
other animals’, the last three words would be limited in their application to animals of the
domestic type, and would not be extended to cover animals such as elephants and camels
which are not domestic animals in the UK.
Expressio unius est exclusio alterius

(The expression of one thing implies the exclusion of another.) Under this rule, where specific
words are used and are not followed by general words, the Act applies only to the instances
mentioned. For example, where a statute contains an express statement that certain statutes are
repealed, there is a presumption that other relevant statutes not mentioned are not repealed.
Noscitur a sociis
(The meaning of a word can be gathered from its context.) Under this rule words of doubtful
meaning may be better understood from the nature of the words and phrases with which
they are associated.
..
EL_C06.qxd 3/26/07 10:41 AM Page 204
Gardiner v Sevenoaks RDC, 1950 – The mischief rule (25)

Keene v Muncaster, 1980 – The golden rule (26)
Lane v London Electricity Board, 1955 – The ejusdem generis rule (27)
R v Immigration Appeals Adjudicator, ex parte Crew, 1982 – The rule of expressio
unius (28)
Muir v Keay, 1875 – The rule of noscitur a sociis (29)
Compatibility with Convention on Human Rights

As we have seen in the overview of the Human Rights Act 1998, in Chapter 3, s 3 of that Act
provides that, as far as it is possible to do so, both primary and subordinate legislation must
be read and given effect in a way which is compatible with Convention rights. The section
applies to past as well as future legislation and the court is not bound by previous interpreta-
tions of past legislation in terms of Convention rights. This has implications for the rule of
precedent (see Chapter 7) under which judges generally follow previous decisions. It may be
that a Crown Court will be obliged to refuse to follow a previous ruling of the Court of
Appeal or the House of Lords where this is required in order to give effect to Convention
rights. It is expected that the courts will in almost all cases be able to interpret UK legislation
compatibly with Convention rights.
Other considerations and presumptions

In addition to the major rules of interpretation, there are also several other considerations
which the court will have in mind.
Use of Hansard
In general terms, the court will concern itself only with the wording of the Act and will not
go to Hansard to look at the reports of debates during the passage of the Act.
There is here some conflict with the mischief rule, since it might be thought there is no
better way to ascertain what mischief the Act was designed to prevent than by reference to
the Parliamentary debates in Hansard. Nevertheless, the Law Commission in their delibera-
tions on the matter of statutory interpretation had decided against the use of Hansard since
they doubted the reliability of statements made in Parliamentary debates.
The general rule that Hansard should not be referred to as an aid to interpretation was
relaxed in Pepper v Hart [1993] 1 All ER 42. The House of Lords held that reference to Hansard
should be allowed where:
(a) the legislation is ambiguous or obscure or where a literal interpretation would lead to an
absurdity. The House of Lords subsequently made it clear that this condition must exist
before reference to Hansard can be made and that the judiciary has no general power
to refer (see R v Secretary of State for the Environment, ex parte Spath Holme Ltd [2001] 1 All
ER 195);
(b) the material which is referred to consists of statements by a Minister or other promoter of
the Bill together with such other Parliamentary material as is necessary to understand the
statements and the effects of them;
(c) the statements relied upon are clear.
Their Lordships held that the above references would not contravene parliamentary privilege.
..
EL_C06.qxd 3/26/07 10:41 AM Page 205
The House of Lords decided in Davis v Johnson [1978] 1 All ER 1132 that it is now permiss-
ible for the court to refer to reports by such bodies as the Law Commission and committees
or commissions appointed by the government or by either House of Parliament from which
the reform of the law stems.
However, according to the judgments, e.g. that of Lord Diplock, ‘Where legislation follows
on a published report of this kind the report may be used as an aid to identify the mischief
which the legislation is intended to remedy but not for the purpose of construing the enact-
ing words . . .’. In other words, the relevant report can assist in terms of what the legislation
was designed to do but not whether the words it uses achieve it.
Of course, it may be the case that a reference to Hansard will not clarify the position. For 6
example, in R v Deegan (Desmond Garcia) [1998] 1 CLY 966 the defendant appealed against his
conviction for possessing a bladed knife in a public place. The issue was whether the type of
knife he was carrying came within the scope of s 139 of the Criminal Justice Act 1988 under
which he was charged. On referring to Hansard, it was discovered that ministerial statements
were not consistent and of no assistance, so knives of a type described in earlier case law relat-
ing to bladed articles were followed, and the defendant’s appeal to the Court of Appeal failed.
No retrospective effect or alteration of existing law

A statute is presumed not to alter the existing law unless it expressly states that it does. There
is also a presumption against the repeal of other statutes and that is why statutes which are
repealed are repealed by specific reference.
In the absence of any express indication to the contrary, a construction which would
exclude retrospective effect is to be preferred to a construction which would not. Thus in
Alexander v Mercouris [1979] 3 All ER 305, where the claimant sued the defendant for alleged
defective workmanship in the conversion of two flats, the claimant tried to bring his case
under the Defective Premises Act 1972 (see further Chapter 21) which came into force on
1 January 1974. However, it appeared that the defendant commenced the work in November
1972 and it was held by the Court of Appeal that no claim could be brought under the Act
as the Act could not be construed as having retrospective effect. Some Finance Acts do have
retrospective effect in terms of taxation.
Miscellaneous rules
When a statute deprives a person of property, there is a presumption that compensation will
be paid. Unless so stated it is presumed that an Act does not interfere with rights over private
property. There is a rebuttable presumption against alteration of the common law. Any Act
which presumes to restrict private liberty will be very strictly interpreted, though the strict-
ness may be tempered in times of emergency. It is presumed that an Act does not bind the
Crown on the ground that the law, made by the Crown on the advice of the Lords and
Commons, is made for subjects and not for the Crown. Furthermore, as we have seen, the
courts lack the power to examine proceedings in Parliament in order to determine whether
the passing of an Act has been obtained by means of any irregularity or fraud (see British
Railways Board v Pickin (1974)).
Purposive interpretation
However, the Law Commissioners have recommended that more emphasis should be placed
on the importance of interpreting a statute in the light of the general purposes behind it and the
intentions of Parliament. This is referred to as a purposive interpretation. Thus in Fletcher v
..
EL_C06.qxd 3/26/07 10:41 AM Page 206
Budgen [1974] 2 All ER 1243 the Divisional Court of Queen’s Bench decided that under the
Trade Descriptions Act 1968 a buyer of goods, in this case a car dealer, could be guilty of the
offence of falsely describing goods when he told a private seller that his car was almost
worthless, bought it, repaired it and sold it at a considerable profit. Lord Widgery, CJ said that
although he had never thought of the Act as applying to buyers of goods, it was necessary in
the public interest that it should, at least in the case of expert buyers, and that in his view
such decision ‘is not in any sense illogical and is not likely to run counter to any intention
which Parliament may have had’.
In Knowles v Liverpool City Council [1993] 1 WLR 1428 a council employee was injured while
handling a defective flagstone. He was awarded damages under the Employers’ Liability
(Defective Equipment) Act 1969. The council appealed on the grounds that a flagstone was
not ‘equipment’ under the Act; the matter reached the House of Lords which said that it was
equipment. The purpose of the Act was to protect employees from exposure to dangerous
materials.
Again, in Inco Europe Ltd v First Choice Distribution [2000] 1 WLR 586 the House of Lords
discovered a drafting error in the Arbitration Act 1996 which prevented a right of appeal from
a decision of the High Court. The House of Lords ruled that the Act should be interpreted as
allowing the appeal since this was the intended purpose of the legislature.
However, as Lord Scarman said in Shah v Barnet London Borough Council [1983] 1 All ER 226
at p 238: ‘Judges may not interpret statutes in the light of their own views as to policy. They
may, of course, adopt a purposive interpretation if they can find in the statute read as a
whole or in material to which they are permitted by law to refer as aids to interpretation an
expression of Parliament’s purpose or policy.’
Rules of interpretation tend to some extent to cancel each other. Thus by using one or
other of these rules judges can be narrow, reformist, or conservative. In fact Pollock, in his
Essays in Jurisprudence and Ethics, suggests:
English judges have often tended to interpret statutes on the theory that Parliament generally
changes the law for the worse and that the business of the judges is to keep the mischief of
its interference within the narrowest possible bounds.
It must be said that this comment applies particularly to judicial interpretation of welfare
law where they have sometimes been reluctant to fill in gaps in order to make the law work,
whereas if the Act is in the field of ‘lawyers’ law, then they have been prepared to do precisely
this in order, for example, to convict a guilty person of a crime. This is, however, not surprising
since judges are the product of a legalistic training and are clearly ill-equipped to pronounce
upon welfare law, whereas in crime, for example, they are dealing with rules which they better
understand so that they feel less reluctant to fill in gaps. There is now, of course, a much
wider training of the judiciary that may overcome this problem.
Explanatory Notes
The Department of State sponsoring the Bill now produces Explanatory Notes at least for
major Bills. These are available for purchase through the Stationery Office and state clause by
clause and in ordinary language the provisions of the Bill. However, the Notes are prefaced
with the warning that they are not part of the Bill and have not been endorsed by
Parliament. They are not judgemental and are in no sense binding on a court in terms of the
interpretation of the Bill once it becomes law. Nevertheless, they are useful to professionals
and those in business as a means of understanding quickly the aims and intentions of the
legislation.
..
EL_C07.qxd 3/26/07 10:41 AM Page 207
7
THE LAW-MAKING PROCESS II:
CASE LAW AND THE LEGISLATIVE
ORGANS OF THE EUROPEAN UNION
We are concerned in this chapter to explain the methods by which the judiciary become
involved in the law-making process and the effect of European Union legislation – how it is
made and interpreted, together with the official bodies involved in law reform.
Case law or judicial precedent

Case law still provides the bulk of the law of the country, although Parliament is becoming
much more active in making new laws and statute law may come to dominate the common
law. This trend is, of course, encouraged by the existence of the Law Commission which is
constantly putting forward proposals to codify the law by statute. Some case law states the
law itself, and some is concerned as we have seen with the interpretation of statutes. We will
examine here case law which is law in its own right. Case law is built up out of precedents,
and a precedent is a previous decision of a court which may, in certain circumstances, be
binding on another court in deciding a similar case. This practice of following previous deci-
sions is derived from custom, but it is a practice which is generally observed. As Park, CJ said
in Mirehouse v Rennell (1833) 1 Cl & Fin 527, ‘Precedent must be adhered to for the sake of
developing the law as a science.’ In more modern times attention to precedent is essential
because without it no lawyer could safely advise his client and every quarrel would lead to a
law suit. Even in early times the itinerant judges adopted the doctrine of stare decisis (abiding
by precedent), and this doctrine has been developed in modern times so that it means that
a precedent binds, and must be followed in similar cases, subject mainly to the power to dis-
tinguish cases in certain circumstances, though there are other exceptions listed later in this
chapter.
The modern doctrine of the binding force of judicial precedent only fully emerged when
there was (a) good law reporting, and (b) a settled judicial hierarchy. By the middle of the
nineteenth century law reporting was much more efficient, and the Judicature Acts 1873–75
created a proper pyramid of authority which was completed when the Appellate Jurisdiction
Act 1876 made the House of Lords the final Court of Appeal. Judicial precedents may be
divided into two kinds:
n binding precedents;
n persuasive precedents.
..
EL_C07.qxd 3/26/07 10:41 AM Page 208
Before we explain the precise meaning of these terms, we have still to find out where these
precedents are to be found. The answer is in the law reports, and, as we have seen, the doctrine
of judicial precedent depends upon an accurate record being kept of previous decisions.
Law reports
Since 1865 law reports have been published under the control of what is now called the
Incorporated Council of Law Reporting for England and Wales, which is a joint committee of
the Inns of Court, the Law Society and the Bar Council. They are known simply as the Law
Reports, and they have priority in the courts because the judge who heard the case sees and
revises the report before publication. Nevertheless, private reports still exist, and of these the
All England Reports, published weekly and started in 1936, are the only general reports exist-
ing in the private sector. These reports are now revised by the judge concerned with the case.
The All England series now includes specialist reports entitled Commercial Cases, also European
Cases, together with the All England Direct online service. The citation of the first reports is,
e.g. [2000] 1 All ER 10 (Comm), the second is cited, e.g. [2000] All ER (EC) 10, and the online
reports are cited, e.g. [2000] All ER (D) 10.
In 1953 the Incorporated Council began to publish reports on a weekly basis and these are
known as the Weekly Law Reports. The Times newspaper publishes summarised reports of
certain cases of importance and interest on the day following the hearing, as do other news-
papers, e.g. the Financial Times, the Independent and the Guardian, and there are also certain
specialised series of reports covering, for example, the fields of taxation, shipping, company
law and employment law. In a Practice Direction in 1990 (see The Times, 7 December 1990)
the Master of the Rolls stated that in the House of Lords and the Court of Appeal the general
rule was that the Law Reports published by the Incorporated Council of Law Reporting
should be cited in preference to other reports where there was a choice. It is not absolutely
essential that a case should have been reported in order that it may be cited as a precedent,
and very occasionally oral evidence of the decision by a barrister who was in court when the
judgment was delivered may be brought.
Citation of unreported cases

The issue of the citation of unreported cases was raised by Lord Diplock in the House of Lords
in Roberts Petroleum v Bernard Kenny [1983] 1 All ER 564, and Sir John Donaldson, MR in
Stanley v International Harvester (1983) The Times, 7 February. These have become readily avail-
able since the Lexis Computer Retrieval System, among others, came into use. Lexis records,
for example, 3,000 Court of Appeal decisions a year. Of these only some 350 are reported in
any of the major series such as All England, and Weekly Law Reports. These, as we have seen,
are edited by the judge(s). Both judges seemed determined to discourage the growing resort
by counsel to unreported cases. Indeed, in the Stanley case the view was that counsel should
beware of citing to the courts cases which are of no great novelty or authority, but which are
supplied in unnecessary profusion by computers.
Also relevant is a Practice Statement issued in May 1996 by the Master of the Rolls. It states
that leave to cite unreported cases before the Court of Appeal will not usually be granted
unless counsel can assure the court that the trial transcript in question contains a relevant
statement of legal principle not found in reported authority and that among other things the
unreported authority is not being cited as an illustration of an established legal principle.
In this connection, the case of Hamblin v Field (2000) The Times, 26 April is instructive. In
hearing a bankruptcy case, the judge had been given a summary of what was a recent case.
There was later an appeal to the Court of Appeal which commented on the citing of such
..
EL_C07.qxd 3/26/07 10:41 AM Page 209
THE LAW-MAKING PROCESS II: CASE LAW AND THE LEGISLATIVE ORGANS OF THE EUROPEAN UNION 209
summaries. The one in question was a Lawtel summary. Lord Justice Peter Gibson said that
the object of these summaries was merely to give practitioners notice via computer that a par-
ticular case in a particular area of law had been decided. It did not appear from the summary
whether the judgment was summarised by a professional lawyer still less a member of the Bar
(as is usual). The intention was that Lawtel should be contacted to obtain a copy of the com-
plete judgment. The practice of using such summaries should not be tolerated.
Reference to decided cases

Decided cases are usually referred to as follows: Smith v Jones, 1959. This means that, in a
court of first instance, Smith was the claimant, Jones the defendant, and that the case was
published in the set of reports of 1959, though it may have been heard at the end of 1958. 7
This is called the ‘short citation’. A longer citation is required if the report is to be referred to,
and might read as follows: Smith v Jones [1959] 1 QB 67 at p 76. The additional information
means that the case is to be found in the first volume of the Reports of the Queen’s Bench
Division, the report commencing on page 67, the number 76 being used to indicate the page
on which an important statement is to be found. Where the date is cited in square brackets, it
means that the date is an essential part of the reference, and without the date it is very
difficult to find the report in question. For many years now the Incorporated Council’s
reports have been written up in a certain number of volumes each year. It will be seen that a
mere reference to Vol 1 of the Queen’s Bench Division will not be sufficient unless the year is
also quoted. The same procedures are followed in the All England Reports.
The early reports by the Incorporated Council and other collections did not use the year as
a basic item of the citation, but continued to extend the number of volumes regardless of the
year. So a case may be cited as follows: Smith v Jones, 17 Ch D 230. It can be found by refer-
ring to Vol 17 of the Chancery Division reports, and it is not necessary to know the year in
which the report was published, though this will be ascertained when the report is referred
to. Where the date is not an essential part of the citation, it is quoted in round brackets. The
abbreviations used in the Official Reports for the various divisions are: QB for Queen’s Bench,
Ch for Chancery, Fam for Family, and AC for the House of Lords and Privy Council (Appeal
Cases). The reports of decisions of the Court of Appeal appear under the reference of the divi-
sion in which they were first heard. As regards the case title petitions for leave to appeal and
appeals to the Court of Appeal carry the same title as that which obtained in the court of first
instance. This results in the claimant being shown first in the title whether he or she be the
petitioner/appellant or respondent in the Court of Appeal. Since a Practice Note of 1974
([1974] 1 All ER 752), this is now true of the House of Lords so that appeals to the House of
Lords now carry the same title as that which obtained in the court of first instance, though in
the Official Reports the reference AC is still used in House of Lords and Privy Council cases.
Media-neutral citations
Decided cases in the High Court and above are now given what are called media-neutral refer-
ence numbers. Examples are EWHC (QB) or (Ch) or (Fam) 103, say. These numbers cover the
three divisions of the High Court in England and Wales and sometimes (Admin) may be
found to indicate the Administrative Court. For the Court of Appeal the references are EWCA
Civ 289, say, for the Civil Division and Crim for the Criminal Division. For the House of
Lords the citation is EWHL 421, say. In all cases the year of the case is in square brackets, i.e.
[2007].
The numbers are media neutral because they do not relate to a publication such as The Times
or the All England Law Reports and so on. However, if the case is reported in a publication
..
EL_C07.qxd 3/26/07 10:41 AM Page 210
such as The Times or the All England Law Reports that reference appears after the media-neutral
one. These numbers do not relate in any way to a computer or other report of the case but
would assist in identifying a case in court records or for identifying a transcript. It is an
advance on the citation ‘(unreported)’.
A practitioners’ text would be expected to include these media-neutral citations. However,
since they are of no assistance in ascertaining the facts of the case in themselves and will assist
only those who wish to purchase expensive transcripts, they are not included in this text.
Precedent – generally
We are now in a position to refer to a decided case but we still have to find out where the
precedent is to be found, since the whole of the case is reported, and the judge may have said
things which are not strictly relevant to the final judgment. We must know what to take as
precedent, and what to ignore, so that we can find what is called the ratio decidendi. The doc-
trine of precedent declares that cases must be decided in the same way when their material
facts are the same. The ratio is therefore defined as the principle of law used by the judge to
arrive at his decision together with his reasons for doing so. To take an example from contract
law, in Household Fire Insurance Company v Grant (1879) (see Chapter 9) the court decided that
a letter of acceptance took effect when it was posted, the reason behind this principle being
that the Post Office was the common agent of the parties.
The ratio decidendi of a decision may be narrowed or widened by a subsequent judge before
whom the case is cited as an authority. Although a judge will give reasons for his ruling, he is
neither concerned nor obliged to formulate all the possibilities which may stem from it.
Thus, the eventual and accepted ratio decidendi of a case may not be the ratio decidendi that
the judge who decided the case would himself have chosen, but the one which has been
approved by subsequent judges. This is inevitable, because a judge, when deciding a case, will
give his reasons but will not usually distinguish in his remarks, in any rigid or unchangeable
way, between what we have called the ratio decidendi and what are called obiter dicta. The
latter are things said in passing, and they do not have binding force. Such statements of legal
principle are, however, of some persuasive power, particularly the dicta of cases heard in the
House of Lords.
The reason why obiter dicta are merely persuasive is because the prerogative of judges is not
to make the law by formulating it and declaring it (this is for the legislature) but to make the
law by applying it to cases coming before them. A judicial decision, unaccompanied by judicial
application, is not of binding authority but is obiter. A judge does sometimes indicate which
of his statements are obiter dicta. For example he may say: ‘If it were necessary to decide the
further point, I should be inclined to say that . . .’. What follows is said in passing.
It may, therefore, be said that the ratio decidendi of any given case is an abstraction of the
legal principle from the material facts of the case and the decision which the judge made
thereon, together with his reasons for so doing. Of course, the higher the level of abstraction,
the more circumstances the ratio decidendi will fit. Let us take the following fact situation: ‘At
12 noon on a Saturday A, a woman aged 30, drove a car through the centre of Manchester at
80 mph. She mounted the pavement and injured B, an old man of 90. B sued A and the judge
found that she was liable.’ If a subsequent judge thinks that the principle in B v A should be
restricted he will tend to retain many of the facts of the case as material. If he thinks that the
principle should be extended, he will not regard many of the facts of the situation as material
and so produce a broad principle of wide application. Thus, a very narrow ratio would be as
follows: ‘If a woman aged 30 by the negligent driving of a car injures an old man of 90, she is
liable to compensate him in damages.’ However, the law of negligence is a much wider principle
and the ratio is: ‘If A, by negligence injures B, A is liable to compensate B in damages.’
..
EL_C07.qxd 3/26/07 10:41 AM Page 211
The same principles of abstraction apply when a judge chooses to follow obiter dicta. This is
well illustrated by the way in which the decision of the House of Lords in Donoghue v Stevenson,
1932 was developed to produce the modern doctrine of negligence (see further Chapter 21).
Binding force – generally

It is now necessary to examine which precedents are binding, and this depends also upon the
level of the court in which the decision was reached. It would be useful to consider again at this
point the diagrams in Chapter 2 which deal with the structure of the civil and criminal courts.
The House of Lords 7

The Supreme Court will take over from the House of Lords as the final court of appeal in
2009. The rules regarding precedent that apply to the House of Lords will apply to the
Supreme Court. The House of Lords was bound by its own decisions (London Street Tramways
v London County Council [1898] AC 375), except, for example, where the previous decision
had been made per incuriam, i.e. where an important case or statute was not brought to the
attention of the court when the previous decision was made. However, in July 1966, the
House of Lords abolished the rule that its own decisions on points of law were absolutely
binding upon itself. The Lord Chancellor announced the change on behalf of himself and the
Lords of Appeal in Ordinary in the following statement:
Their Lordships regard the use of precedent as an indispensable foundation upon which to
decide what is the law and its application to individual cases. It provides at least some
degree of certainty upon which individuals can rely in the conduct of their affairs, as well
as a basis for orderly development of legal rules.
Their Lordships nevertheless recognize that too rigid adherence to precedent may lead
to injustice in a particular case and also unduly restrict the proper development of the
law. They propose therefore to modify their present practice and, while treating former
decisions of this House as normally binding, to depart from a previous decision when it
appears right to do so.
In this connection they will bear in mind the danger of disturbing retrospectively the
basis on which contracts, settlements of property and fiscal arrangements have been
entered into and also the special need for certainty as to the criminal law.
This announcement is not intended to affect the use of precedent elsewhere than in this
House.
A Practice Direction issued in March 1971 by the Appeal Committee of the House of Lords
requires lawyers concerned with the preparation of cases of appeal to state clearly in a separate
paragraph of the case any intention to invite the House to depart from one of its own decisions.
The declaration was not used for over 20 years to overrule decisions in the field of criminal
law. It has now been used in the context of crime. For example, in R v Howe [1987] 2 WLR
568, the House of Lords overruled its previous decision in DPP for Northern Ireland v Lynch
[1975] 1 All ER 913 which had decided that duress could be a defence in a prosecution for
murder. R v Howe removes the defence of duress from the law relating to murder altogether
so that the defence is now never available to any participant in murder.
Schorsch Meier Gmbh v Hennin, 1975 – A case leading to the use of the 1966
declaration (30)
Miliangos v George Frank (Textiles) Ltd, 1975 – The declaration applied (31)
..
EL_C07.qxd 3/26/07 10:41 AM Page 212
The Court of Appeal

On the next rung of the hierarchy there is the Court of Appeal (Civil Division), and this court
is bound by its own previous decisions, as well as by those of the House of Lords (Young v
Bristol Aeroplane Co [1944] 2 All ER 293). There are, however, two main exceptions to the
above rule.
(a) If there are two conflicting decisions of its own on the case before it the court may
choose which one to follow.
The court may follow the most recent decision but this is not necessarily the rule.
Where the ratio of an earlier decision is directly applicable to the circumstances of the
case currently before the court but that decision has been wrongly distinguished in a later
decision of the Court of Appeal, it is in principle open to the Court of Appeal to apply
the ratio of the earlier decision and to decline to follow the later one (see Starmark
Enterprises Ltd v CPL Distribution Ltd [2001] All ER (D) 472. A case concerned with whether
a notice required to be served under a rent review clause in a lease had been served in
sufficient time to make the rent review valid).
(b) The court will not follow a decision of its own if that decision is inconsistent with a
decision of the House of Lords or the Judicial Committee of the Privy Council. Thus, Re
Polemis [1921] 3 KB 560, a Court of Appeal decision which said that in negligence all
direct harm was actionable even if not foreseeable, was disapproved of by the Privy
Council in The Wagon Mound (1961) (see Chapter 20) and was not subsequently followed
by the Court of Appeal.
The decisions of the Court of Appeal (Civil Division) are binding on the lower civil courts, i.e.
the High Court and the county court.
On the criminal side, the Court of Appeal (Criminal Division) is bound by the decisions of
the House of Lords and normally by its own decisions and those of the former Court of
Criminal Appeal and the earlier Court for Crown Cases Reserved. However, an ordinary court
of three judges in the Criminal Division may deviate from previous decisions more easily
than the Civil Division because different considerations apply in a criminal appeal where the
liberty of the accused is at stake and in any case a full court of the Criminal Division can
overrule its own previous decisions.
In this connection, a court of five judges including the Lord Chief Justice declined to follow
and overruled a previous decision of the Court of Appeal Criminal Division stating in particular
that the decision could create problems if allowed to stand and bind the Criminal Division
because in criminal cases there were many situations where in practice there was little prospect
of an appeal to the House of Lords (see R v Simpson (2003) The Times, 26 May).
A full court generally consists of five judges instead of three as is usual in an ordinary
sitting. A decision of the Civil Division is not binding on the Criminal Division and vice
versa. Decisions of the Criminal Division are binding on lower criminal courts, i.e. the Crown
Court and magistrates’ courts.
It is perhaps worth noting that Lord Denning in Davis v Johnson [1978] 1 All ER 841 took
the view that the Court of Appeal should take for itself guidelines similar to those taken by
the House of Lords in 1966 to depart from a previous decision of its own where that decision
was clearly wrong. However, Lord Denning does not appear to have received sufficient sup-
port for this view and a declaration on the lines he suggested has not been made.
However, it was decided in Williams v Fawcett [1985] 1 All ER 787 that the Court of Appeal
could depart from one of its own previous decisions where that decision was felt to be wrong
in law and there was unlikely to be an appeal to the House of Lords by a person whose liberty
was at stake.
..
EL_C07.qxd 3/26/07 10:41 AM Page 213
R v Gould, 1968 – Precedent in criminal appeals (32)
Divisional Courts
Divisional Courts are, in civil cases, bound by the decisions of the House of Lords, the Court
of Appeal (Civil Division) and generally by their own previous decisions. However, a
Divisional Court of Queen’s Bench decided in R v Greater Manchester Coroner, ex parte Tal
[1984] 3 All ER 240 that a Divisional Court would normally follow a previous decision of
another Divisional Court but could in rare cases exercise its power to refuse to follow a previ-
ous Divisional Court decision if the court was convinced that the previous decision was 7
wrong. In criminal cases there is, under ss 12–15 of the Administration of Justice Act 1960, an
appeal from the Divisional Court of the Queen’s Bench Division straight to the House of
Lords, and the Divisional Court is not bound by the decisions of the Criminal Division of the
Court of Appeal. The decisions of Divisional Courts are binding on judges of the High Court
sitting alone and on magistrates’ courts but not on Crown Courts (see below).
The High Court

At the next lower stage, a High Court judge, although bound by the decisions of the Court
of Appeal and the House of Lords is not bound by the decisions of another High Court judge
sitting at first instance (Huddersfield Police Authority v Watson [1947] 2 All ER 193). Neverthe-
less, such a judge will treat previous decisions as of strong persuasive authority. If a judge of
the High Court refuses to follow a previous decision on a similar point of law, the Law
Reports will contain two decisions by judges of equal authority and the cases will remain in
conflict until the same point of law is taken to appeal before a higher tribunal whose decision
will resolve the position (and see the statement of Nourse, J in the Colchester Estates case
considered later in this chapter).
The Crown Court

A judge sitting in the Crown Court, the jurisdiction of which is largely confined to criminal
cases, is bound by decisions made in criminal matters by the House of Lords and Court of
Appeal (Criminal Division) but not apparently by decisions of the Divisional Court of the
Queen’s Bench Division (R v Colyer [1974] Crim LR 243). A judge sitting in the Crown Court
and exercising a civil jurisdiction, e.g. licensing, is bound by the decisions of the House of
Lords, Court of Appeal and the High Court.
Magistrates’ courts and county courts

These courts are bound by the decisions of the higher courts. Their own decisions are not
reported officially and have no binding force on other courts at the same level.
The Employment Appeal Tribunal (EAT)

As regards this tribunal, only the decisions of the Court of Appeal and the House of Lords on
matters of law are binding, though the decisions of the earlier Industrial Relations Court and
the High Court in England are of great persuasive authority and the tribunal would not
lightly differ from the principles which are to be found in those decisions (per Bristow, J in
..
EL_C07.qxd 3/26/07 10:41 AM Page 214
Portec (UK) Ltd v Mogensen [1976] 3 All ER 565 at p 568). These remarks remain valid even
though the Portec case was overruled in terms of its decision by Wilson v Maynard Shipbuilding
Consultants AB [1978] 2 All ER 78. Nevertheless, Wait, J, who as President of the EAT presided
in Anandarajah v Lord Chancellor’s Department [1984] IRLR 131, ruled that no assistance could
be derived from precedent in deciding whether a dismissal was unfair (see further Chapter 19).
The EAT is not bound to follow its own decisions and the decision of an employment tribunal
binds no one except the parties to the dispute.
The Judicial Committee of the Privy Council

The decisions of the Judicial Committee of the Privy Council are in general not binding,
either on the Committee itself or on other English courts, save the Ecclesiastical and Prize
Courts. Its decisions are technically only of persuasive authority in English law, and this
derives from the fact that the Judicial Committee hears appeals from overseas territories.
Thus, when it hears an appeal from Belize, it may not apply a rule of law used (say) in a previ-
ous appeal from the Channel Islands.
As regards the relationship of the Judicial Committee and the House of Lords, where the
law applicable to the case is English, the Committee will feel bound to follow a relevant deci-
sion of the House of Lords but not otherwise (Tai Hing Cotton v Liu Chong Hing Bank [1985] 2
All ER 947).
Although in general terms the decisions of the Privy Council are persuasive only, there
may rarely be cases where a decision of the Privy Council can overrule a decision of
the House of Lords. This occurred in a case concerning provocation as a defence to a charge
of murder which, if accepted by the court, can reduce the charge to one of manslaughter.
The difficulty, as Chapter 24 will further illustrate, is whether in the act put forward as a
provocation any special characteristics of the defendant can be taken into account as
leading him or her to be provoked when a person without those characteristics would not.
In R v Smith (Morgan James) [2000] 4 All ER 289, the House of Lords ruled that the
defendant’s depressive illness could be taken into account. In Attorney-General for Jersey v
Holley [2005] 2 AC 580 the Privy Council ruled that alcoholism could not. The matter came
before the House of Lords in R v James [2006] 1 All ER 759. James had killed his wife after
they had separated and psychiatric evidence was adduced and James sought to regard this as
a special characteristic, though the killing was not spontaneous. Should the House of Lords
follow Holley or Smith, bearing in mind that the Privy Council in Holley had said Smith was
wrongly decided?
The House of Lords followed Holley. Why? Because the Privy Council which heard the
Holley case consisted of nine of the Lords of Appeal in Ordinary: a very strong court. We have
seen that the House of Lords can overrule its own decisions and in effect surely that is what
it was doing here under the guise of the Privy Council.
Could it happen once the Supreme Court is in place? Under the Constitutional Reform Act
2005, the judges of the Privy Council are those who have held high judicial office and former
holders who are privy councillors. Since the judges of the Supreme Court and former judges
of the court are within this category, the answer is yes, if the Privy Council had a high per-
centage of Supreme Court judges and/or former judges on the bench when the relevant deci-
sion was made.
General exceptions to the rule of binding precedent

Having examined the relationship of the above courts with regard to the rule of binding
precedent, it should be noted that a court is not always bound to follow a precedent which
..
EL_C07.qxd 3/26/07 10:41 AM Page 215
according to the rules outlined above ought to be binding on it. It is by avoiding the follow-
ing of precedents that judges can, and do, make law.
Thus, when the court in question is invited to follow a binding precedent, it may refuse to
do so, for example:
(a) by distinguishing the case now before it from the previous case on the facts. A case is
distinguished when the court considers that there are important points of difference between
the facts of the case now before it and a previous decision which it is being invited to follow.
As Lord Halsbury said in Quinn v Leatham [1901] AC 495:
Every judgment must be read as applicable to the particular facts proved, or assumed to be
proved, since the generality of the expressions which may be found there are not intended
to be expositions of the whole law but govern and are qualified by the particular facts of 7
the case in which such expressions are found.
This process of narrowing down the implications of the ratio decidendi of a previous case by
‘distinguishing’ is a device often used by a court which does not wish to follow an earlier
decision which would otherwise be binding on it.
If a court deems that an earlier case was wrongly decided but cannot overrule it because the
ratio decidendi of the case now before it does not cover all the matters raised in the earlier case,
it may, by way of obiter dictum, disapprove the earlier case which is then to some extent affected
as a precedent. Examples of distinguishing are to be found by comparing the decisions in
Ingram v Little (1961) and Lewis v Averay (1971) (see Chapter 12);
(b) by refusing to follow the previous case because its ratio is obscure. Thus, in Harper v
NCB [1974] 2 All ER 441 the Court of Appeal refused to follow the decision of the House of
Lords in Central Asbestos Co v Dodd [1972] 2 All ER 1135 because the majority of three to two
judges who found for Dodd left behind no discernible ratio. It was unclear whether the deci-
sion that Mr Dodd, who brought an action against his employers because he contracted an
industrial disease in the course of his employment after the time limit of three years had
elapsed, succeeded (i) because he knew that the injury arose from his employment but did
not know that he could sue; or (ii) because he knew he could sue but not that the disease
arose from his employment;
(c) by declaring the previous case to be in conflict with a fundamental principle of law,
as where, for example, the court in the previous case has not applied the doctrine of privity
of contract (see Beswick v Beswick (1967) (see further Chapter 10));
(d) by finding the previous decision to be per incuriam, i.e. where an important case or
statute was not brought to the attention of the court or ignored (see view of Bristow, J in
Miliangos) when the previous decision was made;
(e) because the previous decision is one of several conflicting decisions at the same level.
In this connection, the comments of Nourse, J in Colchester Estates (Cardiff ) v Carlton
Industries [1984] 2 All ER 601 are of interest. He said that as a general rule, a judge faced with
two conflicting authorities of judges of the same rank should feel himself bound by the later
of them. This would not, however, be the rule if it appeared to the judge deciding the case
that the later judgment was wrong in not following the first, as, for example, where some
other binding authority had not been cited to the earlier judge or judges;
(f ) because the previous decision had been overruled by statute.
(g) effect of the Human Rights Act 1998. We have already noted that the courts will not be
bound by previous interpretations of statute law that does not take account of Convention
rights. This is true also of the common law that must also be developed so as to be compatible
..
EL_C07.qxd 3/26/07 10:41 AM Page 216
with the Convention. Furthermore, there is no protection for the common law as there is for
primary legislation where the courts can only declare primary legislation incompatible and
then it is a matter for Parliament to decide how to deal with the matter.
(h) references to the European Court of Justice (ECJ). The Court of Appeal ruled in Trent
Taverns Ltd v Sykes (1999) The Times, 5 March that it could, in the exercise of its discretion,
make a reference to the ECJ in a case where the relevant point of Community law had already
been decided by the Court of Appeal since the ordinary rules of precedent did not apply to
such references.
It should be noted that when a reference is made to the European Court, it is to rule on the
law not the facts of the case. If the European Court does give a contrary ruling on the facts in
reaching its decision, a national court can refuse to follow it. This arose in Arsenal Football
Club plc v Reed [2003] 1 All ER 137. Arsenal claimed that Mr Reed was passing off his mer-
chandise as official Arsenal merchandise from his stall outside the ground. Mr Reed displayed
a disclaimer saying that his goods were not official Arsenal merchandise. In the High Court
Mr Justice Laddie ruled that there was no passing off because of the fact of the disclaimer. The
ECJ ruled that there was in spite of the fact of the disclaimer. The ECJ therefore took a different
view of the facts from Laddie J and he refused to follow the ECJ. The matter was resolved
by the Court of Appeal in Arsenal Football Club plc v Reed (2003) The Times, 22 May. The
Court of Appeal accepted the view of the facts taken by the ECJ that in spite of the disclaimer
there had been a passing off by Mr Reed. Nevertheless, the case is still a valid and almost
singular illustration of a judge refusing to apply an ECJ ruling.
(i) Some miscellaneous rulings. In R (on the application of Kadhim) v Brent LBC Housing
Benefit Board [2001] QB 955 the Court of Appeal ruled that a precedent may be departed from
where the previous court had assumed the correctness of the precedent without hearing
argument. Furthermore, in Bakewell Management Ltd v Brandwood (2002) The Times, 19 April
the High Court ruled that a High Court judge ought not to regard himself or herself as able
to depart from an applicable Court of Appeal decision on the basis that a new argument not
presented to the Court of Appeal had been presented to him or her. That was all the more so
where the House of Lords had refused leave to appeal against the earlier Court of Appeal decision.
Cases heard in the county court and in the magistrates’ courts are not generally reported,
and for this reason do not create binding precedents. It would not be desirable to report such
cases, for English law already possesses such a large number of reported cases that decisions
are sometimes made in which relevant precedents are not cited or considered, and may there-
fore be per incuriam. Some judges feel that this position is exacerbated by unreported cases
stored in computers (see above).
Persuasive precedents
These consist of decisions made in lower courts, and generally in the Judicial Committee of
the Privy Council of obiter dicta at all levels and also decisions of Irish, Scottish,
Commonwealth, and United States courts, the reason being that these nations also base their
law on the common law of England and Wales, though some parts of the law of Scotland are
derived from Roman law. Cases coming to the House of Lords from Scotland do not bind
English courts. They are only persuasive unless the legal principles involved are the same in
both systems of law. The House of Lords normally gives a direction as to the binding nature
of such decisions; for example, Donoghue v Stevenson (1932) (see Chapter 21), which is a funda-
mental case on the law of negligence, is binding on both jurisdictions, although it was an
appeal from the Scottish Court of Session.
..
EL_C07.qxd 3/26/07 10:41 AM Page 217
In the absence of any persuasive authority from the above sources, the court may turn to
textbooks and sometimes to Roman law. The weight which a court will give to persuasive
authority may depend upon the standing of the judge whose decision or dictum it was and
whether it was a reserved judgment, i.e. a case in which the court took time to consider the
judgment. Reserved judgments are highly regarded. Undefended cases in which the issues
have not been fully argued on both sides do not carry great weight.
Declaratory and original precedents

One further classification of precedents must be noted. They may be either ‘declaratory’ or
‘original’:
7
n a declaratory precedent is one which is merely the application of an existing rule of law;
n an original precedent is one which creates and applies a new rule. Original precedents alone
develop the law; declaratory precedents are merely further evidence of it. Thus, if a judge
says: ‘The matter before us is not covered by authority and we must decide it on principle . . .’
an original precedent is indicated.
Reversing, overruling and res judicata

It often happens that when a case has been decided in (say) the High Court, a decision is
taken to appeal to an appellate court, in this case the Court of Appeal. The Court of Appeal
will re-examine the case and, if it comes to a different conclusion from the judge in the High
Court, it reverses his decision. Reversal, therefore, applies to a decision of an appellate court
in the same case. Sometimes, however, the case which comes before the appellate court has
been decided by following a previously decided case, the judge having followed precedent. In
this case, if the appellate court decides to differ from the decision reached in the lower court,
it is said to overrule the case which formed the basis of the precedent.
In this connection, it was held to be in order for a court, in this case a county court, to
adjourn proceedings pending a ruling by the House of Lords on a similar issue on which the
Court of Appeal had already ruled instead of following the Court of Appeal ruling (see
Kingcastle Ltd v Owen-Owen (1999) The Times, 18 March).
Reversal affects the parties, who are bound by the decision of the appellate court, and it
affects precedent because lower courts will in future be bound to follow the decision.
Overruling affects precedent, but does not reach back to affect the parties in the original case
now regarded as wrongly decided, and it is not necessary, for example, for a successful
claimant to return his damages. Furthermore, the case could not be tried again because the
rule of res judicata would apply. So the rule of res judicata (a matter which has been adjudicated
on) protects defendants against a multiplicity of actions in regard to the same issues.
Res judicata does not apply where the decision is affected by judicial bias. This is illustrated
by the various proceedings brought in connection with the application for extradition of
General Pinochet, the former head of the state of Chile, to Spain to face charges of murder
of Spanish citizens in Chile and the taking of such citizens as hostages and the torturing of
them. On the basis of these allegations, the House of Lords ruled in 1998 (see R v Bow Street
Metropolitan Stipendiary Magistrate, ex parte Pinochet [1998] 3 WLR 1456) that Pinochet was not
entitled to immunity as an ex-head of state. However, lawyers acting for him discovered that
one of the Law Lords, who was part of the court that heard the case, had been the chairman
and an unpaid director of Amnesty International, which had been allowed to intervene in
the appeal and was vigorously seeking Pinochet’s extradition. In 1999 (see R v Bow Street
Metropolitan Stipendiary Magistrate, ex parte Pinochet [1999] 1 WLR 272) the House of Lords
..
EL_C07.qxd 3/26/07 10:41 AM Page 218
re-heard the case with a different court and set aside the 1998 ruling, although the matter
was in a sense res judicata.
The rule of res judicata can in modern law be divided into what is called cause of action
estoppel and issue estoppel. Cause of action estoppel prevents a party to an action from suing
again on the same matter in order to try to overturn the earlier decision. The earlier decision
must stand once all rights of appeal have been exhausted or abandoned. The matters in issue
must be the same, otherwise the rule does not apply. Thus, the failure or settlement of a
claim for unfair dismissal (see Chapter 19) does not prevent a claim being made for unpaid
wages (see Dattani v Trio Supermarkets [1998] ICR 872 – a ruling of the Court of Appeal).
A claimant is also barred by cause of action estoppel from bringing a claim which could
have been brought at the same time as another claim brought by a different claimant having
the same cause of action against the same defendant. Thus, in Talbot v Berkshire County
Council [1993] 4 All ER 9, Talbot and his passenger were injured when his car ran into water
on the highway and went off the road. The passenger sued Talbot and the Council, and dam-
ages were awarded to her as to two-thirds against Talbot for his negligence and one-third
against the Council for its negligence. Talbot, who had been unaware of the claim against the
Council because of the involvement of insurance companies, then tried to claim against the
Council. The Court of Appeal said he could not. Talbot’s claim could have been brought at
the same time as the passenger’s and was, therefore, barred by cause of action estoppel.
Issue estoppel is different and the court may in some cases allow an issue which was dealt
with in an earlier action between the parties to be litigated again in a later claim between them.
Arnold v National Westminster Bank plc, 1990 – Cause of action and issue
estoppel (33)
Advantages and drawbacks of case law

The system of judicial precedent has several advantages. Up to a point it can claim the advant-
age of certainty, since it is possible to predict the ruling of a court because judicial decisions
tend to be consistent. Nevertheless judges have a habit of distinguishing cases on the facts
and, as we have seen, avoiding the following of cases in a variety of other ways. This means
that the claim to certainty has to be taken with reservations. Another claim put forward in
favour of case law is its power of flexibility and growth. New decisions are constantly being
added as new cases come before the courts. In this way the law tends to keep pace with the
times and can adapt itself to changing circumstances. Judicial precedent covers a wealth of
detail. There is a case in point for every rule, and there is a practical character to judicial rulings.
Legal rules are made only as the need arises, and the law is not made in advance on the basis
of theory. When a case arises, a decision is taken and the ruling is usually recorded, so that
when a similar case arises again the law will be there to be applied.
Case law has certain drawbacks. These drawbacks are in some cases merely the converse
aspects of the advantages. For example, Jeremy Bentham criticised the principle of the ‘law
following the event ’, and applied the epithet ‘dog’s law’ to the system. ‘It is’, he says, ‘the
judges that make the common law. Do you know how they make it? Just as a man makes
laws for his dog. When your dog does something you want to break him of, you wait till he
does it then beat him. This is the way you make laws for your dog: this is the way the judges
make law for you and me.’
A further criticism is that the binding force of precedent limits judicial discretion. It has been
said that judges are engaged in ‘forging fetters for their own feet’. This can be illustrated by
..
EL_C07.qxd 3/26/07 10:41 AM Page 219
the doctrine of common employment, which was laid down by the House of Lords in Priestley
v Fowler (1837) 3 M & W 1. This doctrine said that if an employee was injured by a fellow
employee whilst both were acting within the scope of their employment, their employer was
not liable vicariously for that negligence. The rule operated in a most unjust fashion during
the period of great industrial development, but it continued to bind judges for over a century
until it was finally abolished by the Law Reform (Personal Injuries) Act 1948. All the judges
could do in the meantime was to try to limit its scope.
Limiting the scope of a decision may lead to the court’s making illogical distinctions. Judges
and counsel pay attention to differences in cases which are fundamentally similar, in order to
uphold the doctrine of precedent and still not feel bound to follow an inconvenient rule.
Often these distinctions have real substance, but occasionally they are illogical and serve to
complicate the law. 7
Difficulties of the kind outlined above may not now arise in such an acute form because, as
we have seen, the House of Lords is no longer bound by its own decisions, though this tends
to detract from the element of certainty.
A further criticism must be noted – that of bulk and complexity. The number of reported
cases is so large that the law can be ascertained only by searching through a large number of
reports. This search has been eased somewhat where case law has been codified by statute in
order to produce a rational arrangement. The Bills of Exchange Act 1882, the Sale of Goods
Act 1893 (now 1979), and the Law of Property Act 1925 have to a large extent produced order
in what might have been called chaos, but case law still tends to develop even around a codify-
ing statute, and its sections soon have to be read in the light of interpretative cases.
Finally, it is a major criticism of our system of case law that only the House of Lords gives
the ultimate authoritative judicial ruling on a matter. However, whether this happens
depends upon the litigants or, at least, the losing party footing the bill to get to the House of
Lords or, increasingly more unlikely these days, legal aid doing so. It would be an improve-
ment if we had a system under which the High Court or Court of Appeal could refer a question
of law to the House of Lords at public expense, rather on the lines of Art 177 (now 234) of the
EC Treaty which allows reference to the Court of Justice by domestic courts on matters
involving Community law.
Precedent in the European Court

In line with the normal Continental approach, there is no doctrine of binding precedent,
though the body of decisions which the court is making in the interpretation of the Treaty
are having strong persuasive influence. These decisions are cited before the court in argument
and are also quoted in judgments. In terms of the interpretation of legislation, the Euro-
pean Court has much broader powers than those which English courts have. There is
no question of being restricted, for example, to the words of the Treaty or regulations.
The court may consider the reasons for enactment and the general objectives and policy of
the Communities. It can have regard to travaux préparatoires, i.e. statements and publica-
tions made prior to enactment and doctrine, i.e. views of learned writers as to what the law
should be.
The European Union

On 1 January 1973 the United Kingdom became a member of the European Community
(now the European Union) and in consequence subject to an additional source of law.
..
EL_C07.qxd 3/26/07 10:41 AM Page 220
Membership of the EU
Twenty-five countries are now members of the European Union. They are: France, Germany,
Italy, Belgium, the Netherlands, Luxembourg, the United Kingdom, the Republic of Ireland,
Denmark, Greece, Spain, Portugal, Sweden, Finland, Austria, Cyprus, the Czech Republic,
Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovenia and Slovakia. Bulgaria and
Romania plan to join in 2007 and Turkey has applied to join.
Union or Community?
The parts of the European co-operation arrangements include:
(a) The European Community (economic co-operation: the old EEC);

(b) The European Atomic Energy Community (EURATOM);
(c) The European Coal and Steel Community (ECSC); and
(d ) The Maastricht areas referred to above.
As we have seen, when referring to all of them the correct legal reference is to the European
Union and the same is true when referring to the Maastricht areas of co-operation. Otherwise,
the correct reference is to the European Community, which took over from the earlier EEC,
or to EURATOM or ECSC as the context requires.
The European Court has no automatic jurisdiction in the Maastricht areas and so rightly
continues to call itself the Court of Justice of the European Communities, although confusingly
the Council of Ministers calls itself the Council of the European Union, even when passing
EC legislation!
The expressions ‘Community’ and ‘Union’ are used indiscriminately in this book as they
are in real life and if the reader is more at home with ‘Union’ then there is no reason why
that expression should not be used throughout.
The European Economic Area (EEA) Agreement came into force on 1 January 1994. It
extends the EC’s Single Market to Austria, Finland, Iceland, Norway and Sweden. Some 1,500
EC measures, such as the rules on competition, will apply to these countries and, as we have
noted, Austria, Finland and Sweden now have full membership of the EU, while Norway
has decided not to join. The EEA was implemented in the UK by the European Economic
Area Act 1993.
The institutions of the Union

The five basic institutions of the Union are:
n the Parliament
n the Council
n the Commission
n the Court of Justice
n the Court of First Instance.
Consideration has already been given to the courts listed above.
The Parliament
This is a large assembly that currently has 732 members directly elected by their member
states. It is important to note that it is not the legislature of the Union. In this sense it differs from
Parliaments modelled on the Westminster Parliament. However, the powers of the Parliament
have been extended by the Single European Act of 1986 and the Treaty on European Union
..
EL_C07.qxd 3/26/07 10:41 AM Page 221
1992 (the Maastricht Treaty). These extensions have in some ways remedied the defect that
critics had of the Parliament in that the unelected Council is the primary legislature.
The Treaty of Amsterdam extended its powers in the field of co-decision (see below). The
Parliament now has a legislative role at a number of levels as follows.
Advisory and consultative. This procedure represents the only original involvement of the
Parliament in legislation. Under this procedure the Commission puts forward proposals to
the Council for consideration. At this stage the Parliament has a right to be consulted and
can give an opinion. The final decision is taken by the Council. This procedure is retained for
matters concerned with the Common Agricultural Policy.
Co-operation. Under this procedure the Parliament has the opportunity to express an opinion
and propose amendments: 7
n when a proposal of the Commission is submitted to the Council; and
n when the Council has considered the opinion of the Parliament and reached what is called
a ‘Common Position’. The procedure is a right to influence but not veto. The procedure is
restricted to matters concerning economic and monetary union.
Co-decision. This procedure is the same as the co-operation procedure to the point where a
Common Position is reached. After that it changes and the Parliament may approve the
Common Position in which case the Council will adopt it. In the case of rejection, the matter
is referred to a Conciliation Committee of 12 persons from the Council and 12 MEPs charged to
reach an agreement acceptable to both sides. If there is no such agreement or the agreement
is unacceptable to the Parliament, the proposal lapses. The Parliament may propose amend-
ments to the Common Position, and then:
n the Council and the Commission will consider the amendments;

n the Council may, if it approves all the amendments, adopt the measure as amended; or
n find the amendments or some of them unacceptable (in this case the Conciliation Com-
mittee is convened; if a joint approach is agreed between the two sides of the Committee,
the measure must be adopted within six weeks by the Council and Parliament);
n if the Committee cannot agree, the proposal will lapse, though it could be adopted unilater-
ally by the Council subject in this case to a power of veto in the Parliament.
This procedure applies to the majority of single-market proposals, culture and public health
and importantly consumer protection.
Assent. The assent procedure applies in regard to applications for membership of the Union
and agreements between the Union and other states, or international organisations. The
Council may only adopt a proposal by the Commission through this procedure by obtaining
the formal assent of the Parliament.
The Council
If the Union can be said to have a legislature this is it. It is a body composed of one minister to
represent each member state. These persons change in accordance with the subject under dis-
cussion. For example agricultural ministers attend when agricultural policies are involved and
finance ministers where economic issues are under discussion or review. This body is not to
be confused with the European Council which meets twice a year at least with the
Commission President, foreign ministers and a Commissioner.
The main function of the Council is to ensure that the treaty objectives are attained. It
acts normally on a proposal from the Commission. Because it is not a permanent body
the day-to-day work of looking into Commission proposals is delegated to COREPER (the
..
EL_C07.qxd 3/26/07 10:41 AM Page 222
Committee of Permanent Representatives) that consists of more junior representatives of the

member states.
The Commission
The Commission is the central administrative and policy making body of the Union. It con-
sists of 25 members one for each member state. The nominee commissioners are approved by
the Parliament and one of them acts as President.
Functions. The Commission initiates legislation and the Council legislates following pro-
posals by the Commission. The Council can, however, ask the Commission to undertake
research and submit proposals in the relevant area. It is a very powerful body in view of this
power of initiation of proposals. The Commission also enforces the treaty obligations of the
member states and can take such a state before the Court of Justice if it fails to comply. It can
also impose penalties and fines on those in breach of competition law who ignore decisions
against them. The Commission has extensive powers of investigation in the furtherance of its
functions.
The Executive of the Commission executes the decisions of the Commission. In regard to
the external policies of the Union the Commission is the negotiator. The agreements that it
makes are concluded by the Council after consultation with the Parliament if this is a treaty
requirement.
Types of Union law

Primary legislation: the Treaty of Rome
The Treaty of Rome (as amended) contains primary legislation in the following areas:
n free movement of goods (Arts 30–31);
n agriculture (Arts 32–38);
n free movement of persons, services and capital (Arts 39–60);
n visas, asylum, immigration (Arts 61–69);
n transport (Arts 70–80);
n common rules on competition, taxation and approximation of laws (Arts 81–97);
n economic and monetary policy (Arts 98–124);
n employment (Arts 125–130);
n common commercial policy (Arts 131–134);
n customs co-operation (Art 135);
n social policy, education, vocational training and youth (Arts 136–150);
n culture (Art 151);
n public health (Art 152);
n consumer protection (Art 153);
n trans-European networks (Arts 154–156);
n industry (Art 157);
n economic and social cohesion (Arts 158–162);
n research and technological development (Arts 163–173);
n environment (Arts 174–176);
n development co-operation (Arts 177–181).
Although we refer to the above as ‘legislation’, the relevant Articles are, in the main,
defining legislative objectives and require implementing secondary legislation to firm up the
..
EL_C07.qxd 3/26/07 10:41 AM Page 223
objectives. This is the task of the Council and the Commission through the exercise of their
powers under the treaty.
Secondary legislation
This is as follows:
Regulations
These are generally applicable throughout the Union so that they may give rise to rights and
obligations for states and individuals without the need for further national legislation.
Regulations in the areas of agriculture and transport are examples of this type of legislation. 7
Directives
These are binding in terms of the result to be achieved, e.g. reform of company law. However,
the member states must enact national laws to achieve the required effect. The UK’s response
to many Directives on company law is included in the Companies Act 1985.
Decisions
These are of more particular application and also are immediately operative. Decisions may
be addressed to a state or individual or a corporation and an example would be a
Commission ruling that a company was adopting restrictive practices in its operations within
the Union contrary to Arts 81/82 of the treaty (see Chapter 16). Such a Decision could also
impose a fine. Decisions have the force of law but affect the recipient only.
Union law: direct effect in the UK

The position is as follows:
Primary law (or legislation)

This is law contained in treaty Articles. If they are sufficiently precise, they are effective in the
UK. They then have what is known as vertical effect, i.e. they create rights against ‘emanations
of the state’, e.g. government departments, local authorities and hospital trusts. They also
have horizontal effect in that rights are created in individuals against other individuals and
organisations in the private sector of industry. An example is provided by Art 141 on equal
pay that is directly applicable in a vertical and horizontal sense in the UK.
If an Article is not sufficiently precise to be enforced as such it is not directly applicable at
all in the UK and requires national legislation to implement it.
Secondary legislation
Here the position is as follows:
Regulations. These are usually directly applicable with vertical and horizontal effect.
Directives. These are not directly applicable in that normally the member state has to pass
legislation to implement them. If there is no such implementation after the expiry of the
deadline set to member states for implementation, a Directive can be directly applicable if
it is sufficiently precise but only in a vertical sense in creating rights against emanations of
the state.
Decisions. These are binding upon the person or organisation to which they are addressed.
..
EL_C07.qxd 3/26/07 10:41 AM Page 224
A EU constitution
In December 2000 there was a meeting of heads of state and government at Nice, where it
was concluded that enlargement of the EU would require constitutional reform. In 2001 the
European Council adopted a Declaration on the Future of the European Union. This led to
the setting up of a European Convention to develop a draft treaty to establish a Constitution
for Europe. The draft constitution was published in full in 2003.
This draft is not, at the present, a profitable area for study. It requires approval by all mem-
ber states and has been turned down by France and the Netherlands. Whether in these
circumstances there will be a referendum in the UK remains to be seen, although it would
appear to have only a marginal chance of success.
Those who wish to pursue this matter further should access http://europa.eu.int. This is
Europa, the EU’s gateway, which carries most of the relevant sites.
Application of EC law in UK cases

Section 3 of the European Communities Act 1972 requires our courts to take note of the pro-
visions of the EC Treaty and also the decisions of the European Court.
Although arguments about the subject rage on, there can be little doubt now that EC law is
supreme and that the sovereignty of the UK Parliament is thereby reduced.
Factortame Ltd v Secretary of State for Transport (No 2), 1991 – Supremacy
of EC law (34)
Monetary union – impact of the euro

Our concern is purely that of the effect of the introduction of the euro on UK law, in particu-
lar, on business law. The arrival of the euro on 1 January 1999 (though not in the UK) could
affect contracts in terms that they might be frustrated by impossibility of performance and so
discharged (see further Chapter 17). This could occur where payment under the contract is
required to be, say, in French francs and yet this has become impossible by the eventual
takeover of this and other currencies by the euro, payment in French francs being no longer
possible. The Maastricht Treaty introduced the solution by providing that, in the absence of a
contrary intention by the parties, the introduction of the euro will not:
n affect any term of the contract;
n discharge or excuse performance under any contract; or
n on its own give any party the right unilaterally to alter or terminate any contract.
These matters will be considered as necessary in relevant parts of the text.
Law reform
It should be noted that a number of official bodies exist to consider and make proposals for
law reform, and the work of these bodies can have a considerable influence on the development
..
EL_C07.qxd 3/26/07 10:41 AM Page 225
of statute law. The most important of these bodies is the Law Commission, which was set
up by the Law Commissions Act 1965. Section 1 of the Act establishes the Commission to
promote the reform of English law and deals with the constitution of the Commission. The
Lord Chancellor appoints the members of the Commission, on a full-time basis, from among
persons holding judicial office, experienced barristers and solicitors and university teachers
of law. Section 3 states the duty of the Commission to be to keep under review the whole of
English law with a view to its systematic development and reform, including the codification
of such law, the elimination of anomalies, the repeal of obsolete enactments and generally
the simplification and modernisation of the law. The programme of the Law Commission
includes the codification of the law of contract. In this connection, and of major importance
to business is the Contracts (Rights of Third Parties) Act 1999, which stems from Law
Commission Report No 242 and provides for major and far-reaching changes in the privity of 7
contract rule (see further Chapter 10).
In arriving at its programme, the Commission consults with the chairmen of the Home
Secretary’s Criminal Law Revision Committee and the Lord Chancellor’s Law Reform
Committee, which are bodies set up on a part-time basis to consider specific matters of law
reform which he may refer to them in the fields of criminal and civil law respectively. The
work of the Commission and the Committees may be regarded as a source of law in that it is
a historical source of the law contained in the statute which implements its proposals. Thus,
the proposals of the Law Commission may be regarded as a historical source of the Criminal
Law Act 1967.
There is also the Civil Justice Council set up under s 6 of the Civil Procedure Act 1997. Under
s 6(2) it must include members of the judiciary appointed by the Lord Chief Justice after con-
sultation with the Lord Chancellor, and the legal professions, together with civil servants
concerned with court administration and persons with experience in and knowledge of con-
sumer affairs and the lay advice sector, e.g. Citizens’ Advice Bureaux and representatives of
employers and employees and business generally appointed by the Lord Chancellor after con-
sultation with the Lord Chief Justice. Its functions are set out in s 6(3) as follows:
n keeping the civil justice system under review;

n considering how to make the civil justice system more accessible, fair and efficient;
n advising the Lord Chancellor and the Lord Chief Justice and the judiciary on the develop-
ment of the civil justice system;
n referring proposals for changes in the civil justice system to the Lord Chancellor and the
Lord Chief Justice and the Civil Procedure Rules committee; and
n making proposals for research.
..
EL_C08.qxd 3/26/07 10:47 AM Page 226
8
PERSONS AND THE CROWN
In law a person possesses certain rights and owes certain duties. There are two categories of
persons as follows:
(a) Natural persons. These are human beings who are referred to as natural persons. An adult
human being has in general terms a full range of rights and duties. However, even in regard
to human beings, the law distinguishes between certain classes and gives to them a status
which may carry with it a more limited set of rights and duties than are given to the normal
adult. These classes include minors, persons of unsound mind, bankrupts and aliens, and the
significance of belonging to these categories will be more fully examined in connection with
the chapters on substantive law, such as contract, tort and crime. Non-human creatures are
not legal persons and do not have the full range of rights and duties which a human being
acquires at birth. However, animals may be protected by the law for certain purposes, e.g.
conservation (see Wildlife and Countryside Act 1981).
( b) Juristic persons. Legal personality is not restricted to human beings. In fact various
bodies and associations of persons can, by forming a corporation to carry out their functions,
create an organisation with a range of rights and duties not dissimilar to many of those
possessed by human beings. In English law such corporations are formed by charter, statute
or registration under the Companies Act 2006 or previous Acts; there is also the common law
concept of the corporation sole.
Natural persons
Here we shall consider some of the more important general principles of law relating to
minors, persons of unsound mind, bankrupts and aliens together with the rules governing
a natural person’s domicile and nationality and the general principles of law preventing
discrimination against natural persons.
Minors
The Family Law Reform Act 1969, s 1(1) reduced the age of majority from 21 to 18 years.
There is also a provision in the Act which states that a person attains a particular age, i.e. not
merely the age of majority, at the first moment of the relevant birthday, though this rule is
subject to any contrary provision in any instrument (i.e. a deed) or statute (s 9).
Section 1(2) provides that the age of 18 is to be substituted for 21 wherever there is a refer-
ence to ‘full age’, ‘infancy’, ‘minor’, ‘minority’ in:
..
EL_C08.qxd 3/26/07 10:47 AM Page 227
PERSONS AND THE CROWN 227
(a) any statutory provision made before or after 1 January 1970;

(b) any deed, will or other instrument made on or after that date.
This sub-section draws a distinction between statutory provisions and private dispositions.
In the case of the former the new age of 18 is substituted. Thus, in s 164 of the Law of
Property Act 1925 which uses the word ‘minority’ to deal with restrictions on the accumula-
tion of income in a trust as where the income is reinvested and not given to a beneficiary, ref-
erences to ‘minority’ will be construed as applying to persons under 18 years of age. However,
in the case of private dispositions such as deeds, wills and settlements the Act does not apply
retrospectively. Accordingly, if in a deed made before 1 January 1970 a person X (say, a
grandchild of the maker of the deed) is to take property ‘on attaining his majority’, he will
take it at age 21 years. If the deed was on or after 1 January 1970, he would take it at 18 years.
The reason for this rule is that where persons in the past have arranged their affairs in
reliance on the law as it stood, it would be unjust to interfere. The following general matters 8
relating to minors can be considered at this point.
(a) A minor cannot contract a valid marriage under the age of 16 years and requires the
consent of his parents or if the parents are divorced or separated, the one with custody,
or if one parent is dead, the survivor (or on failure that of a magistrates’ court) to marry
under 18 years of age.
(b) A person under 18 years cannot vote at elections and must be 21 before he can sit in
Parliament or be a member of the council of a local authority.
(c) With regard to civil litigation, a minor sues through a ‘litigation friend’, i.e. an adult who
is liable for the costs (if any) awarded against the minor in the action, though the minor
must indemnify him. A minor defends an action through a ‘litigation friend’ who is not
liable for costs. The minor’s father or mother often acts as ‘litigation friend’.
(d ) A person of 16 or over can give valid consent to medical treatment and it is not necessary
as before to obtain the consent of a parent or guardian (Family Law Reform Act 1969,
s 8). However, the court can override a minor’s refusal to consent to medical treatment
(Re W (1992) 142 NIJ 1124).
(e) The Tattooing of Minors Act 1969 makes it an offence, punishable by fine, for a person
other than a duly qualified medical practitioner to tattoo a person under the age of 18.
The person charged with the offence will have a defence if he can show that at the time
he had reasonable cause to believe that the person tattooed was 18 years of age or over.
The position in contract, tort and criminal law is set out in Chapters 11, 20 and 25 respectively.
The protection of children

The Children Act 1989 introduced a new regime to ensure the safety and protection of
children. Of major importance are two orders provided for by Part V of the Act. The first is an
emergency protection order.
Under s 44 an emergency protection order will only be made if the court which is asked to
grant it is satisfied that:
(a) there is reasonable cause to believe that the child is likely to suffer significant harm; or
(b) enquiries are being made by the relevant local authority and these are being frustrated by
denial of access to the child where such access is urgently required; or
(c) the applicant is an authorised person such as a local authority or the National Society for
the Prevention of Cruelty to Children and the applicant has reasonable cause to suspect
that a child is suffering or likely to suffer significant harm and the enquiries of the author-
ised person are being frustrated by lack of access.
..
EL_C08.qxd 3/26/07 10:47 AM Page 228
It will be seen that an emergency protection order will be granted only on the basis of hard
evidence.
However, s 43 provides for child assessment orders and these allow a local authority or
authorised person to apply to the court to take the child away from home, if necessary, for
assessment in cases which are not necessarily emergencies. Here the court must be satisfied
that the child is suffering or is likely to suffer ‘significant harm’ and that an assessment is
needed which would not otherwise be likely to take place. This order is not designed for
absolute emergencies but could be asked for following a case conference of interested
professionals which had considered a case where a child had, e.g., suddenly ceased to
attend a day nursery in suspicious circumstances or where neighbours had reported repeated
screaming.
Also of importance is the concept of ‘parental responsibility’ introduced by ss 2, 3 and 12 of
the 1989 Act. The court may make a parental responsibility order. This involves maintenance
of the child and seeing to its education and providing accommodation, medical attention
and so on. This is no longer a matter for the natural parents. Parental responsibility can now
be held by others, e.g. grandparents and even the local authority. It can be held by several
people concurrently. Every person who has parental responsibility can act alone in most cases
to ensure the welfare of the child. In many cases, therefore, there will be a small army of
persons including relatives and the local authority who will be able to intervene legally for
a parental responsibility order if the natural parents are found wanting in terms, e.g., of the
welfare of the child.
The 1989 Act also provides for the making of contact orders. Where the parents of a child are
divorced or separated, an application may be made for a contact order (normally by the man)
where access cannot be achieved by arrangement between the parents. The court will refuse
such an order to prevent direct contact between a father and his child where the father is,
e.g., violent and/or has an alcohol problem.
The effect of adoption

The material that follows is not concerned with the procedure for adoption but only with the
effects of adoption on the individual adopted in the law once adoption has taken place.
An adopted person is to be treated in law as if born as the legitimate child of the adopters
or adopter whether the adopters or adopter are married or unmarried (s 67 Adoption and
Children Act 2002). This principle applies in interpreting wills, settlements made during life-
time and intestacies. Where questions of seniority arise, ss 69 and 70 of the 2002 Act pro-
vide that the adopted child is deemed to have been born on the date of the adoption and if
adoptive parents adopt two or more children on the same day they are regarded as born on
that day in the order of the actual dates of their births. For example, we may take a gift in the
will of a testator ‘to the eldest son of X’. Suppose that X had a natural child (A) in 1975 and
in 1976 adopted a child (B) then aged 10, it appears that the natural child (A) takes the gift
although B is biologically the elder.
However, the above rules do not affect a document where there is reference to the age of a
child (s 69 of the 2002 Act).
Thus, if a testator gave his estate ‘to the children of X at 25’, it is clear that an adopted
child would take the gift when he in fact attained that age and not 25 years after his adop-
tion. It also seems that a gift to ‘the first son of X to attain 25’ would go to an adoptive child
if he attained 25 before X’s natural born children, although, as we have seen, he would not
take as X’s ‘eldest son’ in the example given above.
Adopted persons may, on reaching the age of 18, have a copy of their birth certificate as of
right and not as formerly only by leave of the court (s 60 Adoption and Children Act 2002).
..
EL_C08.qxd 3/26/07 10:47 AM Page 229
Under s 63 of the 2002 Act when information such as a birth certificate is supplied the
registration authorities must tell the applicant that counselling services are available and
from whom, e.g. a local authority. The Registrar must also maintain a register of relatives
of adopted persons who wish to make contact. A person supplied with information about his
natural parents may have access to this register if he wishes.
Persons suffering from mental disorder

We shall be giving fuller consideration to the position of mentally disordered persons in
contract, tort and crime in the chapters which follow. However, the following general points
can be noted now.
If a person suffering from mental disorder goes through a ceremony of marriage but cannot
understand the nature of marriage, i.e. the responsibilities and change of status involved, the
marriage will be void.
8
In connection with mental disorder, it is of interest to note the existence of the Court of
Protection which under the Mental Capacity Act 2005 is concerned with proper management
of a mental patient’s property. The court operates through deputies who are, in many cases,
close relatives of the patient. The court can administer the patient’s property and make a
will for the patient or make lifetime gifts of that property on the application of the patient’s
deputy.
Undischarged bankrupts
Bankruptcy procedure is set out in the Insolvency Act 1986. Bankruptcy proceedings which
involve asking the court to make a bankruptcy order may be taken against a debtor by his
creditor(s). The debtor’s affairs will then be taken over by an insolvency practitioner who is
generally an accountant in practice though in the case of many bankruptcies the estate is too
small for this and a state official called the Official Receiver (OR) does the work. A petition to
the court for a bankruptcy order is most usually presented by a creditor who must be owed
£750 or more. Two or more creditors (none of whom is owed as much as £750) may present a
joint petition if they are together owed £750 or more by the debtor as where creditor A is
owed £280 and creditor B is owed £600.
As regards the disabilities of an undischarged bankrupt, he is disqualified from being an
MP and cannot be a member of a local authority council. This, however, applies under
ss 265–267 of the Insolvency Act 1986 (as amended) only to those bankrupts who are the
subject of a bankruptcy restriction order (BRO). These are made by the court and are intended
for ‘culpable bankrupts’, such as those who have not kept proper accounting and other busi-
ness records. The restrictions also apply to those culpable bankrupts who have not waited for
the court to make a BRO but have offered a BRO to the Secretary of State who has accepted
the undertaking. Under s 360 of the 1986 Act he is guilty of an offence punishable by a max-
imum of two years’ imprisonment and/or an unlimited fine if either alone or jointly with
another person he obtains credit of £500 or more unless he tells the person giving it that he
is an undischarged bankrupt – in general he will not then get the credit. Under s 11 of the
Company Directors Disqualification Act 1986 it is an offence for an undischarged bankrupt to
act as a company director or to promote or form or manage a company without the permis-
sion of the court which made the bankruptcy order.
The position is as follows.
n there is automatic discharge from bankruptcy on the 12-month anniversary of the
bankruptcy order. This will be the end of the bankruptcy disabilities, e.g. there is no credit
restriction;
..
EL_C08.qxd 3/26/07 10:47 AM Page 230
n for the culpable bankrupt there will normally be a BRO in place that imposes such restric-
tions as are contained in the order, e.g. the credit restriction (the length of a BRO can be
any period between two and 15 years);
n many non-culpable bankrupts may be discharged even sooner than the 12-month period
following a small investigation by the Official Receiver following which the OR may file a
certificate in court discharging the bankrupt.
Any money owed by the debtor which has not been paid at the date of discharge is no longer
payable by the debtor, who can then go back into business legally free of his or her old debts
and with no restriction on credit. This does not apply where there is a BRO.
However, damages awarded against all bankrupts for personal injury caused by negligence
or nuisance, money payable under maintenance and other matrimonial orders, and fines and
debts incurred by fraud are not discharged and remain payable, as does money due under the
Child Support Act 1991.
Domicile – generally
The basis of jurisdiction and the law to be applied in many matters coming before English
courts, e.g. wills, matrimonial causes and taxation, may depend on the domicile of the par-
ties. A person’s domicile is the country which he regards as his permanent home, and thus
contains a dual element of actual residence in a country and the intention of remaining
there. Where a country has within its national boundaries several jurisdictions, the person’s
domicile must be determined with reference to a particular jurisdiction, e.g., there is no such
thing as domicile in the United States of America, though a person may be domiciled in a
particular state. England and Wales, Scotland, Northern Ireland, the Channel Islands, and the
Isle of Man are distinct jurisdictions within the British Isles. A person must always have a
domicile, and he can only have one domicile at a time. It should be noted that the concepts
of domicile and nationality are, as appropriate, applied to corporate bodies.
IRC v Bullock, 1976 – Domicile and taxation (35)
Domicile of origin
The domicile of origin of a child is that of its father at the date of the child’s birth if the
father is alive at that date and is married to the child’s mother, i.e. if the child is legitimate
(for example, the Nova Scotia domicile of Mr Bullock in IRC v Bullock (1976)). If the child is
illegitimate or, though legitimate, the father is not alive when it is born, it takes its domicile
of origin from that of its mother at the date of the child’s birth. Foundlings take their domicile
of origin from the place where they were found.
Dependent domicile
The concept of dependent domicile applies as follows:
Minors (i.e. persons under the age of 18 years)

(a) At common law. The domicile of a legitimate, legitimated or adopted child is dependent
on, and changes with, that of its father or adoptive father, and after the father’s death with
that of its mother or adoptive mother. The domicile of an illegitimate child depends on, and
changes with, that of its mother.
..
EL_C08.qxd 3/26/07 10:47 AM Page 231
(b) Under statute. Sections 3 and 4 of the Domicile and Matrimonial Proceedings Act 1973 are
concerned with the domicile of minors. Where previously the domicile of a minor had to follow
that of his father until the age of majority, a minor can under the Act acquire an independent
domicile at the age of 16, or under that age if he marries before then. This latter principle
cannot, of course, apply to any marriages in this country, but it may apply to those in this
country, e.g. Nigerians, who may be married under 16 according to their domiciliary law. The
provision referred to above, which is in s 3 of the Act, avoids the previous possibility of a father
leaving this country and establishing a domicile elsewhere, thus changing the domicile of his
minor son who had remained in this country. Furthermore, it had always been uncertain
whether, after the divorce of the parents, a child’s domicile continued to follow his father’s
or followed that of his mother with whom the child was living. Now s 4(2) of the 1973 Act
provides that the child’s domicile where he is under 16 or has not set up an independent
domicile and his father and mother are alive but living apart shall be that of his mother if:
8
(a) he then has his home with her and has no home with his father; or
(b) he has at any time had her domicile by virtue of (a) above and has not since had a home
with his father.
The section also deals with other possible situations: for example, where the mother is
dead and the child has not returned to his father, he will keep the domicile he acquired
under s 4(2).
Married women
By s 1 of the Domicile and Matrimonial Proceedings Act 1973, the domicile of a married woman
is not bound to be determined by that of her husband, as was the case at common law. She is
capable of acquiring a separate domicile in exactly the same manner as her husband. By s 1(2)
of the 1973 Act a married woman is treated as retaining the domicile of her husband (as a
domicile of choice if it is not one of origin) at the coming into force of the Act unless and
until it is changed in accordance with common law rules for determining such change.
Certain consequences regarding jurisdiction in divorce proceedings follow from the general
principles enacted by the above section. As a wife can now acquire a separate domicile from
that of her husband, jurisdiction is now based upon the domicile of either party in England
and Wales at the time of the proceedings or on the ground that either party was habitually
resident in those countries for one year before the proceedings commenced (but see below).
The court has power to stay proceedings where courts in two countries have jurisdiction. This
would prevent, for example, divorce proceedings being taken in an English court and a
Scottish court contemporaneously as where the husband had an English domicile but his wife
had acquired one in Scotland.
The rules on jurisdiction in matrimonial cases set out above are now governed by the
European Communities (Matrimonial Jurisdiction and Judgments) Regulations 2001.
Jurisdiction in matrimonial suits is now available where:
n both parties are habitually resident here (period irrelevant);
n both parties were last habitually resident here and one still is (period irrelevant);
n the respondent is habitually resident here (period irrelevant);
n the petitioner is resident here and has been for at least 12 months;
n the petitioner is domiciled here and has resided here for at least six months; or
n both parties are domiciled here (no matter where they may reside).
On the matter of ‘habitual residence’, the High Court ruled in Ikimi v Ikimi (Divorce:
Habitual Residence) [2001] 1 FLR 913 that where a person had two residences and occupied
both from time to time even though for only short periods in one of them that person could
be regarded as ‘habitually resident’ in both.
..
EL_C08.qxd 3/26/07 10:47 AM Page 232
Domicile of choice
A person, other than a minor under 16, can change his domicile of his own volition. To do
so he must be in the new country, and have a ‘fixed and settled intention’ to abandon his
domicile of origin or choice, and to settle instead in the new country.
A person retains his domicile of origin until he acquires a domicile of choice, and since a
person must always have a domicile, there can be no abandonment of the domicile of origin
unless a domicile of choice is acquired instead. However, having acquired a domicile of
choice, a person who abandons it without acquiring a fresh domicile of choice, reverts to his
domicile of origin.
The country in which a person resides is on the face of it the country of his domicile. Where
it is claimed that a domicile of origin has been changed for one of choice, the onus of proof
is on the party claiming that such a change has taken place. Examples of evidence which
suggest a change of domicile are oral or written declarations to this effect, letters, wills as in
IRC v Bullock, the adoption of a new name, as where a German living in England changes his
name to Richmond from Reichman, an application for naturalisation, the purchase of land,
or a grave, or of a home or a business in the new country. It was decided in Plummer v IRC
[1988] 1 All ER 97 that it is not enough merely to express an intention eventually to live and
work in the new country. Furthermore, it was held in Cramer v Cramer [1987] 1 FLR 116 that
domicile is not established by an intention to marry a person resident in the new country at
some time in the future even where the intention to marry is reciprocated by the other party.
Tee v Tee, 1973 – Reverting to domicile of origin (36)

Steiner v IRC, 1973 – Evidence of change of domicile (37)
Residence
The residence of a person is important for certain purposes, e.g. liability for income tax, and a
person who is not domiciled in the UK may nevertheless be liable to UK tax if he is regarded
as resident here in the year of assessment. The matter is of considerable importance to inter-
national high-earners since income tax is charged broadly on the world income of UK resid-
ents. Non-residents are liable to UK tax only on income that arises in the UK. Furthermore,
the jurisdiction of magistrates in matrimonial matters is based on the residence of the parties
and not their domicile, as is the right to vote in a particular constituency at an election under
s 1(1) of the Representation of the People Act 1983. On the other hand, the jurisdiction of
the High Court in matrimonial proceedings is based either on domicile or habitual residence
for one year (Domicile and Matrimonial Proceedings Act 1973, s 5). Domicile must, therefore,
be distinguished from residence.
The term residence imports a certain degree of permanence, and must not be casual or
merely undertaken as a traveller. In Fox v Stirk [1970] 3 All ER 7, the Court of Appeal decided
that two undergraduates were resident at their universities and entitled to have their names
on the electoral register for that constituency although their parental homes were elsewhere.
On the other hand, in Scott v Phillips 1973 SLT (Notes) 75 it was held that the claimant, who
lived mainly at his house in Inveresk but had a cottage on lease in Berwickshire in which he
spent 31/2 months each year, was not resident in Berwickshire and therefore not entitled to
have his name included on the electoral roll for that county. Obviously, residence can be
changed at any time by moving to a new home. Temporary absences abroad while on holiday
or on business do not create a gap in the period of residence, which is determined on the
facts of the case.
..
EL_C08.qxd 3/26/07 10:47 AM Page 233
Racial and Religious Hatred Act 2006

The Public Order Act 1986 (see below) is amended by the Racial and Religious Hatred Act
2006 to create offences which involve stirring up hatred on racial and/or religious grounds.
The offences cover: use of words or behaviour or display of written material; publishing or
distributing written material; the public performance of a play; distributing, showing or play-
ing a recording; broadcasting programmmes; and possession of inflammatory material. There
are powers of entry to property and seizure of material. The Act makes clear that freedom of
speech is protected in terms of discussion and also, for example, criticism. The police have
powers of arrest but there is no power for a citizen’s arrest. The Act does not apply to reports
of parliamentary or judicial proceedings. Offences are triable either way and a conviction on
indictment attracts a penalty of a maximum of seven years’ imprisonment or an unlimited
fine or both. On conviction before magistrates the maximum imprisonment is six months
and/or a fine of up to £5,000. The bringing of proceedings requires the consent of the 8
Attorney-General.
Discrimination
We shall now consider the rules of law which are designed to prevent discrimination against
natural persons. Discrimination in employment is dealt with in Chapter 19.
Racial discrimination
The Race Relations Act 1976 and the Public Order Act 1986 are designed to deal with discrimina-
tion on racial grounds and with relations between different racial groups. It should be noted
before considering the main provisions of the Acts that under s 72 of the 1976 Act a term in a
contract which purports to exclude or limit any provisions of that Act is unenforceable by
any person in whose favour the term would operate.
The Race Relations Act 1976

Discrimination to which the Act applies
Section 1 provides that it is direct discrimination to treat a person less favourably on racial
grounds and indirect discrimination where there is some requirement or condition, e.g. of
employment, which, although it applies to all potential employees, is discriminatory since a
smaller proportion (or none) of black applicants can comply with it than white. Thus a rule
insisting that bus conductors wear company caps could be indirect discrimination against Sikh
applicants, who were held to be a protected ethnic group by the House of Lords in Mandla v
Dowell Lee [1983] 1 All ER 1062.
Section 2 deals with discrimination by way of victimisation of a person who has, for example,
brought or given evidence in proceedings under the Act against a discriminator or alleged dis-
criminator. Thus if A brings proceedings against his employer, B, for alleged discrimination
and as a consequence A’s landlord, C, will not allow A to use a goods lift provided for com-
mon use in the block of flats where A lives, then C could be guilty of victimisation under s 2.
Under s 3, ‘racial grounds’ means colour, race, nationality, or ethnic or national origins, and
‘racial group’ means a group of persons defined by reference to colour, race, nationality, or
ethnic or national origin.
For example in Commission for Racial Equality v Dutton (1988) The Times, 29 July, the Court
of Appeal held that gypsies were a racial group for the purposes of the Act. They were not,
however, synonymous with ‘travellers’ so that a notice in a public house saying ‘sorry, no
..
EL_C08.qxd 3/26/07 10:47 AM Page 234
travellers’ did not directly discriminate against them. It did, however, indirectly discriminate
against them. However, in Crown Suppliers ( PSA) v Dawkins [1993] IRLR 284, the Court of
Appeal decided that Rastafarians are not a group defined by ethnic origin within the meaning
of the 1976 Act. Therefore, a van driver who was turned down for a job because he would
not cut his hair had not been discriminated against. Rastafarians were a religious sect not an
ethnic group. The Act still permits discrimination on grounds of religious belief unless that
constitutes racial discrimination, as it would if the religion was Jewish but not if it was
Catholic or Protestant since the last two named are not matters of race.
As regards harassment, the Race Relations Act 1976 did not contain an express definition of
harassment. Case law has found a remedy for harassment by regarding it as a ‘detriment’
within the terms of the 1976 Act. The Race Relations Act 1976 (Amendment) Regulations
2003 introduce a new test for racial harassment that is applied also to harassment on the
grounds of sexual orientation or religion or belief and is applied to disability discrimination
from 1 October 2004. For these purposes, harassment is defined as occurring where – on
grounds of race or ethnic or national origins or sexual orientation or religion or belief or for
a reason that relates to a person’s disability A engages in unwanted conduct which has the
purpose of:
n violating B’s dignity; or

n creating an intimidating, hostile, degrading, humiliating or offensive environment for B.
The conduct is deemed to have the required effect if having regard to all the circumstances
including, in particular, the perception of B it should reasonably be considered as having
that effect.
Areas of racial discrimination not relating directly to the contract of employment appear
below.
Partnerships
Section 10 of the 1976 Act extends protection against discrimination to partnerships as
regards failure to offer a partnership or the terms on which it is offered, including benefits,
facilities and services. Thus discrimination would exist if a partner was refused a cheap loan
for house purchase under the firm’s scheme or was refused the use of a firm’s car. The section
applied only to firms of six or more partners. The exemption for partnerships of fewer than
six partners was removed by the Race Relations Act 1976 (Amendment) Regulations 2003.
The section also covers discrimination in cases where persons are preparing to form them-
selves into a partnership.
Trade unions, etc.

Section 11 renders unlawful discriminatory practices by trade unions, employers’ associations
and professional trade bodies. Surprisingly, individual discriminatory action by shop stewards
is not covered by the Act. Thus if a shop steward discriminates with the authority of his
union, the union will be liable, but if he acts without authority, no one is liable. This appears
to be a defect in the Act since it is well known that white organised labour has in several areas
of the country held back black development in employment.
Qualifying bodies
Section 12 provides that it is unlawful for an authority or body which can confer an author-
isation or qualification which is needed for, or facilitates employment in, a particular trade or
profession, e.g. the General Medical Council, to discriminate against a person in terms of
conferring that authorisation or qualification.
..
EL_C08.qxd 3/26/07 10:47 AM Page 235
Discrimination in education
Sections 17–19 make it unlawful for responsible bodies, e.g., governing bodies of educational
establishments including both state and private schools, to discriminate on racial grounds as
regards, for example, allocation of places or dress. These matters are also often covered by the
Convention on Human Rights, which can be used as a basis for complaint to the court (see R
(on the application of SB) v Headteacher and Governors of Denbigh High School [2005] 3 All ER 396).
Discrimination in provision of goods, facilities or services

Under s 20, discrimination by, for example, shops, hotels, boarding houses and banks is
outlawed as is discrimination in clubs which have 25 or more members. When membership
of a club reaches 25 or more a licence to serve intoxicating liquor must be sought. Clubs with
membership of less than 25 members are excluded and may discriminate.
In terms of public authorities, the 1976 Act was weak because it protected against racial 8
discrimination only in terms of the provision of goods, facilities and services and its
application to the police required strengthening. Public authorities not only supply goods,
facilities and services, they make decisions, e.g. in the field of planning permission where there
could be discrimination. The 2000 Act inserts new sections and amends Sch 1 of the 1976 Act
to achieve the wider coverage. A police authority is covered and chief officers of police are
made vicariously liable (see Chapter 20) for acts of racial discrimination by police officers.
Direct and indirect discrimination is covered. The making of Orders by the UK and Scottish
Parliaments is covered as is the Welsh Assembly and the enforcement agencies such as
Customs and Excise, which are now on the same footing as a bank or building society.
Discrimination in the disposal or management of premises

Section 21 states that discrimination on racial grounds by a seller of property in terms of the
buyer or by, say, a brewery in terms of who shall manage a public house, is unlawful. The sec-
tion does not apply to owner-occupiers of houses who sell the property without employing
an estate agent or advertising it for sale (s 21(3)). There is also an exemption for the letting of
accommodation in premises where the occupier or a near relative of his resides and intends
to continue to reside on the premises which are ‘small premises’ under s 22(2), e.g. where
there is not room for more than six persons in addition to the occupier and members of his
household. Section 23 provides for exemptions allowing discrimination where a person takes
into his home and treats as a member of his family a child, an elderly person or a person
requiring a special degree of care and attention. Thus discrimination on racial grounds in the
choice of foster children is not unlawful. Section 24 provides that where a tenant requires the
licence or consent of the landlord to assign or sublet to another person it is unlawful for that
licence or consent to be withheld in a discriminatory way, as where a landlord will not allow
a tenant to assign to a black tenant.
As we have seen, discrimination in clubs with 25 or more members is unlawful but s 26
provides an exemption for organisations whose main object is to confer benefits on ethnic or
national groups and does not exclude others. Thus the London Welsh Club is still a lawful
association but must not exclude black Welshmen.
By s 27 the Act applies only to benefits, facilities and services in Great Britain. However, it
does extend outside Great Britain in some cases. For example, discrimination in Great Britain
in regard to the provision of facilities for travel is unlawful even though the facilities are to be
supplied outside Great Britain.
Discrimination in the legal profession

The Race Relations Act 1976 did not make unlawful discrimination on the grounds of race
either by or within barristers’ chambers or by solicitors in relation to barristers approached
..
EL_C08.qxd 3/26/07 10:47 AM Page 236
to take on cases. The Courts and Legal Services Act 1990 inserts a new section, s 26A, into the
1976 Act making it unlawful for a barrister or a barrister’s clerk to discriminate against
current or prospective pupils or members of chambers on the grounds of race. It also makes
it unlawful to discriminate on the grounds of race in regard to the giving or withholding of
instructions to a barrister.
Discriminatory practices
Under s 28 there may be a discriminatory practice, even where there is no victim. Thus a
factory which has discriminatory recruiting procedures may be regarded as discriminating
even during a recession when there has been no recruitment for some time. However, pro-
ceedings under s 28 can be brought only by the Commission for Racial Equality.
Advertisements
Section 29 makes discriminatory advertisements unlawful, as in Commission for Racial Equality
v Dutton, 1988, unless, as in an employment advertisement, there is, for example, a GOQ
(genuine occupational qualification), e.g. being Chinese is a GOQ for employment in a
Chinese restaurant, but not a take-away.
Instructions, pressure or inducement to discriminate

Under ss 30 and 31 it is unlawful to instruct a person to discriminate or to put pressure on a
person to discriminate in a way which the 1976 Act makes unlawful. The act must be unlaw-
ful so instructions by a landlord to his tenant not to take black foster children would not be
unlawful. Under s 32 an employer is vicariously liable (see Chapter 20) together with the
offending employee for any act done by the employee in course of employment, whether the
act was done with the knowledge or approval of the employer or not. Similarly, principals
will be liable for the authorised acts of their agents but in neither case does vicarious liability
extend to criminal proceedings. An employer (not a principal) is given a defence if he can
show that he took such steps as were reasonably practicable to prevent his employee doing
discriminatory acts. Under s 33 those who assist others to do unlawful acts are also liable.
The Commission for Racial Equality v Imperial Society of Teachers of Dancing,

1983 – Inducement to discriminate (38)
Charities
Section 34 makes it clear that any provision in an existing or future charitable instrument,
e.g. a trust, which confers benefits on persons of a different colour is void. Further, it is
unlawful to do any act in Great Britain to give effect to such a provision.
General exceptions
Certain general exceptions from liability are set out in Part IV of the Act. Under s 35 acts
done to meet the special needs of racial groups with regard, for example, to education, train-
ing and welfare, such as special language training for groups whose first language is not
English, are not unlawful. Sections 37 and 38 allow positive discrimination in favour of par-
ticular racial groups by training bodies, employers and trade unions, employers’ associations,
and professional and trade associations, by encouraging members of those groups to take
work by giving special talks and guided tours of factories and premises. Under s 39 the selec-
tion of sports teams on the basis of nationality, place of birth, and length of residence is
exempted from the provisions of the Act. Thus a country may continue to select its football
..
EL_C08.qxd 3/26/07 10:47 AM Page 237
teams from among those born in the country but cannot refuse to select a person otherwise
willing and able who was born in the country but of parents born elsewhere.
Equality Act 2006

Before considering the Commission for Racial Equality, it should be appreciated that the
Equality Act 2006 creates the Commission for Equality and Human Rights (CEHR) to take
over and build on the work of the existing bodies, i.e. the Equal Opportunities Commission
(EOC), the Commission for Racial Equality (CRE) and the Disability Rights Commission
(DRC). The CEHR will be established in 2007 but the CRE will continue until April 2009,
when its functions will also transfer to the CEHR.
The Commission for Racial Equality

Section 43 sets up the Commission (CRE) which is to work towards the elimination of dis- 8
crimination, to promote equality of opportunity and good relations between different racial
groups, and to keep under review the working of the Act. Under s 47 the CRE has issued
codes of practice giving guidance on ways of achieving equality of opportunity and eliminat-
ing discrimination in the employment field and in housing including rented housing.
Sections 48–52 give the CRE power to conduct formal investigations, for example into alleged
discriminatory employment practices, in order to carry out its duties. The court may prevent
such an investigation going ahead on the grounds, e.g., that the concern to be investigated has
not been given an opportunity to make representations of its own position (R v Commission
for Racial Equality, ex parte Prestige Group plc [1983] IRLR 408).
Section 47 empowers the Commission for Racial Equality to issue codes of practice in the field
of employment. While such codes are not binding in law, they are taken into account in the
decisions of employment tribunals concerned with racial discrimination in employment.
Enforcement
The enforcement provisions which are set out in Part VIII are of two types:
(a) Complaints by an individual who is the subject of unlawful conduct other than ‘dis-
criminatory practices’, advertising or pressures or instructions to discriminate. In employ-
ment cases the complaint goes to an employment tribunal (s 54) (see below). Complaints of
discrimination in education and in the provision of goods, facilities and services and in hous-
ing may be made to the county court (s 57). Complaints that a responsible body in an educa-
tional establishment has discriminated must be notified to the Secretary of State for
Education who must be given a maximum of two months to consider the matter before court
proceedings can be commenced (s 57(5)). It should be noted that an individual is now given
direct access to courts and tribunals in race relations matters; under previous legislation only
the Race Relations Board (now abolished) could institute proceedings.
No compensation will be awarded for indirect discrimination on the grounds of race if the
defendant proves that he did not intend to treat the claimant unfavourably (s 57).
(b) Enforcement by the CRE. This involves: (i) the issuing of a non-discrimination notice
(s 58); (ii) proceedings in the county court or employment tribunal where there are discriminat-
ory practices, advertisements or pressures or instructions to discriminate (s 63); (iii) proceedings
in the county court for an injunction where there has been persistent discrimination (s 62);
(iv) assisting individual complainants in certain matters of principle or complexity or other
special considerations (s 66).
It should be noted that a non-discrimination notice will require a person not to commit
any further discriminatory acts and, where in order to comply with this it is necessary to
..
EL_C08.qxd 3/26/07 10:47 AM Page 238
change practices or arrangements, to inform the CRE that the changes have been effected and
bring these changes to the attention of other persons concerned. There is a right of appeal
within six weeks against such a notice to an employment tribunal which may modify or quash
the notice (s 59). If an appeal against a notice is dismissed, the notice becomes final and is
entered on the CRE’s Register of Notices (s 61).
Sex discrimination
The three main Acts of Parliament involved here are the Sex Discrimination Acts 1975 and
1986 and the Equal Pay Act 1970, to which amendments have been made by the Equal Pay
(Amendment) Regulations 1983. Some provisions of the above legislation relate to the field of
employment and are dealt with in Chapter 19.
Sex Discrimination Act 1975

The form of drafting used in the Race Relations Act 1976 was based on the Sex Discrimina-
tion Act 1975, and the reader will recognise many similar features.
Under the Act of 1975 it is unlawful to treat anyone, on the grounds of sex, less favourably
than a person of the opposite sex is or would be treated in the same circumstances. Once
again, a term in a contract which purports to exclude or limit any provision of the Act is
unenforceable by any person in whose favour the term would operate (s 73(3)).
Sex discrimination defined

There are two kinds of discrimination as follows:
(a) Direct discrimination which involves, for example, treating a woman less favourably than
a man because she is a woman or because of marital status.
(b) Indirect discrimination which occurs where conditions are applied which favour, quite
unjustifiably, one sex more than the other, as where a firm advertises for clerical workers who
must be six feet tall.
It should be noted that although the Act is written in terms of discrimination against
women, it applies equally to discrimination against men either because they are men or
because of marital status. Thus in Jepson and Dyas-Elliott v The Labour Party (1996) 543 IRLB 10
it was held that the Labour Party’s policy of shortlisting only women as prospective parlia-
mentary candidates in some constituencies was unlawful direct sex discrimination against
two men who but for their sex would have been considered.
Areas of discrimination
Areas of sexual discrimination not relating directly to the contract of employment appear below.
(a) Partnerships. The sex discrimination provisions were extended to all partnerships regard-
less of the number of partners by the Sex Discrimination Act 1986. The provisions cover failure
to offer a person a partnership on grounds of sex or to offer it but on worse terms or to refuse
benefits or give inferior benefits, facilities and services to a partner on the grounds of sex.
(b) Trade unions and qualifying bodies. The provisions relating to sex discrimination are
applied as they are for racial discrimination with the necessary changes being made.
(c) Education. Co-educational schools, colleges, and universities may not discriminate in
the provision of facilities or in their admissions. Thus it would be unlawful to refuse a girl
admission to a metalwork class because she is a girl. In addition, the Careers Service must not
discriminate in the advice and assistance offered to girls and boys, though single-sex schools
are still permissible.
..
EL_C08.qxd 3/26/07 10:47 AM Page 239
Local education authorities are required to provide secondary education without discrim-
inating on the grounds of sex. In R v Birmingham City Council, ex parte Equal Opportunities
Commission [1989] 1 All ER 769 it appeared that the Council provided considerably fewer
grammar school places for girls than for boys. The House of Lords approved a declaration that
the Council’s arrangements were unlawful.
(d) Housing, goods, facilities and services. In general, no one providing housing, goods,
facilities or services to the public may discriminate because of sex. There are some exceptions
where discrimination will not be unlawful; these include, for example, situations where it is
necessary to preserve decency and privacy, e.g. public lavatories.
Discrimination must not be used in the buying or renting of accommodation and a hotel,
boarding house or restaurant may not refuse accommodation or refreshment on the grounds
of sex.
In addition, a bank, building society, finance house or other credit business must offer 8
credit, a mortgage or loan on the same terms that it would offer the facilities to someone of
the opposite sex.
Gill v EI Vino Co Ltd, 1983 – Sex discrimination: facilities and services (39)
Quinn v Williams Furniture Ltd, 1981 – Sex discrimination: credit (40)
(e) Advertising. Advertisements with job descriptions such as ‘salesgirl, waiter, stewardess,
postman’ are deemed to discriminate unless they contain an indication that both men and
women are eligible, though it should be noted that only the Equal Opportunities
Commission (EOC) can bring proceedings in matters to do with advertising.
Victimisation
The provisions here are similar to those set out in the Race Relations Act 1976, so that the law will
protect a person if they are victimised for bringing a complaint under the Sex Discrimination
Act 1975.
The Equal Opportunities Commission

The Equal Opportunities Commission was set up to ensure effective enforcement of the Sex
Discrimination Act and the Equal Pay Act (see Chapter 19) and to promote equal opportunity
between the sexes. The Commission has power to hold formal investigations, and if satisfied
that practices are unlawful, can issue non-discrimination notices requiring that they cease.
When holding a formal investigation, either on its own initiative or because it has been asked
to do so by the Secretary of State, the Commission has power to require any person to furnish
information and to attend hearings to give evidence.
The Commission has power to help individuals in the preparation and conduct of com-
plaints in both courts and tribunals, and as well as investigating areas of inequality between
the sexes, the Commission has a duty to make recommendations to the government about
the operation of existing law. It is also empowered to undertake or assist others to undertake
research and educational work and generally to advise people as to their rights.
The Race Relations Act 1976 made minor amendments in the Sex Discrimination Act. In
particular, the EOC was given power to issue codes of practice giving practical guidance
on equality of opportunity and the elimination of discrimination between men and women,
i.e. powers matching those given to the CRE. This was achieved by adding s 56A to the Sex
Discrimination Act 1975.
..
EL_C08.qxd 3/26/07 10:47 AM Page 240
Enforcement
The provisions, which are similar to those of the Race Relations Act 1976, are as follows:
(a) Individuals’ rights. Complaints in the employment field may be made to employment
tribunals (see further Chapter 2).
Complaints in all other fields may be made to a county court and if the court finds in
favour of the complainant it may award: (i) an order declaring the rights of the parties as
e.g. in Gill v El Vino Co Ltd (1983) 1 All ER 398 (Case 39); (ii) an injunction; or (iii) damages
which may include loss of earnings and also compensation for injured feelings. The Sex
Discrimination and Equal Pay (Miscellaneous Amendments) Regulations 1996 (SI 1996/438)
give power to make an award of compensation in cases of unintentional indirect discrimina-
tion. This does not apply to race discrimination cases where no such award can be made
unless a tribunal is satisfied that the defendant intended the discriminatory consequences of
the imposition of the relevant condition or requirement.
(b) The Equal Opportunities Commission. The functions of the EOC in regard to enforce-
ment are as follows:
(i) the Commission may conduct formal investigations into any matter in order to carry out
its duties and where it discovers conduct which contravenes the Sex Discrimination Act
or the Equal Pay Act it is empowered to issue a non-discrimination notice. The result of
issuing such a notice is the same as that under the Race Relations Act 1976;
(ii) the Commission can institute legal proceedings in respect of persistent discrimination,
including judicial review (R v Birmingham City Council, ex parte EOC (1989) (see above);
(iii) the Commission has the sole right to institute legal proceedings in respect of discrimin-
atory practices in advertisements, and instructions and pressure to discriminate;
(iv) the Commission has power to assist individual complainants in preparing their case on,
e.g., difficult aspects of the law.
The effect of the Equality Act 2006 has already been noted (see p 72).
(c) Qualifying bodies. Where a qualifying body is required by law to satisfy itself as to the
good character of an applicant for the authorisation or qualification it can confer, it must
have regard, in deciding whether or not to issue, renew or extend the authorisation or
qualification, to any evidence tending to show that the applicant, or any of his past or
present employees or agents, has practised unlawful discrimination in, or in connection with,
the carrying on of any profession or trade. Discrimination by persons who require such
authorisations or qualifications to carry on their profession or trade may therefore be drawn
to the attention of the appropriate qualifying body, e.g. the Law Society. An additional
example would be an allegation against a person in the consumer credit or hire business, for
which a licence from the Office of Fair Trading is required. Such an allegation may be referred
to the Director-General who is required to have regard to evidence of discrimination when
considering the fitness of a person to hold a licence under s 25 of the Consumer Credit Act
1974 as amended by the Consumer Credit Act 2006.
Disability discrimination
To those forms of discrimination which relate to race and sex must now be added dis-
crimination against the disabled. The Disability Discrimination Acts 1995 and 2005 apply
and the main employment provisions will be considered in Chapter 19. Other provisions are
considered below.
..
EL_C08.qxd 3/26/07 10:47 AM Page 241
What is disability?
Section 1 of the 1995 Act defines a disabled person as a person who has a physical or mental
impairment which has a substantial and long-term effect on his or her ability to carry out
normal day-to-day activities. Section 3 allows the Secretary of State to issue guidance.
However Sch 1 states that impairment is of long-term effect if it has lasted for 12 months or is
likely so to last or is likely to last for life. A severe disfigurement is included as is a progressive
condition such as HIV, multiple sclerosis and cancer. Under the Disability Discrimination
Act 2005 there is now no need to show current substantial effect and disability dates from
diagnosis. Section 2 covers a person ‘who has had a disability’ even though he or she may no
longer be disabled as in the case of a cancer which has gone into remission. This follows a
government pledge that those with a history of disability should be covered.
Meaning of discrimination 8
In terms of access to goods, facilities and services, a person discriminates against a disabled
person if for a reason which relates to the disabled person’s disability he treats him less
favourably than he treats or would treat others to whom that reason does not nor would not
apply and he cannot show that the treatment in question is justified (s 20(1)(a) and (b)).
Provision of goods, facilities or services

Part III of the Act (ss 19 –28) makes it unlawful for those who provide goods, services and
other facilities, to the public or a section of the public, to discriminate against disabled persons
by treating them less favourably for a reason relating to their disability than they treat or
would treat others.
Thus providers must take reasonable steps:
(1) to change any practice, policy or procedure which makes it unreasonably difficult
or impossible for a disabled person to make use of a service which is provided to other
members of the public;
(2) to alter or remove any physical barrier which makes it unreasonably difficult or imposs-
ible for a disabled person to make use of such a service or to provide alternative means of
making the service accessible; and
(3) to provide other aids or services which would make it easier for disabled people to use
their services.
A code of practice has been issued on rights of access to goods, facilities and services to help
suppliers to make reasonable adjustments to comply with the law. The code is not legally
binding but breach of its provisions may be taken into account by any court or tribunal when
considering whether a breach of the 1995 Act has taken place. The code also gives examples
of possible breaches of the law as follows:
n a hotel refusing to take a booking from a schizophrenic, saying that the hotel is fully
booked when it is not;
n a fast-food outlet telling a person with a severe facial disfigurement to sit at a table out of
sight of other customers, even though other tables are free; and
n a bookshop refusing to order a large print book for a visually impaired person, even
though it does order books for other persons.
Giving the disabled more favourable treatment is not in general prevented by the Act, says
the code.
There has been some confusion in business as to whether the 1995 Act applies to company
meetings. It would seem that the Act will apply if a company meeting can be sensibly
described as a meeting involving the public. In the case of a public company whose shares are
..
EL_C08.qxd 3/26/07 10:47 AM Page 242
listed on the Stock Exchange and are widely held, the annual general meeting might well be
regarded as a public meeting so that consideration should be given to access for disabled
members and possibly as regards the provision of accounts in braille, together with systems
designed to enable, e.g., the deaf to participate in the meeting and so on. However, since
private unlisted companies are by far the major form of corporate structure in the UK, many
with five or fewer members, it is unlikely that the Act would apply in that context except in
employment situations (see Chapter 19). Of course, it does a company no harm to give
proper consideration to its disabled members and there is an overriding rule of the common
law that states in regard to all meetings that the organisers must ensure that all those attend-
ing can participate fully in the proceedings.
It is also unlawful under ss 22–24 of Part III to discriminate against a disabled person in
regard to the sale, letting and management of premises in the sense, e.g., of refusing to sell or
rent a property to a disabled person or offering it on worse terms than would be offered to
anyone else, unless the less favourable treatment can be justified on grounds stated in s 24,
e.g. on the grounds of health and safety, so that it is reasonable for the person selling or
letting the property to apply the less favourable treatment. Thus it may justifiable to refuse to
let a flat to a disabled person if that person is unable to negotiate stairs safely or use the fire
escape in an emergency. Thus in Rose v Bouchet [1999] IRLR 463 the landlord was held to be
justified in refusing to let premises to a blind person because of the difficulty he would have in
negotiating steps leading to them where a handrail was missing. It should be noted that in the
context of selling of premises there is no duty to make reasonable adjustments to the property.
The Disability Discrimination Act 2005 amends the 1995 Act to bring in the letting of
premises and a requirement to make adjustments, but not if this requires altering the physical
features of the premises. For example, a landlord might be required to provide a clip-on
receiver which vibrates when the door bell rings where the tenant is deaf. There would not in
the case of a relevant disability be a requirement to provide a wheelchair where the tenant
needed one for general purposes and not only for getting around the house. A tenant with
mobility difficulties may have to be allowed to deposit rubbish in another place if it is too
difficult to access the designated place. These changes would not apply where the letting was
in the landlord’s own home.
Disabled access to the Internet

Access to websites is included in the scope of the Disability Rights Commission’s Code of
Practice and the 1995 Act. Website proprietors must therefore take reasonable steps to ensure
that their websites are accessible to persons with a wide range of disabilities. Thus text-only
versions of documents must be made available to allow visually impaired users access using a
braille reader. New contracts for design and maintenance of websites should contain detailed
provisions regarding compliance with the supplier’s obligations to ensure that the website
meets the requirements of the law. Changes to existing websites should also be made if this is
necessary to comply with the legislation.
Enforcement
Claims under Part III must be brought in the county court and the remedies available are the
same as those which would be available in the High Court. The court may award damages
and include an element of compensation for injury to feelings. There is no upper limit on the
damages.
Discriminatory advertisements
These were not included in the 1995 Act but are now following insertion of provisions by the
2005 Act. Where the publisher of the advertisement relies upon a statement by the person
..
EL_C08.qxd 3/26/07 10:47 AM Page 243
placing the advertisement that it is not discriminatory and it is reasonable for him to do so,
the publisher will not commit an offence but the person placing the advertisement will. The
matter is triable summarily and can result in a fine of up to £5,000.
Education
The education of children with special educational needs and of students with learning
difficulties is consolidated in the Education Act 1996. The Disability Discrimination Act 1995
made some modest changes to legislation existing in 1995 requiring governing bodies and
local authorities to provide information as to arrangements made and facilities for disabled
pupils and students. These provisions are now to be found in the Education Act 1996 (see
s 528 (duty to publish disability statements)).
Public transport 8
Transport facilities are limited to access improvements provided this does not involve altering
the physical features of the vehicle and, with rail, the changes relating to access do not take
effect until 2020. Other forms of transport, e.g. by aircraft, may be brought in at some time in
the future by regulations.
The Disability Rights Commission

The Disability Rights Commission Act received the Royal Assent on 27 July 1999. It sets up
the Disability Rights Commission. The DRC will:
n work towards eliminating discrimination against disabled people;

n promote equal opportunities for disabled people;
n provide information and advice in particular to disabled people, employers and service
providers;
n prepare codes of practice and encourage their use;
n review the working of the Disability Discrimination Act 1995;
n investigate discrimination and ensure compliance with the law;
n arrange for a conciliation service between service providers and disabled people to help
resolve disputes on access to goods and services.
The major powers of the Disability Rights Commission are as follows:
n The conduct of formal investigations. The Commission may conduct a formal investiga-
tion into alleged discrimination and it may be required to do so by the Secretary of State.
n The issue of non-discrimination notices. If after a formal investigation the Commission is
satisfied that a person is committing or has committed an unlawful act, it may issue a non-
discrimination notice which may include recommendations as to action which the person
concerned could reasonably be expected to take to comply with the law. The notice may
also require the drawing up of an action plan by the person who is the subject of the notice
to change procedures, practices and policies or other arrangements which have caused or
contributed to the breach of law.
n Non-discrimination agreements. As an alternative to setting up an investigation or issuing
a non-discrimination notice the DRC may make an agreement with the person concerned
that no action will be taken if there is an agreement that the person concerned will take
such action as may be specified in the agreement.
Non-compliance with a non-discrimination notice, agreement or action plan makes the

offender liable to a fine of up to £5,000.
..
EL_C08.qxd 3/26/07 10:47 AM Page 244
Disability: reform
The Disability Discrimination Act 1995 (Amendment) Regulations 2003 came into force on
1 October 2004. They extend the Disability Discrimination Act 1995 to cover partnerships,
qualifying bodies, vocational training, employment agencies, barristers and advocates and
the police. The regulations also remove the small employer exemption. Employers with less
than 15 employees were not covered though associated organisations were taken into
account such as the total number of employees in a holding company and its subsidiary.
Additional areas of discrimination

Regulations as indicated have brought in new areas of discrimination consequent upon EU
directives as follows:
n The Employment Equality (Religion or Belief ) Regulations 2003 (SI 2003/1660). These
regulations that came into force in December 2003 make it unlawful to discriminate on
grounds of religion or belief in employment and vocational training. They prohibit direct
and indirect discrimination and harassment on the grounds of any religion, religious belief
or similar philosophical belief. There is the usual general occupational requirement
defence and a special one allowing bias where the employer has an ethos based upon
religion or belief.
n The Employment Equality (Sexual Orientation) Regulations (SI 2003/1661). These regu-
lations make it unlawful to discriminate on the grounds that a person is gay, heterosexual
or bisexual in employment and vocational training. They prohibit direct and indirect
discrimination, victimisation and harassment. There is a GOR that provides an exemption
in the case of an organised religion to avoid conflict with the religious convictions of a
significant number of its followers.
The areas of non-employment discrimination broadly follow those already considered in

sex, race and disability discrimination.
However, they are not given by the regulations but appear in the Equality Act 2006 for reli-
gion or belief. The same Act gives power to make regulations to cover the non-employment
areas for sexual orientation. At the time of writing these had not been made.
n The Employment Equality (Age) Regulations 2006. These regulations, which came into
force on 1 October 2006, outlaw age discrimination in employment and vocational train-
ing only.
The Gender Recognition Act 2004

Under the provisions of this Act, transsexual persons are given all the rights and responsibil-
ities appropriate to the acquired gender. Gender Recognition Panels will grant recognition
in the new gender. Once this has been obtained, a person will be treated as a person of the
acquired agenda so, for example, a male-to-female transsexual will be able to marry as a
woman and obtain a birth certificate showing that she is a woman. State benefits and pension
benefits will be given as a woman. Female-to-male transsexuals are also included.
It is not necessary for transsexuals to have had surgery, but they must have lived for at
least two years in the new gender and intend to continue to live in it. They must also meet
medical criteria, so that gender dysphoria must be diagnosed. Rights and obligations under
the former gender are retained, e.g. as a mother or a father.
..
EL_C08.qxd 3/26/07 10:47 AM Page 245
The Civil Partnership Act 2004

This Act allows same-sex partners to give notice of their intention to register their civil part-
nership at a Register Office. UK law restricts the registration of a marriage to heterosexual
couples. Of most importance so far as the general law is concerned is to note the areas where
the word ‘spouse’ is used to give rights or duties to heterosexual married couples and where
civil partners acquire those rights and duties. For example, there is a duty to provide reason-
able maintenance for a partner and the partner’s children. There is also an equality of treat-
ment in life assurance and pension benefits. There is recognition under the intestacy rules
where a partner dies without leaving a will and access to fatal accident compensation. Thus,
where a negligent act results in the death of a partner, the right to claim in the same way as a
spouse can now be enjoyed by a same-sex registered partner. For tax purposes, civil partners
will be treated in the same way as married couples so that, for example, no inheritance tax
will be payable on property coming to a partner on the death of the other partner. 8
The Act allows couples who have entered into legally recognised overseas partnerships to
be treated as civil partners in the UK.
Persons and legal relationships

The law recognises and defines certain common relationships. The following, in particular,
have relevance to the various branches of substantive law dealt with in later chapters.
Agency
It is quite common to find parties having the relationship of principal and agent. Sometimes
a person (the principal) wishes to have certain tasks carried out – he may wish to sell a house
or buy shares in a company. He therefore employs an estate agent or a stockbroker to carry
out his purposes. Sometimes an agent is a specialist who carries out a limited range of duties,
e.g. an auctioneer who sells a wardrobe put into an auction. Sometimes he has wider powers,
and may even be able to bind the principal in all the ways the principal could bind himself, as
where the agent has a power of attorney.
An agent may be specifically appointed as such, but in some cases an agent acquires his status
without specific authority being given to him, and such an agent may bind his principal by what
is called usual authority. If P appoints A to be the manager of a hotel, A may be able to bind P in
a contract although he had no actual authority to make it, for the law is not solely concerned
with the actual authority of an agent but regards him as having the usual powers of an agent
of his class. It follows that the usual powers of a hotel manager will be relevant in deciding
the sort of agreement which A can make on behalf of P. The doctrine of usual authority does
not apply where the third party knows that the agent has no authority to make the contract.
An agent’s powers may also be extended in an emergency. If A is a carrier of perishable
goods for P, he may be able to sell them on behalf of P if the goods are deteriorating and he
cannot get P’s instructions with regard to disposal. A becomes an agent of necessity for the
purpose of sale, though his actual authority is to carry the goods. Agency may also arise out
of conduct resulting in apparent authority. If a husband pays the debts which his wife incurs
with the local dressmaker, he may be liable to pay for an expensive article of clothing which
she buys without his consent, because the husband has, by his conduct, led the dressmaker
to believe that the wife has power to bind her husband in contracts of this nature. This type
of agency is not peculiar to the relationship of husband and wife and could arise wherever
P holds out A as having authority to make contracts on P’s behalf. It is also possible in certain
circumstances for a principal to ratify, i.e. adopt, the contracts of his agent, even though the
agent had no actual authority when making the contract.
..
EL_C08.qxd 3/26/07 10:47 AM Page 246
At one time, if a person appointed an agent to manage his or her affairs, the appointment
became invalid when the person making the appointment lost mental capacity. However,
under the Mental Capacity Act 2005 it is possible to enter into an agency agreement called a
Lasting Power of Attorney which does not terminate on the principal’s loss of mental capacity.
Bailment
A bailment arises when one person (the bailor) hands over his property to the care of another
(the bailee). The reasons for such a situation are many. The bailee may have the custody of
the property by way of loan or for carriage. The article may be pledged, or left with another
to be repaired or altered. Sometimes the bailee has the mere custody of the goods; sometimes
he may use the property, as when he ‘purchases’ a radio set under a hire-purchase (or con-
sumer credit) agreement or borrows a lawn mower. In all cases of bailment, the property or
ownership remains with the bailor; the possession with the bailee.
A bailment is an independent legal transaction and need not necessarily originate in a con-
tract. When X hands his goods to Y under a bailment Y has certain duties in regard to the care
of the goods even though the bailment is not accompanied by a contract. Thus Y may be held
liable for negligent damage to the goods even though he had not been promised any money
or other benefit for looking after them. Bailment is considered in more detail in Chapter 22.
Lien
A lien is a right over the property of another which arises by operation of law and can be
independent of any contract. In its simplest form it gives a creditor, such as a watch repairer,
the right to retain possession of a debtor’s property, in this case his watch, until he has paid
or settled the debt, incurred in this case as a result of repairing the watch. Lien is considered
in more detail in Chapter 22.
Juristic persons
As we have seen, the concept of personality is not restricted to human beings and we shall
now consider corporate personality in terms of the nature and types of corporations.
The registered joint stock company

The enormous increase in industrial activity during the industrial revolution of the last century
made necessary and inevitable the emergence of the registered joint stock company and the
concept of limited liability. For the first time it was possible for the small investor to contribute
to the capital of a business enterprise with the assurance that, in the event of its failure, he could
lose no more than the amount he had contributed or agreed to contribute. The principles of
‘legal entity’ and ‘perpetual succession’ apply, whereby the joint stock company is deemed to be
a distinct legal person, able to hold property and carry on business in its own name, irrespective
of the particular persons who may happen to be the owners of its shares from time to time.
The concept of corporate personality is capable of abuse and where, for example, the con-
cept has been used to evade legal obligations, the courts have been prepared to investigate
sharp practice by individuals who are trying to hide behind a corporate mask or front.
Salomon v Salomon & Co, 1897 – The concept of legal personality (41)
Gilford Motor Company v Horne, 1933 – Looking behind corporate personality (42)
..
EL_C08.qxd 3/26/07 10:47 AM Page 247
Joint Stock Companies are formed by registration under the Companies Act 2006 or
previous Acts. The main current controlling statute is the Companies Act 2006. It provides for
two types of registered companies: the public limited company and the private company. A
registered company is fully liable for its debts but the liability of the members may be limited
either to the amount unpaid on their shares, i.e. a company limited by shares, or to the amount
they have agreed to pay if the company is brought to an end (wound up), i.e. a company
limited by guarantee. Some companies are unlimited and the members are fully liable for the
unpaid debts of the company if, and only if, the company goes into liquidation.
The allotted capital of a public limited company, which must before it can trade or borrow
money be at least £50,000 with 25 per cent of the nominal value and the whole of any pre-
mium paid up, is usually raised by the public subscribing for its shares, which are issued with
varying rights as to dividends, voting powers, and degrees of risk. Shares are freely trans-
ferable and are almost invariably but not necessarily listed on a recognised investment
exchange such as the London Stock Exchange. When making a public issue of shares, the
8
company is under a statutory obligation to publish full particulars of the history, capital
structure, loans, profit record, directors, and many other matters calculated to assist the
intending shareholder to assess the possibilities of the company. Such a document is called
Listing Particulars or a Prospectus, and the directors are liable to penalties for fraud, misrep-
resentation or failure to disclose the material information as required by the Prospectus
Regulations 2005 (SI 2005/1433) for listed securities. Part VI of the 2005 Regulations applies
to unlisted securities on the Alternative Investment Market maintained by the Stock
Exchange, together with the rules of a recognised investment exchange such as the London
Stock Exchange.
The Listing Rules are now under the control of the Financial Services Authority: the City of
London regulator which derives its authority from the Financial Services and Markets Act 2000.
The minimum number of members is usually two. However, s 123 of the Companies Act
2006 provides for the registration of private limited companies with only one member. Existing
multi-member companies may also convert to one-member status. There is no upper limit.
Incorporation of companies is achieved by making an application to the Registrar of
Companies at Companies House, of which the main office is in Cardiff.
The application for registration must give:
n the name of the company;

n the situation of the registered office, i.e. England and Wales or Wales (for Welsh compan-
ies if the promoters wish);
n the status of the company, i.e. whether it is to be public or private;
n a statement of initial shareholdings and a statement of capital (these two documents are
required where the company is to have a share capital);
n a statement of guarantee where the company is to be limited by guarantee as where the
members agree to pay a certain sum to the liquidator if the company is wound up (or is
brought to an end).
The application must also state the company’s proposed officers and the intended address of
the registered office. It must be accompanied by a copy of the proposed articles (unless the
company intends to use the model articles issued by the Secretary of State currently for Trade
and Industry). There must also be a copy of the company’s memorandum and a statement of
compliance with the requirements of the Companies Act 2006.
The relevant documents can be delivered online as well as paper. The above requirements
appear in ss 9–13 of the Companies Act 2006.
As regards the memorandum, this used to be the main constitutional document but it now
serves to carry the names of those who wish to form the company and is merely a formation
..
EL_C08.qxd 3/26/07 10:47 AM Page 248
document. The main constitutional document is now the articles of association and all com-
panies have unlimited objects unless the members wish to restrict the objects by a clause in
the articles.
If the application satisfies legal requirements, the Registrar will issue a certificate of incor-
poration which is conclusive evidence that the company was properly formed. Thus, in the
UK, the activities of a company cannot be challenged even if there was a defect in the forma-
tion procedures.
The directors of a company stand in the fiduciary position of agents towards the company
whose money they control, and many of the provisions of the Companies Act 2006 are
framed to ensure the maximum possible degree of disclosure by the directors of information
calculated to keep the members acquainted with the affairs of the company.
The Memorandum and Articles of Association are public documents which must be deposited
with the Registrar of Companies at Companies House in Cardiff and are open to public
inspection along with other records relating to charges on the company’s property, and
copies of important resolutions. Each year the company’s Annual Return, giving particulars
of share capital, debentures, mortgages and charges, list of members, particulars of directors
and secretary, is sent by the Registrar of Companies to the company for checking and, if
necessary, alteration if there have been changes, before return to the Registrar. In addition,
the company’s accounts and the directors’ and auditors’ reports are filed with the Registrar
within nine months (private company) and six months (public company) of the end of the
accounting period to which they relate. Under ss 477 to 479 of the Companies Act 2006
small private companies whose annual turnover does not exceed £5.6 million need not
appoint auditors, so they would not file an auditors’ report if they had taken advantage of
the exemption. Any person may inspect the Register of Members at the Registered Office of
the company.
The private company, for which the usual minimum is two members (but see above) and no
maximum number, is now a firmly established feature of the business world. The private
company is barred by the Financial Services Authority Prospectus Rules 2005 from going to
the general public for subscriptions for its securities. As we have seen, under the Companies
Act 2006, a private company limited by shares or guarantee may be formed with only one
member or allow its membership to fall to one.
Dissolution of a registered company usually takes place by the company being put into
liquidation, as a result of the process of winding-up.
Other types of corporation

Incorporation may also be achieved by a Royal Charter granted by the Crown. The procedure
is for the organisation desiring incorporation to address a petition to the Privy Council,
asking for a grant of a charter and outlining the powers required. If the Privy Council
consider that the organisation is an appropriate one, the Crown will be advised to grant a
charter. Charter companies were formerly used to further the development of new countries,
e.g. the East India Company and the Hudson Bay Company, but now they are usually
confined to non-commercial corporations, e.g. the Institute of Chartered Accountants in
England and Wales and the Institute of Chartered Secretaries and Administrators. Universities
are also incorporated in this way. It is possible for the liability of members to be limited,
and a chartered company, sometimes known as a ‘Common Law Corporation’, has the same
powers as an individual person in spite of limitations in its charter. However, it is said that
the Crown may forfeit the charter if the company pursues ultra vires activities, and certainly a
member can ask the court to grant an injunction preventing the company from carrying out
ultra vires activities.
..
EL_C08.qxd 3/26/07 10:47 AM Page 249
Jenkin v Pharmaceutical Society, 1921 – Charter companies: acts inconsistent

with charter (43)
Companies have also been created by special Act of Parliament, and governed by their special
Acts and also by Acts which apply to statutory companies generally, which are known as
‘Clauses Acts’. These Acts together define and limit their activities. The purpose of statutory
companies was to promote undertakings of the nature of public utility services, e.g. gas and
electricity, where monopolistic powers and compulsory acquisition are essential to proper
functioning. The liability of members could be limited. Many of the former statutory public
utility companies were nationalised by other statutes and operated on a national basis. In
more recent times these undertakings have been privatised and run as public limited com-
panies, e.g. gas and electricity.
All the forms of incorporation which we have discussed have one feature in common, i.e.
8
they produce corporations aggregate having more than one member. However, English law
recognises the concept of the corporation sole, i.e. a corporation having only one member. A
number of such corporations were created by the common lawyers. They were concerned
because land did not always have an owner, and there could be a break, however slight, in
ownership. Church lands for example were vested in the vicar of the particular living, and
at higher levels in other church dignitaries, such as the bishop of the diocese. When such
persons died, the land had no legal owner until a successor was appointed, so the common
lawyers created the concept of the corporation sole whereby the office of Vicar or Bishop was
a corporation, and the present holder of the office the sole member of that corporation. The
death of the office holder had thereafter no effect on the corporation, which never dies, and
each successive occupant of the office carries on exactly where his predecessor left off. The
Bishop of London is a corporation sole, and the present holder of the office is the sole mem-
ber of the corporation. The Crown is also a corporation sole. A private registered company can
have one member but is not a corporation sole.
It does not seem likely that any further corporations sole will be created by the common
law, but they may still be created by statute. For example, the Public Trustee Act 1906 sets up
the office of Public Trustee as a corporation sole. The Public Trustee (who is also the Official
Solicitor) works as part of the Public Trust Office in London, and is prepared to act as execu-
tor or trustee, when asked to do so, and much property is vested in him or her from time
to time in the above capacities. It would be most inconvenient to transfer this property to the
new holder of the office on the death or retirement of the current one, and so the person
who holds the office of Public Trustee is the sole member of a corporation called the Public
Trustee, and the property over which he has control is vested in the corporation, and not in
the individual who is the holder of the office.
Unincorporated associations
Having considered juristic personality, we will now turn to organisations which have no
personality separate and distinct from the members. Many groups of people and institutions
exist which carry on their affairs in much the same way as incorporated associations,
but which are in fact non-charitable unincorporated associations. Examples are cricket clubs,
tennis clubs, and societies of like kind. Such associations have no independent legal personal-
ity, and their property is treated as the joint property of all the members. The main areas of
legal difficulty arising in regard to these associations are as follows:
..
EL_C08.qxd 3/26/07 10:47 AM Page 250
Liability of members in contract. This rests on the principles of the law of agency. Thus a
member who purports to make a contract on behalf of his club is usually personally liable.
The other members will only be liable as co-principals if they had authorised the making
of the contract. This would be the case if, for example, the rules of the club so provided.
Alternatively, the members may ratify the contract after it is made. However, it appears that
no member has authority to make a purchase on credit (Flemyng v Hector (1836) 2 M&W 172)
unless he is specifically authorised to do so. Membership of a club usually involves payment
of an annual subscription and nothing more. Consequently, it is expected that everything
needed by the club will be paid for from existing funds. If more money is needed, a meeting
of members should be called so that subscriptions might be raised rather than pledge the
credit of the members.
Liability of members in tort. A person is liable if he committed the tort and in addition may
be liable vicariously for the tort of his employee (see Chapter 20). These principles have been
applied to clubs in two main types of case, viz.:
(a) Where a person has been injured as a result of the dangerous condition of the club
premises. The Court of Appeal held in Robertson v Ridley [1989] 2 All ER 474 that at com-
mon law membership of the committee of a members’ club did not of itself carry with it
any duty of care towards the members. However, this rule could be changed by the rules
of the club which could create a duty of care in the committee in regard to the safety
of club premises. It was, however, held in Jones v Northampton Borough Council (1990) The
Times, 21 May, that if a member of a club or of its committee is given a task to do on
behalf of the other members he owes them a duty of care to warn them of any circum-
stances of which he becomes aware which give rise to the risk of injury. In this case A
who was the chairman of a sports club booked accommodation for a six-a-side football
match in premises which to his knowledge had a leaking roof making the floor slippery.
He was held liable to a member of the team who was injured because of this.
(b) Where a person has been injured as a result of the negligence of an employee of the club.
The tendency here is to find that the employee is employed by the officer or committee
or trustees who appointed him (Bradley Egg Farm Ltd v Clifford [1943] 2 All ER 378).
Rights of members in the assets of the association. While a club is functioning the indi-
vidual members have no separate rights in its property. They do, however, acquire realisable
rights when the club is dissolved. On dissolution the general rule is that the assets are sold
and after liabilities have been discharged any surplus is divided equally among those persons
who are members at the time of dissolution regardless of length of membership or of sub-
scriptions paid (Re GKN Bolts & Nuts Ltd Sports & Social Club, Leek and Others v Donkersley and
Others [1982] 2 All ER 855), subject, of course, to any contrary provision in the rules of the
club. It should be noted that a club is not dissolved simply because it changes its name and
constitution with the express or implied consent of the members (Abbatt v Treasury Solicitor
[1969] 3 All ER 1175).
Rights of members under the rules. The rules of an unincorporated association constitute
a contract between the members of the association and the court will grant an injunction to
a member who is denied a right given under the rules, e.g. the right to vote at meetings
(Woodford v Smith [1970] 1 All ER 1091), or if he is expelled either where there is no power of
expulsion under the rules, or if the power exists it has not been exercised properly as where
the principles of natural justice (see Chapter 3) have not been observed.
Procedure. If only a few of the members are liable no problems arise since they can all
be sued personally. If, however, it is intended to allege that all the members are liable this
..
EL_C08.qxd 3/26/07 10:47 AM Page 251
procedure is impracticable since all would have the right to be individually defended and
represented. In this sort of case a representative action is available. Under the Rules of the
Supreme Court and the county court rules the claimant may ask for a representative order to be
made against certain members of the association and sue them. If he is successful these mem-
bers will be liable to pay the damages but may also be entitled to an indemnity from the
funds of the association, and in this way the claimant is in effect paid from the association’s
funds. Similarly, some members of an unincorporated association can sue for wrongs done to
the association by means of the representative order procedure.
Trade unions
As regards the status of trade unions, the Trade Union and Labour Relations (Consolidation)
Act 1992 is the governing statute and ss 10 and 12 provide that a trade union shall not be 8
treated as if it were a body corporate but it is capable of making contracts; the property of the
trade union is vested in trustees on trust for the union; it is capable of suing and being sued
in its own name, whether in proceedings relating to property or founded on contract or tort
or any other cause of action whatsoever; proceedings for any offence alleged to have been
committed by it or on its behalf may be brought against it in its own name and any judg-
ment made in proceedings of any description brought against a trade union are enforceable,
e.g. by way of execution against the property held in trust for the union as if the union were
a body corporate.
Section 127(2) extends the identical provisions to an employers’ association where it is
unincorporated. However, an employers’ association may be a body corporate.
Under s 20 the liability of trade unions is as follows:
Industrial action against the employer of its members (primary action)

In an official strike the union would at common law be liable for torts committed during
the dispute. The most usual tort is interfering with contracts of employment by organis-
ing the strike. There may be other torts for which it is liable, e.g. damage to the employer’s
property.
A trade union has immunity, however, in regard to the tort of interference with contracts
of employment only if the industrial action is preceded and supported by a ballot of members
and the action is commenced within four weeks of the ballot taking place, or such longer
duration, not exceeding eight weeks, as is agreed between the union and the members’
employer, unless under s 234 the union was prevented from calling action during that period
by, e.g., a court injunction when the union can apply to the court for an order that the
period of injunctive restraint shall not count towards the relevant period. The rationale
behind the provision allowing the union and the employer to agree a period beyond four
weeks and up to eight weeks is that the shorter period might pressurise the union into calling
industrial action before the end of four weeks. This can prejudice continuing post-ballot
negotiations.
However, a ballot becomes ineffective in any case after the end of a period of 12 weeks
beginning with the date of the ballot. The employer is entitled to seven days’ notice of strike
action. The majority of those voting must vote in favour of the action. Under the 1992 Act
the ballot must be secret, and there must be separate ballots for each place of work where
there are separate workplaces. An official scrutineer must supervise the way in which voting
papers are drawn up and sent to members to prevent ballot-rigging. Under s 62 balloting is
extended to self-employed members of a trade union. Section 229 requires the voting papers
for industrial action ballots to say who can call for such action if there is a vote in favour. The
..
EL_C08.qxd 3/26/07 10:47 AM Page 252
statutory immunity of the trade union will not apply unless the action is called by the
specified person.
If there is no ballot the union can be sued for an injunction and damages which are limited
according to the number of members it has.
Under provisions of the Employment Relations Act 1999, which inserted those provisions
into the 1992 Act, it is automatically unfair (see Chapter 19) to dismiss employees or select
them for redundancy for the first eight weeks of their participation in an official and other-
wise lawfully organised, protected industrial action. Dismissal during unofficial action is not
protected and action is not protected if it involves unlawful secondary action.
Action which is not against the employer (secondary action)

Basically, secondary action is a term used to describe industrial action taken by workers where
the real dispute is not between themselves and their own employer. A major example is a
‘sympathy strike’.
Under s 224 virtually all forms of secondary action are unlawful and the union is liable for
torts including interfering with contracts of employment and there is no immunity by reason
of a ballot. An injunction and damages may be awarded and again the damages are limited
according to the membership of the union involved.
Unofficial industrial action

Section 20 makes a trade union legally responsible for the acts of its committees and officials
including shop stewards and other officials regardless of whether they are authorised by the
rules of the union to act on its behalf. This means that a trade union is potentially liable for
industrial action organised by any of its officials or committees unless the union takes steps
to repudiate the call for action. Section 20 contains a requirement that the union must ‘do its
best’ to give individual written notice to the members involved.
Contracts made by a trade union are normally enforceable in accordance with the general
principles of the law of contract. However, under s 179 collective agreements, i.e. with an
employer in regard to wages, hours and conditions of work of a group of workers, are pre-
sumed not to be intended to be legally enforceable unless they are in writing and contain a
provision to that effect.
Political strikes
A political strike is not a trade dispute. Strikes against government policy are not covered by
the statutory immunity. In Beaverbrook v Keys [1978] IRLR 34 the TUC’s ‘Day of Action’
against the then Conservative government and its policies was ruled unlawful.
Citizen’s right
Under s 235A of the 1992 Act any individual who is deprived or likely to be deprived of
goods or services because of an unlawfully organised form of industrial action can bring pro-
ceedings before the High Court to restrain the unlawful action. Such an individual can apply
to the Commissioner for Protection against Unlawful Industrial Action for assistance at his
office in Warrington.
Essential workers
In contrast to some other European countries UK law does not impose more stringent restric-
tions on its essential workers such as firefighters. It once did but the criminal sanctions as
they were became repealed shortly after the Second World War.
..
EL_C08.qxd 3/26/07 10:47 AM Page 253
Human rights law

Article 11 of the Convention which is given direct effect in the UK by the Human Rights Act
1998 gives a right of association which extends to membership of and protection by trade
unions. However, Art 11 does not expressly include a right to strike and the European Court
of Human Rights has not implied one. Contracting states are left a choice as to how the free-
dom of trade unions can be safeguarded.
The partnership
A partnership is defined in s 1 of the Partnership Act 1890 as ‘the relationship which subsists
between persons carrying on a business in common with a view of profit’. It will be noted
that there must be a business; that it must be carried on in common by the members
(whether by all of them, or by one or more of them acting for the others, will depend on the 8
agreement subsisting between them); and that there must be the intention to earn profits.
An association of persons formed for the purpose, say, of promoting some educational or
recreational object to which the whole of the funds of the association shall be devoted, and
from which no advantage in the nature of a distribution of a profit shall accrue to the mem-
bers, is not a partnership.
Sharing profits
Participation in the profits of a business may be regarded as prima facie evidence of a partner-
ship, but it is not conclusive – the intention of the parties must be examined. Thus, an
employee whose remuneration is based on a share of profits, or the widow or child of a
deceased partner receiving an annuity in the form of a share of profits, would not legally be
deemed to be partners. Neither does the common ownership of property constitute a partner-
ship (see further Chapter 22), nor the lending of money in consideration of an agreement to
pay the interest, or to repay the capital, as a share or percentage of profits as they accrue. (But
in such a case the lender should take the precaution of having the agreement embodied in
writing, signed by all the parties, and setting out clearly the fact that he is not to be considered
a partner.)
Citation as partner
The question of citation as a partner is of great importance because the existence of a partner-
ship, if such is proved, will involve all parties cited as partners in unlimited liability for the debts
of the firm. Partners are agents for the firm, and can bind the other partners in contracts
concerning the business of the firm whether they are specifically authorised to make them
or not.
No formalities
Two or more persons can combine to form a partnership, which can be brought into exist-
ence in a highly formal or a very casual manner. No legal formalities are required, but it is desir-
able and usual for the rights and liabilities of the partners to be defined in a formal Deed of
Partnership, or at least in a written Partnership Agreement. On the other hand, a mere oral
agreement is equally binding, and in extreme cases a relationship of partnership may be
inferred from the conduct of the parties. The partners are at liberty to vary the arrangements
made between them and, where the conduct of the parties has for a lengthy period been
inconsistent with the terms as originally agreed, it will be presumed that they intend that the
new arrangements shall be binding on them. The Partnership Act 1890 makes provisions
as to contribution of capital, division of profits, rights of partners to participate in active
..
EL_C08.qxd 3/26/07 10:47 AM Page 254
management, and so on, but these only apply in so far as they are not varied by agreement
between the partners.
Number of partners
Section 716 of the Companies Act 1985 prohibited the formation of a partnership consisting
of more than 20 persons for the purpose of carrying on any business for gain. The Banking
Act 1979, s 51(2) and Sch 7 applied the usual limit of 20 to banking partnerships.
Now the Regulatory Reform (Removal of 20 Member Limit in Partnerships etc.) Order 2002
applies and disapplies the above sections. It therefore removes entirely the 20-member limit
from all unlimited and limited partnerships. The restriction did not apply to limited liability
partnerships. The order is a Regulatory Reform Order. These orders can be used to reform any
legislation, even a statute, that imposes a burden on business. There is no need for primary
legislation.
Capacity to contract
There is no limitation on the activities of partners, provided that these are legal, nor is there
any limit to the liability of the individual partners for the debts of the firm, each partner
being liable to the full extent of his personal estate for any deficiencies of the partnership.
However, provision is made for the introduction of limited partners whose liability is limited
to the amount of capital they have introduced, though there must always be at least one gen-
eral partner who is fully liable for the debts of the firm. Such a partnership must be registered
as a limited partnership under the Limited Partnerships Act 1907 (and see below).
Partnership as a business organisation

The partnership was the normal form of business organisation for operations on a fairly
large scale before the advent of the joint stock company, but it is now largely restricted to
the type of enterprise requiring intimate personal collaboration between the members, or
where incorporation is not possible or desirable, as among doctors, though the increasing
control over companies including, in particular, private companies, may see some revival of
the partnership as a more general business organisation. However, in the legal and account-
ing professions particularly, negligence liability is encouraging a move towards incorpora-
tion of firms to achieve limited liability or the formation of limited liability partnerships
(see below).
Lack of continuity
One of the defects of the partnership is its lack of continuity. On the death of a partner the
continuing partners must account to his personal representatives for the amount of his inter-
est in the firm. This difficulty may be met to some extent by providing funds out of the pro-
ceeds of an insurance policy on the deceased partner’s life, or by arranging for the balance of
his capital account to be left in the business as a loan, but failing these measures the sudden
withdrawal of a large amount of capital may well cause serious dislocation of the smaller
business, or even end its operations. The most serious defect of a partnership, however, is the
difficulty of providing additional funds for expansion, and this may induce partners to admit
new members for the sake of their capital, regardless of their fitness for taking an active part
in controlling the business.
Not a persona at law

A partnership firm is not a persona at law; a partnership is an aggregate of its members. In the
matter of procedure, the Rules of the Supreme Court make it possible for the firm to sue and
..
EL_C08.qxd 3/26/07 10:47 AM Page 255
be sued in its own name, but this does not confer upon it a legal personality as is possessed
by a corporation. This makes the holding of property more difficult in the partnership. For
example, land cannot be conveyed to the firm. Instead it is conveyed to some or all of the
partners as legal owners who declare a trust of land for all the partners in equity.
Limited liability partnerships (LLPs)

The Limited Liability Partnerships Act 2000 creates a new kind of partnership arrangement that
is of major importance to those in the professions and in business generally. Its provisions are
set out below. Registration began on 1 April 2001.
Section 1
8
This provides that an LLP is a legal person. It is a body corporate formed by incorporation
(see below). It has an unlimited capacity and is able to undertake the full range of business
activities which an ordinary partnership can undertake. The matter of ultra vires transactions
will not therefore arise. An LLP is separate and distinct from its members. However, the mem-
bers may be liable to contribute to its assets if it is wound-up. The extent of that liability is set
out in regulations. Since an LLP will be a corporate body partnership law will not in general
apply to an LLP. The basic principles of corporate law and the Companies Act 1985 apply
with appropriate modifications. Clause 14 however provides that elements of partnership law
may be applied to LLPs by regulations.
Comment The new LLP is not confined to those practising a profession but is open to other
persons who may wish to use it as a business organisation. The new form of limited liability
partnership also addresses liability of the partners individually in terms of their private
estate. The members of the new organisation will benefit from limited liability because the
LLP is a separate person. Thus the LLP and not its members personally will be liable to third
parties. However, under the general law a professional person owes a duty of care to a third
party or may do. Therefore negligent advice given to a client will result in liability of the LLP
and may result in the professional giving the advice having personal liability but the other
members will not be personally liable. Where the person injured by negligent advice is not a
client, then, provided there is a duty of care when the advice was given and it was in the
course of business, the LLP will be liable and the professional giving the advice will be per-
sonally liable but not the other members.
This is a principal aim of LLPs, i.e. to provide protection against ‘Armageddon’ legal claims,
as they are called, that are capable of bringing even a substantial practice to its knees in terms
of insolvency as the result of a negligent act by one of the partners, since in the ordinary
partnership liability for such acts lies also with the other partners under the rule of joint and
several liability.
Personal liability of the partners

It should be noted that an outsider may not find it easy to establish this personal liability.
There will have to be evidence that the partner concerned was not merely acting as an
agent for the firm but was also assuming personal liability to the outsider, e.g. a client.
This could occur where the partner (or member as they may be called) has signed letters
and documents in a personal capacity and not merely as an agent in the firm’s name or on
behalf of the firm. There is at the moment no specific case law, though company directors
..
EL_C08.qxd 3/26/07 10:47 AM Page 256
who performed a professional service on behalf of the company, e.g. a valuation have
escaped personal liability for a negligent performance where it was made clear that they were
acting on behalf of the company as an agent (see Williams v Natural Life Health Foods Ltd
[1998] 2 All ER 577).
However, where the evidence shows that the partner or even a qualified employee has
signed documents and conducted certain business apparently in a personal capacity without
indicating that he or she was acting as an agent of the firm there may be personal liability
(see Merrett v Babb [2001] QB 1174: a case involving an ordinary partnership that is neverthe-
less applicable to the LLP situation). This attempt to make an individual partner or member
liable will arise crucially where the firm is insolvent and there are no liability insurance
arrangements to cover the loss.
Incorporation
Section 2
This sets out the conditions to be met for the incorporation of an LLP. There must be at least
two people who subscribe to a document called an ‘incorporation document’. This document
must be delivered to the Registrar of Companies.
The incorporation document must contain various items of information: name; whether
the registered office is to be situated in England or Wales; in Wales or in Scotland; the address
of the registered office; the names of the persons who are to be members on incorporation
and whether some or all of them are to be designated members. Designated members are
responsible for the LLP’s conduct, including matters of compliance. If there are no designated
partners, all partners are responsible.
Section 3
This provides that when the Registrar receives the incorporation document he will retain and
register it. Once the document has been registered, the Registrar will issue a certificate that
the LLP is incorporated by the name specified in the incorporation document. The certificate
is evidence that all requirements have been complied with.
Membership
Section 4
This provides that the first members of an LLP are those signing the incorporation document.
Following incorporation any person can become a member of an LLP by agreement with the
existing members. A person may cease to be a member in accordance with any agreement
with the other members.
Section 5
This deals with the relationship between the members. The rights and duties of the members
of an LLP to one another and to the LLP are governed by the provisions of any agreement
between the members subject to the provisions of the incorporation document. The Act does
not require the members to have such an agreement and there is no requirement to publish
it. There is a provision under which when an LLP comes into being it is bound by the terms
of any agreement that is entered into by the persons who sign the incorporation document
before incorporation. This avoids the problems presented, to some extent, in company law by
pre-incorporation contracts. (But see now the Contracts (Rights of Third Parties) Act 1999 –
Chapter 10.)
..
EL_C08.qxd 3/26/07 10:47 AM Page 257
Section 6
Under these provisions each member of the LLP is an agent of it and may represent and act
on its behalf in all its business. However, the LLP is not bound by the non-authorised acts of
a member provided that the person who deals with the member knows this or is not aware
that the member was a member of the LLP. A transaction entered into by a person who is no
longer a member of the LLP is nevertheless valid and binding on the LLP unless the other
party has been told that the person is no longer a member or the Registrar has received notice
to that effect, in which case the person is deemed to know that the person he has dealt with
is not a member of the LLP. Notice is constructive.
Section 7
This section is concerned with the situation in which a person ceases to be a member of an
LLP or his interest in the LLP is transferred to someone else as, e.g., by assignment. A former 8
member, the member’s personal representative or trustee in bankruptcy or liquidator (in the
case of a corporate member), or the trustees under a trust deed for the benefit of his creditors
or assignee may receive any amount to which the former member would have been entitled
but may not interfere in the management or administration of the LLP.
Section 8
Where the incorporation document states who the designated members are, they will become
designated members on incorporation. Other members may become designated by agreement
with the other members and may cease to be designated members in the same way. There must
be at least two designated members. Every member may, however, be a designated member.
An LLP may at any time notify the Registrar that all persons who may from time to time be
members are to be designated members and on notification they will be. The notification will
be in a form specified by the Registrar and must be signed by a designated member. A person
who ceases to be a member of the LLP will also cease to be a designated member.
Designated members have additional responsibilities such as signing the accounts and
delivering them to the Registrar of Companies and preparing, signing and delivering the
annual return together with appointing an auditor (unless the audit exemption applies).
Registration of membership changes

Section 9
This section provides that if a person ceases to be a member or a designated member, the
Registrar must be notified within 14 days and a change in the name and address of a member
must be notified in 21 days. Where all the members are designated, members’ notice is
required only of the fact that the person who is concerned has ceased to be a member. Failure
to comply with the notice requirements is a criminal offence, but it is a defence to show that
all reasonable steps were taken to comply. Punishment is by fine.
Taxation
Section 10
Under this section members of an LLP carrying on business are treated for income tax and
capital gains tax purposes as if they were partners even though an LLP is a body corporate.
Also the property of an LLP will be treated as partnership property. This means that, like part-
ners, members will be individually liable to tax on their shares of the profits of the LLP.
..
EL_C08.qxd 3/26/07 10:47 AM Page 258
For capital gains tax purposes, the assets of the LLP are treated as partnership assets. This
means that members will be individually liable for chargeable gains when LLP assets are
disposed of. An acquisition or disposal will not therefore be treated as made by the LLP.
Section 11
This clause inserts a new section in the Inheritance Tax Act 1984. This provides that for the
purposes of IHT the members of an LLP are treated as members of a partnership. Thus IHT
will be charged in respect of members’ interests in an LLP as for a partnership and business
relief will be available on that basis.
Section 12
This provides for relief from stamp duty on an instrument transferring property from a
partnership to a newly incorporated LLP. The relief is conditional on the membership of the
partnership and the LLP being the same and on the members’ interest in the property being
the same.
It should be noted that s 12 of the LLP Act 2000 gives this concession for only 12 months
from incorporation. This is important to those who may register an LLP for future operation
of an existing business.
Regulations
Section 13
This gives regulation-making powers in regard to insolvency by incorporating with
modifications various parts of the Insolvency Act 1986. This will ensure that procedures
relating to company voluntary arrangements, administration, receivership and voluntary
and compulsory winding up are available as suitably modified.
The section also contains regulation-making powers in regard to the insolvency and
winding-up of an overseas LLP. There will be separate consultation on and before the exercise
of this power.
Sections 14 to 18
These sections give general rule-making powers in regard to LLPs.
Names
Schedule to the Act
The name of an LLP must end with ‘limited liability partnership’ or llp or LLP. There are
equivalents in Welsh where the registered office is situated in Wales. An LLP cannot have a
name which is already used by a registered company nor one that the Secretary of State
thinks constitutes a criminal offence or is offensive. A name may not be registered if it gives
the impression that it is connected with central or local government authorities. An LLP may
change its name at any time. If it has been registered in a name which is the same or similar
to a registered name, the Secretary of State may direct a change within 12 months of register-
ing the name. Where the LLP has given misleading information to obtain a sensitive name
such as ‘charity’, the Secretary of State may direct a change within five years of it being
registered and where it is misleading and likely to cause harm to the public the Secretary of
State can direct a change at any time but the LLP may appeal to the court.
The above matters are for all practical purposes like those rules for company names.
..
EL_C08.qxd 3/26/07 10:47 AM Page 259
Registered office
An LLP must have a registered office at all times and this must be situated in either England
and Wales, Wales or Scotland. The details, e.g. the address of the registered office, must
appear in the incorporation document. On change of address of the registered office, the
Registrar must be notified on the approved form to be signed by a designated member. For
the next 14 days documents may be validly served at the old address.
Disclosure and audit

The extent to which disclosure of financial and other information is required depends upon
regulations (see the Limited Liability Partnerships Regulations 2001) and this is also the case
with audit. However, the audit exemption for small companies is applied as appropriate
(see earlier in this chapter). 8
The need for a membership agreement
The need for the LLP to have a carefully drafted agreement covering all eventualities cannot
be over-stressed. Although the LLP regulations apply many Companies Act 1985 provisions it
must be remembered that an LLP is not a species of company. Section 1(1) of the LLP Act
2000 states ‘There shall be a new form of legal entity . . .’. Furthermore, the law relating to
ordinary limited partnerships (see below) does not apply. Section 1(5) of the LLP Act 2000
states that in general terms and unless there is a provision in statute law to the contrary the
law relating to partnerships does not apply to an LLP.
The general internal procedures of a registered company are governed by special articles or
Table A which is a statutory instrument designed for companies. Ordinary partnerships are
governed by more extensive fall-back provisions in the Partnership Act 1890 that apply in the
absence of partnership articles. There is no equivalent support for the LLP and so an agree-
ment is vital to determine the internal governing rules that are to apply.
Limited partnerships
It is possible for the liability of partners in certain circumstances to be limited. This is in the
case of limited partnerships which are formed under the Limited Partnerships Act 1907.
While this might appear attractive, limited partnerships are not commonly used in the gener-
ality of business (but see Reform below).
Limited partnerships must have one or more partners (called general partners) who
are liable for all of the debts and obligations of the firm and may then have one or more
persons (called limited partners) who are only liable for the debts and obligations of the
firm to the stated amount of the value of capital or property contributed by them to the
firm at the outset. As already noted, the Regulatory Reform (Removal of 20 Member Limit
in Partnerships etc.) Order 2002 removes the 20-member limit in all limited and ordinary
partnerships.
The limited partners must not then either directly or indirectly draw out or receive back
any part of that contribution; if they do then they are liable for the debts of the firm up to
the amount so drawn out or received back.
Limited partners must not take any part in the management of the business of the firm: if
they do they can be made liable for all debts and obligations of the firm incurred while they
were doing so. Any person may, subject to the general requirements as to capacity of a partner
mentioned before, be a limited partner and this includes a body corporate.
..
EL_C08.qxd 3/26/07 10:47 AM Page 260
In this connection, it is a not uncommon misconception that if a limited company is

introduced as a partner the firm must of necessity convert into a limited partnership. This is
not the case since a limited company is, like an individual, fully liable for its debts so long
as it has assets to pay them. It is the liability of the members that is limited. Thus when the
company’s assets have been exhausted in the payment of its debts the members cannot be
called upon to meet the deficit provided of course they have paid for their shares in full.
If therefore, other individuals join a limited partnership as members of a limited company,
the liability of all the partners is limited and yet the partnership would comply with the law.
The company as the general partner would be liable to the full extent of its assets for the
debts of the firm but the individual members having paid for their shares in full would not
be. This assumes that there is no fraud which might convince a court to ignore the corporate
separate entity rule and make individual members liable.
The other main points to note as regards a limited partnership are:
(a) a limited partner has no power to bind the firm;

(b) any question arising as to ordinary business matters may be decided by a majority of the
general partners;
(c) a new partner may be introduced without the consent of the existing limited partners; and
(d) a limited partner is not entitled to dissolve the partnership by notice.
Limited partnerships must be registered under the Act with the Registrar of Companies. If
they are not so registered then every limited partner loses the benefit of that status and is
deemed to be a general partner. There are forms to be filed giving the necessary details and
changes in those details must also be notified to the Registrar. A certificate of registration is
issued. There are various other detailed formalities that need to be followed.
Reform
The Law Commission and the Scottish Law Commission have published a joint consultation
paper on the Limited Partnerships Act 1907. It can be accessed at http://www.scot-lawcom.gov.uk.
Limited partnerships are increasingly used by institutional investors such as insurance com-
panies and pension funds that are wholly or partially exempt from tax. These investors can
invest jointly with others that are liable to tax without losing their own tax status. Limited
partnerships are also used extensively by venture capitalists. The view of the Law Commis-
sions is that current legislation requires updating to maintain the UK’s competitive position
in the venture capital market.
There is currently no legislation on this.
The Crown
The Crown consists of the Monarch and her Ministers, together with the central government
departments staffed by civil servants, the armed forces, and the Privy Council which retains
some powers, e.g. to arrange for the coronation of the Monarch. The police are not servants
of the Crown.
Until 1947 the Crown was not liable for the tortious acts of its servants, and was liable only
to a limited extent in contract, though the person who did the wrongful act could be sued
and the Crown often stood behind him and paid the damages against him. Actions in con-
tract could only be started by an awkward procedure known as a Petition of Right, with the
consent of the Crown given on the advice of the Attorney-General.
..
EL_C08.qxd 3/26/07 10:47 AM Page 261
The rather anomalous position at common law which has been outlined above arose out of
the ancient maxim, ‘The King can do no wrong’, which was extended to cover the activities
of the Departments of State and their servants. The Crown Proceedings Act 1947, and the
Rules of the Supreme Court (Crown Proceedings) Act 1947, which were required to support
the Act in the matter of procedure, came into force together on 1 January 1948, to rectify the
matter.
The general effect of this legislation is to abolish the rule that the Crown is immune from
legal process, though s 40 preserves the immunity of the Monarch in a personal capacity
from any liability in law, and to place the Crown as regards civil proceedings in the same
position as a subject. Proceedings by Petition of Right are abolished, and all claims which
might before the Act have been enforced by Petition of Right can be brought by ordinary
action in accordance with the Act.
8
Contractual claims
The Crown is now liable in contract where a Petition of Right could have been brought before,
and also in tort. Regarding contractual claims, there are some limitations upon the rights of
the other party, viz:
Executive necessity
In Rederiaktiebolaget Amphitrite v R [1921] 3 KB 500, a neutral shipowner’s vessel was detained
in England, although the British Legation in Stockholm had given an undertaking that
it would not be. The basis of Rowlatt, J’s decision for the Crown was that the government
cannot by contract hamper its freedom of action in matters which concern the welfare of
the state. This statement has been regarded as much too wide and is probably of very limited
application.
The main result of the ruling of Rowlatt, J is that contracts with the government normally
contain cancellation clauses which provide for compensation. In practice, the Crown does
not invoke the Amphitrite rule to avoid liability for such compensation.
Parliamentary funds
In Churchward v R [1865] 1 QB 173, a contract to carry mail for 11 years was terminated by
the Crown in the fourth year. Shee, J, in deciding for the Crown, held that it was a condition
precedent of the contract that Parliament would allocate funds and if they chose not to there
was no claim. This decision came under criticism in subsequent cases and the better view is
that it is limited to cases where Parliament has expressly refused to grant the necessary funds.
This rule does, of course, cause hardship to contractors with the government but it must be
continued if the control of Parliament over public expenditure is to be maintained.
Freedom to legislate
In Reilly v R [1934] AC 176, a barrister who was employed by the Canadian government had
his contract terminated by legislation. The Privy Council found for the Crown on the ground
that the Crown cannot by contract restrict its right to legislate.
Contracts of employment
Here the position is as follows:
(a) Military personnel. Military employees cannot successfully claim against the Crown for
breach of contract (Dickson v Combermere (1863) 3 F & F 527) nor can they claim arrears of
..
EL_C08.qxd 3/26/07 10:47 AM Page 262
pay (Leaman v R [1920] 3 KB 663). Thus, although they have a statutory right to claim unfair
dismissal (see below) they cannot bring a claim for wrongful dismissal which is based on
breach of contract.
(b) Civil servants. It was the position at common law that civil servants were dismissible at
pleasure (Shenton v Smith [1895] AC 229) but could claim arrears of pay (Kodeeswaran v
Attorney-General of Ceylon [1970] 2 WLR 456). The general rule that those in Crown service
might be dismissed at the Crown’s pleasure could be varied by legislation. A well-known
example is the provision under which judges of the High Court and the Court of Appeal hold
their offices during good behaviour (Supreme Court Act 1981, s 11(3)).
However, in R v Lord Chancellor’s Department, ex parte Nangle [1991] IRLR 343 a Divisional
Court of Queen’s Bench held that a civil servant is employed under a contract of service
based upon the Civil Service Pay and Conditions of Service Code. This sets out conditions
regarding, e.g., pay, pensions, holidays and so forth. Admittedly para 14 of the code says that
a civil servant does not have a contract of employment enforceable in the courts but the
court held in this case that para 14 must be seen in context. It could not be said that all the
carefully prepared terms and conditions of service in the code were to be regarded as purely
voluntary. Mr Nangle could sue for damages for breach of contract if, as he alleged, his
employers, the Crown, had failed to follow a code of practice when transferring him to
another department with a loss of a salary increment following allegations that he had
assaulted and sexually harassed a female colleague. Section 191 of the Employment Rights
Act 1996 extends most of the statutory employment rights to those in Crown employment
including the right to claim unfair dismissal. They are not, however, covered by the provision
relating to minimum periods of notice (because of the rule that employment by the Crown is
terminable at will) and redundancy (although redundancy payments are made to civil ser-
vants as appropriate). The legislation relating to sex, racial and disability discrimination is
applied to Crown servants.
The armed forces enjoy, by reason of s 192 of the Employment Rights Act 1996, the
employment rights relating to a written statement of employment particulars, itemised pay
statements, remuneration while on medical suspension, time off for ante-natal care, matern-
ity leave, written statement of reasons for dismissal, unfair dismissal and the ability to com-
plain to an employment tribunal. However, members of the armed forces are required to
exhaust internal grievance procedures before going to a tribunal. In addition, ss 21–27 of the
Armed Forces Act 1996 enable service men and women to complain to an employment tribunal
in regard to sex and racial discrimination or equality of treatment provided the appropriate
services’ redress of complaints procedures have been followed first. These are provided for by
s 20 of the Armed Forces Act 1996. These matters are further considered in Chapter 19.
Actions in tort will lie against the Crown for the torts of its servants or agents committed in
the course of their employment; for breach of duty owed at common law by an employer to
his servants; for breach of the duties attaching to the ownership, occupation, possession or
control of property; and for breach of statutory duties, e.g. breaches of the duty of fencing
dangerous machines under factory legislation.
The law as to indemnity and contribution under the Civil Liability (Contribution) Act 1978
applies to Crown cases so, if the Crown is a joint tortfeasor, it can claim a contribution from
fellow wrongdoers, which may, under s 2(2) of the 1978 Act be a complete indemnity, so that
where the Crown is led into publishing a libel, it may claim an indemnity against the party
responsible (see further Chapter 20). The Law Reform (Contributory Negligence) Act 1945
also applies to Crown cases (see further Chapter 21).
Under s 10 of the Crown Proceedings Act 1947 both the Crown and any member of the
Armed Forces were immune from liability in tort in respect of the death of, or personal injury
..
EL_C08.qxd 3/26/07 10:47 AM Page 263
to, another member of the Armed Forces on duty, provided that the death or injury arose out
of service which ranked for the purpose of pension. This section was repealed in regard to
acts or omissions causing injury after 15 May 1987 (see Crown Proceedings (Armed Forces)
Act 1987). It follows that any claim by members of the armed forces for injury or death
occurring between 1947 and 1987 is barred. In this connection, claims relating to injury for
exposure to asbestos dust during that period have come before the courts alleging that Art 6
(fair trial) and Art 2 (right to life) of the Human Rights Convention were infringed by s 10
of the 1947 Act. The House of Lords ruled that there was no infringement of the Convention
since s 10 created an issue of procedure not substantive law to which the Convention could be
applied (see Matthews v Ministry of Defence [2003] 2 WLR 435). However, this does not mean
that service men and women will necessarily win a claim against the Crown. Thus in an action
against the Crown for injury caused by negligence the person making the claim will, as a civilian
would, have to prove that there was a duty of care owed to him or her which was breached
(see further Chapter 21). Thus in Mulcahy v Ministry of Defence (1996) The Times, 27 February
8
the claimant was a soldier serving in the Gulf War who suffered damage to his hearing when
a fellow soldier fired a shell from a howitzer. He lost the case because the Court of Appeal
decided that there was no duty of care between service personnel in battle conditions.
Actions under the Act may be brought in the High Court or a county court, and under ss 17
and 18 of the 1947 Act the Treasury is required to publish a list of authorised government
departments for the purposes of the Act, and of their solicitors. Actions by the Crown will be
brought by the authorised department in its own name, or by the Attorney-General. Actions
against the Crown are to be brought against the appropriate department, or, where there is
doubt as to the department responsible or appropriate, against the Attorney-General.
In any civil proceedings by or against the Crown, the court can make such orders as it can
make in proceedings between subjects, except that no injunction or order for specific perform-
ance can normally be granted against the Crown (but see below). The court can, in lieu
thereof, make an order declaratory of the rights of the parties in the hope that the Crown will
abide by it. No order for the recovery of land, or delivery up of property, can be made against
the Crown, but the court may instead make an order that the claimant is entitled as against
the Crown to land or to other property or to possession thereof. No execution or attachment
will issue to enforce payment by the Crown of any money or costs. The procedure is for the
successful party to apply for a certificate in the prescribed form giving particulars of the order.
This is served on the solicitor for the department concerned, which is then required to pay
the sum due with interest if any. The above exceptions show that, in spite of the Act, the
rights of the subject against the Crown are still somewhat imperfect.
However, injunctions can be granted against officers of the Crown personally, even though
acting in their official capacity. Thus, in M v Home Office [1993] 3 WLR 433, a mandatory
injunction was issued against the Home Secretary for contempt of court, to achieve the return
to this country of a person deported while his case for political asylum was still under review
by the court.
Following the decisions of the House of Lords in M v Home Office (see above) and Factortame
v Secretary of State for Transport (No 2) (1991) 1 All ER 70 it would appear that while a perman-
ent injunction cannot be granted against the Crown injunctive relief by way of interim relief
can be given, e.g. to suspend the operation of legislation said to be inconsistent with
Community law.
For historic, constitutional and procedural reasons also, the Crown cannot be prosecuted
for crime. Once again a nominated defendant is put forward; e.g. for a road traffic offence,
such as using a lorry with a defective tyre, the principal transport officer of the Department
concerned would probably be nominated. Unfortunately, this practice results in the officer con-
cerned acquiring a long record of motoring convictions in a personal capacity. Accordingly,
..
EL_C08.qxd 3/26/07 10:47 AM Page 264
in Barnett v French [1981] 1 WLR 848, the Court of Appeal suggested the use of the name
‘John Doe’ for the nominated defendant who, for the purpose of criminal records, would be
shown as having a date of birth ‘circa 1657’. The name ‘John Doe’ was used in civil actions
from about that time onwards as part of a very elaborate procedure to prove the title to land.
The procedure is no longer in use.
The general rule that statutes do not bind the Crown unless by express words or necessary
implication is contained in s 40 of the 1947 Act. It produced an absurd result when it was
decided that public health and hygiene legislation did not apply to National Health Service
hospital kitchens. This anomaly was abolished by the National Health Service (Amendment)
Act 1986 though the general immunity in other areas given by s 40 was preserved.
Crown privilege in civil proceedings

As we have seen, either party to a civil action can, amongst other things, ask the court to
order the other party to produce any relevant documents for inspection: a process called dis-
closure (see Chapter 5). Under s 28 of the Crown Proceedings Act 1947, this right lies against
the Crown though the Crown could refuse to obey the order if production of the
document(s) would be injurious to the public interest. It had been felt for some time that
Ministers whose departments were involved in civil litigation had abused this right.
Undoubtedly, some claimants failed in an action against the Crown because even the judge
could not obtain access to documents necessary to support the claim. As a result of a number
of cases of this kind, the House of Lords decided, in Conway v Rimmer [1968] 1 All ER 874,
that even though a Minister certifies that production of a particular document would be
against the public interest, the judge may nevertheless see it and decide whether the
Minister’s view is correct. If the judge cannot accept the Minister’s decision, he may overrule
him and order disclosure of the document to the party concerned. Thus the decision of the
Minister is no longer conclusive though it is unlikely that a judge would order disclosure if
there was a danger of real prejudice to the national interest.
However, despite dicta in Conway v Rimmer that claims to privilege on grounds of confiden-
tiality could not expect sympathetic treatment, the courts vary in their interpretation of this
view.
Norwich Pharmacal Co v Commissioners of Customs and Excise, 1973 – Crown

or public interest privilege: documents (44)
Alfred Crompton Amusement Machines v Customs and Excise Commissioners
(No 2), 1973 – Non-disclosure of documents: privilege (45)
Privilege in civil proceedings – the public interest ground

Privilege extends beyond cases against the Crown. Thus in D v NSPCC [1977] 1 All ER 589 the
House of Lords held that the NSPCC or a local authority is entitled to privilege from disclos-
ing the names of its informants in relation to child neglect or ill-treatment.
The House of Lords decided in British Steel Corporation v Granada Television [1980] 3 WLR 774
that the information media and their journalists do not have immunity from the obligation
to disclose their sources of information when disclosure is necessary in the interests of justice.
Their Lordships went on to say, however, that the remedy is equitable and may be withheld
in the public interest.
Public interest privilege has really replaced the older Crown privilege. However, the latter
has been included as a separate head of privilege to show the historical development.
..
EL_C08.qxd 3/26/07 10:47 AM Page 265
Legal professional privilege

Two kinds of legal professional privilege protect some communications from disclosure to
other parties to legal proceedings as follows:
n legal advice privilege which protects communications between solicitor and client where
the purpose is to obtain legal advice regardless of whether litigation is pending or in con-
templation; and
n litigation privilege which protects communications between solicitor and client and a
third party where the primary purpose for which the document was brought into existence
was, from the beginning, its use in pending or contemplated litigation.
Legal advice privilege was affirmed by the House of Lords in R v Special Commissioner, ex
parte Morgan Grenfell & Co Ltd [2002] STC 786. Their Lordships ruled that documents in the
taxpayer’s possession but prepared for the purpose of seeking legal advice from solicitors on 8
tax matters were subject to legal professional privilege and need not be disclosed to an inspector
of taxes whether they were in possession of the solicitor or the client.
The privilege is confined to lawyers and so whether communications between accountants
and their clients is privileged presents a difficulty. However, in such a case the client may be
able to claim successfully the right to privacy in Art 8 of the Human Rights Convention in
order to justify refusal to produce tax advice given to the client by accountants to the tax
authorities under a Revenue notice to do so.
Some difficulties have arisen in connection with legal advice given by lawyers in the pre-
sentation of legal advice to a public or other inquiry where litigation is not necessarily in
view. However, in Three Rivers DC v Bank of England [2005] 1 AC 610 the House of Lords
affirmed that such advice did come within legal advice privilege. The case arose from legal
advice given in an inquiry into the collapse of the Bank of Credit and Commerce
International.
..
EL_C08.qxd 3/26/07 10:47 AM Page 266
..
EL_C09.qxd 3/26/07 10:47 AM Page 267
Part 2
THE LAW OF CONTRACT
..
EL_C09.qxd 3/26/07 10:47 AM Page 268
..
EL_C09.qxd 3/26/07 10:47 AM Page 269
9
MAKING THE CONTRACT I
A contract may be defined as an agreement, enforceable by the law, between two or more
persons to do or abstain from doing some act or acts, their intention being to create legal
relations and not merely to exchange mutual promises, both having given something, or hav-
ing promised to give something of value as consideration for any benefit derived from the
agreement. As regards the requirement that consideration must be supplied by a party to a
contract, this is subject to a number of exceptions, including arrangements made under the
Contracts (Rights of Third Parties) Act 1999.
The definition can be criticised in that some contracts turn out to be unenforceable and, in
addition, not all legally binding agreements are true contracts. For example, a transaction by
deed derives its legally binding quality from the special way in which it is made rather than
from the operation of the laws of contract, e.g. a deed is enforceable even in the absence of
valuable consideration. In consequence, transactions by deed are not true contracts at all.
Nevertheless, the definition at least emphasises the fact that the basic elements of contracts
are (i) an agreement, (ii) an intention to create legal relations, and (iii) valuable considera-
tion. It should be noted that even in the exceptional case where a third party who has not
supplied consideration can claim under the contract, that underlying contract must be sup-
ported by consideration given one to the other by the parties unless it is a deed.
The essentials of a valid contract
The essential elements of the formation of a valid and enforceable contract can be summar-
ised under the following headings:
(a) There must be an offer and acceptance, which is in effect the agreement.
(b) There must be an intention to create legal relations.
(c) There is a requirement of written formalities in some cases.
(d) There must be consideration (unless the agreement is by deed).
(e) The parties must have capacity to contract.
(f ) There must be genuineness of consent by the parties to the terms of the contract.
(g) The contract must not be contrary to public policy.
In the absence of one or more of these essentials, the contract may be void, voidable, or
unenforceable.
..
EL_C09.qxd 3/26/07 10:47 AM Page 270
270 PART 2 · THE LAW OF CONTRACT
Classification of contracts
Before proceeding to examine the meaning and significance of the points set out above, the
following distinctions should be noted.
Void, voidable and unenforceable contracts

A void contract has no binding effect at all, and in reality the expression is a contradiction
in terms. However, it has been used by lawyers for a long time in order to describe particular
situations in the law of contract and its usage is now a matter of convenience. A voidable
contract is binding but one party has the right, at his option, to set it aside. An unenforceable
contract is valid in all respects except that it cannot be enforced in a court of law by one or
both of the parties should the other refuse to carry out his obligations under it. This sounds
strange but property or money which has passed from one party to the other under the con-
tract can be retained by that party. The contract can be used as a defence if the party brings a
claim to recover the property or money. So the contract has some life; it is not void. Con-
tracts of guarantee are unenforceable unless evidenced in writing (see further Chapter 11).
Executed and executory contracts

A contract is said to be executed when one or both of the parties have done all that the con-
tract requires. A contract is said to be executory when the obligations of one or both of the
parties remain to be carried out. For example, if A and B agree to exchange A’s scooter for B’s
motor cycle and do it immediately, the possession of the goods and the right to the goods are
transferred together and the contract is executed. If they agree to exchange the following week
the right to the goods is transferred but not the possession and the contract is executory. Thus
an executed contract conveys a chose in possession, while an executory contract conveys a chose
in action (see Chapter 22).
Specialty contracts
Specialty contracts are also called deeds.
The general law of contract requires a deed in the case of a lease of more than three years,
which must be made as a deed if it is to create a legal estate (see further Chapter 22). In addi-
tion, a transfer of property, e.g. a conveyance, which imposes covenants (or agreements) in
regard, for example, to the use of the land, is a contract and must also be by deed. In addition,
a conveyance is an agreement by the vendor of land to convey his title or ownership and the
agreement of the purchaser to take it.
As regards the form of a deed the Law of Property (Miscellaneous Provisions) Act 1989 is
now relevant. Section 1 requires, as before, that a deed must be in writing but gets rid of the
requirement for sealing where a deed is entered into by an individual. The signature of the
individual making the deed must be witnessed and attested. Attestation consists of a state-
ment that the deed has been signed in the presence of a witness.
The section also provides that it must be made clear on the face of the document that it is
intended to be a deed. The usual form to satisfy this requirement and attestation is: ‘signed as
a deed by AB in the presence of XY’.
As far as companies are concerned, s 44 of the Companies Act 2006 provides that while
a company may continue to execute documents by putting its common seal on them it need
not have such a seal. Any document signed by an authorised signatory such as a director and
the secretary of the company if it has one, or by two directors and said to be executed by the
..
EL_C09.qxd 3/26/07 10:47 AM Page 271
MAKING THE CONTRACT I 271
company will be regarded as if the seal had been put on it. Once again, it must be made clear
on the face of the document that it is intended to be a deed and the form here could be as
follows: ‘signed as a deed: AB director and CD secretary (or another director) – for and on
behalf of Boxo Ltd’.
A deed has certain characteristics which distinguish it from a simple contract:
(a) Merger. If a simple contract is afterwards embodied in a deed made between the same
parties, the simple contract merges into, or is swallowed up by the deed, for the deed is the
superior document. The deed is then the only contract between the parties. But if the deed is
only intended to cover part of the terms of the previous simple contract, there is no merger
of that part of the simple contract not covered by the deed.
(b) Limitation of actions. The right of action under a specialty contract is barred unless it is
brought within 12 years from the date when the cause of action arises on it, i.e. when the
deed could first have been sued upon, which is in general when one party failed to carry out a
duty under it. For example, A and B make a contract by deed on 1 March. B is due to pay 9
money under it on 1 April and fails to do so. Time runs from 1 April not 1 March as regards a
claim by A. A similar right of action is barred under a simple contract after only six years.
However, it would appear from a ruling of the Court of Appeal that when a business is deal-
ing with another business of broadly equal negotiating power as distinct from a consumer
the above period, certainly of six years, can be much reduced thus shortening the period of
potential liability for breach of contract (see Granville Oil and Chemicals Ltd v Davis Turner &
Co Ltd (2003) (unreported)). In that case a simple contract stated that action was barred nine
months after the provision of a service. The Court of Appeal ruled that the period must be
adhered to. It was not an unfair term (see further Chapter 18).
(c) Consideration is not essential to support a deed, though specific performance, which
requires a party in default to actually carry out the contract as distinct from paying damages,
will not be granted if the promise is gratuitous (see Chapter 18). Simple contracts must be
supported by consideration.
(d) Estoppel. Statements in a deed tend to be conclusive against the party making them, and
although he might be able to prove they were not true, the rule of evidence called ‘estoppel’
will prevent him from doing this by excluding the very evidence which would be needed. In
modern law, however, a deed does not operate as an estoppel where one of the parties wishes
to bring evidence to show fraud, duress, mistake, lack of capacity or illegality.
Simple contracts form the great majority of contracts, and are sometimes referred to as parol
contracts. This class includes all contracts not by deed, and for their enforcement they
require consideration. Simple contracts may be made orally or in writing, or they may be
inferred from the conduct of the parties; but no simple contract can exist which does not
arise from a valid offer and a valid acceptance supported by some consideration. When these
elements exist, the contract is valid in the absence of some defect such as lack of capacity of
one of the parties, lack of reality of consent, or illegality or impossibility of performance.
The formation of a contract

In order to decide whether a contract has come into being, it is necessary to establish that
there has been an agreement between the parties. In consequence, it must be shown that an
offer was made by one party (called the offeror) which was accepted by the other party (called
the offeree) and that legal relations were intended.
..
EL_C09.qxd 3/26/07 10:47 AM Page 272
Agreement
A contract is an agreement and comes into existence when one party makes an offer which
the other accepts. The person making the offer is called the offeror, and the person to whom
it is made is called the offeree. An offer may be express or implied. Suppose X says to Y – ‘I
will sell you this watch for £5’, and Y says – ‘I agree’. An express offer and acceptance have
been made; X is the offeror and Y the offeree. Alternatively, Y may say to X: ‘I will give you
£5 for that watch’. If X says: ‘I agree’, then another express offer has been made, but Y is the
offeror and X is the offeree. In both cases, the acceptance brings a contract into being. In
order to find out who makes the offer and who the acceptance, it is necessary to examine the
way in which the contract is negotiated.
Offer and invitation to treat

An offer is an undertaking by the offeror that he will be bound in contract by the offer
if there is a proper acceptance of it. An offer may be made to a specific person or to any
member of a group of persons, and in cases of an offer embracing a promise for an act
designed to produce a unilateral contract, to the world at large.
Carlill v Carbolic Smoke Ball Co, 1893 – Offer: the unilateral situation (46)
Invitation to treat – auctions

Problems relating to contractual offers have arisen in the case of auction sales but the position
is now largely resolved. An advertisement of an auction is not an offer to hold it. At an
auction the bid is the offer; the auctioneer’s request for bids is merely an invitation to treat.
The sale is complete when the hammer falls, and until that time any bid may be withdrawn
(Payne v Cave (1789) 3 Term Rep 148).
Where an auction is expressly advertised as subject to a ‘reserve price’ the above rules are
not applied and there is no contract unless and until the reserve price is met and this is so
even if the auctioneer knocks the goods down below the reserve price by mistake (McManus v
Fortescue [1907] 2 KB 1). The auctioneer is not liable for a breach of warranty of authority to
sell at the price knocked down because the sale is advertised as being subject to a reserve and
this indicates to those attending the sale that the auctioneer’s authority is limited.
The position when the auction is without reserve is not absolutely certain because it has
never been clearly decided whether an advertisement to sell articles by auction without any
reserve price constitutes an offer to sell to the highest bidder. It is at any rate clear that s 57(2)
of the Sale of Goods Act 1979 prevents any contract of sale coming into existence if the auc-
tioneer refuses to accept the highest bid. There remains the possibility once the auction of an
item has begun that the auctioneer may be liable in damages on the basis of a breach of war-
ranty that he has authority to sell, and will sell, the goods to the highest bidder. This device
appears to be sanctioned by obiter dicta, i.e. statements made by the court which were not
part of its decision (see further Chapter 7), of the Court of Exchequer Chamber in Warlow v
Harrison (1859) 1 E & E 309.
Harris v Nickerson, 1873 – Invitation to treat: the auction situation (47)
..
EL_C09.qxd 3/26/07 10:47 AM Page 273
Invitation to treat – price indications: price lists and catalogues

If I expose in my shop window a coat priced £50, this is not an offer to sell. It is not possible
for a person to enter the shop and say: ‘I accept your offer; here is the £50.’ It is the would-be
buyer who makes the offer when tendering the money. If by chance the coat has been
wrongly priced, I shall be entitled to say: ‘I am sorry; the price is £100’, and refuse to sell. An
invitation to treat is often merely a statement of the price and not an offer to sell.
The same principles have been applied to prices set out in price lists, catalogues, circulars,
newspapers and magazines.
Pharmaceutical Society of Great Britain v Boots Cash Chemists (Southern) Ltd,

1953 – Price indications (48)
Partridge v Crittenden, 1968 – Magazines and circulars (49)
9
Company prospectuses/advertisements in connection with sale of securities
A prospectus/listing particulars issued by a company in order to invite the public to subscribe
for its shares (or debentures, i.e. loan capital) is an invitation to treat, so that members of the
investing public offer to buy the securities when they apply for them and the company, being
the acceptor, will only accept the proportion of public offers which matches the shares or
debentures which the company wishes to issue. If there are more offers than shares, the issue
is said to be over-subscribed. Some applicants then get no shares at all or only a proportion of
what they applied for. The conditions of issue also allow the company to make a binding
contract by a partial acceptance in this way. Normally acceptance must be absolute and
unconditional.
A prospectus is used where the shares are offered on say the Alternative Investment Market
and listing particulars are used where the company has a full listing on the main London
Stock Exchange.
Other situations
In other cases, such as automatic vending machines, the position is doubtful, and it may be
that such machines are invitations to treat. However, it is more likely that the provision of
the machine represents an implied offer which is accepted when a coin is put into it.
However, it does seem that if a bus travels along a certain route, there is an implied offer on
the part of its owners to carry passengers at the published fares for the various stages, and it
would appear that when a passenger puts himself either on the platform or inside the bus, he
makes an implied acceptance of the offer, agreeing to be bound by the company’s conditions
and to pay the appropriate fare: per Lord Greene obiter in Wilkie v London Passenger Transport
Board [1947] 1 All ER 258.
Price indications
The court may find in a variety of circumstances that an alleged offer is a mere price indication.
Harvey v Facey, 1893 – Offers and price indications (50)
Those in business clearly require to contract on somewhat firmer ground than is indicated
by the above materials. It is therefore common in business contracts to indicate clearly by a
..
EL_C09.qxd 3/26/07 10:47 AM Page 274
clause in the contractual documents that a particular document is not an offer and to
omit this information when the relevant document is an offer. Nevertheless, a study of the
above materials is necessary in order to understand why certain matters are contained in
business contracts.
Acceptance – generally
Once the existence of an offer has been proved, the court must be satisfied that the offeree
has accepted the offer, otherwise there is no contract. An agreement may nevertheless be
inferred from the conduct of the parties.
The person who accepts an offer must be aware that the offer has been made. Thus if B has
found A’s lost dog and, not having seen an advertisement by A offering a reward for its
return, returns it out of goodness of heart, B will not be able to claim the reward. He cannot
be held to accept an offer of which he is unaware. However, as long as the acceptor is aware
of the making of the offer, his motive in accepting it is immaterial (see Carlill v Carbolic
Smoke Ball Co (1893)).
It should be noted that an acceptance brings the offer to an end because the offer then
merges into the contract.
Brogden v Metropolitan Railway, 1877 – Acceptance by conduct (51)
Conditional assent
An acceptance must be absolute and unconditional. One form of conditional assent is an
acceptance ‘subject to contract’. The law has placed a special significance on these words,
and they are usually construed as meaning that the parties do not intend to be bound until a
formal contract is prepared.
In the past the main practical use of this phrase was in correspondence relating to sales
of land and agreements for leases of land, to indicate that the correspondence between the
parties was part of a process of negotiation and not in itself contractual. Under the Law of
Property (Miscellaneous Provisions) Act 1989 a contract for the sale or other disposition of
land must now be in writing in a document incorporating all the terms which the parties
have expressly agreed and must be signed by each party. Solicitors and conveyancers are thus
no longer at risk that pre-contract correspondence signed only by one party might amount
to enforceable evidence of the contract itself, which was a possibility before. The practice
of heading correspondence ‘subject to contract’ in the above context has therefore lost its
former importance. However, the practice may well continue in case litigation on the 1989
Act provisions reveals an unsuspected trap as a result of its omission.
In addition, the form of words is well established in case law as indicating mere negotiation
and there is no reason why it should not be used in pre-contractual correspondence in other
fields where the parties wish to indicate that they will not be bound by statements in such
correspondence unless they later appear in a formal contract.
It is worth noting that the House of Lords decided in Walford v Miles [1992] 2 WLR 174
that an agreement to continue negotiations until an agreement was reached was not enforce-
able as having no legal content. So if A and B agree with each other that they will continue
to negotiate with each other in regard to the sale of property belonging to A until they reach
a binding agreement, the agreement to negotiate will have no legal effect and B will have no
..
EL_C09.qxd 3/26/07 10:47 AM Page 275
successful claim if, in the course of negotiations between himself and A, A decides to sell the
property to C.
However, a negative undertaking by the vendor that he will not for a given period deal with
anyone else once the purchaser has agreed to buy and is getting on with the exchange of con-
tracts, is enforceable even if oral. Section 2 of the 1989 Act does not apply. The agreement is not
for the sale or disposition of land but only a ‘lock-out’ agreement not to deal with another for
a stated period after which, if contracts are not signed, the vendor can deal with and sell to
another. If he does sell within the stated period, he is liable in damages to the would-be purchaser.
Pitt v PHH Asset Management Ltd, 1993 – Effect of lock-out agreement (52)
Counter-offer
A counter-offer is a rejection of the original offer and in some cases has the effect of 9
cancelling it. Where the counter-offer introduces a new term, the original offer is cancelled,
though the counter-offer may be accepted either expressly or by implication. However, a
simple request for information where the offeree merely tries to induce a new term may not
amount to an actual counter-offer.
Hyde v Wrench, 1840 – Effect of counter-offer (53)

Stevenson v McLean, 1880 – Request for information (54)
Butler Machine Tool Co v Ex-Cell-O Corporation, 1979 – Accepting a
counter-offer (55)
Acceptance in the case of tenders

In the case of an invitation to submit tenders for the purchase of specific goods, as in Spencer
v Harding (1870) where the defendants were selling off a business and issued a circular invit-
ing submission of tenders to buy specific goods listed, the person or company which asks for
the tender will usually be regarded as making an invitation to treat. The tender is the offer
and the person who asks for it may accept it or reject it as he thinks fit. If tenders are asked
for an indefinite amount of goods, e.g. ‘coal as required during 2001 not exceeding 100,000
tonnes’, the ‘acceptance’ of such a tender results in a standing offer by the supplier to supply
the goods set out in the tender as and when required by the person accepting it. Each time
the buyer orders a quantity, there is a contract confined to that quantity; but if the buyer does
not order any of the goods set out in the tender, or a smaller number than the supplier quoted
for, there is no breach of contract. Conversely, if the person submitting the tender wishes to
revoke his standing offer, he may do so, except in so far as the buyer has already ordered
goods under the tender. These must be supplied or the tenderer is in breach of contract.
Great Northern Railway v Witham, 1873 – The tender as a standing offer (56)
Incomplete (or inchoate) agreements

A contract will not be enforced unless the parties have expressed themselves with reasonable
clarity on the matter of essential terms. A situation may therefore exist in which the parties
have gone through a form of offer and acceptance but this has left some terms unclear so that
..
EL_C09.qxd 3/26/07 10:47 AM Page 276
if either party wishes to avoid the contract he may claim to do so on the basis that he does
not know precisely what to do in order to perform his part of it. The concept of the inchoate
contract normally arises as a defence to an action for breach of contract.
In such a case it may be possible for the court to complete the contract by reference to a
trade practice or course of dealing between the parties. Sometimes the agreement itself may pro-
vide a method of completion as where it contains an arbitration clause. However, if the court
cannot obtain assistance from these sources, it will not usually complete the contract for the
parties, and the contract, being inchoate, cannot be enforced. However, a covenant in a con-
veyance that the purchaser should be given ‘the first option of purchasing . . . at a price to be
agreed upon’ certain adjoining land imposes an obligation on the vendor at least to offer the
land to the purchaser at a price at which he is willing to sell or, in other words, give him first
refusal (Smith v Morgan [1971] 2 All ER 1500).
However, it is necessary to distinguish between a term which has yet to be agreed by the
parties and a term on which they have agreed but is in the event meaningless or ambiguous.
In the first case, no contract exists unless the deficiency can be made good by the methods
outlined above. In the second case, it may be possible to ignore the term and enforce the con-
tract without it. However, if the term is still being negotiated the contract will be inchoate and
unenforceable. In addition, the term must be clearly severable from the rest of the contract,
i.e. it must be possible to enforce the contract without it.
Hillas & Co Ltd v Arcos Ltd, 1932 – Inchoate agreements: a course of dealing (57)
Foley v Classique Coaches Ltd, 1934 – Inchoate agreements: an arbitration
clause (58)
Scammell v Ouston, 1941 – Where the agreement is inchoate (59)
Nicolene v Simmonds, 1953 – A meaningless term is ignored (60)
Communication of acceptance
An acceptance may be made in various ways. It may be made in writing or orally, or at an
auction by the fall of the hammer, but it must in general be communicated and communica-
tion must be made by a person authorised to make it. Silence cannot amount to acceptance
except sometimes where there is the prior consent of the offeree which is, for example,
implied in circumstances such as those in Carlill’s case (see Case 46). Thus if P says to Q: ‘If I
do not hear from you before noon tomorrow, I shall assume you accept my offer’, he will find
he is unable, at least without Q’s consent to this method of making a contract, to bind Q in
this way, and Q need take no action at all.
This rule of the common law goes some way towards preventing inertia selling, though
protection is now given by the Unsolicited Goods and Services Acts, 1971 and 1975. The Acts
provide for fines to be made on persons making demands for payment for goods which they
know are unsolicited. If the demand is accompanied by threats a higher scale of fines applies.
Furthermore, under s 1 of the 1971 Act, unsolicited goods may be kept by the recipient with-
out payment after a period of 30 days provided the recipient gives notice to the sender asking
that they be collected, or after six months even if no such notice has been given. It should be
noted that the Acts are designed to protect the consumer and do not apply where the goods are
acquired in the context of a trade or business, i.e. they do not apply to a business recipient.
Felthouse v Bindley, 1862 – Silence does not amount to acceptance (61)
..
EL_C09.qxd 3/26/07 10:47 AM Page 277
Waiver of communication
There are some cases in which the offeror is deemed to have waived communication of the
acceptance. This occurs in the case of unilateral contracts such as promises to pay money in
return for some act to be carried out by the offeree. Performance of the act operates as an
acceptance, and no communication is required (Carlill v Carbolic Smoke Ball Co (1893), see
Case 46). In addition, acceptance need not necessarily be communicated if the post is used
(see below).
Mode of communication prescribed by offeror

The offeror may stipulate the mode of acceptance, e.g. to be by letter so that there will be
written evidence of it. In such a case, however, the offeror could still waive his right to have
the acceptance communicated in a given way and agree to the substituted method.
In addition, an acceptance made in a different way may be effective if there is no prejudice
to the offeror, as where the method used is as quick and reliable as the method prescribed.
9
Thus although the method of communication may be prescribed by the offeror very clear
words are required to make the court treat that method as essential.
Yates Building Co v R J Pulleyn & Sons (York), 1975 – Prescribed mode of

acceptance: the matter of prejudice (62)
Oral acceptances
If the offeror has not stipulated a method of acceptance, the offeree may choose his own
method, though where acceptance is by word of mouth it is not enough that it be spoken, it
must actually be heard by the offeror. In this connection an interesting development occurs
with the use of the telephone, teleprinter and, presumably, fax and e-mail. Since these are
methods of instantaneous communication, it is held that the contract is not complete unless
the apparent communication takes place.
Entores Ltd v Miles Far Eastern Corporation, 1955 – Acceptance by telex and
telephone (63)
Use of post in offer and acceptance

If the post is the proper method of communication between the parties, then acceptance is
deemed complete immediately the letter of acceptance is posted, even if it is delayed or is lost
or destroyed in the post so that it never reaches the offeror. Nevertheless, the letter of accept-
ance must be properly addressed, stamped and properly posted and the court must be
satisfied that it was within the contemplation of the parties that the post might be used as a
method of communicating acceptance. Thus in Henthorn v Fraser [1892] 2 Ch 27 the post was
the proper method of accepting an offer, which the offeror had, in fact, handed to the
offeree, because the parties lived in different towns.
The rule relating to acceptance by post is a somewhat arbitrary one seeming to favour the
offeree and is in practice kept within narrow confines. For example, if the statements of the
parties appear to exclude the rule then the court will not apply it. Where there is a misdirec-
tion of a letter containing an offer, then the offer is made when it actually reaches the
offeree, and not when it would have reached him in the ordinary course of the post.
..
EL_C09.qxd 3/26/07 10:47 AM Page 278
In contrast with the rule regarding acceptance by post, a letter of revocation is not effective
until it actually reaches the offeree, whereas a letter of acceptance is effective when it is
posted (see Byrne v Van Tienhoven (1880)).
The better view is that, in English law, an acceptance cannot be recalled once it has been
posted even though it has not reached the offeror. Thus, if X posted a letter accepting Y’s
offer to sell goods, X could not withdraw the acceptance by telephoning Y and asking him to
ignore the letter of acceptance when it arrived, and Y could hold X bound by the contract if
he wished to do so. This is obvious, the rules being what they are, since otherwise Y would
be bound when the letter was posted, and X would be reserving the right to withdraw his
acceptance during the transit of the letter even though Y was still bound.
There is some controversy as to whether agreement can result from identical cross-offers.
For example, suppose X by letter offers to sell his bicycle to Y for £50, and Y, by means of a
second letter, which crosses X’s letter in the post, offers to buy X’s bicycle for £50. Can there be
a contract? The matter was discussed by an English court in Tinn v Hoffman (1873) 29 LT 271,
and the court’s conclusion was that no contract could arise, though this is regarded as too
strict a view of the position. The matter is still undecided by the judges and it is possible to
hold the view that today a contract would come into being where it appears that the parties
have intended to create a legally binding agreement on the same basis.
Household Fire Insurance Co v Grant, 1879 – Effect of posting an acceptance (64)

Holwell Securities Ltd v Hughes, 1974 – The postal rule of acceptance
excluded (65)
Adams v Lindsell, 1818 – A misdirected offer (66)
The post rule and e-mail

Legal opinion is divided on the effect of an acceptance by e-mail and clearly the best
approach is for those making offers by website or e-mail to stipulate methods of acceptance
and when they will be regarded as having concluded a contract. However, where there is no
such indication, the better view would seem to be that the post rule does not apply to e-mail
acceptances. After all an offeree can always ascertain whether the e-mail has been successfully
delivered. Most e-mail software allows for request of delivery receipts and it would seem
reasonable to expect this to be used.
Termination of offer
We shall now consider the ways in which an offer may be terminated.
Revocation – generally
The general rule is that an offer may be revoked at any time before it is accepted (Payne v Cave
(1789) 3 Term Rep 148). Once an offer has been accepted, it cannot be withdrawn merely
because the offeror made a mistake, provided the offeree was not aware of that mistake. Thus
in Centrovincial Estates v Merchant Investors Assurance, The Times, 8 March 1983 it was held
by the Court of Appeal that a landlord who offered to grant a tenancy at a stated rent of
£65,000, which the tenant accepted, could not withdraw the offer merely because he made a
..
EL_C09.qxd 3/26/07 10:47 AM Page 279
mistake in the offer and had intended to ask for a rent of £126,000. If the offeree knows that
the offeror is mistaken the contract may be void for unilateral mistake (see Chapter 12).
Sometimes there is what is known as an option attached to the offer, and time is given to
the offeree in which to make the decision whether to accept the offer or not. If the offeror
agrees to give seven days, then the offeree may accept the offer at any time within seven
days, or he need not accept at all. However, the offeror need not keep the offer open for
seven days but can revoke it unless the offeree has given some consideration for the option,
or the option is made by deed, though even in such a situation the offeror can still revoke the
offer but will in that event be liable to the offeree in damages for breach of the option.
Revocation, to be effective, must be communicated to the offeree before he has accepted
the offer. The word ‘communication’ merely implies that the revocation must have come to
the knowledge of the offeree.
Presumably the offeree cannot ignore facts suggesting an attempt to communicate a revoca-
tion. If A offers B a car and before B accepts A posts a letter of revocation which B receives
but, recognising A’s handwriting, does not open until he has written and posted a letter of 9
acceptance, it would seem unfair to regard A as bound in contract and he would probably not
be. In addition, it appears from statements made in the House of Lords in Eaglehill Ltd v
J Needham (Builders) Ltd [1972] 3 All ER 895, where their Lordships were discussing notice of
dishonour of a bill of exchange, that an offer would be revoked when the letter of revocation
‘was opened in the ordinary course of business or would have been so opened if the ordinary
course of business was followed’.
Communication may be made directly by the offeror or may reach the offeree through
some other reliable source. Suppose X offers to sell a car to Y and gives Y a few days to think
the matter over without actually giving him a valid option. If, before Y has accepted, X sells
the car to Z and Y hears from P that X has in fact sold the car, it will be of no use for Y to pur-
port to accept and try to enforce the contract against X, provided P is a reliable source.
Routledge v Grant, 1828 – Revocation where there is an option (67)

Byrne v Van Tienhoven, 1880 – Communication of revocation (68)
Dickinson v Dodds, 1876 – Communication of revocation by third parties (69)
Revocation – unilateral contracts

Where the offer consists of a promise in return for an act, as where a reward is offered for the
return of lost property, the offer, although made to the whole world, can be revoked as any
other offer can. It is thought to be enough that the same publicity be given to the revocation
as was given to the offer, even though the revocation may not be seen by all the persons who
saw the offer.
A more difficult problem arises when an offer which requires a certain act to be carried out
is revoked after some person has begun to perform the act but before he has completed it. If,
for example, X offers £1,000 to anyone who can successfully swim the Channel, and Y, decid-
ing he will try to obtain the money, starts his swim from Dover, can X revoke his offer from a
helicopter when Y is half-way across the Channel? One view is that he cannot on the
grounds that an offer of the kind made by X is two offers in one, namely (i) to pay £1,000 to
a successful swimmer and (ii) something in the nature of an option to hold the offer open for
a reasonable time once performance has been embarked upon, so that the person trying to
complete the task has a reasonable time in which to do so.
..
EL_C09.qxd 3/26/07 10:47 AM Page 280
Other lawyers reach the same conclusion by distinguishing between the acceptance of the
offer and the consideration necessary to support it. As regards the latter, the completion of
the act involved is necessary before the offeror can be required to pay any money because
until the act is completed the necessary consideration has not been supplied. However, accept-
ance may be assumed as soon as the offeree has made a beginning on the performance of the
contract and proof of the fact that he has made a beginning makes revocation impossible.
The problem could have arisen in Carlill’s case if the company had tried to revoke its offer
after Mrs Carlill had started to perform the contract by using the smoke ball.
The matter also came before the Court of Appeal in Errington v Errington [1952] 1 All ER
149. In that case a father bought a house for his son and daughter-in-law to live in. He paid
the deposit but the son and daughter-in-law made the mortgage payments after the father
gave the building society book to the daughter-in-law, saying, ‘Don’t part with this book. The
house will be your property when the mortgage is paid.’ The son left his wife who continued
to live in the house. It was held by the Court of Appeal that neither the father nor the
claimant, his widow, to whom the house was left by will, could eject the daughter-in-law
from the property. As Lord Denning said: ‘The father’s promise was a unilateral contract – a
promise of the house in return for their act of paying the instalments. It could not be revoked
by him once the couple entered on the performance of the act . . .’ The court went on to
decide that the son and daughter-in-law would be fully entitled to the house once they had
made all the mortgage repayments.
Lapse of time
If a time for acceptance has been stipulated, then the offer lapses when the time has expired.
If no time has been stipulated, then the acceptance must be within a reasonable time. What
is reasonable is a matter of fact for the judge to decide on the circumstances of the case.
Ramsgate Victoria Hotel Co v Montefiore, 1866 – Offer and lapse of time (70)
Conditional offers
An offer may terminate on the happening of a given event if it is made subject to a condition
that it will do so, e.g. that the offer is to terminate if the goods offered for sale are damaged
before acceptance. Such a condition may be made expressly in the contract as where, e.g., a
seller offers to sell goods by tender from time to time subject to a condition that the seller can
himself obtain adequate supplies. It may also be implied from the circumstances.
Financings Ltd v Stimson, 1962 – Conditional offers (71)
Effect of death of a party

The effect of death would appear to vary according to the type of contract in question,
whether the death is that of the offeror or the offeree, and whether death takes place before
or after acceptance.
Death of offeror before acceptance

It would seem that if the contract envisaged by the offer is not one involving the personality
of the offeror, the death of the offeror may not, until notified to the offeree, prevent acceptance.
..
EL_C09.qxd 3/26/07 10:47 AM Page 281
However, there is a contrary point of view based on an obiter dictum in the judgment of
Mellish, LJ in Dickinson v Dodds (1876) where he said, ‘it is admitted law that, if a man who
makes an offer dies, the offer cannot be accepted after he is dead . . .’. However, the decision
in Bradbury v Morgan (1862) (see below) suggests that the offer can be accepted until the
offeree is told of the offeror’s death. The matter is therefore unresolved pending a further
decision. If the contract envisaged by the offer does involve a personal relationship, such as
an offer to act as agent, then the death of the offeror certainly prevents acceptance.
Death of offeree before acceptance

Once the offeree is dead, there is no offer which can be accepted. His executors cannot, there-
fore, accept the offer in his stead. The offer being made to a living person can only be
accepted by that person and assumes his continued existence. The rule would seem to apply
whether the proposed contract involves a personal relationship or not.
Death of parties after acceptance

9
Death after acceptance has normally no effect unless the contract is for personal services,
when the liability under the contract ceases. Thus, if X sells his car to Y and before the car is
delivered X dies, it would be possible for Y to sue X’s personal representatives for breach of
contract if they were to refuse to deliver the car. But if X agrees to play the piano at a concert
and dies two days before the performance, one could hardly expect his personal representa-
tives to play the piano in his stead.
Bradbury v Morgan, 1862 – Where the offeror dies before acceptance (72)
Re Cheshire Banking Co, 1886 – Where the offeree dies before acceptance (73)
Offer and acceptance not identifiable

Sometimes the usual processes of offer and acceptance are not easily identifiable and yet a
contract is deemed to exist (The New Zealand Shipping Co Ltd v AM Satterthwaite & Co Ltd
(1974) – see Chapter 15). There are also situations of collateral contract. These derive from
another main contract, and for purposes of illustration reference should be made to the case
law and comment as indicated below.
Rayfield v Hands, 1958 – The concept of the collateral contract (74)
Trading electronically
Electronic trading or electronic commerce (e-commerce) is trading carried on by electronic

means. In its simplest form it involves an exchange of e-mails instead of letters, and the law
to be applied is presumably that applied to instantaneous communications like telex
(see Entores v Miles Far East Corporation (1955)), but there are more complex forms in which
a contract can be concluded by communication between two or more computers without
any immediate human intervention. The means by which e-commerce is conducted is
the Internet.
..
EL_C09.qxd 3/26/07 10:47 AM Page 282
Open e-commerce
This occurs where the parties have contracted through the means of an Internet website on
which a supplier is, say, offering goods for sale.
Whilst the legal rules relating to this form of trading are largely a matter of informed sur-
mise and largely untested in the courts, the following matters should be borne in mind.
If demand exceeds supply. The seller will wish to avoid actions for breach of contract by
reason of his inability to meet orders from customers responding to the seller’s website. In
these circumstances every website should make clear that the seller is not making an offer
to supply the goods but inviting offers from potential customers (i.e. an invitation to treat). If
this is done, the website should be regarded in law as a mere shop window.
Customer’s orders. Since we are dealing with instantaneous communication, customer’s

orders must be received by the seller. This may not happen, given the occasional vagaries of
e-mail, which may lead to the loss of or the scrambling of the order. The website should carry
a cut-off date for receipt of orders. If the acceptance is via a website, the position is likely to
be clearer, since the seller and the customer can immediately identify whether or not com-
munication has broken down.
Whose terms apply? Sellers will normally be using standard terms for each customer and to
ensure that the seller’s terms apply the potential customer should be asked to scroll through
the terms to indicate his agreement to them. This should be done before the contract is made.
Conflict of laws. In terms of international trading, the seller should state the law which applies
to the contract, e.g. English law. Sometimes, however, the law of the customer’s state may
override the adoption of foreign law for international agreements and a careful check should
be made and legal advice taken before embarking on international sales. If there is uncer-
tainty as to foreign law or the seller does not wish to become involved, orders from a particu-
lar country or countries which might raise applicable problems of law should be declined.
A problem that has faced those wishing to engage in e-commerce is that the law has not
recognised the validity of electronic signatures so that there was, e.g., no way in which a deed
could be made by electronic means. However, the Electronic Communications Act 2000
makes provision for this by changing all those laws which require an actual signature so that
an electronic signature is now acceptable. Digital signatures can now be used.
A significant impact of the 2000 Act is for property lawyers who are now able to use
electronic conveyancing and in this context it is worth noting that the Law of Property
(Miscellaneous Provisions) Act 1989 already contains provisions allowing the use of electronic
signatures in land deals – a forward looking piece of legislation. The 1989 Act is considered in
Chapter 11.
Contract formation and call centres

A caller to a call centre may well enter into a contract for the call centre’s client’s goods or
services. The client needs to look at the way in which contract law governs the formation of
such a contract. The position is as follows:
n the caller will normally be the offeree and the call centre operator the offeror;
n if the call centre operator does not receive the message of acceptance through no fault of
his own though the caller thinks he has, there is not likely to be a contract (Entores Ltd v
Miles Far East Corporation (1955));
..
EL_C09.qxd 3/26/07 10:47 AM Page 283
n if, however, it is the call operator’s fault that he did not receive the acceptance, e.g.
because he did not hear it and failed to ask that it be repeated, he may be estopped or
precluded from denying that he did receive it and a contract will come into being;
n it is always necessary to attend to the matter of consideration and intention to create
legal relations, though these matters should not normally provide a problem in the
call-centre context.
..
EL_C10.qxd 3/26/07 10:48 AM Page 284
10
MAKING THE CONTRACT II
In this chapter we continue the study of those elements of contract law which go to making
a mere agreement into a contract which is at least potentially binding on the parties.
Consideration and intention to create legal relations are looked at here.
Consideration
Definition and related matters

Consideration, which is essential to the formation of any contract not made by deed was
defined in Currie v Misa (1875) LR 10 Ex 153 as:
Some right, interest, profit or benefit accruing to one party, or some forbearance, detri-
ment, loss or responsibility given, suffered or undertaken by the other.
Paying (or promising to pay) money in return for the supply of goods or services constitutes
the most common form of consideration.
Consideration may be executory, where the parties exchange promises to perform acts in the
future, e.g. C promises to deliver goods to D and D promises to pay for the goods; or it may
be executed, where one party promises to do something in return for the act of another, rather
than for the mere promise of future performance of an act. Here the performance of the act is
required before there is any liability on the promise. Where X offers a reward for the return of
his lost dog, X is buying the act of the finder, and will not be liable until the dog is found and
returned.
The definition in Currie v Misa suggests that consideration always refers to the type called
executed consideration since it talks of ‘benefit’ and ‘detriment’, whereas in modern law
executory contracts are enforceable. Perhaps the definition given by Sir Frederick Pollock is to
be preferred:
An act or forbearance of one party, or the promise thereof, is the price for which the promise
of the other is bought, and the promise thus given for value is enforceable.
This definition, which was adopted by the House of Lords in Dunlop v Selfridge (1915), fits
executory consideration as well as executed. The ‘promise for a promise’ concept really means
that consideration can consist in a promise to act in the future, e.g. to deliver goods or to pay
for goods.
..
EL_C10.qxd 3/26/07 10:48 AM Page 285
MAKING THE CONTRACT II 285
Figure 10.1 Executed and executory consideration

10
Consideration in relation to formation of a contract – generally

There are a number of general rules governing consideration in terms of the formation of a
contract:
(a) Simple contracts must be supported by consideration. This has a long history, but in
practical terms it is the common law’s way of limiting the number of agreements which can
be brought before the courts for enforcement. Other legal systems have required, e.g., part
performance by one or other of the parties or that the contract be made in writing and, if so,
no consideration is required. The effect of the consideration rule is that in English law an
agreement, even if the parties intend legal relations, is not a contract unless it is supported by
consideration or made by deed.
(b) Consideration need not be adequate, but must have some value, however slight. The
courts do not exist to repair bad bargains, and though consideration must be present, the
parties themselves must attend to its value. However, where the consideration for a transaction
is of very small value, it may raise a suspicion of fraud, duress or undue influence on the part
of the person gaining the advantage. However, what is offered by way of consideration must
be capable of expression in terms of economic value or at least the giving up of some right.
That apart, acts or omissions even of a trivial nature may be sufficient to support a contract.
Thomas v Thomas, 1842 – Adequacy of consideration (75)

Chappell Co Ltd v Nestlé Co Ltd, 1959 – Adequacy: a commercial application (76)
White v Bluett, 1853 – Economic value required (77)
Although there were once arguments to the contrary, it is now accepted that an express or
implied forbearance to sue may be adequate consideration. It is not necessary to show that
the action would have succeeded but merely that if it had been brought to trial it might have
done. Thus the court would be unlikely to accept that a bookmaker could supply considera-
tion by forgoing a claim against a client for stake money. Such an action, being based on an
illegal transaction, could have no hope of success.
..
EL_C10.qxd 3/26/07 10:48 AM Page 286
Horton v Horton, 1961 – Implied forbearance to sue (78)
A self-seeking act in itself may not suffice, and in the case of Carlill v Carbolic Smoke Ball Co
(1893) the consideration was provided not by using the smoke ball to cure influenza, but by
the unpleasant method of its use. A gift promised conditionally may be binding, if the perform-
ance of the condition causes the promisee trouble or inconvenience, e.g. ‘I will give you my
old car if you will tow it away.’ So too may a gift of property with onerous obligations
attached to it, e.g. a promise to give away a lease would be binding, if the donee promised to
perform the covenants to repair and pay rent. A promise to give away shares which were
partly paid up would be good, if the donee promised to pay the outstanding calls.
(c) Bailment. The concept of bailment gives rise to problems because a person may be held
liable for negligent damage to or loss of goods in his care, although he received no money or
other consideration for looking after them. However, confusion can best be avoided by
regarding bailment as an independent transaction, which has characteristics of contract and
tort but is neither. It seems that when X hands his goods to Y under a bailment Y has certain
duties in regard to the care of the goods, whether the bailment is accompanied by a contract
or not.
Of course, the court may be invited to refuse a claim on the contract by a person who has
given inadequate consideration by invoking the doctrine of inequality of bargaining power
(see further Chapter 13). However, at the present time the basis of this doctrine, which was
applied in particular by Lord Denning, is somewhat vague and has not, as yet, received much
direct judicial support.
Gilchrist Watt and Sanderson Pty v York Products Pty, 1970 – Bailment and
consideration (79)
(d) Consideration must be sufficient. Sufficiency of consideration is not the same thing as
adequacy of consideration, at least in law. The concept of sufficiency arises in the course of
deciding whether the acts in question amount to consideration at all. This situation arises
where the consideration offered by the promisor is an act which he is already bound to carry
out. Thus, the discharge of a public duty imposed by law is not consideration nor is the per-
formance of a contractual duty already owed to the defendant. However, where the contractual
duty is not precisely coincident with the public duty but is in excess of it, performance of the
contractual duty may provide consideration and the actual performance of an outstanding con-
tractual obligation may be sufficient to support a promise of a further payment by a third party.
Collins v Godefroy, 1831 – Sufficiency and public duties (80)

Stilk v Myrick, 1809 – Sufficiency and contractual duties (81)
Glasbrook Bros Ltd v Glamorgan County Council, 1925 – Sufficiency: public duty
exceeded (82)
Shadwell v Shadwell, 1860 – Sufficiency: payments by third parties (83)
(e) Consideration must be legal. An illegal consideration makes the whole contract invalid
(see further Chapter 16).
(f) Consideration must not be past. Sometimes the act which one party to a contract puts
forward as consideration was performed before any promise of reward was made by the
other. Where this is so, the act in question may be regarded as past consideration and will
..
EL_C10.qxd 3/26/07 10:48 AM Page 287
not support a contractual claim. This somewhat technical rule seems to be based on the idea
that the act of one party to an alleged contract can only be regarded as consideration if it was
carried out in response to some promise of the other. Where this is not so, the act is regarded
as gratuitous, being carried out before any promise of reward was made.
However, there are exceptions to this rule:
(i) Where services are rendered at the express or implied request of the promisor in circum-
stances which raise an implication of a promise to pay. This exception is not entirely a
genuine one since the promisor is assumed to have given an implied undertaking to pay
at the time of the request, his subsequent promise being regarded as deciding merely the
actual amount to be paid. In this situation the act, which follows the request but precedes
the settling of the reward, is more in the nature of executed consideration which, as we
have seen, will support a contract.
(ii) A debtor or his duly authorised agent can make a written acknowledgement of the debt
to the creditor or his agent (Limitation Act 1980, s 29). Time begins to run again from
the date of acknowledgement. However, once a debt is statute barred it cannot be
revived in this way (s 29(7) of the 1980 Act) (see further Chapter 18). Again, this excep- 10
tion is not wholly genuine since the Limitation Act 1980 does not provide that past con-
sideration will support the subsequent acknowledgement of debt. The Act simply states
that no consideration of any kind need be sought.
(iii) Section 27 of the Bills of Exchange Act 1882 provides that an antecedent debt or liability
will support a bill of exchange or cheque. This genuine exception was probably based on
a pre-existing commercial custom. This is essential particularly in the case of cheques
many of which are based on a form of past consideration. Thus, if S sells goods to B, a
debt comes into being payable in legal tender (i.e. bank notes or coins – see further
Chapter 17) when the contract is made. So when B decides to pay S by cheque, which he
may do provided S is agreeable, the cheque is based upon a previous or antecedent debt
or liability and is for past consideration. Nevertheless, this type of consideration will
support the cheque should an action be brought on it.
Re McArdle, 1951 – Consideration must not be past (84)

Re Casey’s Patents, Stewart v Casey, 1892 – The effect of a previous request (85)
(g) The Contracts (Rights of Third Parties) Act 1999 has no direct effect on the concepts of
adequacy, sufficiency and past consideration discussed above. The 1999 Act has an effect
where A contracts with B to give a benefit to C. In these circumstances C may have rights
under the 1999 Act to sue A for failure to perform the contract. However, if the consideration
moving between A and B does not conform with the above rules (or there is no considera-
tion), the contract is not enforceable by B or C (or A for that matter) and the 1999 Act does
not change that situation.
(h) Consideration must move from the promisee, i.e. the person to whom the promise is
made (the promisee) must give some consideration for it to the promisor. From this arises the
doctrine of privity of contract which is considered below.
Privity of contract
This means that in general third parties cannot sue for the carrying out of promises made
by the parties to a contract. Thus, if a contract between A and B requires B to benefit C, the
privity rule prevents C from suing B. However, A may sue B if B breaks the contract, and the
..
EL_C10.qxd 3/26/07 10:48 AM Page 288
court may award A damages or may grant a decree of specific performance under which B
must perform the contract for the benefit of C. If A and C are, in fact, both parties to the con-
tract with B then C still cannot sue B unless he has provided some consideration. Merely
being a party to the contract is not enough. Even though C may be named in the document,
if any, which records and constitutes the contract between A and B, or may be a party to their
oral deliberations, if he does not undertake anything in return for a promise from A or indeed
from B, then he is not participating in a bargain with A and/or B and is not a party to the
contract. This view is based upon the belief that the ‘privity’ rule is merely an aspect of the
rule that ‘consideration must move from the promisee’. The position is different if A, B and C
are parties to a deed. C can then sue B for damages if B fails to carry out his promises in the
deed. Deeds do not require consideration.
Tweddle v Atkinson, 1861 – Privity of contract illustrated (86)

Dunlop v Selfridge, 1915 – Privity: a further application (87)
Jackson v Horizon Holidays, 1975 – Remedies of the promisee: damages (88)
Beswick v Beswick, 1967 – Remedies of the promisee: specific performance (89)
Main exceptions to the privity rule

There are cases in which a person is allowed to sue upon a contract to which he is not a party
as follows.
The Contracts (Rights of Third Parties) Act 1999

This important piece of legislation provides a major exception to the law of privity of con-
tract. It received the Royal Assent on 11 November 1999. For six months from that date it
only applied where its provisions were said expressly to apply in the contract. After that it
applies to nearly all categories of agreement unless expressly excluded.
The Act provides for a major and far-reaching method of preventing the application of the
privity rule. The Act brings English law into line with the position in Scotland, in most mem-
ber states of the European Union and in many of the common law countries of the world,
including the USA. The harmonisation of business law in this way is of benefit to the business
community.
The Act implements the recommendations of the Law Commission in Report No 242,
Privity of Contract: Contracts for the Benefit of Third Parties, published in July 1996. Before look-
ing at its provisions, it should be noted that there is no change to the rule of law which states
that a burden cannot be imposed on a third party without his consent. Thus, in general
terms, a person can assign the right to receive money owed to him but cannot without the
consent of all parties assign the burden of paying his debts. The Act deals only with the con-
ferring of benefits on third parties.
Section 1
This section is at the heart of the Act. It deals with the circumstances in which a third party
may have the right to enforce a term of a contract. He will have that right:
n where the contract contains an express term saying so;

n where a term of the contract purports to confer a benefit on him.
This part of s 1 will not apply if it appears on a true construction of the contract that the
contracting parties did not intend the third party to have a right to enforce it. Thus, if a
contract confers a benefit on a child, it may also provide specifically that any claim in respect
..
EL_C10.qxd 3/26/07 10:48 AM Page 289
of it should be brought by either of its parents and in such a case the child could not bring a
claim under the Act. The parents would have the third-party rights. In order to acquire the
third-party right, the party concerned must be expressly identified in the contract but need
not be identified by name. It is enough if the third party is identified as a member of a class,
e.g. ‘both of my children’.
In addition, so long as the third party is adequately described, that party need not be in
existence when the contract is made. It might, therefore, be in the business context, that a
company as yet not incorporated but to be incorporated may take benefits under a contract
made by its promoter.
Remedies available to the third party will be the same as those available to a party to a con-
tract bringing an action for its breach and the rules relating to damages, injunctions, specific
performance and other relief will apply, as will mitigation of loss. Section 1 also defines
‘promisor’ and ‘promisee’ as used in the Act. The promisor is the person against whom the
contractual term is enforceable by the third party. The promisee is the contracting party by
whom the term is enforceable against the promisor. Thus in a contract by A with B for the
benefit of C, A is the promisor and B is the promisee. C sues under third-party rights. Section
1 also makes it clear that the third party may take advantage of any exclusion or limitation 10
clause in the contract.
Section 2
This restricts the way in which the contracting parties can alter the third party’s entitlement
under the contract without his consent once the third party has the right to enforce the term.
There may be no variation or cancellation of the contract after the third party has accepted
the term as by written notice to the promisor or relied on it when the promisor knows of or
can reasonably be expected to have foreseen that reliance. Suppose A, a wealthy business-
woman, sells one of the many businesses that she owns to B in return for the payment of an
annuity of £15,000 a year to her favourite nephew Sam, by B. So long as Sam has not
accepted the payment term, A and B could alter it to, say, £12,000 a year, but once Sam has
accepted it or, say, B has made a payment under it and can be assumed to expect that Sam
will rely on getting future payments, the term cannot be altered without Sam’s consent. If he
never accepts or if there is no evidence of reliance, Sam is still entitled to the payment, but it
could be altered without his consent. Acceptance by post is not effective until received by the
promisor. This is contrary to the general rules of contractual acceptance by post. In keeping
with the Act’s preservation of the freedom of the parties to make their own contract, the
above rules relating to third-party consent may be displaced by an express term of the con-
tract providing that the contract can be cancelled or varied without the third party’s consent.
Where the consent of the third party is required, the court may on the application of both
parties to the contract dispense with that consent where:
n it cannot be obtained because his or her whereabouts are unknown; or

n he or she is mentally incapable of giving consent.
This will enable the parties to the contract to change the third-party beneficiary or to remove
the contract term so that there are not third-party rights in it.
The courts having power to make the variation are the High Court and county court.
Section 3
This deals with the defences, set-offs and counterclaims available to the promisor in proceed-
ings by a third party to enforce a term of the contract. Illustrations are as follows:
n The third party cannot enforce the contract if it is void as where it is affected by agreement
mistake or illegality or has been discharged as where the promisor has performed the
..
EL_C10.qxd 3/26/07 10:48 AM Page 290
contract, e.g. by making a payment or supplying goods under it, or is unenforceable as

where the third party is given rights on a contract of guarantee which is not evidenced
in writing (see Formalities in Chapter 11. This provision follows from the fact that in the
circumstances the promisee could not enforce it either (s 3(2)).
n A (the promisor) contracts with B (the promisee) that B will sell goods to A, who will pay
the price of the goods, to C (the third party). If B delivers sub-standard goods to A in
breach of contract and A is sued by C for the price, then A is entitled to counterclaim to
reduce or extinguish the price by reason of B’s breach of contract. B could also be faced by
this counterclaim if he or she were to sue A (s 3(2)).
n A and B make a contract under which A will pay C if B transfers his car to A. B already
owes money to A under a different and unrelated contract, say, in connection with the
previous sale of a van. A and B agree to an express term (as the Act requires) in the contract
which states that A can raise against a claim by C any matter which would have given A a
defence or set-off to a claim by B. Thus, in a claim by C for the money, A can set-off what
he is owed by B (s 3(3)).
Section 3 also makes it clear that the promisor also has available any defence or set-off and
any counterclaim not arising from the contract with B but which is specific to the third party.
Illustrations are as follows:
n A contracts with B to pay C £2,000, C already owes A £600. A may set-off against any claim
by C the £600 and need only pay C £1,400.
n C induces a contract between A and B by misrepresentation of which B is unaware. A has a
defence or a counterclaim for damages when sued by C which he or she would not have
had against B (s 3(4)).
The agreement may specifically provide e.g. that A will not raise set-off or counterclaim in an
action by C (s 3(5)).
Section 4
This states that the Act does not affect the rights of the promisee A to enforce any term of the
contract including the term which benefits the third party. Thus B can sue on behalf of C.
Section 5
This states that if the promisee B has already recovered a sum by way of damages for the
promisor’s breach, then in a claim by the third party C this sum will be taken into account in
terms of any sum recovered by C. This is to prevent A from suffering a double liability.
Section 6
This excludes certain types of contract from the operation of the Act. Main examples are:
n A third party is prevented from suing an employee for a breach of his contract of employ-
ment. Without this exception there could be a risk that workers taking lawful industrial
action might be sued and restricted from doing so in unexpected ways. It is worth noting
here that the Trade Union and Labour Relations (Consolidation) Act 1992 gives individuals
the right to bring proceedings to halt unlawful industrial action which deprives them of
goods and services.
n The s 6 provisions also prevent third-party rights arising from the ‘deemed’ contracts
under s 14(1) of the Companies Act 1985 under which the memorandum and articles of a
registered company constitute a contract between the company and its members in respect
of their rights as such. The special nature of these deemed contracts makes them unsuit-
able for enforcement by a third party under the 1999 Act, which is a general reform.
..
EL_C10.qxd 3/26/07 10:48 AM Page 291
Also excluded are contracts for the carriage of goods by sea, as are contracts for the interna-
tional carriage of goods by road, rail or air, which are covered by international conventions.
Nevertheless, the Act allows third parties to enforce exclusion or limitation of liability clauses
in the above contracts. For example, the person who charters a ship may make a contract
with the owner of the goods being carried that the shipowner is not liable for damage result-
ing from negligent stowage. The Act enables the shipowner as a third party to rely on that
exclusion clause should the owner of the goods sue him. The business application is that the
price of the carriage will be cheaper if the shipowner knows he can rely on the clause. In a
similar way, exclusions and defences available to the carrier of goods can be extended to
employees’ agents and independent contractors such as stevedores engaged in loading and
unloading, and will be effective without the legal gymnastics seen in New Zealand Shipping Co
Ltd v A M Satterthwaite & Co Ltd (1975) (Case 181).
Contracts contained in a bill of exchange, promissory note or other negotiable instrument
are also excluded.
Section 7
This preserves any rights or remedies which may be available to a party at common law or by
statute apart from the Act, for example, by making ineffective a contractual provision which
10
tries to exclude liability for personal injury or death. However, the section ensures that a
third party cannot use the ‘reasonableness’ test under s 2(2) of the Unfair Contract Terms Act
1977 to try to defeat a clause excluding liability for other damage caused by negligence on
the ground that the exclusion is unreasonable. (See Chapter 15.) The policy of the Act is to let
the parties decide to what extent they should be sued by the third party. The opposing view
that the policy of the law should be against unreasonable terms in contracts whoever relies
on them and in whatever situation did not prevail.
Effect on business
The Act has significant implications for almost all kinds of contract. All businesses should
review their standard form and other contracts to see where advantage may be taken of the
new law and to decide where its effects might be excluded for it is possible to opt out. In par-
ticular businesses may wish to look again at those contracts where devices such as agency and
trust law have been used to get round the privity rule.
The following areas will be of benefit in company law and company formation:
n Group purchasing companies. In many situations one company in a group of companies
will enter into a contract to purchase goods or services which will be used by other com-
panies in the group. Formerly the other group companies had no right to enforce the
contract directly and it was difficult for the contracting group company to recover for loss
suffered by other group companies (see Jackson v Horizon Holidays (1975) (Case 88)). The
contracting group company can now use the Act to give the other group companies a right
to enforce the contract directly.
n Directors’ and officers’ insurance. Companies are allowed by the Companies Act 1999 to
take out insurance against liability of directors and officers. The 1999 Act allows the company
to confer direct rights on the directors and officers concerned to enforce the insurance
contract themselves instead of the company having to do so on their behalf.
n Pre-incorporation contracts. The promoters of companies may use the Act to give direct
rights to newly formed companies to enforce contracts made on their behalf prior to their
incorporation. Under the 1999 Act the third party does not have to be in existence when
the contract is made.
n Exclusion. The effects of the Act are likely to be uncertain and far-reaching and until there
is defining case law it is likely (and sensible) for those in business to exclude, at least in the
generality of contracts, the application of the Act as the Act permits.
..
EL_C10.qxd 3/26/07 10:48 AM Page 292
Agency
A principal, even if undisclosed, may sue on a contract made by an agent. This exception is
perhaps more apparent than real, because in fact the principal is the contracting party who
has merely acted through the instrumentality of the agent.
Cheques and bills of exchange

Bills of exchange provide an exception. Suppose A buys goods from B but does not wish to
pay immediately; then, if B agrees, a period of credit can be achieved by using a bill of
exchange. A takes the goods and B draws up a bill of exchange on a standard form under
which A (the drawee) agrees to pay the bill at some time in the future, say three months from
the date on the bill. B (the drawer) can make himself or another person the payee. Let us sup-
pose he makes himself the payee. B has now a choice: he can wait three months and get the
money from A; or he can discount the bill with a bank, so that the bank will present the bill
for payment by A after three months; or B can sign it (indorse it) over to someone else.
Suppose he indorses it over to his daughter C as a birthday present. Can C sue A if she pre-
sents him with the bill for payment on the due date and he does not pay it? The answer is ‘yes’
because, although C gave no consideration to A or B, s 27 of the Bills of Exchange Act 1882
gives C a statutory right to sue. In order to make bills as negotiable as possible, the technical rule
of privity is not applied. C could not sue B on the bill because, as between immediate parties,
consideration is required.
It used to be possible to give an indorsed cheque as an example but this is impractical since
the passing of the Cheques Act 1992. This makes clear that a cheque crossed ‘account payee’
or ‘a/c payee’, with or without the word ‘only’, is not transferable. The banks are now print-
ing these words on cheques issued to customers and reinforcing the non-transferability rule
by removing the words ‘or order’ after the payee’s name and inserting ‘only’. However, the
example given is quite valid as regards bills of exchange other than cheques, since these
remain transferable unless crossed ‘a/c payee’, but this is a matter for the parties and bills of
exchange which are not so crossed remain transferable.
The Contracts (Rights of Third Parties) Act 1999 does not apply to these instruments.
Insurance
Section 11 of the Married Women’s Property Act 1882 provides that if a man insures his life
for the benefit of his wife and/or children, or a woman insures her life for the benefit of her
husband and/or children, a trust is created in favour of the objects of the policy, who,
although they are not parties to the contract with the insurance company, can sue upon it. In
addition the policy moneys are not liable for the deceased’s debts.
Bankers’ commercial credits and performance bonds

As regards bankers’ commercial credits, it is common commercial practice for an exporter, E,
to ask the buyer of the goods, B, to open, with his banker, a credit in favour of E, the credit to
remain irrevocable for a specified time. B agrees with his banker that the credit should be
opened and, in return, promises to repay the banker, and usually gives him a lien over the
shipping documents. The banker will also require a commission for his services. B’s banker
then notifies E that a credit has been opened in his favour, and E can draw upon it on presenta-
tion of the shipping documents.
It will be seen that E and B’s banker are not in privity of contract. It might be thought that
this could give rise to problems in the unlikely event that the banker did not pay. However,
this is not so. In fact the buyer/customer of the bank cannot stop payment. In Malas
(Hamzeh) v British Imex [1958] 1 All ER 262 the claimants, who were buyers of goods, applied
..
EL_C10.qxd 3/26/07 10:48 AM Page 293
to the court for an injunction restraining the sellers (who were the defendants in the case)
from drawing under a credit established by the buyer’s bankers. The Court of Appeal refused
to grant this injunction and Jenkins, LJ said: ‘The opening of a confirmed letter of credit con-
stitutes a bargain between the banker and the vendor of the goods which imposes on the
banker an absolute obligation to pay . . .’. Sellers, LJ said that there could well be exceptions
where the court could exercise a jurisdiction to grant an injunction, as where there was a
fraudulent transaction. However, in other situations the binding nature of the banker’s
commercial credit is an exception to the doctrine of privity of contract.
There have been similar developments making performance bonds enforceable by commercial
custom so that where a bank guarantees performance of an export contract by the supplier a
claim may be made against the bank if the contract is not performed. The leading authority
for this is Edward Owen Engineering Ltd v Barclays Bank International Ltd [1978] 1 All ER 976.
There is no reason why the right of exporters to sue the relevant bank should not be con-
tained in the contract between B and his banker providing the credit under the Contracts
(Rights of Third Parties) Act 1999. However, the rule that the bank always pays (fraud apart)
is such a part of international commerce that the case law rules may well be felt sufficient in
themselves. 10
Assignment
If A owes B £10 B may assign the right to receive the money to C and provided that
assignment is a legal assignment (as distinct from an equitable one) C may sue A without the
assistance of B as a party to the claim. The matter of assignment is considered more fully in
Chapter 22.
Land law – generally

The position in land law is that benefits and liabilities attached to or imposed on land may in
certain circumstances follow the land into the hands of other owners.
Smith and Snipes Hall Farm Ltd v River Douglas Catchment Board, 1949 –
Exceptions to the privity rule: passing of benefits (90)
Tulk v Moxhay, 1848 – The passing of burdens (91)
Land law – leases

The rule of privity of contract had an unfortunate effect on leases of land in the sense that if
the original tenant under the lease assigned his tenancy to another tenant with the landlord’s
consent the original tenant, being in privity with the landlord, could not get rid of the duties
under the lease. If, therefore, the person to whom the lease was assigned did not, for example,
pay the rent the original assignee could be required to do so and this remained the case
where there were further assignments to other assignees. The Landlord and Tenant
(Covenants) Act 1995 abolished this liability in the original tenant so that the landlord will
only be able to sue the tenant for the time being unless there is an authorised guarantee
agreement in force. Under the Act a landlord may require an assigning tenant to enter into a
guarantee with the landlord as a condition of the landlord giving his assent to the lease being
assigned. Under such an agreement the outgoing tenant would guarantee the performance of
the terms of the lease, e.g. payment of rent by his immediate (but not subsequent) assignee.
The rules relating to leases are, as we have seen, contained in the Landlord and Tenant
(Covenants) Act 1995 which applies to the exclusion of the Contracts (Rights of Third Parties)
Act 1999.
..
EL_C10.qxd 3/26/07 10:48 AM Page 294
Privity and claims against insolvent businesses

If an employee is injured by his employer’s negligence and the employer is, for example, a
company that goes into liquidation, the Third Parties (Rights Against Insurers) Act 1930
allows the injured employee to make a claim against the company’s insurers directly, thus
avoiding a proof in the company’s liquidation which might only produce a small payment
covering only part of the claim.
However, the claim against the insurer is not straightforward since the insurer is only liable
to indemnify the company, so that the victim must sue the company to establish its liability
before the insurance company is obliged to pay. This may mean an action at law to restore
the company to the register if it has been struck off on liquidation and another action to
establish its liability. It may then be necessary to bring a legal action against the insurance
company if it fails to pay for some reason. The Law Commission published a consultation
paper in the spring of 1998 suggesting legislative changes to enable claims to be dealt with in
one set of proceedings. As yet, there is no legislation.
Consideration viewed in relation to the discharge

or variation of a contract
All that has so far been said in regard to consideration relates to the formation of a contract.
As we have seen, there must be consideration in order to bring a contract into existence,
deeds apart. The rules are rather different where a contract is to be discharged or varied. There
are a number of ways in which a contract may be discharged, all of which will be dealt with
later. However, the one with which we are now concerned is discharge by agreement under
which contract A is to be discharged or varied by a new contract, B, the question being to
what extent does contract B require consideration? The attitude of the common law is differ-
ent from that of equity, as we shall see.
Common law – the rule of accord and satisfaction

At common law if A owes B £10 and wishes to discharge that obligation by paying B £9, he must:
(a) obtain the agreement (accord) of B; and

(b) provide B with some consideration (satisfaction) for giving up his right to £10 unless the
release is by deed.
This is the common-law rule of accord and satisfaction. The rule is an ancient one and an
early example of it is to be found in the judgment of Brian, CJ in Pinnel’s Case (1602) 5 Co
Rep, 117a. Pinnel sued Cole in debt for what would now be £8.50 which was due on a bond
on 11 November 1600. Cole’s defence was that at Pinnel’s request he had paid him £5.12 on
1 October and that Pinnel had accepted this payment in full satisfaction of the original debt.
Although the court found for Pinnel on a technical point of pleading, it was said that:
(a) payment of a lesser sum on the due day in satisfaction of a greater sum cannot be any
satisfaction for the whole; but
(b) payment of a smaller sum at the creditor’s request before the due day is good considera-
tion for a promise to forgo the balance for it is a benefit to the creditor to be paid before
he was entitled to payment and a corresponding detriment to the debtor to pay early.
..
EL_C10.qxd 3/26/07 10:48 AM Page 295
The first branch of the rule in Pinnel’s Case was much criticised but was eventually
approved by the House of Lords, and the doctrine then hardened because of the system of
binding precedent.
Exceptions to the rule

The practical effect of the rule is considerably reduced under common law by the following
exceptions which have been made to it:
(a) Where there is a dispute as to the sum owed. If the creditor accepts less than he thinks
is owed to him the debt will be discharged. For example, A says that B owes him £11. B says
it is only £9. A agrees to take £10. Then, even if it can be proved that A was owed £11, he
cannot recover the £1. He has compromised his claim.
(b) Where the creditor agrees to take something different in kind, e.g. a chattel, the debt
is discharged by substituted performance. Thus, if A gives B a watch worth £5 and B is agree-
able to taking it, then the debt of £10 will be discharged. The legal theory here seems to be
that the article given may be worth more than the balance of the debt and the court is not
prepared to be a valuer. In this connection it should be noted that a cheque for a smaller sum
10
no longer constitutes substituted performance.
(c) The payment of a smaller sum before the larger is due gives the debtor a good dis-
charge. This is the second branch of the rule in Pinnel’s Case.
(d) If a debtor makes an arrangement with his creditors to compound his debts, e.g. by
paying them 85p in the £1, he is satisfying a debt for a larger sum by the payment of a
smaller sum. Nevertheless, it is a good discharge, the consideration being the agreement by
the creditors with each other and with the debtor not to insist on their full rights.
(e) Payment of a smaller sum by a third party operates as a good discharge.
Foakes v Beer, 1884 – Pinnel’s Case: House of Lords approves (92)

D & C Builders v Rees, 1965 – Cheque not substituted performance: extinguishing
rights (93)
Good v Cheesman, 1831 – Compositions with creditors (94)
Welby v Drake, 1825 – Payments by third parties (95)
Equity – the rule of promissory estoppel

There has always been some dissatisfaction with the common-law rule of accord and satis-
faction. After all, if A owes B £10 and B agrees to take £9, as he must before there can be any
question of discharging the obligation of A to pay £10, why should B be allowed afterwards
to break his promise to take £9 and succeed in an action against A simply because A gave him
no consideration?
It was to deal with this sort of situation that the equitable doctrine of promissory estoppel
was propounded, first by Lord Cairns in Hughes v Metropolitan Railway (1877) 2 App Cas 439 and
later by Denning, J (as he then was) in the High Trees case (1947) (see below) and later by the
House of Lords in Tool Metal Manufacturing Co Ltd v Tungsten Electric Co Ltd (1955) (see below).
The doctrine of estoppel is basically a rule of evidence under which the court, surprisingly
enough, is not prepared to listen to the truth.
..
EL_C10.qxd 3/26/07 10:48 AM Page 296
It occurs at common law out of physical conduct. Suppose A and B go into a wholesaler’s
premises and A asks for goods on credit. The wholesaler, who knows that B is creditworthy,
but has no knowledge of A, is not prepared to give credit until A says, ‘Do not worry, you will
be paid, B is my partner’. If B says nothing and A receives the goods on credit and does not
pay, then B could be sued for the price, even though he can produce evidence that he was
not in fact A’s partner. This evidence will not be admitted because the wholesaler relied on a
situation of partnership created by B’s conduct and the statement is concerned with existing
fact which is essential at common law (see Jorden v Money (1854) 5 HL Cas 185). A statement
about future conduct is not enough at common law.
Promissory estoppel in equity is very little different except that the equitable estoppel arises
from a promise and not from conduct. The common law does not recognise an estoppel arising
out of a promise, or a statement about future conduct, but equity does.
Ingredients of promissory estoppel

The doctrine of promissory estoppel has the following ingredients:
(a) It arises from a promise made with the intention that it should be acted upon. The
promise must be clear and unambiguous to the effect that strict legal rights will not be
enforced. It must also be unconscionable to allow the promise to be disregarded. It is difficult
to say when this might be the case. However, the courts may very well, in practice, decide
(i) that it is unconscionable, in equity, to revoke any agreement modifying an obligation
unless it is done quickly and before any action has been taken on it so that if a tenant actually
pays a lower rent under a promise that he may do so it will not be possible to recover the rent
forgiven though the payment of the full rent can be required for the future if the landlord
gives reasonable notice (see the High Trees case below) or (ii) unless the promise to modify
was extorted under duress as in D & C Builders v Rees (1965).
(b) It was once thought that the person who had received the promise must do something to
show that he had relied on it. If A, a landlord, said B could pay only half his usual rent while
he was unemployed, it was thought that B would have to show, for example, that he had
spent what should have been the rent money on travelling expenses to find work in the dis-
trict. Reliance upon the promise in this way is not, it would appear, a necessary requirement.
All that would seem to be necessary is that the debtor has made the part-payment; he need
not do anything else.
(c) It relates only to variation of a contract by agreement and does not affect the requirement
of consideration on formation of contract.
(d ) So far as the rule has been developed in cases, it merely suspends rights but does not
totally discharge them because it does not preclude enforcement of the original contract after
reasonable notice has been given. Thus it does not create a binding variation for the future
(see Tool Metal Manufacturing Co Ltd v Tungsten Electric Co Ltd below).
(e) The promise must be freely given and not extorted by threats (see D & C Builders v Rees
(1965) above).
(f) Of considerable importance is a dictum by Lord Denning in D & C Builders v Rees (1965)
(see above) that the rule could be developed to the point at which it operated, not merely to
suspend rights, but to preclude enforcement of them. If this point is reached, then if A owes
£10 and B agrees to take £9, A will be discharged from his obligation to pay £10 without the
need for consideration.
..
EL_C10.qxd 3/26/07 10:48 AM Page 297
Such a situation would involve a virtual overruling of Foakes v Beer (1884) (see above) and
would put an end to the first branch of the rule in Pinnel’s Case which is that payment of a
lesser sum on the day due in satisfaction of a greater sum cannot be any satisfaction for the
whole. Although in the past a number of dicta by Lord Denning have been incorporated into
the ratio of subsequent decisions, the position outlined here has not yet been reached.
The High Trees case, 1947 – The rule of promissory estoppel (96)
Tool Metal Manufacturing Co Ltd v Tungsten Electric Co Ltd, 1955 – Promissory
estoppel merely suspends rights (97)
Alan v El Nasr, 1972 – No need for reliance on promise (98)
Combe v Combe, 1951 – Rule not applicable to formation of contract (99)
Discharge of contract by performance – 10

relevance of the High Trees case
The rule of equitable estoppel has relevance in discharge of a contract by performance
(see Chapter 17). Although the agreed date of delivery must usually be complied with in
a contract of sale, the buyer may waive the condition relating to the date of delivery and
accept a later date. Such a waiver may be binding on him whether made with or without
consideration. It was held by Lord Denning in Charles Rickards Ltd v Oppenhaim, 1950
(see Chapter 17) that the binding nature of a waiver without consideration might be based
on the High Trees case (i.e. a promissory estoppel to accept a later delivery date). Alternatively,
the seller may rely on s 11(2) of the Sale of Goods Act 1979, which states: ‘Where a con-
tract of sale is subject to any condition to be fulfilled by the seller, the buyer may waive that
condition.’
Equitable estoppel – other applications
The principle of equity on which promissory estoppel is based is one of general application
and may be applied whenever the court feels it is necessary in the interests of justice to do so.
Durham Fancy Goods v Michael Jackson (Fancy Goods) Ltd, 1968 – Equitable
estoppel: use other than in discharge or variation of contract (100)
Intention to create legal relations

The law will not necessarily recognise the existence of a contract enforceable in a court of law
simply because of the presence of mutual promises. It is necessary to establish also that both
parties made the agreement with the intention of creating legal relations so that if the agree-
ment was broken the party offended would be able to exercise legally enforceable remedies.
The subject can be considered under two headings as follows.
..
EL_C10.qxd 3/26/07 10:48 AM Page 298
Cases where the parties have not expressly denied their intention to
create legal relations
Advertisements
Most advertisements are statements of opinion and as such are not actionable. Thus, unless
the advertisement makes false statements of specific verifiable facts, which is rare, the court
will not enforce the claims made for the product on a contractual basis. However, where a
company deposits money in the bank against possible claims, the court is likely to hold that
legal relations were contemplated (Carlill v Carbolic Smoke Ball Co (1893)), though a deposit is
not essential (Wood v Lectric Ltd (1932) – see Chapter 9).
Family agreements
Many of these cannot be imagined to be the subject of litigation but some may be. The ques-
tion is basically one of construction and the court looks at the words and the surrounding
circumstances. The two basic divisions of family agreements are set out below.
(a) Husband and wife. With regard to agreements between husband and wife, it is difficult to
draw precise conclusions. However, the following situations have appeared in decided cases.
(i) Where husband and wife were living together in amity when the agreement was made,
the agreement is not enforceable as a contract because legal proceedings are an inappro-
priate method of settling purely domestic disputes.
(ii) Where husband and wife were living together but not in amity or were separated alto-
gether when the agreement was made, the court may enforce it.
(iii) If the words used by the parties are uncertain, the agreement will not be enforced – the
uncertainty leading to the conclusion that there was no intention to create legal rela-
tions. Thus in Gould v Gould [1969] 3 All ER 728 a contractual intention was negatived
where a husband on leaving his wife undertook to pay her £15 per week ‘so long as I can
manage it’. The uncertainty of this term ruled out a legally binding agreement.
Agreements of a non-domestic nature made between husband and wife are enforceable, e.g.
in Pearce v Merriman [1904] 1 KB 80 it was held that a husband may be his wife’s tenant and
as such could be made to pay the rent.
(b) Other family and personal relationships. The question of intention to create legal rela-
tions arises for consideration here as well but it seems that the less close the relationship
between the parties the more likely it is that the court will presume that legal relations were
intended. However, in these cases also uncertainty as to the terms of the agreement normally
leads to the conclusion that there was no contractual intention.
Other cases
There may well be other areas where intention to create legal relations is doubtful but
which have not been the subject of cases in court. Again, the matter is one of fact for the
court. However, in the case of clubs and societies many of the relationships which exist
and promises which are made are enforceable only as moral obligations. They are merely
social agreements. For example, the decision in Lens v Devonshire Club, The Times, 4 December
1914, would suggest that if a person competes for a prize at a local golf club and is the
winner, he or she may not be able to sue for the prize which has been won if it is not other-
wise forthcoming.
However, in Peck v Lateu (1973) The Times, 18 January, two ladies attended bingo sessions
together and had an arrangement to pool their winnings. One of them won an additional
..
EL_C10.qxd 3/26/07 10:48 AM Page 299
‘Bonanza’ prize of £1,107 and claimed it was not covered by the sharing arrangements.
Pennycuick, VC held that there was an intention to create legal relations and to share all
prizes won. The claimant was entitled to a share in the prize.
It should also be borne in mind that quotations and estimates may be passed from one
person to another without any intention that they should be legally binding at that stage.
Balfour v Balfour, 1919 – Husband and wife living in amity (101)

Merritt v Merritt, 1970 – Effect of separation (102)
Simpkins v Pays, 1955 – Intention in family relationships (103)
Jones v Padavatton, 1969 – Family relationships and uncertainty (104)
Cases where the parties expressly deny any intention to create

legal relations
By contrast with family arrangements, agreements of a commercial nature are presumed to be 10
made with contractual intent. Furthermore, the test applied by the court is an objective one so
that a person cannot escape liability simply because he did not have a contractual intention.
The presumption is a strong one and it was held in Edwards v Skyways Ltd [1964] 1 All ER 494
that the use of the words ex gratia in regard to an airline pilot’s contractual redundancy
payment did not displace the presumption, so that the airline had to make the payments and
did not have a discretion whether to make them or not.
However, the Court of Appeal has held more recently that a court need not necessarily pre-
sume intention to create legal relations just because the parties are in business.
Kleinwort Benson Ltd v Malaysian Mining Corporation, Berhad, 1989 –

Business contracts: intention usually but not always assumed (105)
Some agreements where the court would normally assume an intention to create legal rela-
tions may be expressly taken outside the scope of the law by the parties agreeing to rely on
each other’s honour. This is a practice which appears to be allowable to pools companies who
are especially subject to fraudulent entries but should not be allowed to spread into other
areas of standardised contracts, i.e. contracts where the consumer has no choice of supplier
as where he requires electrical services laid on which can only be provided by a monopoly
corporation.
There is no such objection where business persons reach agreements at arm’s length, and if
the parties expressly declare, or clearly indicate, that they do not wish to assume contractual
obligations, then the law accepts and implements their decision.
Jones v Vernon’s Pools Ltd, 1938 – Business agreements: contractual intent may
be excluded (106)
Rose and Frank Co v Crompton (JR) & Bros Ltd 1925 – An honourable pledge
clause (107)
Statutory provisions
Sometimes an Act of Parliament renders an agreement unenforceable. Thus under s 1 of the
Law Reform (Miscellaneous Provisions) Act 1970, a contract of engagement, which is, in
..
EL_C10.qxd 3/26/07 10:48 AM Page 300
effect, an agreement to marry, is not enforceable at law since there is a statutory presumption
that there was no intention to create legal relations. Thus actions for breach of promise are
no longer possible.
In addition, under s 29 of the Post Office Act 1969, the acceptance of ordinary letters and
packets for transmission does not give rise to a contract between the Post Office and the
sender.
Finally, under s 179 of the Trade Union and Labour Relations (Consolidation) Act 1992,
collective agreements between trade unions and employers (or employers’ associations) con-
cerning industrial conditions such as hours, wages, holidays, procedures in disputes and so
on, are presumed not to be intended to be legally enforceable unless they are in writing and
contain a provision to that effect.
However, under s 70A and Sch A1 of the 1992 Act, as inserted by the Employment
Relations Act 1999, arrangements between an employer and a trade union in regard to re-
cognition for the purposes of collective bargaining have effect as legally binding agreements,
specific performance being the only remedy for breach.
..
EL_C11.qxd 3/26/07 10:48 AM Page 301
11
MAKING THE CONTRACT III
In this chapter we shall conclude the study of those elements of contract law which go to
making a mere agreement into a binding contract. Formalities (or the need for writing) and the require-
ment that the parties must have capacity in law to make the contract are considered here.
Formalities
In most cases a contract made orally (or by parol, which is an alternative expression) is usually
just as effective as a written one. Exceptionally, however, written formalities are required as
follows.
Contracts which must be made by deed

A lease of more than three years should be made by deed otherwise no legal estate is created
(see ss 52 and 54 of the Law of Property Act 1925). If there is no deed then there is in equity a
contract for a lease. This is an estate contract under s 2(3) of the Law of Property Act 1925. It
is enforceable against third parties who acquire the freehold from the landlord only if it has
been registered at the Land Registry. Registration gives notice to the whole world. Failure to
register makes the contract void against a later purchaser of the freehold from the landlord
for a consideration, even though in fact the purchaser knows the lease exists (Law of Property
Act 1925, s 199(1)). The purchaser could turn out the tenant if the lease was not registered.
However, where it is registered the tenant is protected.
It should be noted, however, that the Court of Appeal decided in Crago v Julian [1992] 1 All
ER 744 that a distinction must be made between the creation of a lease and its assignment. If
tenant A wishes, say, to sell his lease to B, the assignment from A to B must be by deed, even
though the original lease given to A was oral and for three years or less. This arises from ss 52
and 53 of the Law of Property Act 1925, which deal with the transfer of interests in land.
As regards the form of a deed, the Law of Property (Miscellaneous Provisions) Act 1989 is
now relevant and was considered in Chapter 9.
Estoppel and deeds

Because the deed is the most formal and considered form of contract making the deed is subject
to the rule of estoppel that says that a party who executes a deed, i.e. signs it, cannot say in a
..
EL_C11.qxd 3/26/07 10:48 AM Page 302
court of law that the deed is not true as to the facts stated in it. Thus, although a deed was not
signed in the presence of a witness, although it was signed by a witness, the Court of Appeal
ruled that a person who had agreed by the deed to be personally liable for a debt owed by a
bank of which he was a director could not deny his liability because he had signed the deed even
though not in the presence of the witness as the law requires (see Shah v Shah [2002] QB 35).
Comment A deed requires attestation and the form required to satisfy this requirement is
‘signed as a deed by AB in the presence of CD’. So, because the deed says that as a fact it must
be regarded as correct even if it is not.
Contracts which must be in writing

For example, the following simple contracts are required by statute to be in writing, otherwise
they are affected in various ways:
(a) By reason of amendments to the Consumer Credit Act 1974 made by the Consumer
Credit Act 2006, all consumer credit agreements of any amount are covered by the legisla-
tion, although there is an exemption for lending over £25,000 to large businesses. The
amount refers to the credit provided. If these agreements are not in appropriate written form
they cannot be enforced by the dealer, unless the court thinks it is fair in the circumstances
to allow him to enforce the contract.
(b) Contracts of marine insurance, which must be embodied in a written policy, otherwise
the contract is not effective, being inadmissible in evidence unless embodied in a written
policy signed on behalf of the insurer (Marine Insurance Act 1906, s 22).
(c) Contracts for the sale or other disposition of land are required by statute to be in writing,
otherwise they are invalid, i.e. there is no contract. Section 2(1) of the Law of Property
(Miscellaneous Provisions) Act 1989 provides that a contract for the sale or other disposition
of an interest in land can only be made in writing and only by incorporating all the terms
which the parties have expressly agreed in one document or, where contracts are exchanged,
in each contract. The document must be signed by each party. As regards the requirement
that the parties must sign a copy of the agreement, it was held by the Court of Appeal in
Firstpost Homes v Johnson [1995] 4 All ER 355 that the word ‘signed’ in the 1989 Act meant
that the parties must sign their names in their own hand. A typed signature was not enough
even though earlier cases on the requirements of writing under previously applicable legisla-
tion had decided that a typed signature was acceptable.
There are some exceptions to the above requirements as follows:
(i) leases for three years or less where the tenant takes possession can be granted orally;
(ii) sales at public auctions are excluded and the contract is regarded as made when the auc-
tioneer’s hammer falls. There is thus no requirement of writing at all at auction sales;
(iii) section 2(5) of the 1989 Act provides that the requirements of the Act do not prevent
the creation of implied trusts over land where these arise orally. Thus, in Yaxley v Gotts
[1999] EGCS 92 there was an oral agreement between the freehold purchaser of a prop-
erty and a builder that if the builder would convert the property into flats the freeholder
would grant him a long lease of the ground floor flat. The builder carried out the work
supplying services and materials. The freehold owner then refused to grant him a lease
of the flat and claimed that the agreement for it was unenforceable since it was not in
writing. The Court of Appeal said that the circumstances had created a constructive trust
over the flat in favour of the builder and since such trusts do not require writing and
s 2(5) provides for this in the context of the case, the builder could enforce the oral
trusts. The court granted him a 99-year lease.
..
EL_C11.qxd 3/26/07 10:48 AM Page 303
MAKING THE CONTRACT III 303
Since the document must now contain all the terms agreed by the parties and be signed by
both parties, solicitors and conveyancers are no longer at risk that pre-contract correspond-
ence signed by only one party might amount to a contract itself as was a possibility before. The
practice of heading correspondence ‘subject to contract’ can now be brought to an end but
some lawyers may advise its retention in case a judicial interpretation reveals an unexpected
trap in its omission. Also, there should not be a problem as to whether the parties to a sale or
other disposition of land intended legal relations because there will be a formal contract.
Contracts which must be evidenced in writing

Here we are concerned with contracts of guarantee where the Statute of Frauds 1677 requires
writing which, though not essential to the formation of the contract, is needed as evidence
if a dispute about it comes before a court. The court will not enforce the guarantee in the
absence of written evidence.
The provision in the Statute of Frauds applies to guarantees and not to indemnities. It is
therefore necessary to distinguish between these two. In a contract of indemnity the person
giving the indemnity makes himself primarily liable by using such words as ‘I will see that
you are paid’.
In a contract of guarantee the guarantor expects the person he has guaranteed to carry out 11
his obligations and the substance of the wording would be: ‘If he does not pay you, I will’.
An indemnity does not require writing because it does not come within the Statute of Frauds:
a guarantee requires a memorandum.
An additional distinction is that it is an essential feature of a guarantee that the person
giving it is totally unconnected with the contract except by reason of his promise to pay the
debt. Thus a del credere agent who, for an extra commission, promises to make good losses
incurred by his principal in respect of the unpaid debts of third parties introduced by the
agent, may use the guarantee form ‘if they do not pay you I will’ but no writing is required.
Such a promise is enforceable even if made orally because even where a person does promise
to be liable for the debt of another that promise is not within the Statute of Frauds where it
is, as here, an incident of a wider transaction, i.e. agency.
Mountstephen v Lakeman, 1871 – Guarantee and indemnity distinguished (108)
The memorandum in writing to satisfy the court need not exist when the contract is made
but must be in existence when an action, if any, is brought for breach of the guarantee.
A guarantee cannot be proved orally – writing is required as evidence. The memorandum
must identify the parties, normally by containing their names. The material terms must be
included, e.g. that it is a guarantee of a bank overdraft facility limited to £50,000. The mem-
orandum must also contain the signature of the party to be charged or his agent properly
authorised to sign. However, the law is not strict on this point and initials or a printed signa-
ture will do (contrast the position under the Law of Property (Miscellaneous Provisions) Act
1989, above). The ‘party to be charged’ is the proposed defendant and there may be cases
where one party has a sufficient memorandum to commence an action whereas the other
may not since the memorandum does not contain the other party’s signature. This could
happen where the memorandum was in a letter written by Bloggs to Snooks. The letter would
presumably be signed by Bloggs but not by Snooks. It would therefore be a good memorandum
for an action by Snooks but not by Bloggs. Section 3 of the Mercantile Law Amendment Act
1856 dispenses with the need to set out the consideration in the memorandum but it must
exist. It is normally the extension of credit by A to B in consideration of C’s guarantee of B’s
liability if B fails to pay.
..
EL_C11.qxd 3/26/07 10:48 AM Page 304
Signatures and electronic trading

A problem which has faced those wanting to engage in electronic commerce is the fact that
the law did not recognise the validity of electronic signatures so that e.g. there was no way in
which a deed could be made by electronic means. However, the Electronic Communica-
tions Act 2000 is now in force. Among the main provisions is one to introduce measures
to promote the legal recognition of electronic signatures. In this connection the Law
of Property ( Miscellaneous Provisions) Act 1989 has abolished the previous rule that a
deed must be written on paper, thus clearing the way for the making of deeds by electronic
means. The Act provides that digital signatures be given legal force and will set up a volun-
tary licensing system for trusted third parties that offer signature and encryption services.
Existing laws (as set out in this chapter) which require the use of paper will be swept away.
Digital signatures are forgery-resistant computer codes which are used to prove someone’s
identity.
Delegated legislation will be required to make the Act of 2000 fully effective. There are so
many instances, e.g. in the law of real property, where paper documents with signatures on
them are required. Areas for change are being identified prior to legislation.
An electronic signature need not be in the form of a code. For example, an e-mail which is
signed off ‘yours faithfully, J. Bloggs’ is a valid electronic signature. However, the High Court
ruled in J Pereira Fernandes SA v Mehta [2006] 2 All ER 891 that a guarantee was unenforceable
because the only thing approaching a signature in the e-mail which set out the guarantee was
the automatic insertion of the sender’s e-mail address after the e-mail had been transmitted
by an internet service provider. An e-mail address, said the court, was not a signature but in
the view of the court more like a phone or fax number.
Capacity to contract
Adult citizens have full capacity to enter into any kind of contract but certain groups of
persons and corporations have certain disabilities in this connection. The most important
groups for our purposes are dealt with below.
Minors
The Family Law Reform Act 1969, s 1, reduced the age of majority from 21 to 18 years.
Contracts made by minors were governed by the common law (including parts of sale of
goods legislation) as amended by the Infants Relief Act 1874 and the Betting and Loans
(Infants) Act 1892. The Minors’ Contracts Act 1987 repealed the relevant parts of the 1874
and 1892 Acts so that minors’ contracts are now governed by the rules of common law
(including the Sale of Goods Act 1979) as amended by the Minors’ Contracts Act 1987.
Valid contracts
(a) Executed contracts for necessaries. These are defined in s 3(3) of the Sale of Goods Act
1979 as ‘Goods suitable to the condition in life of the minor and to his actual requirements
at the time of sale and delivery’. If the goods are deemed necessaries, the minor may be
..
EL_C11.qxd 3/26/07 10:48 AM Page 305
compelled to pay a reasonable price which will usually, but not necessarily, be the contract
price. The Sale of Goods Act does not, of course, cover necessary services such as, for example,
a series of treatments by an osteopath. However, the common law applies and follows the
Sale of Goods Act by requiring the minor to pay a reasonable price. The minor is not liable
if the goods, though necessaries, have not been delivered or the service has not yet been
rendered, i.e. there is no claim for breach of contract. This, together with the fact that he is
only required to pay a reasonable price, illustrates that a minor’s liability for necessaries is
only quasi-contractual.
If the goods (or services) have a utility value, such as clothing, and are not merely things of
luxury, e.g. a diamond necklace, then they are basically in the category of necessaries.
Whether the minor will have to pay a reasonable price for them depends upon:
(i) the minor’s income which goes to his condition in life. If he is wealthy, as where he has
a good income from a trust, then quite expensive goods and services may be necessaries
for him, provided they are useful;
(ii) the supply of goods which the minor already has. If the minor is well supplied with the
particular articles then they will not be necessaries, even though they are useful and are
well within his income.
(b) Contracts for the minor’s benefit. These include contracts of service, apprenticeship and
11
education.
However, trading contracts of minors are not enforceable no matter how beneficial they
may be to the minor’s trade or business. The theory behind this rule is that when a minor is
in trade his capital is at risk and he might lose it, whereas in a contract of service there is no
likelihood of capital loss.
Nash v Inman, 1908 – What are necessaries? (109)

Roberts v Gray, 1913 – Contracts which are beneficial (110)
Mercantile Union Guarantee Corporation v Ball, 1937 – Trading contracts not
‘beneficial’ (111)
Contracts not binding unless ratified

(a) Loans. These are not binding on the minor unless he ratifies the contract of loan after
reaching 18 which he may now legally do. No fresh consideration is now required on
ratification.
(b) Contracts for non-necessary goods. Again, these are not binding on the minor unless
he ratifies the contract after reaching 18, as he may now legally do. Once again, no fresh con-
sideration is required on ratification.
It should be noted that in spite of the fact that the contracts in (a) and (b) above are not
enforceable against the minor, he gets a title to any property which passes to him under the
arrangement and can give a good title to a third party as where, for example, he sells non-
necessary goods on to someone else (who takes in good faith and for value). This was decided
in Stocks v Wilson [1913] 2 KB 235. Furthermore, any money or property transferred by the
minor under the contract can only be recovered by him if there has been a total failure of
consideration (see below).
..
EL_C11.qxd 3/26/07 10:48 AM Page 306
Contracts binding unless repudiated

These are usually contracts by which the minor acquires an interest of a permanent nature in
the subject matter of the contract. Such contracts bind the minor unless he takes active steps
to avoid them, either during his minority or within a reasonable time thereafter. Examples of
voidable contracts are shares in companies, leases of property and partnerships.
Steinberg v Scala (Leeds) Ltd, 1923 – Minors: voidable contracts (112)
Consequences of the defective contracts of minors

We must now have a look at what happens where there has been some performance of a con-
tract with a minor which is either not binding unless ratified or binding unless repudiated.
Recovery by minor of money paid

Where a minor has paid money under these defective contracts he cannot recover it
unless total failure of consideration can be proved, i.e. that the minor has not received any
benefit at all under the contract. The court is reluctant to say that no benefit has been
received. This can be seen in the context of a contract not binding unless ratified in Pearce v
Brain (see below) and in the context of a contract binding unless repudiated in Steinberg v
Scala (see above).
Pearce v Brain, 1929 – Recovery of money paid or property transferred (113)
Effect of purchase by minor of non-necessary goods

As we have seen, the minor acquires a title to the goods and can give a good title to a third
party who takes them bona fide and for value (Stocks v Wilson [1913] 2 KB 235). The trades-
man who sold the goods to the minor cannot recover them from the third party.
However, as regards recovery from the minor, if he still has the property, s 3 of the
Minors’ Contracts Act 1987 provides that the court can order restitution, for example, of
non-necessary goods to the tradesman, where the minor is refusing to pay for them. As we
know, he cannot be sued for the price.
The question of recovery in any particular case is left to the court which must regard it as
just and equitable to allow recovery, though a restitution order can be made whether the
minor is fraudulent, as where he obtained the goods by overstating his age, or not. Fraud is no
longer a requirement for restitution. Money will be virtually impossible to recover because
it will normally be mixed with other funds and not identifiable. However, the minor could be
made under s 3 to offer up any goods acquired in exchange for the non-necessary goods. The
tradesman recovers the goods in the state he finds them and cannot ask for compensation
from the minor if they are, for example, damaged.
Thus, if Ann, a minor, buys a gold necklace and does not pay for it, the seller can recover
the necklace from Ann. If Ann exchanges the necklace for a gold bangle, the seller can
recover the gold bangle from Ann. If Ann sells the necklace for £500, it is not clear whether
the seller can get restitution of the money unless it has been kept separate from Ann’s other
..
EL_C11.qxd 3/26/07 10:48 AM Page 307
funds or can be identified in a fund containing other money of Ann’s, for example, a bank
account into which she has paid her salary. Section 3 says that the seller can recover the
article passing under the contract ‘or any property representing it’. It is at least arguable that
Ann’s general funds do not solely represent the necklace in the way that the bangle does.
Judicial interpretation is required.
Guarantees
Section 2 of the Minors’ Contracts Act 1987 provides that a guarantee by an adult of a
minor’s transaction shall be enforceable against the guarantor even though the main contrac-
tual obligation is not enforceable against the minor. Thus, if a bank makes a loan to a minor
or allows a minor an overdraft and an adult gives a guarantee of that transaction, then
although the loan or overdraft cannot be enforced against the minor, the adult guarantor can
be required to pay.
Mental disorder and drunkenness 11

Where the property and affairs of a person who lacks capacity under the Mental Capacity Act
2005 are placed under the management of the Court of Protection by means of a court
appointed person called a ‘deputy’ (formerly a ‘receiver’), that person has no capacity to con-
tract as regards that property but the deputy has. In other cases, s 1 of the 2005 Act states that
a person must be assumed to have capacity unless it can be established, normally to the
satisfaction of the court, that he or she lacks capacity, in which case there is no contract. The
burden of proof falls on the person who says that capacity is lacking. Section 7 of the 2005
Act deals with necessary goods and services and provides that, if necessary goods or services
are supplied to a person who lacks capacity to contract for the supply, he or she must pay a
reasonable price for them. The section goes on to define ‘necessaries’ as goods or services
suitable to a person’s condition in life and to his or her actual requirements at the time of
supply. The common law rule that a person who makes a contract while lacking capacity can
ratify it at a later stage if he or she recovers sufficiently to understand the transaction would
seem to survive and continue to apply.
As regards persons who make contracts while drunk, the common law applies and the posi-
tion is as follows:
(a) A contract made by a person who by reason of drunkenness is incapable of understanding
what he is doing is valid unless he or she can prove:
(i) that he or she did not understand the nature of the contract; and
(ii) that the other party knew this to be the case.
(b) A contract made by such a person is binding on him or her if he or she afterwards ratifies
it at any time when the state of mind is such that the person can understand what he or she
is doing.
(c) Where necessaries are sold and delivered to a person who by reason of drunkenness is
incompetent to contract, he or she is bound to pay a reasonable price (Sale of Goods Act
1979, s 3(2)). This is also true of services, but by reason of the common law.
(d ) Necessaries are ‘goods suitable to the condition in life of such person and to his
actual requirements at the time of the sale and delivery’ (1979 Act, s 3(3)). The common law
defines necessary services in the same way. Therefore the principle of ‘necessaries’ is applied to
..
EL_C11.qxd 3/26/07 10:48 AM Page 308
persons who are drunk in the same way as it is to minors and s 7 of the Mental Capacity Act
follows this.
Imperial Loan Co v Stone, 1892 – Contract and mental disorder (114)

Matthews v Baxter, 1873 – Contracts with drunkards (115)
Lasting powers of attorney

Professionals in practice, such as solicitors and accountants, may have clients who are of
advancing years and whose sanity may come into doubt at a future time and where there is a
desire to avoid the cost and delay of deputy proceedings through the court. In this connec-
tion the Mental Capacity Act 2005 makes it possible for the ageing person to enter into an
agreement with, say, a younger member of the family (or the practitioner) being the agent.
Such an agreement does not terminate on the client’s loss of capacity as other forms of
agency do. Thus an application for a deputy is avoided as are the uncertainties that may arise
from not knowing precisely when or if the client/principal actually became mentally inca-
pable. The instrument creating the power must be in the form prescribed by the 2005 Act.
Lasting powers of attorney are wider in scope than the former enduring powers of attorney.
The latter related mainly to financial affairs, whereas the lasting power extends also to things
such as healthcare and general welfare of the person who gives the power.
Corporations
We have seen that regardless of the method by which it is formed, a company on incorpora-
tion becomes a legal person, acquires an identity quite separate and distinct from its members,
and carries on its activities through agents (see Chapter 8). In carrying out those activities
and making contracts companies and their agents are to some extent restrained by the ultra
vires rule. Ultra vires acts are those which are beyond the powers of the company. Our main
concern here is to look at that rule as it affects registered companies.
Ultra vires rule – statutory and registered companies

The powers of statutory corporations are contained in the statute setting them up and these
powers are sometimes increased by subsequent statutes or by delegated legislation. Acts
beyond these powers are ultra vires and void, i.e. of no effect.
Before proceeding to discuss the contractual capacity of the registered company after the
intervention of the Companies Act 2006 and previous legislation, the reader should refer to
the Ashbury case (see below) for a classic example of the ultra vires rule at common law as a
way of appreciating the statutory changes.
Ashbury Railway Carriage & Iron Co v Riche, 1875 – The ultra vires rule before
the intervention of Parliament (116)
By way of explanation of the decision in the Ashbury case, it should be said that the ultra
vires rule was brought in by the courts in earlier times to protect shareholders. It was thought
that if a shareholder X bought shares in a company which had as its main object publishing
..
EL_C11.qxd 3/26/07 10:48 AM Page 309
and allied activities then X would not want the directors of that company to start up a differ-
ent kind of business because he wanted his money in publishing.
In more recent times it has been noted that shareholders are not so fussy about the kind
of business the directors take the company into so long as it makes money to pay dividends
and raises the price of the company’s shares on the stock market thus giving a capital gain. In
these days of the conglomerates it is doubtful whether any investor invests in a company
because of only one facet of its trading.
The legal position today

Section references are to the Companies Act 2006.
Section 39 – A company’s capacity

This section provides that the acts of a company are not to be questioned on the ground of
lack of capacity because of anything in the constitution of the company and so contracts
beyond the company’s powers (where the articles, and not as before the memorandum, con-
tain restrictions on business) are valid and enforceable by the company and the other party.
Post the coming into force of the Companies Act 2006, new companies requiring restrictions
will put them in a clause in the articles of association and where an existing company has
11
restrictions in the memorandum these will be deemed to be in the articles. The articles can be
altered by a resolution of the members.
There is no power, as there was in previous law, giving members the right to restrain acts of
the directors beyond the company’s powers or their own because under the provisions of the
Companies Act 2006, companies will normally have unrestricted objects so that such a power
would be pointless. Where there are restrictions in the articles on the company’s powers or
on the directors’ powers, there are provisions in the Companies Act 2006 for the company
to have civil remedies against the directors, e.g. to recoup for the company any loss it has
suffered from the directors involved.
Section 40 – Power of directors to bind the company

For those dealing with the company in good faith, the power of the directors to bind the
company or authorise others (agents) to do so is deemed not to be constrained by the com-
pany’s constitution. External parties need not enquire whether there are any limitations
on the powers of the directors, nor are they affected by actual knowledge that the directors
have no power. External parties must, however, be ‘dealing with the company’, which will
normally require involvement with some commercial transaction such as the buying and
selling of goods or the provision of services.
Section 41 – Constitutional limitations: directors and their associates

Company insiders such as directors and their associated persons, e.g. husband or wife, do not
have the protection of s 40 so that the relevant transaction can be avoided by the company
and not enforced against it.
Insiders and any authorising directors are liable to account to the company for any gain
made by them and to indemnify the company for any loss or damage caused to it even
though the contract was avoided by the company, e.g. legal costs not recoverable by the com-
pany in connection with the avoidance.
Insiders who are not directors may be able to avoid the abovementioned liability if they did
not know when entering into the transaction with the company that the directors were act-
ing beyond their powers and so an associated or connected person, such as a husband or a
wife, may not always be liable.
..
EL_C11.qxd 3/26/07 10:48 AM Page 310
Transactions will not be avoidable if restitution of the company’s property is not possible,
as where the company’s money has been spent by a director on a cruise (and there is no resti-
tution against the cruise company unless it was in some way involved in the director’s breach
of duty) or the company has been indemnified or the company through its members has
affirmed (or approved) of the transaction.
Section 42 – Charities
This section provides that, for companies that are charities, the rules relating to the capacity
of the company and the power of its directors to bind it shall not apply to an external party
unless that party did not know that the company was a charity when the act was done or the
charity receives full consideration in regard to the act done and the external party did not
know that the act was beyond the powers of the company and therefore beyond the powers
of its directors to bind it.
Charitable companies cannot affirm a transaction so as to make valid those acts infringing
the above rules without the prior written consent of the Charity Commissioners.
The above rules would not apply so as to invalidate an illegal act as where the directors
issue shares at a discount, i.e. a share with a nominal value of £1 for 80 pence, because this is
forbidden by the Companies Act 2006.
..
EL_C12.qxd 3/26/07 10:49 AM Page 311
12
REALITY OF CONSENT I
In this chapter we begin a study of the various factors which can affect an agreement once
it has been formed. We begin by dealing with the law relating to mistake which affects the
true consent of one or both parties so that one or both of them may be asked to be released
from their contractual obligations.
Introduction
A contract which is regular in all respects may still fail because there is no real consent to it
by one or both of the parties. There is no consensus ad idem or meeting of the minds. Consent
may be rendered unreal by mistake, misrepresentation, duress and undue influence. There are
also instances of inequality of bargaining power where it would be inequitable to enforce the
resulting agreement.
It is particularly important to distinguish between mistake and misrepresentation because a
contract affected by mistake is void, whereas a contract affected by misrepresentation is only
voidable. As between the parties themselves, this makes little difference since in both cases goods
sold and money paid can be recovered. However, the distinction can be vital so far as third parties
are concerned. If A sells goods to B under circumstances of mistake and B resells them to C,
then C gets no title and A can recover the goods from him or sue him for damages in conver-
sion. If, on the other hand, the contract between A and B was voidable for misrepresentation,
then if B sold the goods to C who took them bona fide and for value before A had rescinded
his contract with B, then C would get a good title and A would have a remedy only against B.
Agreement mistake in general

Mistake, to be operative, must be of fact and not of law. Furthermore, the concept has a
technical meaning and does not cover, for example, errors of judgment as to value. Thus, if A
buys an article thinking it is worth £100 when in fact it is worth only £50, the contract is
good and A must bear the loss if there has been no misrepresentation by the seller. This is
what is meant by the maxim caveat emptor (let the buyer beware).
The various categories of mistake will now be considered, beginning with the rather special
case where a document is signed by mistake.
..
EL_C12.qxd 3/26/07 10:49 AM Page 312
Documents mistakenly signed

If a person signs a contract in the mistaken belief that he is signing a document of a different
nature, there may be a mistake which avoids the contract. He may be able to plead non est
factum (‘it is not my deed’). This is a defence open to a person who has signed a document by
mistake. Originally it was a special defence to protect those who could not read who had
signed deeds which had been incorrectly read over to them. At one time the defence was
available only where the mistake referred to the kind of document it was and not merely its
contents. Now the defence is available to a person who has signed a document having made
a fundamental mistake as to the kind of document it is or as to its contents. However, the
defendant must prove that he made the mistake despite having taken all reasonable care. If
he is negligent he will not usually be able to plead the defence.
Since the courts have taken the view that merely to sign a document without knowing its
contents is in itself negligent, the plea will rarely be successful, though it may be where the
document is commonly regarded as confidential, such as an alleged will where the signer
believes he signs in the capacity of a witness but in fact appears to incur liability on the docu-
ment which is not in fact a will as in Lewis v Clay (1898) 77 LT 653.
Saunders v Anglia Building Society, 1970 – Documents mistakenly signed: the

legal effect (117)
Unilateral mistake
Unilateral mistake occurs when one of the parties, X, is mistaken as to some fundamental
fact concerning the contract and the other party, Y, knows, or ought to know, this. This
latter requirement is important because if Y does not know that X is mistaken the contract
is good.
The cases are mainly concerned with mistake by one party as to the identity of the other
party. Thus a contract may be void for mistake if X contracts with Y thinking that Y is
another person, Z, and if Y knows that X is under that misapprehension. Proof of Y’s know-
ledge is essential but since in most cases Y is a fraudulent person, the point does not present
great difficulties.
Higgins (W) Ltd v Northampton Corporation, 1927 – Relevance of knowledge

of the mistake (118)
Cundy v Lindsay, 1878 – Mistake as to identity (119)
There were difficulties where the parties contracted face to face because in such a case the
suggestion could always be made that whatever the fraudulent party was saying about his
identity, the mistaken party must be regarded as intending to contract with the person in
front of him, whoever he was. Thus in this situation, the court might find on the facts of the
case that the contract was voidable for fraud or sometimes void for mistake.
However, the position is now a little clearer as a result of the decision in Lewis v Averay
(1971) (see below) where it was said that if the parties contracted face to face the contract will
normally be voidable for fraud but rarely void for mistake. However, much depends upon the
facts of the case and if the court is convinced on the evidence that identity was vital then
..
EL_C12.qxd 3/26/07 10:49 AM Page 313
REALITY OF CONSENT I 313
even a ‘face to face’ contract will be regarded as void for mistake, as Ingram v Little (1961)
(see below) shows.
Lewis v Averay, 1971 – Mistake as to identity when the parties are face to face (120)
Ingram v Little, 1961 – Another approach (121)
Effect of unilateral mistake in equity

If the claimant is asking for an equitable remedy, such as rescission of the contract or specific
performance of it, then equitable principles will apply. As far as unilateral mistake is con-
cerned, equity follows the principles of the common law and regards a contract affected by
unilateral mistake as void and will therefore rescind it or refuse specific performance of it.
Rectification of the contract is also available.
Webster v Cecil, 1861 – Unilateral mistake: the equitable approach (122)
12
Bilateral identical (or common) mistake
This occurs where both parties are mistaken and each makes the same mistake. In other
words it is a shared mistake. There is no general rule that common mistake affects a contract
and in practice only common mistakes as to the existence of the subject matter of the con-
tract or where the subject matter of the contract already belongs to the buyer will make the
contract void at common law. The principles applied are considered below.
(a) Cases of res extincta. Here there is a common mistake as to the existence of the subject
matter of the contract. Thus, if S agrees to sell his car to B and unknown to both the car had
at the time of the sale been destroyed by fire, then the contract will be void because A has
innocently undertaken an obligation which he cannot possibly fulfil. It should be noted that
the goods may actually exist but the rule of res extincta applies if they are not in the condition
envisaged by the contract.
(b) Cases of res sua. These occur where a person makes a contract about something which
already belongs to him. Such a contract is void at common law.
Couturier v Hastie, 1856 – An example of res extincta (123)

Cochrane v Willis, 1865 – Res sua illustrated (124)
(c) Other cases – mistakes as to quality. These occur when the two parties have reached
agreement but have made an identical mistake as to some fact concerning the quality of
the subject matter of the contract. Suppose, for example, that X sells a particular drawing
to Y for £5,000 and all the usual elements of agreement are present, including offer and
acceptance and consideration, and the agreement concerns an identified article. Never-
theless, if both X and Y think that the drawing is by a well-known Victorian artist when it
is in fact only a copy worth £25, then the agreement is made in circumstances of common
mistake.
..
EL_C12.qxd 3/26/07 10:49 AM Page 314
At common law a mistake of the kind outlined above has no effect on the contract and the
parties would be bound in the absence of fraud or misrepresentation. The case law shows
how reluctant the courts have been to establish a general rule of common mistake.
Bell v Lever Bros Ltd, 1932 – Mistakes as to quality (125)

Leaf v International Galleries, 1950 – Quality mistakes: a further illustration (126)
Effect of identity bilateral (or common) mistake in equity

The position in equity is as follows.
(a) Cases of res extincta and res sua. Equity treats these in the same way as the common
law, regarding the agreement as void. The equitable remedy of specific performance is not
available for such an agreement which may also be rescinded.
(b) Other cases. Equity could apparently regard an agreement affected by common mistake
as voidable even though the case was not one of res extincta or res sua. The above statement
derives from the decision of Lord Denning in Solle v Butcher [1950] 1 KB 671. In the case Lord
Denning advanced the view that a contract affected by common mistake as to quality,
although unaffected at common law, could be rescinded in equity. The case concerned the
lease of a flat where the parties had assumed that the rent was controlled to a maximum by
rent control legislation whereas by reason of improvements that the landlord had made to the
premises a higher rent could have been charged. Lord Denning said that although the common
law would ignore the common mistake as to quality that the flat had a controlled rent thus
leaving the fortunate tenant to pay only the controlled rent equity could rescind the lease
and in effect put the tenant out unless the parties could renegotiate the terms. This develop-
ment was brought to an end by the House of Lords in Great Peace Shipping Ltd (see below).
Cooper v Phibbs, 1867 – Equity and res sua (127)

Great Peace Shipping Ltd v Tsavliris Salvage (International) Ltd, 2002 – Mistake
as to quality, no general power of rescission (128)
(c) Rectification. If the parties are agreed on the terms of their contract but because, for
example, of drafting or typing errors certain terms are set out incorrectly, the court may order
equitable rectification of the contract so that it properly represents what the parties agreed.
Thus, if A orally agrees to give B a lease of premises for 99 years and in the subsequent written
contract the term is expressed as 90 years by mistake, then if A will not co-operate to change
the lease, B may ask the court to rectify it by substituting a term of 99 years for 90 years. In
order to obtain rectification it must be proved:
(i) that there was complete agreement on all the terms of the contract or at least continuing
intention to include certain terms in it which in the event were not included. It is not
necessary to show that the term was intended to be legally binding prior to being
written down;
(ii) that the agreement continued unchanged until it was reduced into writing. If the parties
disputed the terms of the agreement, the written contract may be taken to represent
their final position;
(iii) that the writing does not express what the parties had agreed. If it does, then there can
be no rectification.
Rectification is available for both common and unilateral mistake.
..
EL_C12.qxd 3/26/07 10:49 AM Page 315
REALITY OF CONSENT I 315
Joscelyne v Nissen, 1970 – Rectification: no need for previous binding

agreement (129)
Frederick Rose (London) Ltd v William Pim & Co Ltd, 1953 – Rectification where
writing is what the parties agreed (130)
Thomas Bates & Sons Ltd v Wyndham’s (Lingerie) Ltd, 1981 – Rectification available
for unilateral mistake (131)
Non-identical bilateral (or mutual) mistake

In a situation where A intends to buy real pearls but the seller intends to sell imitation pearls,
and in the absence of misrepresentation by the seller, there is a bilateral mistake that is non-
identical. It will be remembered that in the previous category the mistake was bilateral but
both parties had made an identical mistake. Here we have what may be described as a mutual
misunderstanding. Confusion of this non-identical bilateral kind generally exists in the mind
of one party only and may therefore have no effect on the contract (see below).
Effect of non-identical bilateral (or mutual) mistake at common law 12

The contract is not necessarily void because the court will try to find the ‘sense of the
promise’. This usually occurs where, although the parties are at cross purposes, the contract
actually identifies a credible (or believable) agreement.
If the parties are at cross purposes and the contract does not identify a credible (or believ-
able) agreement, it is void.
The basis of the ‘sense of the promise’ rule is that the court does not ascertain contractual
intention from what is in the minds of the parties, i.e. a subjective intent, because the parties
are confused. Instead the court decides contractual intention in an objective way by looking at
the parties dealings to see if these identify a contract. If they do, the court will enforce it; if
not, the transaction is void.
Effect of non-identical bilateral (or mutual) mistake in equity

Equity also tries to find the sense of the promise as identified by the contract, thus following
the law. However, equitable remedies are discretionary and even where the sense of the
promise as identified by the contract can be ascertained equity will not necessarily grant
specific performance if it would cause hardship to the defendant.
Wood v Scarth, 1858 – The sense of the promise: the hardship rule (132)
Raffles v Wichelhaus, 1864 – Where there is no sense of the promise (133)
Mistake is a matter that should concern online traders. Suppose purchasers wanting to buy
advertised goods of one company through its website visit the website of a company with a
similar name in a similar line of business. Would such purchasers be entitled to return the
goods or reject the services and obtain a refund once the mistake was realised? A mistake as
to identity is fundamental as we have seen and may negate the consent of the purchasers.
..
EL_C13.qxd 3/26/07 1:08 PM Page 316
13
REALITY OF CONSENT II
In this chapter we continue a study of further situations in which a contract can be affected
by lack of proper consent. Topics considered to complete the study of consent problems are
misrepresentation, duress, undue influence, economic duress and unconscionable bargains.
Misrepresentation
Misrepresentation is an expression used to describe a situation in which there is no genuine-
ness of consent to a contract by one of the parties. The effect of misrepresentation on a
contract is less serious than that of mistake because the contract becomes voidable and not
void. This means that the party misled can ask the court to rescind the contract, i.e. to put the
parties back into the positions they held before the contract was made. Thus in a sale of
goods the goods would be returned to the seller and the money to the buyer.
However, the effect on third parties is more fundamental because if A sells goods to B under
circumstances of misrepresentation by B and before A has a chance to rescind the contract B
sells the goods to C, who takes them for value without notice of the misrepresentation, C has
a good title and A cannot recover the goods or sue him in conversion. His remedy is against B
and the type of remedy available will depend upon the nature of B’s misrepresentation, i.e.
whether it was fraudulent, negligent or innocent.
Meaning of representation
A representation is an inducement only and its effect is to lead the other party merely to
make the contract. A representation must be a statement of some specific existing and
verifiable fact or past event. It becomes a misrepresentation, of course, when it is false.
However, a statement which is not entirely false but a half-truth may be a misrepresenta-
tion. Thus in Dimmock v Hallett (1886) LR 2 Ch App 21 it was held that a statement that a
property was let, and therefore producing income, was a misrepresentation because it was not
revealed that the tenants had given notice (see also Curtis v Chemical Cleaning and Dyeing Co
(1952) in Chapter 15).
There are three ingredients: (1) a statement, (2) of specific existing and verifiable fact or
past event, and (3) that the statement induces the contract.
..
EL_C13.qxd 3/26/07 1:08 PM Page 317
REALITY OF CONSENT II 317
There must be a statement

In consequence, silence or non-disclosure has no effect except in the following
circumstances.
(a) Failure to disclose a change in circumstances. Where the statement was true when
made but became false before the contract was made there is a duty on the party making
the statement to disclose the change and if he does not do so his silence can amount to an
actionable misrepresentation.
(b) Where the contract is uberrimae fidei (of utmost good faith), such as a contract of
insurance (see further p 324).
(c) Where there is a confidential or fiduciary relationship between the parties, as where
they are solicitor and client. Here the equitable doctrine of constructive fraud may apply to
render the contract voidable.
Although this branch of the law is closely akin to undue influence, which will be consid-
ered later, there is a difference in the sense that in undue influence the person with special
influence, such as a solicitor over his client, is often the prime mover in seeking the contract.
Constructive fraud, however, could apply where the client was the prime mover in seeking a
contract with his solicitor. In such a case if the solicitor remains silent as regards facts within
his knowledge material, say, to the contract price, then the client could rescind the contract
for constructive fraud. 13
(d) Where statute requires disclosure, as does the Financial Services and Markets Act 2000
under which a number of specified particulars must be disclosed in an advertisement/
prospectus issued by a company to invite the public to subscribe for shares or debentures. The
particulars must give all such information as investors and their professional advisers would
reasonably require and reasonably expect to find in the advertisement /prospectus for the
purpose of making an informed assessment as to whether to buy the securities.
The provisions of the Financial Services and Markets Act 2000 apply to companies which
have a full listing on the Stock Exchange. Similar disclosures are required in relation to
prospectuses that are used for issues of unlisted securities that are quoted on the Alternative
Investment Market. These provisions are contained in the Offers of Securities Regulations
1995 and 1999.
(e) In cases of concealed fraud, following the case of Gordon v Selico Co Ltd (1986) The Times,
26 February. In that case a flat in a block of flats which had recently been converted by a
developer was taken by the claimant on a 99-year lease. Soon after he moved in dry rot was
discovered. Goulding, J, who was later upheld by the Court of Appeal, decided that deliberate
concealment of the dry rot by the developer could amount to fraudulent misrepresentation
whereupon damages were awarded to the claimant. Silence can, therefore, amount to misrep-
resentation in the case of concealed fraud.
With v O’Flanagan, 1936 – Where circumstances change (134)
Specific existing and verifiable fact or past event

The representation must be a statement of some specific, existing and verifiable fact or past
event, and in consequence the following are excluded.
..
EL_C13.qxd 3/26/07 1:08 PM Page 318
(a) Statements of law. Everyone is presumed to know the law which is equally accessible to
both parties and on which they should seek advice and not rely on the statements of the
other party. Thus, if A has allowed B, a tradesman, to have goods on credit and C has agreed
orally to indemnify A in respect of the transaction, then if A enters into a second contract
with B under which A is to receive two-thirds of the price of the goods from B in full settle-
ment on B’s representation that C’s indemnity is unenforceable at law because it is not in
writing, then the second contract would be good because A cannot deny that he knows the
law because of the maxim ‘ignorance of the law is no excuse’.
(b) Statements as to future conduct or intention. These are not actionable, though if the
person who makes the statement has no intention of carrying it out, it may be regarded as a
representation of fact, i.e. a misrepresentation of what is really in the mind of the maker of
the statement.
(c) Statements of opinion. Again, these are not normally actionable unless it can be shown
that the person making the statement held no such opinion whereupon the statement may
be considered in law to be a misstatement of an existing fact as to what was in the mind of
the maker of the statement at the time. However, in Bissett v Wilkinson [1927] AC 177 it was
held that a vendor of land was not liable for stating that it could support 2,000 sheep,
because he had no personal knowledge of the facts, the land having never been used for
sheep farming. The buyer knew this so that it was understood by him that the seller could
only be stating his opinion.
Nevertheless, the expression of an opinion may involve a statement of fact. Suppose A
writes a reference for B to help B get a house to rent and A says to C, the prospective land-
lord: ‘B is a very desirable tenant’. A is doing two things: first he is giving his opinion of B,
but also he is making a statement of fact by saying that he believes B to be a very desirable
tenant. If in fact therefore A actually believes B to be a bad tenant he is lying as to what is in
his mind.
(d) Sales talk, advertising, ‘puffing’ (or what is called these days ‘hype’). Not all state-
ments in this area amount to representations. The law has always accepted that it is essential
in business that a seller of goods or services should be allowed to make some statements
about them in the course of dealing without necessarily being bound by everything he says.
Thus, if a salesman confines himself to statements of opinion such as ‘This is the finest floor
polish in the world’ or ‘This is the best polish on the market’, there is no misrepresentation.
However, the nearer a salesman gets to a statement of specific verifiable fact, the greater the
possibility that there may be an action for misrepresentation. Thus a statement such as ‘This
polish has as much wax in it as Snooks’ wax polish’ may well amount to a misrepresentation
if the statement is not in fact true.
Edgington v Fitzmaurice, 1885 – Statements as to future conduct or

intention (135)
Smith v Land and House Property Corporation, 1884 – Opinion may be construed as
fact (136)
The statement must induce the contract

It must therefore:
(a) have been relied upon by the person claiming to have been misled who must not have
relied on his own skill and judgment or some other statement.
..
EL_C13.qxd 3/26/07 1:08 PM Page 319
Thus in Attwood v Small (1838) 6 Cl & Fin 232 the purchaser of a mine elected to verify
exaggerated (but not fraudulent) statements of its earnings by commissioning a report from
his agents. This failed to reveal the defects in the original statement and the purchaser
bought the mine. It was later held that he could not rescind the contract because he had
relied on the report, not on the statement. It should be noted that relief is not barred simply
because there has been an unsuccessful attempt by the misled person to discover the truth
where the misrepresentation was fraudulent (Pearson v Dublin Corpn [1907] AC 217);
(b) have been material in the sense that it affected the claimant’s judgment;
(c) have been known to the claimant. The claimant must always be prepared to prove that an
alleged misrepresentation had an effect on his mind, a task which he certainly cannot fulfil if
he was never aware that it had been made.
Thus in Re Northumberland and Durham District Banking Co, ex parte Bigge (1858) 28 LJ Ch 50
a person who bought shares in a company asked to have the purchase rescinded because the
company had published false reports as to its solvency. Although these reports were false, the
claimant failed because, among other things, he was unable to show that he had read any of
the reports or that anyone had told him what they contained;
(d) have been addressed to the person claiming to have been misled.
Peek v Gurney, 1873 – The statement must induce the contract: the common law
approach (137) 13
Knowledge that statement is untrue

If the person to whom the false statement was made knew that it was untrue then he cannot
sue in respect of it because he has not been misled. However, it is not an acceptable defence
to an action for misrepresentation that the representee was given the means of discovering
that the statement was untrue.
Redgrave v Hurd, 1881 – No need to check on a statement (138)
Did the statement influence the representee’s decision?

The law requires that a misrepresentation must have operated on the mind of the representee.
If it has not, as where the representee was not influenced by it, there is no claim.
Smith v Chadwick, 1884 – Was the statement material? (139)
Types of actionable misrepresentation and remedies in general

Innocent misrepresentation
A purely innocent misrepresentation is a false statement made by a person who had reason-
able grounds to believe that the statement was true, not only when he made it but also at the
time the contract was entered into. As regards reasonable grounds, the representer’s best hope
..
EL_C13.qxd 3/26/07 1:08 PM Page 320
of proving this will be to show that he himself had been induced to buy the goods by the
same statement, particularly where he is not technically qualified to verify it further (see
Humming Bird Motors Ltd v Hobbs (1986) and Oscar Chess Ltd v Williams (1957)). The party mis-
led can ask the court to rescind the contract but has no right to ask for damages. However,
the court may at its discretion award damages instead of rescission (Misrepresentation
Act 1967, s 2(2)). Rescission in effect cancels the contract and the court may in some cases
regard this as a drastic remedy, particularly where there has been misrepresentation on a
trivial matter, such as the quality of the tyres on a car. Suppose the seller of a car in a private
sale says: ‘The previous owner fitted new tyres at 26,000 miles’. If that statement is false but
the seller was told this by the previous owner, the court could award damages instead
of rescission, thus leaving the contract intact but giving the party misled monetary com-
pensation. Statements by dealers, however, are often taken to be terms of the contract (see
Chapter 14).
There has been uncertainty as to whether damages could be awarded under s 2(2) of the
Misrepresentation Act 1967 if the remedy of rescission was no longer available as where a
third party had acquired rights in the subject matter of the contract. However, in Thomas
Witter v TBP Industries Ltd [1996] 2 All ER 573 the High Court ruled that damages could be
awarded under s 2(2), provided that the right to rescind had existed at some time. It was not
necessary said the High Court for the right to exist at the time of the judgment. This seems a
reasonable interpretation of the sub-section because the remedy of rescission is lost so quickly
that it is unlikely to exist at the time of trial because of, among other things, the passage of
time (see later in this chapter).
The same ruling was given again by the High Court in Zanzibar v British Aerospace
(Lancaster House) Ltd (2000) The Times, 28 March and would seem to be firmly established.
Negligent misrepresentation
A negligent misrepresentation is a false statement made by a person who had no reasonable
grounds for believing the statement to be true. The party misled may sue for rescission (see
below) and /or damages, and the requirement to prove that the statement was not made
negligently but that there were reasonable grounds for believing it to be true is on the maker
of the statement (or representer) (Misrepresentation Act 1967, s 2(1)).
The sub-section recognises only a claim for damages and says nothing about rescission.
However, in Mapes v Jones (1974) 232 EG 717 a property dealer contracted to lease a grocer’s
shop to the claimant for 21 years but in fact did not have sufficient interest in the property
himself to grant such a lease, the maximum period available to him being 18 years. Despite
constant requests, no lease was supplied as originally promised and the claimant shut the
shop and elected to treat the contract as repudiated. Willis, J held that the claimant was
entitled to rescission for misrepresentation under s 2(1) of the 1967 Act. He also found that
the defendant’s delay in completion was a breach of condition which also allowed the
claimant to repudiate the contract. As we have seen, s 2 claims can extend to statements of
opinion (see BG plc v Nelson Group Services (Maintenance) Ltd [2002] EWCA Civ 547.
Gosling v Anderson, 1972 – Negligent misrepresentation illustrated (140)
Fraudulent misrepresentation
A fraudulent misrepresentation is a false representation of a material fact made knowing it
to be false, or believing it to be false, or recklessly not caring whether it be true or false.
..
EL_C13.qxd 3/26/07 1:08 PM Page 321
Mere negligence is not enough. An element of dishonesty is required. For example, if

Mr Tidbury in the Gosling case had known that there was no planning permission for the
garage but had nevertheless gone on to state that there was, then the element of dishonesty
would have been present and he would have been guilty of fraud. The party misled may sue
for rescission and/or damages. As regards the action for damages, the claimant sues not on
the contract but on the tort of deceit.
In this connection, it is worth noting that when a person is sued upon the tort of deceit he
or she will not be able to defend the claim on the basis that although the contract was
induced by deceit it would not have been if the claimant had done more checking and not
been perhaps careless in accepting the fraudulent inducement. Why? – because the defence of
contributory negligence does not apply where the claim is for fraud (see Standard Chartered
Bank v Pakistan National Shipping Corp (No 2) [2002] 3 WLR 1547).
Derry v Peek, 1889 – Fraudulent misrepresentation defined (141)
Compensation under the Financial Services

and Markets Act 2000
Under this Act, where the directors of a company with a full Stock Exchange listing publish
13
an advertisement or prospectus containing false statements made innocently they may have
to pay a form of damages called compensation.
This will occur where they have issued listing particulars or a prospectus that is inaccurate.
In general terms, errors of omission or commission in listing particulars or a prospectus will
render any party responsible such as the directors of the company liable for loss caused thereby
to anyone acquiring the securities covered by the document.
Those responsible such as the directors can escape liability if they made such enquiries as
were reasonable and reasonably believed that the statement was true when the document was
submitted to the Financial Services Authority (as Listing Authority for the UK) for approval
provided that at the time the securities were subsequently acquired:
n they continued in that belief;
n it was not reasonably practicable to bring the correction to the attention of those likely to
acquire them;
n they had taken all reasonable steps to bring the correction to their attention; or
n they ought reasonably to be excused because they believed it when dealings commenced
and now too much time has elapsed.
Where the statement is in a report by an expert such as an engineer or accountant the
directors are not liable for it provided they had a reasonable belief in the competence of the
expert.
Experts, such as accountants, are liable under the Act for false statements in their reports
which are included in the listing particulars or prospectus. Again, the defence of lack of
responsibility is available, as where the expert has not consented to the inclusion of his
report in the prospectus. However, given that he accepts responsibility for the inclusion of his
report, he has a defence if he can show that he had reasonable grounds for believing the
statement to be true. Presumably, he could sustain this defence by showing, amongst other
things, that the false statement came from an official document. Furthermore, whether or not
a professional person has reasonable grounds will almost always depend upon the steps taken
..
EL_C13.qxd 3/26/07 1:08 PM Page 322
to verify the statement. If these are reasonable the professional person will not be liable even
if the statement is wrong.
Agent’s breach of warranty of authority

Under the law of agency where an agent misrepresents himself as having authority he does
not possess, the third party will not obtain a contract with the principal and if he suffers loss
as a consequence he may sue the agent for breach of warranty of authority, the action being
for damages and brought in quasi-contract. Quasi-contract is based on the idea that a person
should not obtain a benefit or unjust enrichment or cause injury to another with impunity
merely because there is no obligation in contract or another established branch of law which
will operate to make him account. The law may in these circumstances provide a remedy by
implying a fictitious promise to account for the benefit of the enrichment or to compensate for
damage caused.
Negligence at common law

The tort remedy in general
Where the parties concerned were not in a pre-contractual relationship when the statement
was made, s 2(1) of the Misrepresentation Act 1967 will not apply. However, an action for
damages for negligence will lie in tort, provided the false statement was made negligently. The
law relating to tortious negligent misstatements is considered in more detail in Chapter 21.
However, the leading case is looked at now.
Hedley Byrne & Co Ltd v Heller & Partners Ltd, 1963 – Negligent misstatements:
the tort remedy (142)
Use of the tort remedy in contract cases

In Esso Petroleum v Mardon [1976] 2 All ER 5 the court held that the principle in Hedley Byrne
could apply even where the parties concerned were in a pre-contractual relationship and in
addition that the person who had made the statement need not necessarily be in business to
give advice, provided it is reasonable for one party to rely on the other’s skill and judgement
in making the statement. Mr Mardon was awarded damages for a negligent misstatement by a
senior sales representative of Esso in regard to the amount of petrol he could expect to sell
per year from a petrol station which he was leasing from Esso. The facts of Mardon pre-dated
the 1967 Act and the court could not use it. The decision is obviously important but where
the facts have occurred since 1967 the Misrepresentation Act is likely to prove more popular
to claimants who have been misled into making contracts, since they can ask the representer to
show he was not negligent. In Hedley Byrne claims the burden of proof is on the claimant to
prove negligence.
There is a very obvious use, however, for the tort of negligence claim even where the care-
less misstatement has induced a contract. The tort claim allows an action for a misleading
opinion or falsely stated intention, whereas misrepresentation in all its forms requires a misstate-
ment of fact, not opinion or intention. The use of Hedley Byrne would today make the legal
..
EL_C13.qxd 3/26/07 1:08 PM Page 323
gymnastics seen in Edgington v Fitzmaurice (1885) and Smith v Land and House Property Co
(1884) unnecessary.
Use of the tort remedy for inaccurate company securities advertisements

As regards actions against directors and experts in respect of statements in an advertisement
for the sale of securities or in a prospectus, there is as we have seen a statutory claim under
the Financial Services and Markets Act 2000 and under Hedley Byrne at common law. The
claim against directors under Hedley Byrne is specifically preserved by the Financial Services
and Markets Act 2000 in s 87(9). A claim under the Misrepresentation Act 1967 is against ‘the
other party to the contract’, i.e. the company or issuing house, and not against directors or
agents.
It will be recalled that in Esso Petroleum Co Ltd v Mardon (1976) (see above) the court held
that it was too restrictive to limit the duty in Hedley Byrne to persons who carried on or who
held themselves out as carrying on the business of giving information or advice. The accept-
ance of these views means that the duty can apply more widely and brings in company
directors in terms that they could be liable on a personal basis for negligence.
In any case, it is a requirement as part of admission of the shares to a full Stock Exchange
listing or AIM (Alternative Investment Market) listing that the advertisement or prospectus
shall state that the directors have taken reasonable care to ensure that the facts stated in it are
true and accurate, that there are no misleading omissions and that, accordingly, all the dir-
ectors take responsibility for the prospectus.
13
In view of this statement, it is likely that a duty of care is owed only by the individuals
involved in the making of the statements and not by the company as such. If this is so, no
claim can be made against the company. This would accord with the general principle of
capital maintenance inherent in the prospectus remedies, i.e. it is difficult to get one’s money
back from the company and easier to get compensation from directors or experts, leaving
capital contributed with the company.
In view of this it would seem that an action for rescission of the contract (see below)
against the company will not in the company law context be a likely remedy. In any case it is
very quickly lost as we shall see.
Remedy of rescission
As we have seen, this remedy is available to a party misled by innocent, negligent or fraudu-
lent misrepresentation. It restores the status quo, i.e. it puts the parties back to the position
they were in before the contract was made. However, the remedy may be lost:
(a) By affirmation. If the injured party affirms the contract he cannot rescind. He will affirm
if with full knowledge of the misrepresentation he expressly affirms the contract by stating
that he intends to go on with it or if he does some act from which an implied intention may
properly be deduced. In the company situation this could, for example, be attending a com-
pany meeting to complain about an inaccurate prospectus.
(b) By lapse of time. This is a form of implied affirmation and applies as follows:
(i) In innocent and negligent misrepresentation the position is governed by equity and the
passage of a reasonable time, even without knowledge of the misrepresentation, may pre-
vent the court from granting rescission: Leaf v International Galleries (1950) – see Chapter 12.
..
EL_C13.qxd 3/26/07 1:08 PM Page 324
(ii) In fraudulent misrepresentation the position is governed by s 32 of the Limitation

Act 1980 and lapse of time has no effect on rescission where fraud is alleged as long as
the action is brought within six years of the time when the fraud was, or with reasonable
diligence could have been, discovered.
(c) Where status quo cannot be restored. Rescission is impossible if the parties cannot be
restored to their original positions as where goods sold under a contract of sale have been
consumed.
(d) Where a third party has acquired rights in the subject matter of the contract. Thus
if X obtains goods from Y by misrepresentation and pawns them with Z, Y cannot rescind the
contract on learning of the misrepresentation in order to recover the goods from Z. Nor can
he sue Z in conversion (Lewis v Averay (1971) – see Chapter 12).
It should be noted that the third party must have supplied consideration, as in Lewis. If the
third party has received the property as a gift, it can be recovered from him.
Long v Lloyd, 1958 – Application of the affirmation rule (143)

Clarke v Dickson, 1858 – Inability to restore status quo (144)
Rescission and contractual debt

The fact that a party to a contract rescinds it because, e.g., of non-performance by the other
party does not mean that the party rescinding has thereby abandoned an action for debts
owed under the contract. Thus in Stocznia Gdanska SA v Latvian Shipping [1998] 1 All ER 883
S rescinded a contract with L to build two ships because of L’s failure to pay the first instalment
of the price when due. The House of Lords later decided that a claim by S for the unpaid
instalment which represented the cost of the design and laying of the keel of a ship was
recoverable.
Contracts uberrimae fidei (utmost good faith)

Silence does not normally amount to misrepresentation. However, an important exception to
the rule occurs in the case of certain contracts where from the circumstances of the case one
party alone possesses full knowledge of all the material facts and in which therefore the law
requires him to show utmost good faith. He must make full disclosure of all the material facts
known to him, otherwise the contract may be rescinded. The contracts concerned are as follows.
At common law
Contracts of insurance provide the only true example of a contract uberrimae fidei. There is a
duty on the person taking up the insurance to disclose to the insurance company all facts
of which he is aware which might affect the premium or acceptance of the risk. Failure to do
so renders the contract voidable at the option of the insurance company. This could happen,
for example, where a person seeking insurance did not disclose that he had been refused
insurance by another company. Where there is a failure to disclose, the insurance company is
not required by law to meet the claim but must return the premiums. In other words, the
contract is rescinded. A leading decision that this is so is Banque Keyser Ullmann SA v Skandia
(UK) Insurance Co [1989] 3 WLR 25.
..
EL_C13.qxd 3/26/07 1:08 PM Page 325
In addition, most proposals for insurance may require the proposer to sign a declaration in
which he warrants that the statements he has made are true and agrees that they be incor-
porated into the contract as terms. Where this is so any false statement which the proposer
makes will be a ground for avoidance of the contract by the insurance company, even though
the statement was not material in terms of the premium.
Dawsons Ltd v Bonnin, 1922 – The contract may widen the duty of disclosure (145)
By statute
As regards contracts to take shares in a company with a listing or quotation on the Stock
Exchange, there is a duty on the directors or its promoters, under the Financial Services and
Markets Act 2000, to disclose various matters essential to an informed assessment as to
whether an investor should purchase the securities. These provisions, and those in earlier
statutes which preceded them, had to be put into law by Parliament because the judiciary
had always refused to regard the sale of securities by a company as a contract uberrimae fidei.
They did not, therefore, require the advertisement or prospectus under which the shares were
issued necessarily to disclose all the material facts.
In equity – fiduciary relationships 13

In contracts between members of a family, partners, principal and agent, solicitor and client,
guardian and ward, and trustee and beneficiary, the relationship of the parties requires that
the most ample disclosure should be made. The duties of disclosure arising from the above
fiduciary relations recognised by equity are not situations of uberrimae fidei. In contracts
uberrimae fidei it is the nature of the contract, i.e. insurance, which requires disclosure regard-
less of the relationship of the parties. In the fiduciary situation it is the relationship of the
parties and not the particular contract which gives rise to the need to disclose.
Gordon v Gordon, 1819 – Disclosure in a family situation (146)
Duress
Duress will affect all contracts and gifts procured by its use. Duress, which is a common-law
concept, means actual violence or threats of violence to the person of the contracting party
or those near and dear to him. The threats must be calculated to produce fear of loss of life or
bodily harm.
Threats of violence
A contract will seldom be procured by actual violence but threats of violence are more prob-
able. The threat must be illegal in that it must be a threat to commit a crime or tort. Thus to
threaten an imprisonment, which would be unlawful if enforced, constitutes duress, but not,
it is said, if the imprisonment would be lawful. However, the courts are unlikely to look with
favour on a contract obtained by threatening to prosecute a criminal. A contract procured by
a threat to sue for an act which was not a crime, e.g. trespass, would not be affected by duress.
..
EL_C13.qxd 3/26/07 1:08 PM Page 326
Welch v Cheesman, 1973 – Duress by threats of violence (147)
Threats to property
In Skeate v Beale (1840) 11 Ad & El 983 a tenant owed £19 10s in old money and agreed to
pay £3 7s 6d immediately and the remaining £16 2s 6d within a month if his landlord would
withdraw a writ of distress under which he was threatening to sell the tenant’s goods. The
tenant later disputed what he owed and the landlord tried to set up the agreement and sued
for the remaining £16 2s 6d. It was held that the landlord was entitled to £16 2s 6d under the
agreement which was not affected by duress since the threat was to sell the tenant’s goods.
However, more recently the courts have been moving away from the view that threats to
property cannot invalidate contracts. In The Siboen and The Sibotre [1976] Lloyd’s Rep 293 it
was said that duress could be a defence if a person was forced to make a contract by the threat
of having a valuable picture slashed or his house burnt down.
Duress probably renders a contract voidable

This, at least, is the view expressed in Cheshire & Fifoot’s Law of Contract (a leading text
on contract law), though other writers have argued that the effect of duress is to render a
contract void. However, the judgments of the Privy Council in Barton v Armstrong [1975] 2 All
ER 465 and Pao On v Lau Yiu Long [1979] 3 All ER 65 suggest that duress has the same effect
as fraud, i.e. it renders a contract voidable. The issue is an important one for third parties,
since if B procures goods from A by duress and sells the goods to C, who has no knowledge
of the duress, A will be able to recover the goods from C if the contract is void, but will not
be able to do so if it is voidable. On the authorities to date, therefore, A would have no claim
against C.
Undue influence and associated equitable pleas
The doctrine of undue influence was developed by equity. The concept of undue influence is
designed to deal with contracts or gifts obtained without free consent by the influence of one
mind over another.
If there is no special relationship between the parties undue influence may exist, but must
be proved by the person seeking to avoid the contract.
Where a confidential or fiduciary relationship exists between the parties, there is a pre-
sumption of undue influence and the party in whom the confidence was reposed must
show that undue influence was not used, i.e. that the contract was the act of a free and
independent mind. It is desirable, though not essential, that independent advice should
have been given.
There are several confidential relationships which are well established in the law, namely
parent and child, solicitor and client, trustee and beneficiary, guardian and ward, and reli-
gious adviser and disciple. In these cases there is a presumption of undue influence by the
parent, the solicitor, the trustee and so on. There is no presumption of such a relationship
between husband and wife, nor, according to the Court of Appeal in Mathew v Bobbins (1980)
256 EG 603, between employer and employee. This was affirmed by Millett, LJ in Credit Bank
Nederland v Burch (1996) The Independent, 27 June. He did, however, state that the relationship
..
EL_C13.qxd 3/26/07 1:08 PM Page 327
could develop into one of trust and confidence on the facts of a particular case but it was not
a relationship where undue influence would necessarily be presumed. The facts must show it
to exist. The Court of Appeal held that undue influence did exist between an employer and
employee on the facts of the case. The employee B agreed to mortgage her flat to the bank as
security for the debts to the bank of a travel company by which she was employed. She had
no independent advice. When the company went into liquidation the bank tried to enforce
the mortgage by a sale of her flat. The Court of Appeal set the mortgage aside because B had
entered into it by reason of her employer’s undue influence and the bank should have been
put on enquiry because of the relationship of employer and employee of which they were
aware and where undue influence might come to exist. However, a presumption of undue
influence may be made between husband and wife where there are special circumstances
such as the lack of sufficient mental capacity in either party to resist the influence of the
other leading to gifts of property which are quite out of character with the donor’s normal
inquiring disposition when disposing of property (Simpson v Simpson (1988) The Times, 11
June). The fiduciary relationship between parent and child ends usually, but not necessarily,
on reaching 18 or on getting married.
Lancashire Loans Ltd v Black, 1934 – Undue influence: parent and child (148)
Allcard v Skinner, 1887 – Undue influence: religious adviser and disciple (149)
However, there may be a presumption of undue influence even though the relationship 13
between the parties is not in the established categories outlined above. In Re Craig (Deceased)
[1970] 2 All ER 390 Ungoed-Thomas, J ruled that presumption of undue influence arose on
proof:
(a) of a gift so substantial or of such a nature that it could not on the face of it be accounted
for on the grounds of the ordinary motives on which ordinary men acted, and
(b) of a relationship of trust and confidence such that the recipient of the gift was in a posi-
tion to exercise undue influence over the person making it.
Hodgson v Marks, 1970 – Undue influence: outside the special categories (150)
Effect of undue influence on third parties

A contract between A and B procured by undue influence cannot be avoided by rescission
against third parties who acquire rights for value without notice of the facts. Where this has
happened the party suffering the undue influence, say, A, will have to rely on tracing the pro-
ceeds of sale into the original purchaser’s, i.e. B’s, assets. The contract may be avoided and
the property recovered from third parties for value with notice of the facts and also against
volunteers (i.e. persons who have given no consideration) even though they were unaware of
the facts.
Effect of undue influence on the parties to the contract

Undue influence renders the contract voidable so that it may be rescinded. However, since
rescission is an equitable remedy, there must be no delay in claiming relief after the influence
has ceased to have effect. Delay in claiming relief in these circumstances may bar the claim
since delay is evidence of affirmation. This is illustrated by the case of Allcard v Skinner above.
..
EL_C13.qxd 3/26/07 1:08 PM Page 328
Economic duress
Apart from the old concepts of duress and undue influence, the courts are developing in
modern times wider rules to protect persons against improper pressure and inequality of bar-
gaining power as it affects contracts. This development was perhaps best described by Lord
Denning in Lloyds Bank v Bundy [1974] 3 All ER 757 where he said, having discussed duress
and various forms of undue pressure in contract:
Gathering all together, I would suggest that through all these instances there runs a single
thread. They rest on ‘inequality of bargaining power’. By virtue of it, the English law gives
relief to one who, without independent advice, enters into a contract on terms which are
very unfair or transfers property for consideration which is grossly inadequate, where his
bargaining power is grievously impaired by reason of his own needs or desires, or by his
own ignorance or infirmity coupled with undue influence or pressures brought to bear on
him by or for the benefit of the other.
Economic duress is within this concept. Suppose A agrees to build a tanker for B by an agreed
date at an agreed price and B enters into a contract with C under which the tanker is to be
chartered to C from the agreed completion date or shortly afterwards. If A then threatens not
to complete the contract by the agreed date unless B pays more and B makes an extra pay-
ment because he does not want to be liable in breach of contract to C, then the agreement to
pay more is affected by economic duress. (See the judgment of Mocatta, J in North Ocean
Shipping Co Ltd v Hyundai Construction Co Ltd, The Atlantic Baron [1978] 3 All ER 1170.)
The decision of the House of Lords in Universe Tankships Inc of Monrovia v International
Transport Workers’ Federation [1982] 2 All ER 67 is instructive in that it affirms the existence of
the doctrine of economic duress. In that case a ship called the Universe Sentinel, which was
owned by Universe Tankships, was ‘blacked’ by the respondent trade union, the ITF, which
regarded the ship as sailing under a flag of convenience. ITF was against flag-of-convenience
ships and refused to make tugs available when the ship arrived at Milford Haven to discharge
her cargo. The blacking was lifted after Universe Tankships had made an agreement with ITF
regarding improvements in pay and conditions of the crew and had paid money to ITF which
included a contribution of $6,480 to an ITF fund known as The Seafarers’ International
Welfare Protection and Assistance Fund. Universe Tankships sued for the return of the $6,480
on the basis of economic duress, and the House of Lords held that they were entitled to
recover it. It appears from the judgments that the effect of economic duress is to make the
contract voidable and to provide a ground for recovery of money paid as money had and
received to the claimant’s use – a form of quasi-contractual claim.
The decision in Universe Tankships was applied by the Court of Appeal in B & S Contracts &
Design v Victor Green Publications [1984] IGR 419 where A agreed to erect stands for B who was
doing a presentation at Olympia. A’s employees threatened to strike unless they received
extra money which they had demanded and to which they were not entitled. A said that the
contract could not proceed unless these extra sums were paid by B as an increase in the con-
tract price. B paid the extra sums to get the work done and then recovered them in this
action. The money was paid under economic duress.
It should also be noted that where extra contractual payments have been arranged under
circumstances of economic duress they cannot be recovered in a claim before a court. Thus in
Atlas Express v Kafco [1989] 1 All ER 641 Atlas, a national road carrier, made a contract to
deliver cartons of basketware to Woolworths stores for Kafco who were a small company
importing and distributing the basketware. A price of £1.10 per carton was agreed but the first
load had fewer cartons than had been anticipated and Atlas told Kafco that they would not
..
EL_C13.qxd 3/26/07 1:08 PM Page 329
carry any more without a minimum payment per trip regardless of the number of cartons
carried. Kafco could not find another carrier quickly and, being worried about their contract
with Woolworths if the latter did not get their supplies, Kafco agreed to the new terms but
later refused to pay the new rate, only the per carton rate. The High Court held that the claim
of Atlas for the minimum rate must be dismissed. The circumstances amounted to economic
duress and there was no proper consent by Kafco.
Unconscionable bargains
The court will, in what it regards as an appropriate case, set aside a contract which is affected
by improper pressure by one party or where there is inequality of bargaining power. However,
mere inequality is not in itself enough: the court will look at all the circumstances of the case.
Lloyds Bank v Bundy, 1974 – Unconscionable bargains illustrated (151)
Further examples of inequality of bargaining power may be found in Clifford Davis

Management v WEA Records [1975] 1 All ER 237 where A, an experienced manager, obtained a
contract with a pop star, B, who had little or no business experience, under which B gave A
the copyright in all his compositions for a period of years. It was held that B could avoid the 13
contract because A had exploited his superior bargaining power.
No general rule that all contracts must be fair
There is no rule of law which states that a fair price must be paid in all transactions and some
unfair contracts will be held binding provided the parties were of equal bargaining strength.
In Burmah Oil Ltd v The Governor of the Bank of England (1981) The Times, 4 July, Burmah was
in financial difficulties and sold a large holding of shares which it had in British Petroleum to
the government at a price below the Stock Exchange price. Burmah then brought an action to
set the contract aside. The court refused to do so. Although there was authority to set aside a
transaction where one party had acted without independent advice, or where the bargaining
strength of one party was grievously impaired, neither of those situations existed in this case.
The relationship was purely commercial and the contract for the sale of shares must stand.
Cases such as Burmah Oil indicate that the broad principle of ‘inequality of bargaining
power’ can be misleading. A further example is provided by Alec Lobb (Garages) Ltd v Total Oil
GB Ltd (1985) where directors of a company which was desperate to raise money negotiated a
disadvantageous mortgage over its property which was nevertheless upheld as valid. Lawful
business pressure seems to be justified no matter how much inequality of bargaining power
may exist particularly where, as in this case, the loan was given in extremely risky circum-
stances to rescue Lobb which was in danger of collapse. The more recent case of Leyland Daf
Ltd v Automotive Products plc (1993) The Times, 9 April, is also of interest. The Court of Appeal
decided that Automotive was entitled to withhold supplies of brake and clutch systems to
Leyland, which owed Automotive £758,955, until this was paid. Leyland was in administrative
receivership and the receivers urgently needed the supplies to carry on the company’s trade
in the hope of finding a buyer for it. The court also decided that Automotive was not in breach
of Art 86 of the Treaty of Rome (abuse of a dominant position) (see further Chapter 16).
..
EL_C14.qxd 3/26/07 1:09 PM Page 330
14
CONTRACTUAL TERMS
We shall now consider the contents of the contract by explaining the types of terms express
or implied which may be found in a contract.
Inducements and terms generally

Even where it is clear that a valid contract has been made it is still necessary to decide pre-
cisely what it is the parties have undertaken to do in order to be able to say whether each has
performed or not performed his part of the agreement.
In order to decide upon the terms of the contract it is necessary to find out what was said
or written by the parties. Furthermore, having ascertained what the parties said or wrote, it is
necessary to decide whether the statements were mere inducements (or representations) or
terms of the contract, i.e. part of its actual contents. The distinction in diagrammatic form
together with an indication of remedies appears in Figure 14.1 at p 331.
The distinction is less important than it was since the passing of the Misrepresentation Act
1967. Before the Act became law there was often no remedy for a misrepresentation which
was not fraudulent, and in such a case the claimant’s only hope of obtaining a remedy was to
convince the court that the defendant’s statement was not a mere inducement but a term of
the contract of which the defendant was in breach and for which damages might be
obtained. As we have seen, under the Misrepresentation Act 1967 the new form of negligent
misrepresentation which did not exist before will now give rise in many cases to an action for
damages even in respect of a mere misrepresentation or inducement.
Written contracts and outside evidence

It is a general rule of the common law that outside (or extrinsic) evidence cannot be brought
to vary a written contract (Goss v Nugent (1833) 5 B & Ad 58). This is known as the parol
(oral) evidence rule. However, the courts have been prepared to admit outside evidence if it
can be shown that the written contract was not intended to express the whole agreement of
the parties. Thus in Walker Property Investments (Brighton) Ltd v Walker (1947) 177 LT 204 a
prospective tenant under a written tenancy agreement was allowed to add an oral agreement
to the tenancy under which, as he satisfied the court, he was entitled to the use of two base-
ment rooms and the garden. Reference to this right had been omitted from the tenancy
agreement.
..
EL_C14.qxd 3/26/07 1:09 PM Page 331
CONTRACTUAL TERMS 331
Figure 14.1 Distinction between pre-contractual and contractual statements
14
Inducements and terms distinguished
Nevertheless, it is still necessary to consider the main tests applied by the courts in order to
distinguish between a mere misrepresentation and a term of the contract, bearing in mind
always that the question whether a statement is an inducement or a term and, if a term,
whether a condition or warranty is a matter of fact for the judge. Fact decisions of this sort vary
widely according to the circumstances of each case, so that it is virtually impossible to predict
with absolute accuracy what the outcome of a particular case will be. However, by way of
illustration the following headings contain the major guidelines which are applied.
The statements and intentions of the parties

The court will always be concerned to implement the intentions of the parties as they appear
from statements made by them. Thus in Gill & Duffus SA v Société pour l’Exportation des Sucres
SA [1985] 1 Lloyd’s Rep 621 the defendants agreed to sell sugar to Gill. A term of the contract
(not specified as a condition or warranty) said that the defendants were to name a port at
which the sugar was to be loaded by 14 November ‘at latest’. The defendants did not nom-
inate a port by that time and so Gill refused to take any sugar from the defendants and
regarded the contract as cancelled. The defendants then tried to make a nomination of a port
but Gill refused to accept it saying that they had repudiated the contract because of the
defendants’ breach of condition (or repudiatory breach). Following a decision unfavourable
to them at arbitration, Gill appealed. Leggatt, J said that there were no words in the English
language by which a deadline could be appointed more concisely, more precisely, or with
more finality than ‘at latest’. They meant what they said and the judge had no doubt that the
intention of the parties as gathered from the contract itself would be best carried out by treat-
ing the promise not as a mere warranty but as a condition precedent by the failure to perform
which the other party was relieved of liability. Gill’s contention was accepted. There was a
..
EL_C14.qxd 3/26/07 1:09 PM Page 332
repudiatory breach of condition. Where in a contract the parties have indicated that a par-
ticular undertaking is to be a term of the contract, the courts will in general abide by the
wishes of the parties. However, the court will not slavishly follow the parties’ statements and
where, for example, the parties appear to have regarded a trivial matter as a vital term of the
agreement, the court may still take the view that it is not.
Thus, so far as a written contract is concerned, the court may disregard a statement by the
parties that a particular undertaking is a condition and say instead that it is a warranty. So far
as wholly oral contracts are concerned, the court may ignore the statements of the parties
and decide that a particular undertaking is a condition, a warranty, or a mere inducement.
Thus in L Schuler AG v Wickham Machine Tool Sales [1973] 2 All ER 39 the claimants entered
into a contract for four years with the defendants giving them the sole right to sell panel
presses in England. A clause of the contract provided that it should be a condition of the
agreement that the defendants’ representatives should visit six named firms each week to
solicit orders. The defendants’ representatives failed on a few occasions to do so and the
claimants claimed to be entitled to repudiate the agreement on the basis that a single failure
was a breach of condition giving them an absolute right to treat the contract as at an end.
The House of Lords said that such minor breaches by the defendants did not entitle the
claimants to repudiate. The House of Lords construed the clause on the basis that it was so
unreasonable that the parties could not have intended it as a condition giving Schuler a right
of repudiation, but rather as a warranty. Thus Schuler were themselves in breach of contract
leaving Wickham with a claim for damages against Schuler.
This case is also an example of the court trying to give redress in regard to an uncon-
scionable bargain and to correct unscrupulous commercial conduct.
The nature of the statement

A statement is likely to be an inducement rather than a term if the person making the
statement asks the other party to check or verify it, e.g. ‘The car is sound but I should get an
engineer’s report on it’.
In addition, a statement is likely to be a term rather than a mere inducement if it is made
with the intention of preventing the other party from looking for defects and succeeds in
doing this, e.g. ‘The car is sound, you need not look it over’.
The importance of the statement

If the statement is such that the claimant would not have made the contract without it, then
the statement will be a term of the contract and not a mere inducement.
Bannerman v White, 1861 – Representations and terms: a vital undertaking (152)
The timing of the statement

A statement made during preliminary negotiations tends to be an inducement. Where the
interval between the making of the statement and the making of the contract is distinct then
the statement is almost certain to be an inducement. Thus in Routledge v McKay [1954] 1 All
ER 855 the claimant and the defendant were discussing the possible purchase and sale of the
defendant’s motor cycle. Both parties were private persons. The defendant, taking the informa-
tion from the registration book, said, on 23 October, that the cycle was a 1942 model. On 30
October a written contract of sale was made. The actual date of the cycle was later found to
..
EL_C14.qxd 3/26/07 1:09 PM Page 333
be 1930. The buyer’s claim for damages for breach of warranty failed in the Court of Appeal.
In this case the interval between the negotiations and the contract was well marked and the
statement was not a term. However, the interval is not always so well marked and in such
cases there is a difficulty in deciding whether the statement is an inducement or a term.
Oral statements later put into writing

If the statement was oral and the contract was afterwards reduced to writing, then the terms
of the contract tend to be contained in the written document and all oral statements tend to
be pre-contractual inducements. Even so the court may still consider the apparent intentions
of the parties and decide that they had made a contract which was part oral and part written
(see Evans v Merzario (1976) in Chapter 15).
Special skill and knowledge or lack of same

Where one of the parties has special knowledge or skill with regard to the subject matter of
the contract, then the statements of such a party will normally be regarded as terms of the
contract. In addition, it will be difficult for an expert to convince the court that a person with
no particular knowledge or skill in regard to the subject matter has made statements which
constitute terms of the contract.
Oscar Chess Ltd v Williams, 1957 – Effect of special skill and knowledge (153)
14
Conditions and warranties

Having decided that a particular statement is a term of the contract and not a mere induce-
ment, the court must then consider the importance of that statement in the context of the
contract as a whole. Not all terms are of equal importance. Failure to perform some may
have a more serious effect on the contract than failure to perform others. The law has applied
special terminology to contractual terms in order to distinguish the vital or fundamental
obligations from the less vital, the expression condition being applied to the former and the
expression warranty to the latter. A condition is a fundamental obligation which goes to the
root of the contract. A warranty on the other hand is a subsidiary obligation which is not so
vital that a failure to perform it goes to the root of the contract.
This distinction is important in terms of remedies. A breach of condition is called a repudiatory
breach and the injured party may elect either to repudiate the contract or claim damages and
go on with the contract.
It should be noted that the claimant must go on with the contract and sue for damages
if he has affirmed the contract after knowledge of a breach of condition. He may do this
expressly as where he uses the goods, or by lapse of time as where he simply fails to take any
steps to complain about the breach for what in the court’s view is an unreasonable period of
time. A breach of warranty is not repudiatory and the claimant must go on with the contract
and sue for damages.
Whether a term is a condition or warranty is basically a matter for the court which will be
decided on the basis of the commercial importance of the term. As we have seen, the words
used by the parties are, of course, relevant, but are not followed slavishly by the court which may
still decide differently from the parties on the basis of the commercial importance of the term.
..
EL_C14.qxd 3/26/07 1:09 PM Page 334
It should be noted that the word warranty is sometimes used in a different way, e.g. by a
manufacturer of goods who gives a warranty against faulty workmanship offering to replace
parts free. The term warranty is used by the manufacturer as equivalent to a guarantee. We are
concerned here with its use as a term of a contract.
Poussard v Spiers and Pond, 1876 – Condition: a vital commercial

undertaking (154)
Bettini v Gye, 1876 – Warranty: a collateral undertaking (155)
Innominate terms
In modern law there are also terms which the parties call conditions and where the breach
has in fact had a serious result on the contract. The court will then agree that the breach
should be treated as a breach of condition and the contract can be repudiated. There are
also terms which the parties call warranties and where the breach has in fact not been serious.
The court will then agree that the breach shall be treated as a breach of warranty and the con-
tract cannot be repudiated. The parties must go on with it though the person injured by the
breach has an action for damages.
There are also what are called innominate terms. The effect of these on the contract will
depend upon how serious the breach has turned out to be in fact. If the breach has turned out
to be serious the court will then treat the term as a condition, so that the contract can be
repudiated. If in fact the breach has not had a serious effect on the contract, the court will
treat it as a breach of warranty, so that the parties must proceed with the contract, though
the injured party will have an action for damages.
Thus, if Dodgy Motors advertises a car for sale as having done 32,000 miles, this statement
is likely to be a warranty giving an action for damages only if in fact the car has done, say,
34,000 miles. If, however, the car had done 60,000 miles the court would be likely to regard
the statement as a condition allowing repudiation of the contract.
The Hansa Nord, 1975 – The innominate term illustrated (156)
Implied terms – generally

Before leaving the topic of the contents of the contract it must be appreciated that in addi-
tion to the express terms inserted by the parties, the contract may contain and be subject to
implied terms. Such terms are derived from custom or statute, and in addition a term may be
implied by the court where it is necessary in order to achieve the result which in the court’s
view the parties obviously intended the contract to have.
Customary implied terms

A contract may be regarded as containing customary terms not specifically mentioned by the
parties.
Hutton v Warren, 1836 – A contract containing a customary term (157)
..
EL_C14.qxd 3/26/07 1:09 PM Page 335
Judicial implied terms

Implication according to parties’ intentions
The court may imply a term into a contract whenever it is necessary to do so in order that the
express terms decided upon by the parties shall have the effect which was presumably
intended by them. This is often expressed as the giving of ‘business efficacy’ to the contract,
the judge regarding himself as doing merely what the parties themselves would in fact have
done in order to cover the situation if they had addressed themselves to it.
The Moorcock, 1889 – When the court implies a term (158)
Implication as a matter of law

Sometimes, however, the courts imply a term which is quite complex so that the parties
would not, in fact, have addressed themselves to it. Here the judge is saying as a matter of law
how the contract should be performed. This is illustrated by Liverpool City Council v Irwin
[1977] AC 239 where the House of Lords held that it was an implied term of a lease of a
maisonette in a block of properties owned by the Council that the landlord should take reason-
able care to keep the common parts of the block in a reasonable state of repair, although the
obligation to do so would not have been accepted by the landlord.
When Irwin’s case was in the Court of Appeal, Lord Denning, in deciding that there should
be an implied term regarding maintenance, rejected the business efficacy test as the only test,
saying that the court could imply a term whenever it was just and reasonable to do so,
14
whether the term was strictly necessary to the performance of the contract or not. Although
the House of Lords implied a term relating to maintenance, it did not go along with the view
of Lord Denning that the test should be reasonableness regardless of necessity. The Court of
Appeal returned to the ‘necessary’ approach in Mears v Safecar Security [1982] 2 All ER 865 and
refused to imply a term into a contract of service that payment should be made to an
employee during sickness. Stephenson, LJ was of opinion that the term could not be implied
because, although it might be reasonable to imply a term relating to sick-pay, it was not
necessary in a contract of employment. The term relating to maintenance in Irwin was in a
sense not absolutely vital to performance of the contract in that the tenants could have
walked up the stairs, even in the dark, to their flats if lift and light maintenance had not been
carried out, but it was much closer to being necessary to performance of the contract than was
the sick-pay term in Mears.
The Court of Appeal also decided in Morley v Heritage plc (1993) 470 IRLB 11 that a contract
of employment does not contain an implied term that an employee will receive pay in lieu of
unused holiday entitlement. A claim that the term should have been implied on the basis
of custom and practice failed because there was no such custom or practice in the company.
If there had been, the claim might well have succeeded.
The decision in Morley was distinguished in Janes Solicitors v Lamb-Simpson (1996) 541
IRLB 15. In that case the Employment Appeal Tribunal decided that there was an implied
contract term to pay accrued holiday pay. Ms Lamb-Simpson had not been given written
particulars of her employment as required by the Employment Rights Act 1996 (see
Chapter 19) and the EAT felt able to imply the term. In Morley there was a detailed written
contract between the parties which dealt with holiday entitlement and holiday pay but said
nothing about accrued holiday pay. It seemed therefore that the parties had addressed them-
selves to the relevant area and if something was not covered it was because it was not
intended.
..
EL_C14.qxd 3/26/07 1:09 PM Page 336
It should be noted that payment for accrued holiday leave is now payable under
the Working Time Regulations 1998 (see further Chapter 19). The maximum leave under the
regulations is currently four weeks so the above materials have application where a claim is
made for accrued holiday pay beyond four weeks.
Implied terms in consumer law – sale of goods

The law relating to the sale of goods is to be found in the Sale of Goods Act 1979 (as
amended). This is a consolidating measure bringing together a number of previous Acts, but
in particular the Sale of Goods Act 1893. Also relevant are rules of the common law not dealt
with by legislation. Section references are to the Sale of Goods Act 1979 (as amended) unless
otherwise indicated.
Title
The rules governing title are as follows.
Implied condition as to title

Section 12(1) provides that, unless the circumstances show a different intention, there is an
implied condition on the part of the seller that in the case of a sale he has the right to sell the
goods, and that in the case of an agreement to sell, he will have the right to sell the goods at
the time when the property (ownership) is to pass.
Usually the ownership of goods passes to the buyer when the contract is made, but in an
agreement to sell it does not. For example, a contract for goods yet to be made is an agree-
ment for sale.
Rowland v Divall, 1923 – Section 12 and total failure of consideration (159)
The decision in Rowland, which has been applied in subsequent cases (see Karflex Ltd v
Poole [1933] 2 KB 251), produces an unfortunate result in that a person who buys goods to
which the seller has no title is allowed to recover the whole of the purchase price even
though he has had some use and enjoyment from the goods before he is dispossessed by the
true owner. It is thus difficult to suggest that there has been total failure of consideration. The
Law Reform Committee (see 1966 Cmnd 2958, para 36) has recommended that, subject to
further study of the law relating to restitution, an allowance in respect of use and enjoyment
should be deducted from the purchase price and the balance returned to the claimant. It
should be noted that the 1979 Act does not deal with this matter.
Section 12(1) might be construed as meaning that the seller must have the power to give
ownership of the goods to the buyer, but if the goods can only be sold by infringing a trade
mark, the seller has no right to sell for the purposes of s 12(1).
Niblett Ltd v Confectioners’ Materials Co Ltd, 1921 – A sale which infringed a

registered mark (160)
..
EL_C14.qxd 3/26/07 1:09 PM Page 337
Implied warranties as to title
Section 12(2) provides that there is:
An implied warranty that the goods are free, and will remain free until the time when the
property is to pass, from any charge or encumbrance not disclosed or known to the buyer
before the contract is made, and that the buyer will enjoy quiet possession of the goods
except so far as it may be disturbed by the owner or other person entitled to the benefit of
any charge or encumbrance so disclosed or known.
This does not apply where a limited interest is sold, but ss 12(4) and 12(5) do and contain
similar provisions (see below).
It is not easy to see what rights this sub-section gives over those in s 12(1). The law
does not recognise encumbrances over chattels unless the person trying to enforce them
is in possession of the goods or in privity of contract with the person who is in possession
(Dunlop v Selfridge (1915) – see Chapter 10). Thus, if A uses his car as security for a loan from
B then:
(a) if B takes the car into his possession, the charge will be enforceable if necessary by a sale
of the vehicle;
(b) the charge is equally enforceable against the car while it is still in A’s possession, though
if A sells it to C, B will be prevented by lack of privity of contract from enforcing any
remedies against the vehicle once it is in the possession of C. 14
Thus, if situation (a) above applied, the sub-section is unnecessary since A could not deliver
the vehicle even if he sold it and would therefore be liable in damages for non-delivery to C.
If situation (b) above applied, then the encumbrances would not attach to the vehicle once C
had taken possession. C would not, therefore, require a remedy.
However, the usefulness of s 12(2) is illustrated by the decision of the Court of Appeal
in Microbeads AC v Vinhurst Road Markings Ltd [1975] 1 All ER 529. In this case A sold road-
marking machines to B. After the sale C obtained a patent on the machines so that their
continued use by B was in breach of that patent and C was bringing an action against B in
respect of this. In a claim by A against B for the purchase price, B wished to include in their
defence breach of ss 12(1) and 12(2). It was held by the Court of Appeal that they could
include breach of s 12(2) but not breach of s 12(1). There had been no breach of s 12(1) at the
time of the sale so that A had not infringed that sub-section but since B’s quiet possession
had been disturbed after sale, A was in breach of s 12(2).
Sales under a limited title
Under s 12(3), the sale of a limited interest is now possible. Where the parties intend only to
transfer such a title as the seller may have, there is an implied warranty that all charges or
encumbrances known to the seller and not known to the buyer have been disclosed to the
buyer before the contract is made (s 12(4)), and an implied warranty that the buyer’s quiet
possession will not be disturbed (s 12(5)). There is an action by the buyer for breach of these
warranties if, for example, he is dispossessed by the true owner. Furthermore, the seller is not
able to contract out of this liability.
Sales under a limited title are common where the sale is of goods taken in execution by the
bailiffs to satisfy a judgment debt.
..
EL_C14.qxd 3/26/07 1:09 PM Page 338
Sales by description
Section 13(1) provides that, where there is a contract for the sale of goods by description,
there is an implied condition that the goods shall correspond with the description.
(a) A sale is by description where the purchaser is buying on a mere description having never
seen the goods. A classic example occurs in the case of mail-order transactions.
(b) A sale may still be by description even though the goods are seen or examined or even
selected from the seller’s stock by the purchaser, as in a sale over the counter, because
most goods are described if only by the package in which they are contained. Therefore
a sale in a self-service store would be covered by s 13 though no words were spoken by
the seller.
Beale v Taylor, 1967 – Application of s 13 where the goods are seen (161)
If s 13 applies it is enforced strictly, and every statement which forms part of that descrip-
tion is treated as a condition giving the buyer the right to reject the goods, even though the
misdescription is of a minor nature. There is no such thing as a ‘slight breach’ of condition.
Buyers have been allowed to reject goods on seemingly trivial grounds, e.g. misdescriptions
of how the goods are packed, and regardless of the fact that no damage has been suffered.
Moore & Co v Landauer & Co, 1921 – Packaging is part of the description (162)
However, if the defect is a matter of quality and/or condition of the goods rather than an
identifying description, s 14 (see below) rather than s 13 applies. Although the Sale of Goods
Act applies in the main to sales by dealers, s 13 applies even where the seller is not a dealer in
the goods sold (Varley v Whipp [1900] 1 QB 513).
There can be no contracting out of s 13 at all where a business sells to a consumer or the
contract is between persons in a private capacity. In a non-consumer sale contracting out is
allowed to the extent that it is ‘fair or reasonable’ (see further Chapter 15).
Where the sale is by sample as well as by description, s 13(2) provides that the bulk must
correspond with both the sample and the description. Thus in Nichol v Godts (1854) 10 Ex 191
a purchaser bought by sample ‘foreign refined rape oil’. It was held that the goods must not
only correspond with the sample, which they did, but also be in fact ‘foreign refined rape oil’
and not a mixture of rape and hemp oil which was inferior.
Sale by description and misrepresentation distinguished

It should be noted that the description must be an identifying description to come under s 13
as in Beale v Taylor (above). Statements regarding the state of a car’s tyres, e.g. ‘they were
fitted 5,000 miles ago’, are concerned more with quality and/or condition of the goods and
s 13 probably does not apply, the claim being for misrepresentation. If s 13 did apply, then
every trivial statement about the goods would be a breach of condition and the law relating
to misrepresentation would have no place – a rather unlikely situation.
Statements such as the one above do not identify the goods. Suppose I were to say to a
student: ‘The notes you require are in the boot of my car. Here are the keys. My car is the one
which had new tyres fitted 5,000 miles ago.’ How would the student find the car? Not easily:
the statement does not identify the vehicle!
..
EL_C14.qxd 3/26/07 1:09 PM Page 339
Sales in the course of a business

Although ss 12 and 13 of the 1979 Act apply to private sales as well as business sales, the s 14
implied terms of fitness and satisfactory quality apply only to sales in the course of a business.
A problem may, therefore, arise where a milkman sells his old float in order to buy a new one.
If the float is not fit for the purpose and/or of satisfactory quality, to what extent will the
implied terms of s 14 (see below) be available to the person who has bought the float? Is it a
private sale or a sale in the course of a business? It was decided by the Court of Appeal that it
could be in the course of a business and that s 14 should be interpreted widely (see Stevenson
v Rogers [1999] 1 All ER 613). Earlier statute law on sale of goods had confined s 14 to situ-
ations where the seller dealt in the goods, but the 1979 Act, following recommendations of
the Law Commission, required only that the goods be sold in the course of a business, so that
even an irregular sale of business property could be included and carry the implied condi-
tions of fitness and satisfactory quality. If the sale is integral to the business, that is enough,
even though the goods are not routinely sold by the business. Thus in Stevenson the sale by a
person in business as a fisherman of one of his boats was within the 1979 Act and the condi-
tion of satisfactory quality applied. The decision in Stevenson runs contrary to the decision of
the Court of Appeal in the R & B Customs Brokers case (1988) (see Chapter 15) where, because
the purchase of a car by a business was irregular and not an integral part of the business, the
company was treated as a consumer for the purpose of exclusion clauses. The Court of Appeal
considered this case in Stevenson, but said that since it was an interpretation of the Unfair
Contract Terms Act 1977, it could stand in that field, but the reasoning was not to be applied
to the Sale of Goods Act 1979.
14
Implied conditions as to fitness
Section 14(3) lays down the following conditions.

Where the seller sells goods in the course of a business and the buyer (or debtor in a credit
sale) expressly, or by implication, makes known (a) to the seller, or (b) to the dealer in a
credit sale any particular purpose for which the goods are being bought, there is an implied
condition that the goods supplied under the contract are reasonably fit for that purpose
whether or not that is a purpose for which such goods are commonly supplied, except where
the circumstances show that the buyer (or debtor) does not rely, or that it is unreasonable for
him to rely, on the skill or judgement of that seller or dealer.
There is no need for the buyer to specify the particular purpose for which the goods are
required when they have in the ordinary way only one purpose, e.g. a hot-water bottle. If
ordinary goods in everyday use are required for a particular purpose, this must be made
known to the seller.
Priest v Last, 1903 – Where the goods have only one purpose (163)
Griffiths v Peter Conway Ltd, 1939 – Where the goods must cope with the
claimant’s abnormalities (164)
Fitness for the purpose: meaning of reliance

In these days of national advertising under brand names it is somewhat unrealistic to
assume that the buyer very often relies on the seller’s skill and judgement. However, in order
..
EL_C14.qxd 3/26/07 1:09 PM Page 340
to make the law work, reliance will readily be implied even to the extent of saying that, at
least in sales to the general public as consumers, the buyer has gone to the seller because
he relies on the seller having selected his stock with skill and judgement. The buyer must
show that he has made known the purpose for which the goods are being bought. Reliance
will then be presumed, unless it can be disproved, or if the seller can show that reliance was
unreasonable.
The court has to decide what amounts to ‘unreasonable reliance’. However, presumably the
seller can disclaim responsibility. For example, suppose B goes into S’s general stores and sees
some tubes of glue. If he then asks whether the glue will stick metal to plastic and S says:
‘I am not expert enough to say’, then if B buys the glue and it does not stick metal to plastic
it would surely be unreasonable for B to suggest that he relied on S’s skill and judgement.
There will in general be no implication of reliance where the buyer knows that the seller
deals in only one brand of goods, e.g. where a public house sells only one brand of beer.
Grant v Australian Knitting Mills Ltd, 1936 – Reliance on seller’s skill and
judgement readily implied (165)
Wren v Holt, 1903 – Position where seller obliged to sell only one product (166)
Fitness: application to non-manufactured goods

The rules relating to fitness for the purpose under s 14(3) apply also to non-manufactured
goods. Thus in Frost v Aylesbury Dairy Co Ltd [1905] 1 KB 608 the defendants who were
retailers of milk were held liable under s 14(3) when they sold milk containing germs which
caused the claimant’s wife to die of typhoid fever.
Fitness: second-hand goods

In deciding the matter of fitness for the purpose in the case of second-hand goods the buyer
must expect that defects are likely to emerge sooner or later. However, if defects occur fairly
quickly after sale this is strong evidence that the goods were not reasonably fit at the time
of sale.
Crowther v Shannon Motor Company, 1975 – Fitness and second-hand

goods (167)
Fitness and satisfactory quality distinguished

Before proceeding to consider satisfactory quality, we must distinguish the two heads of liabil-
ity, i.e. fitness and satisfactory quality. Under s 14(2) an article is regarded as not satisfactory
because of a manufacturing defect so that a perfect article would have served the purpose,
or in other words it is the right article but it is faulty. Under s 14(3) an article is regarded as
not fit for the purpose because of its design or construction. It may be perfect in terms of
its manufacture but its construction or design does not allow it to fit the purpose and con-
sequently no amount of adjustment or repair will ever make it right. In other words, it is a
perfect article but the wrong article for the purpose.
Baldry v Marshall, 1925 – Where goods not fit but satisfactory (168)
..
EL_C14.qxd 3/26/07 1:09 PM Page 341
Satisfactory quality
By s 14(2) (as amended by the Sale and Supply of Goods Act 1994) where the seller sells goods
in the course of a business there is an implied condition that the goods supplied under the
contract are of satisfactory quality, except that there is no such condition:
(a) as regards defects specifically drawn to the buyer’s attention before the contract is made; or
(b) if the buyer examines the goods before the contract is made, as regards defects which that
examination ought to reveal.
If the seller does not normally deal in goods of the type in question, there is no condition
as to fitness (nor as to satisfactory quality unless the sale is by sample which is dealt with
below). The only condition in such a case is that the goods correspond with the description.
This arises because s 14(1) provides that except as provided by s 14 and s 15 (sale by sample),
and subject to any other enactment, there is no implied condition or warranty about the
quality or fitness for any particular purpose of goods supplied under a contract of sale. If,
therefore, S (who is not a dealer) sells a car to B with no express terms as to quality and
fitness, the court is prevented by s 14 from implying conditions or warranties, even though S
seems, from the circumstances, to have been warranting the car in good order.
The s 14 provision regarding satisfactory quality applies where the sale is by a dealer who
does not ordinarily sell goods of precisely the same description. Thus if B ordered an ‘X’
brand motor bike from S who has not formerly sold that make, s 14 applies if the motor bike
is unfit or unsatisfactory.
There is no need under s 14(2) for the buyer to show that he relied on the seller’s skill and
14
judgement, and the seller is liable for latent defects even though he is not the manufacturer
and is merely marketing the goods as a wholesaler or retailer. Such a seller can, however,
obtain an indemnity from the manufacturer if the buyer successfully sues him for defects in
the goods.
Sales through an agent

Section 14(5) is concerned with the problem of a private seller who sells through an agent.
The sub-section provides that the implied conditions of fitness and satisfactory quality oper-
ate if the agent is selling in the ordinary course of business unless the principal is not acting
in the course of business and the buyer is aware of this, or reasonable steps have been taken
to bring it to his notice. Thus, for example, an auctioneer acting for a private seller could
exclude these sections by making it clear that the principal was a private seller.
Examination of the goods

The buyer is not obliged to examine the goods but if he does do so he will lose the protection
of s 14(2) if he fails to notice obvious defects, at least in respect of such defects as where a
new washing machine is examined and the buyer misses a rather obvious scratch on the front
of the machine. The buyer can also lose his right to complain where the seller actually points
out the defects.
The price paid

The interpretation of the word ‘merchantable’ (now ‘satisfactory’) has often been discussed in
the courts. Section 14(6) provides: goods of any kind are of merchantable (now satisfactory)
..
EL_C14.qxd 3/26/07 1:09 PM Page 342
quality within the meaning of this Act if they are as fit for the purpose or purposes for
which goods of that kind are commonly bought as it is reasonable to expect having regard
to any description applied to them, the price (if relevant) and all the other relevant
circumstances.
The price paid by the buyer is therefore a factor to be taken into account. Goods (provided
they are not defective) are not unsatisfactory simply because their resale price is slightly less
than that which the buyer paid, though they may be if the difference in purchase and resale
price is substantial.
B S Brown & Son Ltd v Craiks Ltd, 1970 – Satisfactory quality and the resale
price (169)
How were the goods described?

As regards the description applied to the goods, old cars or other mechanical items which are
sold and described as scrap need not be of satisfactory quality. Furthermore, ‘shop-soiled’,
‘fire-damaged’, ‘flood-salvage’ and so on might imply non-satisfactory lines. In addition, old
items, such as antiques and curios would not presumably be required to be in perfect working
order. However, as we have seen it was held in Cavendish-Woodhouse v Manley (1984) 82 LGR
376 that the phrase on an invoice ‘bought as seen’ merely confirms that the purchaser has
seen the goods. It does not exclude any implied terms as to quality or fitness.
Duration of satisfactory quality

As regards the time during which the goods must be satisfactory, the law is not clear. So far as
perishable goods are concerned, the decision in Mash and Murrell v Joseph I Emmanuel [1961] 1
All ER 485 is relevant. In that case potatoes, though sound when loaded in Cyprus, were
rotten by the time the ship arrived in Liverpool, though there was no undue delay. It was
held by Diplock, J that the sellers were liable under s 14(2) because the goods should have
been loaded in such a state that they could survive the normal journey and be in satisfactory
condition when they arrived. In addition, the seller is liable for defects inherent in the goods
when they are sold and will not escape merely because the defects do not become apparent
until a later time. Circumstances such as those seen in Crowther v Shannon Motor Co (1975)
provide an illustration of this situation.
Goods partially defective

Where part only of the goods is unsatisfactory it seems to depend on how much of the con-
signment is defective. In Jackson v Rotax Motor and Cycle Co Ltd [1910] 2 KB 937 the claimants
supplied motor horns to the defendants and one consignment was rejected by the defendants
who alleged they were unmerchantable (now unsatisfactory). Half the goods were dented and
scratched because of bad packing and the Court of Appeal held that the buyers were entitled
to reject the consignment.
In this connection we have already considered s 15A of the Sale of Goods Act 1979 (as
inserted by the Sale and Supply of Goods Act 1994) under which a consumer can reject goods
where the breach is slight but a business buyer will, where the breach is slight, have to take
delivery and sue for any loss. Clearly in the Jackson case s 15A would have allowed rejection
in a business context as well as a consumer context. The breach was hardly slight!
..
EL_C14.qxd 3/26/07 1:09 PM Page 343
Satisfactory quality: the current test

Section 1 of the Sale and Supply of Goods Act 1994 inserts in s 14 of the Sale of Goods Act
1979 a reformed definition of the concept of quality, and merchantable quality has gone.
There was always doubt about its scope and minor defects were not necessarily covered. Thus
in Millars of Falkirk Ltd v Turpie 1976 SLT 66 it was decided that a new car with a slight leak of
oil in the power-assisted steering was even so of merchantable quality. Similarly, a scratch on
the dashboard of a new car would not prevent it from being merchantable.
Now a sale in the course of business carries an implied condition that the goods are of
‘satisfactory quality’. To be of such quality the goods must meet the standard that a reason-
able person would regard as satisfactory taking into account any description, price and other
relevant circumstances. This is a general test but the section then explains that the quality of
the goods includes their state and condition and gives specific and non-exhaustive aspects
of quality:
n fitness for the purpose for which the goods are commonly supplied;
n appearance and finish;
n freedom from minor defects;
n safety;
n durability.
As before, defects specifically brought to the buyer’s attention before the contract or if the
buyer has examined the goods those he ought to have noticed are not covered. Nevertheless,
many more defects will now be covered, and the Law Commission, in Working Paper 85
(which advocated the satisfactory quality test), took the view that in the Millars case the car 14
would have failed the new test which it proposed.
The above rules also apply to goods supplied under a contract for work and materials, e.g.
an oil filter supplied when servicing a car (see further later in this chapter).
Fitness and satisfactory quality

Private sales
The rules as to fitness for purpose and satisfactory quality do not apply to private sales of
second-hand goods and there is still a fairly wide application of the maxim caveat emptor
(let the buyer beware). In practice only manufacturers, wholesalers, retailers and dealers in
new or second-hand goods will be caught by the implied conditions. The courts cannot imply
conditions and warranties into private contracts similar to those implied by the Act into sales
by dealers, because, as we have seen, s 14(1) forbids it.
Extension to items supplied with goods

The implied terms relating to fitness and satisfactory quality extend also to other items supplied
under the contract of sale of goods, e.g. containers, foreign matter and instructions for use.
Geddling v Marsh, 1920 – Fitness and satisfactory quality: returnable bottles (170)
Wilson v Rickett, Cockerell & Co Ltd, 1954 – Where foreign matter is supplied with
the goods (171)
Wormell v RHM Agriculture (East) Ltd, 1986 – Application to instructions for use (172)
..
EL_C14.qxd 3/26/07 1:09 PM Page 344
Injury to third party, purchaser’s indemnity

It should be noted that if a retailer sells goods which are faulty and in breach of s 14 he is
obliged to indemnify the purchaser if the faulty goods injure a third party to whom the pur-
chaser is found liable. However, no such indemnity is payable if the purchaser has continued
to use the goods having become aware that they are faulty and dangerous.
Lambert v Lewis, 1981 – Where goods are used by the buyer after knowledge of
defects (173)
Usage of trade
Section 14(4) provides that an implied warranty or condition as to quality or fitness for a
particular purpose may be attached to a contract of sale by usage. Where the transaction is
connected with a particular trade, the customs and usages of that trade give the context in
which the parties made their contract and may give a guide as to their intentions. Thus, in a
sale of canary seed in accordance with the customs of the trade it was held that the buyer
could not reject the seed delivered on the grounds that there were impurities in it. A custom
of the trade prevented this but allowed instead a rebate on the price paid (Peter Darlington
Partners Ltd v Gosho Co Ltd [1964] 1 Lloyd’s Rep 149).
Sale by sample
Section 15(1) states that a contract of sale is a contract of sale by sample where there is a term
in the contract, express or implied, to that effect. The mere fact that the seller provides a
sample for the buyer’s inspection is not enough: to be such a sale either there must be an
express provision in the contract to that effect, or there must be evidence that the parties
intended the sale to be by sample.
There are three implied conditions in a sale by sample.
(a) The bulk must correspond with the sample in quality (s 15(2)(a)).
(b) The buyer shall have a reasonable opportunity of comparing the bulk with the sample
(s 15(2)(b)). The buyer will not be deemed to have accepted the goods until he has had an
opportunity to compare the bulk with the sample, and will be able, therefore, to reject the
goods, even though they have been delivered, if the bulk does not correspond with the
sample. He is not left with the remedy of damages for the breach of warranty.
(c) The goods shall be free from any defect, making their quality unsatisfactory, which
would not be apparent on reasonable examination of the sample (s 15(2)(c)).
The effect of s 15(2)(c) is to exclude the implied condition of satisfactory quality if the defect
could have been discovered by reasonable examination of the sample whether or not there
has in fact been any examination of the sample. This is presumably based upon the premise
that the seller is entitled to assume that the buyer will examine the sample. The provision is
in contrast with s 14(2) where the implied condition of satisfactory quality is not excluded
unless an examination has actually taken place.
..
EL_C14.qxd 3/26/07 1:09 PM Page 345
A reasonable examination for the purpose of a sale by sample is such an examination as is

usually carried out in the trade concerned.
Godley v Perry, 1960 – When a sale is by sample (174)
Implied terms in consumer law – the supply

of goods and services
Having looked at the implied terms in a contract of sale of goods, we can now move on to
consider the law relating to contracts for work and material, e.g. car repairs where goods and
services are supplied together and the goods are used or supplied in such a process as distinct
from being sold on their own (which would be a sale of goods), and for the supply of services
and the implied terms therein.
Supply of goods other than by sale

As regards the rights of those who purchase goods, we have seen that the Sale of Goods Act
1979 applies and that ss 12–15 of that Act imply terms to which a buyer may resort if the 14
goods are faulty, defective or unsuitable. Those who take goods on hire-purchase are similarly
protected by ss 8–11 of the Supply of Goods (Implied Terms) Act 1973.
As regards contracts for work and materials, the supply of goods (or the materials used) is
governed by Part I of the Supply of Goods and Services Act 1982. The services supplied (or the
work element) are governed by Part II of the 1982 Act.
Contracts of exchange or barter, hire, rental or leasing are governed by Part I of the 1982
Act, while contracts for services only, e.g. a contract to carry goods or advice from an account-
ant or solicitor, are governed by Part II of the 1982 Act. The relevant provisions of the Act are
dealt with in detail below. Section references are to the 1982 Act unless otherwise indicated.
The 1982 Act was amended by the Sale and Supply of Goods Act 1994. The relevant
amendments are included in the material appearing below.
Contracts for the transfer of property in goods

The contracts concerned are dealt with in s 1(1) which provides that a contract for the trans-
fer of goods means a contract under which one person transfers, or agrees to transfer to
another, the property in goods, unless the transfer takes place under an excluded contract.
These excluded contracts are set out in s 1(2). They are contracts for the sale of goods, hire-
purchase contracts, and those where the property in goods is transferred on a redemption of
trading stamps. (These are governed by the Trading Stamps Act 1964.) Transfer of property
rights in goods by way of mortgage, pledge, charge or other security is excluded, as are gifts.
There must be a contract between the parties. If not, the statutory implied terms cannot be
relied upon if the goods supplied prove to be defective. Thus a chemist supplying harmful
drugs under a National Health Service prescription will not come within the Act. This is
because the patient does not provide consideration. The chemist collects the prescription
..
EL_C14.qxd 3/26/07 1:09 PM Page 346
charge for the government and not for himself. The payment to the chemist does not come
from the patient unless it is a private prescription where the patient has paid the full amount.
Otherwise an action against the chemist would have to be framed in the tort of negligence.
As regards promotional free gifts, e.g. the giving away of a radio to a purchaser of a televi-
sion set, the free gift may not be within the 1982 Act. The matter is not free from doubt, but
s 1(2)(d) excludes contracts for the supply of goods which are enforceable only because they
are made by deed which would seem to exclude other gifts. Furthermore, the Law
Commission Report (No 95 published in 1979) on which the Act is based concludes that gifts
are outside the scope of the Act.
Contracts for work and materials

It is impossible to provide a complete list of contracts for work and materials but they fall
under three broad heads as follows:
(a) Maintenance contracts. Here the organisation doing the maintenance supplies the
labour and spare parts as required. An example would be a maintenance contract for lifts.
( b) Building and construction contracts. Here the builder supplies labour and materials.
An example would be the alteration of an office or workshop involving the insertion of new
windows and extending the central heating system.
(c) Installation and improvement contracts. Here the contractor does not have to build or
construct anything but, for instance, fits equipment into an existing building or applies paint
to it. Examples are the fitting of an air-conditioning system, or painting and decorating an
office or workshop.
The terms implied

Title
Section 2 implies terms about title. Under s 2(1) there is an implied condition that the
supplier has a right to transfer the property in the goods to the customer. Under s 2(2) two
warranties are implied:
(a) that the goods are free from any charge or encumbrance which has not been disclosed to
the customer; and
(b) that the customer will enjoy quiet possession except when disturbed by the owner or
other person whose charge or encumbrance has been disclosed.
The customer would have an action here if he suffered loss as a result of the true owner
reclaiming or suing in conversion where the materials fitted had been stolen. Sections 2(3),
(4) and (5) are concerned with sales under a limited title. If under the contract the supplier is
to give only such title as he may possess, s 2(1) does not apply but warranties are implied that
the supplier will disclose all charges and encumbrances which he knows about and that the
customer’s quiet possession of the goods will not be disturbed by, for example, the supplier or
the holder of an undisclosed charge or encumbrance.
Cases involving bad title have occurred not infrequently in the sale of goods but the
problem seems to have arisen only rarely in contracts for work and materials.
..
EL_C14.qxd 3/26/07 1:09 PM Page 347
Description
Under s 3 there is an implied condition that where a seller transfers property in goods by
description, the goods will correspond with the description. If the goods are supplied by refer-
ence to a sample as well as a description they must correspond with the sample as well as the
description. Section 3 applies even where the customer selects the goods.
Section 3 will operate, for example, where a person is having his house or business premises
extended and agrees with the contractor a detailed specification which describes the materials
to be installed. It will not operate in some types of maintenance contract where the materials to
be replaced are unknown until the maintenance is carried out. The materials fitted in the course
of such a contract will not be described before the contract is made but probably only in an
invoice after it has been made, which is too late to apply s 3. It should be noted that ss 2 and
3 apply to supplies in the course of a business and to a supply by a person other than in the
course of a business, e.g. a milkman ‘moonlighting’ by doing the odd decorating job, provided
there is a contract. They would not apply to a mere friendly transaction without consideration.
Quality and fitness

The first implied term in this area is in s 4 and it relates to satisfactory quality (s 4(2) ).
Satisfactory quality is defined in s 4(9) which states that the goods must be as fit for the purpose
for which they are commonly supplied as it is reasonable to expect, having regard to their
description, price and other relevant circumstances. This condition of satisfactory quality
does not apply to defects:
14
(a) drawn to the customer’s attention before the contract is made; or
(b) which any prior examination the customer has actually made ought to have revealed.
Thus, if the materials used are dangerous, unsafe, defective or faulty, and will not work prop-
erly under normal conditions, the supplier is in breach of s 4(2).
However, if the materials are described as ‘seconds’ or ‘fire-damaged’, the customer cannot
complain if the materials are of lower quality than goods not so described.
As regards defects which ought to have been revealed where the customer has examined
the goods, it is not likely that materials used in a contract for work and materials will be
identified before the contract or that the customer will examine them. If they are examined,
the customer should ensure that it is done properly so that obvious defects are seen and the
goods rejected.
The second implied term in s 4 relates to fitness for the purpose (s 4(5)). Where a customer
makes known, either expressly or by implication, to the supplier any particular purpose for
which the goods are being acquired, there is an implied condition that the goods are reason-
ably fit for the purpose. This condition does not apply where the customer does not rely on,
or it is not reasonable for him to rely on, the skill or judgement of the supplier.
If, for example, a factory process requires a lot of water supplied under high pressure, e.g. to
clean special equipment, and the factory owners ask for the installation of a system of pres-
sure hoses and a pump, revealing to the contractor precisely what the requirements are, then
the contractor will be in breach of s 4(5) if the pressure is inadequate. This will be so even
though the pressure hoses and pump are of satisfactory quality and would have been quite
adequate for use in a different type of installation.
Of course, the way out of the fitness problem for the supplier is for him to make it clear to
the customer that he has no idea whether the equipment will be suitable for the customer’s
special requirements. In such a case he will not be liable, though he may put some customers
off by his unhelpful attitude.
..
EL_C14.qxd 3/26/07 1:09 PM Page 348
Sample
If under the contract there is a transfer of the property in goods by reference to a sample,
then under s 5 there is an implied condition that:
(a) the bulk will correspond with the sample in quality;

(b) the customer will have a reasonable opportunity of comparing the bulk with the sample;
and
(c) there will not be any defect making the goods unsatisfactory which would not have been
apparent on a reasonable examination of the sample.
Except as provided by ss 4 and 5, no conditions or warranties as to quality or fitness are to

be implied into contracts for the transfer of goods. Sections 4 and 5 apply only to a supply
of goods in the course of a business, and not to a supply by those such as the moonlighting
decorator.
Remedies
In so far as the implied terms are conditions and are broken by the supplier, then the cus-
tomer can treat the contract as repudiated. The customer is discharged from his obligation to
pay the agreed price and may recover damages. The breach of implied warranties gives the
customer only the right to sue for damages.
Exchange and barter

The most likely transactions to emerge here are the exchange of goods for vouchers and
coupons as part of promotional schemes. Part I of the 1982 Act applies and the retailer who
supplies the goods under a contract to the customer is the one who is liable if they are in
breach of, for example, the implied terms of fitness and/or satisfactory quality. The manufac-
turer will be liable to the retailer, of course.
An exchange transaction in which goods are simply exchanged is not a sale but is covered
by the 1982 Act. Where part of the consideration is money, as in a part-exchange of an old
car for a new one with a cash difference, the contract is presumably a sale of goods because
money is at least part of the consideration. It does not really matter now whether it is a sale
or a supply, because the implied terms are almost identical.
Often where there has been a sale of faulty goods the seller exchanges them for other
goods of the same type, although he is under no legal duty to do so unless a particular
contract expressly provides. What happens if the other goods are faulty? The substitute
goods must comply with the implied terms as to title, description, quality and fitness, and
there is no longer any point in going into legal niceties as to whether the exchange is a sale
or supply.
The terms implied

The implied terms in exchange or barter are the same as those implied in a contract for work
and materials, i.e. s 2 (title), s 3 (description), s 4(2) (satisfactory quality), s 4(5) (fitness) and
s 5 (sample).
..
EL_C14.qxd 3/26/07 1:09 PM Page 349
Contracts for the hire of goods

The main areas of hiring (or renting or leasing) are as follows:
(a) office equipment, e.g. office furniture and a variety of machines, including telephones;
(b) building and construction plant and equipment, e.g. cranes and earth-moving equipment,
such as JCBs;
(c) consumer hiring, e.g. cars, televisions and videos.
Under s 6(1) a contract for the hire of goods means a contract under which one person bails,
or agrees to bail, goods to another by way of hire. There must be a contract, so that when the
next-door neighbour makes a free loan of his lawnmower the Act does not apply. Also
excluded are hire-purchase agreements. A contract is a contract of hire whether or not
services are also provided. This would be the case where a supplier rented a television to a
customer and also undertook to service it.
The terms implied

Title
Section 7 deals with title. It reflects s 2 except that being a contract of hire it makes provision
only for the transfer of possession and not for the transfer of ownership. There is an implied 14
condition on the part of the supplier that he has the right to transfer possession of the goods
to the customer by hiring for the appropriate period. There is also a warranty that the cus-
tomer will enjoy quiet possession of the goods except where it is disturbed by the owner or
other person entitled to the benefit of any charge or encumbrance disclosed to the customer
before the contract was made.
If, for example, the undisclosed true owner retakes possession so that the supplier is in
breach of s 7, then the customer will have an action for damages. These will reflect the value
he had had under the contract before the goods were taken from him. Thus, if C pays S £120
for the year’s rent of a television but the undisclosed true owner takes it back after, say, two
months, the damages would, on the face of it, be £100.
Neither of the terms in s 7 prevents the supplier from taking the goods back himself pro-
vided the contract allows this, as where it provides expressly for the repossession of the goods
on failure to pay the rental or the court is prepared to imply that it does.
Description
Section 8 is the equivalent of s 3. Where the supplier hires or agrees to hire the goods by
description, there is an implied condition that the goods will correspond with the description.
If the goods are hired by reference to a sample as well as by description, they must correspond
with the description as well as the sample. Section 8 applies even where the customer selects
the goods. If the goods do not match the description, the customer will be able to reject them
and recover damages for any loss.
Quality and fitness

Section 9 enacts the same provisions for hiring contracts as s 4 does for contracts of
work and materials and exchange and barter. Except as provided by ss 9 and 10 (hire by
..
EL_C14.qxd 3/26/07 1:09 PM Page 350
sample), there are no implied terms regarding quality or fitness for any purpose of goods
hired.
There are two terms in s 9 as follows:
(a) An implied condition that the goods hired are of satisfactory quality. There is no
such condition where a particular defect has been drawn to the customer’s attention before
the contract was made or to defects which he should have noticed if he actually examined
the goods.
(b) An implied condition that the goods hired are reasonably fit for any purpose to
which the customer is going to put them. The purpose must have been made known to the
supplier, expressly or by implication. The condition does not apply if the customer does not
rely on the skill of the seller or if it is unreasonable for him to have done so.
Once again, where goods are to be hired for a special purpose, the supplier should make
it clear that the customer must not rely on him if he wishes to avoid the implied condition
of fitness. This has rather special application to those who supply DIY equipment on hire.
A supplier in this area should certainly not overestimate the capacity of, for example, power
tools, in order to get business. If he does he certainly faces s 9 liability.
Where the goods are leased by a finance house, it is responsible for breach of the implied
terms in the hiring contract. It is in effect the supplier. This is also true of hire-purchase
where the implied terms of the Supply of Goods (Implied Terms) Act 1973 apply against the
finance company.
As regards fitness for the purpose, it is enough to involve the finance company in liability if
the customer has told the distributor of the purpose. Generally, of course, the finance house
will have an indemnity against the distributor under which it may recover any damages it
has to pay, so it will all get back to the distributor in the end.
The above conditions relate to the state of the goods at the beginning of the hiring and for
a reasonable time thereafter. It does not impose upon the supplier a duty to maintain and
repair. This must be provided for separately in the contract.
Thus in UCB Leasing Ltd v Holtom (1987) 137 NLJ 614 the Court of Appeal decided that
where a car was the subject of a long leasing agreement, the owner was not under an obliga-
tion to provide a vehicle which was fit for the purpose during the whole period of the leasing.
Instead, rather like a sale of goods, the obligation is to provide a vehicle which is fit at the
outset of the agreement. If it is not, the hirer must rescind quickly if he wishes to return the
car. If he does not do so, he cannot return the vehicle but is entitled to damages only.
Sample
Section 10 applies and is in line with s 5 (above). Section 10 states that in a hiring by sample
there is an implied condition that the bulk will correspond with the sample in quality; that
the customer will have a reasonable opportunity to compare the bulk with the sample; and
that there will be no defects in the goods supplied rendering them unsatisfactory which
would not have been apparent on a reasonable examination of the sample.
As with ss 4 and 5 (above), the terms of ss 9 and 10 are implied only into contracts for
hiring entered into in the course of a business. Thus, if there is a hiring for value with a
private owner, or a mere friendly lending without consideration, s 9 of the Act would not
apply. Incorrect and express statements by a private owner would be actionable in the com-
mon law of contract provided that there was consideration. In a friendly lending there could
be an action for negligent misstatements made by the owner about the goods if they cause
damage (see Hedley Byrne v Heller & Partners (1963)).
..
EL_C14.qxd 3/26/07 1:09 PM Page 351
Exclusion clauses – supply of goods

Section 11 of the 1982 Act applies the provisions of the Unfair Contract Terms Act 1977 to
exclusion clauses in work and materials, barter and exchange, and hiring contracts. The effect
of this is set out below.
(a) Consumer transactions. In a contract covered by Part I of the Act, the rights given by
the implied terms under ss 3–5 and ss 8–10 of the 1982 Act cannot be excluded or restricted.
The circumstances in which a person deals as a consumer are described in Chapter 15.
( b) Business contracts. In these circumstances the supplier can only rely on an exclusion
clause if it is reasonable. However, the obligations relating to title in s 2 of the 1982 Act can-
not be excluded in a business dealing relating to work and materials and barter and exchange
any more than they can in a consumer dealing (see Unfair Contract Terms Act 1977, s 7, as
amended by s 17(2) of the 1982 Act).
However, the term in s 7 relating to the right of possession in the case of a hiring can be
excluded in a consumer or business contract if reasonable.
The supply of services

The main areas of complaint in regard to services have been the poor quality of service, e.g. the 14
careless servicing of cars; slowness in completing work, where complaints have ranged over a
wide area from, for example, building contractors to solicitors; the cost of the work, i.e. over-
charging. Part II of the Act is concerned to deal with these matters.
The contracts covered

Under s 12(1) a contract for the supply of a service means a contract under which a person
agrees to carry out a service. A contract of service (i.e. an employment contract) or apprentice-
ship is not included, but apart from this no attempt is made to define the word ‘service’.
However, the services provided by the professions, e.g. accountants, architects, solicitors, and
surveyors, are included.
Section 12(4) gives the Secretary of State for Trade and Industry power to exempt certain
services from the provisions of Part II. Of importance here is the Supply of Services (Exclusion
of Implied Terms) Order 1982 (SI 1982/1771) which exempts services rendered by a director
to his company, thus retaining existing common-law liability in this area. This is largely
because more time is needed to consult the relevant interests and decide what sort of liability
there should be in the areas referred to.
Part II applies only to contracts. If there is no contract there cannot be implied terms. This
will exclude work done free as a friendly gesture by a friend or neighbour. If, however, injury
is caused to a person who is not in a contractual relationship with a supplier as a result of the
negligence of the supplier, there may be an action in the tort of negligence at common law
(see Chapter 21).
Duty of care and skill

This duty applies to contracts which are purely for service, e.g. advice from an accountant
or solicitor, and also to the service element of a contract for work and materials. Section 13
..
EL_C14.qxd 3/26/07 1:09 PM Page 352
provides that where the supplier of a service is acting in the course of a business there is an
implied term that the supplier will carry out that service with reasonable skill and care. This
means that the service must be performed with the care and skill of a reasonably competent
member of the supplier’s trade or profession. In other words, the test is objective, not subjec-
tive. Thus an incompetent supplier may be liable even though he has done his best. A private
supplier of a service, e.g. a moonlighter, will not have this duty.
There is no reference to conditions and warranties in regard to this implied term.
Generally, therefore, the action for breach of the term will be damages. In a serious case
repudiation of the contract may be possible. This is rather like the intermediate term concept
discussed at p 334.
Cases such as Woodman v Photo Trade Processing Ltd and Waldron-Kelly v British Railways
Board, which were brought on the basis of the common-law tort of negligence, would now be
brought under the 1982 Act (see further Chapter 15).
Time for performance

Section 14 provides that a supplier who acts in the course of a business will carry out the
service within a reasonable time. This term is only implied where the time for perform-
ance is not fixed by the contract, but left to be fixed in a manner agreed by the contract,
or determined by the dealings of the parties. Section 14 states that what is a reasonable
time is a question of fact. A claimant can claim damages for unreasonable delay. Of course,
if a time for performance is fixed by the contract, it must be performed at that time and the
question of reasonableness does not arise. Time is of the essence in commercial contracts
unless the parties expressly provide otherwise or there is a waiver (see further Chap-
ter 17).
The charges made for the service

Under s 15 the customer’s obligation is to pay ‘a reasonable charge’ which is, again, a matter
of fact. This obligation is not implied where the charge for the service is determined by the
contract, left to be determined in a manner agreed by the contract, or determined by the
dealings of the parties. The section in essence enacts the common-law rule of quantum meruit
(see Chapter 18); it protects both the supplier and the customer, and applies to a supply in
the course of a business and to a supply by a moonlighter.
Exclusion clauses – supply of services

Section 16 of the 1982 Act applies the provisions of the Unfair Contract Terms Act 1977 to
exclusion clauses in regard to services. Section 2 of the 1977 Act is concerned with liability
for negligence. There can be no exclusion of liability if death or personal injury is caused. In
other cases an exclusion clause may apply if reasonable.
Section 3 of the 1977 Act is concerned with liability for breach of contract. Broadly speak-
ing, there can be no exclusion of liability for breach of contract, or a different performance or
non-performance, unless reasonable (see further Chapter 15). The terms implied by the 1982
Act cannot be excluded in a consumer transaction. They can in a non-consumer deal if
reasonable. The criteria relating to bargaining power and so on apply only to the exclusion
of implied terms in a non-consumer transaction relating to goods, but they will no doubt
be applied by analogy to contracts under the 1982 Act.
..
EL_C14.qxd 3/26/07 1:09 PM Page 353
The Sale and Supply of Goods to Consumers Regulations

This statutory instrument (SI 2002/3045) came into force on 31 March 2003. It implements
the 1999 Directive of the EU entitled Directive on the Sale of Consumer Goods and
Associated Guarantees. Now that we have completed a study of other UK sale and supply of
goods legislation we are in a position to deal with these regulations that give new rights to
consumers buying and hiring goods.
A consumer is defined as ‘a natural person acting for purposes outside his trade or
profession’.
Current law
The implied conditions of other existing legislation that goods are of satisfactory quality and
fit for the purpose continue.
The regulations
These can be dealt with under the following heads.
Conformity to the contract

This provision states that where goods sold or hired to a consumer do not conform to the
contract of sale or hiring at any time within the period of six months beginning with the
14
date on which the goods were delivered to the buyer they must be taken not to have so
conformed at that date. This is achieved by inserting a new s 48A into the Sale of Goods
Act 1979. Similar provisions are inserted into legislation relating to hire and hire-purchase
but the main treatment is in terms of a sale.
The provision in s 48A does not apply if:
n it is established that the goods did so conform on that date; or

n if its application is incompatible with the nature of the goods themselves.
Thus grocery retailers may escape in many ways since for example a dozen eggs will
inevitably prove to be defective after six months. The section will not therefore apply.
The effect of the section is that for the first six months after purchase/delivery the burden
of proof when reporting faulty goods will be on the seller and thus reversed in the buyer’s
favour.
If the seller can show that the goods were perfect when delivered and so satisfies the
burden of proof and the buyer cannot prove they were defective the buyer could resort to the
Sale of Goods Act 1979, for example, by alleging that if the goods were perfect at sale/delivery
then they should have lasted longer. This is a possible head of claim under the 1979 Act.
After the first six months then only the 1979 Act claims are available.
Repair or replacement
The regulations insert a new s 48B into the 1979 Act. It applies within the first six months’
period and if within that period a defect is discovered the seller must, at his own expense,
repair or replace the goods at the request of the consumer within a reasonable period of time
and without causing any significant inconvenience to the consumer. The seller is not obliged
to repair or replace the product if it can demonstrate that replacement or repair is impossible
..
EL_C14.qxd 3/26/07 1:09 PM Page 354
or that it would be disproportionate to do so. Determining whether such repair or replace-

ment would be disproportionate will rest mainly on whether it would impose unreasonable
costs upon the seller in comparison to those arising from any other remedy that might be
available to the buyer. The courts will have to work these provisions out through case law but
it can be seen straightaway that it is often not worthwhile to repair the cheaper goods so that
a replacement would satisfy the requirements on the seller even if the only such products the
seller has left are green and the consumer wanted and originally had red!
The court has power to order specific performance in respect of repair or replacement but
also has a discretion to order an alternative remedy e.g. damages if that is deemed reasonable
in the circumstances.
Reduction of purchase price or rescission

If a problem arises in a consumer contract within the first six months then s 48C (inserted by
the regulations) provides that the buyer may require the seller to reduce the purchase price of
the goods by an appropriate amount or in the alternative rescind the contract. This remedy is
subject to the condition that the buyer has required the seller to repair or replace the goods
but the seller has failed to do so within a reasonable time and without significant incon-
venience to the buyer. Furthermore, once the buyer has embarked upon price reduction or
rescission he cannot ask also for repair or replacement.
If the buyer rescinds the contract any reimbursement to the buyer may be reduced on
account of any use which the buyer has had from the goods since delivery.
Consumer guarantees
Suppliers will be affected by the concept under the regulations of consumer guarantees. Sellers
and suppliers are not bound to give guarantees but if any undertaking is given to a consumer
to repair the goods or refund their cost if they fail to meet the specification in the guarantee
or in any relevant advertising it will come within the consumer guarantee provision. The
guarantee does not have to be given by the supplier and could, e.g. be given by the manufac-
turer or a distributor or by a salesperson. It takes effect on delivery as a contractual obligation
on the organisation giving the guarantee. The consumer can require that the guarantee be
put into writing in intelligible language and if the guarantee is given by the manufacturer
the request can be made to the supplier. Where the goods are offered within the UK the guar-
antor must ensure that it is given in English.
Amendment of Unfair Contract Terms Act 1977

If an accountant bought a commercial cooker for his private use the protection of the 1977
Act in terms of reasonable exclusion clauses did not apply because the goods were not
ordinarily supplied for private use or consumption. The Act now applies in this situation.
Individuals who buy new (not secondhand) goods at auction or by competitive tender are
also now treated as consumers for the purpose of the Act of 1977.
Passing of risk
Relevant legislation is now amended so that when a buyer of goods deals as a consumer the
goods will remain at the seller’s risk until they are delivered to the consumer. Furthermore,
the parties cannot effectively change this rule even in cases where title may have passed
before delivery under contractual arrangements.
..
EL_C14.qxd 3/26/07 1:09 PM Page 355
Application of the regulations

Equivalent changes are made to the Supply of Goods and Services Act 1982 in regard to the
hiring of goods and in the Supply of Goods (Implied Terms) Act 1973 in regard to goods
taken on hire-purchase.
14
..
EL_C15.qxd 3/26/07 1:10 PM Page 356
15
EXCLUSION CLAUSES
AND OTHER UNFAIR TERMS
In this chapter we shall look at the rules which decide whether an exclusion clause which
purports to exclude liability for breach of contract and other civil damage is valid.
Exclusion clauses – the issue of communication
A contract may contain express terms under which one or both of the parties excludes or
limits liability for breach of contract or negligence. Although such express terms are per-
missible, both the courts and Parliament have been reluctant to allow exclusion clauses to
operate successfully where they have been imposed on a weaker party, such as an ordinary
consumer, by a stronger party, such as a person or corporation in business to supply goods
or services.
The judges have protected and continue to protect consumers of goods and services against
the effect of exclusion clauses in two main ways, i.e. by deciding that the exclusion clause
never became part of the contract, and by construing (or interpreting) the contract in such a
way as to prevent the application of the clause.
It is still important to consider the judicial contribution because even though an exclusion
clause can now, under the Unfair Contract Terms Act 1977 (see below), be regarded as not
applying if it is unreasonable, there is no need to consider the matter of unreasonableness
if the clause has not been communicated or does not apply under the rules of construction
(see below). As important is the fact that even if an exclusion clause is acceptable as reason-
able, it will not apply if it has not been communicated or cannot survive the judicial rules of
construction.
Was the clause part of the contract?

The court will require the person wishing to rely on an exclusion clause to show that the
other party agreed to it at or before the time when the contract was made, otherwise it will
not form part of the agreement. In this connection:
(a) Where a contract is made by signing a written document the signer will in general be
bound by everything which the document contains, even if he has not read it, unless the
signature was induced by misrepresentation as to the effect of the document. An exception is
the rule of non est factum, provided the signer is not negligent.
..
EL_C15.qxd 3/26/07 1:10 PM Page 357
EXCLUSION CLAUSES AND OTHER UNFAIR TERMS 357
L’Estrange Ltd v Graucob (F), 1934 – Where the document containing the clause
is signed (175)
Curtis v Chemical Cleaning and Dyeing Co, 1951 – Where the claimant was misled as
to the extent of the clause (176)
(b) Where the terms are contained in an unsigned document, the person seeking to rely
on an exclusion clause must show that the document was an integral part of the contract
which could be expected to contain terms. However, if the document is contractual in the
sense outlined above, the clause will apply even though the claimant did not actually know
about the exclusion clause in the sense that he had not read it. Communication may be con-
structive so long as the document adequately draws the attention of a reasonable person to
the existence of terms and conditions.
Thompson v LMS Railway, 1930 – A constructive communication (177)

Chapelton v Barry UDC, 1940 – Where the document is not contractual (178)
This rule of constructive communication will not necessarily be applied if the term in the
contract is particularly burdensome for the other party. In such a case the law may require
that the burdensome clause is actually brought to the attention of the other party. This
results from the decision of the Court of Appeal in Interfoto Picture Library Ltd v Stiletto Visual
Programmes Ltd [1988] 1 All ER 348. In that case Interfoto sent some transparencies to Stiletto
for it to make a selection. The delivery note, which is a contractual document, contained a
clause that if the transparencies were not returned within 14 days, Stiletto would pay £5 per
day for each transparency retained after that. Stiletto delayed returning the transparencies for
15
three weeks and ran up a bill of some £3,783. When Stiletto was sued for this sum the court
said that it could not be recovered by Interfoto because the clause was not specifically drawn
to the attention of Stiletto. The court awarded damages of £3.50 per transparency per week
but would not apply the clause.
(c) As regards previous dealings, where the defendant has not actually given the claimant
a copy of conditions or drawn his attention to them when making a particular contract, the
doctrine of constructive notice will not apply, at least in consumer transactions, in order to
enable the defendant to rely on previous communications in previous dealings, unless, per-
haps, the dealings have been frequent. Thus in Hollier v Rambler Motors [1972] 1 All ER 399 it
appeared that the claimant had had his car repaired five times in five years (i.e. infrequently)
by the defendants and had signed a form containing a clause stating ‘the company is not
responsible for damage caused by fire to customers’ cars on the premises’. On the occasion
in question the claimant was not required to sign a form when leaving his car for repair. In
the event the car was damaged by fire caused by the defendants’ negligence. In an action by
the claimant the defendants pleaded the clause. It was held by the Court of Appeal that the
claimant succeeded and that the clause did not apply. Previous dealings were not incor-
porated and in any case as a matter of construction the wording was not sufficiently plain to
exclude negligence. However, where the parties are, for example, large corporations, terms
used in previous dealings between the parties themselves or in the trade generally may be
incorporated.
Thus in British Crane Hire Corporation Ltd v Ipswich Plant Hire Ltd [1974] 1 All ER 1059 the
defendants hired a crane from the claimants who were the owners. The agreement was an
oral one, though after the contract was made the defendants received a printed form from
the claimants containing conditions. One of these was that the hirer of the crane was liable
..
EL_C15.qxd 3/26/07 1:10 PM Page 358
to indemnify the owner against all expenses in connection with its use. Before the defendants
signed the form the crane sank into marshy ground, though this was not the fault of the
defendants. The claimants were put to some cost in repairing the crane and now sued the
defendants for an indemnity under the contract. The defendants argued that the indemnity
had not been incorporated into the oral contract of hire. It was held that the bargaining
power of the defendants was equal to that of the claimants and the defendants knew that
printed conditions in similar terms to those of the claimants were in common use in the business.
The conditions had therefore been incorporated into the oral contract on the basis of the
common understanding of the parties and the claimants’ action for an indemnity succeeded.
(d) Any attempt to introduce an exclusion clause after the contract has been made is
ineffective because the consideration for the clause is then past.
(e) An exclusion clause may be made ineffective by an inconsistent oral promise.
Olley v Marlborough Court Ltd, 1949 – Belated notice of a exclusion clause (179)
J Evans & Son (Portsmouth) Ltd v Andrea Merzario Ltd, 1976 – An inconsistent
promise (180)
(f) At common law the rule of privity of contract may also prevent the application of
an exclusion clause. Thus, if A, the owner of a road haulage company, excludes his own and
his employees’ liability for damage to the goods of his business customers by a properly
communicated clause, an employee who causes damage to the goods will be liable under
common law, although his employer will not be, provided the clause is reasonable under the
Unfair Contract Terms Act 1977, because the employee has not supplied consideraton for
the contract which is between his employer and the customers.
Reference should, however, be made to the case of NZ Shipping v A M Satterthwaite (see
below) where by application of the common law rules relating to acceptance in unilateral
contracts and the performance of existing contractual duties owed to a third party the court
was able to hold that a stevedore could take the benefit of an exclusion clause in the shipping
company’s contract of carriage.
The New Zealand Shipping Co Ltd v A M Satterthwaite & Co Ltd, 1974 – An

exclusion clause avoids privity rule at common law (181)
It has already been noted in Chapter 10 that exclusions and defences available to a
carrier of goods can under the Contracts (Rights of Third Parties) Act 1999 be extended to
employees, agents and independent contractors that will be effective without the ingenious
application of common law rules seen in the New Zealand Shipping case, though the common
law rules will be helpful to such persons where the main contract does not extend exclusion
rights to them and is, therefore, construed as not applying to them even by implication.
The position of the third party under the 1999 Act

The Contracts (Rights of Third Parties) Act 1999, s 7(2) may apply. A may enter into a contract
with a builder to build a house for his daughter Jane to live in. A may name Jane as having
third-party rights under the contract. Let us suppose that the contract contains an exclusion
clause exempting the builder from liability caused by his negligent building. There is a
provision in s 7(2) of the 1999 Act that can best be understood by an example. The builder’s
negligence results in death or personal injury to A or his daughter Jane. Any exclusion clause
..
EL_C15.qxd 3/26/07 1:10 PM Page 359
inserted by the builder in his contract with A is void and of no effect in so far as it tries to
exclude liability for death or personal injury. The 1999 Act leaves this untouched. The 1977
Act outlaws such clauses. However, if by reason of negligence by the builder a wall collapses
and A’s car is damaged he can sue the builder successfully unless the builder can show that
the exclusion clause is reasonable. However, because of s 7(2) of the 1999 Act, if it is Jane’s
car which is damaged the clause, even if unreasonable, will be effective to exclude the
builder’s liability to her.
There are those who think that unreasonable exclusion clauses should be void even in
regard to Jane’s (the third-party’s) loss but the 1999 Act does not reflect this view.
Construction of exclusion clauses

Rules of construction (i.e. interpretation) of contract may, when applied, prevent the applica-
tion of an exclusion clause. The major rules of construction are as follows.
The contra proferentem rule

Under this rule, if there is any ambiguity or room for doubt as to the meaning of an exclu-
sion clause, the courts will construe it in a way unfavourable to the person who put it into
the contract. An example of the application of this rule is to be seen in Hollier v Rambler
Motors because the Court of Appeal, having decided that previous dealings were not incor-
porated, went on to use the rule by saying that the wording in the form was not sufficiently
plain to exclude negligence. That ambiguity had therefore to be construed against the defend- 15
ants who put it into the contract. Those who wish to exclude liability for negligence must use
clear words, said the House of Lords in Smith v South Wales Switchgear [1978] 1 All ER 18.
Alexander v Railway Executive, 1951 – The contra proferentem rule (182)
The repugnancy rule

This rule says in effect that the exemption clause is in direct contradiction to the main purpose
of the contract and is therefore repugnant to it. Where such repugnancy exists the exemption
clause can be struck out. Thus, if A makes a contract to supply oranges to B but includes a
clause which allows him to supply any sort of fruit, the clause is repugnant to the main pur-
pose of the contract and could be struck out. Thus, A would be liable in breach of contract if
he supplied B with apples and could not rely on the clause to excuse his breach of contract.
The four corners rule

Under this rule exemption clauses only protect a party when he is acting within the four cor-
ners of the contract. Thus he is liable for damage which occurs while he is deviating from the
contract and he would not be protected by the exclusion clause.
Pollock & Co v Macrae, 1922 – Where the clause is repugnant (183)

Thomas National Transport (Melbourne) Pty Ltd v May and Baker (Australia)
Pty Ltd, 1966 – The four corners rule (184)
..
EL_C15.qxd 3/26/07 1:10 PM Page 360
The doctrine of fundamental breach

This doctrine (or rule) was usually invoked where a claimant sought a remedy on a contract
containing exemption clauses which had been adequately communicated. The doctrine said,
in effect, that where one party had fundamentally broken his contract, i.e. done something
fundamentally different from what he had contracted to do, an exclusion clause could not
protect him, and that this was a rule of law and not a rule of construction, so that the court had
no discretion in the matter.
After some years of differing judicial opinion regarding this, the House of Lords eventually
affirmed that there was no rule by which exclusion clauses had become inapplicable to
exclude liability for a fundamental breach of contract. It was in each case a question of con-
struction whether in fact the clause covered the breach which had taken place.
Fundamental breach, which survives as a rule of construction, is only a simple presumption
that exclusion clauses are not intended to apply where there is a very serious breach of contract.
This presumption can be rebutted, as in Photo Production (below) and is not automatically applied.
Photo Production Ltd v Securicor Transport Ltd, 1980 – Fundamental breach:

no automatic application (185)
The approach of Parliament to exclusion clauses

Parliament has tried to prevent the widespread use of exclusion clauses by the passing of
various statutes, the main one being the Unfair Contract Terms Act 1977.
The strongest protection is given by the Act to persons who deal as consumers (C), though
those dealing otherwise than as consumers, e.g. where the goods are bought for use in a busi-
ness, are covered. To be a consumer one must be dealing as a private buyer with a person in
business (B). In addition, as the 1977 Act was originally enacted, the contract had to be for the
supply of goods ordinarily supplied for private use or consumption and not obtained at an
auction or by competitive tender (but see below). Thus a contract between a private buyer and
a private seller is not a consumer deal.
However, in R & B Customs Brokers Co Ltd v United Dominions Trust Ltd [1988] 1 All ER 847
the Court of Appeal decided that when a business buys goods it may still take advantage of
consumer law applying to an ordinary member of the public if the transaction concerned is
not a regular one. The facts of the case were that R & B Customs bought a car for the use of a
director. The contract excluded an implied term under s 14(3) of the Sale of Goods Act 1979
that the goods be fit for the purpose. Such an exclusion does not operate if the sale is between
a person in business and a consumer. It was held that R & B Customs must be treated as a
consumer. The purchase of the car was not a frequent transaction and unless regularity could
be established the transaction could not be regarded as an integral part of the business and
was not therefore in the course of business. (See as a contrast Stevenson v Rogers [1999] 1 All
ER 613 in Chapter 14.)
Changes effected by the Sale and Supply of Goods to

Consumers Regulations
As already noted, if a private person bought a commercial cooker for his or her private use,
the protection of the Unfair Contract Terms Act 1977, in terms that any exclusion clause had
..
EL_C15.qxd 3/26/07 1:10 PM Page 361
to be reasonable or it would not be effective, did not apply because the goods were not ordi-
narily supplied for private use or consumption. The 1977 Act now applies in this situation
and exclusion clauses are ineffective unless reasonable. Individuals who buy new (not second-
hand) goods at auction or by competitive tender are now treated as consumers for the pur-
poses of the 1977 Act.
Clauses rendered ineffective by the Unfair Contract Terms Act

(a) Any exclusion clause contained in a contract or notice by which B tries to exclude or
restrict his liability for death or personal injury resulting from negligence is wholly ineffective
(ss 2 and 5). However, in Thompson v Lohan [1987] 2 All ER 631 A hired plant together with
operatives to B. The contract contained a clause stating that B was liable for the negligence
of the operatives who were A’s employees. This clause was held by the Court of Appeal not to
be contrary to s 2 of the Unfair Contract Terms Act. It was not designed to restrict or exclude
liability to those who might be injured by the negligence of the operatives but merely
decided whether A or B was to bear the liability.
( b) A manufacturer’s guarantee cannot exclude or restrict the manufacturer’s liability for

loss or damage arising from defects in goods if used by a consumer which results from
negligence in manufacture or distribution (s 5). The section is concerned with actions either
in negligence or on the collateral contract (see further Chapter 9) which the guarantee can
create against the manufacturer who is not the seller of the goods to the customer. The sec-
tion is not concerned with a contractual relationship between the seller and the customer 15
which is covered by ss 6 and 7. Thus, a manufacturer’s 12-month guarantee for a vacuum
cleaner which said that the goods would, if defective, be replaced or repaired free of charge
but ended with a phrase such as: ‘This guarantee is in lieu of, and expressly excludes, all
liability to compensate for loss or damage howsoever caused’ would not prevent a claim by
the purchaser against the manufacturer if he/she was electrocuted by the cleaner (see
Donoghue v Stevenson (1932), Chapter 21).
As regards consumer guarantees, the Sale and Supply of Goods to Consumers Regulations
2002 provide that such guarantees whoever gives them in the supply chain take effect on
delivery as a contractual obligation on the part of the organisation giving them and there
would be no need for the consumer to resort to the collateral contract or negligence
approach. The claim would normally be for breach of the contract of guarantee, and exclu-
sions would not apply in a claim on the guarantee.
(c) A clause under which B tries to exclude his liability, whether by guarantee or
otherwise, to C for breach of the implied terms in the Sale of Goods Act 1979 (on a sale)
or the Supply of Goods (Implied Terms) Act 1973 (as amended) (on a hire-purchase
transaction), e.g. that the goods are fit for the purpose or of satisfactory quality, is wholly
ineffective, as is a clause which tries to exclude against the consumer the implied terms in the
Supply of Goods and Services Act 1982 in a contract of pure hiring, e.g. of a car, or a con-
tract for work and materials, as in the repair of a car (Unfair Contract Terms Act 1977, ss 6(2)
and 7(2)).
Section 6 also applies to non-business liability. However, since the implied terms requiring
satisfactory quality and fitness for the purpose do not apply to non-business transactions,
only s 13 of the Sale of Goods Act 1979 (sale by description) can be implied. However, s 13
cannot be excluded in a non-business transaction with a consumer.
..
EL_C15.qxd 3/26/07 1:10 PM Page 362
Exclusion clauses applicable if reasonable
General
(a) Any clause by which B tries to exclude or restrict his liability for loss arising from negli-
gence other than death or personal injury (s 2(2)).
Such a clause may be raised successfully to defeat a claim by a third party who has acquired
rights under the Contracts (Rights of Third Parties) Act 1999 whether the clause is reasonable
or not. Even an unreasonable clause would be effective. The reasonableness test would be
applied in an action between the original promisor and promisee. The relevant provision is
contained in s 7(2) of the 1999 Act.
( b) Any clause by which B tries to exclude or restrict his liability to a non-consumer for
breach of the implied terms in the Sale of Goods Act 1979, the Supply of Goods (Implied
Terms) Act 1973, and the Supply of Goods and Services Act 1982 relating, for example, to
contracts of hiring and work and materials (ss 6(3) and 7(3)).
(c) Any clause by which B tries to exclude his liability for breach of contract if the contract is
with a consumer or, in the case of a non-consumer contract, the agreement is on B’s written
standard terms (s 3(1) and (2)(a)). There is no definition of ‘written standard terms’ in the
1977 Act, but it obviously covers cases in which the seller requires that all (or nearly all) of
his customers purchase goods on the same terms with no variation from one contract to
another. An example is provided by L’Estrange v Graucob (1934). This section applies also
to cases where the clause purports to allow B to render a substantially different performance,
as where a tour operator tries to reserve the right to vary the accommodation or itinerary or
reserves the right to render no performance at all (s 3(2)(b)).
Section 3 of the 1977 Act which applies, as we have seen, between contracting parties
where one ‘deals as a consumer’ to prevent the other from excluding or restricting any liabil-
ity of his or hers for breach of contract extends to contracts of employment said the High Court
in Brigden v American Express Bank Ltd (2000) 631 IRLB 13. Thus a clause in a contract of
employment that excluded or restricted the employer’s liability for wrongful dismissal would
not apply by reason of the 1977 Act.
(d ) As regards indemnity clauses in consumer transactions, B may agree to do work for C

only if C will indemnify B against any liability which B may incur during performance of the
contract, e.g. an injury to X caused by B’s work (s 4). B may, for example, be a builder who
takes an indemnity from C, the owner of a property on which B is to do work in regard to
any injuries which B’s work might cause to third parties. Such an indemnity will be unen-
forceable by B unless reasonable. Such clauses are unlikely to be found reasonable and B will
have to cover himself by insurance. The section does not cover non-consumer situations and
the indemnity found in British Crane Hire would still be enforceable (and see also Thompson v
Lohan (1987)).
Inducement liability
Any clause purporting to exclude liability for misrepresentation applies only if reasonable,
whether the transaction is with a consumer or a non-consumer (Misrepresentation Act 1967,
s 3, as substituted by s 8(1) of the Unfair Contract Terms Act 1977). Thus, an estate agent
would not be able to exclude his liability for falsely representing the state of a house unless
..
EL_C15.qxd 3/26/07 1:10 PM Page 363
the court felt that it was reasonable for the agent to exclude his liability, as it might be if the
property was very old and there had been no survey.
However, the matter of reasonableness is a matter for the court in each case and will depend
upon the circumstances. Thus an estate agent may be allowed to enforce a disclaimer in the
case of a high value property where the client is a more sophisticated person whereas in the
case of a property of less value and a less sophisticated client the court may take the view that
enforcement of a disclaimer by the agent is unreasonable. (Contrast McCullagh v Lane Fox
with Smith v Eric S Bush: Chapter 21.)
It is also worth noting that the Property Misdescriptions Act 1991 makes it a criminal
offence to make a false or misleading statement about property matters in the course of an
estate agency or property development business.
Section 3 also applies to non-business liability. A private seller cannot exclude his liability
for misrepresentation unless he can show that the exclusion clause concerned satisfied the
test of reasonableness.
Walker v Boyle, 1982 – When liability for misrepresentation cannot be

excluded (186)
Reasonableness
The burden of proof

15
The burden of proving that the clause is reasonable lies upon the party claiming that it is –
usually B, the person in business (s 11(5)).
Meaning of reasonableness
Although the matter is basically one for the judge, the following guidelines appear in the
1977 Act.
(a) The matter of reasonableness must be decided on the circumstances as they were when
the contract was made (s 11(1)).
(b) Where a clause limits the amount payable regard must be had to the resources of the
person who included the clause and the extent to which it was possible for him to cover him-
self by insurance (s 11(4)). The object of this rule is to encourage companies to insure against
liability in the sense that failure to do so will go against them if any exclusion clause which
they have is before the court. However, in some cases it may be right to allow limitation of
liability, e.g. in the case of professional persons such as accountants where monetary loss
may be caused to a horrendous amount following negligence and be beyond their power to
insure against.
(c) Where the contract is for the supply of goods, i.e. under a contract of sale, hire-purchase,
hiring, or work and materials, the criteria of reasonableness are laid down by s 11(2) of and
Sch 2 to the 1977 Act. They are:
(i) strength of the bargaining position of the parties. Thus if one party is in a strong posi-
tion and the other in a weaker in terms of bargaining power, the stronger party may not
be allowed to retain an exclusion clause in the contract;
..
EL_C15.qxd 3/26/07 1:10 PM Page 364
(ii) availability of other supplies. Again, if a seller is in a monopolistic position so that it is

not possible for the buyer to find the goods readily elsewhere, the court may decide that
an exclusion clause in the contract of a monopolistic seller shall not apply;
(iii) inducements to agree to the clause. If the goods have been offered for sale at £10 with-
out an exemption clause but at £8 with the inclusion of the clause, the court may see fit
to allow the clause to apply at the lower price because there has been a concession by the
seller in terms of the price;
(iv) buyer’s knowledge of the extent of the clause. If the clause had been pointed out to the
buyer and he is fully aware that it reduces the liability of the seller, this will be relevant
in deciding whether the seller should be allowed to rely on the clause. If a buyer is reason-
ably fully informed and aware of the seller’s intentions as regards exclusion of liability,
the buyer may have to accept the clause;
(v) customs of trade and previous dealings. If, for example, exclusion clauses are usual in the
trade or have been used by the parties in previous dealings, the court may decide that
an exclusion clause should apply. It should be noted that previous dealings do not seem
relevant in consumer transactions, unless quite regular, but they are in this area where
one is considering a non-consumer situation;
(vi) whether the goods have been made, processed or adapted to the order of the buyer.
Obviously if the seller has been required by the buyer to produce goods in a certain way,
then it may well be fair and reasonable for the seller to exclude his liability in respect of
faults arising out of, for example, the buyer’s design which he insisted was used. It would
probably be reasonable to exclude the implied term under the Sale of Goods Act 1979
that the goods were fit for the purpose (see further Chapter 14).
Although the above criteria are, strictly speaking, confined to exclusion of statutory
implied terms in, for example, the Sale of Goods Act 1979, they are being applied in other
situations. For example, Judge Clarke in the Woodman case (see below) felt it was right to use
them where what was at issue was a negligent service. The Supply of Goods and Services Act
1982 has not changed the law regarding the exclusion of liability of a supplier of services.
Services are not specifically mentioned in the 1977 Act but they fall within the ambit of ss 2
and 3 which deal with negligence and breach of contract respectively.
Mitchell (George) (Chesterhall) Ltd v Finney Lock Seeds Ltd, 1983 –

Reasonableness: the tests to be applied (187)
Reasonableness – other case law

The following is a selection of other case law on the 1977 Act to illustrate its application.
Section 2(2) came up for consideration in two county court cases which were brought
under the Act. In Woodman v Photo Trade Processing Ltd, heard in the Exeter County Court in
May 1981, Mr Woodman took to the Exeter branch of Dixons Photographic for processing
a film which carried pictures of a friend’s wedding. The film was of special value because
Mr Woodman had been the only photographer at the wedding, and he had said he would
give the pictures as a wedding present. Unfortunately, the film was lost and when Dixons
were sued they relied on an exclusion clause which, it appeared, was standard practice
throughout the trade and had been communicated. The clause read as follows: ‘All photo-
graphic materials are accepted on the basis that their value does not exceed the loss of the
material itself. Responsibility is limited to the replacement of film. No liability will be
accepted consequently or otherwise, however caused.’ His Honour Judge Clarke found in the
county court that the customer had no real alternative but to entrust his film to a firm that
..
EL_C15.qxd 3/26/07 1:10 PM Page 365
would use such an exclusion clause and that, furthermore, Dixons could have foreseen that
the film might be irreplaceable and although they could argue that the exclusion clause
enabled them to operate a cheap mass-production technique, it could not be regarded as
reasonable that all persons, regardless of the value of their film, should be required to take
their chance of the system losing them. The judge therefore granted compensation of £75 to
Mr Woodman and held that the exclusion clause was unreasonable.
In Waldron-Kelly v British Railways Board, which was heard in the Stockport County Court
in 1981, the claimant delivered a suitcase to Stockport railway station so that it could be
taken to Haverfordwest station. The contract of carriage was subject to the British Railways
Board general conditions ‘at owner’s risk’ for a price of £6. A clause exempted the Board from
any loss, except that if a case disappeared then the Board’s liability was to be assessed by ref-
erence to the weight of the goods, which in this case was £27 and not to their value, which in
this case was £320. The suitcase was lost whilst it was in the control of British Rail. In the
county court Judge Brown held that the claimant succeeded in his contention that the exclu-
sion clause was unreasonable and therefore of no effect. The judge held that in the case of
non-delivery of goods the burden of proof to show what had happened to the goods was on
the bailee. British Rail had failed to show that the loss was not its fault, and in any case the
fault and loss were not covered by the exclusion clause because it did not satisfy the test of
reasonableness.
Further, in Stag Line Ltd v Tyne Ship Repair Group Ltd [1984] 2 Lloyd’s Rep 211 Staughton, J,
in finding that exclusion clauses inserted into the contract by the defendants were not fair
and reasonable, said:
The courts would be slow to find clauses in commercial contracts made between parties of
equal bargaining power to be unfair or unreasonable, but a provision in a contract, which
deprived a ship owner of any remedy for breach of contract or contractual negligence
15
unless the vessel were returned to the repairer’s yard for the defect to be remedied would be
unfair and unreasonable because it would be capricious; the effectiveness of the remedy
would depend upon where the ship was when the casualty occurred and whether it would
be practical or economic to return the vessel to the defendants’ yard.
Also in Rees-Hough Ltd v Redland Reinforced Plastics Ltd [1984] Construction Industry Law
Letters 84, His Honour Judge Newey QC decided that it was not fair and reasonable for the
defendants to rely on an exclusion clause in their standard terms and conditions of sale. They
had sold pipes to the claimants which were not fit for the purpose for which the defendants
knew they were required, nor were they of merchantable (now satisfactory) quality under the
Sale of Goods Act 1979 (see further Chapter 14) and the clause excluded liability for this.
Clearly, then, it is difficult to apply exclusion clauses which try to prevent liability for supply-
ing defective goods.
Where there is no contract, as in the Hedley Byrne situation where a bank used a ‘without
responsibility’ disclaimer, s 2(2) of the Act applies the ‘reasonable’ test to the disclaimer (see
further Chapter 21).
Provisions against evasion of liability
General
If an attempt is made to exclude or restrict liability in contract X by a clause in a secondary
contract Y, then the clause in Y is ineffective (s 10). For example, C buys a television set from
..
EL_C15.qxd 3/26/07 1:10 PM Page 366
B. There is an associated maintenance contract. The sale of a television would be within s 6 of

the 1977 Act and so there could be no exclusion of B’s implied obligations. Any attempt to
exclude or restrict these obligations in the maintenance contract would also fail. If the trans-
action was a non-consumer one the ‘reasonable’ test would have to be applied.
Nor can the Act be excluded by a clause which states that the contract is to be governed by
the law of another country which does not outlaw exclusion clauses, at least if it is part of an
evasion scheme, or if the contract is with a United Kingdom consumer and the main steps in
the making of the contract took place in the UK (s 27).
The Act does not apply to insurance contracts, nor to contracts for the transfer of an inter-
est in land (s 1(2) and Sch 1, para 1(a) and (b)). House purchase is therefore excluded though
inducement liability cannot be excluded unless reasonable (see above). Nor does it apply to
certain contracts involving the supply of goods on an international basis because these are
covered by conventions. Furthermore, it should be noted that a written arbitration agreement
will not be treated as excluding or restricting liability for the purposes of the 1977 Act and
such an agreement is valid (s 13(2)).
Office of Fair Trading and the Enterprise Act 2002

The Office of Fair Trading is empowered to deal with infringements (i.e. conduct) that harms
the collective interests of consumers (ss 211 and 213, EA 2002). In addition to its enforcement
powers, s 7 of the EA 2002 gives the OFT the function of making proposals to any Minister of
the Crown on amongst other things proposed changes in the law. It was under a similar pro-
vision in earlier legislation that the Consumer Transactions (Restrictions on Statements)
Order 1976 (SI 1976/1813) as amended by SI 1978/127 was passed to make it a criminal
offence to sell or supply goods and purport that the implied terms in sale of goods and hire-
purchase legislation can be excluded in a consumer sale since this might suggest to the cus-
tomer that he has no rights so that he will not bother to try to enforce them.
Unfair contract terms regulations

The Unfair Terms in Consumer Contracts Regulations 1999 (SI 1999/2083) now implement
the EC Directive on Unfair Terms in Consumer Contracts (93/13/EEC).
Terms covered (reg 3)

The Regulations apply to any term in a contract between a seller or supplier who is acting for
purposes relating to his business and a consumer, i.e. a natural person (not a company) who
is acting for purposes outside of business where the term has not been individually negoti-
ated. Although the Regulations apply to oral contracts, it is businesses which use pre-printed
contract terms, the substance of which cannot be influenced by the consumer, which are
most affected by the Regulations.
No assessment is made of the fairness of terms which identify the goods or services to be
supplied or the price or remuneration involved, provided such terms are in plain intelligible
language. The fact that some terms of a contract have been negotiated will not prevent the
contract being unfair if on an overall assessment it is found to be a pre-formulated standard
contract. The seller or supplier must prove that a term in dispute was individually negotiated.
Under Sch 1 certain contracts and their terms are excluded from the scope of the
Regulations, e.g. employment contracts and contracts relating to the incorporation and
..
EL_C15.qxd 3/26/07 1:10 PM Page 367
organisation of companies and partnerships. In addition, a contract that complies with other
relevant UK legislation, e.g. the Package Travel Regulations will not be further tested under
the Unfair Terms Regulations. Sales by auction are not excluded.
Unfair terms (reg 4)

An unfair term is any term which, contrary to the requirement of good faith, causes a
significant imbalance in the rights and obligations of the parties under the contract, to the
detriment of the consumer. The concept of good faith is thus introduced more widely into
English law, having really only applied before to the disclosure requirement in a contract of
insurance, which is a contract of utmost good faith.
Schedule 2 sets out matters which go to deciding whether the contract meets the require-
ment of good faith. These are:
n the strength of the bargaining positions of the parties;

n whether the consumer had an inducement to agree to the term, e.g. where the goods were
cheaper if the term was included, it might survive;
n whether the goods or services were sold or supplied to the special order of the consumer,
e.g. where goods were made to a consumer’s design or adapted to the consumer’s require-
ments, it might be fair to include a term relating to the possible unfitness of the goods for
the intended purpose;
n the extent to which the seller or supplier has dealt fairly and equitably with the consumer.
Schedule 3 gives an indicative and non-exhaustive list of terms which may be regarded as
unfair. This does not mean that they are automatically unfair. There are 17 examples includ-
ing clauses: 15
n excluding or limiting the liability of a seller or supplier in the event of the death or per-
sonal injury of or to a consumer resulting from an act or omission of that seller or supplier;
n requiring any consumer who fails to meet his obligations to pay a disproportionately high
sum in compensation. This could include, e.g., a non-refundable deposit;
n enabling the seller or supplier to alter the contract unilaterally;
n limiting the consumer’s rights in the event of total or partial non-performance by the
seller or supplier;
and so on.
It is worth noting here the somewhat unfortunate overlap between the 1999 Regulations
and the Unfair Contract Terms Act 1977. The first example in the above list which is ‘unfair’
under the Regulations is actually totally barred by the 1977 Act in s 2(1). The other examples
given in Sch 3 would probably be regarded as inapplicable because they do not satisfy the
‘reasonableness’ test of the 1977 Act. The government did not feel able to align the ‘reason-
ableness’ test and the ‘fairness’ test but did announce in the Final Consultation Document in
September 1994 that the Regulations would not limit the 1977 Act, so we can take it that our
first example is totally outlawed so that there is no need to apply the ‘fairness’ test.
There are differences between the two pieces of legislation. The Act applies to exclusion
clauses in consumer contracts but can extend to business contracts, negotiated contracts and
exclusion notices. The Regulations apply only to consumer contracts where the terms were
not individually negotiated and in that sense are narrower but, since they are not limited to
exclusion clauses, their effect may be much wider. Regulation 4 also states that an assessment
of the unfair nature of a term should take into account: (a) the nature of the goods or services
for which the contract was concluded; (b) the circumstances attending the conclusion of the
contract; and (c) the other terms of the contract or of another contract on which it is dependent.
..
EL_C15.qxd 3/26/07 1:10 PM Page 368
Consequences of inclusion of unfair terms (reg 5)

An unfair term is not binding on the consumer but the contract will continue to bind the
parties if it is viable without the unfair term.
Construction of written contracts (reg 6)

Standard form contracts offered to consumers must be expressed in plain intelligible lan-
guage. If there is any doubt about the meaning of a term the interpretation most favourable
to the consumer shall prevail. This rule of construction applies only if the term under review
is regarded as unfair. It does not apply to other terms not so regarded.
Enforcement by the Office of Fair Trading (OFT)

The Regulations and the Enterprise Act 2002 impose on the OFT a duty to consider
complaints that contracts which have been drawn up for general use are unfair unless the
complaint appears to be vexatious or frivolous. The OFT may apply to the court for an
enforcement order against persons who appear to be recommending or using unfair terms in
contracts with consumers. The OFT may also arrange for the dissemination of information
and advice concerning the operation of the Regulations.
The Director-General of Fair Trading (see now Office of Fair Trading) achieved a substantial
victory for borrowers in the Court of Appeal where the court gave the first authoritative guid-
ance on the regulations (see Director-General of Fair Trading v First National Bank plc (2000) The
Times, 14 March where the court ruled in favour of the Office of Fair Trading which had
taken exception to a provision in a lending contract, apparently common to most banks in
the UK, under which the lender was entitled to contractual interest on outstanding capital
even after obtaining a judgment against the defaulting debtor until payment, which goes
against the ‘no interest’ protection normally applied by court orders in this type of case, i.e.
no interest accrues on the debt after judgment. An injunction (now an enforcement order) to
stop the practice was granted against the bank.
Wider enforcement
The Regulations and Enterprise Act 2002 allow specified bodies referred to as ‘qualifying
bodies’ or enforcers to consider complaints and apply for enforcement orders to restrain the
use of unfair terms. The qualifying bodies include for example the various industry regulators
and the Consumers’ Association.
Terms affected
Examples are provided by an Office of Fair Trading Case Report Bulletin, as follows:
n a mobile phone company that required the consumer to pay for call charges even after giving
the supplier notification of the loss/theft of the phone – changed so that call charges only
payable up to the time of notification;
n airline recruitment and training company that gave itself the right to alter course venues,
dates and times – changed to allow a full refund if changes not suitable;
n a package holiday business that allowed retention of prepayments on a sliding scale to 100
per cent loss of deposit on cancellation two weeks before departure – changed so that scale
taper lengthened with full loss of deposit only in final week;
n a property letting company that had a financial penalty of £5 per day when payment was in
arrears – this was withdrawn altogether.
..
EL_C15.qxd 3/26/07 1:10 PM Page 369
Reform
The Law Commission has published proposals for a reform of the law relating to unfair con-
tract terms. The intention is to replace the current legislation with new legislation extending
the protection of the law to businesses particularly small and medium-sized enterprises
including companies.
Organisations selling online need to take into account the provisions of the law relating to
unfair terms in the same way as other traders. The relevant legislation as described in this
chapter applies.
15
..
EL_C16.qxd 3/26/07 1:01 PM Page 370
16
ILLEGALITY, PUBLIC POLICY
AND COMPETITION LAW
In this chapter we are concerned to describe the effect of illegality and public policy on the
freedom of contract. The more commercial aspects of restraint of trade and restrictive prac-
tices are treated in greater depth as is competition law.
Introduction
Freedom of contract must always be subject to overriding considerations of public policy.
Public policy has been ascertained as follows:
(a) At common law by the judiciary. At one time the judiciary had wide powers of
discretion in the matter of creating new categories of public policy but this view is now
unacceptable. In Fender v Mildmay [1937] 3 All ER 402 the House of Lords declared against
the extension of the heads of public policy, at least by the judiciary. However, up to then the
judiciary had created a number of categories of public policy. These fell into two areas as
follows:
(i) Illegal contracts. These involve some degree of moral wrong and contracts to commit
crimes or to defraud the Revenue fall into this category.
(ii) Void contracts. In these cases there is not in any strict sense blameworthy conduct; the
contracts are rendered void because if enforced by the courts they could produce unsatis-
factory results on society. Examples are contracts in restraint of trade, e.g. an agreement
under which an employee covenants with his employer that on the termination of his
contract he will not work for a rival firm or start a competing business, and contracts
prejudicial to marriage, e.g. a contract under which a person promises not to marry at all.
( b) By Parliament. Parliament expresses its view as to what is public policy by Acts of

Parliament and rules and orders made by Ministers under Acts of Parliament.
The two main areas requiring consideration here are:
(i) Wagering contracts, which will be dealt with later; and

(ii) The prevention of restrictive practices. Here the Competition Act 1998 applies and prohibits,
e.g., resale price agreements between suppliers of goods and retailers who agree not to sell
below the minimum resale price agreed by the suppliers. This is covered by Prohibition 1
of the 1998 Act and any agreement that infringes the Chapter 1 prohibition is void and
unenforceable.
..
EL_C16.qxd 3/26/07 1:01 PM Page 371
ILLEGALITY, PUBLIC POLICY AND COMPETITION LAW 371
The European Court of Justice confirmed in Courage v Crehan [2002] QB 507 that EU law
required national courts to award relief, including damages, to any person suffering as a result
of infringements of EU competition law. Under s 60(6)(b) of the Competition Act 1998 courts
are required to follow this ruling when deciding what remedies to award in regard to infringe-
ments of UK competition law. Therefore, damages and injunctions should now be available
to those who have suffered as a result of infringements of the UK Competition Act 1998. The
provisions of the Competition Act 1998 and the Enterprise Act 2002, including third-party
rights, are considered in more depth later in this chapter.
Crehan in the Lords

As a result of the ECJ ruling the UK Court of Appeal later awarded Bernie Crehan damages of
£131,336, having decided that a lease agreement between a brewer and a publican Mr Crehan
which tied him to buying beer at more expensive prices than other local pubs contravened
Art 81. The Court of Appeal followed as a precedent a European case involving Whitbread
which had a beer-tie with its tenant.
The brewer appealed to the House of Lords against the ruling of the Court of Appeal (see
Inntrepeneur Pub Company v Crehan [2006] 4 All ER 465). The House of Lords ruled that beer-
ties did not infringe Art 81 and that Mr Crehan was not entitled to any damages. The Lords’
judgment shows that an English court is entitled to consider all evidence before it and does
not have to follow an ECJ decision which presented similar facts but in which Mr Crehan was
not involved. However, the House of Lords did state, perhaps rather helpfully, that a party to
an agreement that does infringe Art 81 has a right to sue for damages.
Public policy – the contribution of the judiciary: 16

illegal contracts
Illegal contracts
These contracts involve some form of moral weakness which society in general seeks to
control. They are as follows:
(a) Contracts to commit crimes or civil wrongs. Thus a contract between an agent and his
client whereby the agent was to receive a double commission would be illegal because it has
as its object the commission of a fraud on the principal, since if the agent takes a double
commission there is a conflict of interest.
( b) Contracts involving sexual immorality. Agreements for future illicit cohabitation are
void, because the promise of payment might encourage immoral conduct in a person who
otherwise would not have participated. However, a contract under which a person promises
to pay another money in return for past illicit cohabitation is not illegal because it does not
necessarily encourage future immorality between the parties. Such a contract will, however,
be unenforceable unless made by deed because it is for past consideration. Furthermore, con-
tracts which are on the face of it legal may be affected if knowingly made to further an
immoral purpose. Immorality seems to refer only to extra-marital sexual intercourse.
It may be asked whether legally enforceable rights of maintenance may be created by a
contract between cohabitants, i.e. persons who live together as husband and wife though
unmarried. Certainly, a contract could be made, but its enforceability is doubtful. It was the
view of the House of Lords in Fender v St John Mildmay [1937] 3 All ER 402 that the courts
..
EL_C16.qxd 3/26/07 1:01 PM Page 372
could not enforce an immoral promise between a man and a woman such as the payment of
money or some other consideration in return for an immoral association. However, much
depends upon the view a court would now take of this. The older cases, such as Fender,
tended to regard the payment of money as a reward for and to induce the sexual aspect of the
relationship. It may be that the courts would enforce a maintenance agreement which was
entered into as part of a stable relationship between cohabitants, and which could not be
seen as mere payment for a sexual relationship.
Nevertheless, in H v H The Times, 22 April 1983, the court refused to enforce maintenance
support provisions in what was in effect a wife-swapping contract intended by the four par-
ties to be permanent. Thus the matter of enforceable maintenance by contract must remain
doubtful in terms that it may be contrary to public policy. In addition, the court may not
enforce it on the basis that the parties did not intend to create legal relations, a concept
which may affect contracts between members of a family or friends. This is unlikely to be a
problem where the contract is in writing or by deed and especially so if the agreement is
made following legal advice.
(c) Pre-nuptial agreements. In M v M (2002) 152 New Law Journal 696 the High Court held
that a pre-nuptial agreement signed in Canada provided useful information as to the parties’
intentions but went on to award a much higher sum to the wife. The judge could also have
awarded less if the circumstances had required it. English law is at odds with many other
jurisdictions in Europe and the English-speaking world in terms of the enforceability of these
agreements. Individuals of high net worth coming to live in the UK should be advised that our
courts are not impressed with such agreements and may regard the financial provisions as on
the low side particularly if there are children or the marriage has lasted for some years. As we
have noted, the judiciary is not obliged to enforce such agreements because they are contrary
to public policy. The view is that they provide encouragement to violate the marriage tie that
might be injurious to the public generally (Fender v St John Mildmay (1937) above). The judgment
of Mr Justice Thorpe in F v F [1995] 2 FLR 45 is also relevant. He described pre-nuptial agree-
ments as having ‘a very limited significance in this jurisdiction’. A government Green Paper
in 1998 supported such agreements but legislation has not been forthcoming.
(d) Contracts prejudicial to good foreign relations. This category includes contracts to
carry out acts which are illegal by the law of a foreign and friendly country, since to enforce
such contracts would encourage disputes.
(e) Contracts prejudicial to the administration of justice. Thus, a contract tending to

defeat the bankruptcy laws is illegal at common law.
(f) Contracts tending to corruption in public life. A contract to procure a title or honour is
illegal under this head.
(g) Contracts to defraud the Revenue. This applies to frauds in connection with national
taxes or local business rates.
Dann v Curzon, 1911 – A contract to commit a crime (188)

Pearce v Brooks, 1866 – The prostitute’s carriage (189)
Regazzoni v KC Sethia, 1958 – A contract to avoid apartheid sanctions (190)
John v Mendoza, 1939 – An attempt to avoid a bankruptcy (191)
Parkinson v College of Ambulance, 1925 – Buying a title (192)
Napier v National Business Agency Ltd, 1951 – A tax fiddle that failed (193)
..
EL_C16.qxd 3/26/07 1:01 PM Page 373
Consequences
The consequences of illegality in the above cases depend upon whether the contract was unlaw-
ful on the face of it, i.e. there was no way in which lawful performance could be achieved,
or whether the contract was lawful on the face of it, i.e. it could have been performed in a
lawful manner.
(a) Contract unlawful on face of it. This includes all the categories mentioned above except
some contracts involving sexual immorality. The consequences where the contract is unlaw-
ful on the face of it are as follows:
(i) The contract is void and there is no action by either party for debt (see Dann v Curzon,
1911), damages, specific performance or injunction.
(ii) Money paid or property transferred to the other party under the contract is irrecoverable
(see Parkinson v College of Ambulance (1925)) unless:
(1) The claimant is relying on rights other than those which are contained in the
contract. Thus, if A leases property to B for five years and A knows that B intends to
use the property as a brothel, A cannot recover rent or require any covenant to be
performed without pleading the illegal lease. However, at the end of the term A can
bring an action for the return of his property as owner and not as a landlord under
an illegal lease. In addition, if the action is to redress a wrong which, although in a
sense connected with the contract, can really be considered independent of it, the
law will allow the action.
(2) The claimant is not in pari delicto (of equal wrong). Where the contract is unlawful
on the face of it, equal guilt is presumed but this presumption may be rebutted if the
claimant can show that the defendant was guilty of fraud, oppression or undue
influence.
16
(3) The claimant repents provided that the repentance is genuine and performance is
partial and not substantial.
Bowmakers Ltd v Barnet Instruments Ltd, 1944 – Where the claimant sues as
owner (194)
Edler v Auerbach, 1950 – An action independent of the illegal contract (195)
Hughes v Liverpool Victoria Legal Friendly Society, 1916 – A contract induced by
fraud (196)
Bigos v Bousted, 1951 – Where repentance is not genuine (197)
Taylor v Bowers, 1876 – A partial performance (198)
Kearley v Thomson, 1890 – A substantial performance: no redress (199)
(b) Contract lawful on face of it. The result here is as follows:
(i) Where both parties intended the illegal purpose. There is no action by either party for
debt, damages, specific performance or injunction (see Pearce v Brooks (1866) ) or to
recover money paid or property transferred under the contract.
(ii) Where one party was without knowledge of the illegal purpose. The innocent party’s
rights are unaffected and he may sue for debt, damages, specific performance or injunc-
tion, or to recover money paid or property transferred.
(iii) The party who would have performed the contract in an unlawful manner has no action
on it nor can he recover property delivered to the other party under the contract.
..
EL_C16.qxd 3/26/07 1:01 PM Page 374
Fielding and Platt Ltd v Najjar, 1969 – An action by an innocent party (200)
Cowan v Milbourn, 1867 – Where the claimant intended unlawful
performance (201)
Berg v Sadler and Moore, 1937 – Unlawful performance: no recovery of money or
property (202)
Public policy and the judiciary – void contracts
These contracts do not involve any type of moral weakness but are against public policy
because they are inexpedient rather than unprincipled. The contracts concerned are contracts
to oust the jurisdiction of the courts, contracts prejudicial to the status of marriage and con-
tracts in restraint of trade. These are dealt with individually below.
Contracts to oust the jurisdiction of the courts

A contract which has the effect of taking away the right of one or both of the parties to bring
an action before a court of law is void, though it may be possible to sever the offensive part of
the contract and enforce the rest. This rule does not make void honourable pledge clauses
because in such cases the parties do not intend to be bound by the contract at all. If the con-
tract is to be binding, however, then the parties cannot exclude it from the jurisdiction of the
courts. Furthermore, arbitration clauses are not affected. Many commercial contracts contain
an arbitration clause, the object being to provide a cheaper or more convenient remedy than
a court action. An arbitration clause in a contract is not void if the effect of it is that the par-
ties are to go to arbitration first before going to court. An arbitration clause which denies the
parties access to the courts completely is, of course, invalid.
Goodinson v Goodinson, 1954 – Severing an unlawful promise (203)
Contracts prejudicial to the status of marriage

A contract in absolute restraint of marriage, i.e. one in which a person promises not to marry
at all, is void. Partial restraints, if reasonable, are said to be valid, e.g. a contract not to marry
a person of a certain religious faith, or not to marry for a short period of time. However, there
are no recent cases and it may be that even a partial restraint would be regarded as void today.
Marriage brokage contracts, i.e. contracts to introduce men and women with a view to their
subsequent marriage, are also void on the ground that third parties should not be free to reap
financial profit by bringing about matrimonial unions.
As regards separation agreements, these are invalid if made for the future, as where a husband
promises that he will make provision for his wife if she should ever live apart from him,
unless the agreement is made as part of a reconciliation arrangement. In this case the agreement
is valid, although it may make provision for a renewed future separation. If the parties are not
living in amity or are actually separated, then a separation agreement is valid. Once it is
apparent that the parties cannot live together in amity, it is desirable that a separation which
has become inevitable should be concluded upon reasonable terms.
The special case of the pre-nuptial agreement has already been considered.
..
EL_C16.qxd 3/26/07 1:01 PM Page 375
Contracts in restraint of trade

Originally all contracts in restraint of trade were regarded as void but in the seventeenth cen-
tury the courts began to allow certain of them to operate if reasonable, apparently because of the
reluctance of masters to train apprentices unless they were able to restrain those apprentices
in some way on the completion of the apprenticeship.
Because of the obvious importance of this area of the law, together with restrictive practices
generally, the remainder of this chapter will be devoted to this subject.
Contracts in restraint of trade – generally

Such contracts are prima facie void and will only be binding if reasonable. Thus the contract
must be reasonable between the parties which means that it must be no wider than is neces-
sary to protect the interest involved in terms of the area and time of its operation. It must
also be reasonable as regards the public interest. Finally, the issue of reasonableness is a matter
of law for the judge on the evidence presented to him which would include, for example,
such matters as trade practices and customs.
Even where the employee receives a special payment to accept the covenant, it must still be
reasonable and justified by the employer. (See Turner v Commonwealth & British Minerals Ltd
(1999) The Independent, 29 November.)
Wyatt v Kreglinger and Fernau, 1933 – Restraint of trade and the public
interest (204)
16
Voluntary contractual restraints of trade
on employees generally
Here the contract is entered into voluntarily by the parties and as regards employees it should
be noted that there are only two things an employer can protect:
(a) Trade secrets. A restraint against competition is justifiable if its object is to prevent the
exploitation of trade secrets learned by the employee in the course of his employment. In this
connection it should be noted that the area of the restraint must not be excessive. Further-
more, a restraint under this heading may be invalid because its duration is excessive.
(b) Business connection. Sometimes an employer may use a covenant against solicitation of
persons with whom the employer does business. The problem of area is less important in this
type of covenant, though its duration must be reasonable. The burden on the employer
increases as the duration of the restraint is extended, though in rare situations a restraint for
life may be valid.
Forster & Sons Ltd v Suggett, 1918 – A restraint in regard to trade secrets (205)
Home Counties Dairies v Skilton, 1970 – A restraint preventing customer
solicitation (206)
Fitch v Dewes, 1921 – A client restraint for life (207)
..
EL_C16.qxd 3/26/07 1:01 PM Page 376
Restraint in the City of London

The problems involved in holding on to key staff in City of London financial institutions has
been a matter of much publicity in recent times.
An important Court of Appeal decision gives some protection against poaching. It held that
a provision in a company manager’s service contract prohibiting him during employment,
and for one year after leaving, from offering a partnership or employment to any person who
had at any time during the manager’s employment also been employed by the company as a
director or senior employee of the company, was a reasonable restraint and enforceable. A
clause which prohibited the poaching of any employee, regardless of status, was struck down
as too wide. (See Dawnay Day & Co Ltd v D’Alphen [1997] IRLR 442.)
The managers concerned were acting as inter-dealer brokers with Dawnay Day, an invest-
ment bank. The managers had also entered into a joint venture with Dawnay Day but non-
solicitation of staff clauses in the shareholder’s agreement were held to be in unreasonable
restraint of trade because they were too wide, since they applied to all staff from top to bottom
of the company.
The importance of the case lies in the fact that there were conflicting decisions in previous
case law as to whether an employer had a legitimate interest in maintaining a stable, trained
workforce.
This case takes the line that there is a legitimate interest which can be protected. It is of
great importance to the City since, if there was no legitimate interest in retaining the senior
workforce, a competitor could take senior staff into his own organisation, in effect taking over
the former employer’s business without actually paying for it. It is important to note that the
case does not cover the situation where an employee leaves because a job is advertised in the
other organisation, for which he applies. The basis of the case is solicitation of employees.
Contractual restraints on employees through

the period of notice
In recent times the court has had to consider the validity of contracts of service with restrict-
ively long periods of notice which have sometimes been given to able and ambitious execut-
ives. Typically such contracts provide that if the employee leaves he must give notice of, say,
one year and during that time the employer can suspend him from work but agrees to give
him full pay and other benefits. The contract will normally also provide that the employer
may exclude the employee from the workplace so that he cannot after serving his notice
obtain any further information which might be of benefit to the new employer nor can he
work for the new employer during the period of notice without being in breach of contract.
He can either do nothing or pursue his hobbies. This is why the period of notice has been
called ‘garden leave’.
A specific provision in the contract is essential if the employee is to be excluded from work.
William Hill Organisation v Tucker [1998] IRLR 313 decides that otherwise the employee has
the right to work.
A ‘garden leave’ contract typically does not contain a restraint clause but the employee can
be restrained from competing, during what is usually a long period of notice, because he is
still employed during the notice period and so owes a duty of fidelity to his employer at common
law not to compete. The ‘garden leave’ contract is an alternative to a restraint clause and
allows the court to adopt a more flexible approach in that the employer may be granted an
..
EL_C16.qxd 3/26/07 1:01 PM Page 377
injunction to prevent competition during the period of notice if, on the facts, it is reasonable
to do so, as where the competition is serious. This happened in GFI Group Inc v Eaglestone
(1994) 490 IRLB 2 where the High Court held that an injunction could be granted to prohibit
a highly-paid foreign exchange options broker from working for a rival firm during his notice
period of 20 weeks, so that for that period of time he could not assist a competing organisation
to deal with the business connections of his employer. If the competition is not so serious, a
claim for damages can be brought, as the Court of Appeal decided in Provident Financial Group
plc v Whitegates Estate Agency [1989] IRLR 84.
If, however, a restraint clause is put into a severance package when the employee leaves,
the clause must satisfy the general test of reasonableness. The duty of fidelity at common law
does not exist since the former employee is no longer employed. Thus, if the clause is too
wide, the court cannot give any protection even if, on the facts, the competition is severe, as
the Court of Appeal decided in JA Mont (UK) Ltd v Mills [1993] IRLR 172. For example:
(a) A surveyor with a firm of estate agents is on ‘garden leave’ and takes a job with a major
competing estate agency in the same town. The court may well grant an injunction on the
grounds of the surveyor’s breach of the duty of fidelity at common law. However, if the court
feels that injunctive relief is unreasonable, a claim for damages could be allowed. If the
surveyor went to work for a firm of estate agents in the next town, the court might decide
on the facts that no relief of any kind should be given.
(b) If the surveyor had left his job and as part of a severance package he was restrained from
working for a firm of estate agents anywhere in the UK for five years, the restraint would
obviously be too wide and wholly void. That being so the court could not give the employer
any relief, even if the surveyor went to work for a rival firm of estate agents next door to his
former employer!
16
Payments in lieu of notice (PILON) – effect on employee restraints
An employer who is in breach of contract may not be able to enforce agreements in restraint
of trade. Thus an employer who, without cause, dismisses an employee without notice is in
breach of contract and the court would be unlikely to uphold any post-employment
restraints on the employee. The authority for this is Atkins v General Billposting [1909] AC 118.
Where the contract contains a PILON clause and the employer makes such a payment then
he or she is not in breach of contract and post-employment restraints can be enforced if
reasonable. There was doubt as to the position where although the contract did not contain a
PILON clause the employer nevertheless dismissed without notice but made a payment in
lieu. The possibility was that the employer was in breach of contract and that the payment
was a non-contractual payment of damages. In these circumstances did post-employment
restraints become unenforceable?
In Mackenzie v CRS Computers Ltd [2002] Emp LR 1048 the Employment Appeal Tribunal
ruled that a payment in lieu, not provided for by the contract, was not a repudiation of the
contract provided the employer paid the ex-employee a sum representing his salary and loss
of any relevant benefits. Therefore, Atkins did not apply and other clauses, including presum-
ably restraint clauses, would apply if reasonable. In this case the clause that survived related
to the fact that the ex-employee should pay settlement charges on the lease of a company car
provided to him if he left, as here, during the first year of employment. There is another
important aspect of MacKenzie because where there is a PILON clause, the payment is contrac-
tual and tax is payable on it. A payment without a PILON clause is, on the face of it, in the
nature of damages and may be entitled to tax relief, up to £30,000, on compensation for loss
..
EL_C16.qxd 3/26/07 1:01 PM Page 378
of employment. The MacKenzie ruling allows the employee to have that benefit and the
employer to retain rights under the contract. However, the Inland Revenue may challenge
non-PILON payments particularly if, in the organisation, a payment in lieu of notice is
always made even though there is no PILON clause.
Non-contractual restraints on employees:

confidential information
The position is different where the employee has no restraint of trade clause in his contract
and is not on ‘garden leave’. Thus, in Faccenda Chicken Ltd v Fowler [1986] 1 All ER 617,
Mr Fowler was sales manager for Faccenda Chicken Ltd for seven years and set up a van sales
operation whereby refrigerated vans travelled around certain districts offering fresh chicken
to retailers and caterers. He left the company and set up his own business selling chickens
from refrigerated vans in the same area. Eight of the company’s employees went to work for
him. Each of the salesmen in the company knew the names and addresses of the customers,
the route and timing of deliveries, and the different prices quoted to different customers.
The company unsuccessfully brought an action for damages in the High Court, alleging
wrongful use of confidential sales information and was also unsuccessful in a counterclaim
for damages for breach of contract by abuse of confidential information in Mr Fowler’s action
against the company for outstanding commission.
It is generally the case that rather more protection in terms of preventing an employee from
approaching customers can be obtained by an express term which is reasonable in terms of
its duration. In the absence of an express term, it is clear from this decision of the Court of
Appeal that confidential information of an employer’s business obtained by an employee in
the course of his service may be used by that employee when he leaves the job unless, as the
Court of Appeal decided, it can be classed as a trade secret or is of such a confidential nature
that it merits the same protection as a trade secret. For example, there would have been no
need for a term in the contract of service in Forster v Suggett (1918). The court could have
prevented use of the secret process for a period without this. It should, however, be noted
that in Faccenda the Court of Appeal did say that if the employees had written down lists of
customers, routes, etc., as distinct from having the necessary information in their memories,
and presumably being unable to erase it, short of amnesia, they might have been restrained
for a period from using the lists. This follows the case of Robb v Green [1895] 2 QB 315 where
the manager of a firm dealing in live game and eggs copied down the names of customers
before leaving and then solicited these for the purposes of his own business after leaving the
employment of the firm. He was restrained from soliciting the customers. In this connection,
the High Court granted an injunction in regard to a one-year non-solicitation of customers
clause in the contract of a manager in a company of insurance brokers who was dealing with
small business clients. He had not set out to learn the client information to use it in competi-
tion with his employer but the High Court held that as regards confidentiality Faccenda
Chicken did not rigidly draw a distinction between deliberate and innocent learning.
Confidential information was confidential regardless of how it came into the employee’s
memory (see SBJ Stevenson Ltd v Mandy, High Court, 30 July 1999).
In the Mandy case there was a restraint in the contract of employment. It is hard to see how
any such contractual restraint could work if memory matters were excluded. The situation
may be different where there is no contract but the claimant is proceeding under the implied
duty of confidentiality. Here mere innocent learning may not always be enough to create an
enforceable restraint.
..
EL_C16.qxd 3/26/07 1:01 PM Page 379
In addition, the courts prefer a written contractual restraint in confidentiality matters.

Many of the cases are based on complex technical facts and a written contract can assist the
court in deciding what is the confidential technical information that is in issue.
In this connection, the Court of Appeal ruled in Pocton Industries Ltd v Michael Ikem Horton
[2000] Lawtel CCH New Law 200059503 that although an electro-plating apparatus was cap-
able of protection under an implied duty of non-disclosure there was no contractual provision
regarding which part of the employee’s knowledge was to be regarded as confidential and the
plating process was only part of a number of pieces of information the employee could not
help but acquire from his duties. The claim to restrain use of the knowledge acquired failed.
Whistle-blowing
When discussing an employee’s duty of confidentiality, mention should be made of the
provisions of the Public Interest Disclosure Act 1998 which inserted some new sections into
the Employment Rights Act 1996. The Act protects workers from being dismissed or penalised
for disclosing information about the organisation in which they work that they reasonably
believe exposes financial malpractice, miscarriages of justice, dangers to health and safety,
and dangers to the environment. Disclosure may be made to an employer, but where the dis-
closure relates to the employer or there is danger of victimisation, it may be made e.g. to a
regulator such as the Financial Services Authority for City frauds. Whistle-blowers who are
dismissed or otherwise victimised may complain to an employment tribunal and make
appeals to higher courts.
In this connection the Court of Appeal ruled in Woodward v Abbey National plc [2006] IRLR
677 that the protection under s 47B of the Employment Rights Act 1996 against whistleblow-
ers being subjected to detriment because of making a protected disclosure is not restricted
to the duration of the contract of employment but extends also to a detriment imposed by an
ex-employer on an ex-employee after leaving employment. In this case the detriment was
16
that Abbey would not provide a reference for Mrs Woodward after she had left employment
with Abbey having made protected disclosures relating to Abbey’s alleged failure to comply
with certain legal obligations.
Is it a trade secret?
The Court of Appeal has held that an ex-employee who made negative remarks about the
financial situation and management of the company from which he had resigned as manag-
ing director did not owe an implied duty of confidentiality with regard to the information
disclosed about the ex-employer.
The information, it said, did not come within the category of a ‘trade secret’ (see Brooks v
Olyslager OMS (UK ) Ltd [1998] 601 IRLB 6).
When Mr Brooks resigned from the company, it was under a compromise agreement giving
him three months’ salary in three monthly instalments. Immediately following his resigna-
tion, he telephoned an investment banker who had an interest in the company. During the
conversation, he intimated that the company’s management was autocratic, the company
was insolvent and would only last a month, its budgets were over-optimistic and that it
would be taken over by its holding company.
When it heard about these remarks, the company refused to pay the salary instalments
and claimed that Mr Brooks was in breach of an implied duty of confidentiality. He claimed
damages in the lower court and was awarded them.
The issue in the Court of Appeal related mainly to the duty of confidentiality. The court
did not agree that there was such a duty in this case and in respect of the information
..
EL_C16.qxd 3/26/07 1:01 PM Page 380
disclosed. There was no evidence that knowledge of the company’s financial affairs was not
already in the public domain. Also, Olyslager had not sought to show that what Mr Brooks
had said was untrue or malicious, nor that his statements had caused any financial loss. The
company’s case was based on its desire to prevent Mr Brooks from disclosing the reasons why
he had resigned and from making statements that were in any way detrimental to its interest.
There was no such broad right in law. Accordingly, Mr Brooks was entitled to his damages
for breach of the compromise agreement and the company was not entitled to an injunction to
prevent further disclosures of the kind put forward in this case. They were not trade secrets.
Employee restraints arising from agreements between

manufacturers and traders
The courts are concerned to prevent an employer from obtaining by indirect means restraint
protection which he could not have obtained in an express contract with the employee.
Kores Manufacturing Co Ltd v Kolok Manufacturing Co Ltd, 1958 – Employee

restraints between employers (208)
Restraints imposed on the vendor of a business

In allowing restraints to protect the goodwill of the business sold, e.g. that customers will
continue to buy from it, the law is only responding to commercial necessity. Unless the
vendor (seller) was legally able to undertake not to compete with the purchaser, no one
would buy the business. However, such a restraint will be void unless it is required to protect
the business sold and not to stifle competition.
It should be noted, however, that the protection of the business sold may in rare situations
involve a world-wide restraint.
British Reinforced Concrete Co v Schelff, 1921 – Restraints against mere

competition not allowed (209)
Nordenfelt v Maxim Nordenfelt Guns and Ammunition Co, 1894 – An exceptional
world-wide restraint (210)
Restrictions on shareholder-employees
The courts will generally allow wider restraints in the case of vendors of businesses than in
the case of employees. However, what is the position where the employee is also a shareholder
and therefore also a proprietor of the business?
Systems Reliability Holdings plc v Smith, 1990 – Where the employee is also a
shareholder in the employing company (211)
..
EL_C16.qxd 3/26/07 1:01 PM Page 381
Restrictions accepted by distributors of merchandise

In order to increase the efficiency of distribution, a manufacturer or wholesaler may refuse
to make merchandise available for distribution to the public unless the distributor accepts
certain conditions restricting his liberty of trading. This is the main purpose of the solus
agreement used by petrol companies. Such agreements are void unless reasonable.
There is an important distinction here between a garage proprietor who borrows money on
mortgage of his own property from a petrol company and a garage proprietor who agrees to
sell only that company’s products for a period of time. The rule relating to unreasonable
restraints of trade applies to the mortgage. However, if the petrol company is the owner of
the land and garage premises and grants a lease to a tenant who will run the garage then the
rule relating to unreasonable restraints of trade does not apply to an agreement in the lease to
take the petrol company’s products.
Esso Petroleum Co Ltd v Harper’s Garage (Stourport) Ltd, 1967 – Restraint in a

mortgage (212)
Cleveland Petroleum Co Ltd v Dartstone Ltd, 1969 – A restraint in a lease (213)
Involuntary restraints of trade

We have so far considered, subject to an exception in the case of confidential information,
restrictions against trading contained in contracts. However, the doctrine is not confined to
these voluntary restraints. It extends to involuntary restraints imposed by trade associations 16
or professional bodies upon their members. Such restraints are void unless reasonable.
Pharmaceutical Society of Great Britain v Dickson, 1968 – Restraints imposed

by a professional body (214)
Consequences where the contract is contrary

to public policy: severance
Where a contract is rendered void by the judiciary, it is enforceable only in so far as it contra-
venes public policy. Thus lawful promises may be severed and enforced. A contract of service
which contains a void restraint is not wholly invalid and the court will sever and enforce
those aspects of it which do not offend against public policy. Thus an employee who has
entered into a contract of service which contains a restraint which is too wide can recover his
wages or salary.
The court will not add to a contract or in any way redraft it but will merely strike out the
offending words. What is left must make sense without further additions, otherwise the court
will not sever the void part in order to enforce what is good. For example, A agrees ‘not to set
up a competing business within ten miles’ in a covenant when he sells his business. If we
suppose that five miles would be reasonable, the court will not in fact substitute ‘five’ and
then enforce the covenant because this would mean making a contract for the parties.
..
EL_C16.qxd 3/26/07 1:01 PM Page 382
It is important also to note that the court will not delete the invalid part of a restraint
clause if it is the major part of the restraints imposed.
Thus in Attwood v Lamont [1920] 3 KB 571 the heads of each department in a business of a
general outfitter were required to sign a contract agreeing, amongst other things, after leaving
the business not to be engaged in ‘the trade or business of a tailor, dressmaker, general draper,
milliner, hatter, haberdasher, gentlemen’s, ladies’ or children’s outfitters, at any place within
a radius of ten miles of the employers’ place of business at Regent House, Kidderminster . . .’.
Lamont, who was employed as cutter and head of the tailoring department, left and began to
compete, doing business with some of his former employer’s customers. The employer then tried
to enforce the above restraint which was drawn too wide in terms of the various departments
covered, since Lamont had never been concerned with departments other than the tailoring
department. The court refused to sever the tailoring covenant from the rest because that
would have meant severing almost the whole of the restraint in order to leave the restraint
regarding tailoring.
A contrast is provided by Goldsoll v Goldman [1915] 1 Ch 292. In that case the defendant
sold imitation jewellery and when he sold his business he agreed ‘not for two years to deal in
real or imitation jewellery in any part of the United Kingdom’. The court was prepared to
sever the words ‘real or’ in order to make the restraint valid and restrict the defendant from
competing in imitation jewellery. Only two words needed to be deleted and this was a very
small part of the restraint as a whole.
No severance of widely drawn clause

It is not appropriate said the Court of Appeal in Wincanton Ltd v Cranny [2000] IRLR 716 for a
court to sever an unenforceable restraint so that it becomes enforceable if it is clear that it has
been drawn intentionally wide. The clause involved stated that the employee should not for a
period of 12 months following the termination of his employment be ‘directly or indirectly
engaged, concerned or interested in any capacity . . . in any business of whatever kind in the
UK which is wholly or partly in competition with any business carried on by the company . . .’.
The Court of Appeal would not contemplate a possible severance.
Public policy: the contribution of Parliament

Some contracts are prohibited by statute in terms that they are illegal, the words ‘unlawful’
being used in the statute concerned. In this context ‘statute’ includes the orders, rules and
regulations that Ministers of the Crown and other persons are authorised by Parliament to
issue.
The statutory prohibitions with which we are concerned may be express or implied.
Implied statutory prohibition

In these cases the statute itself does not say expressly that contracts contravening its provi-
sions are necessarily illegal. The statute may affect the formation of a particular contract as
where a trader does business without taking out a licence. In some cases the statute may
affect the manner of performance of the contract as where a trader is required to deliver to a
purchaser a written statement such as an invoice containing, for example, details of the
chemical composition of the goods.
..
EL_C16.qxd 3/26/07 1:01 PM Page 383
In either case whether failure to comply with a statutory provision renders the contract
illegal is a matter of construction of the statute and is for the judge to decide.
If, in the opinion of the judge, the Act was designed to protect the public then the
contract will be illegal. Thus in Cope v Rowlands (1836) 2 M&W 149 an unlicensed broker
in the City of London was held not to be entitled to sue for his fees because the purpose of
the licensing requirements was to protect the public against possibly shady dealers.
Furthermore, in Anderson Ltd v Daniel [1924] 1 KB 138 a seller of artificial fertilisers was
held unable to recover the price of goods which he had delivered because he had failed to
state in an invoice the chemical composition of the fertilisers which was required by Act of
Parliament.
On the other hand, if in the opinion of the judge the purpose of the legislation was mainly
to raise revenue or to help in the administration of trade, contracts will not be affected. Thus
in Smith v Mawhood (1845) 14 M&W 452 it was held that a tobacconist could recover the
price of tobacco sold by him even though he did not have a licence to sell it and had not
painted his name on his place of business. The purpose of the statute involved was not to
affect the contract of sale but to impose a fine on offenders for the purpose of revenue. In addi-
tion, in Archbolds (Freightage) Ltd v Spanglett Ltd [1961] 1 QB 374 a contract by an unlicensed
carrier to carry goods by road was held valid because the legislation involved was only designed
to help in the administration of road transport.
Express statutory prohibition
Sometimes an Act of Parliament may expressly prohibit certain types of agreement. For
example, the Competition Act 1998 in s 2(2)(a) prohibits agreements, decisions or practices
that directly or indirectly fix purchase or selling prices, and this would include resale
price maintenance agreements. As regards the remedies available to an organisation affected
16
by an anti-competitive practice, it may complain to the Office of Fair Trading or if the
infringement has a European Union dimension it may complain to the EU Commission
in Brussels. Interim relief may be asked for in urgent cases. However, the final outcome will
be an infringement decision and a large fine on the offending organisation. This will not
produce damages for the organisation if it has lost profits because of the offending organisation’s
activities.
Organisations wishing to pursue claims against the offender may go through the ordinary
courts of law. Actions for damages and injunctions are clearly available to those who have
suffered loss as a result of infringements of the 1998 Act (see Courage v Crehan [2002] QB 507:
a ruling of the ECJ).
Organisations suffering loss may wait for the OFT to investigate and make a finding of
infringement. When the appeals process has been exhausted the organisation may rely on
the infringement decision and this will be beneficial because there will be no need to produce
evidence that there has been an infringement to the court again. Obviously, matters of causa-
tion and quantification of damages may arise but the claim will be made easier. These are
called ‘piggyback’ claims and have been introduced by the Enterprise Act 2002 inserting a new
s 58A into the Competition Act 1998.
Finally, if there is difficulty in pleading before the ordinary courts because of their unfam-
iliarity with competition issues the Enterprise Act 2002 has expanded the jurisdiction of the
Competition Appeals Tribunal (a specialist tribunal) so that it can hear actions for damages fol-
lowing domestic competition infringement decisions by the OFT and the EU Commission regarding
infringements of EU law. These will be ‘piggyback’ claims.
..
EL_C16.qxd 3/26/07 1:01 PM Page 384
Wagering contracts: insurance and dealing in differences

In essence, for a wager to exist it must be possible for one party to win and one party to lose
and there must be two persons or two groups opposed to each other in their views as to a
future event. Thus, where S, Y and Z each put £5 into a fund to be given to the party whose
selected horse wins a given race, there is no wager. The only commercial importance of the
concept of wagering and the only reason why it is introduced in a book of this nature relates
to insurance and dealing in differences (see below). A contract is not a wager if the person to
whom the money is promised on the occurrence of the event has an interest in the non-
occurrence of that event, e.g. where a person has paid a premium to insure his house against
destruction by fire. Such an interest is called an insurable interest and is not a wager. However,
to insure someone else’s property would be a wager and not a valid contract of insurance.
The Gaming Act 1845 renders wagering contracts void so that there is no action for the bet
or for the winnings. However, it should be noted that if the bet or the winnings have actually
been paid over they cannot be recovered. Payment operates as waiver of the Act and the
payment over of the money confers a good title to that money upon the person to whom it
is paid.
It has become more common in recent times for persons to deal in differences, i.e. to bet
on the future rises or falls in selected stock exchange indexes. No securities are bought or
sold, the only transaction being the payment by one party to the other of the eventual differ-
ence in the indexes according to the accuracy or otherwise of the gambler’s predictions.
It was decided in City Index Ltd v Leslie [1991] 3 All ER 180 that such a contract was valid-
ated by s 63 of the Financial Services Act 1986 so long as it was made ‘by way of business’.
The claimants offered clients a differences service and recovered £34,580 plus interest from
the defendant whose predictions of rise and fall had not been successful.
Competition law
Competition law has become extremely complex and a detailed study of it can only be of
benefit to the specialist practitioner. Nevertheless, it is important for all students in those
disciplines that require a grounding in the law to have an environmental knowledge of
current competition law. The following materials are designed to provide that environmental
knowledge.
Setting the scene

Current competition law is based mainly on the Competition Act 1998, the Enterprise Act
2002 and Arts 81 and 82 of the EU Treaty of Rome.
We begin with the Competition Act 1998 the major provisions of which came into force in
March 2000. It contains a system of public regulation of competition law that mirrors to a large
extent EU competition law. Section 2 of the CA 1998 introduces the Chapter I Prohibition
which has the objective of preventing co-ordinated market behaviour between undertakings,
e.g. to fix prices. This policy was formerly carried out by the repealed Restrictive Trade
Practices Act 1976 and the Resale Prices Act 1976. Prohibition I is modelled closely upon Art 81
of the Treaty of Rome.
Section 18 of the CA 1998 introduces the Chapter II Prohibition which controls any
conduct in a market by one or more undertakings that amounts to an abuse of a dominant
position in that market. Prohibition II is modelled closely upon Art 82 of the Treaty of Rome.
..
EL_C16.qxd 3/26/07 1:01 PM Page 385
Finally, s 60 of the CA 1998 provides that in the absence of any relevant differences inter-
pretation of the Prohibitions should be designed to achieve consistency with EU law.
Practices and provisions which infringe the Chapter 1 Prohibition

The 1998 Act sets out in s 2 a non-exhaustive list of practices and provisions that will infringe
Prohibition I. There is a similarity with Art 81. The list is as follows:
n directly or indirectly fixing purchase or selling prices or other trading conditions. This
includes attempts to fix resale prices (or resale price maintenance);
n limiting or controlling production markets, technical development or investment;
n agreements to share markets or sources of supply or doing so in practice;
n discrimination by applying different conditions to equivalent transactions with other
trading parties so that they are at a competitive disadvantage;
n making the conclusion of contracts subject to the acceptance by the other parties of supple-
mentary obligations which are unconnected with the subject matter of those contracts
either by their nature or according to their commercial use.
Chapter 1 exclusions
These include:
n Mergers which have been cleared under previous legislation such as the Fair Trading Act
1973 which are allowed to continue.
n Agreements controlled by other legislation such as the acquisition of a controlling interest
in a public listed company. This is controlled by the Financial Services Authority as the UK
Listing Authority under the Financial Services and Markets Act 2000 and the City Code on
16
Take-overs and Mergers. The same is true in regard to the general control of contracts
between a company and its directors under the Companies Act 1985.
n Agreements which under previous law were not sent for investigation by the Restrictive
Practices Court by the Secretary of State because they were not considered significant.
There is, however, a ‘claw-back’ provision under which the Office of Fair Trading can
reconsider them if they appear to infringe the Chapter I Prohibition which is unlikely.
n Vertical agreements are excluded so long as they are not price-fixing agreements. A vertical
agreement is one entered into by organisations operating at different levels of the market
such as an agreement between a manufacturer and a distributor. A horizontal agreement is
normally one made between organisations operating at the same level in the market as in
the case of an agreement between manufacturers or an agreement between distributors.
n Agreements concerning land, i.e. agreements that create or transfer estates in land such as
restrictive covenants over land restricting its use. A major effect is to exempt leases where,
for instance, there is a covenant restricting use of the property and forbidding car-breaking
on the premises by the tenant. However, covenants protecting the landlord’s business as
distinct from the land may be affected by the Chapter I Prohibition as where a landlord
leases property for use as a shop but includes a covenant forbidding the sale of goods that
are sold by his own shop that is nearby. The Chapter II Prohibition does apply to land as
where the owner of an airport refuses to grant a lease at the airport to a bookseller in order
to protect a rival bookseller.
The Secretary of State has order-making powers that may be used to prevent adverse effects
on competition in terms of access to facilities such as marinas and taxi-ranks.
..
EL_C16.qxd 3/26/07 1:01 PM Page 386
Reform
Although the exclusion for vertical agreements is still in force European developments are to
the effect that vertical agreements are within Art 85. Therefore, s 209(3) of the Enterprise Act
2002 gives the Secretary of State power to remove the exclusion as soon as it is reasonable to
do so. In addition, the rules of professional bodies such as the Law Society were excluded
under the Competition Act 1998. Now s 207 of the EA 2002 repeals that provision and profes-
sional rules are no longer excluded.
Chapter I exemptions
There are three exemptions as follows:
(a) an individual exemption granted by the Office of Fair Trading (OFT) where it can be
shown that the agreement will contribute to improving production or distribution or
promote technical or economic progress and allows consumers a fair share of the result-
ing benefit. Furthermore, any restrictions must be indispensable and there must be no
elimination of competition. Potentially exempt agreements should be notified to the OFT
and the OFT may also give guidance without formal notice as to whether the agreement
might or might not be exempted;
(b) a block exemption given by the Secretary of State on the recommendation of the OFT
covering particular classes of agreement which satisfy the criteria for individual exemption;
(c) agreements which are the subject of individual or block exemption under Art 81 are auto-
matically exempt under the 1998 Act.
Abuse of a dominant position – the Chapter II Prohibitions

The prohibition on the abuse of a dominant position appears in Chapter II of the 1998 Act
and is closely modelled on Art 82 of the EC Treaty of Rome.
Chapter II prohibits:
n any conduct on the part of one or more undertakings;

n which amounts to an abuse;
n of a dominant position in the market; and
n which may affect trade within the UK or any part of it.
In the same way as Art 82, the 1998 Act sets out a non-exhaustive list of the types of
conduct which can amount to an abuse. The list includes:
n the imposition of unfair purchase or sale prices, e.g. unfairly high selling prices or unfairly
low purchase prices and predatory pricing;
n the limitation of production, markets or technical developments to the prejudice of con-
sumers, such as restricting output with a resulting rise in prices or refusal to supply;
n the imposition of unfair trading conditions over and above pricing, e.g. quality of products
and service;
n applying dissimilar conditions to equivalent transactions thereby placing some organisa-
tions at a competitive disadvantage;
n tying, i.e. making the conclusion of a contract depend on the acceptance by other parties
of obligations which have no connection with the subject matter of the contracts, e.g. A,
a manufacturer, requires a retailer not to stock the products of a rival manufacturer, B.
Conversely, a retailer might prevent a manufacturer from supplying rival outlets.
..
EL_C16.qxd 3/26/07 1:01 PM Page 387
Article 82 is not followed entirely since the Art 82 provision refers to a substantial part of
the Community, whereas Chapter II refers to any part of the UK, so that localised markets are
covered, e.g. the provision of bus services in local areas.
What is dominance?
The 1998 Act does not set out thresholds for defining dominance but EU law cases will apply
and these show that dominance has been found to exist where market shares have been in
excess of 40 per cent in some cases and 45 per cent in others. This is also the Commission’s
view. The OFT Guidance note, however, quotes a lower market share, i.e. 20–40 per cent.
Exemptions and exclusions

As with Art 82, there are no exemptions from Chapter II. There are exclusions which are
similar to the exclusions provided in regard to the Chapter I Prohibition.
It is possible to notify the OFT in regard to conduct that may amount to a Chapter II Pro-
hibition for guidance or decision as to whether the prohibition does or does not apply.
Monopolies and mergers

This area of competition law was covered by the Fair Trading Act 1973. The Competition Act
1998 left the provisions of the 1973 Act in place. A major feature of the 1973 Act was that
monopolies and mergers in terms of their undesirability had to be evaluated in terms of a
‘public interest’ test, i.e. did they operate or could they operate against the public interest?
Section 84 of the FTA 1973 (now repealed) gave matters to which regard must be paid, e.g.
the desirability of promoting, through competition, the reduction of costs and the develop-
ment of new techniques and new products. The test was imprecise and was criticised for that. 16
Control was by the Monopolies and Mergers Commission. This became the Competition
Commission under the CA 1998. The Competition Commission, as the Monopolies and
Mergers Commission before it, continues under the Enterprise Act 2002 but originally could
be required to investigate and report in relevant areas of business following a reference to it
by the Director-General of Fair Trading (a position that is now defunct). There were two types
of monopoly situation as follows:
n the scale monopoly where one company or other organisation supplied or purchased 25 per
cent or more of all goods or services of a particular type in the UK; or
n the local monopoly as above but the purchase or supply was only in a part of the UK; or
n the complex monopoly where a group of organisations acting together controlled 15 per
cent of the market.
The Competition Act 1998 retained the above monopoly provisions.
The Enterprise Act 2002 changes

The main changes made by the Act of 2002 are the removal (with some exceptions, e.g.
public interest cases affecting e.g. defence contracts) of the Secretary of State’s role and the
substitution of a ‘substantial lessening of competition’ test for the former general ‘public
interest’ test.
There are also new monopoly tests called jurisdictional tests that replace the earlier tests. The
primary requirements are:
..
EL_C16.qxd 3/26/07 1:01 PM Page 388
n that two or more enterprises cease to be distinct; and

n that the value of the turnover in the UK of the enterprise being acquired, i.e. the target
enterprise exceeds £70 million; or
n that in relation to the supply of goods or services of any description at least one-quarter of
all the goods or services of that description that are supplied in the UK are supplied by or
to one and the same person.
The first test is referred to as the ‘turnover test’ and the second the ‘share of supply test’. The
supply test means in practice that the merging parties will together supply or receive the
relevant percentage of goods and services.
Media mergers
The most important of these are newspaper and TV channel monopolies and mergers. These
are left untouched by the Enterprise Act 2002 and are dealt with by the Communications Act
2003. Part V of the Act applies and gives the Office of Communications (OFCOM) concurrent
jurisdiction with the OFT under the Competition Act 1998 in relation to the application of
the Chapter I and II Prohibitions to the relevant industries. It also has power in regard to
market investigation references (see below).
The institutional structure in competition law

As we have seen the CA 1998 abolished the Restrictive Practices Court but the central author-
ity in the enforcement of the CA 1998 was the Director-General of Fair Trading supported by
the Office of Fair Trading’s staff. The decisions of the Director-General, e.g. that a Prohibition
of the Act had been infringed and any penalty imposed were capable of appeal to the
Competition Commission Appeals Tribunal and from there to the Court of Appeal on matters
of law. The Director-General also intitiated monopoly inquiries. The CA also reconstituted
the Monopolies and Mergers Commission as the Competition Commission.
The EA 2002 abolishes the office of Director of Fair Trading and his functions become those
of the Office of Fair Trading. The office is under the governance of a chairman and four other
members appointed by the Secretary of State for Trade and Industry. Appointment is for a
period of five years. There is also a chief executive appointed by the Secretary of State for
Trade and Industry after consultation with the chairman of the Commission. References in
legislation to the Director-General are to be taken as a reference to the OFT. The Competition
Commission becomes the Competition Appeals Tribunal.
Civil remedies of third parties to recover loss

As regards the remedies available to an organisation affected by an anti-competitive practice,
it may complain to the Office of Fair Trading or if the infringement has a European Union
dimension it may complain to the EU Commission in Brussels. Interim relief may be asked
for in urgent cases. However, the final outcome will be an infringement decision and a large
fine on the offending organisation. This will not produce damages for the organisation if it has
lost profits because of the offending organisation’s activities. Organisations wishing to pursue
claims against the offender may go through the ordinary courts of law. Actions for damages
and injunctions would seem to be available to those who have suffered as a result of infringe-
ments of competition law (see Courage v Crehan [2002] QB 507: a ruling of the ECJ). The
House of Lords has said that damages are available ‘in an appropriate case’ but were not
required to give damages in the event because they ruled that pub beer-ties were not in the
..
EL_C16.qxd 3/26/07 1:01 PM Page 389
Crehan case contrary to Art 81 of the Treaty of Rome (see Inntrepeneur Pub Company v Crehan
[2006] 4 All ER 465 at p 371).
Organisations suffering loss may wait for the OFT to investigate and make a finding of
infringement. When the appeals process has been exhausted the organisation may rely on
the infringement decision and this will be beneficial because there will be no need to produce
evidence that there has been an infringement to the court again. Obviously matters of causa-
tion and quantification of damages may arise but the claim will be made easier. These are
called ‘piggyback’ claims and have been introduced by the Enterprise Act 2002 inserting a
new s 58A into the Competition Act 1998.
Finally, if there is difficulty in pleading before the ordinary courts because of their unfam-
iliarity with competition issues, the Enterprise Act 2002 has expanded the jurisdiction of the
Competition Appeals Tribunal (a specialist tribunal) so that it can hear actions for damages
following domestic competition infringement decisions by the OFT and the EU Commission
in regard to infringements of EU law. These will be ‘piggyback’ claims.
Complaints
Under the provisions of the CA 1998 any person may complain to the OFT in regard to
alleged breaches of the CA 1998 Prohibitions. These provisions are retained but the EA 2002
makes provision for designated consumer bodies to make ‘super complaints’ where there are
market features that may be harming consumers to a significant extent. An example is pro-
vided by certain complaints made by the Consumers’ Association asking for an investigation
into practices in the private dentistry market. The complaint must relate to the market as a
whole and not merely the conduct of individual businesses.
Relationship with EU law 16

The prohibitions set out in the Competition Act 1998 mirror more directly Arts 81 and 82 of
the Treaty of Rome. The Articles are in general directly effective in the UK where there is in,
say, the case of a restrictive practice ‘an effect on trade between member states’. In the absence
of such an effect, EU law is not applicable. Where the practice called into question affects
only trade in the UK it is the UK Prohibitions of the CA 1998 that apply but even here UK law
is required to be interpreted in line with European Law (see s 60, CA 1998). Thus UK courts
will be expected to reach similar conclusions in UK cases to those reached in the European
Court EXCEPT where there is a ‘relevant difference’.
Other main changes and innovations of the Enterprise Act 2002

Part 4 provides for market investigations by the Competition Commission (CC). This regime
is designed to inquire into markets where the structure of the market or the conduct of the
suppliers or customers is harming competition. The OFT may make references as may other
regulators such as the Rail Regulator.
Part 5 provides for rules of procedure in the Competition Commission.
Part 6 has been the cause of much controversy in that it sets up a new criminal offence for
people engaged in cartels and gives the OFT investigatory powers. A person is liable to criminal
prosecution if he or she dishonestly engages in prohibited cartel activities, e.g. price-fixing
or limitation of supply or production. The OFT can issue no-action letters to those who
although they have been involved in the cartel give the OFT information about it. A kind of
reward for whistleblowing. The maximum term of imprisonment where trial is on indictment
is five years. Instead or in addition to this term there may be an unlimited fine.
..
EL_C16.qxd 3/26/07 1:01 PM Page 390
Part 7 importantly gives a new power to disqualify company directors for serious breaches
of competition law.
Part 8 deals with procedures for making ‘super-complaints’.
Part 9 is concerned with disclosure of information by public authorities; Part 11 is con-
cerned with the bringing into force and application of the Act. Part 10 makes significant
changes to insolvency law that are not relevant here.
The European Community approach to restrictive practices

Under Articles 81 and 82 of the Treaty of Rome all agreements between business organisa-
tions which operate to prevent or restrict competition in the Market are void.
Restrictive trading agreements and the Treaty of Rome generally

We have already considered the position under English domestic law with regard to restrict-
ive trading agreements. Some consideration must now be given to the position under
Community law.
Policy and source of law

The provisions of the Treaty, which have been part of our law since January 1973, are based,
as UK law is, on the protection of the public interest. The basis of the competition policy is to
be found in Arts 81 and 82 of the Treaty. These ban practices which distort competition
between members of the Community (Art 81), and prohibit the abuse of a monopolistic
position by an organisation within the Market (Art 82). There is an additional aim of raising
living standards.
Application of Arts 81 and 82, Treaty of Rome

It is perhaps inappropriate in a non-specialist book of this nature to go through the many
illustrative cases on the above articles of the Treaty of Rome which have been heard by the
European Court of Justice. However, by way of illustration and to show the application of the
Articles in English cases before English courts we can consider the following.
When doing so, it is worth noting that, following the judgment of the European Court in
BRT v SABAM [1974] ECR 51 that Arts 85 (now 81) and 86 (now 82) have direct effect in the UK,
our courts have shared responsibility for the enforcement of Community competition law, as
the cases illustrate.
They also provide examples of situations that might come before UK courts under Prohibi-
tions I and II of the 1998 Act. Now under the Competition Act 1998 UK courts are dealing
with the Prohibitions set out in Chapters I and II of the 1998 Act and so are applying English
law which is now substantially the same as the Treaty of Rome provisions. In addition, the
interpretation of the prohibitions will follow the line taken by European courts so that there will
be a fusion of rulings. (See the governing principles provision (above) of s 60 of the 1998 Act.)
Article 81
Of interest here is the case of Cutsforth v Mansfield Inns [1986] 1 All ER 577. C supplied coin-
operated machines to 57 Humberside public houses owned by Northern County Breweries. M
acquired Northern and requested all the tenants of the old Northern public houses to operate
..
EL_C16.qxd 3/26/07 1:01 PM Page 391
equipment supplied by M’s list of nominated suppliers. M refused to put C on that list. This
was held to be an infringement of Art 81 and an injunction was granted preventing M from
interfering with C’s agreements with the tenants of the 57 public houses and from taking any
action to limit the freedom of those tenants to order machines from C. M was not infringing
Art 82 because they were not in a dominant position in the market.
Article 82
An illustration of the use of Art 82 in an English court of law is provided by Garden Cottage
Foods Ltd v Milk Marketing Board [1983] 2 All ER 770. Garden Cottage (the company) was a
middle-man transferring butter from the Board to traders in the bulk market in Europe and
the UK taking a cut of the price. In March 1982 following some packaging problems which the
company appeared to have overcome, the Board refused to supply direct. It said that supplies
must be obtained from one of four independent distributors nominated by the Board.
These distributors were the company’s competitors. The company would have to pay more to
them for its supplies than if it bought direct from the Board. Therefore, it could not compete
on price, and would be forced out of business.
The company alleged that the Board was in breach of Art 82 of the Treaty of Rome. This
provides: ‘Any abuse by one or more undertakings of a dominant position when in the
Common Market or in a substantial part of it, shall be prohibited as incompatible with the
Common Market in so far as it may affect trade between Member States . . .’.
The Court of Appeal, and later the House of Lords (see Garden Cottage Foods Ltd v Milk
Marketing Board above), decided that there had been a breach of Art 82.
As regards remedies the court was asked to grant an injunction restraining the Board from
refusing to maintain normal business relations contrary to Art 82. The case was dealt with on
that basis. However, the House of Lords was of the opinion that the remedy of damages was
available for breach of the Treaty but there is still some uncertainty about this. UK courts
have not as yet clarified precisely what remedies are available in this area.
16
It will be recalled that more recently the Court of Appeal decided in Leyland Daf Ltd v
Automotive Products (1993) that Automotive was not in breach of Art 82 when it refused to
supply goods to Leyland unless Leyland paid £758,955 which Leyland owed to Automotive
(see also Chapter 13).
Enforcement by European Commission

The responsibility for enforcement of the Articles lies with the European Commission. The
Commission is able to levy fines of up to 10 per cent of worldwide turnover as a penalty for
infringement. The classic decision of the Commission was in the Tetra Pak II (1992 OJ L72/1)
case where the Commission levied a fine of 75 m ECU (£52 m) on an organisation for abuses
of Art 86 (now 82).
EC Merger Regulation
Mergers which potentially set up monopolistic undertakings are dealt with under UK com-
petition rules where the merger has only a UK dimension. Where there is an impact on other
European states, the rules of the EC must be taken into account.
Under the EC Merger Regulation, which came into force on 21 September 1990, ‘concen-
trations’ (mergers) involving a combined worldwide turnover of more than 5 billion ECU
(£3.9 bn), and in which at least two of the parties also have a European turnover exceeding
250 million ECU (around £200 m), and not more than two-thirds of the aggregate Community-
wide turnover of the undertakings concerned are in one and the same member state, fall to
..
EL_C16.qxd 3/26/07 1:01 PM Page 392
the European Commission for assessment as the exclusive competition authority. Such mergers
must be formally notified to the EC Commission not more than one week after the conclusion
of the agreement or the announcement of the public bid or the acquisition of a controlling
interest (whichever of these is the earliest). Article 223 of the EC Treaty allows member states
to take measures to protect essential security interests and remove such mergers from the
Commission’s jurisdiction. In recent times a proposed acquisition of British Aerospace was
removed from the Commission’s jurisdiction by the UK government.
Changes were made to the above regulations by Council Regulation No 1310/97, which
came into force on 1 March 1998. The old system, as outlined above, remains in place but the
notification requirements have been extended to a wider category of transactions and, in
addition to the above thresholds, mergers must also be filed in Brussels if:
n the aggregate combined worldwide turnover of the undertakings concerned is more than
2.5 billion ECU;
n in each of at least three member states the combined aggregate turnover of all the under-
takings involved is more than 100 million ECU;
n in each of at least three member states identified above, aggregate turnover of each of at
least two of the undertakings involved is more than 25 million ECU; or
n the aggregate Community-wide turnover of each of at least two of the undertakings con-
cerned is more than 100 million ECU. However, if each of the undertakings involved in
the transaction achieves more than two-thirds of its aggregate Community-wide turnover in
one and the same member state, the EC Merger Regulation will not apply and the parties
will have to make any required filings under national law.
EU merger reform
EU merger rules are currently undergoing reform. Major features of the reform that will be by
way of a new directive are:
n a proposal for companies to request a ‘cooling off’ period of two weeks before probes into
mergers and takeovers. This extra time will enable companies to discuss and present con-
cessions that could help to get mergers and acquisitions approved.
n The concept of ‘dominance’ is to be replaced by the US and UK test of ‘substantial lessen-
ing of competition’.
..
EL_C17.qxd 3/26/07 10:51 AM Page 393
17
DISCHARGE OF CONTRACT
In this chapter we shall consider the four methods by which a contract can be discharged or
terminated.
The discharge of a contract means in general that the parties are freed from their mutual
obligations. A contract may be discharged in four ways: lawfully by agreement, by perform-
ance or by frustration, and unlawfully by breach.
Discharge by agreement
Obviously, what has been created by agreement may be ended by agreement. Discharge by
agreement may arise in the following ways.
Out of the original agreement

Thus the parties may have agreed at the outset that the contract should end automatically on
the expiration of a fixed time. This would be the case, for example, with a lease of premises
for a fixed term. Alternatively, the contract may contain a provision entitling one or both
parties to terminate it if they wish. Thus a contract of employment can normally be brought
to an end by giving reasonable notice. This area of the law is, of course, subject to statutory
minimum periods of notice laid down by s 86 of the Employment Rights Act 1996. They are
one week after one month’s service, two weeks after two years’ service and an additional week
for each year of service up to 12 weeks after 12 years’ service. Section 86 provides that the
employee must, once he has been continuously employed for one month, give at least one
week’s notice to his employer to terminate his contract of employment. This is regardless of
the number of years of service. Individual contracts may provide for longer periods of notice
both by employer and employee.
Change of control clauses

When entering into a contractual arrangement many companies will have carried out
research into the ability of the other party to carry through the contract in terms of finance
and general stability. These matters can, of course, be badly affected by a change in the share-
holder control of the other party particularly where the contract is a continuing one for, e.g.,
the supply of goods over a period. Therefore, the contract when made could be drafted to
..
EL_C17.qxd 3/26/07 10:51 AM Page 394
allow one party to terminate the agreement where the controlling shareholder (if any) in the
other party is changed by a transfer of shares. Such a clause would not normally operate to
automatically discharge the contract but it does give the party who may be adversely affected
the right to terminate if he so desires. Such a clause which operates as a discharge by agreement
is particularly useful if the new controlling shareholder is a corporate competitor.
Out of a new contract

If the contract is executory, i.e. a promise for a promise, and there has been no performance,
the mutual release of the parties provides the consideration and is called bilateral discharge.
The only difficulty here is in relation to the form of the release. The position is as follows:
(a) contracts which are required to be in writing under the Law of Property (Miscellaneous
Provisions) Act 1989 (see further Chapter 11), i.e. contracts involving a sale or other disposi-
tion of land, can be wholly discharged (or rescinded) by an oral agreement but variation
requires a written document containing the variation and signed by both parties. For example,
a revised completion date on the sale of a property requires a written document containing
the variation and signed by both parties (as decided in McCausland v Duncan Lowrie (1996)
The Times, 18 June);
Under the provisions of the Electronic Communications Act 2000 the relevant signatures
may be electronic signatures and will increasingly be so in the developed future.
(b) written contracts other than the above may be rescinded or varied by an oral agreement
(see MSAS Global Logistics Ltd v Power Packaging Inc (2003) The Times, 25 June);
(c) deeds may be rescinded or varied orally;
(d) contracts required to be evidenced in writing, i.e. guarantees, may be totally discharged
by oral agreement but variations must be in writing.
If the contract is executed as where it has been performed or partly performed by one party,
then the other party who wishes to be released must provide consideration for that release
unless it is effected by deed. This is referred to as unilateral discharge. In other words, the doc-
trine of accord and satisfaction applies. This matter has already been dealt with and is really
an aspect of the law relating to consideration (see Chapter 10).
Discharge by performance generally

A contract may be discharged by performance, the discharge taking place when both parties
have performed the obligations which the contract placed upon them. Whether performance
must comply exactly with the terms of the contract depends on the following.
Construction of the contract as entire

According to the manner in which the court construes the meaning, the contract may be an
entire contract. Here the manner of performance must be complete and exact.
Bolton v Mahadeva, 1972 – Where the contract is entire (215)
..
EL_C17.qxd 3/26/07 10:51 AM Page 395
DISCHARGE OF CONTRACT 395
Entire agreement clauses

In addition to the possibility that the court will construe a contract as entire, the parties may
seek to achieve an entire contract by the use of entire agreement clauses that are set out
expressly in the contract. A typical clause has two parts as follows:
n an express statement that the written agreement (and often other documents that the
agreement expressly refers to) contain the whole agreement of the parties regarding the
transaction and supersedes all previous agreements;
n an acknowledgement by the parties that they have not relied on any representation that is
not set out in the agreement.
These clauses are subject to interpretation by the courts in terms of what exactly they
cover and, for example, the second limb is unlikely to exclude liability for fraudulent
misrepresentation.
There is obviously some hardship when the entire contract rule is applied because some-
times work is done by A for B which B does not pay for and certain other approaches have
been worked out by the judiciary as follows.
Substantial performance
If the court construes the contract in such a way that precise performance of every term by
one party is not required in order to make the other party liable to some extent on it, the
claimant may recover for work done, though the defendant may, of course, counterclaim for any
defects in performance. In this connection it should be noted that in construing a contract to
see whether a particular term must be fully performed or whether substantial performance is
enough, the court will refer to the difference between conditions and warranties. A condition
must be wholly performed whereas substantial performance of a warranty is often enough.
17
(Poussard v Spiers and Pond (1876) and Bettini v Gye (1876) – see further Chapter 14.)
Hoenig v Isaacs, 1952 – Where there is substantial performance (216)
Acceptance of partial performance

If, for example, S agrees to deliver three dozen bottles of brandy to B and delivers two dozen
bottles only, then B may exercise his right to reject the whole consignment. But if he has
accepted delivery of two dozen bottles he must pay for them at the contract rate (Sale of
Goods Act 1979, s 30(1)). It is worth noting here that s 30(2A) of the Sale of Goods Act 1979
(inserted by the Sale and Supply of Goods Act 1994) provides that a commercial buyer as dis-
tinct from a consumer may not reject goods for the delivery of the wrong quantity where the
seller can show that the excess or shortfall is so slight that it would be unreasonable to do so.
In the above example the shortfall is not slight and a commercial buyer (as well as a con-
sumer) could reject the goods.
However, the mere conferring of a benefit on one party by another is not enough; there
must be evidence of acceptance of that benefit by the party upon whom it was conferred. The
acceptance must arise following a genuine choice.
..
EL_C17.qxd 3/26/07 10:51 AM Page 396
Sumpter v Hedges, 1898 – Has partial performance been accepted? (217)
Full performance prevented by the promisee

Here the party who cannot further perform his part of the contract may bring an action on a
quantum meruit (a claim for a payment for work done) against the party in default for the
value of work done up to the time when further performance was prevented.
De Barnardy v Harding, 1853 – Where full performance is prevented (218)
Time of performance
Section 41 of the Law of Property Act 1925 provides that stipulations as to the time of per-
formance in a contract are not construed to be of the essence of the contract and therefore
need not be strictly complied with, unless equity would have regarded them as such. There
are the following exceptional situations in which time was of the essence even in equity.
(a) The contract fixes a date and makes performance on that date a condition.
( b) The circumstances indicate that the contract should be performed at the agreed time.
These cases are:
n contracts for the sale of land or a business because uncertainties as to ownership of land
have traditionally been regarded as undesirable and uncertainties as to the ownership of a
business can affect its goodwill;
n commercial contracts such as a sale of goods;
n contracts for the purchase of shares because share values are often volatile, which could affect
the price at which it was agreed to sell them.
(c) Where the time of performance was not originally of the essence of the contract or has
been waived but one party has been guilty of undue delay, the other party may give notice
requiring that the contract be performed within a reasonable time.
Bowes v Shand, 1877 – Sale of goods: time is of the essence (219)

Chas Rickards Ltd v Oppenhaim, 1950 – Waiver of time of delivery (220)
Tender
With regard to the manner of performance, the question of what is good tender arises.
Tender is an offer of performance which complies with the terms of the contract. If goods are
tendered by the seller and refused by the buyer the seller is freed from liability, given that the
goods are in accordance with the contract as to quantity and quality. As regards the payment
of money, this must comply with the following rules.
..
EL_C17.qxd 3/26/07 10:51 AM Page 397
(a) It must be in accordance with the rules relating to legal tender. By s 1(2) and (6) of the
Currency and Bank Notes Act 1954 a tender of a note or notes of the Bank of England
expressed to be payable to bearer on demand is legal tender for the payment of any amount.
A tender of notes of a bank other than the Bank of England is not legal tender, though the
creditor may waive his objection to the tender if he wishes. As regards coins, s 2 of the Coinage
Act 1971, as amended by the Currency Act 1983, provides that coins made by the Mint shall
be legal tender as follows:
(i) Certain gold coins for payment of any amount. We are referring here to the gold
sovereign. These are legal tender if struck after 1837. Even though the sovereign contains
just under 1/4 ounce of gold it is valid only for £1 although it is worth much more as a
collector’s item.
(ii) Coins of cupro-nickel or silver of denominations of more than 10 pence, i.e. 20p, 50p,
£1 and £2 coins are legal tender for payment of any amount not exceeding £10.
(iii) Coins of cupro-nickel or silver of denominations of not more than 10 pence (in practice,
the 5p and 10p coins) are legal tender for payment of any amount not exceeding £5.
(iv) Coins of bronze, i.e. the 2p and 1p coins, are legal tender for payment of any amount
not exceeding 20 pence.
There is power of proclamation to call in coins which then cease to be legal tender or to make
other coins legal tender.
(b) There must be no request for change.
(c) Tender by cheque or other negotiable instrument or by charge card or credit card is not
good tender unless the creditor does not object. It should be noted that if a proper tender of
money is refused the debt is not discharged, but if the money is paid into court the debtor
has a good defence to an action by his creditor and the debt does not bear interest.
In connection with payment by credit card or charge card, the consumer normally dis-
charges his obligation to the seller by payment in this way. If the card company cannot pay
the seller as where that company is insolvent, the seller has no redress against the consumer 17
subject always to the terms of the contract (Re Charge Card Services [1988] 3 All ER 702).
Discharge by receipt
A method of proving payment is by a receipt signed by or on behalf of the person paid. Proof
may, however, be given orally and a court may be satisfied with this. A receipt is not conclusive
evidence of payment and oral evidence is acceptable to the court to prove, e.g., that it was given
in circumstances of fraud. In addition, a receipt given in ‘full discharge’ does not release the
person paid unless there is ‘accord and satisfaction’. Receipts are not normally given in business
today since the passing of s 3 of the Cheques Act 1957 which provides that ‘an unendorsed
cheque which appears to have been paid by the bank on whom it is drawn is evidence of the
receipt by the payee of the sum payable by the cheque’. This, again, is not conclusive evidence
and, since banks do not return used cheques with monthly statements these days, evidence
of payment through the clearing system would have to be sought from the bank, e.g. by a
certified copy of the cheque. The receipt is thus in many ways more straightforward.
Appropriation of payments
In connection with performance, it is important to consider the rules governing appropria-
tion of payments. Certain debts are barred by the Limitation Act 1980 and money which has
..
EL_C17.qxd 3/26/07 10:51 AM Page 398
been owed for six years under a simple contract or 12 years under a specialty contract without
acknowledgement may not be recoverable by an action in the courts. Where a debtor owes
several debts to the same creditor and makes a payment which does not cover them all, there
are rules governing how the money should be appropriated. These are as follows.
(a) The debtor can appropriate either expressly by saying which debt he is paying or by
implication as where he owed £50 and £20 and sends £20.
(b) If the debtor does not appropriate, the creditor can appropriate to any debt, even to one
which is statute-barred (see further Chapter 18). However, if the statute-barred debt is £50 and
the creditor appropriates a payment of £25 to it, the balance of the debt is not revived and
cannot be sued for (Mills v Fowkes (1839) 5 Bing NC 455).
(c) Where there is a current account, there is a presumption that the creditor has not appro-
priated payments to him to any particular item. The major example is a bank current
account. Appropriation here is on a chronological basis, i.e. the first item on the debit side of
the account is reduced by the first item on the credit side: a first in first out principle. This
follows from the rule in Clayton’s Case (1816) 1 Mer 572.
Deeley v Lloyds Bank, 1912 – Clayton’s Case applied (221)
Discharge by frustration generally
If an agreement is impossible of performance from the outset, it is void at common law

(Couturier v Hastie (1856) – see Chapter 12). This is also at the root of s 6 of the Sale of Goods
Act 1979 which provides that where there is a contract for the sale of specific goods and the
goods, without the knowledge of the seller, have perished at the time when the contract is
made, it is void. However, some contracts are possible of performance when they are made
but it subsequently becomes impossible to carry them out in whole or in part and they are
then referred to as frustrated.
The judges developed the doctrine of discharge by frustration, which applies, as the House
of Lords decided in Davis Contractors Ltd v Fareham UDC [1956] 2 All ER 145, in the restricted
set of circumstances where there has been such a change in the significance of the obligation
that the thing undertaken would, if performed, be a different thing than that contracted for.
The subject is considered under the following heads.
Contracts for personal service
Such a contract is discharged by the death of the person who was to perform it; thus if A
agrees to play the piano at a concert and dies before the date on which the performance is
due, his personal representatives will not be expected to go along and play in his stead.
Incapacity of a person who has to perform a contract may discharge it. However, temporary
incapacity is not enough unless it affects the contract in a fundamental manner (Poussard v
Spiers and Pond (1876) – see Chapter 14).
..
EL_C17.qxd 3/26/07 10:51 AM Page 399
If a contract of employment has been brought to an end by reason of frustration, the parties
cannot agree afterwards that the contract continues to exist. Thus, in G F Sharp & Co Ltd v
McMillan [1998] IRLR 632 a joiner lost the use of his left hand and could never work for the
employer as a joiner again. Nevertheless, the parties agreed to keep him ‘on the books’ so that
he could get access to greater pension benefits. The Employment Appeal Tribunal ruled that
this did not amount to a continuation of his contract of employment. The contract had been
terminated by his injury. In consequence, he was not entitled to notice from the employer or
a payment in lieu of notice.
The doctrine of frustration will usually only apply where there is no fault by either party.
Where performance of the contract is prevented by the fault of one party, that party is in
breach of contract and that is the proper approach to the problem.
Storey v Fulham Steel Works, 1907 – Illness did not frustrate the contract (222)
Norris v Southampton City Council, 1982 – Frustration and breach in a personal
service contract (223)
Government interference
In times of national emergency the government may often requisition property or goods in
the national interest. This will have the effect of frustrating relevant contracts.
Re Shipton, Anderson & Co and Harrison Bros’ Arbitration, 1915 – Frustration

by government action (224)
17
Destruction of the subject matter of the contract
Physical destruction of the subject matter of the contract operates to frustrate it.
Taylor v Caldwell, 1863 – A fire at a concert hall (225)
Non-occurrence of an event
Where the taking place of an event is vital to the contract, its cancellation or postponement
will, in the absence of a contrary provision, frustrate it. However, if the main purpose of the
contract can still be achieved, there will be no frustration.
Krell v Henry, 1903 – A coronation is cancelled (226)

Herne Bay Steamboat Co v Hutton, 1903 – Cancellation of a naval review (227)
..
EL_C17.qxd 3/26/07 10:51 AM Page 400
Commercial purpose defeated

Physical destruction of the subject matter is not essential to frustration. It extends to situ-
ations where although there is no physical destruction the essential commercial purpose of
the contract cannot be achieved – a rule referred to as ‘frustration of the common venture’.
Jackson v Union Marine Insurance Co, 1874 – A ship is stranded (228)
Situations in which the doctrine does not apply

It is now necessary to consider the three situations where the application of the rules relating
to frustration are limited.
Express provision in the contract

In such a case the provisions inserted into the contract by the parties will apply. Thus in
some of the coronation seat cases, e.g. Clark v Lindsay (1903) 19 TLR 202, the contracts pro-
vided that if the procession was postponed the tickets would be valid for the day on which it
did take place or that the parties should get their money back with a deduction for the room
owner’s expenses. These took effect to the exclusion of the principles of frustration.
Self-induced events
The rules relating to frustration do not apply where the event making the contract impossible
to perform was the voluntary act of one of the parties.
Leases and contracts for the sale of land

Judicial opinion has been divided as to whether leases and contracts for the sale of land can
be frustrated since these create an interest in land which survives any frustrating event.
Maritime National Fish Ltd v Ocean Trawlers Ltd, 1935 – Effect of a self-induced
frustration (229)
Cricklewood Property and Investment Trust Ltd v Leighton’s Investment Trust Ltd,
1945 – Frustration where a title to land is acquired (230)
The Law Reform (Frustrated Contracts) Act 1943

This important statute has laid down the conditions which will govern the rights and duties
of the parties when certain contracts are frustrated.
Before 1943
The common-law doctrine of frustration did not make the contract void ab initio (from the
beginning) but only from the time when the frustrating event occurred. Thus money due and
not paid could be claimed and money paid before the frustrating event was not recoverable.
..
EL_C17.qxd 3/26/07 10:51 AM Page 401
Chandler v Webster, 1904 – A startling application of the common-law rules (231)
After 1943
The position under the Act is as follows:
(a) Money paid is recoverable.
(b) Money payable ceases to be payable.
(c) The parties may recover expenses in connection with the contract or retain the relevant
sum from money received, if any.
(d) It is also possible to recover on a quantum meruit (a reasonable sum of money as compen-
sation) where one of the parties has carried out acts of part performance before frustration,
provided the other party has received what the Act calls ‘a valuable benefit’ under the con-
tract other than a money payment ‘before the time of discharge’, i.e. to the time of the frus-
trating event. There are difficulties in regard to the expression ‘valuable benefit’, particularly
where the work is destroyed, since the Act is not clear as to whether a sum can be recovered
by the person conferring the benefit where there has been destruction of his work. In Parsons
Bros v Shea (1965) 53 DLR (2d) 86 a Newfoundland court, in dealing with an identical provi-
sion under the Newfoundland Frustrated Contracts Act 1956, held that the carrying out of
modifications to a heating system in a hotel subsequently destroyed by fire could not be
regarded as conferring any ‘benefits’ upon the owner. However, in BP Exploration Co (Libya) v
Hunt (No 2) [1982] 1 All ER 125 the claimants were engaged to develop an oil field on the
defendant’s land and were to be paid by oil from the wells. After the wells came on stream
but before BP had received all the oil which the development contract provided they should
have, the wells were nationalised by the Libyan government which gave the defendant some
compensation. The contract was obviously frustrated but Goff, J, who was later affirmed by the
17
Court of Appeal and the House of Lords, gave BP a sum of 35 million dollars as representing
the ‘benefit’ received by the defendant prior to the frustrating event.
Clearly, here there was a surviving benefit conferred before the frustrating event and at the
time of it, i.e. the value of the oil already removed by Mr Hunt before nationalisation and, of
course, his claim for compensation against the Libyan government. None of these things
would have been available to him before BP’s discovery and extraction of oil on his land.
Since the benefit conferred up to the time of frustration clearly survived the frustrating event,
i.e. the nationalisation, the case does not resolve the problems posed by Parsons Bros v Shea
(above) where the benefit did not survive the frustrating event.
However, it is the better view that there is no need for the benefit conferred to survive the
frustrating event. The court can make an award provided benefit was once conferred. The fact
that it did not survive the frustrating event can be taken into account by the court when
assessing (and probably reducing) how much it gives to the claimant.
The force majeure clause

It is unwise in business to rely on the court to declare that a contract is frustrated. If the court
rules that there is no frustration, the defendant may be required to pay damages for breach to
the other party. It is common, therefore, to include in business contracts what are known as
force majeure clauses. The expression means ‘irresistible compulsion or coercion’ and a typical
clause will contain events likely to impede performance such as strikes, accidents to machinery,
..
EL_C17.qxd 3/26/07 10:51 AM Page 402
government restrictions in terms of licences, wars, epidemics and so on. The contract will go
on to provide that the parties may suspend the contract or cancel it should one or more of
the events happen and there will be no frustration. Why? – because as Lord Denning said in
The Eugenia [1964] 1 All ER 161, ‘The contract must govern’.
Discharge by breach
This occurs where a party to a contract fails to discharge it lawfully but instead breaches one
or more of the terms of the contract. There are several forms of breach of contract as follows:
(a) Failure to perform the contract is the most usual form as where a seller fails to deliver the
goods by the appointed time or where, although delivered, they are not up to standard as
to quality or quantity.
(b) Express repudiation which arises where one party states that he will not perform his part
of the contract.
(c) Some action by one party which makes performance impossible.
Any breach which takes place before the time for performance has arrived is called an anti-
cipatory breach. Thus the situations described in (b) and (c) above are anticipatory breaches.
Where the breach is anticipatory the aggrieved party may sue at once for damages.
Alternatively, he can wait for the time for performance to arrive and see whether the other
party is prepared at that time to carry out the contract.
Hochster v De la Tour, 1853 – An express repudiation (232)

Omnium D’Enterprises and Others v Sutherland, 1919 – An implied
repudiation (233)
White and Carter (Councils) Ltd v McGregor, 1961 – Anticipatory breach: where a
party carries on with the contract (234)
Anticipatory breach and supervening events

It may be dangerous to wait for the time of performance to arrive since the contract may, for
example, have become illegal, thus providing the party who was in anticipatory breach with
a good defence to an action.
Avery v Bowden, 1855 – Anticipatory breach: where the second breach was
excused (235)
Effect of breach on contract

Not every breach entitles the innocent party to treat the contract as discharged. It must be
shown that the breach affects a vital part of the contract, i.e. that it is a breach of condition
rather than a breach of warranty (contrast Poussard v Spiers and Pond (see Chapter 14) with
Bettini v Gye (see Chapter 14) ) or that the other party has no intention of performing his
..
EL_C17.qxd 3/26/07 10:51 AM Page 403
contract as in Hochster v De la Tour (see above) or has put himself in a position where it is
impossible to perform it as in Omnium D’Enterprises and Others v Sutherland (see above).
Other matters relevant to breach
Two further points arise in connection with breach of contract. The first is that the concept
of contributory negligence does not apply. In Basildon District Council v J E Lesser (Properties)
Ltd [1985] 1 All ER 20 the claimant sued for breach of contract in regard to the building
of dwellings which had become unfit for habitation without repair. There was a defence that
the damages payable should be reduced on the basis that the council’s officers were guilty of
contributory negligence. It was said that they should have noticed the lack of appropriate
depth in foundations on seeing the building contractors’ original drawings. It was decided by
the High Court that the defence of contributory negligence did not apply in contract but
only in tort.
It should be noted, however, that the obligation in the above case was entirely contractual.
If the claimant could have sued, either in contract or in tort, as where the damage arises from
a breach of contract and a tort, then even if the injured party decides to sue for breach of
contract only the damages can be reduced if he is contributorily negligent (see Forsikrings
Vesta v Butcher [1988] 2 All ER 43).
The Law Commission in its report made in 1993 entitled Contributory Negligence as a
Defence in Contract recommends that the availability of apportionment of damages for breach
of contract should be extended from the field of tort to cases where the claimant who
complains of breach of contract has contributed to his own loss.
Second, the Drug Trafficking Act 1994, s 50 brought in what is called a ‘laundering’ offence
under which anyone knowingly assisting with the retention, control or investment of drug-
trafficking proceeds could be liable to a term of imprisonment. Banks, building societies, 17
accountants, solicitors and other advisers are given protection by the Act if they disclose their
suspicions about their client’s finances if these seem to be connected with drug trafficking.
However, the Act ensures that they cannot be sued for breach of contract if they pass on to
the appropriate authorities their suspicions that any funds or investments may be connected
with drug trafficking. Section 50 is repealed and replaced by provisions in the Proceeds of
Crime Act 2002.
Impact of the introduction of the euro
The immediate problem to be looked at is that of ensuring that commercial contracts affected
by the arrival of the euro in much of the EU on 1 January 1999 do not operate where required
beyond that date. The main reason for this will be that, as we have seen, a wide variety of con-
tracts governed by English law provide that where a party is unable to perform his contractual
obligations through factors beyond his control (such as in this case the abolition (eventually)
of the currency in which he is required to tender payment), the contract is automatically dis-
charged by frustration – a concept which has no direct equivalent in the rest of the EU, where
law is based on Roman Law – or under a force majeure clause. The Maastricht Treaty deals with
this by providing that, in the absence of an express contrary intention by the parties, the
introduction of the euro will not:
..
EL_C17.qxd 3/26/07 10:51 AM Page 404
n alter any term of the contract;

n discharge or excuse performance under any contract; or
n on its own give any party the right unilaterally to alter or terminate any contract.
The parties can, by expressing a contrary intention, agree that the introduction of the euro
will end the original contractual intention.
Nevertheless, for contracts continuing beyond 1 January 1999, there will have to be some
renegotiation to establish the equivalence of value between the originally contracted cur-
rency and the euro.
..
EL_C18.qxd 3/26/07 10:52 AM Page 405
18
REMEDIES AND
LIMITATION OF ACTIONS
In this chapter we shall consider the various remedies which exist both in common law and
equity to deal with losses arising from contractual relationships and the rules which govern
the recovery of money compensation through damages together with the time limits which
are placed on the bringing of claims.
Damages generally
This is the main remedy for breach of contract and the rules of law relating to an award of
damages are considered below.
Liquidated damages
In some cases the parties foreseeing the possibility of breach may attempt in the contract to
assess in advance the damages payable. Such a provision for liquidated damages will be valid if
it is a genuine pre-estimate of loss and not a penalty inserted to make it a bad bargain for the
defendant not to carry out his part of the contract. The court will not enforce a penalty but
will award damages on normal principles used in the assessment of unliquidated damages
(see below).
Certain tests are applied in order to decide whether or not the provision is a penalty.
Obviously, extravagant sums are generally in the nature of penalties. Where the contractual
obligation lying on the defendant is to pay money, then any provision in the contract which
requires the payment of a larger sum on default of payment is a penalty because the damage
can be accurately assessed. Where the sum provided for in the contract is payable on the
occurrence of any one of several events, it is probably a penalty for it is unlikely that each
event can produce the same loss. If the sum agreed by the parties is regarded as liquidated
damages, it will be enforced even though the actual loss is greater or smaller.
Ford Motor Co (England) Ltd v Armstrong, 1915 – No genuine pre-estimate of

loss (236)
Cellulose Acetate Silk Co Ltd v Widnes Foundry Ltd, 1933 – Liquidated damages
where the loss is smaller (237)
..
EL_C18.qxd 3/26/07 10:52 AM Page 406
Unliquidated damages
Assessment
Unliquidated damages are intended as compensation for the claimant’s loss and not as
punishment for the defendant. Thus where no loss has been suffered, as where a seller fails to
deliver the goods but the buyer is able to purchase elsewhere at no extra cost, the court will
award nominal damages, i.e. an award of a small sum, e.g. £2, to reflect the view that any loss
or damage is purely technical.
Exemplary or punitive damages which exceed the actual loss suffered by an amount
intended to punish the offending party are not awarded for breach of contract. The intention is
that the claimant should be placed in the same situation as if the contract had been performed.
Thus in an action by an employee for wrongful dismissal, the court will base its award on
‘net’ wages, i.e. after deduction of income tax and national insurance contributions. An award
based on ‘gross’ wages or salary would make the employee better off than if the contract had
continued.
Beach v Reed Corrugated Cases Ltd, 1956 – Damages are compensatory (238)
Type of loss recoverable

Damages can include compensation for financial loss, personal injury and damage to property.
Also there may be included a sum by way of compensation for disappointment, vexation and
mental distress.
Jarvis v Swans Tours Ltd, 1973 – Damages for mental distress (239)
Remoteness
Apart from the question of assessment, the matter of remoteness of damage arises. The con-
sequence of a breach of contract may be far reaching and the law must draw a line somewhere
and say that damages incurred beyond a certain limit are too remote to be recovered.
Damages in contract must therefore be proximate.
The modern law regarding remoteness of damage in contract is based upon the case of
Hadley v Baxendale (see below), as further explained in The Heron II (see below). These cases
are authority for the statement that damages in contract will be too remote to be recovered
unless they arise naturally, i.e. in the usual course of things, or if they do not arise naturally
they are such that the defendant, as a reasonable man, ought to have had them in contempla-
tion as likely to result. Damage which does not arise naturally and which would not have
been in the contemplation of the reasonable man can only be recovered if the defendant was
made aware of it and agreed to accept the risk of the loss.
Hadley v Baxendale, 1854 – Where damages are too remote (240)

The Heron II, 1967 – Where damages are in contemplation (241)
Horne v Midland Railway Co, 1873 – Has the defendant agreed to be liable for the
loss? (242)
Victoria Laundry Ltd v Newman Industries Ltd, 1949 – Where loss arises naturally from
the breach (243)
..
EL_C18.qxd 3/26/07 10:52 AM Page 407
REMEDIES AND LIMITATION OF ACTIONS 407
Mitigation of loss
The injured party has a duty to mitigate or minimise his loss, i.e. he must take all reasonable
steps to reduce it. Thus a seller whose goods are rejected must attempt to get the best price for
them elsewhere and the buyer of goods which are not delivered must attempt to buy as
cheaply as possible elsewhere. Loss arising from failure to take such steps cannot be recovered.
Brace v Calder, 1895 – There must be a mitigation of loss (244)
However, the claimant is not under a duty to mitigate his loss before there has been a breach
of contract which the claimant has accepted as a breach. No doubt this is logical but it can
produce startling results (see White and Carter (Councils) Ltd v McGregor (1961), Chapter 17).
More recently the requirement of a ‘legitimate interest’ in keeping the contract going has
made the position more equitable (see, for example, Clea Shipping (1984)).
Provisional damages for personal injury

The Administration of Justice Act 1982, s 6 makes provision for a court to award provisional
damages for contractual claims for personal injury. Thus, in an action for a fracture to the hip
caused to a passenger in an accident involving a negligently driven bus, the court can make
an order for damages payable at once for the fracture and an award of provisional damages in
case in the future chronic arthritis affects the injured passenger. If it does, but not otherwise,
the provisional damages may also be recovered without another visit to the court to prove
the damage.
Damages Act 1996 18

Section 3 of the Damages Act 1996 provides that where a claimant dies of his injuries after
receiving a provisional award his dependants will not be prevented from claiming as depend-
ants for loss of dependency. This is a separate claim made by the executors of the deceased on
behalf of all those who were dependent on him, e.g. a wife. The claim will extend only to losses
not covered by the original award. Since there is also a potential claim by the deceased’s
estate in such a case, the Act makes clear that dependants’ claims will be preferred, if there are
any, thus preventing double recovery by the dependants and then by the estate.
Structured settlements
In more recent times the courts have set up a system of structured settlements. The settle-
ment of a damages claim is by means of a permanent income instead of a single lump sum.
These settlements are confined to personal injury cases and are particularly suitable where the
injuries are serious and the claimant is a young person.
An example is provided by the case of Kelly v Dawes (1990) The Times, 27 September.
Catherine Kelly, a young nurse, was a passenger in a car which was involved in an accident
by reason of the negligence of the defendant who died in the crash. She was awarded, in
effect against the insurance company involved, a structured settlement with monthly pay-
ments guaranteed for her lifetime or for 10 years, whichever proved the longer, and inflation
proofed. Because of a favourable tax treatment by the Inland Revenue, the payments were not
subject to income tax. It follows that claimants who receive structured settlements do not have
..
EL_C18.qxd 3/26/07 10:52 AM Page 408
to concern themselves with investment or inflation, and if they live longer than expected the
money will still be there. They are also protected against their own extravagance and against
payment of tax.
These settlements are most likely to be found in actions for tort, e.g. negligence in terms of
road accidents. Nevertheless, there are situations where the claimant has a claim in contract
and tort as where A is a passenger on a bus and is injured by an accident caused by the
driver’s negligence. The claim here is for the tort of negligence and breach of contract for
which one award is made, but the structured settlement rules are applied (or may be) to the
contract claim as well as the tort claim.
Interest on debt and damages

Under the provisions of the Administration of Justice Act 1982, s 15 and Sch 1, which
inserted s 35A of the Supreme Court Act 1981 and s 69 of the County Courts Act 1984, the
court has power to award interest on debt or damages at the end of the trial or where judg-
ment is obtained in default, i.e. where there is no defence and no trial. Interest may also be
awarded where the defendant settles after service of claim form but before judgment. Interest
is not available where a person settles before service of claim form no matter how long he has
kept the other party waiting. High Court judgments carry interest at a rate that is fixed from
time to time by statutory instrument. Since 1 April 1993 the rate has been fixed at 8 per cent
per annum (Judgment Debts (Rate of Interest) Order 1993 (SI 1993/564)).
County court judgments of £5,000 or more also carry interest and once again the rate is
8 per cent per annum. County court judgments under £5,000 do not carry any interest unless
the debt attracts contractual or statutory interest under the Late Payment of Commercial
Debts (Interest) Act 1998 (see below).
Recovery of debt
Where one party has performed his part of the contract but the other has failed to pay, e.g.
following a supply of goods complying with the contract requirements, the claim of the sup-
plier is for debt rather than damages. The main point to be considered here is the possibility of
recovering interest on unpaid debts. The topic may be considered by looking at the business
procedure which involves the use of a default interest clause in the contract and then by
looking at statutory provisions.
Default interest clauses

A default interest clause can be included in support of any obligation to pay a sum of money
by a given date. A rate of 3 or 4 per cent over the Bank of England base rate is common and
this is payable from the stated due date until payment. The court would enforce such a
clause, but any attempt to make an interest charge except during the period for which the
debt was due may very well be unenforceable as a penalty.
Late payment of commercial debts legislation

The Late Payment of Commercial Debts (Interest) Act 1998 gives creditors a statutory right to
claim interest from debtors on debts relating to commercial contracts for the supply of goods
..
EL_C18.qxd 3/26/07 10:52 AM Page 409
and services. The Act was brought into force by stages. However, on 7 August 2002 the final
phase of the implementation was made and the Act now applies to ALL businesses and public
sector bodies.
Application of the Act

The Act applies to contracts for the supply of goods or services where the purchaser and the
supplier are acting in the course of a business. It does not apply to consumer credit agree-
ments or to any contract that operates by way of a security, for instance a mortgage, pledge,
or charge.
What is the rate of interest?

Interest is calculated at 8 per cent above the Bank of England base rate. To simplify matters
and avoid an ever changing rate, interest is calculated at 8 per cent above the base rate in
force on 30 June for interest that starts to run between 1 July and 31 December or the base
rate in force on 31 December for interest that starts to run between 1 January and 30 June.
Thus where the base rate is, say, 4 per cent on the applicable date, the late payment rate will
be 12 per cent. The Act gives suppliers an entitlement to simple interest only and not com-
pound interest, i.e. interest on interest. From 1 January 2006, and in view of the then Bank of
England base rate, the rate is 12.5 per cent.
From when does interest run?

Interest starts to run from the day after the due date for payment or, where no such date has
been agreed, when 30 days have elapsed from the delivery of the goods or the carrying out of
the services or notice being given to the purchaser of the amount of the debt, whichever is
the later.
Recovering the costs

In addition to interest, a business can claim reasonable debt recovery costs, but only where
the contract concerned was made on or after 7 August 2002.
The costs that are allowed are as follows:
18
n debt of less than £1,000: recovery costs £40;
n debt between £1,000 and £10,000: recovery costs £70;
n debt of more than £10,000: recovery costs £100.
A major problem in enforcement

A major problem in terms of the enforcement of the Act by small and medium enterprises
against the larger organisations and public authorities is the fear that enforcement will lead
to the loss of contracts. Some assistance is given by the Late Payment of Commercial Debts
Regulations 2002 (SI 2002/1674). The regulations give a right to trade and other bodies repres-
enting SMEs to challenge on their behalf express contractual terms in regard to payment and
interest that are unfair to SMEs (see below).
Express terms for payment of interest

The Act does not rule out contractual terms that have been agreed by the parties for payment
of interest but unless they are ‘substantial’ the court will regard them as void and apply the
provisions of the Act. It does not follow that because the contractual provision is less gener-
ous than the Act that it will be regarded as void but, among other things, the strength of the
bargaining power of the parties is relevant. This may render void a less generous clause
..
EL_C18.qxd 3/26/07 10:52 AM Page 410
imposed on a small or medium-sized enterprise by a conglomerate. However, the conglomer-

ate’s less generous clause may be binding where the supplier has received an inducement to
accept the term, such as a longer-term contract to supply goods or services.
EU developments
EU industry ministers have reached agreement on a European-wide Directive to combat late
payment of debt. Progress is now being made towards the adoption of the Directive. The
Directive entitled Combating the Late Payment of Commercial Debt is to provide interest at 6 per
cent above the Bank of England or European Central Bank base rate in the event of late
payment. The parties will retain freedom of contract to decide when debts should be paid,
but interest would start to accrue 30 days after the date for payment. Member states may
introduce provisions more favourable to creditors. The advantage of the Directive will be that
small and medium entities in the UK can be sure of rights similar to those in the UK wherever they do
business in the EU.
Equitable remedies
Damages are the common law remedy for breach of contract. However, in some situations
equity will provide more suitable remedies and these will now be considered.
A decree for specific performance

This is an equitable remedy which is sometimes granted for breach of contract, where damages
are not an adequate remedy or where specific performance is regarded by the court as a more
appropriate remedy (see Beswick v Beswick (1967), Chapter 10). It is an order of the court and
constitutes an express instruction to a party to a contract to perform the actual obligations
which he undertook in a contract. For all practical purposes the remedy is now confined to
contracts for the sale of land, though it may be a more appropriate remedy in the case of a
contract to pay an annuity because the exact value of the annuity will depend on how long
the annuitant lives and this cannot be known at the time of the breach (see Beswick v Beswick
(1967), Chapter 10). It is not normally granted in the case of contracts for the sale of goods
because other goods of a similar kind can be purchased and the difference assessed in money
damages. In addition, it should be noted that specific performance will not be granted if the
court cannot adequately supervise its enforcement. Thus contracts of a personal nature, such
as employment, which rely on a continuing relationship between the parties, will not gener-
ally be specifically enforced because the court cannot supervise performance on the day-to-
day basis which would be necessary. However, if constant supervision by the court is not
required, a decree of specific performance may be made of a personal service undertaking.
Thus in Posner v Scott-Lewis [1986] 3 All ER 51 Mervyn-Davies, J decided that the tenants of a
block of flats could enforce by specific performance an undertaking in their leases that the
defendant landlords would employ a resident porter to keep the communal areas clear. The
court had only to ensure that the appointment was made. The claimants were not asking
the court to supervise the porter’s day-to-day work. Furthermore, specific performance will
not be awarded either to or against a minor because a minor’s contracts cannot in general
be enforced against him and those which can, i.e. beneficial contracts (see Chapter 11), are in
..
EL_C18.qxd 3/26/07 10:52 AM Page 411
the nature of contracts of personal service. Equity requires equality or mutuality as regards its
remedies and this does not exist in the case of minors’ contracts.
An injunction
This is an order of the court used in this context to direct a person not to break his contract.
The remedy has a somewhat restricted application in the law of contract and will be granted
to enforce a negative stipulation in a contract where damages would not be an adequate remedy.
Being an equitable remedy it is only ordered on the same principles as specific performance,
so that it will not normally be awarded where damages are an adequate remedy (but see
Garden Cottage Foods Ltd v Milk Marketing Board (1983), Chapter 16). Its main use in the con-
tractual situation has been as an indirect means of enforcing a contract for personal services
but a clear negative stipulation is required. The court will not imply one.
Warner Brothers Pictures Incorporated v Nelson, 1937 – Enforcing a negative

stipulation (245)
Whitwood Chemical Co v Hardman, 1891 – A negative stipulation will not be
implied (246)
Freezing injunction
This remedy, which can be of assistance to a party suing for breach of contract, has developed
considerably over recent times. It was formerly known as a Mareva injunction but is now
called a freezing injunction under the Civil Procedure Rules 1998 that followed the Woolf
reforms of civil procedure. In general terms a court will not grant an injunction to prevent a
person disposing of his property merely to assist a person suing, for example, for a debt, to
recover his money. However, the freezing injunction is an exception to that general rule and
is granted to restrict removal of assets outside the jurisdiction, often by a foreign defendant,
where this is a real and serious possibility. The injunction took its original name from the
second case in which it was awarded, i.e. Mareva Compania Naviera SA v International Bulk 18
Carriers SA [1975] 2 Lloyd’s Rep 509. However, the power of the High Court to issue a freezing
injunction is now recognised by s 37 of the Supreme Court Act 1981 which makes it clear that
the power applies to domestic as well as foreign defendants, whether the latter are residents
in this country or not (The Siskina [1977] 3 All ER 803). However, the power is only to freeze
assets within the jurisdiction of the English court. It cannot be used to freeze assets abroad.
An order of a local court must be obtained (Babanaft International Co SA v Bassante (1988) 138
NLJ 203). It is, however, a valuable addition to existing contractual remedies, particularly
when business is now so often conducted on an international scale.
A search order
This is an order that may be issued under the Civil Procedure Rules 1998. It permits the rep-
resentatives of a claimant to enter the defendant’s premises to inspect and remove vital
material or evidence where it is contemplated that there is a risk that the defendant might
destroy or otherwise dispose of them. It was previously referred to as an Anton Pillar order
from the title of the case in which it was first granted.
Rescission
This is a further equitable remedy for breach of contract. The rule is the same when the remedy
is used for breach as it is when it is used for misrepresentation. If the contract cannot be
..
EL_C18.qxd 3/26/07 10:52 AM Page 412
completely rescinded, it cannot be rescinded at all; it must be possible to restore the status
quo. All part payments must be returned. In this connection the fact that a claimant has
rescinded the contract does not prevent that claimant from bringing an action for debts owed
under the contract prior to rescission. These are not regarded as abandoned by the order of
rescission (see Stocznia Gdanska SA v Latvian Shipping Co [1998] 1 All ER 883).
Refusal of further performance: a self-help remedy

If the person suffering from the breach desires merely to get rid of his obligations under the
contract, he may refuse any further performance on his part and set up the breach as a defence
if the party who has committed the breach attempts to enforce the contract against him.
Claims for restitution: quasi-contract

Quasi-contract is based on the idea that a person should not obtain a benefit or an unjust
enrichment as against another merely because there is no obligation in contract or another
established branch of the law which will operate to make him account for it. The law may in
these circumstances provide a remedy by implying a fictitious promise to account for the
benefit or enrichment. This promise then forms the basis of an action in quasi-contract.
In practice the following two areas are important.
Claims on a quantum meruit

This remedy means that the claimant will be awarded as much as he has earned or deserved.
The remedy can be used contractually or quasi-contractually as follows.
(a) Contractually. Here it may be used to recover a reasonable price or remuneration where
there is a contract for the supply of goods or services but the parties have not fixed any pre-
cise sum to be paid. This area is also covered by statute law in the case of a sale of goods by
s 8 of the Sale of Goods Act 1979, and in the case of a supply of goods, e.g. a new distributor
in a car repair contract, or the mere supply of a service by s 15 of the Supply of Goods and
Services Act 1982.
(b) Quasi-contractually. A claim on this basis may be made where, for example, work has
been done under a void contract. The claimant cannot recover damages for breach because
no valid contract exists, but he may in some circumstances recover on a quantum meruit.
Craven-Ellis v Canons Ltd, 1936 – A claim on a quantum meruit (247)
Total failure of consideration: actions for money had and received

Of particular importance here is the action for total failure of consideration. A total failure
will result in the recovery of all that was paid. A common reason for total failure of considera-
tion arises where A, who has no title, sells goods to B and B has to give up the goods to the
true owner. B can then recover the whole of the consideration from A, his action being based
upon the quasi-contractual claim of money had and received.
It should be noted that the action is based on failure of consideration and not its absence.
Thus money paid by way of a gift cannot be recovered in quasi-contract. As we have seen, the
..
EL_C18.qxd 3/26/07 10:52 AM Page 413
decision in Rowland v Divall (1923) would appear to have been based on total failure of con-
sideration (see Chapter 14).
Payments made under a mistake

This is a further aspect of restitution by use of an implied promise in the recipient to repay
the sum(s) involved.
Payment under a mistake of fact

A claim lies (derived from the old action for money had and received) where money has
been paid under a mistake of fact. The error may arise from an error in calculation as where
defective arithmetic causes a debtor to pay more than he owes the creditor or where there is
duplication of an item again in the debtor’s accounts so that he pays it twice.
Payment under mistake of law

Until recent times, there was no claim for money paid under mistake of law. However, the
House of Lords overturned this old rule in Kleinwort Benson Ltd v Lincoln City Council [1998] 4
All ER 513 where their Lordships ruled that money paid under a contract which was ultra vires
or beyond the legal powers of the Council was nevertheless recoverable by the claimant who
had made the payment.
Limitation of actions
Contractual obligations are not enforceable for all time. After a certain period the law bars
any remedy in the main because evidence becomes less reliable with the passage of time.
Time is the greatest enemy of the truth! The Limitation Act 1980 lays down the general periods
within which an action may be brought. They are as follows.
(a) An action on a simple contract may be brought within six years from the date when the 18
cause of action accrued.
As we have already noted, where the parties are broadly of equal bargaining power the
above period of six years can be reduced by a term of the contract, in the relevant case to
nine months after the provision of a service (see Granville Oil and Chemicals Ltd v Davis Turner
& Co Ltd (2003) (unreported), Chapter 9). The case is not on its facts applicable to deeds.
(b) An action upon a contract made by deed may be brought within 12 years from the date
when the cause of action accrued.
Where the claimant’s claims include a claim for damages in respect of personal injury, the
period is three years.
A person may suffer personal injury the extent of which only comes to light more than
three years after the breach of contract which caused it. For example, A is a passenger on B’s
coach and B’s careless driving causes an accident as a result of which A suffers injury consist-
ing of bruising of the face. Four years later A goes blind as a result of the accident. Under the
Limitation Act 1980, A has three years from his knowledge of the blindness to sue B and the
court’s permission is not required. The court may extend this period at its discretion, though
in this case application must be made to the court for the extension.
A right of action ‘accrues’ from the moment when breach occurs, not from the date when
the contract was made. Thus, if money is lent today for four years, the creditor’s right to
recover it will not expire until 10 years from today.
..
EL_C18.qxd 3/26/07 10:52 AM Page 414
If when the cause of action accrues the claimant is under a disability by reason of minority
or unsoundness of mind, the period will not run until the disability is ended or until his death,
whichever comes first. Once the period has started to run, subsequent insanity has no effect.
If the claimant is the victim of fraud or acts under a mistake or deliberate concealment, the
limitation period will not begin to run until the true state of affairs is discovered or should
with reasonable diligence have been discovered.
Lynn v Bamber, 1930 – Limitation of actions where there is fraud, etc. (248)
The Limitation Act does not truly discharge a contract, which is why it has been dealt with
separately here. The Act merely makes the contract unenforceable in a court of law and if the
defendant does not plead the statutes of limitation, the judge will enforce the contract. In
addition, where the contractual claim is not for damages but for a debt or other liquidated
(i.e. ascertained) demand, time for making a claim can be extended by a subsequent payment
of money not appropriated by the debtor, because, as we have seen, the creditor can appro-
priate it, or by the debtor or his duly authorised agent making a written acknowledgement of
the debt to the creditor or his agent. Time begins to run again from the date of the acknow-
ledgement. However, once a debt is statute-barred, it cannot be revived by acknowledgement
in this way (Limitation Act 1980, s 29). Electronic acknowledgement by telex was held valid
by the Court of Appeal in Good Challenger Navegante SA v MetalExportImport SA [2004] 1
Lloyd’s Rep 67.
Equitable remedies, i.e. specific performance or an injunction, are not covered by the ordin-
ary limitation periods but will usually be barred much earlier under general equitable rules. An
equitable remedy must be sought promptly and, according to the nature of the contract, a
short delay of weeks or even days may bar the remedy.
Finally, the enforcement of a judgment debt does not become statute-barred by lapse of
time under s 24 of the Limitation Act 1980 so that a judgment once obtained can be
enforced, e.g. by a sale of the defendant’s goods even though the relevant statutory period
has elapsed. The amount of interest recoverable from the judgment until payment is similarly
not limited to the relevant period but is limited to six years before the judgment is executed.
Thus, if A obtains a judgment against B in 1998, he can still execute it to take the defendant’s
property for sale even though he leaves it until, say, 2005 to execute it. However, he can
only recover interest on the judgment for six years prior to 2005 (Lowsley v Forbes (1996) The
Times, 5 April).
Reform
In 2001 the Law Commission issued a report entitled Limitation of Actions. The report recom-
mends a single regime of periods of limitation to be applied to all claims. There would be:
n A primary limitation period of three years from the date on which the claimant knew or
ought reasonably to have known the relevant facts with a long stop period of ten years
starting from the date on which the relevant events occurred.
n Exceptionally personal injury claims would only be subject to the three-year limitation period
and not the 10-year period. The court would then have a discretion to disapply the primary
period in appropriate cases.
n Claims to recover land would not fall under the main regime but would be subjected to a
10-year limitation period that will run from the date on which the cause of action accrued.
At the time of writing, no further action has been taken.
..
EL_C19.qxd 3/26/07 10:52 AM Page 415
19
EMPLOYMENT RIGHTS
An ever-increasing feature of contract law is the way in which particular contracts are
controlled by legislation to which the general principles of contract law yield; nowhere is this
more obvious than in the contract of employment. Accordingly, the main features of this
legislation, which are so important in all walks of business life, are given below.
Recruitment and selection of employees

Here the prospective employer must take account of discrimination legislation. The Equal
Opportunities Commission set up under the Sex Discrimination Act 1975 (SDA) has the duty
to work towards the elimination of discrimination on the grounds of sex. The Race Relations
Act 1976 (RRA) sets up the Commission for Racial Equality with powers much the same as the
Equal Opportunities Commission. The Disability Rights Commission set up under the Dis-
ability Discrimination Act 1995 (DDA) has similar powers. The government intends to create
one commission to deal with all of the ever growing areas of discrimination liability. This has
been initiated by the Equality Act 2006. It provides for the setting up of the Commission for
Equality and Human Rights. The government has stated that the new Commission will
become operative in 2007 with all Commissions and matters of discrimination being incor-
porated in 2008/09.
It is unlawful for a prospective employer (and an employer) to discriminate between
applicants for jobs on the grounds of sex or marital status, colour, race, nationality or
ethnic or national origins or on the grounds of sexual orientation, religion or belief, gender
reassignment or age.
It is also unlawful to publish an advertisement which could be interpreted as dis-
criminatory. Thus job descriptions such as ‘waiter’ and ‘salesgirl’ have largely disappeared
from our newspapers. However, one still sees advertisements which are clearly intended to
attract female employees which are nevertheless within the law, e.g. ‘publishing director
requires sophisticated PA/secretary with style and charm who can remain cool under
pressure’.
Under the SDA it is unlawful for a person to discriminate against another on grounds of sex
or on grounds of marital status when determining who will be offered a job and in regard to
the terms and conditions of the job. There are exceptions where the sex or marital status of
the person required is a genuine occupational qualification (GOQ), e.g. for reasons of physio-
logy (as in the employment of a model) or for reasons of decency or privacy (as in the case of
..
EL_C19.qxd 3/26/07 10:52 AM Page 416
an attendant in a public lavatory) or where the job is one of two held by a married couple, as
where the woman is to be a housekeeper living in with her husband who is to be employed as
a gardener or a married couple is required to manage a club and live in.
Sex and race discrimination

Discrimination may be direct or indirect.
Direct discrimination. There is direct discrimination against a person if on the ground of

race or sex that person is treated less favourably than a white or male person would be. This
covers the usual scenario though, of course, both white and male persons can be discriminated
against, but there is little case law on this.
Indirect discrimination. This occurs, e.g., where an employer has applied requirements or
conditions to a job but the ability of some persons to comply because of sex, marital status
or race is considerably smaller and cannot be justified.
Examples
n A company wishes to appoint a black woman to supervise a call centre but changes its
mind when some of the white operators object. This is direct racial discrimination.
n A firm wishes to appoint a woman to a post as senior manager but she will be dealing
mainly with one particular client who says he would prefer to work with a man. The firm,
therefore, appoints a man instead. This is direct sexual discrimination by the employer.
n A company has a strict office rule that women way not wear trousers in the office. A
Muslim woman who applies for a job with the company is unable to comply with this rule
because religion and custom forbid the wearing of skirts and she must cover her legs. The
proportion of the members of her racial group who can comply is considerably smaller
than the proportion of other persons who can comply, although religious discrimination
as such is not forbidden. This is indirect discrimination under the RRA but also now the dis-
crimination rules relating to religion or belief.
An employer need not take the above applicants into work, but if he does not, he faces a
claim for compensation. There may also be a genuine occupational qualification (see below).
However, s 7(4) of the SDA imposes a duty on employers to take reasonable steps to avoid
relying on GOQ exceptions, so that where the employer already has sufficient female staff
in a department store to, say, measure women for clothing, it may be unlawful not to employ
a man for other duties in the relevant department of the store, e.g. in the women’s shoe
section or even in the clothing department if the job does not include intimate contact with
the customers.
It should be noted that it is unlawful in all partnerships to discriminate on the grounds
of race in regard to the selection of new partners and benefits, facilities, or services given to
partners, unless a GOQ applies. Sex discrimination is unlawful in partnerships of all sizes and
sex and race discrimination is unlawful in all companies and by sole traders, no matter how
small the workforce.
It is also contrary to law to give unfavourable treatment to a person by way of victimisation.
This occurs where, e.g., the person has taken proceedings in respect of discrimination or has
threatened to do so, as where an employer refuses a job to a female applicant because she is
involved in an unresolved sexual harassment case as in Cornelius v Manpower Services Commission
(SXD 36117/86).
As regards race, it is lawful to discriminate where there is a GOQ for the job as, for example,
in the employment of a West Indian social worker or probation officer to deal with pro-
blems relating to young persons of West Indian extraction. Other instances are dramatic
..
EL_C19.qxd 3/26/07 10:52 AM Page 417
EMPLOYMENT RIGHTS 417
performances or other entertainment, artists or photographic models and employment in

places serving food or drink to be purchased and consumed on the premises by the public.
Thus, being Chinese is a GOQ for employment in a Chinese restaurant, but not necessarily in
a ‘take-away’.
Exceptions
(a) Work outside Great Britain. Race, sex and disability discrimination legislation does not
apply to work which is done wholly outside Great Britain.
However, under discrimination regulations passed to implement the EU Equal Treatment
Directive a person who works or is to work wholly outside Great Britain will be able to use
the discrimination laws if:
n the employer has a place of business at an establishment in Great Britain; and

n the work is for the purposes of that business; and
n the employee is ordinarily resident in Great Britain at the time when he applies for or is
offered the employment or is so resident at any time during the employment.
( b) Under s 5 of the Employment Act 1989. Under these provisions the appointment of
head teachers in schools and colleges may be restricted to members of a religious order where
such a restriction is contained in a trust deed or other relevant instrument setting up the
school or college. This is still the case in spite of the rules rendering unlawful discrimination
on the grounds of religion or belief.
Enforcement
As regards enforcement, those who believe they have been discriminated against may com-
plain to an employment tribunal within three months of the date of the act complained of.
A conciliation officer of the Advisory Conciliation and Arbitration Service will try to settle the
complaint without the need for a tribunal hearing.
In addition, it is possible once in employment for an employer and employee to settle a
dispute by a binding agreement, called a compromise contract or agreement, in which the
employee waives the right to bring or continue with a claim before an employment tribunal
19
relating to the dispute in question. However, it is essential that the employee has received
independent legal advice before entering into the contract.
If the matter goes to a tribunal, the tribunal may make an order declaring the rights of the
parties in relation to the complaint. In addition, it may make an order for compensation,
without limit as to amount, which could cover loss of prospective earnings and injured feel-
ings. It may also recommend that the employer take, within a specified period, action which
appears to the tribunal to be practicable for the purpose of obviating or reducing the adverse
effect of any act of discrimination on which the complaint is based. Proceedings (relating for
example to discriminatory advertisements and instructions to discriminate) will in future
only be instituted by the Commission for Equality and Human Rights.
Johnson v Timber Tailors (Midlands), 1978 – Racial discrimination (249)

Sisley v Britannia Security Systems, 1983 – A matter of decency (250)
Trade union members and non-members

Discrimination against job applicants on the ground of trade union membership or non-
membership is dealt with in much the same way as other forms of discrimination. It is
..
EL_C19.qxd 3/26/07 10:52 AM Page 418
unlawful to refuse employment to a person because he or she is or is not a member of a trade

union or is unwilling to become or remain a member. Application to a tribunal must be made
within three months of the date of refusal and there is no cap on awards.
Discrimination against the disabled

The Disability Discrimination Act 1995 applies as follows.
Applicants for employment

It is unlawful to discriminate against disabled persons in deciding whom to interview, whom
to give the job to and the terms of the offer. The potential employer has a defence if he
believes on reasonable grounds that the nature of the disability will substantially affect the
disabled person’s ability to carry out the required task(s).
Employers are required to make reasonable adjustments in the working conditions and the
workplace to accommodate disabled persons, but cost may be taken into account in deciding
what is reasonable.
Reasonable adjustments include changes to the physical environment, such as widening a
doorway to allow for wheelchair access. Also included are changes to arrangements in the
workplace, such as flexible working hours, purchasing specialised equipment and allowing
time off for treatment. If the employer rents his premises, the landlord cannot reasonably
refuse permission to accommodate the disabled person(s), however, the landlord may require
that the premises be returned to their original condition when vacated. Unreasonable refusal
to make changes by a landlord can result in a claim for discrimination before an employment
tribunal which can recommend steps to be taken by the landlord, refusal to take these steps
resulting in increased money compensation.
These provisions have effect on the GOQ rules that apply more clearly in other areas of
discrimination. With a disabled person the occupational qualification, i.e. for a non-disabled
person can often be overcome by making adjustments in the workplace.
Exceptions
The 1995 Act only applies to employers who employ 15 or more people. This exception is
removed from 1 October 2004 by the Disability Discrimination Act 1995 (Amendment)
Regulations 2003. The disability discrimination rules will from then on apply to all employers,
though it does not apply to operational staff in the prison service or fire service. Complaints
must be made to a tribunal within three months of the act complained of and monetary
compensation can be awarded. There is no cap upon the amount.
Disability defined
The 1995 Act defines disability as ‘a physical or mental impairment which has a substantial
and long-term adverse effect on a person’s ability to carry out normal day-to-day activities’.
Impairment includes things such as blindness, deafness or learning disabilities and mental
illness. ‘Substantial’ means more than a minor or trivial problem. ‘Long-term’ means effects
that have lasted at least 12 months or are likely to last for the rest of the person’s life. Persons
are covered by the Act if they have a severe disfigurement, even though it may not have any
effect on the ability to carry out normal activities.
‘Day-to-day’ activities are defined as activities that involve moving from place to place,
manual dexterity, physical co-ordination, continence, the ability to lift, carry or move
objects, speech, hearing or eyesight, memory or the ability to concentrate, learn or under-
stand and being able to recognise physical danger. The definition includes persons who have
..
EL_C19.qxd 3/26/07 10:52 AM Page 419
had a disability in the past, even if they no longer have it. This follows a government pledge
to include those with a history of disablement. Medication or equipment that helps the dis-
abled person is ignored, but glasses or contact lenses are not. It is the disability with the
glasses or contact lenses which is considered.
The Disability Discrimination Act 2005 extends the definition of ‘disability’ specifically to
cover those with HIV infection, cancer and multiple sclerosis from the time of diagnosis. The
1995 Act required that they had reached a significantly disabling point. Furthermore, the
requirement in the DDA 1995 that a mental illness must be ‘clinically well recognised’ is
removed.
The DDA 2005 also carries provisions relating to discriminatory advertisements which were
not in the DDA 1995.
Enforcement
This is by application to an employment tribunal within three months of the discriminatory
act. Damages for financial loss or hurt feelings is recoverable with no cap on the award.
Discrimination against transsexuals

The decision of the ECJ in P v S and Cornwall CC [1996] IRLR 347 was to the effect that the
SDA 1975 should be applied to discrimination in connection with gender reassignment.
The decision was confined to the public sector on the basis of the direct effect of EU law on
‘emanations of the state’. However, in Chessington World of Adventure Ltd v Reed [1997] IRLR
556 the Employment Appeal Tribunal ruled that it was possible to interpret the SDA 1975 as
applying to prohibit discrimination in connection with gender assignment in the private
sector. The position now is that the Sex Discrimination (Gender Reassignment) Regulations
1999 (SI 1999/1102) have inserted s 2A into the SDA 1975 and this prohibits direct discrimina-
tion against a person on the grounds that he or she intends to undergo, is undergoing or has
undergone gender reassignment. This provision regulates equal pay in this area rather than the
Equal Pay Act 1970.
Section 2A does not protect against indirect discrimination but the EU Equal Treatment
Directive would appear to do so. In addition, s 2A applies only in the context of employment 19
and vocational training. In view of the probable contravention of the Equal Treatment
Directive, UK law may require further amendment.
Restricted reporting orders

It is, of course, important in the above cases that confidentiality be preserved. In this connec-
tion, procedural rules for cases in the High Court allow for restricted reporting orders to be
made. There is now specific power to make such orders in current rules relating to tribunals.
Genuine occupational qualifications

The SDA 1975, as amended, provides for GOQ exceptions to this form of discrimination.
However, the alleged GOQ must be accepted by the court or tribunal. For example the
Court of Appeal decided in A v Chief Constable of West Yorkshire [2003] 1 All ER 593 that a
person who had declared to the employer on interview that she was a male to female
transsexual was discriminated against on the grounds of sex when she was refused a post as a
woman police officer because by law certain searches had to be conducted by a person of the
same sex. The claimant was prepared to declare the gender change at the time of search.
On the facts of this case a person who had become the acquired gender after following
the procedures set out in the Gender Recognition Act 2004 would be discriminated against
..
EL_C19.qxd 3/26/07 10:52 AM Page 420
without court approval because the SDA 1975 is amended by the 2004 Act to give statutory
recognition to the acquired gender.
Human rights
Although transsexuals have some protection as regards employment and vocational training
under UK discrimination legislation, the European Court of Human Rights is extending pro-
tection by applying the Convention on Human Rights. Thus in Goodwin v UK [2002] IRLR
664 the ECHR considered the case of a male to female transsexual who complained of dis-
crimination in that she was still regarded as a man for the purposes of retiring age, i.e. 65 not 60
and the requirement to pay national insurance contributions after age 60. Such contributions
cease on reaching state retirement age. The ECHR ruled that Art 8 of the Convention (right to
respect for private and family life) had been infringed.
Discrimination on the grounds of sexual orientation

The Employment Equality (Sexual Orientation) Regulations 2003 (SI 2003/1661)
They apply from 1 December 2003. The regulations make it unlawful to discriminate on the
grounds that a person is gay, heterosexual or bisexual in employment and vocational train-
ing. They prohibit direct and indirect discrimination in recruitment and victimisation and
harassment once in employment. All partnerships of whatever size are covered.
Genuine occupational requirements (GORs). The regulations use the expression ‘genuine
occupational requirement’ rather than a reference to a ‘genuine occupational qualification’. The
practical effect is the same. Importantly the regulations make clear that a GOR can exempt an
otherwise unlawful discrimination. There is a specific GOR for the purposes of ‘an organised
religion’ that would allow such a religion to exclude, e.g., gay clergy.
Positive discrimination. The regulations allow positive discrimination in regard to training

where it reasonably appears to the person initiating the positive discrimination that it will
prevent or compensate for disadvantages linked to sexual orientation suffered by persons of
that sexual orientation doing certain types of work or likely to take it up. This substitutes for
the test in other areas which is that workers covered are under-represented in the workforce
which would not be easily ascertainable in terms of sexual orientation.
Marital status. The regulations do not prohibit anything such as a term of employment that
prevents access to a benefit by reference to marital status. Obviously discrimination on the
grounds of marital status is unlawful under the SDA 1975 so that it would be unlawful to
exclude married persons from benefits. However, only persons who are married according to
law can regard themselves as within the protection of marital status. Persons of the same sex
living together are not within the protection offered by marital status.
Pensions. It is unlawful for an employer to discriminate against a person on the grounds

of sexual orientation in relation to membership of a pension scheme. The regulations do not
extend protection to the trustees and the managers of schemes. Provisions covering these
persons have now been made and are in force.
Claims jurisdiction. Claims may be brought before employment tribunals in line with the
time limits set for other discrimination claims. There is no cap on compensation.
Direct and indirect discrimination: definitions. Although the Religion and Belief Regula-
tions are considered more fully below, it is convenient to deal with the definitions here
because they are similar to those for sexual orientation.
..
EL_C19.qxd 3/26/07 10:52 AM Page 421
Direct discrimination. The SDA, the RRA and the Sexual Orientation and the Religion and
Belief Regulations all use the same method for identifying direct discrimination, i.e. less
favourable treatment by comparing the treatment of the alleged victim with that of an actual
or hypothetical comparator not of the same sex, race or sexual orientation or not of the same
religion or belief.
Indirect discrimination. The Sexual Orientation and the Religion and Belief Regulations
both use the same basic test and state that a person (A) discriminates against another (B) if:
A applies to B a provision, criterion or practice which he applies or would apply equally to
persons not of the same sexual orientation or religion or belief but which –
n puts or would put persons of the same sexual orientation or religion or belief as B at a par-
ticular disadvantage when compared with other persons;
n puts B at that disadvantage; and
n A cannot show this to be a proportionate means of achieving a legitimate aim.
No doubt tribunal case law will soon start to interpret the above provisions. It is, however,
worth noting that informal practices can be indirectly discriminatory under the test as well as
contractual requirements.
Discrimination on the grounds of religion and belief

The Employment Equality (Religion and Belief ) Regulations 2003 (SI 2003/1660) apply from
2 December 2003. Prior to the coming into force of the regulations some religious groups have
been able to claim protection under the RRA 1976, e.g. Jews and Sikhs. However, the Religion
and Belief Regulations introduce for the first time a general protection from discrimination
on the grounds of religion or belief. This is defined by the regulations as any religion, reli-
gious belief or philosophical belief. It is thought that political beliefs will not fall within the
regulations. As to what is a religion or belief, it is likely that tribunals will see the need for
factors such as collective worship, a clear belief system and/or a profound belief affecting a
person’s way of life and view of the world when deciding whether in the circumstances the
regulations should be applied. 19
Direct and indirect discrimination. These matters have already been considered when deal-
ing with the sexual orientation regulations. There is, however, a specific instance of indirect
discrimination regarding Sikhs. Under this provision the requirement that those on construc-
tion sites must wear helmets would, by excluding Sikhs, be a form of indirect discrimination
against them. It would be a requirement that they could not meet because of a religious
requirement to wear a turban. The regulations here are consistent with s 11 of the Employ-
ment Act 1989 that exempts Sikhs generally from requirements to wear safety helmets on
construction sites.
Genuine occupational requirements. There is a general GOR provision in regard to the

Religion or Belief Regulations that is the same as the GOR for sexual orientation and has
already been considered. There is also an additional GOR that applies where being of a par-
ticular religion is a proportionate requirement for the job.
Positive discrimination. The regulations contain an exception to allow positive discrimina-

tion on the lines of the Sexual Orientation Regulations.
Pensions. The government has taken the same position here as it has for sexual orientation.
..
EL_C19.qxd 3/26/07 10:52 AM Page 422
Claims jurisdiction. The Religion and Belief Regulations take the same position as regards
the forum for claims as do the Sexual Orientation Regulations. Once again, there is no cap on
compensation.
The Equality Act 2006 makes amendments in the 2003 regulations as follows:
n The regulations are extended to cover discrimination against those who lack religion or
belief and the requirement that a philosophical belief be similar to a religious belief is
dropped.
n There is also an amendment to the regulations to make clear the fact that direct dis-
crimination can occur even if it is another person’s religion or belief and not the
victim’s which constitutes the grounds for discrimination, as where a manager
discriminates against an employee on the basis that the victim associates with a person
of a particular religion or belief. For example, an anti-semite manager may dis-
criminate unlawfully against an employee who associates with a member of the Jewish
community.
Some case law

Some examples of claims under the regulations are coming before tribunals. Thus, in
Williams-Drabble v Pathway Care Solutions Ltd [2005] IDS Brief 776 an employment tribunal
ruled that where an employer changed a Christian employee’s hours so that she had to work
on Sundays there was indirect religious discrimination under the Religion or Belief
Regulations. It was a condition of working that made it difficult for Ms Drabble to comply
with since she could not attend Sunday service. The employer was on notice that she was a
practising Christian.
In Brooks v Findlay Industries Ltd [2005] IDS Brief 784 Mr Brooks, a homosexual, was
employed by Findlay. He did not want his homosexuality to be known to his fellow workers.
His line manager, who knew, informed the human resources manager in order to joke with
him about this and rumour spread among the workforce and Mr Brooks was subjected to
inappropriate and insulting remarks. A tribunal held that Mr Brooks had been subjected to
conduct which fell within the sexual orientation regulations. The acts constituted direct dis-
crimination against Mr Brooks.
Discrimination on the grounds of age

The Employment Equality (Age) Regulations 2006 (SI 2006/1031) came into force on
1 October 2006.
The regulations generally

The regulations follow the existing regulations on sex, race, religion or belief and sexual
orientation:
n Direct and indirect discrimination on the grounds of age are unlawful and so is victimisa-
tion and harassment.
n There is an exception where there is a genuine occupational requirement where ‘possessing
a characteristic related to age’ is concerned, provided it is proportionate to apply that
requirement in a particular case – for example, if a person is producing a play which has
parts for older or younger characters. Thus, a 60-year-old who was turned down for the
part of Peter Pan could hardly claim discrimination!
..
EL_C19.qxd 3/26/07 10:52 AM Page 423
n Positive action is allowed to encourage ‘persons of a particular age’ to take advantage of

employment opportunities where this ‘prevents or compensates for disadvantages linked
to age suffered by persons of that age who do the work’.
n Claims may be brought in employment matters before an employment tribunal and
potential claimants may serve a questionnaire to obtain information from a potential
defendant. The county court will take claims in non-employment areas, e.g. discrimination
in further or higher education.
n Post-termination discrimination is covered as where the ex-employer refuses a reference.
n Employees are obviously covered but also the self-employed, partners in a partnership,
contract workers, office holders, members of trade organisations and those in vocational
training are included.
The regulations apply in the case of age discrimination in terms both of recruitment and once
in employment.
Exceptions
Regulation 3 provides that discriminatory treatment may be justified if it is a proportionate
means of achieving a legitimate aim. This applies to direct and indirect discrimination.
Examples given are:
n The setting of age requirements to ensure the protection or promote the vocational integ-
ration of people in a particular age group. This could include the health, welfare and safety
of the individual, including protection of young people or older workers.
n The fixing of a minimum age to qualify for certain advantages linked to employment or
an occupation so as to recruit or retain older people where perhaps these are under-
represented in the workforce. This could include travel facilities and gift vouchers.
n The fixing of a maximum age for recruitment which is based upon the training require-
ments of the post or the need for a reasonable period in post before retirement. This is a
general rule but the regulations provide more specifically that where a person is older than
the employer’s normal retirement age or will be within six months, or 65 if the employer
does not have one, the employer may refuse to recruit that person.
Regulation 26 gives a further exception where employers must comply with other legislation, 19
e.g. the law that prohibits under-18s from being employed in bars where alcoholic drinks
are sold.
Default retirement at age 65

It will not amount to age discrimination if employers retire employees at or above age 65
where it is a genuine retirement. Employers are able to continue the employment of people
beyond the default age. A retirement age below 65 will in general be unlawful. A lower age
will be permitted, but only if the employer can satisfy the objective justification test.
In this connection the ruling of the EAT in Payne v Royal and Sun Alliance Group plc [2005]
IRLR 848 is instructive although not a case brought under the Age Regulations. Mr Payne’s
contract provided for him to retire at age 65. The employer changed the retirement age,
unilaterally and without Mr Payne’s consent, to 62 and then terminated Mr Payne’s con-
tract at that age. Mr Payne successfully claimed wrongful and unfair dismissal by reason of
breach of contract by the employer in terminating his contract at 62 and therefore not in
accordance with its terms. The EAT agreed with the tribunal ruling in an area where there has
previously been no clear authority that the normal retirement age cannot be earlier
than the contractual retirement age unless the employee consents. Mr Payne’s claim was not
..
EL_C19.qxd 3/26/07 10:52 AM Page 424
prevented by s 109(l)(a) of the Employment Rights Act 1996 (no claim by those who have
reached retirement age).
Comment The case is of importance under the Age Regulations because under the regulations
a retirement below 65 is forbidden unless the employee consents or the employer can justify
it on objective grounds. The Payne case shows what will happen if employers do unilaterally
retire workers below age 65 and cannot justify it.
Fair dismissal only on planned retirement date

The upper limit for bringing unfair dismissal claims which was 65 has been removed.
However, reg 29 states that it will not be unlawful to dismiss an employee who is over 65
where the reason for the dismissal is retirement. For a dismissal on the planned retirement
date to be fair regardless of the employee’s age an employer who intends to dismiss for retire-
ment must:
n give the employee not more than one year’s and not less than six months’ notice of the
intention to retire him or her; and
n comply with a new duty under Sch 7 to the Age Regulations to notify the employee that
he or she has a right to make a request not to retire on the intended date;
n consider a request by an employee to continue working, and meet with the employee
within a reasonable time to discuss the request.
If the employer refuses a request to continue working, the employee has a right of appeal and
another meeting must be held before the retirement dismissal takes effect. The employee’s
request must be in writing and made no more than six months nor less than three months
before the retirement date. The employee must specify whether the request is to stay on
indefinitely, or for a stated period or until a stated date. An employee can make only one
request. At the meeting to consider the request the employee has a right to be accompanied
by a fellow worker but not a trade union representative. If the fellow worker is not available
the employee can postpone the meeting to a date convenient to the parties and within seven
days of the date set by the employer. The employer is under no obligation to give a reason
for rejecting a request to stay on. It is advisable, however, to do so, since failure to do so may
lead to challenges under other discrimination laws, e.g. disability.
Where an employer fails to follow the above procedures, the employee may claim compen-
sation of up to eight weeks’ pay, currently capped at £310 per week but normally revised
upward every 12 months.
Service-related pay and benefits

Older employees are more likely to qualify for these benefits, e.g. extra holiday entitlement,
which might be regarded as discrimination against those of a younger age. To cover this, the
Age Regulations include specific exemptions and one general provision as follows:
n nothing will prevent an employer from using length of service up to a maximum of five
years as a criterion for awarding benefits, those with less service being denied them;
n the benefits must, however, be awarded to all employees who meet the length of service
requirement and whose circumstances are not materially different;
n there is a general exception for all other service-related benefits provided that the employer
reasonably believes that awarding benefits in this way fulfils a business need.
Where an employer is following statutory benefits based on age, this is lawful or where
he or she is following more generous benefits in the statutory situation based on length of
..
EL_C19.qxd 3/26/07 10:52 AM Page 425
service, this will be lawful. This will apply in particular to statutory redundancy payments or
more generous contractual redundancy payments. The exception covers only benefits based
on length of service and not pay or other differentials on the ground of age nor does it
extend to experienced-based criteria which may indirectly discriminate and which employers
will have to justify objectively.
Other employee rights

n There is now no upper or lower age limit for claiming redundancy payments. The statutory
formula will be calculated as before on a 20-year maximum service. These changes are fur-
ther considered later in this chapter when dealing with redundancy.
n Age discrimination in recruitment will be permitted where candidates have reached 65 or
will do so within six months of application.
n As regards pensions, there are special rules in Sch 2 to the Age Regulations so that, for
example, it will not be unlawful to fix an age for admission to a pension scheme or for
benefits to have different contribution requirements.
n Whenever the dismissal is other than for retirement the statutory dismissal and grievance
procedures will apply.
Finally, the Department of Trade and Industry envisages a future where there will be no
default retirement age because of trends in life expectancy, and it will review the matter again
in 2011.
Asylum and Immigration Act 1996

This Act is relevant in terms of recruitment. It contains provisions designed to prevent illegal
working by immigrants, overstayers and those breaching their immigration conditions.
Employers must take steps to check the existence (but not the authenticity) of documents
such as birth certificates or certificates of registration or naturalisation to prevent illegal work-
ing. If such checks have been carried out but nevertheless illegal working occurs, the
employer is not liable. Failure to check regarding this responsibility can lead to a fine on the
employer of up to £5,000. In the case of a corporate employer, directors and other officers 19
and management of the company may be similarly prosecuted if they have connived at the
offence or it has been committed as a result of their neglect. There is no need to check exist-
ing employees, who were employed when the legislation came into force.
The Immigration, Asylum and Nationality Act 2006 introduces a scheme of civil penalties
including fines on the employer of up to £2,000 per illegal employee and a possible two-year
custodial sentence and unlimited fine for those who have knowingly used or exploited illegal
workers. This has manifested itself particularly in the cockle picking trade.
The Act does not apply to employees under the age of 16 or to the self-employed or to the
clients of agencies in terms of agency workers. Furthermore, the transferee employer is not
required to check the status of employees who come to the organisation following a transfer
of undertakings.
Criminal records
The government has set up the Criminal Records Bureau (CRB) under the provisions of
ss 112–127 of the Police Act 1997. It is put forward as a one-stop shop for those going through
recruitment procedures to access a variety of information sources to ascertain criminal
records.
..
EL_C19.qxd 3/26/07 10:52 AM Page 426
There are standard disclosures and enhanced disclosures and these are wider and intended
for those employing persons where the job involves regular contact with children and /or
vulnerable persons. There are also basic disclosures for all other employments.
Employers have to register with the CRB and there is a charge for each request. This can be
paid either by the would-be employer or the applicant. The standard and enhanced disclosures
are sent to the applicant and to the employer. Basic disclosures are sent only to the applicant.
It is then a matter for the applicant whether he/she shows them to the potential employer.
An offer of employment can be legally withdrawn or a promotion refused if there is failure to
disclose. Advertisements should state that a request for disclosure will be made. Employers
who are registered with the CRB must abide by a code of practice and have a policy with
regard to the employment of ex-offenders.
Protection during employment
Once an employee has taken up employment, there are the following safeguards.
The contract of employment
The Employment Rights Act 1996 (ERA) provides that an employee is entitled to one week’s
notice after one month or more of service. After two years’ service, the minimum notice is
increased to two weeks, and for each year of service afterwards it is increased by one week, to
a maximum of 12 weeks after 12 years’ service. The statutory minimum period of notice
which an employee must give is one week, irrespective of the period of employment, pro-
vided he has been employed for one month. No other period of service is required.
In addition, an employer must give his employee written information about the terms of
employment. The statement must be given to employees within two months of starting work
but not if the job is for less than one month unless in fact it lasts for more than one month.
This statement must contain the names of the employer and the employee; the date when
the employment began; whether employment with a previous employer is to be counted as
part of the employee’s ‘continuous period of employment’ and, where this is so, the date on
which it began (this is important to the employee, for example, in terms of redundancy pay-
ments and unfair dismissal); the title of the job, though under the ERA the employer can give
a brief job description instead; the scale or rate of remuneration or the method of calculating
remuneration; the intervals at which remuneration is paid; any terms and conditions relating
to the hours worked, entitlement to holidays and holiday pay, sickness or injury and sick pay,
pensions and length of notice. The rules for calculating continuous employment, normal
hours and a week’s pay are in the ERA.
There must also be a note specifying any disciplinary rules, the name of a person to
whom the employee can apply in case of any disciplinary decision or grievance; and the dis-
ciplinary and grievance procedures. These procedures are now governed by the Employment
Act 2002 and regulations made under it. All employers must include disciplinary and
grievance procedures in the statement. These may be the employer’s own or the statutory
procedures but in any case the statutory procedures will apply and can be used by employees
normally where the employer’s procedures are inferior. A typical statutory procedure is set
out on the facing page.
..
EL_C19.qxd 3/26/07 10:52 AM Page 427
DISCIPLINARY PROCEDURE
(a) The employer must set out in writing the employee’s alleged conduct or characteristics or
other circumstances which lead him/her to contemplate dismissing or taking disciplinary
action against the employee.
(b) The employer must send the statment, or a copy of it, to the employee and invite the
employee to attend a meeting to discuss the matter.
Meeting
(c) The meeting will take place before action is taken except in the case where the discip-
linary action consists of suspension.
(d) The meeting must not take place unless –
(i) The employer has informed the employee what the basis was for including in
the statement referred to above the ground or grounds that he/she has given in it,
and
(ii) the employee has had a reasonable opportunity to consider his response to that
information.
(e) The employee must take all reasonable steps to attend the meeting.
(f) After the meeting the employer must inform the employee of his / her decision and
notify him/ her of the right to appeal against the decision if he /she is not satisfied
with it.
Appeal
(g) If the employee does not wish to appeal he/she must inform the employer.
(h) If the employee informs the employer of his/her wish to appeal the employer must invite
him / her to attend a further meeting. The employee must take all reasonable steps to
attend the meeting.
(i) The appeal meeting need not take place before the dismissal or disciplinary action takes
effect.
(j) After the appeal meeting the employer must inform the employee of the final decision.
GRIEVANCE PROCEDURE
(a) The employee must set out in writing the grievance and send the statement or copy of it
to the employer.
19
Meeting
(b) The employer must invite the employee to attend a meeting to discuss the grievance.
(c) The meeting must not take place unless –
(i) the employee has informed the employer what the basis for the grievance was when
he/she made the above statement, and
(ii) the employer has had a reasonable opportunity to consider his/her response to that
information.
(d) The employee must take all reasonable steps to attend the meeting.
(e) After the meeting the employer must inform the employee of his/her decision as to his/her
response to the grievance and notify him/her of the right to appeal against the decision if
he/she is not satisfied with it.
Appeal
(f) If the employee does not wish to appeal, he/she must inform the employer.
(g) If the employee informs the employer of his/her wish to appeal the employer must invite
him/her to attend a further meeting.
(h) The employee must take all reasonable steps to attend the meeting. After the appeal
meeting the employer must inform the employee of his/her final decision.
..
EL_C19.qxd 3/26/07 10:52 AM Page 428
As regards hours worked, it should be borne in mind that the Working Time Regulations
1998 provide for a maximum 48-hour working week averaged over 17 weeks, except where an
individual employee has specifically opted out (see below).
Further particulars are required as follows:
(a) the duration of temporary contracts;

(b) work location or locations;
(c) collective agreements with trade unions affecting the job;
(d) where the job requires work outside the UK for more than one month, the period of such
work; the currency in which the employee will be paid; and any other pay or benefits
provided by reason of working outside the UK. Employees who begin work outside the
UK within two months of starting the job must have the statement before leaving the
UK.
Particulars can be given by instalments, provided all are given within two months.
However, there must be a ‘principal statement’ in one document giving the following
information:
(a) the identities of the parties;

(b) the date when the employment began;
(c) where the employment counts as a period of continuous employment with a previous
one, a statement that this is so and the date when it began;
(d) the amount and frequency of pay, e.g. weekly or monthly;
(e) the hours of work;
( f ) holiday entitlement;
(g) job title (or description);
(h) work location.
Certain particulars can be given by reference to a document, e.g. a collective agreement

with a trade union, but any such document must be readily accessible to the employee. These
particulars are pension arrangements, sickness provisions, notice entitlement and details of
disciplinary matters and grievance procedures.
An employee who does not receive written particulars or who wants to dispute their
accuracy or sufficiency may refer the matter to an employment tribunal. The tribunal may
then make a declaration that the employee has a right to a statement and what particulars
should be included in it or amended within it. The statement approved by the tribunal is
then deemed to have been given by the employer to the employee and will form the basis of
his rights.
Section 38 of the Employment Act 2002 provides for tribunals to award monetary com-
pensation to an employee where on a claim being made, e.g. for unfair dismissal it appears
that the particulars the employee has received are incomplete or inaccurate. Where this is so
the tribunal may increase any award made against the employer by between two and four
weeks’ pay according to whether the statement is merely inaccurate or has never been issued
at all. One or two weeks’ pay is also to be awarded where compensation is not a remedy for the
particular complaint or is not a remedy chosen by the tribunal as where it awards reinstate-
ment in the job. Formerly there was no monetary penalty on the employer where particulars
were incomplete, inaccurate or non-existent.
Exemptions from the written particulars requirements

There are some situations under the ERA where the employer does not have to give the writ-
ten particulars. Those which may be found in the average business are as follows:
..
EL_C19.qxd 3/26/07 10:52 AM Page 429
n employees with fully written contracts or letters of engagement containing all the neces-
sary items need not be given also the written particulars;
n as already briefly noted it is not necessary to give an employee written particulars if he or
she is employed for a specific job e.g. to clear a backlog of office work which is not
expected to last more than one month. If it does last for more than one month, the worker
is entitled to written particulars.
It should be noted that the former exception that there was no need for particulars where
the employee was the husband or the wife of the employer is repealed as is the exemption
formerly available to employers with fewer than 20 employees in regard to particulars of
disciplinary procedures. All employers have now to state these in the particulars and the
statutory ones are available anyway.
Working time
The Working Time Regulations 1998 (SI 1998/1833) came into force on 1 October 1998. They
enact the European Working Time Directive (93/104). From that date there are detailed rules
which govern hours of work and entitlement to paid holidays as set out below:
n a maximum 48-hour working week, averaged over 17 weeks, or 26 weeks in some cases
(see below);
n at least four weeks of paid annual leave;
n a daily rest period of at least 11 consecutive hours between each working day;
n a weekly rest period of at least 24 hours in each seven-day period. This may be averaged
over a two-week period, i.e. a worker is entitled to 48 hours’ rest in 14 days, or two periods
of 24 hours rest in 14 days;
n an in-work rest break of 20 minutes for those working more than six hours a day. This
should not be taken at either the start or the end of a working day and should not overlap
with a worker’s daily rest period;
n the normal hours of night workers should not exceed an average of eight hours for each
24 hours over a 17-week period.
Who is a worker?
19
Generally speaking, a worker is a person employed under a contract of service, but the major-
ity of agency workers are included as are trainees who are engaged on work experience. The
Regulations also apply in part to domestic employees, though the working time limits do not
apply but they are entitled to the rest breaks, rest periods and paid annual leave. Those who
are genuinely self-employed are not covered. However, those businesses that take on self-
employed workers for contracts of some length could be obliged to offer them holiday
pay (see Wright v Redrow Homes (Yorkshire) Ltd [2004] 3 All ER 98, where self-employed brick-
layers engaged by Redrow succeeded in a claim for holiday pay, having been engaged in some
cases for a seven-month period). Developers and contractors would appear to be most
involved.
Partners are not included since they own the firm. Salaried partners are if, as is usually the
case, they are regarded in law as employees.
What is working time?

Working time is defined by the Working Time Regulations (WTR) as when a worker is working
at his employer’s disposal and carrying out his duty or activities. Training time is included but,
according to DTI Guidance, time when a worker is ‘on call’ but is otherwise free to pursue
..
EL_C19.qxd 3/26/07 10:52 AM Page 430
his own activities or is sleeping would not be working time. Lunch breaks spent at leisure
would not be working time, but working lunches and working breakfasts would be. Travelling
to and from a place of work is unlikely to be working time. The Regulations usefully allow
workers or their representatives and employers to make agreements to add to the definition
of working time.
Following the ruling of the ECJ in Sindicato de Médicos de Asistencia Pública (Simap) v
Conselleria de Sanidad y Consumo de la Generalidad Valenciana Case C-303/98 [2001] All ER
(EC) 609, it can be taken that overtime is working time and so is on call time where workers
are obliged to be at their place of work to be ready to provide services immediately to the
undertaking.
Can the WTR apply to a non-worker?

In Kigass Aero Components v Brown [2002] IRLR 312 the Employment Appeal Tribunal ruled
that an employee who had been off work for a considerable time with a longstanding back
injury was entitled under the 1988 Regulations to be paid the statutory holiday pay due to
him even though his entitlement had accumulated while he was not working. It appeared from this
decision that so long as workers are on the payroll they can build up holiday-pay entitlement
even though they are not actually at work.
However, in Inland Revenue Commissioners v Ainsworth [2005] IRLR 465 the Court of Appeal
held that Kigass was wrongly decided and was overruled. A worker on long-term sick leave is
not entitled to four weeks’ annual leave in a year when he or she has not been able to work,
so that a claim for holiday pay must fail.
The 48-hour week

The law does not say that employees cannot work more than 48 hours in any one week. The
48-hour limit is averaged over a ‘reference period’ which will generally be a 17-week rolling
period, in the absence of any other agreement. This gives a certain amount of flexibility for
businesses to cope with surges in demand, so long as the average over the whole reference per
period is not exceeded.
The reference period may be increased to 26 weeks if the worker is a special case, as in
hospital work, or where there is a foreseeable surge of activity as in agriculture, tourism and
postal services. The reference period can be increased to 52 weeks by a workforce agreement
(see below) or by individual agreement with the employer (see below).
A High Court judge has ruled that all contracts of employment should be read as providing
that an employee should not work more than an average of 48 hours in any week during
the 17-week working time reference period, unless the relevant employee has opted out in
writing. The judge also ruled that if the average hours are equalled or exceeded during the
reference period, an employee may refuse to work at all during the remainder of the period
until the working hours come down to the required level (see Barber and Others v RJB Mining
(UK) Ltd [1999] 613 IRLB 16).
Mr Justice Gage gave his ruling in a case brought by five members of the pit deputies’
union NACODS against RJB Mining, their employer. They had all been required to carry
on working, although they had all worked in excess of 816 hours in the 17-week
reference period. The judge also granted them an injunction ( breach of which by the
employer could lead to sanctions of contempt of court) to the effect that they could refuse
to work any more during a 17-week reference period where the 48-hour average had
been equalled or exceeded. The decision could present a number of employers with major
problems, particularly in terms of staff in key areas. They could face the prospect of a number
..
EL_C19.qxd 3/26/07 10:52 AM Page 431
of workers being able to refuse to do any more work until their hours came down to the
required level.
Paid annual leave

The entitlement is to four weeks of paid leave. Leave under the Regulations is not additional
to contractual entitlements so that taking contractual paid leave in a particular leave year
counts against the worker’s entitlement under the Regulations. In the absence of any agree-
ment, the employer can require a worker to take all or any of the leave at specified times,
subject to giving the worker notice of at least twice the period of the leave to be taken. The
worker is also required to give notice to the employer of the wish to take leave. The notice
period must again be at least twice the period of leave to be taken.
A week’s leave is the equivalent to the time a worker would work in a week. A full-time
worker working five days a week is entitled to 20 days’ leave. A part-time worker working two
days a week would have a right to eight days of leave. Where the work is expressed in hours,
annual leave may be so expressed, e.g. a worker works 24 hours a week and gets 96 hours
leave entitlement. The leave cannot be replaced with a payment in lieu except on termina-
tion of employment.
Furthermore, the ECJ has decided that workers who do not take all of their minimum four
weeks’ leave during a given year must be allowed to carry it forward to the next year. In the
same case the ECJ gave a confirmatory ruling that to give pay in lieu of minimum holiday leave
is illegal. The basis of the rulings is that minimum leave must actually be taken for health and
safety reasons (see Case C-12/405 Netherlands Federation of Trade Unions v Dutch Government).
Leave in the first year

The four weeks (or 20 days) of leave accrue during the first year of employment. After
six months of the leave year therefore an employee is entitled to 10 days’ paid leave and
fractionally less at earlier stages of employment.
Leave in advance of entitlement

There is no harm in allowing employees to take leave in excess of the accrued entitlement but
unless there is a provision in the contract of employment an employer cannot recover holi-
19
day pay where the relevant leave has been taken in advance of accrued entitlement and the
worker resigns before he or she has accrued the necessary leave to match the leave actually
taken (see Hill v Chapell (2002) EAT/1250/01).
Miss Hill gave in her resignation after taking 15 days holiday in six months of the leave
year. Her contract had no provision about recovery of holiday pay in this situation and the
EAT turned down the employer’s claim for it.
This is an aspect of the WTR that should be considered by employers when making
employment contracts. It is often convenient to allow leave to be taken in advance of
entitlement. However, the contract of employment should allow recovery of any excessive
sum of holiday pay where, e.g. the employee resigns before completing the necessary entitle-
ment period.
If a worker’s employment ends he/she has a right to be paid for leave accrued but not
taken. This applies even where an employee is fairly dismissed (see Witley and District Men’s
Club v Mackay [2001] IRLR 595) where the dismissal was for dishonesty.
It should be noted that leave does not accrue on a pro-rata basis after the first year. All this means
is that the worker is not obliged to wait until holiday has accrued before being allowed to
take it. Of course, problems such as those seen in the Hill case above will arise but may be
provided for in the contract of employment.
..
EL_C19.qxd 3/26/07 10:52 AM Page 432
Paying a rolled-up rate

Calculating the various leave entitlements of a workforce is a time-consuming job for the
employer and some have resorted to paying a rolled-up rate by including a proportion of
holiday pay with the weekly or monthly basic pay.
In a number of conjoined appeals from the UK Court of Appeal, the ECJ ruled that
rolled-up pay was unlawful. However, where the employer has before the ruling operated a
system of rolled-up pay and the payments have been made in a transparent and com-
prehensible manner so that the worker can identify what is pay and what is holiday pay,
the pay can be set off against future leave entitlement. However, after that an employer
must not proceed with further rolled-up pay payments. The Department of Trade and
Industry has also issued a statement to a similar effect: contracts must be renegotiated for
the future.
The ECJ ruling is to be found in Robinson-Steele v RD Retail Services Ltd; Clarke v Frank
Steddon Ltd; Caulfield v Marshalls Clay Products Ltd [2006] All ER (D) 195 (Oct).
Length of night work

Night work is presumed to be work between 11 pm and 6 am, unless otherwise defined by
agreement.
Excluded sectors
The Regulations, other than those parts which apply to young workers (see below), were not
applied to workers employed in the following sectors:
n air transport;
n rail;
n road transport;
n sea transport;
n inland waterway and lake transport;
n sea fishing;
n other work at sea, e.g. offshore work in the oil and gas industry.
In this connection, the Working Time (Amendment) Regulations 2003 came into force
on 1 August 2003. They cover the above sectors but disapplying the following in regard
to them:
n the average 48 hour working week;

n four weeks’ paid annual holiday;
n rest breaks;
n health assessments for night workers; and
n an eight-hour limit on night working;
n the 1998 regulations are disapplied in their entirety in the case of seafarers, workers on
board sea-going fishing vessels and workers on certain ships and hovercraft on inland
waterways.
Although the WTR are applied to the police and armed services there will clearly be times
when their working time cannot be measured or predetermined and in these situations they
will be exempt from the WTR under the derogation mentioned below.
Other derogations
As regards road transport, the Road Transport (Working Time) Regulations 2005 now
give working time protection for all mobile workers (in general, drivers and crew travelling
..
EL_C19.qxd 3/26/07 10:52 AM Page 433
in vehicles that are subject to tachograph requirements), such as goods vehicles over 3.5
tonnes, coaches and inter-urban bus services. The Regulations cover mobile workers in the
haulage industry and those who work for companies with their own transport section and
agency drivers.
Employees whose working time is not measured or predetermined are exempt from the
provisions relating to the 48-hour week, daily and weekly rest periods, rest breaks and limits
on night work but not the holiday provisions. Examples given in the WTR include ‘managing
executives or other persons with autonomous decision making powers, family workers and
ministers of religion’. This seems to be a very limited exception that will only cover individuals
who can choose the hours which they work. It is not likely to cover professional staff who have
core hours but work additional hours as required. Since the definition is not entirely clear,
employers would be advised to make the position clear by agreement.
A salaried partner, although a ‘worker’, may well be exempt under this head since he/she
will not normally have core hours.
Collective and workforce agreements

The Regulations allow employers to modify or exclude the rules relating to night work, daily
and weekly rest periods and rest breaks and extend the reference period in relation to the
48-hour week – but not the 48-hour week itself – by way of agreement as follows:
n a collective agreement between an independent trade union and the employer (or an
employers’ association);
n a workforce agreement with representatives of the relevant workforce or if there are 20
workers or fewer the agreement may be with a majority of the workforce which obviates the need to
elect worker representatives. As regards worker representatives, these may be representatives
elected for other purposes, e.g. health and safety consultation;
n for, e.g., technical reasons or reasons concerning the organisation of work the 17-
week averaging period may be extended by up to 52 weeks by a collective workforce
agreement;
n individuals may also choose to agree with their employer to work in excess of the 48-hour
n
weekly time limit. This is all that an individual agreement can cover;
this individual agreement must be in writing and must allow the worker to bring the
19
agreement to an end. The agreement may specify a notice period of up to three months
and if no period of notice is specified, only seven days’ notice by the employee is required.
The worker must give written notice to the employer;
n in addition, a workforce agreement may apply to the whole of the workforce or to a group
of workers within it.
These agreements can only last for a maximum of five years before renewal.
Records
In outline the position is as follows:
n An employer must keep adequate records to show that he has complied with the weekly
working time limit. The records must be kept for two years. It is up to the employer to
determine what records must be kept. Pay records may adequately demonstrate a worker’s
working hours.
n Similar provisions apply in regard to records showing that the limits on night work are
being complied with. Records need not be kept in regard to rest periods and in-work rest
breaks nor in regard to paid annual leave.
..
EL_C19.qxd 3/26/07 10:52 AM Page 434
n Amendments have been made to the record keeping requirements to relieve the burden on
business (see SI 1999/3372 in force 17 December 1999). The amending Regulations:
– remove the need to keep records for staff who have opted out. (Formerly, where a worker
had agreed to work in excess of the 48-hour weekly working limit, the employer was
required to keep records of the number of hours that the worker had worked.);
– provide that unpaid time which workers have agreed to work over and above their con-
tracted hours are disregarded in terms of records.
Compensatory rest
Employers who make use of the derogations or who enter into collective or workforce agree-
ments must provide an equivalent period of rest or, if this is not possible, give appropriate
health and safety protection. Thus the Regulations allow, through agreement, flexibility in
the way its rights are delivered, but they do not allow those rights to be totally avoided.
Health and safety assessments

An employer must offer a free health assessment to any worker who is to become a night
worker. Employers must also give night workers the opportunity to have further assessments
at regular intervals.
Young (or adolescent) workers

The Regulations also apply rights to persons over the minimum school-leaving age but
under 18.
The Regulations have been amended by the Working Time (Amendment) Regulations 2002
(SI 2002/3128) that came into force on 6 April 2003. The position under the WTR as amended
is as follows:
n weekly working hours are limited to 40;

n there is a prohibition on night work between 10 pm and 6 am or 11 pm and 7 am;
n daily working time is limited to eight hours;
n health assessments for night workers: adolescent workers are entitled to a health and capa-
city assessment if they work during the period 10 pm to 6 am. Such an assessment for an
adolescent worker differs in that it considers issues like physique, maturity and experience
and takes into account the competence to undertake the night work that has been
assigned;
n weekly rest: for young workers the general requirement is two days off per week;
n in-work rest breaks: for young workers the general provision is 30 minutes if the working
day is longer than 41/2 hours;
n paid annual leave: adult and young workers are treated the same.
The restrictions are subject to various exceptions relating to particular occupations and
circumstances, e.g. hospitals, agriculture, retail trading and hotel and catering work (but not in
restaurants and bars), bakeries, postal and newspaper deliveries subject to certain conditions,
e.g. compensatory rest. Young workers in the seafaring and sea fishing industries and the
armed forces are excluded from the provisions.
Other young workers rules

SI 2000/2548, reg 2 limits the number of hours a child of school age can work – in any week
during which he or she is required to attend school – to 12.
..
EL_C19.qxd 3/26/07 10:52 AM Page 435
Enforcement and remedies

The weekly working time limit, the night work limit and health assessments for night workers
are enforced by the Health and Safety Executive or local authority environmental health
officers. The usual criminal penalties for breach of the health and safety law apply. In addi-
tion, workers who are not allowed to exercise their rights under the Regulations or who are
dismissed or subjected to a detriment – whether a pay cut, demotion or disciplinary action –
for doing so will be entitled to present a complaint to an employment tribunal. In view of the
abolition on the ceiling of awards for unfair dismissal, employment tribunal claims could be
much more expensive than health and safety fines.
The following case gives an example of a situation which gave rise to a claim. In Brown v
Controlled Packaging Services (1999) unreported, a fork-lift truck driver was told when inter-
viewed for a job that he would have to work overtime on occasions. On commencing work,
he discovered that the amount of overtime he was expected to do conflicted with an evening
part-time job which he had. His manager indicated that his services were not required in the
business if he did not sign the opting-out agreement. Mr Brown took this as a dismissal and
left. He later claimed unfair dismissal and the tribunal ruled that the main reason for the dis-
missal was his refusal to sign the agreement and that his dismissal was automatically unfair.
Pay
In business organisations the duty of the employer to pay his employees and the rate or
amount of pay is decided as follows: (a) by the contract of employment; or (b) by the terms
of what is called a collective agreement made between a trade union and the employer. The
terms of this agreement, including the part on pay, are then assumed to be part of the indi-
vidual contracts of employment of the members. The employer must also comply with the
National Minimum Wage Act 1998 (see below).
The pay which the worker is to get should nearly always be definite because it is included
in the written particulars, which we have just dealt with, and also because the ERA requires
itemised pay statements. 19
Itemised pay statements
Under the ERA, an employee is entitled to an itemised pay statement, containing the gross
amount for wages or salary; the amounts of any variable and fixed deductions and the reasons
for them; and the net amount of wages or salary payable. As only gross and net amounts and
deductions are required, it is apparently unnecessary for workers to be informed as to details
of their basic rates, overtime payments or shift premiums. The fixed deductions can be aggreg-
ated so long as the employee is issued with a statement of fixed deductions which is reissued
every 12 months, and he is notified of any alterations when they are made. If an employee
does not receive a pay statement or if he receives one that is inadequate, he may refer the
matter to an employment tribunal. The employment tribunal will make a declaration which
will include answers to questions relating to the employer’s failure to give particulars or his
failure to give accurate amounts. The declaration then determines these matters. Where there
have been unnotified deductions from pay during the previous 13 weeks, the tribunal may
order the employer to pay to the employee a sum not exceeding the total unnotified deduc-
tions. It can do this even where the employer was entitled to make the deductions under the
terms of the contract.
..
EL_C19.qxd 3/26/07 10:52 AM Page 436
The compensation is intended to act as a penalty on the employer for non-compliance and
it is payable even where the employer has accounted for the sums deducted to the Inland
Revenue and therefore ends up paying twice (Cambiero v Aldo Zilli & Sheenwalk Ltd t/a Signor
Zilli’s Bar) (1998) 586 IRLB 11).
If the particulars are complete and in accordance with the law but the employee wishes to
question the accuracy of the amounts deducted, this is a matter for the county court though it
can be dealt with by an employment tribunal if the employee has left work.
Contractual sick pay

There is no presumption that a contract of employment contains an implied term that sick
pay will be paid.
Mears v Safecar Security, 1982 – No presumption about sick pay (251)
Statutory sick pay

Employers are required to provide what is called statutory sick pay (SSP) on behalf of the gov-
ernment. It is not necessary in a book of this nature to go into detail in regard to the scheme
but the main principles are that when an employee falls sick he or she gets a weekly amount
from the employer and not from the Department of Social Security. As regards reimbursement
of employers who have paid SSP, there is now no distinction between small employers whose
annual National Insurance Contributions bills do not exceed £45,000 and other employers.
Under the Statutory Sick Pay Percentage Threshold Order 1995 (SI 1995/512) all employers
recover SSP on the ‘percentage threshold scheme’. This works as follows: the employer takes
the figure of NIC (employer’s and employee’s contributions) paid in any given tax month. The
employer then finds out the SSP paid in that same month. If this is more than 13 per cent of
the NIC figure he recovers the excess.
SSP can go on for 28 weeks and since the vast majority of employees are not sick for any-
thing like as long as this, employee sickness benefit is, in effect, now paid by the employer.
It is not possible to avoid the SSP provisions and any clause in a contract of employment
which sets out to do this is void.
The current single rate of SSP is £70.05. The amount is reviewed annually.
Exceptions
There are some exceptions. Examples are:
n employees over pension age, though women who continue to work between the ages of 60
and 65 are eligible for SSP;
n persons employed for a fixed period of not more than three months unless the contract is
extended beyond three months;
n an employee whose average weekly earnings are less than the lower earnings limit (cur-
rently £84 a week) is not entitled to SSP but there is no service requirement.
The national minimum wage

The National Minimum Wage Act 1998 received the Royal Assent on 31 July 1998. It is in
part an enabling Act and its order- and Regulation-making powers came into force on 31 July.
Remaining provisions were in force by 1 April 1999 (see SI 1998/2574). This section combines
..
EL_C19.qxd 3/26/07 10:52 AM Page 437
the main provisions of the Act with those of Regulations so far issued under it. Section refer-
ences are to the 1998 Act, unless otherwise indicated.
The Act provides workers with a floor below which their wages will not fall, regardless of
the size of the employer’s business. Those who work part time will benefit most.
Entitlement
Those entitled must be ‘workers’ who work or ordinarily work in the UK under a contract of
employment and are over compulsory school leaving age (ss 1(2) and 54(3)). Casual workers
are included, as are agency workers (s 34) and home-workers (s 35).
Regulations may exclude any age group below 26 and prescribe different rates for different
age groups below 26 (s 3). The self-employed are excluded, when providing services to
a client or business customer, and there are other exclusions in ss 43 – 45, e.g. voluntary
workers defined in s 44. These include charity workers, who are e.g. either unpaid or receive
only reasonable travel and out-of-pocket expenses.
Also excluded are au pairs and nannies and companions who are treated as a member of
their employer’s family with free accommodation and meals.
Owner-managed businesses
The 1998 Act applies to directors of owner-managed businesses. Thus, a person who works as
a director of his company, but takes no salary (or very little) relying on dividends as income,
falls foul of the Act and must receive the minimum wage. The same is true of directors who
receive nothing in the first months of the new company’s life. The alternative is to remain a
creditor and pay when the company can afford to do so.
A further solution for directors is not to have a contract of employment so that they are
not employees. This is accepted by the National Minimum Wage Office (part of HM Revenue
and Customs (HMRC)) which is the enforcing agency and by the Department of Trade and
Industry which has confirmed that it will not challenge such an arrangement on the basis
that the director has an implied contract of employment.
Level
The levels of the NMW are currently as follows: 19
n adult minimum wage £5.35;
n rate for age 18 to 21 £4.45;
n rate for age 16 to 17 £3.30.
The above are hourly rates.
Increases in level
This depends upon the advice of the Low Pay Commission (LPC) and the economic situ-
ation, and is not automatic.
Extensions
There is power to apply the Act to those who do not fit the current definition of a ‘worker’
(s 41). This could be used to deal with changes in working practices and to close loopholes
which bad employers may exploit.
Calculation
The Regulations set out the averaging period to be used in calculating whether a worker has
been paid the NMW. It is set at a month (i.e. a ‘calendar month’) except where workers are
..
EL_C19.qxd 3/26/07 10:52 AM Page 438
currently paid by reference to periods of shorter than one month, e.g. a week, a fortnight
or four weeks. In the latter cases, the pay reference period for NMW purposes will be the
worker’s existing pay period. In addition, the hourly rate for those who are paid annual salary
will be calculated on an average basis. Therefore, the lowest salary for a 35-hour week would
be: the current rate per hour × 35 × 52.
What counts as remuneration?

The Regulations deal with a number of instances of what does and does not count towards
discharging an employer’s obligation to pay the NMW. Examples of things which do not
count are advances of wages, pensions, redundancy payments and benefits in kind. However,
deductions are allowed where the employer provides accommodation, but only up to a fairly
low limit.
Service charges, tips, gratuities or cover charges not paid through the payroll are not included.
Tips pooled under an employees’ informal scheme and distributed are not included.
However, where tips are pooled by the employer and paid through the payroll, they do count
as remuneration.
Basically tips given in cash to the worker belong to him or her and do not count towards
NMW. Where the workers pool the tips and distribute them themselves the tips belong to the
workers and do not count. Additions to the bill where payment of the whole account is made
to the employer then this is his or her money and can be used to pay the basic wage and is
not an addition to it (see Nerva v UK [2002] IRLR 815).
Enforcement
The Secretary of State appoints enforcement officers (s 13) and HM Revenue and Customs
is responsible for enforcement by checking employers’ records to ensure compliance.
Complaints by employees will be investigated and spot checks will be made on employers.
The National Minimum Wage (Enforcement Notices)

Act 2003
This Act ensures that the Inland Revenue can issue enforcement notices to require the payment
of the NMW to former employees as well as current employees. The Act closes a loophole that
was revealed by the decision of the EAT in IRC v Bebb Travel plc [2002] 4 All ER 534. In the
Bebb case the EAT ruled that under s 19(2) of the National Minimum Wage Act 1998 an
enforcement notice could be issued in regard to a previous failure to pay the NMW if the
notice also contained a requirement that the employer pay the NMW in the future. Thus
former employees could not claim merely for past failures to pay. The 2003 Act adds s 19(2A)
to the 1998 Act which allows the service of an enforcement notice where it is of opinion that
a worker who qualifies has ‘at any time’ not received the minimum wage. The 2003 Act is
retrospective. Workers may bring claims under it to an employment tribunal, a county court
or through HMRC’s enforcement unit.
In this connection, enforcement officers can disclose information obtained from the
employer to the worker and similarly disclose information obtained from the worker to the
employer. Enforcement notices can be withdrawn or replaced as can penalty notices.
Organisations that refuse to pay the NMW will face daily fines of twice the NMW for each
employee (s 21). If defiance continues, the fine goes up to a maximum of £5,000 for each
offence (s 31). Workers have the right to recover the difference between what they have been
paid and the NMW before a tribunal as an unlawful deduction from wages (s 17). There is no
limit of time on back claims.
..
EL_C19.qxd 3/26/07 10:52 AM Page 439
Access to tax records

The inspectors required to enforce the NMW have access through the Inland Revenue to
relevant tax records.
Records
The record-keeping obligations were eased following consultation and it is now merely pro-
vided that an employer has to keep records ‘sufficient to establish that he is remunerating the
worker at a rate at least equal to the national minimum wage’. The records may be in a format
and with a content of the employer’s choosing and must be capable of being produced as
a single document when requested either by an employee or the Inland Revenue. The DTI
publishes guidance on the kinds of records that will be regarded as sufficient.
Corporate offences
Where a relevant offence is committed by a company, its directors and other officers are
jointly responsible with the company where they have consented to or connived at the
offence or been neglectful in regard to it (s 32).
Contracting out
Section 29 makes void any agreement to exclude or limit the Act’s provisions or to prevent a
complaint from being made to a tribunal, unless there has been conciliation by a conciliation
officer or a valid compromise agreement.
Victimisation and unfair dismissal

Section 23 gives workers the right not to be subject to any detriment e.g. failure to promote
because they have asserted rights under the 1998 Act. Under s 25, employees who are dismissed
or selected for redundancy for similarly asserting rights will be regarded as automatically
unfairly dismissed so that a complaint may be made to a tribunal even by those who do not
have one year’s service.
Low Pay Commission

The government has asked the Low Pay Commission, which was put on to a statutory footing
19
when ss 5–8 of the National Minimum Wage Act 1998 came into force on 1 November 1998,
to report on a number of matters e.g. to monitor and evaluate the impact of the NMW in
terms of pay, employment and competitiveness in low-paying sectors and small businesses,
and the effect on pay differentials.
Method of payment and deductions from pay

Employees no longer have a right to be paid in cash. The matter is now left to be decided by
the contract of employment. The Truck Acts 1831–1940, which used to give this right, have
been repealed. Payment may still, of course, be made in cash, but an employer can if he wishes
pay the employee, for example, by cheque or by crediting the employee’s bank account. It
should be noted, however, that if a worker was paid in cash before 1986 when the new pro-
visions came into force, the method of payment may only be changed if the worker agrees to
a variation of the contract of service.
Under Part II (ss 13 –17) of the ERA deductions from pay are unlawful unless they are
(a) authorised by Act of Parliament, such as income tax and National Insurance deductions;
or (b) contained in a written contract of employment, or the worker has signed a written
statement containing his agreement or consent to the making of them. Such a statement is
..
EL_C19.qxd 3/26/07 10:52 AM Page 440
ineffective if made after the need to make the deductions arises. Once there are shortages, the
employee is under much more pressure to sign a document to agree to make them good in
order to save his job, even though he might not be responsible for them. This was decided in
Discount Tobacco and Confectionery Ltd v Williamson [1993] IRLR 327. As regards (b), deduc-
tions from the wages of workers in the retail trade, e.g. petrol station cashiers, for stock and
cash shortages are limited to 10 per cent of the gross wages and deduction may be made on
any pay day, but only in respect of shortages within the period of 12 months from the date
when the employer knew or ought to have known of the shortage. Deductions may be made
by instalments and no limit is placed on the amount which may be deducted from a final pay
packet when employment is terminated. These provisions are enforceable by the employee
against the employer exclusively in employment tribunals (see Franks Investment Management
Ltd v Robertson (1996) The Times, 12 November).
Equal treatment in terms and conditions of employment as

between men and women in the same employment
The Equal Pay Act 1970, as amended, implies a term into men’s and women’s contracts of em-
ployment which requires equal treatment in terms of pay, holidays, sick pay and hours of work.
The Equal Pay Act 1970 provides that all contracts of employment are regarded as contain-
ing an equality clause which operates on pay when a woman is employed on ‘like work’ or on
work ‘rated as equivalent’ to that of a man, e.g. by a job evaluation study.
Under the Equal Pay (Amendment) Regulations 1983, there is a further instance when
equality is to have effect, i.e. where a woman is employed on work which is, in terms of the
demands made on her, for instance under such headings as effort, skill and ‘decision’, of
equal value to that of a man in the same employment. In addition, under the Regulations a
complaint may go before an employment tribunal, even if the two jobs under comparison
have already been shown to be unequal in a job evaluation study. However, the tribunal
must find the study unsatisfactory either on the grounds of sex bias or other grounds.
Even if the two jobs are wholly dissimilar a claim may be made if the jobs are of ‘equal
value’. A case in point is British Coal Corporation v Smith [1996] 3 All ER 97 where women can-
teen workers and cleaners employed in the coal industry claimed that their work was of equal
value to that of surface mineworkers and, in some cases, clerical workers employed at their
own and at separate workplaces. The House of Lords decided that the women could use the
above categories of worker as comparators. It was a matter for a court or tribunal to decide
what was a relevant class of employees.
In addition, under directly applicable EC law (i.e. Art 141 of the Treaty of Rome), a person may
rely on a successor to the post as a comparator as in Hallam Diocese Trustee v Connaughton
[1996] IRLR 505 or a predecessor as in Macarthys v Smith [1980] ICR 672.
The Act applies to all forms of full-time and part-time work. There are no exemptions for
small firms or in respect of people who have only recently taken up the employment, although
the Act does not apply, for example, to those who work wholly outside Great Britain. Both
the complainant and the comparator must be employed at an establishment or establishments
in Great Britain. The Act also applies to pay discrimination against men but in practice claims
have usually been made by women.
The comparison is with the pay of a comparator of the opposite sex and in the case of part-
timers with part-time comparators. The 1970 Act is not concerned with fair wages generally but
only between those of opposite sex. Thus, for a woman a male comparator is required, and
vice versa.
..
EL_C19.qxd 3/26/07 10:52 AM Page 441
Equal pay questionnaires

Under s 7B of the Equal Pay Act 1970 (as inserted by s 42 of the Employment Act 2002) an
employee who believes that she/he may not be receiving equal pay can use a questionnaire
to request key information from the employer when deciding whether to bring an equal
pay claim. If it is decided to go to a tribunal the information elicited from the employer will
be admissible as evidence and will help the complainant to formulate and present the case.
A tribunal will be able to draw inferences from a deliberate refusal to answer or from an
evasive reply. This includes an inference that the employer is contravening the implied
equality clause in the employee’s contract. While it is not necessary for the employer to
reveal the names of persons on higher pay but only pay there are those in industry who
feel that, particularly in the smaller organisation, it will be possible to make identification so
that the employer may be in breach of confidence by revealing salaries of other employees
though an employer should have a good defence because he or she is carrying out a statutory
requirement.
Under the Employment Tribunals (Constitution and Rules of Procedure) (Amendment)
Regulations 2004 (SI 2004/2351), a tribunal may order an employer to grant access to his or
her premises to an expert where one has been appointed by the tribunal or to the claimant or
his or her representative in order to question certain employees, e.g. alleged comparators.
Non-employees
Rights are given to persons who are not employees in the ordinary sense. The EPA definition
includes persons who work under a contract to execute any work or labour, e.g. those who
provide consultancy services under a contract for services.
Effect of successful claim

The complainant has a contractual right to the higher pay and/or the other contract terms
enjoyed by the comparator. The tribunal can also award compensation in respect of the
disparity. 19
Time limits
The Equal Pay Act 1970 (Amendment) Regulations 2003 (SI 2003/1656) apply and affirm
the law laid down by the ECJ in Levez v TH Jennings (Harlow Pools) Ltd [1999] IRLR 36
and Preston v Wolverhampton Healthcare NHS Trust [2000] IRLR 506 by making appropriate
amendments to the Equal Pay Act 1970. The time limit for bringing a claim is six months
after the claimant was employed in the employment. However, where there is a succession
of contracts at regular intervals forming part of a stable employment relationship the
period of six months runs from the end of the last such contract. As regards compensation,
the limit now relates to a six-year period before the date on which the proceedings were
commenced.
Part-time workers
The Part-time Workers (Prevention of Less Favourable Treatment) Regulations 2000, which came into
force on 1 July 2000, and are not retrospective, enable part-timers to claim equal treatment
without the need to prove sex discrimination.
..
EL_C19.qxd 3/26/07 10:52 AM Page 442
A part-time worker will not normally be able to use a full-time worker as a comparator
where it is the job that gives rise to the different conditions and not gender (Lynn v Rokeby
School Board of Governors [2001] All ER (D) 440 (Mar)).
Pensions
The matter of equality in pension rights exists but is dealt with by the Pensions Act 1995 and
supporting Regulations.
Sections 62–66 require all occupational pensions schemes to provide equal treatment for
men and women with regard to:
n the terms on which they become members of the scheme; and

n the terms on which members are treated in relation to any pensionable service.
Equality in this context means that claims for pension rights must be made within six
months of leaving service or where there is a series of contracts forming a stable employment
relationship six months from the end of the last contract. Service for pension entitlement
may be calculated for service back to 8 April 1976 if there has been a stable employment rela-
tionship for that period of time and the claim has been brought in time. The date of 8 April
1976 is based upon the date of the ECJ decision in Case 149/77 Defrenne v Sabena [1978] ECR
1365 that decided pensions were pay for the purposes of EU law and Barber v Guardian Royal
Exchange Assurance Group [1990] 2 All ER 660 which decided that equality clauses must be
implied in pension schemes.
Community law
A claim can be brought under UK legislation only if the complainant and the comparator
are or have been employed at the same time. However, any gaps or exceptions in UK
legislation can be overridden by Community law. Article 141 of the Treaty of Rome estab-
lishes the principle that men and women are entitled to equal pay for work of equal
value. As we have seen the EAT ruled that an employment tribunal could hear a claim for
equal pay under what is now Art 141 where the applicant relied on a male comparator
appointed after her resignation (see Hallam Diocese Trustee v Connaughton [1996] IRLR 505).
In Macarthys v Smith [1980] ICR 672 the ECJ ruled that the complainant’s predecessor was a
valid comparator.
The above rulings on the basis of EC law provide good examples of the effect of European
rulings on English law, in this area.
Employer’s defences
One obvious defence is that the two jobs cannot be regarded as being ‘like work’. Equal value
is more difficult but here there may be resort to a job evaluation exercise to resolve the mat-
ter. The employer will not normally be able to argue the defence that the woman and the
comparator are not in the same employment, where associated employers are included so
that employees can find comparators in a holding company or a fellow subsidiary in a group
situation. The material factor defence is more difficult and examples appear in the case law
and comment that follows.
Capper Pass v Lawton, 1976 – An equal pay claim succeeds (252)

Navy, Army and Air Force Institutes v Varley, 1977 – An equal pay claim fails (253)
..
EL_C19.qxd 3/26/07 10:52 AM Page 443
Part-time workers
The Part-time Employees (Prevention of Less Favourable Treatment) Regulations 2000 came
into force on 1 July 2000 with the object of further extending the rights of part-time workers.
Although the rights of part-time employees have been extended in recent years so that, for
example, claims for unfair dismissal can be brought by part-timers with one year’s service,
their rights are not the same in some remaining areas. The Regulations are intended to put
this right. The provisions are set out below:
n Pay. Part-time employees should receive the same hourly rate of pay as comparable full-
time workers. A lower rate may be justified on objective grounds as where, e.g., there is
performance-related pay.
n Overtime. Part-time employees should receive the same hourly rate of overtime pay as
comparable full-time employees once they have worked more than the full-time hours.
n Contractual sick pay and maternity pay. Part-time employees should not be treated less
favourably than full-time employees in terms of the rate of contractual sick pay or mater-
nity pay; the length of service required to qualify for payment and the length of time the
payment is received. The benefits which a part-timer will receive are to be pro rata which
means that where a comparable full-time employee receives or is entitled to receive pay or
any other benefit a part-time employee is to receive or be entitled to receive not less than
the proportion of that pay or other benefit that the number of his weekly hours bears to
the number of weekly hours of the comparable full-time employee.
n Occupational pensions. Employers must not discriminate between full-time and part-time
employees over access to pension schemes unless different treatment is justified on objec-
tive grounds. Calculation of benefits from the pension scheme for part-time staff should
be on a pro rata basis of the calculation for full-time employees.
n Access to training. Employers should not exclude part-time staff from training simply
because they work part-time.
n Leave / holiday/ breaks: annual leave, maternity, adoption and parental leave, career
breaks. The contractual holiday entitlement of part-time staff should be pro rata to that
of full-time employees. Contractual maternity leave, adoption leave and parental leave 19
should be available to part-time employees as well as full-time employees. Career break
schemes should be available to part-time employees in the same way as for full-time
employees, unless their exclusion is objectively justified on grounds other than their part-
time status.
n Redundancy. The criteria used to select jobs for redundancy should be objectively justified
and part-time employees must not be treated less favourably than comparable full-time
workers in regard to selection for redundancy.
The Regulations cover not only workers but extend also to homeworkers and agency
workers. In the case of homeworkers, they will have to find a comparator which may not be
easy. Full-time workers who switch to part-time work can make a comparison with the
benefits provided in their full-time contract. This may assist women wishing to convert to
part-time work after maternity leave, though some employers may regard this as a further
burden. It may, therefore, be counter-productive. A worker’s request to the employer for
change must be made in writing and the employer has 21 days to respond before a claim
is made to an employment tribunal. This is intended to produce a reconciliation of the
position. If not, a claim may be made to an employment tribunal within three months of the
act of discrimination. This time scale does not seem to matter since failure to comply with
the requirement to up-rate conditions in relation to a full-time comparator is a continuing
..
EL_C19.qxd 3/26/07 10:52 AM Page 444
source of complaint so time will stop running in regard, e.g., to back pay only when the part-
timer’s rights are equalised. There is no limit on the money aspect of the award in terms of a
back-pay claim.
Qualifying periods
There is no requirement that the claimant should have any minimum period of service.
Also, the upper limit of normal retirement age, or if there is none at the workplace 65 years
of age, does not apply. This is the first sign of laws prohibiting discrimination on the ground
of age.
Effect on employers
Many employers follow the above practices and will not be affected. If not, they will be
because there are likely to be comparators who are full-time.
Some small businesses may not be affected at all, either because they do not provide the
contractual benefits set out above or because all the staff are part-time and so no pro rata
comparison can be made with full-time staff.
Matthews v Kent and Medway Towns Fire Authority, 2006 – Part-time

firefighters: pensions and sick pay (253a)
Workers on fixed-term contracts
The Fixed-Term Employees ( Prevention of Less Favourable Treatment) Regulations 2002

apply. The main provisions are set out below.
Definition
A fixed-term contract will generally be a contract of employment that terminates at the end
of a specified term fixed in advance or automatically on completion of a particular task.
Comparators
Both individuals must be employed by the same employer and be engaged in the same
or broadly similar work having regard to whether they have a similar level of qualifications
and skills.
Less favourable treatment

This can be in regard to levels of pay, pension and other benefits such as bonuses. However,
admission to a pension scheme may not be viable in the case of a short fixed-term contract.
Written statements
A fixed-term employee who thinks that he/she has been treated less favourably has a right to
ask the employer for a written statement of reasons. This must be provided within 21 days.
..
EL_C19.qxd 3/26/07 10:52 AM Page 445
A tribunal claim
A fixed-term employee who thinks that he/she has been treated less favourably may present a
claim to an employment tribunal normally after having exhausted all internal procedures.
Vacancies for permanent employment

The Regulations give fixed-term employees a right to be informed of available vacancies for
permanent employment.
Transfer to permanent employment

The Regulations provide that where an employee is on a fixed-term contract that has been
renewed or where there is a re-engagement on a new fixed-term contract and where the
employee has been employed for at least four years (excluding any period before 10 July
2002) the renewal of the contract will take effect as a permanent contract. The period of
four years must be an unbroken one as where one fixed-term contract has immediately fol-
lowed the previous one. The Regulations may not therefore correct the abuse seen in Booth v
United States [1999] IRLR 16 where the US government employed men on fixed-term contracts
at its UK base. There were intervals of two weeks between each contract. The claimant was
not entitled to a claim for unfair dismissal or redundancy because his service was not con-
tinuous for the requisite period, nor would he have had four years of continuous service to
trigger the permanent contract arrangements in the regulations. However, the employer ’s
conduct in Booth may have been actionable under the Regulations if it had been based on
‘detriment’.
In this connection it is worth noting that the first fixed-term workers became eligible to
take advantage of the permanent contract provisions on 10 July 2006.
Dismissal and detriment

Dismissal where the Regulations have been infringed is automatically unfair so that there is
no service requirement for a claim. This would overcome the major obstacle to a claim that 19
emerged in Booth in terms of the claim itself. Fixed-term workers are also protected against a
detriment for trying to enforce the Regulations.
Remedies
A tribunal may order compensation or recommend that reasonable action be taken to remove
or reduce the effect of an employer’s practice where less favourable treatment is found.
Discrimination once in employment

We have already considered the law relating to discrimination in the formation of the contract
of employment, i.e. in recruitment and selection. Here we are concerned with discrimination
during the course of employment.
As we have seen discrimination on the grounds of sex, marital status, race, disability, sexual
orientation, religion and belief, transsexuality and age are unlawful. As regards employees, it is
unlawful to discriminate as regards opportunities for promotion, training or transfer to other
..
EL_C19.qxd 3/26/07 10:52 AM Page 446
positions or in the provision of benefits, facilities or services or by selection for redundancy

or dismissal.
The following kinds of discrimination apply:
n direct discrimination;
n indirect discrimination;
n victimisation; and
n harassment.
Direct and indirect discrimination bear the same definitions in the employment context as
they do in recruitment. Victimisation and harassment are normally found, if at all, once
employment has commenced and require treatment in this section of the text.
In direct and indirect discrimination a genuine occupational qualification or requirement if
acceptable to the tribunal can be a defence for the employer. In the case of disability discrimina-
tion, however, the employer is required where possible to make reasonable adjustments to
overcome individual difficulties with the job.
Some general illustrative case law

The concept of discrimination is wider than the relationship of employer and employee
under a contract of service or apprenticeship. It includes employment ‘under a contract
personally to execute any work or labour’ and no period of service is required before a claim
can be brought. Rights are also given to partners in all partnerships.
An example of the broad nature of discrimination law is provided by Harrods Ltd v Remick;
Harrods Ltd v Seely; Elmi v Harrods [1996] ICR 846. In that case the three complainants
were dismissed by their employers from ‘shops within a shop’ at Harrods because Harrods
said they were in breach of the Harrods dress code, for example in Mrs Seely’s case the wear-
ing of a nose stud. Although their contract of employment was not with Harrods that store
was liable for sex discrimination when their employers dismissed them because Harrods
threatened to withdraw the ‘shop within a shop’ concession. They were ‘doing work for
Harrods’ and were ultimately under Harrods’ control in view of the power to withdraw the
concession.
Nor is discrimination liability confined to the discriminatory acts of the employer or
those of his employees. In Burton v De Vere Hotels Ltd [1997] ICR 1 the EAT ruled that an
employer can be regarded as having subjected employees to harassment, in this case racial
harassment, by allowing a third party to inflict racial abuse on them in circumstances in
which he could have prevented the harassment or reduced the amount of it. The com-
plainants were two black women who were employed as waitresses at a Round Table
function at a hotel in Derby and were subjected to racially offensive remarks by Mr Bernard
Manning, a guest speaker, for example, about the sexual organs of black men and their sexual
abilities. The employer did not withdraw them from the room at once as he should have
done and was liable.
The House of Lords discredited this ruling in MacDonald v Advocate General for Scotland;
Pearce v Governing Body of Mayfield School [2004] l All ER 339. In the above cases the claims
were brought for discrimination against homosexual people but it is the last part of their
Lordships’ ruling that has most significance. Although the matter did not arise directly and
the decision is technically not binding, the House of Lords stated that an employer would
no longer be liable for failing to protect employees from the acts of third parties such as
Mr Manning for whose acts the employer is not vicariously liable unless that failure is in
itself less favourable treatment on discriminatory grounds.
..
EL_C19.qxd 3/26/07 10:52 AM Page 447
It appeared that the manager would not have withdrawn white waitresses from a situa-
tion involving sex discrimination. In fact, he said in evidence that the matter of withdrawing
the waitresses never occurred to him. So the employer is liable only for his or her own
discrimination in this situation as where employees are left in a discriminatory situation
because the employer, in effect, wishes to see them embarrassed or does not care whether
they are.
An employer is also liable for the acts of his employees ‘in the course of employment’. Em-
ployers have tried to defend themselves by saying that their employees were not employed
to discriminate but in Jones v Tower Boot Co Ltd [1997] NLJR 60 the Court of Appeal rejected
this defence saying a purposive interpretation must be put on ‘in course of employment’ for
discrimination purposes. The case involved the harassment of a 16-year-old black youth who
was called ‘Baboon’, ‘Chimp’ and ‘Monkey’ and was branded with a hot screwdriver. An
employer has a defence where he or she can show that best endeavours were used to prevent
the conduct. That was not the case in Jones. All reasonable steps to prevent the abuse were
not used.
Victimisation in employment
Under discrimination legislation it is unlawful to treat a person less favourably than another
because that person asserts rights under anti-discriminatory legislation or is or has helped
another to do so. Damages can be awarded where victimisation has occurred. An example is
to be found in Cornelius v Manpower Services Commission (SXD 36117/86) where the Commis-
sion refused to consider C for a permanent post for which she had applied because one of the
references which she supplied indicated that she was involved in an unresolved sexual harass-
ment case.
Harassment: generally
Most complaints of harassment have involved sexual harassment though Jones v Tower Boot
Co Ltd (1997) provides a particularly bad situation of racial harassment.
There is now a separate head of liability for harassment in regard to sex, race, disability,
sexual orientation and religion or belief. It is no longer an aspect of detriment as it has been
19
for many years. The definition which results from the new Regulations in these areas described
earlier in this chapter is defined as follows.
‘Harassment occurs where on grounds of sex, race or ethnic or national origins or sexual
orientation or religion or belief or for a reason which relates to a disabled person’s disability
– A engages in unwanted conduct which has the purpose or effect of (a) violating B’s
dignity; or ( b) creating an intimidating, hostile, degrading, humiliating or offensive
environment for B. The conduct is deemed to have the required effect if having regard to
all the circumstances including in particular the perception of B, it should reasonably be
considered as having that effect (author’s emphasis). Obviously tribunals will be concerned
to interpret this definition but it is likely that many of the cases on ‘detriment’ will fit the
new definition.
Harassment and case law

There are numerous cases of mainly sexual harassment. Most of these provide different fact
situations of such harassment and cannot, because of their number, be reproduced here.
However, a leading case containing guidance from the EAT that can be applied in other cases
..
EL_C19.qxd 3/26/07 10:52 AM Page 448
even under the new definition of harassment is Driskel v Peninsular Business Services Ltd [2000]
636 IRLB 12.
Mrs Driskel was an adviceline consultant with Peninsula. She claimed that she had been
sexually harassed by the head of her department. She alleged that she had been subject to
sexual banter and comments and that at an interview for promotion he had suggested that
she wear a short skirt and a see-through blouse showing plenty of cleavage. This advice was
not accepted. She then refused to return to work unless the head of department was moved
elsewhere. She was then dismissed and made a claim to an employment tribunal. Her claim
was rejected because the incidents looked at in isolation were not enough. She appealed and
the EAT substituted a finding of sexual harassment and in doing so stated:
n the tribunal should have looked at the total or overall effect of the acts complained of;
n a woman’s failure to complain at times throughout the conduct should not necessarily be
taken as significant;
n sexual ‘banter’ between heterosexual men cannot be equated with, so as to excuse, similar
comments towards a woman.
Harassment: other legislation

When harassment is intended and studied the Criminal Justice and Public Order Act 1994
creates a criminal offence of intentional harassment. It appears as s 4A inserted into the
Public Order Act 1986. The penalty on conviction by magistrates is imprisonment for up to
six months and/or a fine of up to £5,000.
It is clear from the wording of s 4A that harassment in the workplace is covered. This
means that employees who are harassed at work are able to report the matter to the police.
The Protection from Harassment Act 1997 is also relevant. The Act is very wide ranging and
covers discriminatory harassment and bullying at work. It is also possible to bring civil pro-
ceedings against offenders under the Act.
Enforcement
As regards enforcement by employees, those who believe that they have been discriminated
against may make a complaint to an employment tribunal within three months of the date
of the act complained of. A conciliation officer may be called in to see whether the com-
plaint can be settled without going to a tribunal. If, however, a tribunal hears the complaint,
it may make an order declaring the rights of the employee and employer in regard to the
complaint, the intention being that both parties will abide by the order for the future. The
tribunal may also give the employee money compensation, with no overall limit, and includ-
ing aggravated damages in severe cases (see HM Prison Service v Johnson (1997) 567 IRLB 13),
and may additionally recommend that the employer take, within a specified period,
action appearing to the tribunal to be practicable for the purpose of obviating or reducing
discrimination.
Damages can also be awarded for personal injury caused by unlawful discrimination
according to the ruling of the Court of Appeal in Sheriff v Klyne Tugs (Lowestoft) Ltd (1999)
625 IRLB 6 where a ship’s engineer suffered racial abuse leading to a nervous breakdown. This
power obviates to need to pursue a personal injuries claim in the county court.
Coleman v Skyrail Oceanic Ltd, 1981 – A direct discrimination (254)

Price v The Civil Service Commission, 1977 – An indirect discrimination (255)
..
EL_C19.qxd 3/26/07 10:52 AM Page 449
Discrimination after the end of work relationship

The relevant discrimination Regulations prohibit discrimination after the end of an employment
(or partnership) relationship if the act of discrimination is closely connected to the relation-
ship, e.g. unreasonable refusal to give a reference.
Of significance here is the case of Woodward v Abbey National plc (2006) 790 IRLB 16. In
that case the Court of Appeal ruled that the statutory protection under s 47B of the
Employment Rights Act 1996 against being subjected to a detriment because of the making
of a protected disclosure (or whistleblowing) is not restricted to the duration of the contract
of employment but extends to a detriment imposed by an employer on an employee who
has left the employment, in this case the failure by Abbey to give Ms Woodward a reference
after she disclosed to management that the company was failing to comply with certain legal
obligations.
The importance of the ruling is that, as regards whistleblowing, there is no specific legisla-
tion giving post-employment rights. This was said by the Court of Appeal to be a purposive
interpretation to make the legislation fulfil what must have been its purpose. The ruling may
be of wider application because there are no specific post-employment protections in health
and safety, maternity, parental or adoption leave working time and flexible working cases.
There may well be however if the Woodward ruling is followed.
Guarantee payments
Employees with not less than four weeks’ continuous service are entitled under Part III of the
ERA to a guarantee payment if they are not provided with work on a normal working day,
e.g. because of a proposed power cut as in Miller v Harry Thornton (Lollies) Ltd [1978] IRLR 430.
The amount of the guarantee payment is reviewed from time to time by statutory instrument
and is currently £19.60 per day. This guarantee is, under the ERA 1996, limited to five work-
less days in any three-month period. The provisions do not apply if the failure to provide
work is due to a trade dispute, or if the employee has been offered suitable alternative work
but has refused it. 19
An employee may present a complaint to an employment tribunal that his employer has
failed to pay the whole or any part of a guarantee payment to which the employee is entitled.
The employment tribunal may make an order to pay the employee the amount of guarantee
payment which it finds is due to him.
The employee must apply to the tribunal within three months of the workless day for
which no payment has been made or within such longer period as the tribunal thinks reason-
able if it is satisfied that it was not reasonable or practical for the employee to present the
claim within three months.
Suspension from work on medical grounds
An employee with not less than four weeks’ continuous service who is suspended from work
under the provisions of an Act of Parliament (e.g. the HASAWA) or a code of practice, not
because he is ill but because he is exposed to a health hazard at his work and may become ill
if he continues at work, is entitled to be paid normal wages while suspended for up to 26 weeks.
This could occur, for example, where there was a leak of radioactivity at the workplace.
..
EL_C19.qxd 3/26/07 10:52 AM Page 450
An employee may present a complaint to an employment tribunal within three months

of the day in respect of which the claim is made (ERA, s 70) that his employer has failed to
pay the whole or any part of remuneration to which he is entitled on suspension, and the
tribunal may order the employer to pay the employee the remuneration due to him.
Family-friendly provisions
Suspension on maternity grounds
The ERA provides for suspension on maternity grounds. Formerly, a pregnant woman could
be fairly dismissed if because of her condition she could not do her work, e.g. because of
health and safety hazards, and either there was no suitable alternative work or she had
refused it. The ERA substitutes suspension on grounds of pregnancy, recent childbirth or
breastfeeding, while the health and safety hazards continue. There is no 26-week limit. The
employee may complain to a tribunal if she is not offered available and suitable alternative
work. Suspension continues even if such an offer is refused but pay ceases. For those who
have not refused an offer, e.g. because it was not possible for the employer to make one, normal
pay continues during the suspension. Those who are not paid, though entitled, can claim
compensation before a tribunal.
If an employer dismisses an employee who tries to assert her rights in the two above
suspension matters, the dismissal is automatically unfair whatever the employee’s length of
service.
Ante-natal care
Under the ERA, refusal of this right by the employer gives rise to a claim. A pregnant
employee who has, on the advice of her doctor or midwife or health visitor, made an
appointment to get ante-natal care must have time off to keep it and she must also be paid.
Except for the first appointment, the employer can ask for proof of the appointment in
the form, for example, of an appointment card. An employer who does not give the
employee these rights can be taken to a tribunal by the employee, but this must normally
be during the three months after the date of the appointment. Compensation may be
given to the employee, both where the employer has failed to give time off and also where
he has given time off but has failed to pay the employee. In either case the compensation
will be the amount of pay to which she would have been entitled if time off with pay had
been given as the law requires. The right to time off for ante-natal care is enjoyed by all
female employees, except any who ordinarily work outside Great Britain. There is no service
requirement.
Maternity leave and pay

This rather complex area of employment law can perhaps be best set out in table form.
The table takes into account the major changes made by the Maternity and Parental Leave
etc. and the Paternity and Adoption Leave (Amendment) Regulations 2006 (SI 2006/2014),
which are sanctioned by the Work and Families Act 2006.
..
EL_C19.qxd 3/26/07 10:52 AM Page 451
The provision The law

Ordinary Maternity From 1 April 2007 an entitlement to 26 weeks Ordinary
Leave (OML)(1) Maternity Leave
Additional Maternity From 1 April 2007 an entitlement to a further period of
Leave (AML)(1) 26 weeks end on to OML
Availability (OML) Available to all female workers regardless of service
Availability (AML) Available to female workers regardless of service
Statutory Maternity Pay Available to female workers with 26 weeks’ continuous service
immediately preceding the 14th week before EWC
Notice required for Notification to the employer in or before the 14th week before
entitlement the EWC
Notice of what? The pregnancy: the EWC and the date of starting OML
Employer’s response The employer must write to the worker within 28 days of her
to notice notice stating the date of her return. This fixes that date
Notification of return No notice is required but if the worker wants to return early she
must give eight weeks’ notice to the employer
Statutory Maternity 39 weeks
Pay period(2)
Rate of SMP 90% of average earnings for the first eight weeks of leave
and for the remaining weeks the lesser of £108.85 or 90% of
average weekly earnings
Notes
(1) An employee can carry out a maximum of 10 days’ work to ‘keep in touch’ during this period
without bringing the leave to an end.
(2) The Work and Families Act 2006 allows the government to extend this period to 52 weeks.
SMP administration
Employers can recover 92 per cent of the amount paid out by way of SMP and small employers
(broadly those whose National Insurance contributions payments for the qualifying tax year
do not exceed £40,000) can recover 100 per cent plus an additional 4.5 per cent of each pay-
19
ment of SMP which is designed to recoup the NI contributions payable on such payments. All
employers can recover SMP from tax and other payments due to the Revenue and not just
NI contributions as before. Furthermore, under s 21 of the Employment Act 2002 advanced
payments can be requested from the Revenue.
Section 21 is not yet in force.
Compulsory maternity leave

This leave is provided for by s 72 of the ERA 1996. The employer of a woman is prohibited
from allowing her to return to work during the two weeks from the day on which the child is
born. An employer who contravenes this requirement commits a criminal offence and is
liable to a fine currently not exceeding £500. It is accepted that the woman will be most
unlikely to want to return to work. The provision is basically designed to prevent the employer
from pressurising her to do so.
Paternity leave
Male and female employees have a right to be away from work on paid paternity leave.
..
EL_C19.qxd 3/26/07 10:52 AM Page 452
The qualifying conditions are set out below:
n the right is available to employees who:

– have continuous service with the employer of 26 weeks by the end of the fifteenth week
before the EWC;
– have or expect to have responsibility for bringing up the child;
– are either the biological father of the child or are married to or are the partner of the
child’s mother;
n leave is for two weeks and whether taken in single weeks or a block of two consecutive
weeks it must be taken within a period of 56 days from the child’s birth or the first day of
the EWC. The second alternative is to deal with a very premature birth where the child
might be kept in hospital for more than 56 days after the birth. The EWC will of course
have been set to fit a normal term pregnancy and will obviously be later than in fact the
birth was giving the opportunity to take leave after the child comes home;
n statutory paternity pay is at the weekly rate of the lesser of £108.85 or 90 per cent of normal
earnings;
n as in the case of SMP employers can recover 92 per cent of the total payments from sums
due to the Revenue and may ask for an advance payment. The small employers’ provision
is as for SMP;
n employees can take paternity leave in addition to unpaid parental leave of 13 weeks.
Additional paternity leave

There is now provision for up to 26 weeks of additional paternity leave (APL). The intention
is for APL to apply in the second six months of the child’s birth and for the father to start
APL only when the mother returns to work before all her SMP entitlement expires. In prac-
tice, this means that APL cannot be taken if:
n in relation to births occurring on and after l April 2007 the mother has already exhausted
her 39 weeks of SMP; or
n when the SMP has been increased to 52 weeks, the mother has also exhausted her full SMP
or AML.
The government was not in favour of allowing APL to be taken during the first six months
after the child’s birth because the mother may feel pressurised to return to work. Therefore,
APL will apply only where the mother has returned to work before all her SMP entitlement
expires.
Adoption leave
Male and female employees are entitled to take adoption leave. There is provision for ordin-
ary adoption leave (OAL) and additional adoption leave (AAL). Where there is a joint adop-
tion by married couples they will be able to choose who takes the adoption leave. Where the
adoption is by one of them only then that person will be entitled to the adoption leave
though the other spouse will be entitled to paternity leave if the criteria are met. It should be
noted that in current law couples in a long-term relationship but who are not married cannot
adopt. Only married couples or one person in an unmarried relationship can adopt. As we
have seen a married couple who adopt can choose which of them takes adoption leave and
which takes paternity leave. The partner of a single person who adopts can take only patern-
ity leave.
The following general points should be noted:
..
EL_C19.qxd 3/26/07 10:52 AM Page 453
n an employee is entitled to OAL or AAL in regard to a child when he or she has been
notified that he or she has been matched with a child by an adoption agency and he or
she has been employed for 26 continuous weeks ending with the matching week;
n OAL is for 26 weeks of leave commencing either on the date the child is placed with the
adopter or a date that is no more than 14 days before the expected date of placement, i.e.
when the child comes to live permanently with the adopter;
n AAL is for a further period of 26 weeks end on to the OAL. No further service qualification
is required;
n OAL is paid for by statutory adoption pay at the lesser of £108.85 or 90 per cent of normal
earnings for 39 weeks;
n the provisions for employer recovery are the same as for SMP and SPP.
Notice provisions
Notice to the employer of 21 days is required of the intention to take leave. The employer
must respond within 28 days stating when the leave ends under the employee’s entitlement.
This fixes the return date. The employee must give eight weeks’ notice to the employer to
change the intended start date and this is also the notice period for early return from leave.
Additional adoption leave

Provision is now made for an additional period of adoption leave of 26 weeks. This cannot be
taken by the person who has taken adoption leave. Once again, this leave is intended to be
taken by the partner who has not taken adoption leave and can commence only when the
person taking the adoption leave has returned to work before exhausting that leave.
Unpaid parental leave

The new ss 76–78 of the ERA 1996 apply. These sections together with the Regulations pro-
vide for collective agreements to be made with trade unions and workforce agreements to be
made with employees in regard to parental leave. Nevertheless, employees retain their rights
under what is called the statutory fallback scheme unless the collective or workforce scheme 19
is more generous, in which case such schemes can replace the fallback scheme. This book
considers only the fallback scheme as follows.
The fallback scheme

An employee who has been continuously employed for a period of not less than one year has
a right to 13 weeks of parental leave in respect of each child born on or after 15 December
1999 and each child under 18 who is adopted by the employee on or after that date (but see
below). Women who qualify for parental leave can take it immediately after taking maternity
leave. A week means seven days’ absence from work, even though the employee would not
have been required to work on every one of the working days. Leave must be taken in seven-
day blocks up to maximum of four weeks’ leave in respect of an individual child during a par-
ticular year calculated from the first time the employee became entitled to take parental
leave. This was affirmed as a correct interpretation of the law in Rodway v New Southern
Railways Ltd [2005] IRLR 583, where Mr Rodway, a train guard conductor, asked for a day off
to look after his two-year-old son while the mother was away for the day. He was refused the
time off but took it anyway, as he could not get anyone else. His employer later put him
through a disciplinary procedure but his claim for detriment because he was trying to use the
parental leave provisions was turned down by the Court of Appeal. Leave of one day was not
..
EL_C19.qxd 3/26/07 10:52 AM Page 454
within the leave provisions. Leave may be taken in blocks of one-day or multiples of one day
where the child is disabled. The leave must be taken during the period of five years from the
date of birth or adoption or until the child turns 18 years if disabled. As regards the adoption
of older children, the leave period ends when they reach 18, even if five years from place-
ment for adoption has not by then elapsed.
Notice
The employer must receive notice (not necessarily written notice) of 21 days specifying the
dates on which leave is to begin and end. Where the leave is to be taken on birth, the notice
must specify the EWC and the duration of leave to be taken and be given 21 days before the
beginning of EWC. The same with adoption except that notice must be given 21 days before
the expected week of placement.
Evidence
The employer is entitled to require evidence of the employee’s legal responsibility for the
child as well as evidence of the age of the child.
Postponement of leave
The employer may postpone a period of leave where he considers that the operation of
the business would be affected in terms that it would be ‘unduly disrupted’. He has only
seven days to make his mind up about postponement which may be for a maximum period
of six months. No postponement is allowed if leave is taken on the birth or adoption of
a child.
The employment contract during leave

While on parental leave, employees remain bound by their obligation of good faith towards
their employer and any express undertakings in the contract in regard to non-disclosure of
confidential information and competition. The employer must continue to abide by the
implied obligations of trust and confidence and offer the right to return to the same job but
if that is not possible to another job which is suitable and appropriate in the circumstance.
There is also protection in regard to salary, continuity of employment and pension rights
on return.
Making a claim
The relevant provision is s 80 of the ERA 1996. It gives employees a right to complain to
an employment tribunal within three months from the date when any of the rights under
the parental leave arrangements are denied, in the sense that these have been unreasonably
postponed or prevented. Any related dismissal is automatically unfair and there is no cap on
the compensation that may be awarded.
Records
The Regulations do not require the keeping of records but it will be impossible for employers
to avoid keeping them for accounting purposes to show that leave has been unpaid and that
the rights are not being abused. Bearing in mind also that time off for domestic emergencies
(also unpaid) exists (see below), employers must consider the need to set up systems and pro-
cedures to cope with the new rights and look at how they can run along with any existing
contractual rights to be paid parental leave that employees already have within a particular
organisation.
..
EL_C19.qxd 3/26/07 10:52 AM Page 455
Time off for dependants

This is provided for by s 57A of the ERA 1996. It entitles every employee regardless of length
of service to take a reasonable amount of time off work ‘to take action that is necessary’
n to help when a dependant gives birth, falls ill or is assaulted;
n to make longer term arrangements for the care of a sick or injured dependant;
n as a result of a dependant’s death;
n to cope when the arrangements for caring for a dependant break down unexpectedly; or
n to deal with an expected incident that involves a dependant child during school hours or
on a school trip or in other situations when the school has responsibility for the child.
Dependants
This means a husband or wife or a child or parent of the employee whether they live with
him or not or any member of the employee’s household who is not employed by him or her
and is not a tenant, lodger or boarder.
Amount of time off

There is no set limit. In every case the right is limited to the amount of time that is reason-
able in the circumstances. Employment tribunals will be the ultimate arbitrators if a claim is
brought by an employee.
Payment for time off

The employer is under no obligation to pay the employee for time taken off.
Notification
The right only applies if the employee ‘as soon as is reasonably practicable’ tells the employer
why he or she is absent and unless the employee is already back at work for how long the
absence is likely to last.
Enforcing the right

Section 57B of the ERA 1996 entitles an employee to complain to an employment tribunal 19
that the employer has unreasonably refused to allow time off as required by s 57A. The period
for application is three months of the employer’s refusal and compensation may be an
uncapped award such as is just and equitable.
Victimisation and dismissal

There is protection in terms of a tribunal complaint for any victimisation or dismissal result-
ing from the exercise or purported exercise of the right in a proper way and dismissal is
automatically unfair. Selection for redundancy for the same reason will be automatically an
unfair dismissal.
Qua v John Ford Morrison Solicitors, 2003 – Guidance on dependants’

leave (255a)
Maternity allowance
Those who do not qualify for statutory maternity pay because e.g. their earnings are below
the lower earnings limit (currently £84 per week) may be able to get maternity allow-
ance. The provisions are broadly as follows:
..
EL_C19.qxd 3/26/07 10:52 AM Page 456
Amount of benefit
A successful claimant will receive weekly the lesser of £108.85 or 90 per cent of average earnings.
Payment period
Maternity allowance is paid for up to 39 weeks. The earliest the period can start is the
eleventh week before the EWC unless the child is born before this and the latest is the
Sunday after the child is born.
Service requirement
In order to qualify for maternity allowance, the claimant must have worked as an employee
and/or been self-employed for at least 26 weeks in the 66 weeks immediately before the EWC.
The weeks do not need to be consecutive or for the same employer and a part-week of work
counts as a full week.
Earnings requirement
To qualify for maternity allowance the claimant’s average weekly earnings must be at least equal
to the maternity allowance threshold which is currently £30 per week. There are a number of
ways of calculating average earnings but, for example, the highest earnings for 13 weeks out
of the 66 weeks referred to above may be taken and divided by 13 to produce the average.
Flexible working
Under Part 8A of the Employment Rights Act 1996 (as inserted by s 47 of the Employment
Act 2002) employers are under a duty to consider applications for flexible working from
employees who are parents of children under age six or disabled children under 18. Changes
in hours and times of work may be applied for.
Qualifying conditions for employees are:
n continuous employment with the employer for not less than 26 weeks. The purpose must
be to care for a child.
The employee must be:
(i) the biological parent, guardian or foster carer of the child;
(ii) married to a person within (i) above and lives with the child; or
(iii) the partner of a person within (i) above and lives with the child.
The employee must also have, or expect to have, responsibility for the upbringing of the
child.
n The employee must apply before the fourteenth day before the child reaches six years of
age or a disabled child reaches 18.
n The employer is then required to meet with the employee within 28 days of the applica-
tion and the employer’s decision must be notified to the employee within 14 days of the
meeting. The employee must have a right of appeal. The employee also has the right to be
accompanied by a fellow worker or a trade union representative at any meeting.
n The employee’s application may be refused where the employer considers that one or more
of the following grounds apply:
(a) burden of additional costs;
(b) detrimental effect on the ability to meet consumer demand;
(c) inability to reorganise work among remaining staff;
..
EL_C19.qxd 3/26/07 10:52 AM Page 457
(d) detrimental effect on quality;

(e) insufficiency of work during the periods the employee proposes to work, as where the
employee proposes to be away at peak times and return at slack times when there
might be a need for less staff;
(f) structural changes would be involved and require planning.
Where the employer fails to comply with his/her duties in regard to the application or bases
his or her decision on incorrect facts, the employee may apply to an employment tribunal. If
the employee’s complaint is well-founded the tribunal may make an order to that effect and
may order the employer to reconsider the matter and/or award compensation to the employee.
Additional rights inserted into the ERA 1996 by the Employment Relations Act 2004
make dismissal for trying to exercise the above rights automatically unfair and selection for
redundancy also. The Work and Families Act 2006 extends the provision to the carers of adult
persons.
Time off
There are circumstances in which employees may be entitled to paid time off work. Some of
these rights, however, arise only if there is a trade union recognised for negotiating or collective
bargaining purposes.
Trade union recognition

If a company has recognised a union and the union has appointed an employee as a safety
representative, the employer must allow the employee paid leave to perform certain functions.
These include investigating potential hazards and dangerous occurrences, investigating
health and safety complaints; making representations to the company about these matters;
and attending meetings of safety committees.
Branch officers and shop stewards of a recognised union are entitled to paid time off in order
to carry out their duties as union officials. These include negotiation with the employer,
19
informing and consulting the members about the negotiations and representing members in
disciplinary matters as well as union courses of training.
In this connection, the decision in Davies v Neath Port Talbot CBC (1999) The Times,
26 October is of interest. Mrs Davies was employed by the Council’s meals on wheels service
on a part-time basis. She was elected as a GMB union health and safety representative. She
attended courses arranged by the GMB. The time involved on these courses exceeded the
normal 22 hours a week that she worked. The Council nevertheless paid her for 22 hours
only. The EAT ruled that she was entitled to be paid for the hours actually worked on the
courses and the Council was liable to pay the shortfall. The EAT followed directly applicable
case law of the ECJ rather than the replacement of wages provision in s 169(2) of the ERA
1996 which was in conflict with Art 141 of the EC Treaty.
Members of a recognised union are also entitled to unpaid time off for certain union activ-
ities, such as attendance at an executive committee meeting or annual conference.
The above provisions in terms of union recognition have become more important because
the proposals of the Employment Relations Act 1999 have been implemented. The Act stipu-
lates that employers must recognise trade unions where a majority of those voting in a ballot
and at least 40 per cent of those eligible to vote are in favour of recognition though firms
with fewer than 21 workers will be exempt. However, in those companies where more than
..
EL_C19.qxd 3/26/07 10:52 AM Page 458
50 per cent of the workers are union members, there will be automatic recognition on the
ground that there is a manifest demonstration that employees wish to be represented by the
union for the purposes of collective bargaining.
Trade union activities

An employee who is a member of an independent trade union which the employer recognises
is entitled to reasonable unpaid time off for trade union activities such as relevant courses.
ACAS has published a code of practice which gives guidance on the time off which the
employer should allow for these activities and also for union learning representatives (see
below). Paid time off for union officials for union duties is considered above.
Union learning representatives

These workers have a right to unpaid time off under s 168A of the Trade Union and Labour
Relations (Consolidation) Act 1992 (inserted by s 43 of the Employment Act 2002). The learning
representatives’ function is to advise union members about their training and educational
and development needs. The advice is usually given at the place of work often through face-
to-face meetings with individuals. Union members are entitled to unpaid time off to consult
their learning representatives.
Young persons – time off for study or training

Section 32 of the Teaching and Higher Education Act 1998 inserts s 63A into the Employment
Rights Act 1996. It allows persons aged 16 to 18 to take reasonable paid time off work during
working hours in order to undertake study or training leading to an external qualification:
attainment of which would be likely to enhance the young person’s prospects whether with his
or her employer or otherwise. The young person is entitled to pay for the time off (see s 63B
of the ERA 1996). These rights are enforceable by way of complaint to an employment tribunal.
If an employee is dismissed for asserting these rights, the dismissal will be automatically
unfair so that no period of service is required to assert the right. The Right to Time Off for
Study or Training Regulations 1999 (SI 1999/986) set out the external qualifications referred
to above. These include, e.g., the qualification awarded by the Association of Accounting
Technicians.
Public duties
Employees have the right to take unpaid time off for certain public duties.
The public duties for which time off may be taken include the duties of a justice of the
peace, a member of a local authority, a member of any statutory tribunal, a member of
a health authority or NHS trust and a governor of a local authority school or member of a
police authority.
The employer must allow as much time off as is reasonable in the circumstances.
Other cases
Other cases in which employees are entitled to paid time off are mentioned below. These are
the cases of pregnant employees who require paid time off for ante-natal care, redundant
employees who require paid time off to look for work or for training, and the Pensions Act
1995 introduces a new right for employees who are also pension fund trustees to be given
paid time off work so that they may perform their duties and undergo relevant training. Like
other statutory ‘time off’ rights, the right is to ‘reasonable’ time off taking into account all the
..
EL_C19.qxd 3/26/07 10:52 AM Page 459
circumstances. In addition, the Collective Redundancies and Transfer of Undertakings

(Protection of Employment) (Amendment) Regulations 1999 (see further p 482) provide that
in a redundancy situation an employer may consult elected workers’ representatives instead
of or as well as a recognised trade union. These representatives are entitled to reasonable time
off with pay during normal working hours to carry out their duties as representatives. All of
these rights to time off are now contained in Part VI of the ERA 1996. It is necessary to add now
time off for dependant emergencies. Here the employer is under no obligation to pay those
taking such leave (see further p 455).
The Health and Safety (Consultation with Employees) Regulations 1996 (SI 1996/1513)
carry similar provisions for employee safety representatives.
Remedies
Refusal to allow an employee the time off to which he or she is entitled or a failure to pay for
it where this is required can lead to an employment tribunal application which must be
made within three months of failure to allow the time off or to pay the employee for that
time (as the case may be). If the complaint is successful, the employment tribunal can award
compensation.
Insolvency of employer
An employee whose employer becomes insolvent is entitled to obtain payment of certain
debts owed to him from the National Insurance Fund. The legal rights and remedies in
respect of the debts covered are transferred to the Secretary of State for Trade and Industry so
that he can try to recover from the assets of the insolvent employer the cost of any payments
made. Employees must apply for payment to the employer’s representative, e.g. administrator
or liquidator, who, if unable to pay the claim in the near future, will submit the application
to the Secretary of State for payment from the National Insurance Fund which remains in
existence for this purpose. Debts included are arrears of pay currently up to £310 per week for
a period not exceeding eight weeks, holiday pay up to £310 per week with a limit of six weeks
in the last 12 months of employment; payment in lieu of notice for the minimum statutory
19
period relevant to the employee up to £310 per week; any outstanding payment in regard to
an award by an employment tribunal of compensation for unfair dismissal; reimbursement of
the fees of an apprentice or articled clerk.
It should be noted that the above amounts are reviewed annually by ministerial order.
There is no period of qualifying service before an employee becomes eligible and virtually
all people in employment are entitled. The amount of £310 refers to the employee’s
gross pay.
Health and safety at work

The HASAWA (the Health and Safety at Work etc. Act 1974) lays down certain general duties
of employers to their employees in the field of health and safety. There is a general duty on
employers to ensure as far as is reasonably practicable the health, safety and welfare of all
employees while at work.
However, particular, as distinct from general, health and safety duties are set out for
most workplaces in the Management of Health and Safety at Work Regulations 1999
..
EL_C19.qxd 3/26/07 10:52 AM Page 460
(SI 1999/2051). The Health and Safety Commission has issued an Approved Code of Practice
to accompany these Regulations. Examples of some of the major duties of the employer are as
follows. He must provide and maintain plant and equipment and safe systems of work; avoid
risks to safety and health in handling, storing and transporting articles and substances; provide
and maintain safe premises and safe means of entering and leaving them; provide and main-
tain adequate welfare facilities and arrangements; provide information, training and supervi-
sion as required in order to ensure the safety and health of employees; prepare and/or revise
policy statements on the safety and health of employees and give proper publicity to these.
The statement of policy provisions does not apply to an employer with fewer than five
employees.
An employer must also conduct his undertaking in such a way that so far as is reasonably prac-
ticable those who are not his employees are not exposed to risk. Additionally, an employer
must ensure so far as is reasonably practicable that premises which are open to others not
employed by him are safe. There is also a duty to use the best practical methods to prevent
noxious or offensive substances going into the atmosphere.
Employees must take reasonable care of their own and other people’s health and safety and
co-operate with the employer in the carrying out of his duties. The Act also states that no
person shall intentionally or recklessly interfere with or misuse anything which is provided
in the interests of health, safety and welfare, e.g. safety equipment, and no employer may
charge any employee for anything done or provided to comply with the employer’s statutory
duties. Finally, those who design, manufacture, import or supply equipment, machinery and
plant must ensure that the design and construction is safe.
Also of interest are the Health and Safety (Display Screen Equipment) Regulations 1992
(SI 1992/2792). These Regulations, which are in force, deal with the risks involved with work
on display screens, e.g. muscular problems, eye fatigue and mental stress.
The Regulations apply where there are one or more employees who habitually use display
screen equipment as a significant part of daily work. The employer’s duties are to:
(a) assess display screen equipment workstations and reduce any risks which are discovered;
(b) ensure that workstations satisfy minimum requirements in terms of the display screen
itself, the keyboard, desk and chair, working environment, task design and software;
(c) plan work on display screen equipment so that the user has breaks or changes of activity;
(d ) provide information and training for display equipment users.
Users are also entitled to eye and eyesight tests and to special spectacles where normal ones
cannot be used.
Health and safety in the office

Offences and civil claims for accidents at work are more likely to arise in a factory than in an
office. However, the following are examples of accidents which can occur and medical condi-
tions which can arise in an office environment:
(a) injury in a fire caused by a discarded cigarette or by an overloaded or defective electrical
system;
(b) a fall or other injury caused by a defect in the premises, such as a dangerous and badly-lit
staircase;
(c) an electric shock caused by badly fitted or defective electrical equipment;
(d ) injury caused by a defect in or careless use of equipment, such as a guillotine or stapler;
(e) a medical condition caused by defective or ill-designed chairs supplied to employees,
particularly secretaries;
(f ) eye strain and other conditions caused by exposure to VDU screens.
..
EL_C19.qxd 3/26/07 10:52 AM Page 461
There has been a large number of claims for repetitive strain injury caused to workers using
keyboards of one sort or another. The Court of Appeal has now decided that an employer is
under a duty to instruct employees on the risks of repetitive strain injury and the need for
taking breaks (see Pickford v ICI plc [1996] IRLR 622).
It is also necessary to note the case of Walker v Northumberland County Council [1994] NLJR
1659 where damages, eventually settled out of court at £175,000, were awarded to Mr Walker
when he suffered psychiatric damage because he was overworked by his employer. The
employer was in breach of his duty to provide a safe system of work for the employee and
was, therefore, liable in negligence for not doing so.
However, these and other relevant cases are also considered in Chapter 21 (Negligence of
employers) since these stress related cases can also be brought under the common law rule
that an employer must provide a safe system of work. The Display Screen Regulations provide
that information be given to employees regarding health and safety risks with VDUs and that
risk assessments be made but claims for damages are brought at common law. Civil liability
for breach of the relevant regulations is strict and the employer may be liable even though
there is no negligence. Thus in Stark v Post Office [2000] IRC 1013 the Court of Appeal ruled
that a postman was entitled to damages when the front wheel of his bicycle locked throwing
him over the handlebars. The employer was liable even though there had been no negligence
in terms of the bicycle’s maintenance. The case was brought under the Provision and Use of
Work Equipment Regulations 1992 which do not exclude civil claims.
Civil claims: reforming regulations

The Management of Health and Safety at Work and Fire Precautions (Workplace)
(Amendment) Regulations 2003 (SI 2003/2457) give new rights to employees to bring civil
law claims for damages from their employers if they have suffered injury or illness because of
a breach by the employer of the Management of Health and Safety at Work Regulations 1999
and the Fire Precautions (Workplace) Regulations 1997. Employers are also able to make
claims against employees for their breaches of duty under the above regulations.
Typically, health and safety regulations have excluded civil claims. Trade unions who often
support workers in claims welcomed the Regulations and have become involved in claims.
The proceedings are brought in the county court or the High Court, not in employment
19
tribunals. There is a general time limit of three years and damages can be reduced by a per-
centage on the grounds of the claimant’s contributory negligence.
Smoking in the workplace

It is also arguable that at common law an employer is at fault in requiring employees to
work in an atmosphere containing heavy concentrations of cigarette, pipe or cigar smoke,
although it may be possible to call medical evidence to challenge the existence or degree of
the risks involved in ‘passive smoking’. In fact, in Bland v Stockport Metropolitan Borough
Council [1993] CLY 1506, a woman who had been exposed to passive smoking from 1979 to
1990 when her employer implemented a no-smoking policy, received £15,000 damages for
injury to her health, including, in particular, chronic bronchitis and sinusitis. There is, of
course, a statutory duty now that the Health and Safety Regulations apply. Certainly there is
no implied contractual right to smoke at work and if an employee leaves because he or she
is not allowed to smoke, there is no constructive dismissal (see Dryden v Greater Glasgow
Health Board [1992] IRLR 469, EAT), and it may well be that a dismissal for infringement of a
no-smoking rule properly communicated and agreed with by the majority of staff would not
be unfair.
..
EL_C19.qxd 3/26/07 10:52 AM Page 462
More recently, the Employment Appeal Tribunal has decided that a secretary in a solicitor’s
office who left because of discomfort caused at the workplace by colleagues who smoked was
constructively dismissed (see Waltons and Morse v Dorrington [1997] IRLR 488). In previous
passive smoking cases the complainant has suffered physical injury. However, in this case,
the EAT, after ruling that it is an implied term in all employment contracts that the employer
will provide and continue to monitor, as far as is reasonably practicable, a working environ-
ment which is reasonably suitable for employees to carry out their duties, went on to com-
ment that the right of an employee not to be required to sit in a smoky atmosphere affects
the welfare of employees at work, even though employees who complain cannot necessarily
prove that there has been any health and safety risk to them. It would appear that discomfort
is enough.
The Health and Safety Commission has issued a code of practice on passive smoking. The
code has no legal force as such but could lead to a successful claim for damages by an
employee at common law if put in evidence to show that the employer was in breach of it.
A workplace smoking ban

The government has issued and consulted on the draft Smoke-free (General Provisions)
Regulations. The Regulations will ban smoking in enclosed public places, including most
workplaces by the summer of 2007. The Regulations give definitions of ‘enclosed’ and ‘sub-
stantially enclosed’ premises, together with requirements for displaying no-smoking signs in
smoke-free premises and duties to prevent smoking in smoke-free vehicles, enforcement by
local authorities and the form of penalty notices for offences.
As regards penalties, employees caught smoking in regulated areas after the Regulations are
in force will face a fixed penalty of £50. Those who pay within 15 days will have the fine
reduced to £30, but those who fail to pay could face a fine of up to £200 and a criminal
record. Company cars must also be non-smoking if they are likely to be used by more than
one person, unless the car is a convertible and the roof is open.
The consultation can be accessed at www.dh.gov.uk/Consultations/fs/en.
Drink and drugs in the workplace

Because of the duties of care placed upon them by statute and common law, employers must
take reasonable steps to ensure that their workers are not under the influence of drink or
drugs where it would create a risk to the health and safety of others if the workers’ perform-
ance was impaired in this way. Employees who are under the influence of drink or drugs or
who fail to report fellow workers who are may also be in breach of their own common law or
statutory duties of care.
Except for these rather general duties there is little specific regulation with regard to drink
and drugs in the workplace, though there is some regulation in regard to railways. The
Transport and Works Act 1992 states that those who work on railways, tramways and other
specified transport systems are guilty of a criminal offence if they are under the influence of
drugs or alcohol while on duty.
Consultation
The Health and Safety (Consultation with Employees) Regulations 1996 (SI 1996/1513),
impose duties on employers who do not have safety representatives appointed by a recognised
trade union to consult their employees on certain specified health and safety matters.
Employers have the choice of consulting employees directly or through representatives
elected by the employees they are to represent. Employers must provide relevant information
..
EL_C19.qxd 3/26/07 10:52 AM Page 463
and give appropriate training, paid time off, and facilities in order that elected representatives
can carry out their functions.
It should also be noted that under the ERA, s 100 designated or acknowledged health and
safety representatives must not be subjected to detriments, e.g. loss of overtime, for carrying
out health and safety activities in the workplace. Dismissal for these reasons is unfair, regard-
less of service. The provisions also apply to ordinary employees, regardless of service, who leave
or refuse to return to the workplace because of a health hazard reasonably thought to exist.
The above Regulations work in tandem with the Safety Representatives and Safety
Committee Regulations 1977 (SI 1977/500) which apply to consultations with safety repres-
entatives appointed where there is a recognised trade union and appointed by that trade union.
Enforcement
Enforcement is in the hands of the inspectorate of the Health and Safety Executive set up by
the Act. Inspectors may issue a prohibition notice if there is a risk of serious personal injury.
This operates to stop the activity concerned until remedial action specified in the notice has
been taken. They may also issue an improvement notice if there is a contravention of any of
the relevant statutory provisions, under which the employer must remedy the fault within a
specified time. They may prosecute any person contravening the relevant statutory provision
instead of or in addition to serving a notice. Failure to comply with a prohibition notice
could lead to imprisonment, though there is an appeal to an employment tribunal. The right
of appeal from the employment tribunal is not as might be expected to the Employment
Appeal Tribunal but to the High Court, Queen’s Bench Division.
R v Mara, 1986 – Health and safety: the duty to non-employees (256)
Trade union membership and activities

Under the Trade Union and Labour Relations (Consolidation) Act 1992 employers have a
19
duty not to take action against employees just because they are members of, or take part in
at an appropriate time, the activities of a trade union which is independent of the employer.
According to the decision in Post Office v Union of Post Office Workers [1974] 1 All ER 229 this
includes activities on the employer’s premises.
Under the provisions of the 1992 Act, dismissal for failing to join a trade union is always
automatically unfair even if there is a closed shop situation within the industry concerned.
This provision greatly weakens the maintenance by trade unions of closed shops.
Dismissal will also be automatically unfair if the employee is selected for redundancy on any
of the above ‘trade union’ grounds. Furthermore, the Court of Appeal decided in Fitzpatrick v
British Railways Board [1991] IRLR 376 that a dismissal for trade union activities in a previous
employment was automatically unfair.
If action is taken against employees, they may complain to a tribunal within three months of
the offending act, which can award money compensation of an unlimited amount or make
an order saying what the trade union rights of the employee are so that the employer can grant
them in the future. If the employee has been dismissed, the unfair dismissal remedies apply.
In addition, the 1992 Act gives job seekers a right not to be refused employment or the ser-
vices of an employment agency on the ground that they are or are not trade union members.
The Act also protects people who will not agree to become or cease to be union members or
..
EL_C19.qxd 3/26/07 10:52 AM Page 464
to make payments in lieu of membership subscriptions. This means that it is no longer lawful
to operate any form of closed shop. Any individual who believes that he or she has been
unlawfully refused employment or the service of an employment agency because of union or
non-union membership can complain to an employment tribunal within three months of the
refusal. If the case is made out, the tribunal can award compensation of unlimited amount.
The compensation will generally be paid by the employer or employment agency con-
cerned, but in cases where a trade union is joined as a party and the tribunal decides that the
unlawful refusal resulted from pressure applied by the union, it may order the union to pay
some or all of the compensation.
The tribunal can also recommend that the prospective employer or employment agency
take action to remedy the adverse effect of their unlawful action on the complainant.
Employer incentives not to join a union

The Employment Relations Act 2004 inserts additional provisions in the Trade Union and
Labour Relations (Consolidation) Act 1992 so that a worker has a right not to have an offer
made to him or her by the employer with the sole or principal purpose of inducing him or
her to give up membership of an independent trade union or to refrain from joining or
taking part in the activities or making use of the services of such a union. Further, a worker
who is a member of an independent trade union has a right not to be made an offer by the
employer where acceptance would result in the terms of the employment no longer being
determined by collective bargaining where this is the sole or main purpose of the offer.
Where offers made in contravention of the above provisions are accepted by the worker, the
employer cannot enforce them as a change in the terms of employment. The provisions
apply to those who provide services and do not work under a contract of employment.
If the employer goes further than the making of an offer and takes steps to prevent the above
contacts with the union, the worker suffers a detriment for which a claim could be brought.
Union recognition – generally

Employers were formerly free to decide for themselves whether they wished to recognise
trade unions regardless of the wishes of their employees, and irrespective of the level of union
membership among their workers. Under the provisions of the Employment Relations Act
1999, which take effect as Sch A1 to the Trade Union and Labour Relations (Consolidation)
Act 1992, employers will have to recognise trade unions where a majority of those voting in a
ballot and at least 40 per cent of those eligible to vote are in favour of recognition. However,
in those organisations where more than 50 per cent of the workers are members of the union,
there will be automatic recognition on the ground that there is a manifest demonstration
that the employees wish to be represented by the union for the purposes of collective bar-
gaining. The Employment Relations Act 1999 will give protection against dismissal for those
campaigning on behalf of recognition and unions will be allowed reasonable access to the
workforce to seek their support and to inform employees about ballots. Those who employ
less than 21 workers are exempt from the recognition procedures.
The areas for which compulsory recognition is required embrace negotiations relating to
pay, hours of work, holidays and training.
Union recognition – disputes

Disputes are referred to the Central Arbitration Committee. An example of such a reference is
to be found in UNIFI v Bank of Ceylon (2000) 652 IRLB 16. In that reference the CAC accepted
..
EL_C19.qxd 3/26/07 10:52 AM Page 465
a recognition application by the Union for the Investment Finance Industry in respect of
workers, including managers, employed by the Bank of Ceylon under contracts based in the
UK. The Bank employed at least 21 workers on the day the union lodged its recognition
request with the Bank, even if employees based in Sri Lanka and in Britain on separate assign-
ments were excluded. The CAC accepted the union’s evidence that it had 14 members out of
the 22 remaining staff in the proposed bargaining unit and statements from 13 staff that they
wanted the union to seek recognition.
The CAC found that at least 10 per cent of the staff in the proposed bargaining unit were
union members and that a majority of the relevant staff would be likely to favour collective
bargaining and accepted UNIFI’s recognition application.
Deduction from pay of union subscriptions

Employers may agree with a recognised union to deduct union subscriptions from pay and
hand the relevant sum over to the trade union concerned. Employers must get the written
authorisation of the relevant workers before starting what are known as check-off deductions
and they must continue to give employees the usual itemised pay statement showing the
amount of any check-off deduction. Furthermore, employees are free to withdraw from
check-off at any time.
However, the Deregulation (Deduction from Pay of Union Subscriptions) Order 1998
(SI 1998/1529) removes from employers the requirement to:
n obtain repeat authorisations from employees at least every three years as confirmation that
they wish to continue to pay their union subscriptions from wages; and
n notify employees at least one month in advance of any increase in the amount that will
be deducted.
Citizen’s right
Although not strictly speaking a matter of employment law, it is worth noting that under
s 235 of the 1992 Act (as amended) any individual who is deprived, or likely to be deprived,
of goods or services because of unlawfully organised industrial action, can bring proceedings
19
before the High Court to restrain the unlawful act. Such an individual can apply to the
Commissioner for Protection against Unlawful Industrial Action for assistance.
The first case to receive financial assistance concerned strike action threatened by members
of a teaching union as a protest against the re-admission of a pupil to a secondary school
after his parents’ successful appeal against the decision of the head teacher and the school
governors to exclude him.
Termination of the contract of employment
Unfair dismissal: generally

Before a person can ask an employment tribunal to consider a claim that another has unfairly
dismissed him or her, it is once again essential to establish that the relationship of employer
and employee exists between them. In this connection, the ERA provides that an employee
is a person who works under a contract of service or apprenticeship, written or oral, express
or implied.
..
EL_C19.qxd 3/26/07 10:52 AM Page 466
Massey v Crown Life Insurance Co, 1978 – Unfair dismissal claims and the
self-employed (257)
In addition to showing that he is an employee, the claimant had to comply with an age
requirement. The unfair dismissal provisions did not apply to the dismissal of an employee from
any employment if the employee had on or before the effective date of termination attained
the age which, in the undertaking in which he is employed, was the normal retiring age for an
employee holding the position which he held, or for both men and women age 65. This exclu-
sion is now repeated by the Age Discrimination Regulations 2006 and there is now no age limit.
As regards the period of employment, the unfair dismissal provisions do not apply to the dis-
missal of an employee from any employment if the employee, whether full or part-time, has not
completed one year’s continuous employment ending with the effective date of termination
of employment unless the dismissal is automatically unfair.
Automatically unfair dismissals

Having noted some of these in various parts of the text, it may be useful to bring them
together in a list, remembering that dismissals of this kind do not require any particular
period of service with the employer.
The main reasons which make a dismissal automatically unfair can briefly be listed as
follows:
n trade union membership or activities including dismissal during official strike action;
n not belonging to a trade union or particular union;
n pregnancy, maternity and dependant leave, adoption leave, paternity leave and parental leave;
n selection for redundancy on any of the above grounds;
n the transfer of the undertaking or a reason connected with it (unless there is an ETO
(economic, technical or organisational reason)). It should, however, be noted at this point that
the one-year qualifying period does not apply where the complaint is based on dismissal
for one of the automatically unfair reasons, though if the dismissal related to the transfer
of an undertaking the one-year qualifying period does apply;
n asserting a statutory employment right under ERA 1996, s 104 e.g. in regard to minimum
notice;
n exercising rights as a part-time worker or fixed-term worker or in connection with flexible
working;
n in health and safety cases involving union safety representatives and now including being
an employee safety representative or putting up for election to be one;
n performing the duties of a member-nominated trustee under the Pensions Act 1995;
n being an employee representative in redundancy consultation or putting up for election to
be one (ERA 1996, s 103);
n refusing (in certain circumstances) to do shop or betting work on a Sunday;
n exercising rights under the Working Time Regulations including rights as an employee rep-
resentative in connection with the workforce agreements (s 101(A), ERA 1996, as inserted
by the Regulations);
n asserting rights under the National Minimum Wage Act 1998 (s 104(A), ERA 1996, as
inserted by the NMW Act 1998);
n asserting rights to time off for study and training under s 63A of the ERA 1996, as inserted
by the Teaching and Higher Education Act 1998;
n protection of whistleblowers under the Public Interest Disclosure Act 1998.
..
EL_C19.qxd 3/26/07 10:52 AM Page 467
Other exceptions
The following are ineligible and cannot claim.
(a) Any employee dismissed while taking unofficial strike or other industrial action is
unable to complain of unfair dismissal (Trade Union and Labour Relations (Consolidation)
Act 1992, s 237). Where the strike or other industrial action is official, the Employment
Relations Act 1999 inserts additional provisions into the Trade Union and Labour Rela-
tions (Consolidation) Act 1992 so that it is automatically unfair to dismiss employees or
select them for redundancy for the first 12 weeks of their participation in official and other-
wise lawfully organised protected industrial action. Dismissal during unofficial action is
not protected and action is also not protected if it involves unlawful secondary action.
Dismissals after the 12-week period are still unfair where the employer has not taken
reasonable steps to resolve the dispute. Where the employer has not taken such steps or
where the action was not lawfully organised, a worker who has been dismissed will norm-
ally be able to claim unfair dismissal where the employer has not dismissed all workers
taking part in the action or has offered re-engagement to some but not all of the employees
within a three-month time limit.
(b) Certain other categories are excluded by the ERA, e.g. members of the police force.
(c) It was once the case that a worker who under his or her contract of employment ordinarily
worked mainly outside Great Britain could not claim unfair dismissal. The ERA 1999
abolished this exclusion but it remains for those who work wholly outside Great Britain,
unless the employment contract is in Great Britain the worker having been merely posted
abroad or the work is connected with Great Britain as where it is at a UK military base
(Lawson v Serco [2006] 1 All ER 823).
(d) To claim unfair dismissal a worker must have been continuously employed for one year at
the date of termination. There is no longer a requirement to have worked a specific number
of hours in a week to qualify.
Under the ERA, s 192, members of the armed forces are now covered by the unfair dis-
missal provisions of that Act provided they have first availed themselves of service redress
procedures.
It should also be noted that s 9 of the Employment Tribunals Act 1996 contains provisions
19
to test the strength of the case of each party before a full hearing proceeds. Pre-hearing
reviews are introduced at which the chairman of the tribunal may sit alone without the two
lay assessors. The chairman may, at his discretion and following an application by one of the
parties, or of his own motion, require a deposit of up to £500 from the other party as a condi-
tion of proceeding further if it is considered that his or her case has no reasonable prospect of
success, or that to pursue it would be frivolous, vexatious or otherwise unreasonable.
Employment Tribunal Regulations also provide for pre-hearing assessments, and if a party
to the proceedings before an employment tribunal considers that an application, or a particu-
lar contention, is unlikely to succeed or be accepted he can ask for a pre-hearing assessment
to be made. A tribunal can make such an assessment of its own volition. Following the pre-
hearing assessment, at which the parties may submit written representations and put forward
oral argument but not evidence, the tribunal may indicate its opinion that if the party who is
unlikely to succeed carries on with the application or persists in the contention an order for
costs may be made against him. The opinion is placed before the tribunal which conducts the
full hearing if it takes place. No member of the tribunal which gave the opinion may be a
member of the tribunal which takes the full hearing.
A pre-trial review may therefore impose a deposit requirement and give a warning order as
to costs if the case proceeds.
..
EL_C19.qxd 3/26/07 10:52 AM Page 468
Dismissal – meaning of
An employee cannot claim unfair dismissal unless there has first been a dismissal recognised
by law. We may consider the matter under the following headings.
Actual dismissal
This does not normally give rise to problems since most employees recognise the words of an
actual dismissal, whether given orally or in writing.
A typical letter of dismissal appears below.
Dear Mr Bloggs
I am sorry that you do not have the necessary aptitude to deal with the work which we have
allocated to you. I hope that you will be able to find other work elsewhere which is more in
your line. As you will recall from your interview this morning, the company will not require
your services after the 31st of this month.
Constructive dismissal
This occurs where it is the employee who leaves the job but is compelled to do so by the con-
duct of the employer. In general terms the employer’s conduct must be a fundamental breach
so that it can be regarded as a repudiation of the contract. Thus, if a male employer were to
sexually assault his female secretary then this would be a fundamental breach entitling her to
leave and sue for her loss on the basis of constructive dismissal.
It would also occur if the employer changed the terms of the contract without the employee’s
consent, e.g. by reducing wages payable under the contract – see Rigby v Ferodo [1987] IRLR 516.
Furthermore, the EAT decided in Whitbread plc (t/a Thresher) v Gullyes (1994) 509 IRLB 14 that
an employee who resigned from a management position because her employer did not give
her proper support – since, among other things, the most experienced staff were transferred
out of her branch without consultation with her – was constructively dismissed.
Fixed-term contracts
When a fixed-term contract expires and is not renewed, there is a dismissal.
Under the provisions of the Employment Rights Act, the ERA 1996 is amended so that an
employee can no longer waive his right to claim unfair dismissal where a contract for one
year or more is not renewed. It used to be possible to forgo the right to claim a redundancy
payment at the end of a fixed-term contract that was of at least two years’ duration. This is no
longer possible by reason of the Fixed-Term Employees Regulations 2002 (see p 444).
Grounds for dismissal

If an employer is going to escape liability for unfair dismissal, he must show that he acted
reasonably and, indeed, s 92 of the ERA requires the employer to give his reasons for dismissal
to the employee in writing.
It should be remembered that the question of whether a dismissal is fair or not is a matter
of fact for the particular tribunal hearing the case, precedents are not rigidly applied and one
cannot predict with absolute accuracy what a particular tribunal will do on the facts of a par-
ticular case. Basically, when all is said and done, the ultimate question for a tribunal is – ‘was
the dismissal fair and reasonable’ in fact.
Section 98 of the ERA includes in the test of reasonableness required in determin-
ing whether a dismissal was fair, the ‘size and administrative resources of the employer’s
..
EL_C19.qxd 3/26/07 10:52 AM Page 469
undertaking’. This was included as a result of fear that the unfair dismissal laws were placing
undue burdens on small firms and causing them not to engage new workers. Earlier legisla-
tion also removed the burden of proof from the employer in showing reasonableness so that
there is now no ‘presumption of guilt’ on the employer and the tribunal is left to decide
whether or not the employer acted reasonably.
In this connection, the tribunal may think that the dismissal was severe but the question is
was it within the band of reasonable responses open to the employer? (Within this band an
employer might reasonably retain the employee, while another employer might dismiss him
or her.) If so, there is no unfair dismissal even if the members of the tribunal would not have
dismissed the claimant (see British Leyland (UK) v Swift [1981] IRLR 91 – a decision of the
Court of Appeal). The EAT has challenged this approach as wrong and has decided that the
view of the tribunal is the test (see Haddon v Van den Berg Foods Ltd [1999] IRLR 672). That
decision was, however, questioned in Midland Bank v Madden (2000) 638 IRLB 2 where a dif-
ferently constituted EAT said that the decision in Swift must stand and could not be overruled
by the EAT. Thus, the rule of the possible reasonableness of the perverse employer goes on
until the matter is resolved by the Court of Appeal.
The Court of Appeal heard an appeal in the Madden case in which the ‘reasonable
responses’ test was affirmed, though the response of a perverse employer is excluded (see
HSBC Bank plc (formerly Midland Bank plc) v Madden [2000] IRLR 827).
Reasons justifying dismissal

These are as follows.
(a) Lack of capability or qualifications. This would usually arise at the beginning of
employment where it becomes clear at an early stage that the employee cannot do the job in
terms of lack of skill or mental or physical health. It should be remembered that the longer a
person is in employment, the more difficult it is to establish lack of capability.
By way of illustration, we can consider the case of Alidair v Taylor [1978] IRLR 82. The pilot
of an aircraft had made a faulty landing which damaged the aircraft. There was a board of
inquiry which found that the faulty landing was due to a lack of flying knowledge on the part
of the pilot who was dismissed from his employment. It was decided that the employee had
not been unfairly dismissed, the tribunal taking the view that where, as in this case, one failure
19
to reach a high degree of skill could have serious consequences, an instant dismissal could be
justified.
However, it was decided in British Sulphur v Lawrie [1987] IRB 338 that the dismissal of an
employee who was alleged to be unwilling or incompetent to do a particular job could still be
unfair if the employee was not provided with adequate training.
As regards qualifications, this could occur where a new employee does not have the
qualifications claimed or fails to get a qualification which was a condition of employ-
ment, for example in the case of legal and accounting trainees who fail to complete their
examinations.
It should also be noted that the Court of Appeal decided in Nottingham County Council v P
(1992) The Times, 18 May, that even though an employee had become unsuitable it could still
be unfair dismissal if the employer failed to make a reasonable investigation of possible
alternative employment. P was an assistant groundsman at a girls’ school and had pleaded
guilty to a charge of indecent assault on his daughter. Obviously, he could not be allowed to
continue to work at the school but the Council should have considered alternative employ-
ment within the authority. Failure to do so could amount to unfair dismissal. The case was
sent back to the employment tribunal to see what efforts the Council had made, if any, in
this regard.
..
EL_C19.qxd 3/26/07 10:52 AM Page 470
(b) Conduct. This is always a difficult matter to deal with and much will depend upon the
circumstances of the case. However, incompetence and neglect are relevant, as are disobedience
and misconduct, e.g. by assaulting fellow employees. Immorality and habitual drunkenness
could also be brought under this heading and, so it seems, can dress where this can be shown
to affect adversely the way in which the contract of service is performed.
Boychuk v H J Symons (Holdings) Ltd, 1977 – A dismissal for conduct (258)
Crime inside employment will normally justify a dismissal on the grounds of misconduct. For
example, the EAT has decided that an employee was dismissed fairly on the ground of theft
from the employer even though the employer could not specifically prove loss of stock but
had only a reasonable belief in the employee’s guilt. The employee had been seen at night by
a security guard at the employer’s warehouse loading boxes into his car (see Francis v Boots the
Chemist Ltd (1998) 586 IRLB 11).
Dismissal on the ground of theft may also be fair even though what is stolen is of little
value. Thus in Tesco Stores Ltd v Khalid [2001] All ER (D) 314 (Nov) the employee was
dismissed for misappropriation of cigarettes from a petrol station where he worked. His
dismissal was held to be fair even though the cigarettes were from damaged stock due
for return to the manufacturer. Dismissal was within the range of reasonable responses of
an employer.
Crime outside of employment raises more difficult issues and generally speaking the employer
will have to show damage to his organisation. Thus in Post Office v Liddiard (2001) (unreported)
a Post Office employee was involved in football violence in France. His dismissal for this was
held to be unfair. It would be different of course where a company’s accountant was convicted
of dishonesty in terms of the funds of a local charity of which he or she was the honorary
treasurer or where a teacher was convicted of offences involving violence or child-abuse in
his or her non-work environment.
An employee’s use of drugs or alcohol outside the workplace is unlikely to amount to a fair
reason for dismissal nor will the mere fact that an employee did not reveal that he or she
used drugs or alcohol when interviewed for the post. However, use of drugs and/or excessive
drinking may constitute grounds for a fair dismissal where the employer believes on reason-
able grounds that it makes the employee unsuitable for the position held. An employer
who wishes to dismiss employees for drink or drug misconduct should have a drink and
drugs policy and make it part of the employee’s contract.
(c) Redundancy. Genuine redundancy is a defence. Where a person is redundant, his employer
cannot be expected to continue the employment, although there are safeguards in the matter
of unfair selection for redundancy.
Examples are selection because of pregnancy, or trade union membership or activities, or
for asserting statutory rights or on health and safety matters as by selection for redundancy,
without other reason, of health and safety representatives.
(d) Dismissals which are union related. These are known as the ‘section 152 reasons’. They
are set out in the Trade Union and Labour Relations (Consolidation) Act 1992, s 152. An
employee will be regarded as automatically unfairly dismissed if the principal reason for the
dismissal was that he was, or proposed to become, a member of a trade union which was
independent of the employer; that he had taken part or proposed to take part in the activities
of such a union at an appropriate time, i.e. outside working hours or within working hours
with the consent of the employer; that he was not a member of any trade union or of a
particular one or had refused or proposed to refuse to become or remain a member. Under
..
EL_C19.qxd 3/26/07 10:52 AM Page 471
the relevant provisions of the Trade Union and Labour Relations (Consolidation) Act 1992 all
dismissals to maintain a closed shop are now automatically unfair.
Dismissal will also be automatically unfair if the employee is selected for redundancy on
any of the above s 152 grounds. Also the Court of Appeal ruled in Fitzpatrick v British Railways
Board [1991] IRLR 376 that a dismissal for trade union activities in a previous employment was
automatically unfair.
It is worth noting also that under s 146 of the 1992 Act an employee has a right not to
have action taken against him or her short of dismissal such as victimisation in terms, e.g., of
not being offered overtime where this is related to union membership and/or activities.
The position in regard to job applicants has already been considered.
(e) Statutory restriction placed on employer or employee. If, for example, the employer’s
business was found to be dangerous and was closed down under Act of Parliament or minis-
terial order, the employees would not be unfairly dismissed. Furthermore, a lorry driver who
was banned from driving for 12 months could be dismissed fairly.
(f ) Some other substantial reason. An employer may on a wide variety of grounds which are not
specified by legislation satisfy an employment tribunal that a dismissal was fair and reasonable.
Crime and suspicion of crime may also be brought under this heading, though if dismissal
is based on suspicion of crime, the suspicion must be reasonable and in all cases the
employee must be told that dismissal is contemplated and in the light of this information be
allowed to give explanations and make representations against dismissal.
Where an employee has been charged with theft from the employer and is awaiting trial, the
best course of action is to suspend rather than dismiss him, pending the verdict. Investiga-
tions which the employer must make, as part of establishing a fair dismissal, could be
regarded as an interference with the course of justice. It is best, therefore, not to make them,
but to suspend the employee. The case of Wadley v Eager Electrical [1986] IRLR 93 should be
noted. In that case husband and wife worked for the same company. The wife was convicted
for stealing £2,000 from the company whilst employed as a shop assistant. The husband was
a service engineer with the company. Husband and wife were dismissed and it was held that
the husband’s dismissal was unfair. He was a good employee of 17 years’ standing and no
misconduct had been made out against him.
The matter of fair or unfair dismissal depends also upon the terms of the contract. If the
19
difficulty is that a particular employee is refusing to do work which involves him, say, spend-
ing nights away from home, then his dismissal is likely to be regarded as fair if there is an
express term in his contract requiring this. Of course, the nature of the job may require it, as in
the case of a long-distance lorry driver where such a term would be implied, if not expressed.
Employees who are in breach of contract are likely to be regarded as fairly dismissed.
However, this is not an invariable rule. Thus a long-distance lorry driver who refused to take
on a particular trip because his wife was ill and he had to look after the children would be
unfairly dismissed (if dismissal took place) even though he was, strictly speaking, in breach of
his contract.
Dismissal could also be for a substantial reason where a breakdown of relationships either
within the office or with a customer have made an employee’s position untenable. The fol-
lowing example illustrates the possibilities. In a small office there are two purchase ledger
clerks working closely together. They were very good friends. One of them sets up home with
the other’s wife. The clerks are no longer on speaking terms and cannot work together. The
employer has no other office to which one of them can be transferred.
There may be no alternative to dismissal. If no solution can be found in discussion with the
clerks one should be dismissed on the basis of length of service and other factors that would
be relevant if the one dismissed was being selected for redundancy.
..
EL_C19.qxd 3/26/07 10:52 AM Page 472
In Cobley v Forward Technology Industries plc [2003] All ER (D) 175 the Court of Appeal ruled
that the chief executive of a public listed company was not unfairly dismissed when the
shareholders removed him from his office as a director by a resolution in general meeting.
This effected his dismissal as CEO because his contract said that he could not continue as
CEO unless he was also a director of the company. His dismissal was, ruled the court, for
‘some other substantial reason’ under the Employment Rights Act 1996 and that made the
dismissal fair. The removal followed a successful hostile takeover of the company and the
case shows that business reorganisations such as this can be brought under the heading
of ‘some other substantial reason’. The new owners clearly cannot be expected to retain the
former board members.
Contractual grievance and disciplinary procedures

These are usually part of the contract. The employer must comply with them if he wishes to
avoid liability. If a series of oral and written warnings is laid down, the procedure should be
observed. However, reasonableness will always prevail.
No matter how good the employer’s reason for dismissal may be, there may still be a claim
by the employee for unfair dismissal if the dismissal was ‘unfair in all the circumstances’.
In Whitbread & Co plc v Mills [1988] IRLR 43 the President of the Employment Appeal
Tribunal (EAT), Mr Justice Wood, gave guidance on the issue of whether an employer had
acted reasonably as the law requires. In applying the guidance let us assume that the main
reason for dismissal is the acceptable one of incompetence as in the case of a senior member
of a publisher’s staff who commissions books without proper market research so that they do
not sell and the publisher is caused loss.
Having reached the conclusion that the incompetence is established, the employer must
according to Mr Justice Wood satisfy a tribunal on four other matters, otherwise the dismissal
might still be unfair, though the employee’s compensation might be reduced for contributory
fault (see below). The four matters are:
(a) Can the employer satisfy a tribunal that he complied with the pre-dismissal procedures
which a reasonable employer could and should have applied in the circumstances of the
case? If the tribunal finds that the employer has not acted reasonably in this regard, at the
date of dismissal, then according to the decision in Polkey v A E Dayton Services Ltd [1988] ICR
564 it is not open to the tribunal to say that the procedures do not matter since it is clear that
the employee was incompetent. The unfairness of the dismissal could still give the employee
a successful claim.
The decision of the House of Lords in Polkey makes clear the importance of consultation.
There may be grounds for the dismissal but if there is no proper consultation the dismissal may
still be unfair, though compensation may be reduced if there were grounds for the dismissal.
However, it is not always necessary to consult. Thus in Eclipse Blinds v Wright (1992) 444
IRLIB 12, Mrs Wright was dismissed because of poor health. The employer received a medical
report with her consent. It revealed that she was more seriously ill than she thought. Rather
than upset her, the employer wrote her a sympathetic letter ending her employment on the
ground of incapacity. The court held she was not unfairly dismissed in spite of the lack of
consultation.
(b) Where there is a contractual appeal process, the employer must have carried it out in its
essentials. A minor departure may sometimes be ignored but a total or substantial failure
entitles a tribunal to find that the dismissal was unfair. Even though no contractual appeal
process exists, it may nevertheless be reasonable, as was decided in West Midland Co-operative
Society Ltd v Tipton [1986] ICR 192, for some sort of appeal to be arranged since this is encour-
aged by the code of practice issued by ACAS.
..
EL_C19.qxd 3/26/07 10:52 AM Page 473
(c) Where conduct is the main reason, the employer must show, on a balance of probabilities,
that at the time of the dismissal he believed the employee was guilty of misconduct and that
in all the circumstances of the case it was reasonable for him to do so.
(d) During the disciplinary hearings and the appeal process the employer must have been fair
to the employee. In particular, the employee must have been heard and allowed to put his
case properly or, if he was not at a certain stage of the procedures, this must have been cor-
rected before dismissal.
Following parliamentary approval of a code of practice on disciplinary and grievance
procedures issued by ACAS the government brought into force both the code and the new
statutory right of a worker under ss 10 –15 of the Employment Relations Act 1999 to be
accompanied, if he or she so requests, by a fellow employee or a trade union representative at
a disciplinary or grievance hearing. The code supplements the statutory provisions.
These rights allow a trade union official to enter the workplace to represent a trade union
member if the member so requests, even though a trade union (or that particular union) is
not recognised by the employer. Refusal to allow accompaniment will mean that a tribunal
can make an award of up to two weeks’ pay against the employer and a refusal of the right
followed by a dismissal will result in the chances of a successful unfair dismissal claim being
increased. The employer need not tell the worker of the right.
As regards the role of the companion at the hearing, the Employment Relations Act 2004
inserts provisions into the Employment Relations Act 1999 which deal with the rights of the
companion.
The employer must permit the companion to put the worker’s case on behalf of the worker,
to sum up that case, respond on the worker’s behalf to any view expressed at the hearing or
meeting, and confer with the worker during the hearing.
The employer is not required to permit the companion to answer questions on behalf of
the worker, address the hearing if the worker indicates that he or she does not wish the com-
panion to do so, or use the powers given by the Act in any way that prevents the employer
from explaining his or her case or prevents any other person at the hearing from making a
contribution to it.
19
Statutory grievance and disciplinary procedures
The Employment Act 2002 in s 29 and Sch 2 provides statutory disciplinary and grievance
procedures. These have already been considered earlier in this chapter. Section 30 of the Act
of 2002 makes it an implied term of every contract of employment that the statutory proce-
dures are to apply and employers and workers cannot contract out of them. Contractual pro-
cedures may continue so long as they are as protective as the statutory procedures and the
latter are there anyway if the worker wishes to use them. Provided the statutory procedures
are followed in a reasonable manner their fairness will not normally be challenged by the
courts and the major case on the requirement for fair procedures – the House of Lords ruling
in Polkey v A E Dayton Services Ltd [1988] ICR 564 – will not apply.
Employee’s contributory fault

This can reduce the compensation payable to the employee by such percentage as the tri-
bunal thinks fit. Suppose an employee is often late for work and one morning his employer,
who can stand it no more, sacks him. The dismissal is likely to be unfair in view of the lack of
warning but a tribunal would very probably reduce the worker’s compensation to take
account of the situation.
..
EL_C19.qxd 3/26/07 10:52 AM Page 474
Principles of natural justice also apply; it is necessary to let the worker state his case before
a decision to dismiss is taken. Furthermore, reasonable inquiry must be made to find the truth
of the matter before reaching a decision. Failure to do this will tend to make the dismissal
unfair.
Unacceptable reasons for dismissal

(a) Dismissal in connection with trade unions. This has already been considered.
(b) Unfair selection for redundancy. An employee dismissed for redundancy may complain
that he has been unfairly dismissed if he is of the opinion that he has been unfairly selected
for redundancy, as where the employer has selected him because he is a member of a trade
union or takes part in trade union activities, or where the employer has disregarded redund-
ancy selection arrangements based, for example, on ‘last in, first out’. Ideally, all employers
should have proper redundancy agreements on the lines set out in the Department of Work
and Pensions booklet, Dealing with Redundancies.
However, even though there is in existence an agreed redundancy procedure, the employer
may defend himself by showing a ‘special reason’ for departing from that procedure, e.g.
because the person selected for redundancy lacks the skill and versatility of a junior employee
who is retained.
There is, since the decision of the EAT in Williams v Compair Maxam [1982] ICR 156, an
overall standard of fairness also in redundancy arrangements. The standards laid down in the
case require the giving of maximum notice; consultation with unions, if any; the taking of
the views of more than one person as to who should be dismissed; a requirement to follow
any laid down procedure, e.g. last in, first out; and finally, an effort to find the employees con-
cerned alternative employment within the organisation. However, the EAT stated in Meikle v
McPhail (Charleston Arms) (1983) (see Case 259) that these guidelines would be applied less
rigidly to the smaller business.
The statutory provisions relating to consultation on redundancy are considered later in this
chapter.
(c) Industrial action. The position in this context has already been considered.
(d) Dismissals in connection with pregnancy, childbirth and parental and dependant
leave. The relevant law has already been considered.
(e) Pressure on employer to dismiss unfairly. It is no defence for an employer to say

that pressure was put upon him to dismiss an employee unfairly. So, if other workers put
pressure on an employer to dismiss a non-union member so as, for example, to obtain a
closed shop, the employer will have no defence to a claim for compensation for the dis-
missal if he gives in to that pressure. If an employer alleges that he was pressurised into dis-
missing an employee and that pressure was brought on him by a trade union or other
person by the calling, organising, procuring or financing of industrial action, including a
strike, or by the threat of such things, and the reason for the pressure was that the employee
was not a member of the trade union, then the employer can join the trade union or other
person as a party to the proceedings if he is sued by the dismissed worker for unfair dismissal.
If the tribunal awards compensation, it can order that a person joined as a party to the pro-
ceedings pay such amount of it as is just and equitable, and if necessary this can be a com-
plete indemnity so that the employer will recover all the damages awarded against him from
the union.
..
EL_C19.qxd 3/26/07 10:52 AM Page 475
(f) Transfer of business. The Transfer of Undertakings (Protection of Employment) Regula-

tions 2006 (SI 2006/246) apply. Under the Regulations if a business or part of it is transferred and
an employee is dismissed because of this, the dismissal will be treated as automatically unfair.
In this case the one-year service limit with the transferor employer applies.
If the old employer dismissed before transfer, or the new employer dismissed after the
transfer, either will have a defence if he can prove that the dismissal was for ‘economic, tech-
nical or organisational’ reasons requiring a change in the workforce and that the dismissal
was reasonable in all the circumstances of the case.
Meikle v McPhail (Charleston Arms), 1983 – A dismissal for economic

reasons (259)
The Collective Redundancies and Transfer of Undertakings (Protection of Employment)

(Amendment) Regulations 1995 (SI 1995/2587) as amended apply. These Regulations are
dealt with more fully later in this chapter but they do require consultation on transfer of
business. The provisions mirror those which relate to collective redundancies except that
there is no limitation on the number of employees who have to be affected by the transfer
before a duty to consult arises. The employer will have to consult relevant representatives as
described later in this chapter even if only one person is to be transferred.
(g) Health and safety dismissals and detriments. Designated or acknowledged health and
safety representatives must not be subjected to detriments, e.g. loss of overtime, for carrying
out health and safety activities in the workplace. Dismissal for these reasons is automatically
unfair and there is no service requirement. These provisions also apply to ordinary employees,
regardless of service, who leave or refuse to return to the workplace because of a health
hazard reasonably thought to exist.
The same is true under the Health and Safety (Consultation with Employees) Regulations
1996 (SI 1996/1513) where the dismissal is of a worker safety representative elected to take
part in the health and safety consultation process where there is no recognised trade union.
(h) Dismissal for asserting statutory rights. This protects employees, regardless of service,
against dismissal for trying to enforce employment rights under the ERA that can be brought 19
before a tribunal, e.g. where the employee has asked for written particulars of the job.
Dismissal will be unfair even if the worker does not in fact have the right, provided he has
acted in good faith.
(i) Dismissal for performing the duties of a member-nominated trustee of an occupa-
tional pension scheme.
( j) Dismissal for performing the duties of an employee representative in redundancy
consultation or putting up for election to be one.
Unfair dismissal and frustration of contract

In cases appearing before employment tribunals there is a certain interplay between the
common-law rules of frustration of contract (see Chapter 17) and the statutory provisions
relating to unfair dismissal. At common law a contract of service is frustrated by incapacity,
e.g. sickness, if that incapacity makes the contract substantially impossible of performance
at a particularly vital time, or by a term of imprisonment. If a contract has been so frustrated,
a complaint of unfair dismissal is not available because the contract has been discharged on
other grounds, i.e. by frustration. Thus, termination of a contract of service by frustration
prevents a claim for unfair dismissal.
..
EL_C19.qxd 3/26/07 10:52 AM Page 476
It is, of course, necessary now in terms of the sickness or incapacity of an employee for the
employer to be alert to the rules about disability discrimination, particularly where an adjust-
ment to working conditions might enable an employee to do the job satisfactorily.
Remedies for unfair dismissal

Conciliation
An employment tribunal will not hear a complaint until a conciliation officer has had a
chance to see whether he can help, provided that he or she has been requested so to do by a
party to the potential complaint. A copy of the complaint made to the employment tribunal
will in such a situation be sent to a conciliation officer of the Advisory, Conciliation and
Arbitration Service (ACAS) and, if he is unable to settle the complaint, nothing said by the
employer or employee during the process of conciliation will be admissible in evidence before
the tribunal.
The reference of cases to a conciliation officer has led to the settlement of some one-third
of them before the tribunal hearing, but the parties do not have to become involved in this
procedure.
ACAS arbitration and compromise agreements

The following provisions of the Employment Rights (Dispute Resolution) Act 1998 should
be noted.
Part II of the Act contains provisions to allow parties to opt for their dispute to be resolved
by independent binding arbitration and gives ACAS powers to pay for and provide an arbitra-
tion service for claims of unfair dismissal and unlawful discrimination.
Part II also contains provisions making changes to the law relating to compromise agree-
ments. The parties to an individual employment rights dispute may conclude that dispute by
reaching, for example, a financial settlement. For such an agreement to be binding, the parties
must have settled after an ACAS-appointed conciliation officer has taken action, or, altern-
atively, the terms of the settlement must be contained in a private compromise agreement.
Formerly, a compromise agreement that had not involved ACAS had to be made in circum-
stances where the employee had received independent legal advice from a qualified lawyer.
The 1998 Act changes this to advice from any independent adviser, provided that advice is
covered by an insurance policy or an indemnity provision for members of a profession or
professional body (ss 9 and 10). This will allow trade unions, advice agencies and others – in
addition to lawyers – to give relevant advice.
Other provisions of Part II allow ACAS-appointed conciliation officers to conciliate in
claims relating to statutory redundancy payments where before they had no duty to con-
ciliate, as they have in almost all other individual employment rights disputes (s 11).
There are also provisions that clarify, streamline and make more flexible current legislation
under which employers and employer-recognised trade unions can, by making a dismissal
procedures agreement, opt out of the statutory rules on unfair dismissals (s 12).
Other remedies
An employee who has been dismissed may:
(a) seek reinstatement or re-engagement; or

(b) claim compensation.
..
EL_C19.qxd 3/26/07 10:52 AM Page 477
The power to order (a) above is discretionary and in practice rarely exercised. However,
reinstatement means taken back by the employer on exactly the same terms and seniority as
before; re-engagement is being taken back but on different terms.
Calculation of compensation
Before proceeding further with a study of the calculations, it should be noted that the basic
award is based on gross pay, but the compensatory award is based on net pay. A cap of
£60,600 is placed on compensatory awards but this is removed for those who are unfairly
dismissed for blowing the whistle on illegal practices or health and safety matters and who
are protected against such dismissal by the Public Interest Disclosure Act 1998. There is no
ceiling on such awards. This is because it was thought that some senior executives might
have been deterred from whistle-blowing since they would have the most salary to lose. The
basic award is calculated with reference to a week’s pay that is currently £310, but is automatic-
ally increased annually to a figure that is index linked to the retail price index for September
of each year. This is a maximum figure so gross pay is the starting point, but if this exceeds £310,
the figure of £310 applies.
The compensation for unfair dismissal is in four parts as follows.
(a) The basic award (maximum: £8,700). This award is computed as a redundancy payment
(see p 481 before reading on). There is a maximum of 20 years’ employment counted (giving
a maximum of 30 weeks’ pay). Contributory misconduct or fault of the employee is taken
into account.
Example
Fred, a 35-year-old lorry driver employed for 10 years earning £400 per week (take home
£350) is unfairly dismissed. He did his best to get a comparable job but did not in fact obtain
one until one week before the tribunal hearing to start two weeks after the tribunal hearing.
Fred had a history of lateness for work and his contributory fault is assessed at 25 per cent.
Fred’s basic award: Fred is in the category of 22 years of age or over but under 41 years of age
for redundancy, which allows one week’s gross pay for every year of service:
10 × £310 £3,100 19
Less: 25% £ 775
£2,325 = basic award
There is a minimum basic award of £4,200 (currently) where the dismissal is due to trade
union membership or activities, duties of a health and safety representative, trustee of an
occupational pension scheme or employee representative. This may be reduced for con-
tributory fault. The amount of the basic award is only two weeks’ pay where the tribunal finds
that the reason or principal reason for the dismissal was that the employee was redundant
and then:
n he unreasonably refused or left suitable alternative employment; or

n his employment was renewed or he was re-engaged and he was, therefore, not considered
dismissed (s 121, ERA 1996).
(b) Compensatory award (maximum: £60,600). This consists of:
(i) estimated loss of wages, net of tax and other deductions to the date of the hearing less any
money earned between date of dismissal and the hearing;
(ii) estimated future losses;
(iii) loss of any benefits such as pension rights and expenses;
..
EL_C19.qxd 3/26/07 10:52 AM Page 478
(iv) loss of statutory rights. An award under this heading is given for loss of minimum notice
entitlement. For example, Fred has been continuously employed for 10 years. He was
entitled to 10 weeks’ notice, which he did not get. He now has a new job but it will take
him time to build up that entitlement again. A tribunal can award something for this.
Once again, contributory fault is taken into account.
A compensatory award is not linked to a redundancy payment as a basic award is. The
figure of one week’s pay of £310 does not apply; the calculation is based on actual net pay
and is designed to recompense the worker for the financial loss suffered as a result of being
dismissed. The basic award is payable in all cases regardless of proved loss. The following
example assumes that Fred had been out of work for 10 weeks before the tribunal hearing.
Fred’s compensatory award:

£
The loss up to the hearing 10 × £350 3,500
Loss up to time of getting new job 2 × £350 700
4,200
Less: 25% 1,050
3,150
£
Loss of statutory rights: a nominal figure of 100
Less: 25% 25 75
3,225
Fred’s total award is therefore:

£
Basic 2,325
Compensatory 3,225
5,500
If Fred has lost anything else, e.g. use of firm’s van at weekends and/or pension rights,
these would be added to the compensatory award subject to 25 per cent discount for contrib-
utory fault.
Those on higher salaries may very well reach the maximum of £60,600. If the sum calcu-
lated in accordance with the above example exceeds the statutory ceiling, only £60,600 is
awarded.
Additional award. This is payable in addition to the above where an employer fails to com-
ply with an order for reinstatement or re-engagement unless it was not practicable for him to
do so.
The amount of the additional award was varied by the Employment Relations Act 1999, s 33(2)
and is now at one level, i.e. an amount not less than 26 weeks’ nor more than 52 weeks’ pay,
subject to a weekly maximum of £310, i.e. £8,060 minimum and £16,120 maximum.
In all cases a deduction will be made for contributory fault, if any, of the employee.
Any unemployment or supplementary benefits received by the employee are deducted from
any award made by a tribunal. However, the employer must pay the amount(s) in question
direct to the DSS.
As regards ex gratia payments the general principle is that if the employer has made such a
payment to the complainant in connection with the dismissal credit will be given for this in
fixing the amount of compensation if and only if the dismissal is in the context of being
unfairly chosen for redundancy. This results from the provisions of s 122 of the ERA as
..
EL_C19.qxd 3/26/07 10:52 AM Page 479
interpreted in Boorman v Allmakes Ltd (1995) The Times, 21 April. If the dismissal is not in
that context, the employee keeps the ex gratia payment in addition to any compensation.
(c) Time limits. A claim for compensation against an employer must reach the tribunal
within three months of the date of termination of employment. The period in regard to dis-
missal in connection with a strike or other industrial action is six months. A worker can
claim while working out his notice but no award can be made until employment ends.
A tribunal can hear a claim after three months if the employee can prove that:
(i) it was not reasonably practicable for him to claim within three months;
(ii) he did so as soon as he could in the circumstances.
Unfair dismissal: damages for injury to feelings not available

For many years the position regarding injury to feelings damages in unfair dismissal cases was
clear. The judgment of the President of what was then the Industrial Relations Court in
Norton Tool Co v Tewson [1972] IRLR 86 applied and was to the effect that no such damages
were available. Loss in unfair dismissal claims was restricted to direct economic loss.
However, in Johnson v Unisys Ltd [2001] 2 All ER 801 Lord Hoffmann in remarks not essential
to his judgment, i.e. obiter took the view that there was no reason why damages for injured
feelings should not be awarded.
Since then some tribunals have gone along with Lord Hoffmann’s remarks and made
awards for injured feelings while others have refused to do so and have stood by the decision
in Norton Tool.
The House of Lords has now ruled that damages for injury to feelings are not available in
unfair dismissal claims. The legal position in these cases is thus clarified. The ruling was given
in Dunnachie v Kingston Upon Hull City Council [2004] 3 All ER 1011.
Internal appeal procedures

The Employment Act 2002 procedures have already been considered earlier in this chapter
along with the sanctions for failing to follow them.
19
Discriminatory dismissal
In addition to legislation relating to unfair dismissal generally, the various discrimination
regulations deal with complaints to employment tribunals for dismissal on the grounds of
discrimination. The nature and scope of these provisions have already been considered and
it is only necessary to add here that there are provisions in the ERA which prevent double
compensation being paid, once under discrimination legislation, and once under the general
unfair dismissal provisions of the ERA.
Redundancy
The ERA gives an employee a right to compensation by way of a redundancy payment if he is
dismissed because of a redundancy.
..
EL_C19.qxd 3/26/07 10:52 AM Page 480
Meaning of redundancy
Under the ERA redundancy is presumed to occur where the services of employees are dis-
pensed with because the employer ceases, or intends to cease carrying on business, or to cease
to carry on business at the place where the employee was employed, or does not require so
many employees to do work of a certain kind as where the number of staff is to be reduced
because of a fall in work. Employees who have been laid off or kept on short time without pay
for four consecutive weeks (or for six weeks in a period of 13 weeks) are entitled to end their
employment and to seek a redundancy payment if there is no reasonable prospect that normal
working will be resumed.
Managing redundancies
After a number of conflicting decisions on what could amount to redundancy the matter was
largely resolved by the House of Lords in Murray v Foyle Meats Ltd [1999] 3 All ER 769. In that
case their Lordships ruled that for employees to be regarded as redundant two things had to
be shown:
n that there is a state of affairs in the employer’s business which meets the statutory defini-
tion of redundancy, e.g. less work; and
n that the employee’s dismissal is wholly or mainly attributable to that state of affairs.
Thus employer A makes widgets. There is a loss of orders and a diminution in the require-
ments of production. Therefore, anyone dismissed by reason of the general reduction in
orders is to be regarded as redundant because the redundancy is attributable to the loss of
orders. So if the employer applies a first-in first-out policy across the workforce, the dismissals
will be regarded as redundancy and not the more costly ground of unfair dismissal.
In addition, a redundancy may be ‘bumped’. Thus if Jones is to be dismissed because the
employer no longer needs anyone to do his job the employer may, instead of dismissing
Jones, give Jones Green’s job and dismiss Green, e.g. on a first-in last-out basis Jones having
been employed by the firm for longer than Green. Green may well be found to have been dis-
missed on the ground of redundancy although he has been ‘bumped’ out of his job by Jones.
The decision in Murray sanctions this.
It should however be said that although the House of Lords in Murray put it in terms that
Green’s dismissal was attributable to redundancy it does seem that his dismissal arises not so
much out of the redundancy situation but rather out of the way it was managed. The flexibility
that the Murray decision allows saves the employer money in that he will not face a claim for
unfair dismissal where the compensation can be much higher, e.g. where the tribunal proceeds
to make a compensatory award.
Eligibility
In general terms, all those employed under a contract of service as employees are entitled to
redundancy pay, including a person employed by his/her spouse. Furthermore, a volunteer
for redundancy is not debarred from claiming. However, certain persons are excluded by
statute or circumstances. The main categories are listed below.
(a) A domestic servant in a private household who is a close relative of the employer. The
definition of ‘close relative’ for this purpose is father, mother, grandfather, grandmother,
stepfather, stepmother, son, daughter, grandson, granddaughter, stepson, stepdaughter, brother,
sister, half-brother, or half-sister.
..
EL_C19.qxd 3/26/07 10:52 AM Page 481
(b) An employee who has not completed at least two years of continuous service. There is now
no minimum age for starting continuous service under the Age Regulations. Alternate week
working does not break continuity (Colley v Corkindale t/a Corker’s Lounge Bar (1996) IRLB 8).
These continuous service provisions remain unchanged under amendments made by the
Unfair Dismissal Statement of Reasons for Dismissal (Variation of Qualifying Period) Order
1999 that apply only to claims for unfair dismissal that can now be brought after one year’s
service.
(c) The right to claim a redundancy payment was lost by either sex at the age of 65 or the
normal retiring age in the business for employees holding the position in question if earlier.
Under the Age Regulations, employees who are dismissed for redundancy but who have
attained the normal retiring age or 65 continue to be entitled to a redundancy payment.
(d) An employee who is dismissed for misconduct loses the right to a redundancy payment.
In the circumstances of the Boychuk and Kowalski cases we can note that, although these
cases were brought for unfair dismissal, they were also situations in which the employees
concerned would have lost the right to a redundancy payment because the dismissal was not
for redundancy. The only issue was whether there had been an unfair dismissal.
An employee who accepts an offer of suitable alternative employment with his employer
is not entitled to a redundancy payment. Where a new offer is made, there is a trial period of
four weeks following the making of the offer, during which the employer or the employee
may end the contract while retaining all rights and liabilities under redundancy legislation.
Fuller v Stephanie Bowman, 1977 – Unreasonable refusal of alternative

employment (260)
Time limits
The employee must make a written claim to the employer or to an employment tribunal
within six months from the end of the employment. An employment tribunal may extend
the time for a further six months making 12 months in all, provided that it can be shown
that it is just and equitable having regard to the reasons put forward by the employee for late 19
application.
Amount of redundancy payment

Those aged 41 or over receive one-and-a-half weeks’ pay (up to a maximum of £310 per week)
for each year of service up to a maximum of 20 years. This period is not changed by the Age
Regulations. In other age groups the above provisions apply, except that the week’s pay
changes: i.e. for those aged 22 but under 41, it is one week’s gross pay; and for those under
22, it is a half week’s pay. Service before the eighteenth birthday now counts under the Age
Regulations and there is no maximum age.
For example, a man of 52 who is made redundant having been continuously employed for
18 years and earning £340 per week as gross salary at the time of his redundancy would be
entitled to a redundancy payment as follows:
34 to 41 years = 7 years at one week’s pay = 7 weeks

41 to 52 years = 11 years at one-and-a-half weeks’ pay = 161/2 weeks
231/2 weeks
It follows, therefore, that the redundancy payment would be 231/2 weeks × £310 = £7,285.
..
EL_C19.qxd 3/26/07 10:52 AM Page 482
Complaints by employees in respect of the right to a redundancy payment or questions as

to its amount may, as we have seen, be made to an employment tribunal which will make a
declaration as to the employee’s rights which form the basis on which payment can be recov-
ered from the employer.
Procedure for handling redundancies

Any agreed formula must be followed, e.g. last-in, first-out. Selection procedures may also be
based on poor work performance or attendance record and there is no requirement on the
employer to determine reasons for this (Dooley v Leyland Vehicles Ltd [1986] IRLR 36). In Byrne
v Castrol (UK) Ltd (1997) 568 IRLB 12, the EAT decided that where selection for redundancy
was based on absence records there was no need to go into the reasons for the absences since
this failure to enquire made the selection more objective. If there is no agreed procedure the
employer must decide after considering the pros and cons in each case.
It should be noted that the dismissal may well be unfair if some reasonable system of selec-
tion is not followed. In this connection the EAT decided in Rogers v Vosper Thorneycroft (UK )
Ltd [1988] IRLR 22 that last-in, first-out is a relevant system but merely asking for volunteers
is not. There must be some criteria, though calling for volunteers is acceptable as a prelim-
inary step in the matter of eventual selection. The decision was affirmed by the Court of
Appeal (see The Times, 27 October 1988). Everyone should, as far as possible, be allowed to
express his or her views, e.g. through elected representatives, if any. An attempt to relocate a
redundant worker should be considered. Failure to do so can result in a finding of unfair dis-
missal unless, of course, there was no chance of finding suitable alternative work. Fairness in
the search for alternative work involves looking at other companies within a group (EAT decision
in Euroguard Ltd v Rycroft (1993) 477 IRLB 5).
Selecting, say, a white single woman or a West Indian single man to go, rather than a mar-
ried white man with two children and a mortgage, might appear to be humane. However,
unless the decision is made on the basis of competence, experience, reliability and so on, the
dismissal is likely to be unfair and also a breach of the SDA and/or the RRA. Selection on the
grounds of gender reassignment, sexual orientation, religion or belief and disability would
also be unfair.
Consultation on redundancies
The Collective Redundancies and Transfer of Undertakings (Protection of Employment) (Amend-
ment) Regulations 1999 (SI 1999/1925) apply. The Regulations substantially amend s 188 of
the Trade Union and Labour Relations (Consolidation) Act 1992 as follows:
n the obligation to consult about redundancies now arises where the employer is proposing
to dismiss as redundant 20 or more employees at one establishment within a period of
90 days or less. This change will remove the need to consult from some 96 per cent of UK
businesses;
n where consultation is required the employer must consult all those who are ‘appropriate
representatives’;
n appropriate representatives of employees are:
(1) employee representatives elected by them; or
(2) if an independent trade union is recognised by the employer, representatives of the
union.
Where the employees elect representatives and belong to a recognised union, the employer
has a choice whether to consult the union or the elected representatives. It will be noted that
..
EL_C19.qxd 3/26/07 10:52 AM Page 483
the Regulations extend the requirement to consult to non-union workplaces. They further
provide that:
n Employee representatives may be elected by the employees for the specific purpose of
consultation or while not having been specifically elected it is appropriate to consult them
as where they are members of an existing works council or joint consultative committee.
In all cases the employee representatives must be employed by the employer. No method
is stipulated in the Regulations which means that ad hoc procedures as and when a redund-
ancy situation will arise are acceptable.
n Consultation must begin in good time as distinct from the earliest opportunity as was for-
merly required and before reaching final conclusions, and in any case.
n Where the employer is proposing to dismiss 100 or more employees at one establishment
within 90 days or less, consultation must begin, as before, 90 days before any notice of
dismissal is served. In cases involving less than 100 but at least 20 employees, consultation
must begin at least 30 days before that date. This means that the employer must wait the
full 30- or 90-day period before serving notice and not, as before, when the first redundan-
cies took effect. Thus the employee gets the full consultation period plus pay for the notice
period plus any redundancy package (see the Collective Redundancies (Amendment)
Regulations 2006).
n Appropriate representatives must be given access to employees who are to be made redund-
ant and facilities, e.g. an office and a telephone must be made available to them.
It should of course be borne in mind that fairness towards employees in a redundancy

situation is always paramount if the matter goes to a tribunal asserting unfair dismissal.
Therefore, individual consultation may be required even where the numbers involved are less
than 20 and even though, the numbers being more, there has been consultation with repres-
entatives. Thus, in Mugford v Midland Bank plc [1997] IRLR 208 the EAT, in confirming that a
particular employee had not in the circumstances been subject to unfairness, commented
that if a person is selected for redundancy, individual consultation may become important in
the circumstances of the case, even if the employer (as he had in this case) has conducted
detailed consultation with what were in this case union representatives.
It should be noted: 19
n that consultation must cover employees who have volunteered for redundancy; and
n although consultation does not have to end in agreement, it must always be properly
conducted.
It is, perhaps rather obviously, direct discrimination not to consult an employee about
redundancy because she is on maternity leave (see McGuigan v T&G Baynes (1999) 622 IRLB
11), and employees who are on parental leave, paternity leave and adoption leave.
Notice
The employer must start the consultation process by giving written notice to the appropriate
representatives stating:
(a) the reasons for the proposals;

(b) the numbers and descriptions of employees whom it proposes to dismiss as redundant;
(c) the total number of employees of that description. In MSF v GEC Ferranti (Defence Systems)
Ltd (1994) 491 IRLB 12 the EAT held that the statutory period for consulting with a trade
union over proposed redundancies did not begin when the employer gave the union a
notice which contained only a ‘best estimate’ of the redundancies;
..
EL_C19.qxd 3/26/07 10:52 AM Page 484
(d) the proposed method of selecting the employees to be dismissed;

(e) the proposed method of carrying out the dismissal, including the period over which the
dismissals are to take effect;
( f ) the method of calculating any non-statutory redundancy payments.
Consultation must also include consideration of ways to avoid redundancies, to reduce the
number to be dismissed and to mitigate the consequences of dismissals. The employer must
also, as part of the consultation process, consider any representations by the appropriate
representatives.
The above obligations do not apply if the employees whom the employer proposes to
dismiss fall into one of several specified categories. The most important of these categories,
for practical purposes, are:
(a) employees who under their contract ordinarily work outside Great Britain;
(b) employees under a contract for a fixed term of three months or less or who have
been engaged to carry out a specific task which is not expected to last for more than
three months (unless in either case the employment has continued beyond the three
months).
The employer must also be able to argue that there were special circumstances which made
it not reasonably practicable for it to comply with the requirements. Even then it must do
whatever is reasonably practicable. If, for example, the employer is proposing to dismiss
25 employees and cannot give the full 30 days’ notice required, it must give as much notice
as possible.
The main practical consequence, if the requirements are not complied with, is that the
union or any employee representative or any of those made redundant can apply to an
employment tribunal for what is known as a ‘protective award’. The effect of the award
is that a protected period of up to 90 days is specified and individual employees can then
apply to have their remuneration paid for that period. The following example illustrates
the position.
Example: A firm is proposing to dismiss 25 employees and fails to give notice to the appro-
priate representatives. The employment tribunal makes a protective award under which the
protected period begins on the date when the first dismissal takes effect and runs for 30 days.
Employees who are dismissed on that first date can claim remuneration for the whole of the
30-day period. Employees dismissed part-way through the protected period can claim remunera-
tion for the balance of the period (subject in each case to the dismissal being for redundancy
and not for some other reason).
Notifying the Secretary of State

The employer’s other obligation is to notify the Department of Trade and Industry of
proposed redundancies. The obligation is to give written notice to the Department:
(a) at least 90 days before the first dismissal notice is given, in the case of 100 or more
redundancies;
(b) at least 30 days before the first dismissal notice is given, in the case of 20 or more
redundancies.
The notice must be in a prescribed form available from local offices and the employer must
give a copy to the relevant appropriate representatives.
..
EL_C19.qxd 3/26/07 10:52 AM Page 485
If there are special circumstances which make it not reasonably practicable for the
employer to comply with the requirements, it must do everything that is reasonably practic-
able. If the special circumstances prevent the full required notice being given, it must give as
much notice as possible.
Failing to comply with the above requirements means that the employer can be prosecuted
and fined.
Redundancy consultation and the Information and Consultation of Employees

Regulations 2004
These Regulations (SI 2004/3426) require consultation and information to be undertaken or
given to employees on an ongoing basis about issues affecting the business in which they
work. From 6 April 2005 the Regulations have applied to employers with at least 150 employees.
From 6 April 2007 they will apply to undertakings employing at least 100 employees and
from 6 April 2008 to those with at least 50 employees.
The Department of Trade and Industry has issued guidance in terms of how these consulta-
tions fit in with the redundancy consultation provisions. The guidance states that the ICE
Regulations are in addition to the redundancy consultation provisions and makes the follow-
ing points:
n An employer who proposes to make collective redundancies must comply with the redun-
dancy provisions even though it has established separate consultation arrangements as
regards representatives under the ICE Regulations. Thus, if a trade union is recognised in
regard to a collective redundancy situation, the employer must consult with the redund-
ancy representatives even where there is a separate group of employees for consultation
put in place as a result of ICE consultations.
n Where there is a separate group of employee representatives for ICE consultations, the
employer will only be required to consult the ICE representative in a redundancy if the
employer has agreed to do so under a ‘negotiated agreement’ under the ICE Regulations.
n Otherwise an employer need not consult on redundancy provisions with ICE representa-
tives if it informs those representatives that the redundancy consultation provisions have
been triggered and that consultation will take place under the redundancy provisions. 19
The guidance document is available at http://www.dti.gov.uk/er.
The role of ACAS

ACAS has now taken on redundancy pay entitlement as an issue on which it has a duty to
conciliate. The Employment Rights (Dispute Resolution) Act 1998 confers a duty on ACAS to
conciliate if a person puts an application to an employment tribunal concerning entitlement
to redundancy pay.
Collective agreements on redundancy

The Secretary of State may, on the application of the employer and the unions involved,
make an order modifying the requirements of redundancy pay legislation if he is satisfied
that there is a collective agreement which makes satisfactory alternative arrangements for
dealing with redundancy. The provisions of the agreement must be ‘on the whole at least as
favourable’ as the statutory provisions, and must include, in particular, arrangements allowing
an employee to go to an independent arbitration or to make a complaint to an employment
tribunal.
..
EL_C19.qxd 3/26/07 10:52 AM Page 486
Written statement of reasons for dismissal

At common law an employer is not required to give his employee any reasons for dismissal.
However, s 92 of the ERA provides that where an employee is dismissed, with or without
notice, or by failure to renew a contract for a fixed term, he must be provided by his
employer on request, within 14 days of that request, with a written statement giving particu-
lars of the reasons for his dismissal. This provision applies only to employees who have been
continuously employed for a period of one year, though there is no service requirement in
pregnancy dismissals. The written statement is admissible in evidence in any proceedings
relating to the dismissal and if an employer refuses to give a written statement the employee
may complain to an employment tribunal. If the tribunal upholds the complaint, it may
make a declaration as to what it finds the employer’s reasons were for dismissing
the employee and must make an award of two weeks’ pay without limit as to amount to the
employee.
Other methods of terminating the contract

of employment
These have already been considered in Chapter 17 and reference might usefully be made at
this point to that chapter in terms of what is said about discharge of contract by notice, by
agreement and by passage of time.
Employee’s breach of contract

An employer may sue his employees for damages for breach of the contract of service
by the employee. Such claims are potentially available, for example, for damage to the
employer’s property, as where machinery is damaged by negligent operation, as was the
case in Baster v London and County Printing Works [1899] 1 QB 901, or for refusal to work
resulting in damage by lost production, as was the case in National Coal Board v Galley [1958]
1 All ER 91. Such claims are rare and impractical because of the fact that the employee
will not, in most cases, be able to meet the claim, and also, perhaps more importantly,
because they lead to industrial unrest. In these circumstances we do not pursue the matter
further here.
The employment contract and shop workers
The Sunday Trading Act 1994, which came into force on 26 August 1994, repeals previous
restrictions on Sunday trading. Recognising the impact of this on shop workers, the ERA
1996, Part IV provides them with new and important rights. These rights are:
n not to be dismissed or made redundant for refusing to work on Sunday; and

n not to suffer a detriment for the same reason.
These rights extend to all shop workers in England and Wales if they are asked to do shop
work on a Sunday. They are not available to Sunday-only workers.
..
EL_C19.qxd 3/26/07 10:52 AM Page 487
The ERA 1996 defines a shop worker as an employee who is required or may be required
by contract to work in or about a shop on a day when the shop is open to serve customers.
However, the worker need not actually serve customers and the provisions extend beyond
sales assistants and check-out operators to clerical workers doing work related to the shop,
managers and supervisors, cleaners, storepersons, shelf fillers, lift attendants and security
staff. Even those employed by outside contractors (but not self-employed) could be covered
as also could van drivers based at the store who deliver goods to customers.
A shop is defined as including any premises where any retail or business is carried on. This
does not include the sale of meals, refreshments or intoxicating liquor for consumption on
the premises, e.g. public houses, cafés and restaurants, nor places preparing meals or refresh-
ments to order for immediate consumption off the premises, e.g. take-aways.
The ERA 1996 defines two categories of shop workers:
n protected shop workers, i.e. those employed as such when the Act came into force,
and those taking up employment afterwards whose contracts do not require Sunday
working;
n opted-out workers, i.e. those who are employed after commencement of the Act under
contracts which require them to work on Sundays but who opt out of this by giving three
months’ notice to the employer (see below).
Protected workers will have the right immediately regardless as to whether they have previ-
ously agreed to a contract requiring them to work on a Sunday. No procedures are involved.
They can simply decide that they no longer wish to work on Sundays. Protected workers are
able to give up their right to refuse to work on Sundays but only if:
n the employer is given a written ‘opting-in notice’ which must be signed and dated and
state expressly that they do not object to Sunday working or actually wish to work on
Sundays; and
n then enter into an express agreement with the employer to work on Sunday or on a par-
ticular Sunday.
Opted-out workers, i.e. those engaged after commencement of the Act or who have opted
in to Sunday working, have the right to opt out. To do this they must give the employer a
19
signed and dated written notice stating that they object to Sunday work. They then have to
serve a three-month notice period. During this time they are still obliged to do Sunday work
and if they refuse will lose statutory protection under the ERA 1996. However, they cannot be
dismissed or made to suffer some other detriment merely because they have been given an
opting-out notice. After the period of three months has expired, the worker has a right not to
do Sunday work.
The ERA 1996 provides that dismissal or redundancy of protected and opted-out workers
will be regarded as unfair dismissal if the reason or principal reason was that the worker(s)
concerned have refused or proposed to refuse to work on Sundays.
The ERA 1996 gives protected and opted-out workers the right not to be subjected to any
other detriment, e.g. non-payment of seniority bonuses, for refusing to work on a Sunday.
These rights apply regardless of age, length of service or hours of work.
Employer’s explanatory statement. The ERA 1996 provides that employers are required to
give every shop worker who enters into a contractual agreement to work on Sundays after the
new Act comes into force a written explanatory statement setting out their right to opt out. If
an employer does not issue such a statement within two months of the worker entering into
such a contractual agreement, the opt-out period is reduced from three months to one.
The ERA 1996 gives a prescribed form of statement to be given to employees.
..
EL_C19.qxd 3/26/07 10:52 AM Page 488
STATUTORY RIGHTS IN RELATION TO SUNDAY SHOPWORK

You have become employed as a shop worker and are or can be required under your contract
of employment to do the Sunday work your contract provides for.
However, if you wish, you can give a notice, as described in the next paragraph, to your
employer and you will then have the right not to work in or about a shop which is open once
three months have passed from the date on which you gave the notice.
Your notice must—
be in writing;
be signed and dated by you;
say that you object to Sunday working.
For three months after you give the notice, your employer can still require you to do all the
Sunday work your contract provides for. After the three-month period has ended, you have
the right to complain to an employment tribunal if, because of your refusal to work on
Sundays on which the shop is open, your employer—
dismisses you, or
does something else detrimental to you, for example failing to promote you.
Once you have the rights described, you can surrender them only by giving your employer a
further notice, signed and dated by you, saying that you wish to work on a Sunday or that you
do not object to Sunday working and then agreeing with your employer to work on Sundays
or on a particular Sunday.
Other important provisions are as follows:
n an employer is not obliged to compensate the employee for loss of Sunday work, either in
terms of extra hours or remuneration;
n a provision in an agreement between a shop worker and his or her employer cannot gener-
ally exclude the provisions of the ERA 1996;
n the dismissal of an employee for asserting a statutory right contained in the ERA 1996 is to
be regarded as being automatically unfair.
Betting offices
Betting offices and bookmaking establishments are allowed to do business on Sundays and
the ERA protects workers against unfair dismissal or victimisation if they object to working
on a Sunday. The provisions are largely the same as those in the case of shopworkers and
appear in Part IV of the ERA 1996. They apply to workers regardless of age, hours of work or
length of service.
..
EL_C20.qxd 3/26/07 10:53 AM Page 489
Part 3
THE LAW OF TORTS
..
EL_C20.qxd 3/26/07 10:53 AM Page 490
..
EL_C20.qxd 3/26/07 10:53 AM Page 491
20
THE LAW OF TORTS:
GENERAL PRINCIPLES
It is difficult to give a satisfactory definition of a tort. According to Professor Winfield (who

was a distinguished author of a major text on the subject and whose definition has been
accepted by our courts in many decided cases), ‘tortious liability arises from a duty primarily
fixed by law: this duty is towards persons generally and its breach is redressible by an action
for unliquidated damages’.
The nature of a tort

It is a matter of dispute whether there should be a law of tort or a law of torts: there are two
schools of thought. One maintains that there should be a law of tort, i.e. that all harm should
be actionable in the absence of just cause or excuse. If there was merely a law of specific torts,
then no new torts could be created by the courts and the categories of tortious liability would
be closed. It is urged that under the flexibility of case law new torts have come into being,
and in no case has an action been refused simply because it was novel. This is called the
general principle of liability theory. The other view is that there should be a law of torts – that
there should be only specific torts and unless the damage suffered can be brought under a
known or recognised head of liability, there should be no remedy. This view is supported by
modern cases where an attempt has been made, unsuccessfully, to establish a purported tort
of eviction and a tort of perjury.
In Khorasandjian v Bush [1993] 3 All ER 669 the Court of Appeal granted an injunction
to restrain the making of unwanted telephone calls and this might be regarded as a recogni-
tion of a new tort of harassment. However, the case is clearly founded on a breach of the
rules of private nuisance and an expansion of that tort rather than the creation of a new one.
Thus the courts have refused to create new torts even when given the opportunity. This is
particularly unfortunate in the case of perjury. Perjury is not merely an offence against the
state, as it has been traditionally regarded by the courts. It can cause an individual great loss
or hardship and many feel that the victim should have a civil remedy in damages.
In addition, there is a danger in modern society of a serious invasion of privacy resulting
from the increasing availability and use of electronic and other devices as a means of sur-
reptitious surveillance and the accumulation of personal information about individuals
in data banks, computers and credit registers. However, the common law of tort does now
appear to be capable of extending to a remedy for invasion of privacy as such. This results
from the ruling in Douglas and Others v Hello! Ltd (2005) (see below).
..
EL_C20.qxd 3/26/07 10:53 AM Page 492
492 PART 3 · THE LAW OF TORTS
On the general issue of privacy we have, of course, to bear in mind the Human Rights Act
1998 which applies the European Convention on Human Rights in the UK. Article 8 provides
that everyone has a right to respect for private, family and home life. Public bodies may only
interfere with such rights for reasons of national security, public safety, economic wellbeing or
as otherwise necessary in a democratic society. The Article was discussed in R v Broadcasting
Standards Commission, ex parte BBC (1999) The Times, 14 September where the BBC had filmed
secretly the sales transactions of Dixons for its ‘watchdog’ programme following the store’s
convictions for the sale of second-hand goods as new. No irregularities were uncovered. The
High Court held that while the ECHR applied to human individuals, it did not apply to com-
panies, so Dixons’ complaint of infringement of its privacy to the Commission failed.
In addition, the Data Protection Act 1998 deals with information stored on computers. The
details of the Act are beyond the scope of a book of this nature but the job of safeguarding
the privacy of the individual in terms, e.g., of the information kept on him and the uses to
which it is put falls under the Act to the Information Commissioner who is appointed by the
Crown. The Commissioner supervises a central register on which all data users must enter
details of data banks and their purposes. The Commissioner and ‘data subjects’, the latter
through the courts, have access to records on computers. Following an EC Directive on the
subject, the government obtained the enactment of the Data Protection Act 1998 which
repeals the former legislation, i.e. the Data Protection Act 1984, and extends the controls in
line with the Directive, e.g., by applying data control to certain types of manually produced
data. The 1984 Act applied only to automatically processed data.
Hence, we may conclude that at the present there is no general principle of liability in
tort. Nevertheless, if judges have not created new torts, privacy apart they have applied old
cases to new situations. This has resulted in an extension of the old torts and there has been a
tendency to expand the area of liability, particularly in the field of negligence (see Chapter
21). If this continues, the law may reach a stage approximating to a general liability for
wrongful acts, for, as Lord Macmillan said in Donoghue v Stevenson (1932), ‘the categories of
negligence are never closed’.
Perera v Vandiyar, 1953 – No tort of eviction (261)

Hargreaves v Bretherton, 1958 – No tort of perjury (262)
Roy v Prior, 1969 – No tort of perjury reaffirmed (263)
Douglas and Others v Hello! Ltd, 2005 (263a) – Privacy and the law of confidence
Donoghue v Stevenson, 1932 – The categories of negligence can be expanded (264)
Damage and liability
The law distinguishes between two concepts – (1) Damnum, which means the damage
suffered, and (2) Injuria, which is an injury having legal consequences. Sometimes, but not
always, these two go together. For instance, if I negligently drive a car and injure a person, he
suffers damnum (the hurt) and injuria (because he has a right of action to be compensated).
There are, however, cases of damnum sine injuria (damage suffered without the violation of
a legal right), and injuria sine damno (the violation of a legal right without damage).
The mere fact that a person has suffered damage does not entitle him to maintain an action
in tort. Before an action can succeed, the harm suffered must be caused by an act which is a
violation of a right which the law vests in the claimant or injured party. Damage suffered in
..
EL_C20.qxd 3/26/07 10:53 AM Page 493
THE LAW OF TORTS: GENERAL PRINCIPLES 493
the absence of the violation of such legal right is known as damnum sine injuria. Furthermore,
a person who suffers damnum cannot receive compensation on the basis of injuria suffered by
another. The concept of damnum sine injuria is not the same as that concerning whether there
is a law of tort or a law of torts because under the concept of damnum sine injuria a person may
suffer harm and have no claim even though the harm was suffered as a result of a known tort.
Best v Samuel Fox & Co Ltd, 1952 – No proprietary right in a spouse (265)
Electrochrome Ltd v Welsh Plastics Ltd, 1968 – Loss but no damage to the
claimant’s property (266)
Malice
The fact that the defendant acts with malice, i.e. with the intention of injuring his neigh-
bour, does not give rise to a cause of action unless a legal right of the claimant is infringed
(see ‘Motive’ below). On the other hand, whenever there is an invasion of a legal right, the
person in whom the right is vested may bring an action and recover damages (though these
may be nominal) or, what may be more important, obtain an injunction, although he has
suffered no actual harm. For example, an action will lie for an unlawful entry on the land of
another (trespass) although no actual damage is done. Furthermore, in Ashby v White (1703)
2 Ld Raym 938, it was held that an elector had a right of action, for a form of nuisance or
disturbance of rights, when his vote was wrongly rejected by the returning officer although
the candidate for whom he tried to vote was elected. This is known as injuria sine damno.
Motive
The law of torts is concerned more with the effects of injurious conduct than with the
motives which inspired it. Hence, just as a bad intention will not necessarily make the
infliction of damage actionable, so an innocent intention is usually no defence unless a bad
intention can be imputed. However, there are circumstances in which malice is important.
Thus where a person puts in motion the criminal law against another, this is actionable if
malice is shown to be present and is known as the tort of malicious prosecution.
Furthermore, the question of malice may be raised when certain defences are pleaded. Thus in 20
the law of defamation the defences of qualified privilege and fair comment are allowed only
where the defendant has not been malicious. Finally, in regard to the tort of nuisance, certain
acts which would not necessarily be a nuisance may be regarded as such if they are exercised
unreasonably. Malice is sometimes regarded as evidence of conduct which is unreasonable
(see Christie v Davey (1893) Chapter 21).
Bradford Corporation v Pickles, 1895 – Effect of bad intention (267)

Wilkinson v Downton, 1897 – Effect of innocent intention and imputation
of intention (268)
Parties in the law of torts

It is now necessary to consider certain categories of persons whose capacity in connection
with tortious acts is limited.
..
EL_C20.qxd 3/26/07 10:53 AM Page 494
Minors
A minor can sue in tort as a claimant in the ordinary way except that, as in contract, he must
sue through an adult as litigation friend. He cannot compromise his action except by leave of
the court, unlike an adult, who does not require such permission.
At common law there was a doubt as to whether a child had a cause of action for personal
injuries caused before its birth. The matter is now covered by the Congenital Disabilities
(Civil Liability) Act 1976. Section 1 establishes civil liability where a child is born disabled in
consequence of the intentional act or the negligence or the breach of statutory duty of some
person before the child’s birth. There can be no liability unless the child is born alive. Section
44 of the Human Fertilisation and Embryology Act 1990 extends the 1976 Act to cover
children conceived following infertility treatments.
It was held in C v S [1987] 1 All ER 123 that a foetus has no right of action unless it is
subsequently born alive. If it is stillborn, the parents might have an action, e.g. for nervous
shock. Causation must be proved which may be difficult in the case of pre-natal injuries. A
mother cannot be liable under s 1 for causing injury to her child by her own negligence,
except where the injury is caused by the mother’s negligence in driving a motor vehicle when
she knows, or ought reasonably to know, that she is pregnant. Barristers and judges, among
others, have been strongly opposed to children being given a cause of action against their
mothers, recognising the danger of inter-family disputes, and, subject to what has been said
about motor vehicle liability where the action is in effect against an insurance company and not
really against the mother, their view has prevailed in the Act. The liability of a father is not,
however, excluded and he can be liable to his child for injuries caused by his own negligence.
The section also distinguishes between matters arising before conception (where the injury
can be to either parent) and matters arising when the child’s mother is pregnant or during the
actual process of childbirth (where the injury can only be to the mother). Thus the injury
could result, for example, from irradiation which damages the progenitive capacity of the
father. It also covers physical damage to the child during childbirth as by the negligent
handling of instruments by those attending the mother. The injuries must be caused during
the pregnancy and there could be problems in dating the beginning of this in some cases.
The defendant is presumed to take the mother as he finds her and thus cannot say that he
did not know she was pregnant nor that the damage to her child was not foreseeable.
The common-law defence of volenti non fit injuria is applicable and in this sense if the
mother is volenti so is the child. It is recognised that this may penalise the child but it was
thought that any other solution would prejudice the position of women in society because
organisations worried that a woman might be pregnant may refuse to enter into a wide
variety of contracts with her. Incidentally, so far as the consent which the child is deemed to
give results from an exemption clause in a contract made by the mother, then s 1 creates a
new exception to the doctrine of privity of contract. Section 1 also provides that the child’s
damages awarded against the defendant are to be reduced by any contributory negligence
of the mother. Finally, s 1 provides that professional persons, such as doctors, are under no
liability for treatment or advice given according to prevailing professional standards of care.
This codifies the common-law rule in Roe v Minister of Health (1954) (see Chapter 21).
Section 3 clarifies the compensation provisions of the Nuclear Installations Act 1965, where
damage results from a nuclear incident and provides for compensation under the Act in the
case of a child born subsequently with disabilities attributable to the incident.
A minor is liable as defendant for all his torts except in a limited number of instances.
Where the tort alleged requires a mental ingredient, the age of the minor (in cases of extreme
infancy) may show an inability to form the necessary intent. In cases of negligence, a very
young child cannot be expected to show the same standard of care as an older person.
..
EL_C20.qxd 3/26/07 10:53 AM Page 495
Basically children are liable for their own torts, but a father may be liable vicariously, if the
relationship of employer and employee exists between him and the child or if there is the
relationship of principal and agent. Simply as a father he is not liable unless the injury is
caused by his negligent control of the child and so when he is liable, it is really for his own
tort, i.e. negligence in looking after the child. Such a liability may extend to other persons
(not being parents) who have control of children, e.g. teachers and education authorities,
and, if such persons or authorities act negligently, they may be held responsible for the
harm caused by children under their care or control. Nevertheless, the basis of the action is
negligent control or supervision.
Williams v Humphrey, 1975 – A minor is sued for negligence (269)

Donaldson v McNiven, 1952 – Parental control: no negligence (270)
Bebee v Sales, 1916 – Where a parent is negligent (271)
Carmarthenshire County Council v Lewis, 1955 – Negligent control by a local
authority (272)
Butt v Cambridgeshire and Ely County Council, 1969 – A local authority is not
negligent (273)
Persons suffering from mental disorder

In criminal law a person of unsound mind has considerable exemption from criminal liability
(see Chapter 25), but these rules have never been applied to civil injuries. This is understand-
able if it is borne in mind that the aim of the law of torts is to compensate the injured party,
not to punish the offender. In the light of this, any exemptions accorded to a person of
unsound mind should be narrow, and he should be liable unless his state of mind prevents
him having the necessary intent (where a mental ingredient is part of the tort) and in
extreme cases where no voluntary act is possible.
Morriss v Marsden, 1952 – Mental patients in tort (274)
Husband and wife 20

The rule used to be that a married woman was liable for her torts only to the extent of
her separate property and that beyond this the husband was fully liable. Since the Law
Reform (Married Women and Tortfeasors) Act 1935, the wife is fully liable for her torts and
the husband as such is no longer held responsible, unless, as in the case of a minor, there is a
relationship of employer and employee or principal and agent.
The old common-law rule whereby one spouse could not sue the other in tort has now
been altered. The Law Reform (Husband and Wife) Act 1962 provides that each of the parties
to a marriage shall have the like right of action in tort against the other as if they were not
married, but where the action is brought by one of the parties to the marriage against the
other during the subsistence of the marriage, the court may stay the action if it appears:
(a) that no substantial benefit would accrue to either party from the continuation of the
proceedings; or
(b) that the question or questions in issue could more conveniently be disposed of on an
application made under s 17 of the Married Women’s Property Act 1882. (This provides
for the determination of questions between husband and wife regarding title to or posses-
sion of property by a summary procedure.)
..
EL_C20.qxd 3/26/07 10:53 AM Page 496
Those who have registered a civil partnership under the Civil Partnership Act 2004 are able to
bring claims against each other.
It should also be noted that under s 2(a) of the Administration of Justice Act 1982 a
husband has no right of action against a person who by a tortious act deprives him of the
society and services of his wife, i.e. loss of consortium. A wife has no such right by reason of
case law in respect of loss of consortium. (See Best v Samuel Fox & Co Ltd (1952), above.) The
above rules apply also to civil partners.
The Crown and its servants

Prior to 1947 the Crown had considerable immunity in the law of tort and contract stem-
ming from the common-law maxim: ‘The King can do no wrong.’ We have already seen that,
by the Crown Proceedings Act 1947, the Crown is, in general, now liable in the same way as
a subject (see further Chapter 8).
The Crown is not liable for torts committed by the police nor is the local authority which
appoints and pays them. However, the Police Act 1996, s 88, provides that the chief officer of
police for any police area is liable for the torts of police officers, e.g. wrongful arrest. The Act
also provides that any damages and costs awarded against the chief officer shall be payable
out of police funds.
Postal and telecommunications authorities

The Post Office is a public authority but is not an agent of the Crown. It is liable, subject to
limitations set out in s 91 of the Postal Services Act 2000, for loss of or damage to inland reg-
istered postal packets. Apart from this, neither the Post Office nor any of its servants, officers
or sub-postmasters is liable for anything done or omitted to be done in regard to anything in
the post or for failure to collect the post (s 90 of the 2000 Act). Thus in Harold Stephen & Co
Ltd v Post Office [1978] 1 All ER 939, the Court of Appeal refused under earlier legislation to
grant an injunction against the Post Office to companies in the Cricklewood area of London
whose businesses were in jeopardy because they were receiving no mail through the Post
Office closing the local sorting office and suspending post office workers who refused to
handle mail in support of workers employed in the private sector.
Persons engaged in the carriage of mail or their servants, agents or sub-contractors, are not
liable for loss or damage in regard to the post (s 90 of the 2000 Act). Thus in American Express
Co v British Airways Board [1983] 1 All ER 557, the claimants gave a postal packet containing
travellers’ cheques to the Post Office for delivery abroad. The Post Office gave it to the
defendants and it was stolen by one of their employees. The claimants sought damages for
breach of bailment. Lloyd, J held that the defendants were not liable; they were exempted by
a similar provision in earlier legislation.
Since the enactment of the Telecommunications Act 1984 (see now Communications
Act 2003) British Telecom provides its telecommunications service under standard service
contracts and is liable in the ordinary way for breach. However, the contracts concerned have
exclusion clauses, e.g. in the case of failure to repair equipment during an industrial dispute.
Judicial immunity
A judge has absolute immunity for acts in his judicial capacity. Section 51 of the Justices of
the Peace Act 1997 extends this immunity to magistrates and their clerks, the intention being
that they should be put in the same position as other judges. Counsel and witnesses have
immunity in respect of all matters relating to the cases in which they are concerned. This is
mainly of importance in connection with possible actions for slander.
..
EL_C20.qxd 3/26/07 10:53 AM Page 497
Foreign sovereigns and ambassadorial staffs

These persons have immunity from actions in both contract and tort. However, it should be
noted that if they remain in this country after finishing their duties, they may become liable
even if the tort was committed before. They may, of course, voluntarily submit to the jurisdic-
tion of our courts, since immunity is from suit and not from liability.
Dickinson v Del Solar, 1930 – Ambassadorial staff are immune from suit not
liability (275)
Aliens
Enemy aliens, including British subjects who voluntarily reside or carry on business in an
enemy state, cannot bring an action in tort, although they themselves can be sued. Other
aliens have neither disability nor immunity.
Corporations
A corporation can, as a claimant, sue for all torts committed against it. Obviously certain
torts, such as assault, cannot by their nature be committed against corporations, but a cor-
poration can maintain an action for injury to its business.
Section 32 of the Companies Act 2006 provides that unless a company’s articles specifically
restrict the objects of the company its objects are unrestricted. The ultra vires (beyond the
powers) rule has no application to such a company. There will, however, be companies that
wish to restrict the company’s objects and will carry these in the articles. The ability of the
directors to overcome lack of capacity in contract does not apply in tort and it is necessary
therefor to examine the effect of the ultra vires rule here.
(a) Intra vires activities. Where an employee or agent of the corporation commits a tort
while acting in the course of his employment in an intra vires activity, the corporation is
liable. Although it has been said that any tort committed on behalf of a corporation must be
ultra vires (since Parliament does not authorise corporations to commit torts), this view is 20
fallacious since a corporation can have legal liability without legal capacity. A corporation
is liable under the principles of vicarious liability for the torts of its employees or agents
committed on intra vires activities.
( b) Ultra vires activities. Here we have to distinguish between express and non-express
authority. A corporation will not be liable if an employee engages in an ultra vires activity
without express authority. Thus, if a corporation has not got authority and has not given it,
you cannot infer it. On the other hand, where a tortious action is ultra vires but has been
expressly authorised, the courts have taken the view that the ultra vires doctrine is irrelevant,
and the corporation is liable for it.
D & L Caterers Ltd and Jackson v D’Anjou, 1945 – An action by a

company (276)
Poulton v London and South Western Railway Co, 1867 – An ultra vires act (277)
Campbell v Paddington Borough Council, 1911 – Is ultra vires relevant if act
authorised? (278)
..
EL_C20.qxd 3/26/07 10:53 AM Page 498
Unincorporated associations and trade unions

These have already been considered in Chapter 8 and their position in tort is set out there.
Joint tortfeasors
Formerly there was no right of contribution between joint tortfeasors, but under the Law
Reform (Married Women and Tortfeasors) Act 1935, it was laid down that, if one joint
tortfeasor was sued and paid damages, he could claim a contribution from fellow wrongdoers.
The relevant provisions are now contained in the Civil Liability (Contribution) Act 1978.
However, there can be no contribution where the person claiming it is liable to indemnify the
person from whom it is claimed. For example, an auctioneer is entitled to be indemnified by
a client who has instructed him to sell goods to which, as it subsequently appears, the client
does not have a title (Adamson v Jarvis (1827) 4 Bing 66). Therefore, if the true owner sues
the client for wrongful interference and the client pays the damages, he has no right to a con-
tribution against the auctioneer although the auctioneer is also liable for wrongful inter-
ference because the auctioneer is a person whom the client would have had to indemnify if
the true owner had chosen to sue the auctioneer. The amount of the contribution is settled
by the court on the basis of what is just and equitable given the responsibility of each party
for the injury and may be the full amount of the damages originally awarded against the
person claiming the contribution.
In connection with the right of contribution, the Law Reform (Husband and Wife) Act 1962
has an important effect. Where a spouse A is injured by the joint negligence of the other
spouse B and of a third party C, e.g. in a car accident, if C is sued by A, he can now claim a
contribution from the negligent spouse B, since B is now a person liable for the purposes of
the Act of 1978.
Executors and administrators

General effect of death
Section 1(1) of the Law Reform (Miscellaneous Provisions) Act 1934 (as amended by the Law
Reform (Miscellaneous Provisions) Act 1970) provides that all causes of action subsisting
against or vested in a person at the time of his death shall survive against or, as the case may
be, for the benefit of his estate.
This does not apply to actions for defamation. Furthermore, damages recoverable in
an action by the representatives of the deceased shall not include exemplary damages
(see further p 521). The right of a person to claim for bereavement under s 1A of the Fatal
Accidents Act 1976 (see below) does not survive for the benefit of his estate (s 4(1) of the
Administration of Justice Act 1982, amending s 1(2)(a) of the Act of 1934). No damages
may be awarded for loss of income in respect of any period after the death of an injured
person (s 4(2)( b) of the Administration of Justice Act 1982, amending s 1(2)(a) of the Act
of 1934).
Under the Proceedings Against Estates Act 1970 all actions against the personal representa-
tives of a deceased person, whether founded in contract or tort, are now subject to the normal
three-year (personal injuries) or six-year (other injuries) limitation period.
Provisional damages which may be awarded where there is a recognised risk that the
claimant may develop a further disease or deterioration (see further later in this chapter) are
dealt with in the context of fatal accidents by s 3 of the Damages Act 1996. This provides that
an award of provisional damages made during an injured person’s lifetime does not prevent
his dependants from claiming further damages if the injury results in death.
..
EL_C20.qxd 3/26/07 10:53 AM Page 499
It was held by the Court of Appeal in Hunger v Butler, The Independent, 2 January 1996 that a
widow could not claim as damages for dependency under the 1976 Act sums which her
deceased husband would have earned by ‘moonlighting’ employments which he would not
have declared because they would have affected his entitlement to social security benefits.
Fatal accidents
If, as a result, e.g., of negligence, a person is killed, there are two sorts of claim against the
person responsible. The executors of the deceased may wish to go ahead with any claim which
the deceased would have had if he had lived. There may also be relatives who wish to claim
because they have suffered as a result of the death.
(a) Claims by the estate. As we have seen, under the Law Reform (Miscellaneous Provisions)
Act 1934, most causes of action in tort subsisting at the time of a person’s death survive for
(or against) his estate.
As regards a fatal accident, the estate can claim damages for the period between the injury
and death, e.g., for pain and suffering and loss of amenity, as where an arm is amputated
before death. Damages may be awarded for earnings lost and medical expenses incurred up to
the time of death.
There is no claim for loss of expectation of life (Administration of Justice Act 1982,
s 1(1)(a)), nor is there a claim for lost earnings in respect of the period between the actual
death and the cessation of notional working life (i.e. the lost years). Section 4(2) of the 1982
Act now states that no damages may be awarded for loss of income after death.
If the injured person died immediately the estate has no claim except for funeral expenses
(s 1(2)(c) of the 1982 Act). If, e.g., a relative pays the funeral expenses but was not dependent
on the deceased and so has no general claim under the Fatal Accidents Act 1976, the relative
may claim those funeral expenses under the 1976 Act.
(b) Claims by dependants. These are brought under the Fatal Accidents Act 1976. The claim
is independent of the one made by the estate under the 1934 Act (as amended). Two awards
of damages may therefore be made, one for the executors on behalf of the estate, and the
other to the executors collectively for the dependants.
Under the provisions of the Fatal Accidents Act 1976 a person whose negligence has caused
the death of another may be liable to certain relatives of the deceased who have suffered
financial loss because of the death. The following persons are entitled to claim but only if they 20
were dependent on the deceased – husband, wife, children, grandchildren, parents, grandparents,
brothers, sisters, aunts, and uncles, and their issue; the relationship may be traced through
step-relatives, adoption, or illegitimacy, and relatives by marriage have the same rights as the
deceased’s own relatives. However, dependency ceases on adoption (Watson v Willmott [1990]
3 WLR 1103). Under s 1(3)(b) of the 1976 Act, as amended by the Administration of Justice
Act 1982, any person who was living with the deceased in the same household for two years or
more (including civil partners), immediately before the death and was living for all of the time
as the husband or wife of the deceased may claim. This allows unmarried cohabitants to claim.
A single action must be brought on behalf of all eligible dependants and the total damages
apportioned according to their dependency. The action may be brought by the personal rep-
resentatives of the deceased, but if there are none, or they fail to bring the action within six
months of the death, the dependants may bring it.
The Court of Appeal stated in Gully v Dix [2004] 1 WLR 1399 that the requirement of
‘immediately before death’ should not be construed literally. A woman who had lived with
the deceased for 27 years and had been maintained by him was allowed to claim even
though she had left him three months before his death. There was, it seemed, an intention to
return, as she had always done when she had left in the past. Her right to make a claim was
..
EL_C20.qxd 3/26/07 10:53 AM Page 500
challenged by the deceased’s brother who would have received more from the estate if her
claim had been turned down.
If the deceased was guilty of contributory negligence or was a volunteer (see later in this
chapter), the damages awarded will be reduced or extinguished, according to the degree to
which the deceased was at fault or was a volunteer. In addition, there can be no claim where
the deceased made a full and final settlement with the potential defendant before the death:
ruled by the House of Lords in Jameson v Central Electricity Generating Board [1999] 1 All ER 193.
Ordinarily, also, if more than three years have elapsed between injury and death, no Fatal
Accidents Act claim can be brought (Limitation Act 1980, s 11(1)). However, it is open to the
personal representatives to ask the court to exercise the discretionary provisions of s 33 of the
Limitation Act 1980 to override the limitation period (see further Chapter 18). Furthermore,
if the claimant dies before the limitation period has expired, a new limitation period runs
under s 11(5) of the Limitation Act 1980. This period is three years from either the date of
death or the date of the personal representative’s knowledge that there is a cause of action,
whichever is the later.
The probability of pecuniary loss is a matter for the claimant to prove and the court to decide
as a matter of fact. However, it should be noted that the object of the Fatal Accidents Act is to
provide maintenance for relatives who have been deprived of maintenance by the death.
There is also now an award of £10,000 for bereavement (Fatal Accidents Act 1976, s 1A(3),
as amended by the Administration of Justice Act 1982). This sum will be increased as appro-
priate by statutory instrument, the current figure being contained in SI 2002/644. It is in
favour of a wife or husband or the parents of the deceased but in the case of parents only if
he or she was under 18 at the time of death and unmarried, or the mother of a child under 18 at
the time of death and unmarried who was illegitimate (Fatal Accidents Act 1976, s 1A(2)(b)).
No proof of dependency is required.
Section 4 of the Fatal Accidents Act 1976, as amended by the Administration of Justice Act
1982, provides that in assessing damages any benefits which have arisen, or will arise, or may
arise, to any person as a result of the death are to be disregarded. Thus, friendly society or
trade union benefits, pensions or gratuities accruing to a relative would be ignored, even
though the pecuniary loss was in a sense thereby reduced.
Finally, it is interesting to note that relatives have no right to sue for non-fatal accidents
to relatives, even if they are a dependant. The action must be brought by the living relative
who has been injured (see Robertson v Turnbull (1981) The Times, 6 October – a decision of the
House of Lords).
Partners, principals and agents generally

Partners in ordinary and limited partnerships are jointly and severally liable for the torts
of other partners committed in the ordinary course of business, or with the authority of
co-partners. The position of members of a limited liability partnership is different and is
considered at p 255. A principal is liable for the torts of his agent committed within the scope
of his authority, whether by prior authority or subsequent ratification.
Vicarious liability
While the person who is actually responsible for the commission of a tort is always liable,
sometimes another person may be liable although he has not actually committed it. In such
a case both are liable as joint tortfeasors. This is the doctrine of vicarious liability, and the
..
EL_C20.qxd 3/26/07 10:53 AM Page 501
greatest area of this type of liability is that of master and servant. A master (employer) is
liable for the torts of his servant (employee) committed in the course of his employment, and
so wide is the risk that it is commonly insured against. Under the Employers’ Liability
(Compulsory Insurance) Act 1969, an employer must insure himself in respect of vicarious
liability for injuries caused by his employees to their colleagues. Insurance is not compulsory
in respect of injuries to persons other than employees.
There is a comparison to be made with contract because whether an employer is bound as
a party to a contract made by the employee depends upon whether the employee has the
authority to make the contract on behalf of the employer and not simply whether the employee
was acting within the course of employment which is the basic tort test (Director-General of Fair
Trading v Smiths Concrete (1991) The Times, 26 July).
Who is an employee?
According to Salmond on Torts (a leading text), an employee may be defined as ‘any person
employed by another to do work for him on the terms that he, the [employee], is to be sub-
ject to the control and direction of his employer in respect of the manner in which his work
is to be done’. This definition was approved by the court in Hewitt v Bonvin [1940] 1 KB 188.
In most cases the relationship is established by the existence of a contract of service, which may
be express or implied and is usually evidenced by such matters as, for example, the power to
appoint, the power of dismissal, the method of payment, the payment of national insurance by
the employer, the deduction of tax under PAYE, and membership of pension schemes (if any).
It must be borne in mind that many of the defining principles, including those based on
case law and statute, were laid down in a different day and age from our own. The words
appearing in judgments and/or statutes cannot be altered because we must set out what the
judge or Parliament actually said, and in some cases the expression ‘servant’ not ‘employee’
will be used.
The control test

However, in deciding whether the relationship of employer and employee exists, the courts 20
have not restricted themselves to cases in which there is an ordinary contract of service but
have often stated that the right of control is the ultimate test. In Performing Right Society Ltd v
Mitchel and Booker (Palais de Danse) Ltd [1924] 1 KB 762 at p 767, McCardie, J said:
The nature of the task undertaken, the freedom of action given, the magnitude of the con-
tract amount, the manner in which it is paid, the powers of dismissal, and the circum-
stances under which payment of the reward may be withheld, all these bear on the
solution of the question. But it seems clear that a more guiding test must be secured. . . . It
seems . . . reasonably clear that the final test, if there be a final test, and certainly the test to
be generally applied, lies in the nature and degree of detailed control over the person
alleged to be a servant. This circumstance is, of course, one only of several to be considered
but it is usually of vital importance.
The learned judge then went on to decide that the defendants, who employed a dance
band under a written contract for one year, were liable for breaches of copyright, which
occurred when members of the band played a piece of music without the consent of the
holder of the copyright, because the agreement gave the defendants ‘the right of continuous,
dominant and detailed control on every point, including the nature of the music to be played’.
..
EL_C20.qxd 3/26/07 10:53 AM Page 502
The existence of the control test means that where an employer (X) lends out his employee
(Y) to another employer (Z), then Z may be liable for the wrongs of Y even though there is
no contract of service between Y and Z, though such liability is rare.
An employer also owes certain duties to his employees, e.g. to provide proper plant, equip-
ment and premises, and this is a further reason for deciding whether Z has become the
master by virtue of the control test. There is a presumption that control remains with X and
the onus is upon him to prove that control has passed to Z. The burden is a heavy one and
the temporary employer will not often become liable. Nevertheless, transfer of control may
be more readily inferred where an employee is lent on his own without equipment or where
he is unskilled.
Transfer of control is often a convenient method of making the temporary employer liable
to, and for, the employee and does not affect the contract of service. A contract of service
is a highly personal one and it cannot be transferred from one employer to another without
the consent of the employee. However, where there is a contract for hire of plant and the
loan of an employee to operate it, the contract of hiring may provide that the hirer shall
indemnify the owners for claims arising in connection with the operation of the plant by the
employee.
Garrard v Southey, 1952 – The control test: a transfer of employer (279)

Mersey Docks and Harbour Board v Coggins and Griffiths, 1947 – A situation of
no transfer (280)
Wright v Tyne Improvement Commissioners, 1968 – Effect of contractual indemnity
(281)
The control test was an appropriate one in the days when an employer could be expected
to be superior to his employee in knowledge, skill and experience. However, in modern times
it is unreal to say that all employers of skilled labour can tell employees how to do their work.
Accordingly, the test has been modified in recent cases, the court tending to look for the
power to control in incidental or collateral matters, e.g. hours of work and place of work. The
existence of this sort of control enables the court to decide whether a person is part of the organ-
isation of another, and it might be called a ‘when and where’ test.
The control test also gives rise to difficulties in the case of the employees of companies.
Subordinate employees are controlled by superior employees and some control is obviously
present if the management is regarded as ‘the company’. However, when one considers the
position of directors and top management it is difficult to see how the company, being inan-
imate, can exercise control. In the case of ‘one-man’ companies, where the managing director
is also virtually the sole shareholder, the reality of the situation is that the servant controls
the company and not vice versa. Nevertheless, directors of companies, even ‘one-man’ com-
panies, are regarded as employees, presumably because the usual incidents of a contract of
service are present and despite the absence of genuine control.
However, as we have seen in Chapter 19, a controlling shareholder may not according to
circumstances be an employee for the purposes of employment legislation in terms, e.g., of
a claim for redundancy (see Buchan v Secretary of State for Employment (1997) 565 IRLB 2).
Although control is the ultimate test in establishing the relationship of employer
and employee, it is also necessary to deal briefly with other circumstances which may be
taken as evidence of the existence of the relationship. In Short v J W Henderson Ltd (1946) 62
TLR 427, Lord Thankerton regarded the power to select or appoint, the power to dismiss, and
the payment of wages, as relevant in establishing the existence, or otherwise, of a contract
of service.
..
EL_C20.qxd 3/26/07 10:53 AM Page 503
Cassidy v Ministry of Health, 1951 – An organisation test (282)

Ferguson v John Dawson & Partners, 1976 – A ‘when and where’ test (283)
Lee v Lee’s Air Farming Ltd, 1960 – Directors and senior employees (284)
Dual vicarious liability

The Court of Appeal has ruled that two parties can be jointly and individually liable for an
employee’s negligence where both have a degree of control over the employee concerned.
Either can be sued for the full amount of the damage but the loss can be recovered only once.
Thus in Viasystems (Tyneside) Ltd v Thermal Transfer (Northern) Ltd [2005] 4 All ER 1181 a
sub-contractor and a main contractor were held jointly and equally liable for the negligence
of the sub-contractor’s employee because his work had been supervised by both an employee
of the main contractor and an employee of the sub-contractor.
Comment If one employer is sued, he or she would be able to join the other employer in the
action and each would contribute 50 per cent to the loss.
The power to select or appoint

The absence of a power to select or appoint may prevent the relationship of employer and
employee arising. Thus, in Cassidy v Ministry of Health [1951] 2 KB 343 Denning, LJ, as he
then was, made it clear that a hospital authority is not liable for the negligence of a doctor or
surgeon who is selected and employed by the patient himself. The employer need not make
the appointment himself, and an appointee may be an employee even though the employer
delegated the power of selection to another employee, or even an independent contractor,
such as a firm of management consultants, or was required by law to accept the employee, e.g.
Ministers of State often have power to appoint members of statutory bodies who become the
employees of those bodies.
The power to dismiss

An express power of dismissal is strong evidence that the contract is one of service. Many
20
public bodies have a restricted power of dismissal in the sense that rights of appeal are often
provided for, but such rights do not prevent a contract of service from arising, nor does the
fact that these authorities cannot dismiss certain of their employees without the approval of
the Crown or a Minister.
Payment of wages or salary

A contract of service must be supported by consideration which usually consists of a promise
to pay wages, or a salary. Where the amount of remuneration or the rate of pay is not fixed in
advance, this suggests that the contract is not one of service, but is for services. The employer
usually pays his employees directly, but in Pauley v Kenaldo Ltd [1953] 1 All ER 226 at p 228,
Birkett, LJ said ‘a person may be none the less a servant by reason of the fact that his
remuneration consists solely of tips’.
An employee may be employed on terms that his remuneration is to consist wholly or
partly of commission which the employer pays directly, the commission being a method of
assessment of the amount of the remuneration.
..
EL_C20.qxd 3/26/07 10:53 AM Page 504
Salaries are paid to people who are certainly not employees, e.g. Members of Parliament,
whereas payment of wages generally indicates a contract of service. However, little, if any-
thing, turns on the distinction between wages and salaries, and we may conclude that the terms
used to describe the way in which a person is paid have little bearing on the relationship
between himself and the person who pays him.
In addition to the above indications of a contract of service, the following matters have
also been regarded as relevant in deciding difficult cases of relationship.
Delegation
In the normal contract of service the employee performs the work himself, and power to delegate
performance of the whole contract to another is some indication that there is no contract of
service. However, the fact that delegation is forbidden does not show conclusively that the
contract is one of service, for agreements with independent contractors may forbid delegation.
Exclusive service
The fact that an employer can demand the exclusive services of another is a material factor lead-
ing to the inference of a contract of service and in some cases it has been the deciding factor.
However, in the absence of an express contractual provision an employer cannot usually
require the exclusive services of his employee, and cannot complain if the employee works
for someone else in his spare time. This being so, an employee and an independent contractor
are usually both able to work for more than one person, and the exclusive service test may
not help in deciding difficult cases of relationship. However, it is true to say that the typical
employee works for one person, and the typical independent contractor works for many.
Place of work
If the services are always rendered on the employer’s premises, this is some evidence of the
existence of a contract of service, though it is not conclusive. Similarly, the fact that a person
works at his home or other premises is some evidence of a contract for services.
It may also be a material factor whether the services are rendered by a person having a
recognised trade or profession, e.g. a surveyor or a consulting engineer, which he is exercising in
a business because such persons tend to be independent contractors rather than employees
and persons not exercising a particular calling may more easily be regarded as the employees
of those who employ them.
Plant and equipment

Provision of large-scale plant and equipment by the employer is an indication of the existence
of a contract of service and a person who supplies his own large-scale plant and equipment
is often an independent contractor. However, provision of minor equipment, such as tools,
carries little weight as a test of relationship, for many employees provide their own tools.
Obligation to work
A contract of service and one for services usually impose an obligation to do the work concerned
and an obligation to work is not helpful in the matter of relationships. However, persons
such as salesmen who are paid entirely by commission, and who are not obliged to work at
all, are probably not working under a contract of service.
..
EL_C20.qxd 3/26/07 10:53 AM Page 505
Hours of work and holidays

The right to control the hours of work and the taking of holidays (subject to the general pro-
visions of the Working Time Regulations 1998) is also regarded as evidence of the existence
of a contract of service. Further, an independent contractor is usually engaged for a specific
job, whereas an employee is usually employed for an indefinite time. However, those on
fixed-term contracts will usually be regarded as employees.
Employees and independent contractors

An employee is a person whose work is at least integrated into the employer’s business organisa-
tion, whereas an independent contractor merely works for the business but is not integrated into
it. Thus, firms of builders, architects, and estate agents are usually regarded as independent
contractors, while factory and office workers are usually regarded as employees.
An employee works under a contract of service, whereas an independent contractor’s
contract is said to be one ‘for services’ under which he is to carry out a particular task or tasks.
Although he may be sued for breach of contract if he fails to carry out his contract properly,
the purchaser of his services has no other control over the manner of his work.
Rights of non-employees
Before leaving the topic of the relationship between employer and employee, it is worth noting
that certain statutory rights are given to persons who are not employees. Rights in respect of
discrimination are given to job applicants and contract workers. Job applicants also have the
right not to be refused a job because they do not belong to a union. Thus a contract worker,
such as a temporary secretary supplied by an agency to an organisation, could make a claim
for sexual harassment against that organisation. In some cases, therefore, non-employees have
the same rights as employees because the law has been widened to cover them.
Nature of vicarious liability 20

The doctrine seems at first sight unfair because it runs contrary to two major principles of
liability in tort, viz:
(a) that a person should be liable only for loss or damage caused by his own acts or omissions;
and
(b) that a person should only be liable where he was at fault.
The doctrine of vicarious liability is a convenient one in the sense that employers are,
generally speaking, wealthier than their employees and are better able to pay damages,
though the doctrine is often justified on the grounds that an employer controls his employee.
However, it should be noted that control is not in itself a ground for imposing vicarious
liability, e.g. parents are not vicariously liable for the torts of their children. It is also said that
vicarious liability is a just concept because the employer profits from the employee’s work
and should therefore bear losses caused by the employee’s torts. Again, the employer chooses
his employee and there are those who say that if he chooses a careless employee he ought to
compensate the victims of the careless employee’s torts. Further, employer and employee are
often identified in the sense that the act of the employee is regarded as the act of his
..
EL_C20.qxd 3/26/07 10:53 AM Page 506
employer and this theory that an employer and his employee are part of a group in much the
same way as other associations of persons, e.g. companies, is expressed in the often quoted
maxim qui facit per alium facit per se (he who does a thing through another does it himself).
However, in practice the employer does not really suffer loss because he commonly insures
against the possibility of vicarious liability and usually the cost of this insurance is put on to
the goods or services which he sells. This has the effect of spreading the loss over a large
section of the community in much the same way as welfare state benefits.
Course of employment
In order to establish vicarious liability, it is necessary to show that the relationship between
the defendant and the wrongdoer is that of employer and employee, and that when the
employee committed the wrong he was in the course of his employment. It is sometimes
difficult to decide whether a particular act was done during the course of employment, but
the following matters are relevant.
Acts personal to the employee

Some acts done by an employee while at work are so personal to him that they cannot be
regarded as being within the scope of employment. Thus, in Warren v Henlys Ltd [1948] 2 All
ER 935, the employer of a petrol pump attendant was held not liable for the latter’s assault on
a customer committed as a result of an argument over payment for petrol. However, where
such authority exists, e.g. in the case of door-keepers at dance halls, the employer will be
liable if the employee ejects a troublemaker but uses excessive force.
An example is provided by Vasey v Surrey Free Inns plc [1996] PIQR 373. The claimant went
to a nightclub on New Year’s Eve with his friends. He was refused entry and responded by
kicking a glass door and breaking it. He was followed to a nearby car park by the club doormen.
One of his friends offered an apology and said he would pay for the damage. The doormen
asked who had broken the door and the claimant said it was him. Shortly after he got back
into his car three of the doormen pulled him out and one hit him violently on the head with
a weapon causing him grievous bodily harm. The Court of Appeal held the employer of the
doormen to be liable. This was not just a personal attack. The doormen were intending to
teach the claimant a lesson and protect the employer’s property by deterrent means.
This area of the law is subject to continuing development and it appears that more and
more the courts will decide, as a matter of fact from the circumstances, that acts which might
have been regarded as personal to the employee will be regarded as the liability also of the
employer who is normally carrying insurance against such risks.
Lister v Hesley Hall Ltd, 2001 – employer liable for employee’s sex abuse (284a)
Improper performance of acts within scope of employment

The employer may be liable where the tort committed by the employee is not a personal or
independent act but is merely an improper way of performing an act which is within the
scope of employment.
The tortious acts for which an employer may be liable must arise out of the employee’s
employment, but the employer may be liable in such circumstances even if the act is one
which he has expressly forbidden his employee to do. The point has arisen in cases in which
employees have given lifts to third parties in the employer’s vehicle. In Twine v Bean’s Express
..
EL_C20.qxd 3/26/07 10:53 AM Page 507
Ltd [1946] 1 All ER 202, a driver employed by the defendants gave a lift to a third person who
was killed by reason of the employee’s negligent driving. Instructions that employees were
not to give lifts were displayed in the van. The court held that the employers were not liable
because in giving a lift to the third person the driver went beyond the scope of his employment.
However, if the express prohibition only affects the way in which the employee is to per-
form his work and is not regarded as affecting the scope of his employment, the employer
may be liable.
Century Insurance Co Ltd v Northern Ireland Road Transport Board, 1942 –

An improper act in course of employment (285)
Limpus v London General Omnibus Co, 1862 – A race for passengers (286)
Rose v Plenty, 1976 – Helping the milkman (287)
Emergencies
Where the employee takes emergency measures with the intention of benefiting his employer
in cases where the latter’s property appears to be in danger, the employer will tend to be
liable even though the acts of the employee are excessive. Thus in Poland v John Parr & Sons
[1927] 1 KB 236, a boy was injured by a carter who knocked the boy off the back of his cart to
protect his employer’s property from theft. It was held that the carter’s action was within his
implied authority and his employers were liable. If, however, the employee’s act is not merely
excessive but outrageous as in Warren v Henlys Ltd [1948] 2 All ER 935, the employer may not
be liable, particularly where the act is not connected with the protection of the employer’s
property generally but, as in Warren, an argument about paying for goods (but see the develop-
ments considered at p 506).
Employee mixing employer’s business with his own

The cases under this heading have arisen largely out of the use of motor vehicles, and since it
is clear that there can be no vicarious liability if the employee’s wrong is not the result of his
carrying out his contract of service, the employer will not be liable if he lends his vehicle to
his employee entirely for the employee’s own purpose. 20
However, a more difficult situation arises where the activity is basically an authorised one
but the employee deviates from it in order to execute some business of his own. The mere
fact of deviation will not prevent the employer being liable and this was made clear in the
judgment of Cockburn, CJ in Storey v Ashton (1869) LR 4 QB 476, when he said:
I am very far from saying that, if the servant when going on his master’s business took a
somewhat longer road, that, owing to his deviation he would cease to be in the employ-
ment of the master so as to divest the latter of all liability; in such cases it is a question of
degree as to how far the deviation could be considered a separate journey. Such a considera-
tion is not applicable to the present case, because here the carman started on an entirely new
and independent journey which had nothing to do with his employment.
However, if the journey is unauthorised, the employee does not render his employer liable
merely by performing some small act for his employer’s benefit during the course of it. Thus
in Rayner v Mitchell (1877) 2 CPD 257, a brewer’s vanman, without permission, took a van
from his employer’s stables for personal reasons, namely to deliver a coffin to a relative’s
house. On the way back he picked up some empty beer barrels and then was involved in an
accident injuring the claimant. It was held that the brewer was not liable.
..
EL_C20.qxd 3/26/07 10:53 AM Page 508
Britt v Galmoye, 1928 – An accident while not on the employer’s business (288)
Employee using his own property on employer’s business

The mere fact that an employee is using his own property in carrying out his employer’s busi-
ness will not prevent the employer from being liable for torts arising out of the use of the
employee’s property. The decided cases are largely concerned with methods of travel, and in
McKean v Rayner Bros Ltd (Nottingham) [1942] 2 All ER 650, an employee who was told to
deliver a message by using the firm’s lorry was held to be in the course of his employment
when he performed the task by driving his own car, contrary to his instructions. However, if
the employee’s act is unreasonable, as where an employee who is authorised to travel by car
charters an aeroplane and flies it himself, then the act will be unauthorised and the employer
will not be liable if the employee, or a third party, is injured.
Effect of contractual exceptions clauses

Cases may arise in which the employer has attempted to exempt himself from the wrongs
of his employee by means of an exemption clause in a contract with a third person who is
injured. Such clauses will be effective to exempt the employer from liability if they are prop-
erly communicated to the third person. However, they will not protect the employee against
his personal liability at common law because he has not usually given any consideration to
the third person and is not in privity of contract with him. Statute may extend the protection
of an exemption clause in the employer’s contract to his employees.
For example, the Carriage of Goods by Sea Act 1971 provides that an employee or agent of
a carrier by sea, but not an independent contractor, shall be entitled to avail himself of the
same defences and limits of liability as the carrier. As regards an independent contractor,
note New Zealand Shipping Co v A M Satterthwaite & Co (1974) (see also Chapter 15) where
stevedores, who were independent contractors, took the benefit of an exemption clause in a
contract between the carrier and the owner of the goods. However, the principle of privity
will apply in other situations, e.g. to an employee of a carrier of goods by road who would not
be protected by an exclusion clause in the contract between his employer and the owner of
the goods being carried.
Reference should now be made to the Contracts (Rights of Third Parties) Act 1999 where
the parties to the original contract may, if they wish, extend exemption rights to third parties
or the court may imply them under the Act unless, of course, the original parties expressly
exclude third-party rights (see Chapter 10).
Fraudulent and criminal acts

In early law the courts would not accept the principle of vicarious liability in fraud but gradu-
ally the concept was extended, first to cases in which the employee’s fraud was committed for
his employer’s benefit, and later even to cases where the fraud was committed by the
employee entirely for his own ends. The leading case is Lloyd v Grace, Smith & Co [1912] AC
716. The defendants were solicitors and employed a clerk in their conveyancing department.
The clerk fraudulently induced the claimant to transfer some property to him and later sold
that property at a profit for his own purposes. Nevertheless, the defendants were held liable
for the claimant’s loss. The liability, however, still depends upon the employee having actual
..
EL_C20.qxd 3/26/07 10:53 AM Page 509
or apparent authority to undertake work or carry out duties of the sort which have enabled
him to commit fraud, and obviously if the fraud is committed outside the course of employ-
ment then the employer will not be liable.
Scope of employment frauds were considered in Balfron Trustees Ltd v Peterson [2001]
IRLR 758. The High Court ruled that a firm of solicitors that was not guilty of any dishonesty
itself could be vicariously liable for the allegedly dishonest acts of a solicitor it employed.
It was alleged that the solicitor in the course of employment knowingly assisted in the
implementation of a scheme to misappropriate funds from a pension scheme existing for the
former employees of the Balfron Group Ltd. The High Court concluded that the action
against the firm in respect of the loss could not be struck out. There was an arguable case
against the firm.
The House of Lords also found an innocent firm of solicitors liable in Dubai Aluminium Ltd
v Salaam [2002] 3 WLR 1913. The proceedings arose out of a complex fraud under which
Dubai paid out $50 million under bogus consultancy agreements. Dubai claimed against the
recipients of money from the scheme and an innocent firm of solicitors. The latter were held
vicariously liable for the acts of a solicitor/partner who had allegedly dishonestly assisted in
setting up the scheme in the course of his work for the firm.
Criminal conduct on the part of an employee may be regarded as being in the course of his
employment so that the employer will be liable at civil law for any loss or damage caused to a
third person by the employee’s criminal act.
Morris v C W Martin & Sons Ltd, 1965 – Vicarious liability for civil aspects of
crime (289)
Casual delegation
If Y lends his car to X for X’s own purposes, then Y is not liable, even if in a general way X is
his employee (see Britt v Galmoye (1928)). Nevertheless, if Y has a purpose and X also has a
purpose, and X is driving a car of Y’s partly for his own and partly for Y’s purposes, then Y
would apparently be liable if X committed a tort. This is known as a case of casual delegation
of authority. In these cases of casual delegation, the courts are guided by the doctrine of the
de facto employee, and by using this doctrine they have extended the vicarious liability of 20
the employer into the area of principal and agent. In fact, the person actually committing the
wrong is often called the agent. The result is to extend the area of operation of the doctrine
of vicarious liability since it is easier to find the relationship of principal and agent than it is
to establish the relationship of employer and employee.
However, merely giving permission to use the vehicle is not enough to make the owner
liable, nor is he liable merely because he is the owner and there will, of course, be no vicari-
ous liability in the owner where he did not consent to the taking of the vehicle.
Ormrod v Crosville Motor Services Ltd, 1953 – A casual delegation (290)

Vandyke v Fender, 1970 – Employer and employee or principal and agent? (291)
Nottingham v Aldridge, 1971 – A trainee returning to work (292)
Morgans v Launchbury, 1972 – Mere permission to drive is not enough (293)
Rambarran v Gurrucharran, 1970 – Ownership alone does not produce liability (294)
Klein v Calnori, 1971 – No liability if vehicle driven without owner’s consent (295)
..
EL_C20.qxd 3/26/07 10:53 AM Page 510
Liability for torts of independent contractors

An independent contractor is by definition a person whose methods and modes of work are
not controlled by the person who employs him, and this being so it would be unfair to give
an employer general liability for the torts of such a contractor. However, there are circum-
stances in which a person may be liable for the torts of an independent contractor employed
by him and these are set out below. However, it should be borne in mind that the circum-
stances listed below are not truly examples of vicarious liability. Instead they are based on the
idea that the employer himself is in breach of a primary duty which he owes the claimant, as
where, e.g., he undertakes hazardous operations.
(a) Where the employer authorises or ratifies the torts of the contractor. If, for example,
an employer authorises, or afterwards, with knowledge, approves the conduct of an
independent contractor in tipping the employer’s industrial waste material on another’s land,
both the employer and the contractor will be liable in trespass as joint tortfeasors.
(b) Where the employer is negligent himself, as where he selects an independent con-
tractor without taking care to see, as far as he can, that he is competent to do the work required,
or gives a competent contractor imperfect instructions or information, as where, for example,
he knows that his land is liable to subsidence and fails to tell a contractor who erects something
on the land which slips and causes damage to another.
(c) Where liability for the tort is strict, so that responsibility cannot be delegated. Thus,
an employer is liable for injuries to workmen resulting from failure to fence dangerous
machinery securely. This duty is laid down by safety legislation, and it is no defence that the
employer has delegated the task of fencing to an independent contractor who has failed to do
the job properly. Moreover, liability under the rule in Rylands v Fletcher, 1868 (see Chapter 21)
cannot be avoided by employing an independent contractor. It seems also that liability is strict
where there is interference with an easement of support.
(d) Finally there is a miscellaneous group of cases in which an employer has been held
liable for the torts of an independent contractor and the principle which seems to run
through them all is that the work which the employer has instructed the independent
contractor to undertake is extra hazardous. Thus, work on or under the highway is attended
with some risk if due precautions are not taken, though work near the highway is not for that
reason alone regarded as extra hazardous. In Pickard v Smith (1861) 10 CB NS 470, the
defendant who was the tenant of a refreshment room at a railway station was held liable
when a coal merchant’s servant left the coal cellar flap open while delivering coal to the
defendant and a passenger on railway premises fell into the cellar and was injured. Again, in
Honeywill & Stein Ltd v Larkin Bros Ltd [1934] 1 KB 191, the claimants had received permission
from the theatre owner to take photographs in a theatre on which the claimants had recently
done work. A firm of photographers was employed by the claimants and in order to take indoor
photographs had, in those days, to use magnesium flares with the result that the theatre
curtains caught fire and much damage was caused. The claimants paid for the damage, and
sued the photographers for an indemnity to which the court said they were entitled. It also
emerged that the claimants would have been liable if they had been sued by the theatre
owner. Work on party walls would also appear to be an example of extra hazardous work.
Bower v Peate, 1876 – Where an independent contractor interferes with an

easement of support (296)
..
EL_C20.qxd 3/26/07 10:53 AM Page 511
Where an employer is held liable to a third person for the torts of an independent
contractor he will, in most cases, be able to claim an indemnity from the contractor. It
should also be noted that an employer is not liable for what are called the collateral wrongs of
his contractor, but only for wrongs which necessarily arise in the course of the contractor’s
employment. Thus, if A employs B, an independent contractor, to do some excavation work
on his land, A will be liable if, say, his neighbour’s greenhouse is damaged by the excavations
but A will not be liable for loss caused by B’s servants making off with the plants.
Salsbury v Woodland, 1969 – Work on or near the highway (297)
General defences
Some torts have special defences which can be raised in a particular action, but there
are certain general defences which can be raised in any action in tort if they seem to be
appropriate.
Volenti non fit injuria

(To one who is willing no harm is done.) This is alternatively called the doctrine of the
assumption of risk. There are two main aspects of this defence:
(a) deliberate harm;

(b) accidental harm.
In the first case the claimant’s assent may prevent his complaining of some deliberate
conduct of the defendant which would normally be actionable. If A takes part in a game of
rugby football, he must be presumed to accept the rough tactics which are a characteristic
and normal part of the game, and any damage caused would not give rise to an action,
although if the same tactics were employed in the street, an action could be sustained.
Similarly, although to stick a knife into a person would normally be actionable, if a surgeon
does it with the consent of the patient it is not so. 20
In this connection, cases have come before the courts in recent times in which the issue of
informed consent has been raised. For example, in Sidaway v Bethlem Royal Hospital Governors
[1984] 1 All ER 1018, the claimant gave her consent for an operation to relieve pain in her
neck. The surgeon did not tell her of the possibility of damage to the spinal cord, which was
in any case remote. However, there was such damage to the claimant’s spinal cord and she
sued the surgeon regarding her consent as nullified because not all possible risks had been
disclosed to her before she gave it. Her claim failed in the Court of Appeal. The risk of spinal
cord injury was in any case too remote to found a claim in negligence. As regards the doctor’s
duty of disclosure prior to a valid consent, Sir John Donaldson, MR said it was ‘giving or
withholding information as is reasonable in all the circumstances . . . , including the patient’s
true wishes, with a view to placing the patient in a position to make a rational choice’. This
test was satisfied here and the claimant’s consent was valid.
Failure to obtain informed consent can result in liability even if the surgical procedures are
carried out without negligence. Thus in Chester v Afshar [2004] 4 All ER 587 a neurosurgeon
carried out a successful operation on the claimant’s back. He was liable in negligence because
he failed to warn the claimant before the operation of the risk of post-operative paralysis
which was suffered by the claimant.
..
EL_C20.qxd 3/26/07 10:53 AM Page 512
It is of interest to note that in Chester the claimant did not assert that if she had known
about the post-operative paralysis she would never have had the operation but only that she
would have asked for a second or third opinion. Nevertheless, the House of Lords ruled that
it was only necessary for her to prove that she would not have proceeded with the operation
that was actually performed on her, though she might have consented to others. This case
seems to have changed the ‘what if’ concept: usually in the past claimants have asserted that
they would not have gone ahead with the operation, but now it seems that even though the
claimant says that he or she might have gone on with the operation at some stage, he or she
will succeed. The issue of causation appears to have produced an area of strict liability. Will
the ruling spread to other areas such as financial advice, as where a person says that he or she
would still have bought the investment in spite of negligent advice from an adviser? The
Chester case does raise issues of causation as well as consent.
It is worth noting that there has been a development in what might be called the ‘vegeta-
tive state’ cases. It was held by the House of Lords in Airedale National Health Service Trust v
Bland [1993] 1 All ER 821 that life-sustaining artificial feeding and antibiotic drugs may be
lawfully withheld from a patient who is in a persistent vegetative state with no hope of recov-
ery, even though it is known that this will cause the patient to die. The court will make the
necessary declaration on the application of relatives and/or the consultant but will normally
require independent medical opinion, with the Official Solicitor (see Chapter 3) representing
the interests of the patient, including the latter’s own previously-expressed wishes, if any.
A Practice Note issued by the Official Solicitor in 1994 requires at least two independent
neurological reports. However, it was held by the Court of Appeal in Frenchay Healthcare
National Health Service Trust v S (1994) The Times, 19 January, that a court would not refuse a
health authority’s urgent application for a declaration that it might stop life-saving emergency
treatment solely on the ground that it had not been possible to obtain independent medical
opinions in the pressurised timescale. The court can also give a declaration in other cases, as
in Re S [1992] CLY para 2917 where a declaration was granted allowing a Caesarean section to
be performed on a pregnant woman who had herself refused the operation on religious
grounds. The operation was vital in her interests and those of the unborn child.
Simms v Leigh Rugby Football Club, 1969 – Effect of consent in sports (298)
Implied consent
The claimant may impliedly consent to run the risk of accidental harm being inflicted upon him.
Thus one of the risks incidental to watching an ice-hockey match is that the puck may strike
and injure a spectator or, in attendance at a motor race, that cars may run off the track for vari-
ous reasons, injuring spectators. These are possible hazards unless spectators are to be so fenced
or walled in that they cannot see the sport and the maxim volenti non fit injuria would apply.
Murray v Harringay Arena, 1951 – Watching ice-hockey (299)

Hall v Brooklands Auto-Racing Club, 1933 – Watching motor sport (300)
While on the subject of implied consent, it is worth noting two cases in this area where the
claim relates to accidents arising out of ‘horseplay’ between school pupils and accidents in
the ordinary course of school activities that are beginning to show a trend away from the
growing US-style compensation culture that has arrived on the UK legal scene since the intro-
duction of conditional fee arrangements – the well known ‘no-win, no-fee’ contract.
..
EL_C20.qxd 3/26/07 10:53 AM Page 513
In Blake v Galloway [2004] 3 All ER 315, a group of 15 boys went out to play at the
lunchtime break. They began throwing bits of bark and twigs at each other. The claimant
picked up a piece of bark and threw it towards the defendant’s lower body. The defendant
threw it back in the general direction of the claimant, striking him in the eye and causing
significant injury. The claimant sued in negligence and battery.
The Court of Appeal turned down the claim. In doing so, the court laid down some prin-
ciples to apply in these cases. They are:
n The accident must not be the result of a departure from the conventions of the activity.
For example, in a snowball fight it is a convention that there are no stones in the snow-
balls. There will normally be no liability unless the conduct in question is regarded by the
court as overstepping the mark. In this case there was no deliberate aiming at the claimant’s
eye, nor were the missiles selected as being inherently dangerous.
n Where the above principles were established the court would imply consent.
An additional case in this area is Babbings v Kirklees Council (2004) The Times, 4 November,
where the Court of Appeal refused a right of Appeal to Lauren Babbings when she broke
her arm in a gym class. The Court of Appeal said that although such injuries were foresee-
able, they were in the nature of the ordinary risks of school activity and Ms Babbings’
claim failed. Brooke LJ said of the case: ‘How boring things would be if there was no risk.’
When we come to consider the duty of care in negligence in Chapter 21, we shall see how the
Compensation Act 2006 is also attacking the compensation culture which has caused prob-
lems in terms, for example, of school trips and holidays.
Notice
In addition, the claimant may be expressly put on notice that he undertakes a particular activity
at his own risk. Thus in Arthur v Anker (1995) The Times, 1 December a motorist parked his car
on private property despite having seen a warning notice. His car was clamped and a release
fee of £40 charged. He sued for damages for tortious interference with his car. It was held by
the Court of Appeal that his claim failed. By reading the sign he had impliedly consented to
the clamping of his car. He had voluntarily accepted the risk that this would happen.
However, it is essential for the defendant to show as a matter of fact that the claimant
agreed to accept the risk. This means, for one thing, that he must have had a choice and if a 20
contract, e.g. of employment, forces him to accept the risk, there is no true assent.
Burnett v British Waterways Board, 1973 – No true consent (301)
Contractual consent
If a person’s assent to harm being inflicted upon him is purely contractual, it can only operate
within the limits allowed by the law of contract; the doctrine of privity of contract applies.
Thus, if a carrier by road puts an exclusion clause in the contract with the customer exclud-
ing liability for damage to the goods, the customer could sue the driver if his negligence
caused damage to the goods. The driver could not raise the exclusion clause in his defence
because he was not a party to the contract in which it was contained. The above situation
will only apply if the parties to the original contract have not granted third-party rights to the
driver under the Contracts (Rights of Third Parties) Act 1999 or, if not, where the court does
not in the circumstances imply the grant of rights. Sometimes a non-contractual agreement
excluding liability for negligence has been upheld.
..
EL_C20.qxd 3/26/07 10:53 AM Page 514
White v Blackmore, 1972 – A non-contractual assent (302)
Defendant’s knowledge of risk

The defendant must show that the claimant knew of the risk (see White v Blackmore, 1972).
He must then go on to show that the claimant agreed to accept the risk. It does not follow
that because a person has knowledge of a potential danger he assents to it. The rule applies
equally to cases of implied volenti and to cases of express volenti (see Burnett v British Waterways
Board, 1973). This principle, i.e. that knowledge is not assent, is most often exemplified in the
employer and employee cases and in rescue cases, and has restricted the application of the
defence.
Baker v James Bros, 1921 – Knowledge is not assent: a defective motor car (303)
Dann v Hamilton, 1939 – A drunken driver (304)
Smith v Baker, 1891 – Stone which fell from a crane (305)
Inherent danger
Where the danger is inherent in the job, as in the case of a test pilot, the maxim applies; but
where the danger is not inherent, the defence will rarely succeed (see Smith v Baker, 1891). In
instances where an employee expressly assumes a risk, and is even paid extra for doing so, the
harm resulting will hardly ever be laid at the door of the employer, unless there is evidence
that the employer was negligent and created a risk which was not normally present even in a
job inherently dangerous.
Statutory duties
The doctrine of volenti non fit injuria cannot be pleaded by an employer in an action for
damages based on breach of a statutory duty, e.g., to fence machinery under safety legisla-
tion. The reason is that the object of the statute, to protect workers, cannot be defeated by a
private agreement between employer and employee.
However, where an employee is in breach of a statutory duty and the employer is not, then
if the party injured by the breach of statutory duty seeks to make the employer vicariously
liable for the tort of the employee, the employer can plead the defence if the circumstances
are appropriate.
ICI v Shatwell, 1964 – Volenti and breaches of statutory duty (306)
The rescue cases

A different situation arises in what are known as rescue cases. In these the claimant is injured
while intervening to save life or property put in danger by the defendant’s negligence. If
the intervention is a reasonable thing to do for the saving of life or property, this does not
constitute the assumption of risk, nor does the defence of contributory negligence apply, but
if it is not reasonable then the defences of volenti and contributory negligence could apply.
..
EL_C20.qxd 3/26/07 10:53 AM Page 515
A person may take greater risks in protecting or rescuing life than in the mere protection of
property, though even in protecting property reasonable risks may be taken.
Baker v Hopkins, 1959 – An attempted rescue (307)

Cutler v United Dairies, 1933 – An unnecessary intervention (308)
Hyett v Great Western Railway, 1948 – Preserving property (309)
Duty to rescuers
The duty of care owed to a rescuer is an original one and is not derived from or secondary to
any duty owed to the rescued person by another. Thus a rescuer may recover damages even
though no duty was owed to the person rescued. In addition, the person rescued may be
liable in negligence to the rescuer. In Harrison v British Railways Board [1981] 3 All ER 679,
Mr Harrison, a guard, jumped off his train as it left the platform to rescue a fellow-employee,
A, who was negligently trying to board the moving train, but had slipped and was hanging
on to a carriage door. The driver, who was unaware of the incident, was not in any way
negligent but A was held liable to Mr Harrison in negligence in regard to the injuries which
Mr Harrison sustained when he jumped off the train in order to rescue A.
In Frost v Chief Constable of South Yorkshire Police (1996) 146 NLJ Rep 1651 police officers
who suffered psychiatric illness as a result of their involvement as rescuers in the disaster at
the Hillsborough football ground were held by the Court of Appeal to be owed a duty of care
by the Chief Constable and entitled to damages. Rescuers were in a special category, it was
said. People who witnessed the incident might not recover damages because they had to meet
more stringent tests. Furthermore, the defendant could not successfully plead that the officers
were volunteers.
This decision was reversed by the House of Lords on the basis that there was no duty of
care to the police officers as rescuers for psychiatric injury because, although present, they
were not relatives and to give them damages when bereaved relatives who had not seen the
accident had been denied compensation would not fit easily or fairly with the general law on
damages for nervous shock (see later in this chapter). A report of the case is to be found
at [1998] 3 WLR 1509. The police officers were not regarded as volunteers, but the case 20
illustrates that a rescuer even though not a volunteer will not be able to recover damages if
there is in the circumstances no duty of care.
Moreover, it is important to remember that the question whether the claimant has
assented to the possibility of harm being inflicted upon him does not arise until it has been
shown that the defendant has committed a tort against the claimant. If the harm is not
tortious, the defence is irrelevant.
Finally, Parliament has in s 149(3) of the Road Traffic Act 1988 legislated to prevent exclu-
sion of liability to passengers in motor vehicles on the basis of volenti. This certainly covers
cases of express volenti where a person is given a lift in a car in which there is a notice saying
that passengers are at their own risk. Whether it covers cases of implied volenti such as Dann v
Hamilton (1939) is more doubtful. A passenger who knows that a driver is under the influence
of drink or drugs may, if he is injured, be barred from recovering damages on the grounds
of public policy since he is aiding and abetting a criminal offence. For this reason there is
doubt as to the correctness of the decision in Dann v Hamilton (1939) where the public policy
principle was not considered.
Section 149 of the 1988 Act does not prevent the driver from pleading contributory negli-
gence if this is appropriate.
..
EL_C20.qxd 3/26/07 10:53 AM Page 516
Videan v British Transport Commission, 1963 – Where no duty is owed to the

person rescued (310)
Wooldridge v Sumner, 1962 – Has the defendant committed a tort? (311)
Nettleship v Weston, 1971 – Matters of public policy (312)
Inevitable accident
The mere fact that the damage caused is accidental cannot itself be a defence if there is a duty
to avert the particular consequences, but there are occasions where the defence of inevitable
accident can be raised. Such an accident would be one which was not avoidable by any pre-
cautions a reasonable person could have been expected to take. It should be noted, however,
that most so-called accidents have a cause, and this defence is of comparatively rare
occurrence.
Stanley v Powell, 1891 – An inevitable accident (313)

National Coal Board v Evans, 1951 – Cutting a cable (314)
Act of God
This is something which occurs in the course of nature, which was beyond human foresight,
and against which human prudence could not have been expected to provide. It is something
in the course of nature so unexpected in its consequences that the damage caused must be
regarded as too remote to form a basis for legal liability. It arises always from the course of
nature and has no human causation. This distinguishes it from inevitable accident.
Nichols v Marsland, 1876 – An act of God (315)
Necessity
This defence is put forward when damage has been intentionally caused, either to prevent a
greater evil or in defence of the realm. The latter is somewhat obsolete but there are some
older cases which have allowed trespass by one person to the land of another to erect
fortifications to defend the realm against an army. Such damage is justifiable if the act was
reasonable. Thus where a whole area is threatened by fire, the destruction of property not yet
alight with a view to stopping the spread of the flames would be damage intentionally done
but reasonable in the circumstances. Furthermore, in Leigh v Gladstone (1909) 26 TLR 139 the
forcible feeding of a suffragette in prison was held justified by the necessity of preserving
her life. This decision, which has been much criticised, means that it is not an assault for
prison officials to take reasonable steps to preserve the health and life of those in custody.
The practice of force-feeding is no longer applied in the prison service.
However, duress does not appear to be a defence and in Gilbert v Stone (1647) Aleyn 35, the
defendant was held liable for trespass although he entered the claimant’s house only because
12 armed men had threatened to kill him if he did not do so.
Cresswell v Sirl, 1948 – Necessity: when dogs worry sheep (316)

Cope v Sharpe, 1912 – Necessity: a heath fire (317)
..
EL_C20.qxd 3/26/07 10:53 AM Page 517
Mistake
It is normally no defence in tort to say that the wrongful act was done by mistake. Even if the
consequences of an act were not fully appreciated, everyone is, at least in civil law, presumed
to intend the probable consequences of his acts. A mistake of law is no excuse, and this is
usually true of a mistake of fact, unless it is reasonable in the circumstances, e.g. in a case of
wrongful arrest.
However, the defence of unintentional defamation under ss 2– 4 of the Defamation Act
1996 is to some extent based on mistake (see Chapter 21).
Beckwith v Philby, 1827 – A mistaken arrest (318)
Act of state
Sometimes the state finds it necessary to protect persons from actions in tort when they have
caused damage whilst carrying out their duties. This defence cannot be raised in respect of
damage done anywhere to British subjects or where the court holds that damage has been
done to a friendly alien.
Buron v Denman, 1848 – Act of State and a slave trader (319)

Nissan v Attorney-General, 1967 – Defence not available against British subjects (320)
Johnstone v Pedlar, 1921 – Damage to a friendly alien (321)
Statutory authority
The acts of public authorities, e.g., local authority councils, are often carried out under the
provisions of a statute. This statutory authority to act may give the public authority con-
cerned a good defence if an action in tort arises as a result. However, much depends upon the
wording of the relevant statute. Statutory authority may be absolute, in which case the public
authority concerned has a duty to act. Alternatively, statutory authority may be conditional, in
which case the public authority concerned has the power to act but is not bound to do so. 20
If the authority given is absolute, the body concerned is not liable for damage resulting
from the exercise of that authority, provided it has acted reasonably and there is no alterna-
tive way of performing the act.
On the other hand, if the authority given is conditional, the body concerned may carry out
the relevant act only if there is no interference with the rights of others.
Whether statutory authority is absolute or conditional is a matter of construction of the
statute concerned, though statutory powers are usually conferred in conditional or permissive
form. The basic rules of construction in these cases appear to be as follows:
(a) Is the authorised act of such public importance as to override private interests?
(b) If it is not, statutory powers are probably conferred subject to common-law rights.
In addition, the matter of statutory compensation may be relevant. If the statute provides
for compensation for loss resulting from an authorised act, there may be no other claim even
though the maximum compensation allowed by the statute is less than the actual loss. On
the other hand, if there is no provision for compensation in the statute, there is a presump-
tion that private rights remain and that an action in respect of any infringement of these
rights may be brought.
..
EL_C20.qxd 3/26/07 10:53 AM Page 518
It should be noted that the above principles also apply where the act done is authorised by
delegated legislation.
Vaughan v Taff Vale Railway, 1860 – An absolute authority (322)

Penny v Wimbledon UDC, 1899 – A conditional authority (323)
Marriage v East Norfolk Rivers Catchment Board, 1950 – Statutory
compensation (324)
Justification or self-defence
Where a person commits a tort in defence of himself or his property, he will not be liable,
provided the act done in such defence is reasonable or proportionate to the harm threatened,
though no provocation by words can justify a blow (Lane v Holloway [1967] 3 All ER 129).
The defence extends to acts in defence of the members of one’s family and probably to acts in
defence of persons generally.
The matter of self-defence is most often raised in criminal cases and is an important part of
the criminal law (see Chapter 25).
Illegality
It would appear that an action in tort may be defeated on the ground that the claimant was
committing an illegal or immoral act when the tort occurred. Thus, in Ashton v Turner [1980]
3 All ER 870 three men committed a burglary after an evening’s drinking and sought to
escape in a car owned by one of them. The car crashed and a passenger was injured. He
claimed damages alleging negligence against the driver and the car owner. It was held by
Ewbank, J, dismissing the claim, that as a matter of public policy the law might not recognise
a duty of care owed by one participant in a crime to another for acts done in the course of
that commission, and in any case volenti non fit injuria was a defence open to the driver.
Again, in the Irish case of Hegarty v Shine (1878) 4 LR Ir 288 the claimant, an unmarried
woman, brought an action for trespass on the grounds that she had contracted venereal
disease following her relationship with the defendant over a period of some two years. Palles,
CB denied her a remedy, saying ‘the cause of an action here is a turpis causa incapable of
being made the foundation of an action. The cause of action is the very act of illicit sexual
intercourse’. It would appear, therefore, that the maxim ex turpi causa is not confined solely
to contract. (For the contractual application see Chapter 16.)
Remedies
The remedies available to a person who has suffered injury or loss by reason of the tort
of another are damages, the granting of an injunction, and in some cases an order for specific
restitution of land or chattels of which the claimant has been dispossessed.
Damages – generally
Usually the damages awarded are compensatory and the underlying principle is that of restitutio
in integrum, i.e. the damages awarded are designed to put the claimant in the position he
would have been in if he had not suffered the wrong.
..
EL_C20.qxd 3/26/07 10:53 AM Page 519
In the case of personal injury, e.g. loss of a limb, damages obviously cannot restore the
claimant to his previous position. However, damages for personal injuries may be awarded
under the following heads:
(a) pain and suffering;

(b) loss of enjoyment of life, or of amenity, as where brain damage causes permanent
unconsciousness;
(c) loss of earnings, both actual and prospective.
As regards pain and suffering, the House of Lords held in Hicks v Chief Constable of the South
Yorkshire Police [1992] 2 All ER 65, a case arising from the Hillsborough disaster, that pain and
suffering immediately prior to a rapid death was not recoverable.
As regards earnings, Oliver v Ashman [1962] 2 QB 210 decided that where a tortious act
had reduced the life expectancy of the claimant, he could recover a sum representing loss
of earnings for the reduced number of years for which he was likely to live but not for the
lost years. In Pickett v British Rail Engineering Ltd [1979] 1 All ER 774, the House of Lords
overruled Oliver and decided that earnings during the lost years should be taken into
account, less, of course, taxation (see Gourley below) and the deduction of an estimated sum
to represent the victim’s probable living expenses during those years. Thus if A, aged 30, is
injured by negligence and would have lived to 70 before but since the accident only to 50,
then earnings from ages 30 to 50 and 50 to 65 (the lost years) must now be taken into
account.
Although s 1(1)(a) of the Administration of Justice Act 1982 has abolished the claim for
damages for loss of expectation of life, it leaves unchanged the right to claim income for the
‘lost’ years.
Personal injury – the amount

There had been concern in the judiciary following the Law Commission’s Report, Damages
for Personal Injury Non-Pecuniary Loss (1999 Law Com No 257), that the sums being awarded
for pain, suffering and loss of amenity were too low and the matter was dealt with by the
Court of Appeal in Heil v Rankin [2000] PIQR Q187. The general effect of the case is that
where the court intends to award damages for pain, suffering and loss of amenity below
£10,000 there is to be no increase. However, awards above that should be increased in accord- 20
ance with a sliding scale which in the most serious cases is to be as high as an increase of
one-third.
Deductions – tax
The House of Lords decided in British Transport Commission v Gourley [1955] 3 All ER 796 that
the fact that the claimant would have paid tax on his earnings must be taken into account
so as to reduce the damages awarded in regard to earnings. The money is not paid to the
Revenue so it is a benefit either to the defendant or to his insurance company. However, the
rule has some logic on the grounds that damages are compensatory, and gross salary must be
reduced to net salary to achieve true compensation.
Reference should be made again to this case and the decision in Shove v Downs Surgical plc
[1984] 1 All ER 7 which accompanies it to revise the precise nature of the tax deduction.
Deductions – collateral benefits

The Law Reform (Personal Injuries) Act 1948, s 2 (as amended) requires deduction of the
value of certain Social Security benefits, e.g. benefits payable for sickness and/or disablement
..
EL_C20.qxd 3/26/07 10:53 AM Page 520
received by the claimant or likely to accrue to him for five years after the accident occurred,
though if the claimant did not know that he had a right to a particular form of national
insurance benefit, and had not acted unreasonably in failing to claim it, the sum which he
might have received will not be deducted from the damages awarded (Eley v Bedford [1971] 3
All ER 285).
Many cases have come before the courts on the matter of deduction of a wide variety
of collateral benefits. In general the policy is one of non-deduction and sums received
from other forms of insurance are not taken into account, nor is a disability or state
retirement pension (Parry v Cleaver [1969] 1 All ER 555 and Hewson v Downes [1969] 3 All
ER 193).
Classification of damages
It is possible to classify damages under a number of headings, and this classification applies
to both contract and tort.
Ordinary damages
These are damages assessed by the court for losses arising naturally from the breach of con-
tract, and in tort for losses which cannot be positively proved or ascertained, and depend
upon the court’s view of the nature of the claimant’s injury. For example, the court may have
to decide what to award for the loss of an eye, there being no scale of payments, and this is
so whether the action is in tort or for breach of contract.
Special damages
These are awarded in tort for losses which can be positively proved or ascertained, e.g. damage
to clothing; garage bills, where a vehicle has been damaged; doctor’s fees; and so on.
However, where it is difficult to determine the exact proportions of a claim for special
damages, e.g. loss of profit not supported by accurate figures, the court must do its best to
arrive at a fair valuation (Dixons Ltd v J L Cooper Ltd (1970) 114 SJ 319). In contract, the term
covers losses which do not arise naturally from the breach, so that they will not be recover-
able unless within the contemplation of the parties as described in Chapter 18.
Exemplary and aggravated damages

The usual object of damages both in contract and tort is to compensate the claimant for
loss which he has incurred arising from the defendant’s conduct. The object of exemplary (or
punitive) damages is to punish the defendant, and to deter him and others from similar con-
duct in the future. Thus, it was at one time thought that, if the court had arrived at a sum of
money which would sufficiently compensate the claimant, it could award a further sum, not
as compensation for the claimant, but as a punishment to the defendant, the exemplary
damages being in the nature of a fine. An award of exemplary damages had always confused
the functions of the civil and criminal law, and it would appear that since the judgment of
Lord Devlin in Rookes v Barnard [1964] 1 All ER 367, an award of exemplary damages should
only be made in certain special cases as follows:
(a) Where there is arbitrary or unconstitutional action by servants of the state, e.g. an
unreasonable false imprisonment or detention by state authorities.
An example is to be found in Kuddus v Chief Constable of Leicestershire Constabulary (2001)
The Times, 13 June, where the House of Lords ruled that exemplary damages could be
awarded to the claimant based on the defendant chief constable’s vicarious liability for the
..
EL_C20.qxd 3/26/07 10:53 AM Page 521
oppressive, arbitrary or unconstitutional action of a police constable who had forged

the claimant’s signature on a statement which withdrew a complaint about the theft from his
home of goods worth some £6,000.
( b) Where the defendant’s conduct has been calculated by him to make a profit
for himself which may well exceed the compensation payable to the claimant. Thus a
newspaper may decide that the increased sales of the paper containing a libel will more than
compensate for any damages which may have to be paid to the person libelled. In such a case
exemplary damages may be awarded to the claimant, though the intention to profit must be
proved. It is not enough that the newspaper has been sold and some profit necessarily made.
An example of the application of this head is to be seen in Cassell & Co Ltd v Broome [1972] 1
All ER 801 where the House of Lords upheld an award of £25,000 exemplary damages against
defendants who published a book containing defamatory passages where the right circum-
stances appeared to exist and a defence, if raised, would have failed.
(c) Where exemplary damages are expressly authorised by statute. It was decided by the
Court of Appeal in AB v South West Water Services [1993] 2 WLR 507 that exemplary (or
punitive) damages are not available in those cases where they had not been awarded prior to
the Rookes decision in 1964. This meant that they were not available in claims for negligence
or public nuisance (see Chapter 21).
AB v South West Water Services was overruled in Kuddus as wrongly decided. However, Lord
Scott observed obiter that exemplary damages should not be available in claims for negligence
and nuisance or where the defendant was merely vicariously liable though this did not affect
the Kuddus decision because it was justified by the Rookes case.
Exemplary or punitive damages were sometimes awarded in contract for breach of promise
of marriage, particularly where a female claimant had allowed the defendant to have sexual
intercourse with her on the promise of marriage. This action was abolished by the Law
Reform (Miscellaneous Provisions) Act 1970, s 1 and examples of exemplary damages would
seem in the main to be confined to actions in tort.
Aggravated damages, on the other hand, can be awarded (generally only in tort) where
the defendant’s conduct is such that the claimant requires more than the usual amount of
damages to compensate him for the unpleasant method in which the tort was committed
against him. However, an award of aggravated damages is still compensatory.
The state of the law may perhaps be illustrated by taking a hypothetical case. Suppose a 20
tenant T is evicted from his flat by the landlord L before T’s term has expired, and that in
order to evict T the landlord uses excessive violence. The court may decide that in an ordinary
case of trespass and assault T would be adequately compensated by an award of damages of,
say, £750. However, if the court considers that L intentionally used particularly violent and
unpleasant methods to achieve this eviction, it may increase the award by, say, £150 as the
aggravated element because, on the facts of the case, this is necessary to compensate T. It
would appear that the court cannot, since Rookes’ case, go on and make a further award to T
in order to punish and deter L.
The decision of the Court of Appeal in Khodaparast v Shad (1999) The Times, 1 December is
to the effect that aggravated damages can be awarded for malicious falsehood. The defendant
deliberately set out to injure the claimant by distributing throughout the Iranian community
material suggesting that she provided services by way of telephone sex lines. She lost her job
as a teacher in an Iranian school. She chose to claim malicious falsehood rather than libel
because legal aid is available for such claims though not for libel. She received damages in a
total award of £20,000. There is no split of the damages; the court simply makes a higher
award. The Court of Appeal affirmed that aggravated damages are compensatory and will not
be awarded unless the defendant acted deliberately. Thus, although they would seem to be
..
EL_C20.qxd 3/26/07 10:53 AM Page 522
available for many intentional torts, e.g. trespass, they would not seem to be available in
cases of negligence where there is no intentional conduct.
Nominal damages
Sometimes a small sum (say £2) is awarded where the claimant proves a breach of contract, or
the infringement of a right, but has suffered no actual loss.
Contemptuous damages
A farthing was sometimes awarded to mark the court’s disapproval of the claimant’s conduct
in bringing the action. Such damages may be awarded where the claimant has sued for
defamation of character in spite of the fact that he has engaged in defamatory activities
against the defendant. Since farthings are no longer legal tender, the decimal penny would
now be used.
Liquidated damages
These are damages agreed upon by the parties to the contract, and only a breach of contract
need be proved; no proof of loss is required. Damages in tort are not normally liquidated.
Unliquidated damages
Where no damages are fixed by the contract it is left to the court to decide their amount. In
such a case the claimant must produce evidence of the loss he has suffered, as is normal in
the case of tort.
Liquidated and unliquidated damages have already been considered in more detail (see
Chapter 18).
Structured settlements
These are considered in more detail in Chapter 18.
Remoteness of damage
The consequences of a defendant’s wrongful act or omission may be endless. Even so a
claimant who has established that the defendant’s wrong caused his loss may be unable to
recover damages because his loss is not sufficiently connected with the defendant’s wrong to
make the latter liable. In other words, the loss is too remote a consequence to be recoverable.
The decision of the Judicial Committee of the Privy Council in Overseas Tankship (UK) Ltd v
Morts Dock and Engineering Co Ltd (1961) (see below) (generally referred to as The Wagon
Mound) laid down the modern test for remoteness of damage in tort which is as follows:
(a) Regarding culpability or responsibility for the harm. The test is an objective test rather
than a subjective one, because the law substitutes for the defendant a hypothetical reasonable
man, and then proceeds to make the defendant only responsible for the damage which the
reasonable man would have foreseen as a likely consequence of his act.
(b) Regarding liability to compensate the claimant. The law now requires the defendant to
compensate the claimant only for the foreseeable result of his act. The defendant is not liable
for all the direct consequences of his act, but only for those which, as a reasonable man, he
should have foreseen. However, it appears from more recent decisions that the precise nature
of the injury suffered need not be foreseeable: it is enough if the injury was of a kind that was
foreseeable even though the form it took was unusual.
..
EL_C20.qxd 3/26/07 10:53 AM Page 523
The Wagon Mound, 1961 – The test for remoteness of damage (325)
Hughes v Lord Advocate, 1963 – Precise chain of events need not be foreseen (326)
Status of The Wagon Mound

Certain problems were raised by the decision in The Wagon Mound.
(a) Being a decision of the Judicial Committee of the Privy Council, it was not binding on
English courts but was persuasive only.
In the event the House of Lords in Hughes v Lord Advocate (1963) (see above) treated the
decision in The Wagon Mound as a correct statement of the law, subject in Hughes’ case to an
additional principle that the precise chain of circumstances need not be envisaged if the con-
sequence turns out to be within the general sphere of contemplation and not of an entirely
different kind which no one can anticipate.
(b) Before The Wagon Mound there was a well-established principle called the ‘unusual plain-
tiff [now “claimant”]’ rule. For example, if X strikes Y a puny blow which might be expected
merely to bruise him, but in fact Y has a thin skull and dies from the blow, the law has
regarded X as liable for Y’s death. The same rule has been applied where the claimant is a
haemophiliac, i.e. a person with a constitutional tendency to severe bleeding.
The courts have held that this principle is not affected by The Wagon Mound and remains as
an exception to it. However, the ‘unusual [claimant]’ rule seems to apply only to disabilities
existing before the accident and not to disabilities arising afterwards.
The test of remoteness of damage in tort as laid down in The Wagon Mound relies upon the
foreseeability of a reasonable person both in respect of culpability and liability to compens-
ate. It appears, therefore, that the law of remoteness of damage is not the same as in the law
of contract. In The Heron II (1967) (see Chapter 18) it will be recalled that the House of Lords
decided that a party to a contract is not liable for all foreseeable damage but only for that
which is ‘in contemplation’.
Finally, it is perhaps worth noting that damage which is intended is never too remote and in
this connection there is an inference that a person intends the natural consequences of his
or her acts.
20
Smith v Leech Braine & Co Ltd, 1962 – The thin skull rule survives (327)
Martindale v Duncan, 1973 – Poverty is within the unusual claimant rule (328)
Morgan v T Wallis, 1974 – There must be a prior disability (329)
Scott v Shepherd, 1773 – Intended damage never too remote (330)
Novus actus interveniens: a new act intervening

A loss may be too remote a consequence to be recoverable if the chain of causation is broken
by an extraneous act. The scope of this concept is as follows:
(a) When the act of a third person intervenes between the original act or omission and the
damage, the original act or omission is still the direct cause of the damage if the act of the
third person might have been expected in the circumstances (see Scott v Shepherd (1773)) or
did not materially cause or contribute to the injury. There is a duty to guard against a novus
actus interveniens.
..
EL_C20.qxd 3/26/07 10:53 AM Page 524
Barnett v Chelsea and Kensington Hospital Management Committee, 1968 –

An immaterial novus actus (331)
Robinson v The Post Office, 1973 – Complications from an injection (332)
Davies v Liverpool Corporation, 1949 – Duty to prevent a novus actus (333)
(b) If the act of the third person is such as would not be anticipated by a reasonable person,
the chain of causation is broken, and the third party’s act and not the initial act or omission
will be treated as the cause of the damage.
Cobb v Great Western Railway, 1894 – Where a theft broke the chain of
causation (334)
(c) The novus actus may be the act of the claimant and in these cases liability will turn on the
precise facts.
Sayers v Harlow UDC, 1958 – The new act may be that of the claimant (335)
McKew v Holland and Hannen and Cubitts, 1969 – A fall down the stairs (336)
(d ) In order to establish the liability of the intervenor, it is essential to show that he con-
sciously intended to carry out the act.
Philco Radio Corporation v Spurling, 1949 – The person who does the intervening
act must intend it (337)
Nervous shock
Damages for illness brought on by nervous shock are not necessarily too remote and may be
recoverable where the nervous shock causes physical illness and:
(a) the defendant intended the shock (see Wilkinson v Downton, 1897); or
(b) where the shock arises from negligence, the claimant was ‘foreseeable’.
Nervous shock will be foreseeable:
(a) Where the defendant’s negligent act puts the claimant in fear of his or her safety as a
primary victim;
Dulieu v White, 1901 – Nervous shock: fear for one’s own life (338)
(b) Where the defendant’s negligent act threatens or actually injures some person who has a
relationship with the claimant, such as a family relationship. The relationship of rescuer and
rescued is included. However, the fact that there is a relationship is not enough to allow a
successful claim by a secondary victim. In addition such a claimant must have:
..
EL_C20.qxd 3/26/07 10:53 AM Page 525
(i) had actual sight or hearing of the event or of its immediate aftermath; or
(ii) although not having seen it, suffered shock by a sensible imagining of it from observed
surrounding circumstances; or
(iii) seen the victim afterwards.
There also is the requirement that the defendant must owe the claimant a duty of care,
though such a duty can exist not merely in regard to personal injury but also to nervous
shock following damage to property.
Chadwick v British Railways Board, 1967 – Nervous shock: rescuer and

rescued (339)
Hinz v Berry, 1970 – Where the accident is seen (340)
Hambrook v Stokes, 1925 – Where the accident is not seen but sensibly
imagined (341)
McLoughlin v O’Brian, 1982 – Where the victim is seen (342)
Bourhill v Young, 1943 – There must be a duty of care (343)
Finally, it should be noted that damages for nervous shock may be recovered where the
claimant has witnessed some awful spectacle even though neither his own life nor that of any
third party was put in peril.
Owens v Liverpool Corporation, 1939 – When a coffin was overturned (344)
The above rules were developed because of the following problems inherent in actions for
nervous shock:
(a) the difficulty of proving the degree of suffering involved and the possibility of fraudulent
claims; thus, only where a known physical or mental condition is manifest are damages awarded;
(b) the difficulty (in terms of endless claims which no insurer would take on) which might
arise if the number of possible claims, e.g. from persons not present at the accident, was not
limited.
20
Damage after successive accidents
If a second event, e.g., injury or illness, which is not connected with the tortious accident,
comes on before the trial and makes the injury worse, damages are reduced to the extent
caused by the further injury or illness. If the second event is a tortious accident, no deduction
has traditionally been made.
This statement must now be taken in the light of the decision of the Court of Appeal in
Holtby v Brigham & Cowan (Hull) Ltd (2000) 150 NLJ 544. In that case the claimant had been a
marine fitter. During the course of that work he was exposed to asbestos dust. For some part
of that period he was employed by the defendants and for the rest of the time of his employ-
ment he was employed by another firm in a similar capacity and exposed to asbestos. He
contracted asbestosis and sued the defendants for damages representing the full period of
exposure. The court made an award of damages less 25 per cent to represent the other
employer’s liability. The case presents a procedural problem in that a claimant must now
ensure that all possible defendants are served process and brought before the court so that the
..
EL_C20.qxd 3/26/07 10:53 AM Page 526
balance of damages can be recovered in the same action. Otherwise separate proceedings will
have to be taken against others who may be liable.
In Fairchild v Glenhaven Funeral Services Ltd [2003] 1 AC 32 the House of Lords ruled that a
person who had contracted mesothelioma as a result of wrongful exposure to asbestos at dif-
ferent times by more than one negligent employer (or occupier of premises) could sue any of
them, even though the claimant could not prove which exposure caused the disease because
all the employers concerned had materially contributed to the risk of contracting the disease.
However, the ruling in Fairchild did not say how liability would be apportioned. It was
assumed by the parties that each employer would be liable for the whole damage and would
then have a claim for a contribution from the others. In other words, liability would be joint
and several and this approach was taken subsequently in practice.
However, in Barker v Corus (UK) plc [2006] 2 WLR 1027 the House of Lords decided on the
question of apportionment and ruled that damages were to be apportioned among the
employers responsible according to their degree of contribution to the chance of a person con-
tracting the disease. This was unsatisfactory because a claimant would have to trace all relev-
ant defendants as far as possible before liability could be apportioned and if any relevant
organisation had become insolvent nothing would be recovered from that organisation, the
loss falling on the claimant.
The matter is now resolved by the Compensation Act 2006, which in s 3 makes clear that
liability is joint and several. Furthermore, it is the intention of the Act that all claimants
affected by the judgment in Barker will receive full compensation and, to achieve that, the
Act will apply to Barker and other cases since then retrospectively.
Similar problems arise where the claimant suffers a minor injury but cannot work again
because the minor injury has aggravated an existing injury. Here the court may discount the
claimant’s damages. This happened in Heil v Rankin (2000) (see p 519) where a police officer,
with a pre-disposition to post-traumatic stress disorder from a previous incident, had it
revived by a later tortious act and could not work in the force again, had his damages reduced
by 50 per cent. This would suggest that while you take your victim as you find him, for fore-
sight, you do not necessarily do so for damages. Liability yes, but damages no.
Provisional damages
Under the Rules of the Supreme Court there can be an award of provisional damages.
Suppose A loses the sight of one eye in an accident caused by B’s negligence. There is a risk
that he might lose the sight of the other eye. If an award of damages is increased because of
this possibility and it does not occur, then the damages were too much. If the sight of the
other eye is affected the damages might be too small because the precise nature of the injury
was not before the court. The judge can now make an award of provisional damages on the
basis that the risk will not develop and specify a period during which a ‘further award’ can be
made if it does.
The effect of the Damages Act 1996 and the use of structured settlements was considered in
Chapter 18 to which reference should be made.
Discounting damages
In the case of personal injury involving, e.g. inability to work again, the court, in assessing
damages for future pecuniary loss, discounts the damages awarded on the basis that the lump
sum will be invested and grow and so provide income as well for the claimant. In Wells v
Wells [1998] 3 WLR 329 the Privy Council decided that the rate of growth of the fund should
be linked to the average return from government securities over the three years preceding the
award, giving a discount rate of 3 per cent. Interest rates and returns from investments have,
..
EL_C20.qxd 3/26/07 10:53 AM Page 527
of course, fallen and the Damages Act 1996 allows the Lord Chancellor to set the rate by
statutory instrument. He did this most recently in the Damages (Personal Injury) Order 2001
(SI 2001/2301). This order sets the rate at 2.5 per cent per annum. The Lord Chancellor has
announced that he does not propose ‘to tinker with the rate frequently to take account of
every transient shift in market conditions’. The courts have power, however, to adopt a differ-
ent rate (see Damages Act 1996, s 1(2)) if there are exceptional circumstances justifying this.
A reduction in the rate is, of course, not popular with defendants and their insurers.
Injunction
An injunction may be granted to prevent the commission, continuance or repetition of an
injury, and there is a form of interlocutory injunction called quia timet ( because he fears)
which may be granted, though rarely, even though the injury has not taken place but is
merely threatened. As we have seen, injunctions are discretionary remedies and cannot be
obtained as of right. Furthermore, an injunction will not be granted where damages would be
an adequate remedy. However, it is no defence to say that it will be costly to comply with the
injunction, though the court may, as in Pride of Derby and Derbyshire Angling Association Ltd v
British Celanese Ltd [1953] 1 All ER 179, where expensive alterations to sewage plant were
required to prevent the pollution of a river, grant an injunction and suspend its operation for
such time as may seem necessary to enable the defendant to comply with the order.
Other remedies
The court may order specific restitution of land or goods where the claimant has been deprived
of possession and a claimant may be given an order for an account of profits received as a
result of a wrongful act. Thus where a company or other business organisation carries on
business under a name calculated to deceive the public by confusion with the name of an
existing concern, it commits the tort of passing off and can be restrained by injunction from
doing so. In addition, the existing concern may be given an order for an account of profits
received by the offending concern as a result of the deception.
Jobling v Associated Dairies, 1980 – Where there is a subsequent non-tortious

act (345) 20
Baker v Willoughby, 1969 – Where there is a subsequent tortious act (346)
Performance Cars Ltd v Abraham, 1961 – Where a second accident occurred before
the damage from the first was repaired (347)
Cessation of liability
Liability in tort may be terminated by death, and also by judgment, waiver, accord and satisfac-
tion and lapse of time.
Judgment
Successive actions cannot be brought by the same person on the same facts and if a com-
petent court gives a final judgment in respect of a right of action that right of action is merged
into the judgment. Thus in Fitter v Veal (1701) 12 Mod Rep 542, the claimant sued the defendant
for assault and battery and obtained a judgment for £11. After some years he discovered his
..
EL_C20.qxd 3/26/07 10:53 AM Page 528
injuries were worse than he had thought and he had to have part of his skull removed. It was
held that he could not sue for further damages. This problem is now overcome in appropriate
cases by an award of provisional damages. Here there is only one award which can be
increased if further loss arises; the increase is part of the original award and not a second award.
There are certain exceptional cases, for example where two separate rights have been
infringed. Thus in Brunsden v Humphrey (1884) 14 QBD 141, the Court of Appeal held that a
cab driver who had brought a successful action for damage to his cab caused by the defendant’s
negligence was able to bring a further action for personal injuries. One action was for damage
to property, the other for injury to the person.
Waiver
A person may waive a tort when he forgoes his right to bring an action upon the wrongful
act. If, for example, S, a second-hand car dealer, buys a car from T, a thief, and sells it to B,
then S will convert the vehicle. If the true owner agrees to settle the matter with S by accept-
ing from S the sale price of the car which S received from B, then the true owner cannot sue S
in the tort of conversion because he has waived his right.
Accord and satisfaction

A person may surrender a right of action in tort by deed or an agreement for consideration.
Lapse of time
In actions for damages for negligence, nuisance or breach of duty, e.g. the statutory duty of
an employer to fence a dangerous machine, where damages consist of, or include, damages
for personal injury, the limitation period is three years (Limitation Act 1980, s 11(1)). Under
s 2 of the 1980 Act the period in all other actions in tort is six years. However, actions in
respect of registered postal packets under s 91(3) of the Postal Services Act 2000 must be
brought within 12 months.
The period of limitation generally begins from the date when the tort was committed, e.g.
the date of a trespass to land. However, at one time an action in negligence arose only when
the harm was suffered but not, apparently, when it was detected. Thus in Pirelli General Cable
Works Ltd v Oscar Faber & Partners Ltd [1983] 1 All ER 65 the defendants designed a chimney
for the claimant. It was in the event a negligent design. Cracks were discovered by the
claimants in 1977 but evidence showed that they had appeared in 1970. When the claimants
sued in 1978 for negligence the House of Lords held that their claim was statute-barred.
The Latent Damage Act 1986 (which inserted provisions into the Limitation Act 1980)
now applies and the limitation period is either six years from the date on which the cause of
action accrued or three years from the earliest date upon which the claimant had sufficient
knowledge to sue. The Act imposes a ‘long-stop’ period of 15 years from the negligent act or
omission or the occurrence of the damage whether or not the damage was discovered or even
discoverable by then. No action can be brought after this time.
‘Knowledge’ for the above purposes is:
n knowledge of such facts relating to the damage as to cause a reasonable person to consider
it sufficiently serious to justify bringing a claim; and
n knowledge that the damage was attributable in whole or in part to the act or omission
which it is alleged constitutes negligence.
Knowledge that the act or omission was negligent as a matter of law is not relevant.
..
EL_C20.qxd 3/26/07 10:53 AM Page 529
The claimant bears the burden of proving that he or she did not have the requisite know-
ledge during the primary period of six years and that, as regards the second three-year period,
he or she first had knowledge no more than three years before he or she issued proceedings.
An example of the use of what is now s 14A of the Limitation Act 1980 is the ruling of the
House of Lords in Haward v Fawcetts (a firm) [2006] l WLR 682. The defendants, a firm of
chartered accountants, were retained by Mr Haward and relying on their advice he purchased
a controlling interest in a company in 1994. The company did not succeed and further
investments by Mr Haward in mid-1995, 1996, 1997 and 1998 failed to improve things. The
allegation by Mr Haward was that the company had been insolvent. Mr Haward asked a spe-
cialist in corporate rescue to look into the ever-mounting losses and a claim for damages for
professional negligence against Fawcetts was commenced on 6 December 2001. The claims
for loss in regard to the 1996, 1997 and 1998 investments could proceed but under the prim-
ary period of six years, claims in respect of the 1994 and 1995 investments could not.
However, Mr Haward relied on s 14A, saying that he had not acquired the requisite know-
ledge until December 1998, i.e. within three years of the start of his action.
The House of Lords ruled that he did have the requisite knowledge. The performance of the
company had missed the original financial predictions by such a massive margin that Mr
Haward must have known before December 1998 that something had gone wrong when
those predictions were made in the first place and this was the ‘essence’ of his case, i.e.
alleged negligent predictions. He knew he had made a bad investment. The key criterion, said
their Lordships, is when a claiment first knows that in essence he has a case. The ruling on
knowledge as being merely the essence of a case will make it harder for claimants to invoke
extensions of time.
The above rules were also rather harsh in personal injury cases where, for example, the
claimant did not know that he had a claim or the extent of that claim, as where he had con-
tracted a dust disease and was not aware of its onset. Furthermore, if X had been run down by
Y’s negligent driving, and unknown to X the injuries inflicted on him at the time of the accid-
ent caused him to go blind, say, four years after the accident, then X’s cause of action in
respect of his blindness was barred before he knew it existed, since it was formerly held that
once damage had occurred the cause of action accrued and that time began to run against the
claimant even though he was unaware or mistaken as to the consequences of the damage.
The matter is now covered by the Limitation Act 1980. The Act applies only to claims for
personal injury arising out of negligence, breach of contract, breach of statutory duty, or 20
damage caused by intentional trespass to the person, as where, e.g., psychological damage fol-
lows sexual abuse. A claim form for damages can be served within three years of the claimant
becoming aware that the damage was caused by the abuse, which may well be more than
three years after the abuse took place (see Stubbings v Webb [1991] 3 All ER 949). The basic
limitation period of three years is retained but time runs from the date of accrual of the cause
of action or the ‘date of the claimant’s knowledge if later’. The ‘date of the claimant’s know-
ledge’ is the date on which the claimant first had knowledge that his injury was significant
and that it was attributable in whole or in part to the act or omission which constitutes the
alleged negligence, or breach of duty.
The action may be brought by dependants or on behalf of the estate of a deceased person.
Thus actions may be brought within three years of the date of death or of the date on which
the personal representatives or dependants, as the case may be, acquired a knowledge of the
relevant facts.
If the tort is of a continuing nature, as in the case of nuisance or possibly trespass, an inde-
pendent cause of action arises on each day during which the tort is committed, and the
aggrieved party can recover for such proportion of the injury as lies within the limitation
period, even though the wrong was first committed outside the period.
..
EL_C20.qxd 3/26/07 10:53 AM Page 530
When time does not run

Where the claimant is a minor or person suffering from mental disorder, the period of limita-
tion does not run against him until his disability ends, i.e. on becoming 18 or on becoming
sane or on death. But once time has started to run, any subsequent disability will not stop it
running.
However, a minor was only regarded as being under a disability if he was not in the custody
of a parent when the cause of action accrued. If he was in the custody of a parent the parent
was expected to commence an action within the limitation period and if they did not the
minor’s action would be statute-barred. The Act of 1980, s 8, abolishes that rule so that periods
of limitation do not run against a minor whether he is in the custody of a parent or not.
Contingencies
The House of Lords has ruled that the possibility of having to pay money in the future, i.e. a
contingent liability, is not enough to start a period of limitation running. In Law Society v
Sephton & Co (a firm) [2006] 3 All ER 401 the House of Lords dismissed an appeal by Sephton,
an accountancy practice, which contended that damage to the Law Society which had to pay
some £1.2 million from its compensation fund to clients of a Solihull solicitor, Andrew
Payne, occurred more than six years before the Law Society issued its claim form on Sephton
so that the Society’s claim was statute-barred.
Over the period 1988–95, Andrew Payne misappropriated around £750,000 from his client
account. He was later struck off and imprisoned. During that period the Law Society had
relied on reports by Sephton that the books and accounts of Payne & Co had been examined
and that they complied with the Solicitors’ Accounts Rules. Lord Hoffmann said that the
partner in Sephton was negligent in signing the relevant reports, since he could not have
made a proper examination without discovering the misappropriations.
Sephton contended that the damage to the Law Society occurred when it supplied its
reports for the years ending 31 October 1988 to 1995 and since the Law Society did not serve
its claim form until 16 May 2002 the claim was statute-barred. The claim should not there-
fore proceed, having been brought more than six years after the damage (Limitation Act
1980, s 2).
The House of Lords did not agree. During the period 1988–95 the liability of the Law
Society was only contingent in the sense that a client might make a claim on the compensa-
tion fund. In fact, the first claim by a client of Payne & Co was not made until July 1996,
with payment being made in October 1996. Thus the Society’s claim was made before the
limitation period had expired. Sephton’s appeal was dismissed.
Special periods of limitation

The periods of limitation in respect of actions against the estate of a deceased tortfeasor have
already been considered. However, it should be noted that the Limitation Act 1980 does
not operate to extend the time within which an action must be brought against a deceased
tortfeasor’s estate. So far as the death of an injured party is concerned, the ordinary six-year
or three-year periods apply. They run from the accrual of the cause of action as if no death
had occurred. As we have seen, personal representatives or dependants may ask for an exten-
sion of time under the provisions of the Limitation Act 1980.
Other special periods of limitation are as follows:
(a) actions arising out of collisions at sea: two years, subject to extension by the court
(Maritime Conventions Act 1911, s 8);
..
EL_C20.qxd 3/26/07 10:53 AM Page 531
(b) proceedings against air-carriers: two years (Carriage by Air Act 1961, s 1(1));
(c) a joint tortfeasor who wishes to recover a contribution must bring the action within two
years from the date on which he admitted liability or judgment was entered against him
(Limitation Act 1980, s 8);
(d ) actions in respect of damage arising from nuclear incidents: 30 years (Nuclear Installa-
tions Act 1965, s 15).
Public authorities and their officers have no special position and actions against them are
governed by the same rules as any other action in tort.
It should also be noted that by s 32 of the Limitation Act 1980, the defendant’s fraud or
negligent concealment may prevent his pleading that the claim is statute-barred.
Beaman v ARTS, 1949 – Limitation of actions: fraudulent concealment of

claim (348)
Reform
The current law on limitation periods is set for radical change following a government
announcement in July 2002 that it accepts in principle the Law Commission’s proposals for
reform of the law on the limitation of actions for civil claims. The government will introduce
legislation when the opportunity arises.
In broad terms a claim would have to be brought within a period of three years from
knowledge of the cause of action with a long stop period of 10 years from the accrual of the
cause of action after which a claim could not be brought even if a claimant only discovered
its existence after that time. The court will have discretion to disapply the three-year period in
personal injury claims and no long stop period would apply. The new regime would apply to
most tort claims and contract claims and claims for breach of trust. Claims in relation to land
would be subject to a limitation period equivalent to the long stop period. Claims on a statute
would in general be covered by the primary three-year period and the 10-year long stop period.
At the time of writing there has been no legislation on these reforms.
Assignment 20
It is against the rules of public policy to allow the assignment of rights of action in tort, since
actions for damages should not become a marketable commodity. However, rights may pass
to others by operation of law in the following circumstances:
(a) Death. Rights and liabilities in tort survive for the benefit or otherwise of the estate,
except actions for defamation unless damage to the deceased’s estate has resulted.
(b) Bankruptcy. Rights of action in tort possessed by a debtor which relate to his property and
which if brought will increase his assets will pass to his trustee in bankruptcy. Actions for
personal torts, e.g. defamation, remain with the bankrupt.
(c) Subrogation. An insurance company which compensates an insured person under a

policy of insurance can step into his shoes and sue in respect of the injury.
..
EL_C21.qxd 3/26/07 10:54 AM Page 532
21
SPECIFIC TORTS
We shall next examine certain specific torts, beginning with those affecting the person.
Torts affecting the person

Trespass to the person
This has several aspects.
Assault
An assault is an attempt or offer to apply unlawful force to the person of another. There
must be an apparent present ability to carry out the threat, the basis of the wrong being that
a person is put in present fear of violence. On general principles, pointing even an unloaded
weapon or a model gun at another, who does not know that it is unloaded or a model, would
amount to an assault.
It is often said that mere words cannot constitute an assault but this is a doubtful proposi-
tion. In Ansell v Thomas [1974] Crim LR 31 the assault seems to have consisted in words
threatening forcible ejectment of a director from the company’s premises if he did not leave
voluntarily. A threat to use force at some time in the future is not an assault, but it seems that
it is enough if the threat is to use force if the person addressed does not immediately do some
act. In Read v Coker (1853) 138 ER 1437, it was held that an assault was committed where the
defendants threatened to break the claimant’s neck if he did not leave the premises. Words,
however, may prevent an assault coming into being.
As regards the unauthorised taking of a photograph the position is somewhat complicated.
It may be that where a flash is used the simple taking of the photograph without more is
unlawful, since it is probably a battery (see below) to project light on to another person in
such a manner as to cause personal discomfort. Where no flash is used, it is hard to see how,
by itself, the taking of a photograph can amount to a battery, an assault or any other trespass.
Turbervell v Savage, 1669 – Words may prevent an assault (349)
Battery
Intentionally to bring any material object into contact with the person of another is enough
application of force to give rise to a battery. Thus to throw water on a person (Pursell v Horn
..
EL_C21.qxd 3/26/07 10:54 AM Page 533
SPECIFIC TORTS 533
(1838) 8 A & E 602), or to apply a ‘tone-rinse’ to the scalp of a customer which was not
ordered and caused damage, i.e. a skin rash, is enough (Nash v Sheen (1953) The Times, 13
March). Substantial damages will be awarded when the battery is an affront to personal
dignity, e.g. the wrongful taking of a fingerprint. It should, however, be noted that a person
who has been detained and charged with or told he will be charged with a recordable offence,
e.g. an offence punishable by imprisonment, can have his fingerprints taken without consent
(s 61, Police and Criminal Evidence Act 1984 (referred to hereunder as PACE)). Persons who
are convicted of a recordable offence but fined rather than imprisoned can be required to
attend at a police station for prints to be taken. Failure to do so allows arrest without warrant
(PACE, s 27). The mere jostling which occurs in a crowd does not constitute battery, because
there is presumed consent and in any case there is normally no hostility which is also a
requirement. Thus in Wilson v Pringle [1986] 2 All ER 440, one schoolboy had intentionally
pulled a schoolbag off another boy’s shoulder. However, this was only a form of horseplay
and in the absence of a hostile intention there was no battery. It should be noted that there
may be a battery without an assault, as where a person is attacked from behind.
There may be exeptional cases where there is a battery even though there is no physical
contact with the victim. Thus, in Haystead v DPP (2000) The Times, 2 June a man hit a woman
causing her to drop the child she was holding. The court ruled that in the circumstances
there was a battery to both the woman and the child.
As regards strip searching of prison visitors, e.g. for drugs the case of Secretary of State for the
Home Department v Wainwright [2002] QB 1334 is instructive. The Court of Appeal decided
that the trial judge was wrong to award basic and aggravated damages to a mother and son
who were strip searched without their consent while on a prison visit. The Court of Appeal
made clear that an intention to do harm or recklessness as to the same must be present and
here the prison officers did not intend harm nor were they reckless. This ruled out the com-
mon law rule of trespass and any privacy rights under the Human Rights Act 1998 though
the events took place in 1997. As regards intention and recklessness, the Court of Appeal
found it necessary to distinguish Wilkinson v Downton (1897) Case 268.
This ruling was affirmed by the House of Lords (see Secretary of State for the Home Department
v Wainwright [2003] 3 WLR 1137).
Was there consent?

In considering the defence of volenti there has already been some treatment of informed con-
sent in an action for alleged negligence in medical cases (see Sidaway v Bethlem Royal Hospital
Governors [1984] 1 All ER 1018 and the cases appearing with it in Chapter 20). A similar issue 21
was raised in Freeman v Home Office [1984] 1 All ER 1036. The claimant was serving a sentence
of life imprisonment. He was given drugs by a medical officer employed by the Home Office.
He claimed that the drugs were given to discipline and control him and not, as he thought,
as medical treatment. He claimed that the medical officer had committed battery upon him
and that his consent was negatived because it was not informed. The Court of Appeal decided
that since the doctrine of informed consent formed no part of English law, the sole issue was
whether on the facts the claimant had consented to the administration of the drugs and on
that issue the trial judge had found that the claimant had so consented. His claim therefore
failed.
In Re MB (Caesarian Section) (1997) 147 NLJ 600 the Court of Appeal held that a woman
with full capacity could consent to or refuse treatment even though refusal might result in
harm to her or her baby. However, doctors were entitled to administer an anaesthetic to carry
out birth by caesarian section where it was in the best interest of the woman and her child
given that she had a temporary lack of capacity because of panic brought on by fear of injection
by needle.
..
EL_C21.qxd 3/26/07 10:54 AM Page 534
Those who suffer passively from the smoking of others are able to claim damages for battery.
Since spitting at someone is a battery there seems no reason why blowing out poisonous
smoke in the vicinity of other people should not also be. Thus in Bland v Stockport
Metropolitan Borough Council [1993] CLY 1506 a woman who had been exposed to passive
smoking for 11 years at her work received £15,000 damages for injury to her health including
in particular bronchitis and sinusitis. The Smoke-free (General Provisions) Regulations 2006
will go some way to dealing with the problem but on the basis of criminal law. In addition, a
claim for damages for mental illness allegedly caused by sexual abuse has been brought
against an alleged abuser and has been allowed to proceed (Stubbings v Webb [1991] 3 All ER
949). Limitation of actions problems did exist in the case and the House of Lords eventually
ruled that the claim was time-barred. But for this it seemed that the substance of the claim
was acceptable (see Stubbings v Webb [1993] 2 WLR 120).
In general there will be some active conduct constituting the assault. However, the courts
have accepted that a battery can arise from an omission.
Fagan v Metropolitan Police Commissioner, 1968 – A battery from an

omission (350)
Defences
There are certain defences to an action brought for assault or for battery:
(a) Self-defence. This is not merely the defence of oneself but also of those whom one has a
legal or moral obligation to protect. It also applies to the protection of property, but no more
than reasonable force must be used.
(b) Parental or similar authority. As regards parents and those in loco parentis, e.g. a step-
father, s 1(7) of the Children and Young Persons Act 1933 provided a defence to the reason-
able chastisement of a child on a charge of assault. This provision was removed by s 58 of the
Children Act 2004. In addition, however, s 58(3) of the 2004 Act states that battery of a child
causing actual bodily harm to the child cannot be justified in any civil proceedings on the
ground that it constitutes reasonable punishment. This leaves problems as to what is ‘actual
bodily harm’. It is in fact a government compromise between retaining the defence and
outlawing smacking. On the issue of the punishment of children in the home, the European
Court ruled in A v UK [1998] CLY 3065 that UK law failed to protect a boy who had suffered
repeated and severe beatings with a cane by his stepfather as contrary to Art 3 of the Human
Rights Convention.
As regards schools, corporal punishment is outlawed in all schools under s 131 of the School
Standards and Framework Act 1998 (see Williamson v Secretary of State for Education and
Employment [2002] 1 FLR 493). In that case it was held that even religious belief in corporal
punishment did not justify corporal punishment even where supported by a religious text and
parental consent. The ruling was later affirmed by the House of Lords (see R (on the application
of Williamson) v Secretary of State for Education and Employment [2005] 2 AC 246).
(c) Volenti non fit injuria. As in the case of the players in a rugby match (see Simms v Leigh
RFC (1969)).
(d) Judicial authority. This includes the right to inflict proper punishment and to make
lawful arrests.
(e) Necessity. This is not favoured as a defence but may be allowed if the defendant can
prove that he committed the battery in order to prevent the happening of a greater harm.
Thus in Leigh v Gladstone (1909) 26 TLR 139, the forcible feeding of a suffragette in prison was
held justified by the necessity of preserving her life.
..
EL_C21.qxd 3/26/07 10:54 AM Page 535
SPECIFIC TORTS 535
Although the forced feeding of prisoners is not in general practised in our penal institu-
tions, the case of Secretary of State for the Home Department v Robb [1995] Fam 127 is of inter-
est. The High Court held in that case that prison officials and medical attendants could
lawfully abstain from providing food or drink to a prisoner who did not want it but only as
long as he retained the capacity to refuse nutrition or hydration. After that presumably forced
feeding could take place. Furthermore, in B v Croydon Health Authority [1995] Fam 133 the
Court of Appeal held that where a patient was detained under the Mental Health Act 1983,
feeding by tube without consent was lawful since it was treatment for the patient’s disorder.
The patient in this case was given to inflicting harm upon herself and her refusal to eat was
another means of inflicting harm.
(f ) Prosecution in a magistrates’ court. Assault and battery is a crime as well as a civil

wrong. If the wrongdoer is prosecuted, and summary proceedings are taken by the victim and
not the Crown and the accused is convicted and punished, or the case is dismissed and the
magistrates award a certificate of dismissal, no further action or civil proceedings may be
taken in respect of the particular wrong (Offences against the Person Act 1861, ss 44–45).
It is now clear that trespass to the person is not actionable in itself; the claimant must
prove intention or negligence, though he need not prove damage. It is also settled that where
the interference is unintentional the claimant’s only cause of action lies in negligence.
Fowler v Lanning, 1959 – Trespass requires intention or negligence (351)
False imprisonment
This is the infliction of unauthorised bodily restraint without lawful justification. It is not
necessarily a matter of bars and bolts, but any form of unlawful restraint might turn out to be
false imprisonment. The imprisonment must be total, and if certain ways of exit are barred to
a prisoner, but he is free to go off in another way, then there is no false imprisonment. If a
person is on premises and is not given facilities to leave, this does constitute false imprison-
ment unless the refusal is merely the insistence on a reasonable condition. It is not even
essential that the claimant should be aware of the fact of his imprisonment, provided it is a
fact. Volenti non fit injuria is a defence to false imprisonment, as where a prison visitor agrees
to be locked in a cell with the prisoner.
It should be noted that a defendant will not be liable for false imprisonment where he
merely gives information to the prosecution which affects the claimant’s arrest and detention. 21
Thus a store detective who incorrectly informed police officers that the claimant had been
shoplifting was not liable for false imprisonment where the police had at their discretion
arrested and detained the claimant (see Davidson v Chief Constable of the North Wales Police
and Another [1994] 2 All ER 597).
A further example is provided by R v Governor of Brockhill Prison ex parte Evans (No 2) [2000]
3 WLR 843 where the claimant was detained in prison for 59 days longer than she should
have been following an error in the calculation of her sentence in terms of days spent in
custody before sentence. The governor was held liable even though he had acted in good
faith. The tort of false imprisonment is one of strict liability said the court.
Bird v Jones, 1845 – Imprisonment must be total (352)

Herd v Weardale Steel, Coal and Coke Co Ltd, 1915 – Where refusal to allow a
person to leave is reasonable (353)
Meering v Grahame White Aviation Co Ltd, 1919 – Knowledge of imprisonment is not
required (354)
..
EL_C21.qxd 3/26/07 10:54 AM Page 536
Arrest and the tort of trespass to the person

An arrest or other restraint of a person, as by stopping and searching him, will be unlawful
and actionable as a trespass in civil law unless the following requirements are met.
Powers of arrest: the Serious Organised Crime and Police Act 2005
Any person may arrest without a warrant:
n anyone who is in the act of committing an indictable offence; or
n anyone whom he or she has reasonable grounds for suspecting to be committing such an
offence;
n where an indictable offence has been committed a person other than a constable may
arrest without warrant:
– anyone who is guilty of the offence;
– anyone whom he or she has reasonable grounds for suspecting to be guilty of it.
It is required in all of the above cases that the citizen has reasonable grounds to believe that it
is necessary to make the arrest and the police are not available. The above material is in s 24A
of PACE, having been inserted by the Serious Organised Crime and Police Act 2005.
In the above context, indictable offence includes each way offences.
The position regarding citizens arrest as it is called has always been unsatisfactory and still
is because a citizen is unlikely to know what an indictable offence or each way offence is
much less to identify them.
The police have a power to arrest for any offence subject only to a necessity requirement.
This is to the effect that an arresting officer should believe, on reasonable grounds, that an
arrest was necessary. The burden of proving this rests with the arresting officer.
The new powers significantly extend the police powers of arrest. The accompanying PACE
Code which is useful to defence lawyers states that the power must be fully justified and
officers exercising it should consider if the necessary objectives can be met by other and less
intrusive means. It states: ‘Arrest must never be used simply because it can be used.’
Section 28 of PACE requires that the person arrested should be told at the time of the arrest
or as soon as practicable thereafter that he is under arrest and the grounds therefor, even if
it is obvious, as where a thief is apprehended in the act of theft. However, an arrest made
without these formalities is not unlawful if the arresting officer cannot comply with them
because of the condition or behaviour of the person arrested, as where there is a struggle with
police and it is impossible to inform him (see DPP v Hawkins [1988] 3 All ER 673).
Since arrest is a continuing act, an arrest which is made without reasons becomes lawful if
reasons are given later, e.g. at the police station as in Lewis v Chief Constable of the South
Wales Constabulary [1991] 1 All ER 206.
Christie v Leachinsky, 1947 – An unlawful arrest (355)

Wheatley v Lodge, 1971 – When arrest is lawful (356)
Under s 32 of PACE a person arrested may be searched for a weapon or evidence relating to
the alleged offence. The power of search extends to any premises on which the arrest took place.
Powers to stop and search

In addition, s 1 of PACE gives the police power to stop and search persons. The Act gives
the police the power to search any person or vehicle found in a public place for stolen or
..
EL_C21.qxd 3/26/07 10:54 AM Page 537
SPECIFIC TORTS 537
prohibited articles, e.g. a gun (and more recently fireworks) and to detain a person or vehicle
for the purpose of such search. A person can be ordered to stop for the purpose of such a
search and any stolen or prohibited article found in the course of the search may be seized.
The statutory powers of stop and search are supported by a code of practice, a revised version
of which took effect from 1 January 2006. Its provisions in terms of its details are unlikely to
be the subject of an examination question and so are not considered further.
The matters of cautioning on arrest and procedure to be followed before the person arrested
reaches court have already been considered (see Chapter 4).
Remedies available against false imprisonment
The remedies available against false imprisonment are self-help, i.e. breaking away, the writ
of habeas corpus and an action for damages. This prerogative writ of habeas corpus is designed
to provide a person, who is kept in confinement without legal justification, with a means of
obtaining his release. If he can show a prima facie case that he might be unlawfully detained,
he (or often a friend or relative) will apply to the Queen’s Bench Division, though application
may be made to any judge of the High Court during vacation times. The person detained
applies, through counsel, for the writ to be issued, the facts alleging unlawful detention being
set out on an affidavit supporting the application. If the writ is issued, the effect is to cause
the alleged captor to ‘bring the body’ of the prisoner before the court which will then decide
on the merits of the case whether there are any legal grounds for detention of the prisoner. If
not, he is set free by the court. The civil procedure reforms introducing tracking arrange-
ments have no relevance to these applications.
A person detained may also be able to make an application for release or damages (if
released) as a result of the incorporation into UK law of the European Convention on Human
Rights. Article 5(4) states: ‘Everyone who is deprived of his liberty by arrest or detention shall
be entitled to take proceedings by which the lawfulness of his detention shall be decided
speedily by a court and his release ordered if the detention is not lawful’.
Torts affecting property

21
Trespass to land
Trespass to land is interference with the possession of land. It is not enough that the claimant
is the owner; he must also have possession. So where land is leased for a term of years, the
lessee is the person entitled to sue in trespass, though the lessor may bring an action if the
damage is such as to affect his reversion when the lease ends. However, when a person signs a
contract for the purchase of land, he becomes entitled to possession of it, and if a trespass
takes place before he actually takes possession, then he can sue in respect of that trespass
when he does. His right to sue relates back to the date on which he became entitled to the
land under the contract.
In Manchester Airport plc v Dutton [1999] 3 WLR 524 the Court of Appeal appears to have
rewritten the common law when it ruled that a mere licensee who was not in occupation was
entitled to a possession order against a trespasser. There was no need, said the court, for the
claimant to have a freehold or lease. It appeared that the claimant wanted another runway
and that this involved felling or lopping trees in a wood owned by the National Trust. The
Trust gave the airport a contractual licence to enter into the wood for that purpose. The
..
EL_C21.qxd 3/26/07 10:54 AM Page 538
defendants set up camps and tree houses to prevent this and the airport authority obtained a
possession order against them. The House of Lords refused an appeal.
Interference with the possession of land may take many forms but it must be direct. For
example, an unauthorised entry on land is a trespass. It is trespass to place things on land,
e.g. leaving a dead cat in a neighbour’s garden. To remain on land after one’s authority is
terminated constitutes a trespass. So, if a friend invites you into his house for a meal, tires
of your company and asks you to leave, then if you refuse you are a trespasser. If you abuse
the purpose for which you are allowed to be on land, you become a trespasser. In Hickman
v Maisey [1900] 1 QB 752, where the highway was used for making notes of the form of
racehorses being tried out on adjoining land, this constituted a trespass, since the proper use
of a highway is for passing and re-passing.
While trespass usually takes place above the surface, it may be underneath by means of
tunnelling or mining. With regard to trespass in the airspace above land, the position is
doubtful, since there is no good authority. It is probably only a trespass if it is either within
the area of ordinary user, or if it involves danger or inconvenience.
Section 76 of the Civil Aviation Act 1982 provides that, subject to the exception of aircraft
belonging to, or exclusively employed in the service of Her Majesty, no action lies in respect
of trespass or nuisance by reason only of the flight of an aircraft over any property at a height
above the ground, which having regard to weather and the other circumstances of the case
is reasonable.
Southport Corporation v Esso Petroleum Co, 1954 – Trespass to land must be

direct (357)
Kelson v Imperial Tobacco Co, 1957 – A sign trespasses into airspace (358)
Woollerton and Wilson v Richard Costain (Midlands) Ltd, 1969 – Crane invades
airspace (359)
Bernstein v Skyviews & General, 1977 – An aerial photograph (360)
Subject to the same exception in regard to aircraft in the service of Her Majesty, the owner
of an aircraft is liable for all material loss or damage to persons or property caused by that air-
craft, whether in flight, taking off, or landing, or by a person in it, or articles falling from it,
without proof of negligence or intention, or other cause of action.
Trespass to land or goods will not be unlawful and actionable at civil law if it is by the police
who follow the provisions laid down in PACE. Broadly speaking, s 17(1) of the Act gives the
police power to enter premises without a warrant in certain circumstances, e.g. to make an
arrest. The Court of Appeal ruled in O’Loughlin v Chief Constable of Essex [1998] 1 WLR 374 that
when exercising power under s 17 a police officer should give reasons for the entry unless this
is impossible, impracticable or undesirable. The fact that this has not been done will assist the
legal position of the occupier who resists the entry. Section 8 gives the police a power to enter
premises to search under a warrant from a JP. Section 19 gives power to seize articles found on
the premises unless they are exempt articles if the officer concerned reasonably believes that
it is evidence in relation to an offence which he is investigating or any other offence, and
that it is necessary to seize it in order to prevent its ‘concealment, loss or destruction’. Section
19(6) states that items exempted from seizure are those subject to legal professional privilege.
Revocation of licences
Problems have arisen where a claimant has entered the premises by virtue of a licence, con-
tractual or otherwise, because at one time it was not certain whether this licence could be
revoked so as to make the claimant a trespasser and permit his ejection.
..
EL_C21.qxd 3/26/07 10:54 AM Page 539
SPECIFIC TORTS 539
The common-law view was that, where a person paid for admission to premises, his licence
to be on those premises could be revoked at any time, in spite of valuable consideration,
so that he could then be ejected as a trespasser, the defendant being liable for breach of
contract, but not for assault.
On the other hand, equity took the view that, if there was an enforceable contract not to
revoke, express or implied, as where valuable consideration had been given, the licence could
not be revoked so that if the claimant had been ejected he could sue for assault; he could not
be made a trespasser by a mere attempt at revocation.
The equitable view gave rise to certain problems because it seemed to confuse rights
over land with mere contracts, but the matter may now be regarded as settled. The position is
that, although a licence for value is contractual in its nature and cannot create a right over
land itself (or a right in rem which will run with the land and affect third parties), yet, as
between the parties to the contract it may be implied, even if it is not expressed, that the
licence cannot unreasonably be revoked during the period for which the parties intended
it to continue.
Winter Garden Theatre (London) Ltd v Millennium Productions Ltd, 1948 –

Revoking a licence (361)
Hounslow LBC v Twickenham Garden Developments, 1970 – Revoking a licence;
a further example (362)
Extra-judicial remedies
There are certain extra-judicial remedies available to a person injured by a trespass. For
example, distress damage feasant is the right to seize chattels which have done damage on
land. There is no right to use or sell the chattels but merely to detain until the owner offers
compensation. The remedy does not lie against Crown property, and the right to sue in trespass
is postponed until the chattel is returned. Livestock may be detained (subject to notice to the
owner and police) for compensation supported by a right of sale (Animals Act 1971, s 7).
These provisions apply only to damage caused by straying animals; they do not give powers of
detention in the case of other forms of damage by animals, e.g. damage caused by negligent
control where the animal has not in fact strayed.
There is a further extra-judicial remedy, often referred to as self-help, whereby the person in
possession of the land may eject the trespasser, using such force as is reasonably necessary. 21
The trespasser must be asked to depart peacefully and given time in which to quit the land. A
trespasser who enters by force may be removed immediately and without a previous request
to depart.
Hemmings v Stoke Poges Golf Club, 1920 – Ejecting trespassers (363)
Other remedies
Trespass to land is actionable per se (in itself ) and it is not necessary for the claimant to show
actual damage in order to commence his action, although the damages would be nominal in
the absence of real loss. Nevertheless, it is possible to obtain an injunction without proof of
loss. Trespass upon property is not normally a criminal offence (but see below p 578). The law
does penalise by statute a trespass on particular property, e.g. railway property, and also the
law punishes trespass on property for the purpose of committing, e.g., theft or rape.
..
EL_C21.qxd 3/26/07 10:54 AM Page 540
Access to Neighbouring Land Act 1992

Before this Act was passed the law did not provide any general right of access to neighbouring
land in order to carry out work on one’s own property, no matter how essential this might
be. To do so without permission was trespass. The Act permits access under an access order
obtainable from a county court or the High Court where the owner of the land concerned
will not agree to entry. The applicant for the order must show that the work is reasonably
necessary to preserve the whole or part of his land and buildings and that the work cannot be
done at all, or it would be substantially more difficult to do it, if entry to the neighbouring
land was not granted. The order is made against the person who could in other circumstances
sue for trespass, so if the neighbouring land is let it will be made against the tenant.
The order may restrict entry to a specified area and provide for compensation to be paid to
the neighbouring owner if this is appropriate. It may also require the person who is given
access to make a payment to the neighbouring owner reflecting the financial benefit, if any,
which the person given access has received. This does not apply where the land subject to the
access order is residential property.
An order will not be granted where it would cause, e.g., unreasonable disturbance to the
neighbouring land. The court may also make an order for inspection to see whether the
works are necessary.
Finally, any provision in an agreement, whether made before or after the Act, which tries
to prevent or restrict application for an access order is void.
Criminal Justice and Public Order Act 1994: criminal trespass

Section 61 of this Act enables a police officer to direct trespassers on land to leave that land
where the occupier has taken steps to ask them to do so:
(a) if any of the trespassers has caused damage; or
(b) if they have been threatening, abusive or insulting; or
(c) if between them they have six or more vehicles on the land.
This part of the Act is aimed in large measure against hippies or travellers. Failure to obey
such a direction, or returning to the land as a trespasser within three months, are criminal
offences. The Act creates a number of other offences of what are, in effect, criminal trespass.
These include a power to remove persons attending or preparing for a rave. There is also the
new offence of aggravated trespass under which it becomes a crime to trespass on land in
order to disrupt or obstruct a lawful activity which is being carried out on it. This is presumably
aimed at groups such as hunt saboteurs and criminalises their activities. Of interest on the
matter of aggravated trespass is the case of DPP v Tilly (2002) 166 JP 22. Ms Tilly appealed
against her conviction for aggravated trespass under the 1994 Act. She had entered a field and
damaged a crop forming part of a government sponsored trial of genetically modified organ-
isms. The question for the Administrative Court on judicial review was whether in view of
the requirement that an activity was being carried out it was necessary that someone was on
the land at the time of the offence because neither the farmer concerned nor his employees
was present on the land cultivating or doing anything else to the crop. Ms Tilly’s appeal was
allowed. A person could not commit aggravated trespass unless the individual(s) engaged in the
relevant lawful activity was (were) physically present on the land at the time of the trespass.
An individual could not be obstructed or disrupted from engaging in a lawful activity if that
individual was absent from the land.
More seriously, it was held by the Divisional Court of Queen’s Bench that under the Act
there is no right to hold a peaceful non-obstructive assembly on the public highway. In DPP
v Jones (1997) 147 NLJ Rep 162 the respondents took part in a peaceful non-obstructive
assembly on the grass verge beside the perimeter fence of Stonehenge, demonstrating for the
..
EL_C21.qxd 3/26/07 10:54 AM Page 541
SPECIFIC TORTS 541
right to have access to the monument. The police had previously obtained a prohibiting
order from the local authority under s 14A of the Public Order Act 1986 (as inserted by s 70 of
the 1994 Act) and arrested the respondents whose criminal act was confirmed by the
Divisional Court. They were rightly convicted by the Salisbury magistrates.
However, the House of Lords allowed an appeal by the demonstrators. A public highway,
said their Lordships, was a public place where any activity that was reasonable, did not cause
a public or private nuisance and did not obstruct the highway was not a trespass (see DPP v
Jones (Margaret) [1999] 2 WLR 625).
Squatters
Apart from these statutory exceptions, the criminal law dealt with entering or remaining on
property by means of the Statutes of Forcible Entry which were a confusing and archaic set of
laws. The fact that trespass is not generally a crime has led to difficulties, particularly in times
of acute housing shortage where the civil law is not adequate to deal with the growing
activities of ‘squatters’. The Criminal Law Act 1977, s 6 now creates the offence of using or
threatening violence to secure entry to premises on which there is another person who
opposes entry. The offence can be committed by a person notwithstanding he has some
interest or right in the premises, as where he is a landlord, but the offence cannot be com-
mitted by a displaced residential occupier, i.e. a person whose residential occupation of the
premises has been interrupted by the occupation of the premises by a trespasser, or someone
acting for a displaced residential occupier. Section 7 makes it a summary offence for a tres-
passer to fail to leave premises when required to do so by a displaced residential occupier.
Section 8 makes it an offence for a person who is a trespasser on any premises which he has
entered as a trespasser to have with him a weapon of offence. Section 9 makes it an offence to
enter or be upon as a trespasser diplomatic or consular premises or the premises or residence
of any body or person having diplomatic immunity in respect of its or his premises or
residence. Section 10 creates a summary offence of resisting or intentionally obstructing a
court officer seeking to execute an order for possession of premises, while s 11 gives to a
constable a power of entry and search for the purpose of exercising a power of arrest under
that part of the Act which relates to offences of entering and remaining on property (i.e.
Part II). Section 13 abolishes the common law offences of forcible entry and detainer and
repeals related statutes.
The Criminal Justice and Public Order Act 1994 supplements the Criminal Law Act 1977 by
making a change in the court procedure in relation to premises such as houses and shops 21
as opposed to open land. The Act allows the court to make an ‘interim order’ for possession.
If, following service of the interim order, the trespasser does not leave the premises within
24 hours or leaves and re-enters within a year, he is guilty of an offence and the police
may arrest him. This is bringing the police even further into the civil law of trespass and the
government announced that the police would be given a ‘frontline role’ to speed up evictions
of squatters from houses and shops where they will usually have squatted in order to carry on
a trade.
Countryside and Rights of Way Act 2000

The main provisions of this Act are as follows:
n a proposed right of access on foot for open air recreation to mountain, moor, heath, down
and registered common land (or open country);
n land over 600 metres above sea level is automatically covered;
n open land will be shown on maps that will be available to the public. There is an appeal to
the Secretary of State where land is included by mistake;
..
EL_C21.qxd 3/26/07 10:54 AM Page 542
n there are exceptions for land that is cultivated, land covered by buildings, parks and
gardens, mineral workings, railway land and golf courses, aerodromes, race courses and
development land where planning permission has been granted if development activities
have commenced;
n landowners must not erect false or misleading signs likely to deter people from using their
statutory right of access, though signs indicating boundaries are acceptable so long as they
do not deter walkers by giving them false information;
n landowners may need to provide for new access to open country where public rights of
way do not exist or are insufficient;
n open country access may be closed for up to 28 days each year, but not over bank holidays
or weekends.
When the Act is in force it will mean that many former trespassers to land will have to be
tolerated.
However, even where an access right is granted it is limited by Sch 2 so that no vehicle can
be used (including bicycles), no craft can be sailed on waters and no organised games played
– so no paintball games! Camping is also prohibited. If these activities are undertaken the
persons concerned become trespassers. Countryside bodies also have power to restrict access
during a specified period in the event for example of a fire risk and indefinitely for nature
conservation, heritage preservation and national defence.
The liability of landowners is not increased by this statutory right of access. Those exercis-
ing the right will be in no better position than trespassers. Thus the owner has only a duty to
warn of dangers known to him or which he reasonably believes to exist. There is no liability
at all in regard to natural features such as ponds and ditches.
Wrongful interference with goods

We propose to discuss the tort of wrongful interference by outlining the basic features of
it, i.e. the relationship between the claimant and the goods, the conduct of the defendant
which the claimant must prove, and the principle of liability, bearing in mind that the Torts
(Interference with Goods) Act 1977 defines, in s 1, wrongful interference with goods as
including conversion of goods, trespass to goods, negligence or any other tort so far as it
results in damage to goods or to an interest in goods.
Wrongful interference by trespass to goods

The relationship between the claimant and the goods
Wrongful interference by trespass to goods is a wrong against the possession of goods.
Possession in English law is a difficult concept which is considered more fully in Chapter 22.
For the moment it will suffice to say that a person possesses goods when he has some form of
control over them and has the intention to exclude others from possession and to hold the
goods on his own behalf.
Possession must exist at the moment when the wrongful interference is alleged to have
been committed. Thus a bailee of goods can sue for a wrongful interference to them, but a
bailor cannot because, although he is the owner of the goods, he does not possess them at
the time. Where there is a bailment at will, i.e. one which can be determined at any time,
both bailee and bailor have possession so that either can sue for a wrongful interference to
the goods. Possession does not necessarily involve an actual grasp of the goods; often a lesser
degree of control will suffice.
..
EL_C21.qxd 3/26/07 10:54 AM Page 543
SPECIFIC TORTS 543
Difficulties have arisen over the requirement of the intention to exclude others as a neces-
sary ingredient of possession, in regard to things found under or on land.
It has been held that where goods are not attached to land it is necessary to distinguish
between a finding in a place over which the occupier has shown a clear intent to control
exclusively, and finding in a place to which the finder has access as a matter of course. In the
latter case, the finder’s possessory title takes precedence over that of the occupier.
However, an occupier of land or a building has superior rights to those of a finder in regard
to goods in or attached to the land or building.
The special rules relating to treasure are considered in Chapter 3.
The Tubantia, 1924 – Possession and control (364)

Parker v British Airways Board, 1982 – Finders of property (365)
South Staffordshire Water Co v Sharman, 1896 – Goods which are on or attached to
land (366)
Although the claimant relies on possession and not on ownership or title, the defendant
can set up the jus tertii (right of a third party) under s 8(1) of the Torts (Interference with
Goods) Act 1977. Under that section the defendant is entitled to show in accordance with
rules of court that a third party has a better right than the claimant as regards all or any part
of the interest sought by the claimant and any rule of law (sometimes and formerly called
jus tertii) to the contrary is abolished. Under s 8(2) rules of court relating to proceedings
for wrongful interference require the claimant to give particulars of his title; to identify any
person who to his knowledge has or claims any interest in the goods; to authorise the defend-
ant to apply for directions as to whether any person should be joined in the action with a
view to establishing whether he has a better right than the claimant, or has a claim as a result
of which the defendant might be doubly liable. If a party refuses to be joined the court may
deprive him of any right of action against the defendant for the wrong, either uncondition-
ally or subject to such terms or conditions as the court may specify.
The conduct of the defendant which the claimant must prove

In wrongful interference by trespass there must be a direct interference with the goods, and
this may consist of moving a chattel or the throwing of something at it. A person who writes
with his finger in the dust on the back of a car commits wrongful interference, as does a
person who beats another’s animals or administers poison to them.
21
In this connection, there have been problems where owners of land have introduced
wheel-clamping to prevent the parking of vehicles on their land. The technique is also
applied by public authorities to enforce parking restrictions. The legal position was stated
definitively by the Court of Appeal in Vine v Waltham Forest LBC (2000) The Times, 12 April
where it was ruled:
n that the act of wheel-clamping a car even when the car is on somebody else’s land without
authorisation is a trespass to goods unless it can be shown that the owner had consented
to or willingly assumed the risk of his car being clamped;
n in order to show this, it has to be proved that the owner of the vehicle or its driver (on his
behalf ) was aware of the consequences of parking the car so that it trespassed on the land
of another;
n this can be done by showing that the owner (or driver on his behalf ) saw and understood
the significance of a warning notice;
n if the notice is seen but not understood, there is nevertheless consent to clamping;
..
EL_C21.qxd 3/26/07 10:54 AM Page 544
n however, in Vine, where the notice was not seen, the clamping was a trespass and the
clamper was liable in damages.
It is important to remember that in the Vine case the parking was on private land where
implied consent following placing of a conspicuous notice is required. However this does not
apply to all parking. In London, for example, there is local statute law in the shape of the
Road Traffic Act 1991 together with subsidiary regulations made under it. Part II and regula-
tions deal with parking in London. Wheel-clamping is permitted by s 69 of the 1991 Act in
the case of a stationary vehicle illegally parked or in a parking place designated for another
or other purposes. Notice is not a requirement. This gives a clamper the defence of statutory
authority. The distinction in Vine is that Ms Vine parked her car in a parking bay on private
land where the local authority’s contractors clamped it. Here implied consent by notice
was required. For those who are concerned about the ‘cowboy’ approach of some clampers
reference should be made to the Private Security Industry Act 2001 which imposes and will
raise professional standards in the clamping business.
The principle of liability

In wrongful interference by trespass to goods the liability would not now appear to be strict.
The defence of inevitable accident would presumably be available to a defendant (National
Coal Board v Evans (1951), see Chapter 20) and it is possible that, since Letang v Cooper (1964)
(see Case 351), the interference with the possession of goods must be intentional. Mere
negligence may not suffice. This would follow a similar development in the tort of trespass to
the person which began with the decision in Fowler v Lanning (1959) (see Case 351).
Wrongful interference by conversion

The relationship between the claimant and the goods
It is often said that the right to sue for wrongful interference by conversion depends on
ownership, but this is not really true. To be able to sue for wrongful interference the claimant
must have had either possession or the immediate right to possess at the time the wrong was
committed. Mere ownership without one of the above rights is not enough. Nor is the mere
right to possess unless it is coupled with ownership.
As in wrongful interference by trespass to goods so in wrongful interference by conversion,
the defendant can set up the right of a third party and s 8(1) and (2) of the 1977 Act apply.
The conduct of the defendant which the claimant must prove

In wrongful interference by conversion the defendant must do something which is a com-
plete denial of, or is inconsistent with, the claimant’s title to the goods; a mere interference
with possession is not enough. Furthermore, wrongful interference by conversion need not
be a trespass.
Generally the conduct of the defendant must be an act rather than a failure to act. Thus,
although the claimant may base his case on a demand for the goods followed by a refusal, he
must still show a denial of title in the defendant. If, therefore, the defendant can show that
he was retaining the goods in the exercise of a lien for, say, repair charges unpaid, the
claimant will fail in his action. A defendant may also refuse temporarily to give up the goods
while he takes steps to check the title of the claimant.
The principle of liability

In general, liability in wrongful interference by conversion is strict and it is not necessary for
the claimant to prove that the defendant had a wrong intention, though sometimes it may
..
EL_C21.qxd 3/26/07 10:54 AM Page 545
SPECIFIC TORTS 545
be a defence for the defendant to say that he acted honestly. Where the defendant had lost
the goods by negligence there was no wrongful interference by conversion but the claimant
may now sue under the provisions of the Torts (Interference with Goods) Act 1977 for
damage to goods caused by negligence.
Jarvis v Williams, 1955 – Conversion: there must be a right of property (367)

Fouldes v Willoughby, 1841 – Mere interference with possession (368)
Oakley v Lyster, 1931 – No need for trespass (369)
Elvin and Powell Ltd v Plummer Roddis Ltd, 1933 – An honest defendant (370)
Detention of goods
Section 2(1) of the Torts (Interference with Goods) Act 1977 abolishes the old tort of detinue
which was a tort relating to detention of goods. The Act substitutes statutory provisions.
Under s 2(2) the tort of wrongful interference by conversion is substituted for the old action
of detinue. Thus mere detention can now amount to conversion. In other words, detinue and
conversion are merged.
As regards the form of judgment where goods are detained, s 3 provides that in proceedings
for wrongful interference against a person who is in possession or in control of the goods
relief may be given if appropriate in accordance with s 3(2). Under s 3(2) the relief is:
(a) an order for delivery of the goods, and for payment of any consequential damages; or
(b) an order for delivery of the goods, giving the defendant the alternative of paying damages
by reference to the value of the goods, together in either alternative with payment of any
consequential damages; or
(c) damages.
Section 3(2) provides that subject to rules of court relief should be given under only one of
paragraphs (a), (b) and (c) above and relief under paragraph (a) is at the discretion of the
court though the claimant may choose between the others. If it is shown to the satisfaction
of the court that an order under (a) above has not been complied with, the court may revoke
the order or the relevant part of it and make an order for payment of damages by reference to
the value of the goods.
Where an order is made under (b) above the defendant may satisfy the order by returning 21
the goods at any time before execution of judgment, but without prejudice to liability to pay
any consequential damages.
Remedies
Reference has already been made to the form of judgment where goods are detained. So far as
wrongful interference by trespass and by conversion are concerned, the remedy is damages.
The value of the goods is usually determined at the date of conversion. When a claimant has
a claim for conversion he cannot delay the issue of his claim form and the duty to mitigate
loss operates. If the goods decrease in value between the date of the conversion and the time
the court gives judgment, the claimant will normally still recover the value at the date of
conversion (Rhodes v Moules [1895] 1 Ch 236).
Section 5 of the 1977 Act makes it clear that a claimant’s title to the goods is not
extinguished by a judgment for damages but only when the judgment has been paid. The
judgment as such does not affect title.
..
EL_C21.qxd 3/26/07 10:54 AM Page 546
Under s 6 an allowance is available for an improvement in the goods. For example, where a
person in good faith buys a stolen car and improves it he is entitled to an allowance for that
improvement, and where a person in good faith buys the car from the improver and is sued
in conversion by the true owner, the damages may be reduced to reflect the improvement.
Section 7 deals with double liability, providing in particular that where as the result of
enforcement of a double liability the claimant is unjustly enriched to any extent he shall be
liable to reimburse the wrongdoer to that extent. For example, if a converter of goods pays
damages first to a finder of the goods and then to the true owner, the finder is unjustly
enriched unless he accounts over to the true owner, which he is required to do, and then the
true owner is unjustly enriched and becomes liable to reimburse the converter of the goods.
Special damage for conversion may be awarded. Thus a carpenter whose tools are converted
can recover his loss of wages (Bodley v Reynolds (1846) 8 QB 779). Furthermore, in Hillesden
Securities Ltd v Ryjack Ltd [1983] 2 All ER 184 the defendant converted a Rolls-Royce car which
he had hired from the claimant. It was held that he remained liable for the hiring charge
until he returned it. This was £13,000, although the value of the Rolls-Royce at the date of
conversion was only £7,500.
Finally, s 2(3) of the Limitation Act 1980 provides that once the six-year period of limita-
tion has expired the claimant’s title to the goods is extinguished. The Act also provides that
if there are successive conversions over the same goods, whether by the same person or not,
the cause of action is extinguished six years from the first conversion (Limitation Act 1980,
s 3(1)).
Recaption
A person who is entitled to the possession of goods of which he has been wrongfully
deprived may retake them after a demand for their return but must not use more than reason-
able force. It is not clear whether he may enter upon the land of an innocent third party in
order to recover the goods. It would seem lawful only after explanation and permission.
Replevin
Goods which have been taken by what is alleged to be unlawful distress, e.g. by a landlord for
unpaid rent which is alleged by the tenant to have been paid, may be recovered by the owner
giving security to the Registrar of the county court that he will immediately bring an action
to determine the legality of the distress. The Registrar issues a warrant for the restitution of
the goods.
Nuisance
The tort of nuisance is of two types – public and private.
Public nuisance
This is some unlawful act or omission endangering or interfering with the lives, comfort,
property or common rights of the public, e.g. the obstruction of a highway or the keeping of
dangerous premises near a highway. A public nuisance is a crime for which the remedy is
..
EL_C21.qxd 3/26/07 10:54 AM Page 547
SPECIFIC TORTS 547
criminal proceedings. An example is provided by R v Johnson (Anthony Thomas) (1996) 160 JP

605 where the Court of Appeal held that obscene phone calls made on numerous occasions
to 13 different women amounted to a public nuisance for which J was rightly sentenced to
240 hours of community service and ordered to pay £500 costs. It is actionable as a tort at the
suit of a private individual if he has suffered peculiar damage over and above that suffered by
the public as a whole.
Obstructions to the highway occur daily in our cities and towns, e.g. road repairs and scaffold-
ing. However, these obstructions, being for reasonable purposes, are lawful unless they last
for an excessive time. Dangerous activities carried on near to the highway may amount to a
nuisance. With regard to projections on to the highway there is no liability for things naturally
on land, e.g. trees, unless the person responsible for them knew, or ought to have known, that
they were in a dangerous condition, as where a branch of a tree is rotten. However, liability
appears to be strict in the case of artificial projections. However, where an action is brought
for damages for personal injuries arising out of other forms of obstruction on the highway,
it appears that fault is essential to liability. Thus, in this respect, the torts of nuisance and
negligence are being drawn together.
Lack of actual knowledge of the nuisance is no defence. Thus in R v Shorrock (Peter) [1993]
3 All ER 917, S let a field on his farm to three people for the weekend and went away. S did
not actually know that the field would be used for an ‘acid house’ party, which it was, and
there were complaints from 275 people living up to four miles away. On prosecution for
public nuisance S pleaded that he did not have actual knowledge of the event. It was held
by the Court of Appeal that it was not necessary to prove actual knowledge of the nuisance;
it was enough to show that S knew or ought to have known of it. The evidence seemed to
establish that he at least knew there was some risk of creation of a nuisance and that con-
structive knowledge was enough. It is worth noting that judgments in the House of Lords in
Sedleigh-Denfield v O’Callaghan and Others [1940] AC 880 suggest that constructive knowledge
is also enough to found a claim in private nuisance.
Attorney-General v Gastonia Coaches, 1976 – Public nuisance: obstruction of

highways and public footpaths (371)
Castle v St Augustine’s Links Ltd, 1922 – A golf ball hits a car (372)
Tarry v Ashton, 1876 – An artificial projection (373)
Dymond v Pearce, 1972 – Other forms of highway obstruction (374)
21
Demise of public nuisance?
In the two following cases the House of Lords has almost passed a death sentence on the
common law crime of public nuisance and has noted that the main areas which were once
the province of public nuisance have to a large extent been taken over by statutory provi-
sions, e.g. the Environment Protection Act 1990. Prosecutions said the House of Lords should
be brought under the relevant statute because the statutory provisions were less vague than
the common law concept of public nuisance and the penalties were known and the defences
more clearly outlined.
The House of Lords looked again at the ingredients of the crime of public nuisance. Their
Lordships affirmed that it requires an act or omission which the defendent knew or ought to
have known would cause common injury to a section of the public at large. Thus a number
of individual acts of private nuisance committed against several individuals was not an
offence nor was an act or omission which had unintended or unforeseen consequences in
causing a nuisance.
..
EL_C21.qxd 3/26/07 10:54 AM Page 548
The above principles were applied in R v Rimmington; R v Goldstein [2006] 1 AC 459.

In Rimmington the defendant sent 538 postal packets containing racially offensive material
to a number of individual members of the public based on their perceived ethnicity. The
House of Lords ruled that these were acts of private nuisance and did not cause common
injury to a substantial section of the public.
In Goldstein the defendant had owed his friend some money for a long time. When he
finally sent his friend a cheque, he put some salt in the envelope as a joke, salt being used to
preserve kosher food of which the defendant was a supplier. Unfortunately, the salt leaked
out at a postal sorting office and went onto the hands of a postal worker who feared it might
be anthrax. The building was evacuated causing disruption to the postal service.
The House of Lords ruled that the defendant could not possibly have intended or foreseen
that the salt would leak out, since that would have ruined his joke. Both defendants were not
guilty of public nuisance.
It is worth noting that the House of Lords did not rule out totally the existence of public
nuisance and the relevant case law but clearly the courts will now require use of the many
statutory provisions by prosecutors. (See further p 552.)
Private nuisance
This is an unlawful interference with people’s use of their property or with their health, com-
fort or convenience, and such interference may vary according to the standard existing in the
neighbourhood. It is a wrongful act causing material injury to property or sensible personal
discomfort. In this connection injuries to servitudes may amount to private nuisance as where
the defendant obstructs a right of way, or interferes with the claimant’s water supply, access
of air, light or support. It is worth noting that a local authority by granting planning permis-
sion for a development cannot prevent a claim for nuisance if that development causes one.
Thus in Wheeler v J J Saunders [1995] 2 All ER 697 the Court of Appeal decided that the
claimant was entitled to damages for nuisance caused by two pig units built on the defendant’s
land following the granting of planning permission for them by the local authority. Unlike
Parliament, a local authority has no authority to authorise a nuisance.
In considering whether an act or omission is a nuisance, the following points are relevant:
(a) There need be no direct injury to health. It is enough that a person has been prevented
to an appreciable extent from enjoying the ordinary comforts of life.
( b) The standard of comfort must be expected to vary with the district. There is no
uniformity of standard between Park Lane and Poplar, although there may be common
ground in some matters, e.g. light, since it requires the same amount of light to read in either
place. However, where the alleged nuisance has caused actual damage to property, it is no
defence to show that the district concerned is of any particular type.
In what may seem at first sight to be an unusual decision, the Court of Appeal ruled in
Murdoch v Glacier Metal Co Ltd [1998] Env LR 732 that an action for nuisance by noise failed
even though the noise was just above World Health Organisation levels for proper sleep.
There was already a busy by-pass near to M’s home and there were no other complaints from
within the area. Thus, applying the standards of the district, M’s claim failed.
(c) A person cannot take advantage of his peculiar sensitivity to noise and smells. There
must be some give and take, and people cannot expect the same amenities in an industrial
town as they might enjoy in the country.
..
EL_C21.qxd 3/26/07 10:54 AM Page 549
SPECIFIC TORTS 549
(d) The utility of the alleged nuisance has no bearing on the question. Pigsties and brew-
eries may be regarded by the community as very necessary, but if they infringe a person’s
right to the ordinary comforts of life, they are nuisances (see Wheeler above). Consent cannot
be implied from the fact that the claimant came to the premises knowing that the nuisance
was in existence. Nor is the fact that the nuisance arises out of the conferment of a public
benefit a defence in the ordinary way.
Bliss v Hall, 1838 – Coming to the nuisance (375)

Adams v Ursell, 1913 – Public benefit (376)
Dunton v Dover District Council, 1977 – A noisy playground (377)
(e) The modes of annoyance are infinitely various. They may include such things as
bell-ringing, circus performing, the excessive use of the radio, spreading tree roots, opening a
sex shop in a residential area (Laws v Florinplace [1981] 1 All ER 659), low-flying aircraft and
many others. It should also be noted that picketing a highway may be actionable as a
nuisance and an injunction may be granted to prevent it. However, in Hunter v Canary Wharf
Ltd [1997] 2 WLR 684 the House of Lords held that a nuisance action following the erection
of a building on land could be brought in regard to interference by noise, dirt or smell but an
action in regard to interference with a TV signal would fail.
Christie v Davey, 1893 – A versatile amateur musician (378)

Hubbard v Pitt, 1975 – Picketing the highway (379)
(f) A nuisance may result from the acts of several wrongdoers. Any one of them may be
proceeded against, and he cannot plead in excuse that the nuisance was a joint effort,
although he has a right of contribution against joint tortfeasors for the damages which might
be assessed against him.
(g) Duration of the act. Although the acts complained of in nuisance are usually continuous,
e.g. the constant emission of pungent smells from a factory, an act may constitute a nuisance
even though it is temporary or instantaneous. The duration of the act complained of has a
bearing upon the remedy which is appropriate and the court will not often grant an
injunction in respect of a temporary nuisance because damages are an adequate remedy.
21
Furthermore, a temporary nuisance may be too trivial to be actionable.
British Celanese Ltd v A H Hunt (Capacitors) Ltd, 1969 – A temporary

nuisance (380)
(h) Sometimes malice or evil motive may become the gist of the offence. Malice or
motive may be evidence that the defendant was not using his property in a lawful way.
Hollywood Silver Fox Farm v Emmett, 1936 – An evil motive (381)
(i) It is possible to acquire the right to create a private nuisance by prescription, that is,
by 20 years’ continuous operation since the act complained of first constituted a nuisance.
..
EL_C21.qxd 3/26/07 10:54 AM Page 550
There is no corresponding right in respect of a public nuisance. Since a public nuisance is a

crime, no length of time will make it legitimate.
Nuisance is primarily a wrong to property, but even where there is no physical damage the
court can award compensation for annoyance and discomfort. A claim in private nuisance
cannot be based solely upon personal injury, where an action would be in negligence. Claims
for personal injuries can be made in public nuisance, though as we have seen in Dymond v
Pearce (1972), fault in the defendant is generally required which makes the action in nuisance
similar to that in negligence.
Bone v Seale, 1975 – No need for diminution in property values (382)
Furthermore, the tort of nuisance refers to the unreasonable use of property and is not a
matter of reasonable care (compare negligence). Thus the defendant’s use of his property may
be offensive and constitute a nuisance no matter how careful he is.
Parties to sue or be sued

The occupant of the property affected by the nuisance is the person who should bring the
action but a landlord may sue if the nuisance is effecting a permanent injury to his property,
e.g. where the defendant is erecting a building which infringes the landlord’s right to ancient
lights.
Malone v Laskey, 1907 – Nuisance: occupier should sue (383)
Regarding liability, it is a general rule that the person who creates the nuisance is liable,
and this will generally be the occupier. But a landlord may be liable, as a joint tortfeasor
with his tenant: (a) if he created the nuisance and then leased the property; or (b) where the
nuisance was due to the landlord’s authorising the tenant expressly or impliedly to create
or continue the nuisance; or (c) where the landlord knew or ought to have known of the
nuisance before he let the premises.
Wilchick v Marks, 1934 – A landlord who had a right of entry (384)

Mint v Good, 1951 – A right of entry implied (385)
Harris v James, 1876 – A landlord authorised the nuisance (386)
Smith v Scott, 1972 – No authorisation by landlord (387)
Brew Bros v Snax (Ross), 1969 – A landlord allowed a nuisance to continue (388)
An occupier must abate a nuisance which was on the premises before he took them over,
or is placed there afterwards, even by trespassers, provided that the occupier knows or ought
to have known of the nuisance. An occupier is also liable for nuisance arising out of the
operations of an independent contractor engaged in work on the premises where there is a
special danger of nuisance arising from the nature of the works being carried out, e.g. exten-
sive tunnelling operations (and see Bower v Peate (1876) in Chapter 20).
Sedleigh-Denfield v O’Callaghan, 1940 – An occupier must abate a known

nuisance (389)
..
EL_C21.qxd 3/26/07 10:54 AM Page 551
SPECIFIC TORTS 551
Remedies
The remedies for nuisance are three in number:
(a) The injured party may abate the nuisance, that is, remove it, provided that no unneces-
sary damage is caused, that no injury arises to an innocent third party, e.g. a tenant, and that,
where entry on the defendant’s land is necessary, a notice requesting the removal of the
nuisance has first been given. The remedies of abatement and self-help are limited to situa-
tions where lives or property are in danger, said the Court of Appeal in Co-operative Wholesale
Society Ltd v British Railways Board (1995) The Times, 20 December. BRB appealed against an
award to CWS of £6,056 which was the cost of pulling down and rebuilding BRB’s wall which
had bulged on to CWS’s property. BRB did not agree that the wall was dangerous but agreed
with CWS that the latter could rebuild it at their own expense. CWS did so and then claimed
to recover the cost from BRB. The Court of Appeal allowed BRB’s appeal. The right of abate-
ment and self-help was only available where lives or property were in danger which was
not the case here. The first instance order was varied by substituting £1,400, i.e. the cost of
demolition only.
(b) He may sue for damages.
(c) He may seek an injunction if (i) damages would be an insufficient remedy; and (ii) the
nuisance is a continuing nuisance, e.g. smoke frequently emitted from a chimney. Where a
continuing actionable nuisance is proved, only in exceptional circumstances should the court
award damages in lieu of an injunction.
Kennaway v Thompson, 1980 – Noise from powerboats (390)
Defences
Certain defences are available to a person who is charged with committing the nuisance:
(a) The injury is trivial. The legal maxim is: De minimis non curat lex (the law does not concern
itself with trifling matters). Such a case would be an extremely short exposure to fumes from
road repairs.
(b) The so-called nuisance arose from the lawful use of the land (Bradford Corporation v Pickles
(1895), see Chapter 20).
21
(c) The nuisance was covered by statutory authority, under the general principles elucidated
under the defence of statutory authority.
(d ) The person committing the alleged nuisance has acquired a prescriptive right through
20 years’ use to do what is complained of.
(e) The character of the neighbourhood is such that the act, while it might be a nuisance
elsewhere, cannot be regarded as such in that particular district.
(f ) Consent of the claimant is a possible defence but consent will not be implied simply
because the claimant came to the premises knowing that the nuisance was in existence (Bliss
v Hall, 1838).
Sturges v Bridgman, 1879 – Nuisance and prescription (391)
..
EL_C21.qxd 3/26/07 10:54 AM Page 552
Remoteness of damage
For the purpose of deciding problems of remoteness of damage the Privy Council held in
The Wagon Mound (No 2) [1966] 2 All ER 709 (see Chapter 20) that in a case of nuisance, as of
negligence, it is not enough that the damage was a direct result of the nuisance if the injury
was not foreseeable. Thus in Lamb v Camden London Borough Council [1981] 2 All ER 408 the
claimants owned a house which had been let furnished but because of local council work a
water main nearby was broken and escaping water severely damaged the house. The tenant
left and the house was then unoccupied. While it was empty squatters entered and caused
extensive damage before they were evicted. The defendants admitted liability in nuisance and
on the issue of the squatters’ damage the Court of Appeal held that it was too remote to form
part of any damages. (See also British Celanese v Hunt (1969) and Page Motors v Epsom and
Ewell Borough Council (1981).)
Statutory intervention
We have been discussing the civil law of nuisance. However, there is also the Environmental
Protection Act 1990. Under s 80 of that Act an officer of a local authority who is satisfied that
a nuisance exists can serve the person responsible for creating it with an abatement notice.
Failure to comply is a criminal offence though there is a right of appeal. The section can be
used for a wide variety of nuisances from noisy parties to dust from construction or demoli-
tion. A complaint is initiated through the environmental health department of the relevant
local authority.
There is also the Noise and Statutory Nuisance Act 1993 (as amended by the Clean
Neighbourhoods and Environment Act 2005). This makes noise in the street a statutory nui-
sance and includes provisions in regard to loudspeakers and their operation in the street and,
most importantly, audible intruder alarms. Provision is also made for the charging by the
enforcing local authority of expenses which have been incurred in abating or preventing the
recurrence of the nuisance. Payment is by the person(s) responsible.
Of particular importance is the suppression of the ‘rogue’ car alarm. However, the proced-
ures involved are complicated and this may put the relevant authorities off enforcement. The
first complaint is to the local environmental health officer (EHO). The EHO must then locate
the vehicle and affix an ‘abatement notice’ to it. He must then wait one hour and only then
can he act by breaking into the car to switch off the alarm. The Act also states that the EHO
must do as little damage to the vehicle as possible and leave it as secure as when he found it.
This may mean that other experts such as locksmiths will have to travel with the EHO, which
will make enforcement more difficult.
There has been other statutory intervention as follows:
n the Noise Act 1996 (as amended by the Clean Neighbourhoods and Environment Act 2005)
gives the local authority a duty to investigate any complaint that excessive noise is coming
from another house. If the local authority officer is satisfied that there is such noise and
that it exceeds permitted limits and is being emitted between 11 pm and 7 am he may serve
a warning notice. If the person responsible continues to create noise during the period
specified in the notice and in excess of the permitted level, he is guilty of an offence;
n the Protection from Harassment Act 1997 may also be of help. It is a very wide-ranging Act
and covers noisy and nuisance neighbours. These activities could be the subject of criminal
or civil proceedings under the Act.
However, the High Court ruled in Huntingdon Life Sciences Ltd v Curtin (1997) The Times, 11
December that Parliament had clearly not intended the Act to be used to prevent individuals
..
EL_C21.qxd 3/26/07 10:54 AM Page 553
SPECIFIC TORTS 553
from exercising their right to protest and demonstrate about issues of public interest, and the
courts would resist any attempts to interpret the statute widely. The claimants were refused
an injunction against the British Union for the Abolition of Vivisection which was demon-
strating by a non-threatening campaign against the company which used animals for
research purposes.
With regard to nuisance caused by the spread of weeds, it is uncertain whether the com-
mon law has any rules controlling this (see Giles v Walker (1890)), and reference should be
made to the Weeds Act 1959. Where any one of five specified weeds is out of control the
Minister of Agriculture can call on the occupier of the land concerned to take action to stop
them from spreading. The Minister can get the work done himself if the occupier defaults,
and prosecute the occupier.
Negligence – generally
In ordinary language negligence may simply mean not done intentionally, e.g. the negligent
publication of a libel. But while negligence may be one factor or ingredient in another tort,
it is also a specific and independent tort with which we are now concerned.
The tort of negligence has three ingredients and to succeed in an action the claimant
must show (i) the existence of a duty to take care which was owed to him by the defendant,
(ii) breach of such duty by the defendant, and (iii) resulting damage to the claimant.
The duty of care – generally
Whether a duty of care exists or not is a question of law for the judge to decide, and it is
necessary to know how this is done. The law of contract dominated the legal scene in the
nineteenth century and this affected the law of torts. The judges, influenced by the doctrine
of privity of contract, used it to establish the existence of a duty of care in negligence in those
cases where a contract existed by laying down the principle that, if A is contractually liable to
B, he cannot simultaneously be liable to C in tort for the same act or omission.
The House of Lords in Donoghue v Stevenson (1932) (see Chapter 20) dispelled the confusion
caused by the application of the doctrine of privity of contract where physical injury
21
is caused to the claimant by the defendant’s negligent act. As we have seen from the
Donoghue case, the fact that the maker of the ginger beer was liable for its defects in
contract to the café owner did not prevent him being liable also to Donoghue in the tort of
negligence. There is, of course, now the possibility of giving third parties rights in contract so
that the privity rule is avoided, although the tort claim would still be available, and where
the rule of privity applies, the tort remedy is the only one available. This results from the
Contracts (Rights of Third Parties) Act 1999 (see further Chapter 10). In this case Lord Atkin
also formulated what has now become the classic test for establishing a duty of care when
he said:
You must take reasonable care to avoid acts or omissions which you can reasonably foresee
would be likely to injure your neighbour. Who then is my neighbour? The answer seems to
be persons who are so closely and directly affected by my act that I ought reasonably to
have them in contemplation as being affected when I am directing my mind to the acts or
omissions which are called in question.
..
EL_C21.qxd 3/26/07 10:54 AM Page 554
It will be seen, therefore, that the duty of care is established by putting in the defendant’s
place a hypothetical ‘reasonable man’ and deciding whether the reasonable man would have
foreseen the likelihood or probability of injury, not its mere possibility. The test is objective
not subjective, and the effect of its application is that a person is not liable for every injury
which results from his carelessness. There must be a duty of care (see Bourhill v Young (1943)
(see Chapter 20)).
Nevertheless, new duties are established from time to time by case law. As we have seen,
Lord Macmillan stated in Donoghue v Stevenson (1932) ‘the categories of negligence are never
closed’. However, there is always the requirement of foresight, i.e. the claimant must be
within the area of foreseeable danger (see Bourhill v Young (1943), in Chapter 20).
Furthermore, there is, in general terms, no liability for failure to act, i.e. for omissions.
Argy Trading v Lapid Developments, 1977 – No liability for omissions (392)
Creation of new duties

For a period of time the tendency of the courts was to widen liability in negligence to
the point where it was more a matter of public policy whether a particular defendant
was liable. The view has been, in some cases, that the court can assume objective foresight
and then see whether there is anything to prevent the defendant from being liable, e.g. a
very wide liability which is currently not insured against may not be imposed as contrary to
public policy.
One major development in this direction was the judgment of Lord Reid in Home Office
v Dorset Yacht Club Co Ltd [1970] 2 All ER 294. This was an action by the owner of a
yacht which was damaged by runaway Borstal boys who escaped while the three officers
in charge of them were, contrary to instructions, in bed. In holding that the Home
Office owed a duty of care to the owner of the yacht, Lord Reid made the following
general comment regarding duty of care. ‘Donoghue v Stevenson may be regarded as a mile-
stone . . . It will require qualification in new circumstances. But I think that the time
has come when we can and should say that it ought to apply unless there is some
justification or valid explanation for its exclusion.’ In other words, Lord Reid is saying that
the court should lean in favour of finding a duty of care. The House of Lords seems also in
this case to have found liability for the officers’ failure to act, i.e. an omission but this seems
to be confined to negligent failure to exercise statutory powers, in this case powers of control
over the boys.
Further moves along these lines came in Anns v London Borough of Merton [1977] 2 All ER 492.
In that case, the claimants held a lease of a block of flats built in 1962. Later, considerable
settlement caused cracks and the tilting of floors. The claimants blamed the builders and
also the local council because, it was alleged, the council had not inspected the flats during
building as the by-laws required, so their shallow foundations were not detected. Their
Lordships found that the local authority had a duty of care to the claimants and made general
comments on the duty of care. Once again, liability arose from a failure to act.
Lord Wilberforce, in particular, took the remarks of Lord Reid (as mentioned) a stage
further when he said:
The position has now been reached that in order to establish that a duty of care arises in a
particular situation, it is not necessary to bring the facts of that situation within those of
previous situations in which a duty of care has been held to exist. Rather the question has
to be approached in two stages.
..
EL_C21.qxd 3/26/07 10:54 AM Page 555
SPECIFIC TORTS 555
First, one has to ask whether, as between the alleged wrongdoer and the person who has
suffered damage there is a sufficient relationship of proximity or neighbourhood such that,
in the reasonable contemplation of the former, carelessness on his part may be likely to
cause damage to the latter, in which case a prima facie duty of care arises.
Second, if the first question is answered affirmatively, it is necessary to consider whether
there are any considerations which ought to negate, or reduce or limit the scope of the
duty or the class of person to whom it is owed or the damages to which any breach of it
may give rise.
The retreat from Anns
However, the Privy Council in Yuen Kun Yeu v Attorney-General of Hong Kong [1987] 2 All ER 705
and the House of Lords in Curran v Northern Ireland Co-Ownership Housing Association [1987]
2 WLR 1043 pointed out the danger of assuming that the comments of Lord Wilberforce in
Anns lead to a rule that objective foreseeability of itself automatically leads to a duty of care
and that a defendant with objective foresight is therefore liable unless there are reasons, e.g.
public policy, why he should not be so.
The movement towards a position where virtually any event can be foreseen leaving the
only bar to liability to rest on public policy came to an end in Murphy v Brentwood District
Council [1990] 2 All ER 908 when the House of Lords overruled its own decision in Anns as
the 1966 declaration gives it power to do.
The facts of Murphy are similar to those of Anns, i.e. a house built on inadequate founda-
tions followed by a claim against the local authority for negligent failure to ensure that the
house was built in accordance with the relevant regulations. The House of Lords decided
that the local authority was not liable and overruled Anns. The judgments of the House
of Lords indicate that the problem with Anns was not so much what it decided in terms
of the liability of the local authority but the broad statements as to the duty of care made
by Lord Wilberforce in the case. Their Lordships felt that if the case was left as good law,
its principles could not be confined to the local authority situation. In fact, it had already
started to expand professional liability to the point where accountants, in particular, were
unable to get adequate indemnity insurance. In this connection, the retreat from Anns is to
be seen in the Caparo case (see later in this chapter) which some think has gone too far the
other way.
It would seem that since Murphy we are back to a tighter test of liability. A duty of care will 21
be based upon the need for proximity enshrined in Lord Atkin’s neighbour test in Donoghue.
Nevertheless, given sufficient proximity new duties can arise in new fact situations. For
example, in Swinney v Chief Constable of Northumbria Police [1996] 3 All ER 449 the Court
of Appeal held that the police had a duty of care not to let information supplied to them
regarding criminal activities get into the hands of a suspect. A statement by the claimant was
allowed, because of police negligence, to get into the hands of a suspect who subjected the
claimant to violence and arson of his premises, a public house. He suffered mental injury
and had to give up the tenancy of the pub. The Court of Appeal held that he was entitled to
damages and no rule of public policy prevented this.
In Vowles v Evans [2003] 1 WLR 1607 the Court of Appeal ruled that a rugby referee owed a
duty of care to his players. The claimant was injured and became confined to a wheelchair
when two front rows failed to engage cleanly in the final set scrum of the match. The incid-
ent occurred because the referee allowed the substitution of an inexperienced and untrained
player to play in the front row without making any inquiry of his captain or the player as to
his suitability for the front row.
..
EL_C21.qxd 3/26/07 10:54 AM Page 556
The duty of care – economic loss

An area of some difficulty, and in which there has been much development, is in the field of
economic loss. Is there a duty to avoid causing foreseeable economic loss? The position is as
follows:
(a) Careless misstatements. These are considered in greater depth later in this chapter.
However, broadly speaking, a person who makes a careless statement which causes economic
loss to a claimant within the area of his foresight may be liable to compensate that claimant
for economic loss.
(b) Physical injury – parasitical damages. Damages for economic loss may be awarded if
there is foreseeable physical injury to the claimant or his property, though issues of public
policy still govern where the line is to be drawn.
Weller & Co v Foot and Mouth Disease Research Institute, 1965 – Where
economic loss is irrecoverable (393)
SCM (UK) Ltd v W J Whittall & Son Ltd, 1970 – Where economic loss is not a
consequence of physical damage (394)
Spartan Steel and Alloys Ltd v Martin & Co Ltd, 1972 – Economic loss following from
physical damage (395)
(c) The Junior Books case. In Junior Books Ltd v Veitchi Co Ltd [1982] 3 All ER 201 the House
of Lords decided that the claimants could recover economic loss which was not parasitical
because in that case there was no physical injury to the claimant or his property, but merely
faulty work.
However, it would be unwise to assume that injury to person or property is now never
necessary. There was a very close proximity in terms of foresight of injury between the parties
in Junior Books and as a matter of public policy it may still be necessary to restrict liability in
cases such as Weller where liability was potentially endless. There have, in more recent times,
been a considerable number of restrictions placed on Junior Books almost confining it to its
own facts (see below).
Junior Books Ltd v Veitchi Co Ltd, 1982 – A rare recovery of economic loss (396)
Breach of the duty

If a duty of care is established as a matter of law, whether or not the defendant was in breach
of that duty is a matter to be decided by the judge on the facts of the case, though the
standard required, i.e. that of acting as a reasonable man, is a legal standard.
Here we are concerned with how much care the defendant must take. It is obvious that if
motorists did not take out their cars many lives would be saved, and yet it is not negligent to
drive a car. Once again, the test is to place the ‘reasonable man’ in the defendant’s position.
It is an objective test and was thus stated by Baron Alderson in Blyth v Birmingham
Waterworks Co (1856) 11 Ex 781:
Negligence is the omission to do something which a reasonable man guided upon those
considerations which ordinarily regulate the conduct of human affairs would do, or doing
something which a prudent and reasonable man would not do.
..
EL_C21.qxd 3/26/07 10:54 AM Page 557
SPECIFIC TORTS 557
The standard required is not that of a particularly conscientious person but that of the
average prudent person in the eyes of the court. It has been said that the reasonable person is
to be found on the Clapham omnibus, but it should not be thought that the average prudent
person has a low standard of care. Most of us behave unreasonably from time to time, and if
during one of these lapses a person suffers injury, it will be no good our pleading that we are
usually reasonable people.
Daniels v R White and Sons Ltd, 1938 – Duty to take reasonable care (397)
Hill v J Crowe, 1977 – A packing case collapses (398)
Causation
It is also necessary for the claimant to prove causation, i.e. that the negligent act in breach of
duty actually caused the situation for which he claims.
Thus in Gregg v Scott [2005] 2 AC 176 the claimant, Mr Gregg, developed a lump under his
arm. He went to see Dr Scott, who told him that it was a collection of fatty tissues. One year
later another doctor discovered it was cancer of a lymph gland. By this time the claimant’s
chances of surviving for 10 years or more if treated promptly had fallen, it was said, from
42 per cent to 27 per cent. The tumour had spread to his chest. The treatment temporarily
destroyed the tumour but the claimant had a relapse and was left with a poor prospect of
survival.
He claimed against Dr Scott in negligence for the loss of a chance of medium term recov-
ery. The House of Lords ruled against him. The reason was, basically, that the court will not
move on damages unless the claimant can prove causation. Nobody could say that the
claimant’s chances of recovery had been reduced. Nobody had actual knowledge of that.
When a court is faced with lack of knowledge of the facts of a case it deals with it by burden
of proof. The claimant must prove causation. Sadly, neither Mr Gregg nor anyone else could.
Even medical science cannot prove a result in cases such as this. Many treatments work, but
not all do on all persons. In such a situation the rule of proof of causation will defeat the claim.
Objective standards – professionals

When a person has undertaken a duty which requires extraordinary skill, a higher standard of
care will be expected. For example, one would expect from a builder the degree of skill appro-
21
priate to a reasonably competent member of his trade and from an accountant or solicitor
also an objective standard of competence. Such persons may, therefore, be negligent even
though they do their best.
Greaves v Baynham Meikle, 1974 – An objective standard (399)
Medical practitioners
In the case of medical practitioners, it seems that because allegations of negligence in the
medical context are more frequent and serious, a high standard of proof of negligence is
required so that an error of clinical judgement does not of itself amount to negligence. Thus
in Whitehouse v Jordan [1981] 1 All ER 267 the claimant was born with severe brain damage
following a difficult birth and sued the defendant, a senior hospital registrar, for damages.
The defendant had used forceps to assist delivery of the claimant and it was alleged that he
..
EL_C21.qxd 3/26/07 10:54 AM Page 558
pulled too hard and too long. It was held by the Court of Appeal and later by the House of
Lords that if the damage had indeed been caused by the defendant’s use of forceps the most
that could be said with the benefit of hindsight was that he had made an error of clinical
judgement which did not of itself amount to negligence, so that the claimant’s claim failed.
However, the standard of care in cases of medical negligence is changing. The necessary
standard of care required of a doctor towards his patient was laid down in Bolam v Friern
Hospital Management Committee [1957] 2 All ER 118. It was to the effect that a doctor is not
liable in negligence if he has acted in accordance with a practice accepted as proper by a
responsible body of medical men and women skilled in the particular procedure. This meant
that doctors could between them set their own standards of care. In more recent times the
Bolam case has not been followed. An example is provided by Newell v Goldenberg [1995] 6
Med LR 371. The claimant complained that he had not been warned of the small risk (1 in
2,300) of a possible failure of his vasectomy. The defendant produced evidence to show that
at the relevant time it was not usual for surgeons to give such warning. However, Mantel
J held that there was liability and that doctors who did not warn could not be regarded as
acting responsibly.
Of even greater importance is the decision of the House of Lords in Bolitho v City and
Hackney Health Authority [1997] 4 All ER 771 where their Lordships qualified the long-
established principle outlined in Bolam. A court was not bound they said ‘to hold that a
defendant doctor escapes liability for negligent treatment or diagnosis just because he
leads evidence from a number of medical experts who are generally of the opinion that the
defendant’s treatment or diagnosis accorded with sound medical practice . . . The court has
to be satisfied that the exponents of the body of opinion relied on can demonstrate that
such an opinion has a logical basis’. The ruling goes wider than medical practitioners in
that accountants may not be able to rebut a charge of negligence merely by showing that
they have followed standards, e.g. Financial Reporting Standards, issued by the profession.
In fact, the Court of Appeal of British Columbia in Kripps v Touche Ross (1992) 94 DLR
(4th) 284 held against Touche Ross on the ground that the accountants had known that
a simple application of a Canadian accounting standard would omit material information
in the particular case. However, the courts, which lack expertise in these matters, will
not often depart from good professional practice, but since Bolitho may do so in an appropri-
ate case.
Advocates
Advocates provided an exception to the above rule because no action lay against them
for negligence in conducting a case (see Rondel v Worsley (1967), in Chapter 3) though it did
(and does) in respect of preparatory work or advice unless it was pre-trial work intimately
connected with the trial itself.
This immunity was removed by the House of Lords in Hall v Simons (2000) The Times,
2 July. The immunity in civil disputes and criminal cases has gone and claims may now be
made against barristers and solicitor advocates even in regard to the way in which the trial
was conducted in court. In the view of the House of Lords, it was not in the public interest
nor in the interest of members of other professions that the advocate’s immunity should
continue.
Standard set by public policy

In other cases public policy may also require a higher standard of care than the defendant
possesses so that again he may be negligent even though he does his best (see Nettleship v
Weston (1971), in Chapter 20).
..
EL_C21.qxd 3/26/07 10:54 AM Page 559
SPECIFIC TORTS 559
Other special cases

It should be noted that if precautions are taken which would have been reasonable in the
case of persons possessed of the usual faculties of sight and hearing, this will be sufficient to
absolve a person who does injury to those not possessed of such faculties, so long as he was
not aware of their infirmity. However, persons engaged on operations on the highway must
act reasonably so as not to cause damage to those who are using the highway, including
blind people. Furthermore, the court will take into account the importance of the object
which the defendant was trying to achieve and whether it was practicable and necessary for
the defendant to have taken the precautions which the claimant alleged should have been
taken.
Paris v Stepney Borough Council, 1951 – Those with infirmities (400)

Haley v LEB, 1964 – Works on the highway (401)
Watt v Hertfordshire County Council, 1954 – The importance of the objective (402)
Latimer v AEC Ltd, 1953 – What could the defendant reasonably do? (403)
Resulting damage to the claimant

It is necessary for the claimant to show that he has suffered some loss, since negligence is not
actionable per se (in itself ). A breach of contract with no loss will at least give an action for
nominal damages but not so in tort. The major problem arising here is the question of
remoteness of damage which was dealt with earlier in the chapter. The judge decides the
measure of general damages.
Res ipsa loquitur

Although the burden of proof in negligence normally lies on the claimant, there is a prin-
ciple known as res ipsa loquitur (the thing speaks for itself ), and where the principle
applies the court is prepared to lighten his burden. The principle applies wherever it is
so unlikely that such an accident would have happened without the negligence of the
defendant that the court could find, without further evidence, that it was so caused. It
seems also to be a commonsense rule in that there is no point in asking the claimant to
prove negligence because he has no view of what happened. If two cars collide on a public 21
road, at least the drivers have a view of what happened prior to the crash but when, for
example, a barrel falls out of a warehouse on to A he has no view at all of the happenings
leading to the impact.
However, two conditions must be satisfied:
(a) the thing or activity causing the harm must be wholly under the control of the defendant
or his servants; and
(b) the accident must be one which would not have happened if proper care had been
exercised.
Easson v LNE Railway, 1944 – No exclusive control (404)

Roe v Minister of Health, 1954 – A defective ampoule (405)
Byrne v Boadle, 1863 – A falling barrel (406)
Scott v London and St Katherine Docks, 1865 – Falling bags of sugar (407)
..
EL_C21.qxd 3/26/07 10:54 AM Page 560
It should be noted that just because the principle res ipsa loquitur applies, it is not certain
that the claimant will succeed; the court is not bound to find the defendant negligent. The
defendant may be able to prove how the accident happened and that he was not negligent.
He may not know how the accident happened but he may be able to prove that it could not
have arisen from his negligence. Finally, he may suggest ways in which the accident could
have happened without his negligence, and the court may find his explanations convincing.
If a tile falls off Y’s roof and injures X who is lawfully on the highway below, this would prob-
ably be a situation in which res ipsa loquitur would apply. But if Y can show that at the time
an explosion had occurred nearby and this had probably dislodged the tile, and the court is
impressed by this explanation of the event, the burden of proof reverts to X. However, it is
not enough to offer purely hypothetical explanations (Moore v R Fox and Sons [1956] 1 All ER
182), nor is it sufficient to explain how the accident happened unless the explanation also
shows that the defendant was not negligent (Colvilles v Devine [1969] 2 All ER 53).
Pearson v North-Western Gas Board, 1968 – Rebutting a presumption of

negligence (408)
If the defendant successfully rebuts the presumption of res ipsa loquitur the claimant has to
establish his case by positive evidence. He will probably be unable to do this by the very
nature and cause of the accident and the chances are that he may lose his claim. If he had
had such positive evidence he would probably have adduced it in the first place and not
relied on the maxim at all.
Contributory negligence
Sometimes when an accident occurs, both parties have been negligent and this raises the
doctrine of contributory negligence. At one time a claimant guilty of contributory negligence
could not recover any damages unless the defendant could, with reasonable care, have
avoided the consequences of the claimant’s contributory want of care. Thus the courts were
often concerned to find out who had the last chance of avoiding the accident, and this led to
some unsatisfactory decisions.
Now, however, under the Law Reform (Contributory Negligence) Act 1945, liability is
apportionable between claimant and defendant. The claim is not defeated but damages may
be reduced according to the degree of fault of the claimant. A person may contribute to the
damage he suffers although he is not to blame for the accident. Thus failure by a claimant to
wear a crash helmet on a motor cycle or moped may reduce the damages he obtains on the
ground of contributory negligence (O’Connell v Jackson [1971] 3 All ER 129). Similarly, failure
by a claimant to wear a seat belt in a motor car may also reduce damages on the grounds of
contributory negligence (Froom v Butcher [1975] 3 All ER 520 (see below) ). The defence of
contributory negligence also applies to an action brought under the Fatal Accidents Act. Thus
a wife whose husband failed to wear a seat belt and was thrown out of the van he was driving
and killed had her damages reduced by one-fifth (Purnell v Shields [1973] RTR 414).
Where a defendant is insured against the injury he has caused, which is often the case, the
effect of a finding of contributory negligence is in a sense to punish the claimant. There have
been suggestions in case law that the rule should be abolished where the defendant is insured
since the doctrine merely saves the insurance company money. However, in Froom v Butcher
[1975] 3 All ER 520, Lord Denning disapproved of these cases and held that where injuries
resulting from a road accident would have been prevented or lessened if a fitted seat belt had
been worn, the failure to wear a seat belt amounted to contributory negligence on the part of the
..
EL_C21.qxd 3/26/07 10:54 AM Page 561
SPECIFIC TORTS 561
claimant and damages awarded should therefore be reduced. In consequence, Lord Denning
has produced an additional definition of contributory negligence so that there are two:
(a) to contribute to the accident, which is the old view of contributory negligence; and
(b) to contribute to the resulting damage, which is a new concept.
Furthermore, in Froom Lord Denning laid down a rather precise formula for contributory
negligence in order to introduce as much certainty as possible in road traffic cases and reduce
the number of trials, by saying that if failure to wear a seat belt by a front-seat passenger or
driver would have made no difference, then nothing should be taken off the damages. If it
would have prevented the accident altogether the damages should be reduced by 25 per cent,
and if the accident would have been less severe the damages should be reduced by 15 per
cent, though exemptions would be made, said Lord Denning, for pregnant women and those
who were very fat.
Since 1983 it has been a criminal offence for the driver and front-seat passenger not to wear
seat belts. The courts may therefore reduce still further the damages where a seat belt is not
worn. It is thought unlikely that they will refuse to give damages altogether because the
claimant is breaking the law, i.e. the defence will probably not be able to raise ex turpi causa
(see Chapter 16) as a complete defence.
Since the rules relating to the wearing of seat belts are now extended in many cases to rear
seat passengers no doubt their damages will be reduced if they are injured while not wearing
a belt.
It should be noted that the rules laid down by Lord Denning do not prevent the courts
from looking at all the circumstances of the case. For example, in Jones v Morgan (1994)
Current Law, Week No 26, the damages awarded to a taxi-driver as a result of the injuries
caused by the negligent driving of the defendant were not reduced because he was not wear-
ing a seat belt. The court took into account the fact that a taxi-driver may be attacked by a
passenger and a seat belt if attached would inhibit his ability to defend himself.
It should be mentioned that a young child will not normally be guilty of contributory negli-
gence but it is a matter of fact in each case. Furthermore, the contributory negligence of an
adult who happened to be with the child is no defence to an action brought by the child.
Jones v Lawrence, 1969 – Contributory negligence and children (409)

Oliver v Birmingham Bus Co, 1932 – A grandfather’s negligence (410)
21
Furthermore, it was held in Yianni v Edwin Evans & Sons [1981] 3 All ER 592 that a house
buyer who relies on a valuation of the property he is buying prepared by a building society
surveyor is not contributorily negligent because he has not had the property surveyed by
another independent surveyor employed by himself.
The victim’s contributory negligence is no defence where the victim’s claim is for
deceit (fraud). Thus if an employer, A, is made vicariously liable for damage caused by an
employee’s fraud in overvaluing properties in order to obtain higher mortgages, it is no
defence for A to say that C, the victim, did not use usual procedures to check on the fraudu-
lent valuations (Alliance & Leicester Building Society v Edgetop Ltd [1994] 2 All ER 38). (For other
non-fraudulent situations, see below.)
It was also held in Corporation Nacional del Cobre de Chile v Sogemin Metals Ltd [1997] 2 All
ER 917 that the defence of contributory negligence was not available to the defendant where
he had bribed the claimant’s employee to act contrary to its interests in making futures con-
tracts, i.e. contracts made for the future delivery of goods at a price fixed at the time of the
contract which price may rise or fall by the time of delivery.
..
EL_C21.qxd 3/26/07 10:54 AM Page 562
Contributory negligence in property valuation

One of the most difficult areas in terms of contributory negligence in business has been the
use of the concept where a lender, such as a building society, bank or other mortgage lender,
lends money on a property that valuers have in the event and by negligence overvalued. If
the borrower cannot repay the loan and the lender repossesses the property and sells it, but
because of the negligent valuation (and not because of a falling market) fails to recover what
was lent and sues the valuer, what happens if the valuer puts in a defence of contributory
negligence on the basis that the lender is partly to blame in that the inability of the borrower
to repay is in part due to the lender’s failure to properly vet his financial circumstances? If
this is a cause of the sale, then a defence of contributory negligence is relevant.
In these cases the first step is to establish what is the basic loss of the lender. This will be
the difference betwen the amount of the loan and the sale price. This must be reduced by a
percentage for contributory negligence by the lender (see Platform Home Loans Ltd v Oyston
Shipways Ltd [2000] 2 AC 190).
The second step is to see whether the basic loss now exceeds the amount of the overvalua-
tion (see Banque Bruxelles Lambert SA v Eagle Star Insurance [1997] 1 WLR 1627). If it does, the
lender’s right of recovery from the valuer is limited to the extent of the overvaluation.
Thus, if the overvaluation was £3,000 and the lender’s loss on re-sale was after deduction of
contributory negligence £2,000, the lender would recover £2,000. If, however, the lender’s
loss was £4,000 after deduction for contributory negligence, he would recover only £3,000. In
the absence of contributory negligence, he would recover the actual loss.
Contributory negligence and deceit

In Standard Chartered Bank v Pakistan National Shipping Corp (Reduction of Damages) [2001] QB
167 the Court of Appeal affirmed that a defendant who has been found liable for deceit, as
in a fraudulent misrepresentation, cannot successfully establish a defence based upon the
contributory fault of the claimant. The defendants had fraudulently issued a bill of lading to
the bank giving a false shipping date for goods which they knew would cause the bank to
make payment of a letter of credit. The defendants tried to defend the claim against them by
alleging the bank’s contributory negligence in failing to notice certain discrepancies in the
bill of lading. This defence failed.
Contributory negligence – warning the victim

The fact that the victim of negligence received a warning of possible harm will not mean
that the damages will be totally eliminated. In Brannan v Airtours plc (1999) The Times,
1 February the defendants put on a party with unlimited free wine, as part of a package
holiday. Guests were told not to stand on tables because of danger from overhead fans.
The claimant climbed on to a table and was injured by a fan. The trial judge reduced his
damages by 75 per cent, but the Court of Appeal said the defendants could have avoided the
damage by ensuring that tables were not under fans, and so assessed contributory negligence
at 50 per cent.
The effect of warnings was also raised in one of the first reported cases on the subject of
whether the smoking of tobacco constituted contributory negligence in terms of a death from
cancer of the lung.
The matter was raised in Badger v Ministry of Defence [2005] 3 All ER 173. The claimant’s
husband died of lung cancer. The primary responsibility for this rested with, and was
admitted by, his employer because he had been exposed to asbestos dust and fibres in his
work as a boiler maker. However, his employer asked for a reduction in the damages because
he had smoked from 1955 onwards and this was a cause also of lung cancer.
..
EL_C21.qxd 3/26/07 10:54 AM Page 563
SPECIFIC TORTS 563
The High Court did not regard the early years of his smoking as contributory negligence
because the connection between smoking and ill-health was not widely accepted. However,
he continued to smoke after 1971 when warnings were put on cigarette packets and this
began the process of contributory negligence. The damages were reduced by 20 per cent.
The doctrine of alternative danger or the ‘dilemma principle’

It sometimes happens that a person is injured in anticipating negligence. If a passenger
jumps off a bus which he believes to be out of control, and breaks his leg in so doing, he is
not prejudiced by the fact that the driver later regains control and the anticipated accident is
averted. He is not deprived of his remedy. This is sometimes referred to as the doctrine of alterna-
tive danger, and an act done in the agony of the moment cannot be treated as contributory
negligence. Thus in Jones v Boyce (1816) 1 Starkie 493, in a coach accident, the claimant was
placed by the negligence of the defendant in a perilous alternative either to jump or not to
jump. He jumped off the coach and was injured and it transpired that had he kept his seat he
would have escaped. However, he was able to recover from the defendant because he had
acted reasonably and in the apprehension of danger.
Statutory duties
Sometimes a particular duty of care is laid upon a person by statute, e.g. the duty laid on
an employer as to guarding machinery under safety legislation. Such duties are high and very
often absolute, though the employer can plead contributory negligence as a defence. In
addition, where there is a breach of a statutory duty, it must be shown that the duty is owed
to the claimant personally and not to the public as a whole.
Atkinson v Newcastle Waterworks Co, 1877 – Where the duty is owed to the
public (411)
A conditional statutory power saying that the person upon whom it is conferred may act
cannot be converted into a statutory duty which says he must act. Thus in East Suffolk Rivers
Catchment Board v Kent [1940] 4 All ER 527, a river catchment board, which had a power to
repair river banks, could not be sued successfully for failing to do so on the grounds that a
statutory duty had been breached.
21
However, where a statute prescribes provision to prevent damage, if an action is brought,
the harm resulting from the breach of duty must be of the type contemplated by the statute.
Gorris v Scott, 1874 – Is the damage of the type contemplated? (412)
Compensation Act 2006

Before leaving negligence generally, note should be taken of the Compensation Act 2006.
This Act is designed to overcome some of the problems created by claims management com-
panies encouraging persons who have suffered injury where there might be negligence to
‘have a go’ under the ‘no-win, no-fee’ arrangements. The problems are that desirable activities
such as school trips and school camps etc. abroad have been reduced and stifled by fear of
litigation if anything goes wrong. The Act deals with this as follows:
..
EL_C21.qxd 3/26/07 10:54 AM Page 564
n the court should consider whether the usual standards of care should apply where if they
are so applied it may prevent a desirable activity from being undertaken; or
n discourage persons from organising and taking part in them;
n an apology or offer of treatment or other redress shall not in itself amount to an admission
of negligence.
The Act also sets up the office of regulator of claims management services. These must be
authorised by the regulator who will then supervise their conduct.
It has already been noted that the Act deals with the decision in Barker v Corus (UK) plc
[2006] 2 WLR 1027 by restoring the joint and several liability ruling in Fairchild v Glenhaven
Funeral Services Ltd [2003] 1 AC 32.
Negligence – product liability
Here we shall consider the liability of a manufacturer for defective goods where in the
absence of a contract between the parties liability is based on the common law of negligence
and to some extent now on statute law.
Physical injury
Where the goods are purchased from a retailer, no action can be brought under the Sale of
Goods Act by the purchaser against the manufacturer. The doctrine of privity of contract
applies (see Chapter 10) with the result that there is no contract between them into which
the warranties and conditions set out in the Act can be implied. However, the purchaser may
have an action in negligence against the manufacturer in respect of physical injury caused by
defects in the goods (see Donoghue v Stevenson (1932) ). The rule arrived at in Donoghue v
Stevenson has been widened since 1932, and now applies to defective chattels generally which
cause injuries to purchasers (see Grant v Australian Knitting Mills Ltd (1936), in Chapter 14).
However, although the Donoghue case shows that the manufacturer has a duty to take care,
evidence may show that he was not in breach of that duty because he took proper precautions.
In addition, liability in negligence is not strict as it is under the Sale of Goods Act. The
claimant must prove negligence in the process of manufacture. However, assistance is given
by the plea of res ipsa loquitur (the thing speaks for itself ). If this plea is accepted by the court
the defendant must as we have seen show he was not negligent or explain how the matter
could have come about without his negligence. If he fails to do this the claimant wins the case.
In this regard, the decision of the Court of Appeal in Carroll v Fearon [1998] PIQR P416 is of
interest. In that case one of the tyres on a car suffered a sudden and complete failure resulting
in tread strip while on a motorway, and causing a collision with one fatality and a number of
serious injuries. The makers of the tyre defended a claim for negligence by saying that the
claimants must prove what act(s) of theirs made the tyre defective. However, the court ruled
that the manufacturers were negligent and liable and it was not necessary to identify specific
acts of negligence in the process of manufacture of the tyre. The facts themselves spoke of
negligence by the maker, which was enough.
In certain of the cases mentioned above the question of inspection of the goods was raised.
It was an important fact in the decision in Donoghue v Stevenson (1932) that the bottle was
made of dark glass, so that the snail could not be seen on external inspection of the bottle,
and that normally no inspection of goods would take place until they reached the consumer.
It is not thought that in the developing law of negligence a manufacturer can rely on an
..
EL_C21.qxd 3/26/07 10:54 AM Page 565
SPECIFIC TORTS 565
inspection revealing the defects in his product, except perhaps in a special case where it is
known that an expert inspection normally takes place. If such an inspection does not take
place, or fails to find the defect which it should have found, the manufacturer may regard
this as a novus actus interveniens (a new act intervening) breaking the chain of causation
between his negligence and the injury so that the claimant’s claim will fail.
The purchaser of goods from a retailer may have a right to sue in contract under the Sale
of Goods Act conditions and warranties if third-party rights have been conferred on him (or
implied) under the Contracts (Rights of Third Parties) Act 1999.
Economic loss
Product liability in negligence has, up to recent times, been confined to defective chattels
which cause physical injury to purchasers as in Donoghue and Grant. The law seemed to have
taken a step forward in the Junior Books case by extending product liability in negligence to
complaints relating to defects in goods which had caused economic loss rather than physical
injury. This seems unlikely to develop at the present time for the reasons given in the com-
ment to the case.
Contributory negligence
Even though the claimant has managed to prove negligence in the manufacturer the latter
may still be able to obtain a reduction in the damages or even defeat the claim by proving
that the claimant was guilty of contributory negligence as where he contributed to the
damage or was even entirely responsible for it by, for example, failing to observe operating
instructions or using the product after knowledge that it was defective. As we have seen, the
Law Reform (Contributory Negligence) Act 1945 applies. Under it the court may, for example,
assess damages at £20,000 but decide that the claimant was 50 per cent to blame and reduce
the damages to £10,000. In an extreme case the court may decide that the claimant was 100 per
cent to blame so that he recovers nothing.
Third-party proceedings
Strict liability under the Act of 1979 can, in effect, be imposed on a manufacturer by means
of third- (or fourth-)party proceedings. Thus, if the seller is sued by the buyer for breach of an
implied condition under the Act, the seller may claim an indemnity from his own supplier 21
which may be the manufacturer. If the retailer has purchased from a wholesaler, the retailer
may claim an indemnity from the wholesaler who may in turn claim an indemnity from
the manufacturer who supplied the goods. In this way the manufacturer can be made to pay
for defects affecting the quality or fitness of the goods. Godley v Perry (1960) (see Chapter 14)
provides an example of joinder of parties in a civil action. In connection with third-party
proceedings, it should be borne in mind that the retailer may be unable to make a successful
claim because of a ‘reasonable’ exclusion clause in the contract between him and his previous
suppliers. In addition, the retailer’s claim will be ineffective if one or more of the previous
suppliers is insolvent.
Collateral contracts with the manufacturer

The manufacturer may also be liable for defects in quality or fitness under a collateral
contract. Thus in Shanklin Pier Ltd v Detel Products Ltd [1951] 2 All ER 471 Shanklin entered
into a contract with A to paint the pier and asked A to use paint made by Detel, the
suitability of which had been communicated to Shanklin by Detel’s agent. The paint was
..
EL_C21.qxd 3/26/07 10:54 AM Page 566
not suitable and Shanklin recovered damages against Detel for breach of a contract which
the court held was collateral to the main contract with A. This applies, however, only where a
specific and express undertaking has been given by the manufacturer to the seller, and it is
doubtful whether such a claim could be based on statements made in a manufacturer’s public
advertisements. There are no firm illustrations of this in English law, though Carlill v Carbolic
Smoke Ball Co (1893) (see Chapter 9) could perhaps be developed. The court did not in fact go
for the collateral contract solution in Lambert v Lewis (1981) (see Chapter 14). The action
against the manufacturer in that case was framed in negligence.
The Law Commission has recognised the need to provide some general form of action
against the manufacturer but has determined that this cannot be done by a simple amend-
ment to the Sale of Goods Act 1979. The Commission, therefore, recommends that a wider
study of the problem be made before embarking upon legislative measures (Exemption Clauses,
First Report, para 63).
Manufacturers’ guarantees
A manufacturer’s guarantee (or warranty, as it is sometimes called) normally amounts to a
warranty to repair or replace during a specified time with the addition in the case of vehicles
of a mileage limit. Such guarantees are presumably enforceable by the buyer as a collateral
contract as in Carlill v Carbolic Smoke Ball Co (1893) (see Chapter 9 and also Chapter 14 in
connection with guarantees under the provisions of the Sale and Supply of Goods to Consumers
Regulations 2002).
They cannot affect the purchaser’s right to sue upon the implied conditions and warranties
set out in the Sale of Goods Act 1979 or at common law for negligence because under s 5 of
the Unfair Contract Terms Act 1977 a clause in a manufacturer’s or distributor’s guarantee
cannot operate to exclude or restrict the manufacturer’s or distributor’s liability to the
customer, provided the goods are of a type ordinarily supplied for private use or consumption
and prove defective while in consumer use, i.e. not used exclusively for the purposes of a
business.
It should be noted, of course, that in addition to the above three procedures which overcome
the privity rule, there is also now the possibility that third-party rights have been conferred
on the claimant (or implied) by the Contracts (Rights of Third Parties) Act 1999.
This Act does not confer a general right on a purchaser against the manufacturer. It will
only do so if the parties to the original contract (say, between the manufacturer and the
retailer) confers such a right or if it can be implied that such rights exist in the circumstances
of the case.
Statutory product liability – claims against

the manufacturer
The Consumer Protection Act 1987 now provides a statutory basis for a claim against the
manufacturer.
Part I of the Consumer Protection Act 1987

This brings into law strict product liability so that the consumer will no longer have to prove
negligence when claiming compensation for damage or injury caused by products which are
defective or unsafe. Civil liability will arise if damage is caused by a defective product. The
..
EL_C21.qxd 3/26/07 10:54 AM Page 567
SPECIFIC TORTS 567
Act is by no means a ‘cure-all’ because the claimant will still have to prove that the product
caused the injury – not always an easy matter.
Damage is described as death, personal injury, or loss of or damage to private property.
Thus, damage to business property is not included. Furthermore, damage to property cannot
be recovered unless it exceeds £275. If it does then the whole amount is recoverable, includ-
ing the first £275. This is to prevent trivial claims for damage to property.
In assessing whether the product is unsafe, the court must have regard to any warnings
as to its use in advertising and marketing in general, instructions for use, how long ago
the goods were supplied, and whether the product was put to what might be described as a
reasonable use.
The following may be liable under the Act: the manufacturer of the product; a person who
puts his name on the product thus holding himself out to be the manufacturer, i.e. a super-
market ‘own brand’ which is made for it by another manufacturer; an importer and a supplier
if that supplier will not respond to a request to identify the person who supplied the product
to him.
It is a defence to show that: (a) the product was not supplied in the course of a business;
(b) the defect did not exist when the product was supplied; (c) technical knowledge was such
that the defect could not have been known (called the ‘development risk defence’). Hence,
the manufacturers of the drug Thalidomide may well have had a defence under the Act.
However, manufacturers pressed for the retention of the development risk defence so as not
to inhibit the development of new products.
The Act provides that any attempt to exclude liability by a term of a contract or notice
will be ineffective. An injured party has three years in which to commence an action after
the injury and discovery of the producer. There is a time bar on claims in any event 10 years
from when the product was supplied.
The Act did not impose liability on the producer of game or agricultural produce provided
it has not undergone an industrial process. SI 2000/2771 now extends Part I to do so.
Abouzaid v Mothercare (UK ) Ltd, 2000 – Older products (412a)

Bogle v McDonald’s Restaurants Ltd, 2002 – The hot drinks (412b)
Part II of the Consumer Protection Act 1987

21
This repeals the Consumer Safety Act 1978 and the Consumer Safety (Amendment) Act 1986
and provides a better legal framework to give the public protection from unsafe goods. The
main provisions are as follows:
(a) A person is guilty of an offence if he supplies any consumer goods which fail to comply
with the general safety requirement. Section 10 of the 1987 Act which contained the general
safety requirements is disapplied by the General Product Safety Regulations 1994 (SI
1994/2328). The Regulations now contain the general safety requirements for goods and
these are expanded so that producers of consumer goods and those involved in the supply
chain, e.g. distributors, will have to ensure among other things that their internal systems are
equipped to supply the consumer with information required by the Regulations, e.g. warning
of any risks in use and precautions to be taken, and that product recall procedures are
adequate. The goods must be ordinarily intended for private use or consumption.
(b) The government may make safety regulations for the purpose of defining the general
safety requirement set out in (a) above.
..
EL_C21.qxd 3/26/07 10:54 AM Page 568
(c) The Department of Trade and Industry may serve upon a supplier a ‘prohibition notice’
prohibiting him from supplying goods which are considered unsafe or a ‘notice to warn’
requiring him to publish a warning about the goods at his own expense.
(d) A suspension notice may also be served by enforcement authorities, e.g. weights and
measures authorities, prohibiting a supplier from supplying specified goods where the authority
has reasonable grounds for suspecting that there has been a contravention of the general
safety requirement, any safety regulations or any prohibition notice.
Part II is primarily enforced by criminal sanctions. However, the duties laid down in Part II
can assist a claimant in a civil claim which is why reference has been made to them. A
claimant injured by goods which infringe the safety requirements of the Act will be able to
bring a claim for damages in negligence on the basis that the manufacturer is in breach of his
statutory duty under the Act. This will make the claimant’s suit much easier since he or she
will not have to show a duty of care at common law. In this respect the Act is available to
those who have no contractual claim against the seller as where they have received the goods
as a gift.
Part III of the Act is concerned with misleading price indications but here again the sanc-
tions are criminal not civil, and since they do not have relevance to civil claims Part III is not
considered further.
Negligence – professional liability

We have considered the scope of a manufacturer’s liability for defective products which
he puts into circulation and the way in which a consumer can take direct action against a
manufacturer in negligence. The law of negligence also applies to the provision of services. In
particular, we are concerned with the position of those whose work involves giving pro-
fessional business advice. The law has developed mainly in cases against accountants but the
principles apply also to e.g. lawyers and valuers and surveyors.
The background and development

Liability for negligent statements is an important area of the law, and the number of claims
continues to increase. Negligent statements are now a more potent cause of actions at law
than negligent acts. This state of affairs has had, and will continue to have, a major influence
on the cost of indemnity insurance arrangements.
It was not always so. For example, in Candler v Crane, Christmas [1951] 2 KB 164
Mr Ogilvie, the owner of a number of companies, was anxious to obtain an investment
in them from Mr Candler. The defendants, a firm of accountants, prepared financial state-
ments for Mr Ogilvie, knowing that they were to be shown to Mr Candler as a basis for his
investment decision. Mr Candler did invest some money but a liquidation followed and
he lost it.
He sued the defendants for damages, alleging negligent preparation of the financial state-
ments. It was claimed that the defendants included freehold cottages and leasehold buildings
as corporate assets without obtaining ownership evidence.
It was further claimed that the cottages were, in fact, owned by Mr Ogilvie, and that the
title deeds were deposited with his bank to secure a personal overdraft. The leasehold build-
ings, it was alleged, did not belong to the company, but to Mr Ogilvie, and in any case, they
had been forfeited, it was said, for non-payment of rent.
..
EL_C21.qxd 3/26/07 10:54 AM Page 569
SPECIFIC TORTS 569
To succeed Mr Candler had first to establish, as a matter of law, that the defendants owed
him a duty of care. If they had indeed been negligent in the preparation of the accounts this
could then give rise to liability. The majority of the Court of Appeal decided that there was
no duty of care in such circumstances, and so the accountants were not liable to Mr Candler,
and would not have been, even if it had been proved that the financial statements were
prepared negligently. There was no further appeal.
However, Lord Denning dissented from the majority view, being of the opinion that the
accountants did owe a duty to Mr Candler, even though he was not a client. In his judgment,
he said:
I think the law would fail to serve the best interests of the community if it should hold that
accountants and auditors owe a duty to no one but their client. There is a great difference
between the lawyer and the accountant. The lawyer is never called on to express his
personal belief in the truth of his client’s case, whereas the accountant, who certifies the
accounts of his client, is always called on to express his personal opinion whether
the accounts exhibit a true and correct view of his client’s affairs, and he is required to do
this not so much for the satisfaction of his own client, but more for the guidance of share-
holders, investors, revenue authorities and others who may have to rely on the accounts
in serious matters of business. In my opinion, accountants owe a duty of care not only to
their own clients, but also to all those whom they know will rely on their accounts in the
transactions for which those accounts are prepared.
However, although Lord Denning was prepared to widen the liability of accountants to
encompass a person who was not a client, he does appear to have restricted that liability to
persons who it is known will rely on the accounts, as the last sentence of the above extract
from his judgment clearly reveals. But he was alone in his view of the case, and the expan-
sion of the liability of accountants (and others) for negligent statements had to wait for more
than a decade.
In Hedley Byrne & Co Ltd v Heller & Partners (1963) (see Chapter 13), the House of Lords over-
ruled the majority judgment of the Court of Appeal in Candler, and approved the dissenting
judgment of Lord Denning.
The decision in Hedley Byrne widened the liability of all professionals (including, of course,
accountants), but the House of Lords refrained, as a matter of public policy, from imposing
the even wider test of foresight formulated by Lord Atkin in Donoghue v Stevenson (1932). That
case, as we have seen, related to negligence actions for physical injury arising from negligent
acts, e.g. liability for a negligently manufactured product which causes physical injury to a 21
consumer. Liability under that test extended to anyone who might reasonably be foreseen
as suffering injury.
The need for a special relationship – knowledge of victim

Instead the House of Lords decided that in the negligent statement cases, there had to be a
‘special relationship’ between the maker of the statement and the person injured by it.
Obviously, this need not be a contractual client relationship. Although their Lordships did
not draw up a list of special relationships, comments made by them in their judgments
suggest that the duty in regard to a negligent statement would be owed only to those persons
whom the maker of the statement knows will rely on it, and not beyond that to those whom
he might foresee relying on it. Thus, the test for negligent statements causing monetary loss
(knowledge) was narrower than that for negligent acts causing physical injury (foresight),
though, in all honesty, it was difficult to see why liability as such should depend upon the
nature of the damage.
..
EL_C21.qxd 3/26/07 10:54 AM Page 570
Indeed, during the decade following Hedley Byrne there were a number of judicial decisions
which suggested that the foresight test propounded in Donoghue v Stevenson could be appro-
priate in the negligent statement situation thus potentially widening liability (see below).
This development was of course encouraged by the judgment of Lord Wilberforce in Anns v
London Borough of Merton (1977), already referred to.
From knowledge to foresight

Lord Wilberforce’s view that judges should consider broad principle rather than slavishly
follow relevant previous decisions enabled Mr Justice Woolf to break out of the Hedley Byrne
strait-jacket of ‘special relationships’ in JEB Fasteners Ltd v Marks, Bloom & Co [1981] 3 All ER
289. In April 1975, the defendants, a firm of accountants, prepared an audited set of accounts
for a company called BG Fasteners Ltd for the year ended 31 October 1974. The company’s
stock, which had been bought for some £11,000, was shown as being worth £23,080, that
figure being based on the company’s own valuation of the net realisable value of the stock.
The accountants nevertheless described the stock in the accounts as being ‘valued at lower
of cost and net realisable value’. On the basis of the inflated stock figure, the accounts
showed a profit of £11.25. If the stock had been shown at cost, with a discount for possible
errors, the accounts would have shown a loss of more than £13,000.
The defendant auditors were aware when they prepared the accounts that the company
faced liquidity problems, and was looking for outside financial support from, amongst other
people, the claimants, JEB Fasteners, who manufactured similar products and were anxious to
expand their business. The accounts which the defendants had prepared were made available
by the directors of BG to the claimants, who, although they had some reservations about the
stock valuation, decided that they would take the company over in June 1975 for a nominal
amount, because they would in so doing obtain the services of the company’s two directors
who had considerable experience in the type of manufacturing which the claimants, JEB,
carried on.
There were discussions between the claimants and the defendant auditors during the
takeover, but the auditors did not inform the claimants that the stock had been put into the
accounts at an inflated figure. The merger of the companies was not a financial success, and
the claimants brought an action for damages against the defendants.
The claimants alleged that the defendants had prepared the company’s accounts negli-
gently, and that they relied on the accounts when buying BG Fasteners, and would not have
bought the company had they been aware of its true financial position. It was contended on
behalf of JEB that an auditor when preparing a set of accounts owes a duty to all persons
whom he ought reasonably to have foreseen would rely on the accounts. The defendant
auditors argued that if a duty of care existed, it could only be to persons who had made a spe-
cific request for information.
Woolf, J decided that the defendant auditors did owe a duty of care to the claimants, but
that they were not liable in damages, since their alleged negligence was not the cause of the
loss. The overriding reason for the takeover had been to obtain the services of two of BG’s
directors. On the balance of probabilities, the takeover would have gone ahead even if the
accounts had shown the true position.
The judge said that, but for the statement of Lord Wilberforce in Anns (as mentioned),
Marks, Bloom would not have owed a duty of care to those who took over BG because the
foresight test could not have been applied, and a ‘special relationship’ would not have existed
(it was admitted that at the time the accounts in question were audited, Marks, Bloom did
not know that they would be relied on by the claimants, or even that any takeover was
contemplated).
..
EL_C21.qxd 3/26/07 10:54 AM Page 571
SPECIFIC TORTS 571
Furthermore, Woolf, J, having found a duty of care, said that following the Wilberforce test
in Anns, he could find no considerations which he felt ought to exclude it in the circum-
stances of the JEB case.
As regards the foreseeability issue, the judge said:
As Mr Marks was aware of the financial difficulties of BG Fasteners Ltd, and the fact that
they were going to need financial support from outside of some sort, I am satisfied that
Mr Marks, whom I can treat as being synonymous with the defendants, ought to have
realized the accounts could be relied on until the time that a further audit was carried
out by the commercial concerns to whom BG Fasteners were bound to look for financial
assistance. When he audited the accounts, Mr Marks would not know precisely who would
provide the financial support, or what form the financial support would take, and he
certainly had no reason to know that it would be by way of takeover by the [claimants].
However, this was certainly one foreseeable method, and it does not seem to me that it
would be right to exclude the duty of care merely because it was not possible to say with
precision what machinery would be used to achieve the necessary financial support.
Clearly, any form of loan would have been foreseeable, including the raising of money by
way of debenture and, while some methods of raising money were more obvious than
others, and a takeover was not the most obvious method, it was certainly one method
which was within the contemplation of Mr Marks.
The judge went on to decide that the events leading to the takeover of BG were therefore
foreseeable.
There was an appeal by JEB to the Court of Appeal, which upheld Woolf, J’s finding that
there was a lack of causal connection between JEB’s loss and the auditors’ alleged negligence.
Thus they were not liable.
However, the Court of Appeal went on to say that it was not necessary in order to decide
the appeal to determine the scope of an auditor’s liability for professional negligence.
From foresight back to knowledge

In more recent times the courts have made it clear that mere foresight is not enough. There
must be some ‘relationship’ or ‘proximity’ or ‘neighbourhood’ between the parties. This is
likely to restrict liability to within reasonable bounds and close the floodgates to a wide variety
of claims by claimants unless they are known to be the users of professional statements and,
further, that the professional concerned knows of the use to which they will be put. Given such a 21
situation a duty of care will exist.
This development was taking place before the Anns case was overruled by the decision
of the House of Lords in Murphy v Brentwood District Council (1990) as the case law below
shows.
Caparo Industries plc v Dickman, 1990 – Accountants’ liability (413)

Morgan Crucible Co plc v Hill Samuel, 1990 – Accountants’ liability in a
takeover (414)
Current trends in liability

A case which appears to widen the liability of auditors beyond statements to mere omissions
is Coulthard v Neville Russell (1997) The Times, 18 December, where the Court of Appeal held
that, as a matter of principle, auditors have a duty of care to advise that a transaction which the
..
EL_C21.qxd 3/26/07 10:54 AM Page 572
company and its directors intend to carry out might be a breach of the financial assistance
provisions of the Companies Act 1985. The High Court has also ruled that two companies
which invested venture capital in a shopfitting company that later went into receivership were
entitled to damages from the shopfitters’ auditors on the basis of negligent misstatements by
the auditors in the company’s accounts and in letters sent by the auditors to the investing
companies. The auditors owed those companies a duty of care. (See Yorkshire Enterprise Ltd v
Robson Rhodes, New Law Online, 17 June 1998, Transcript Case No 2980610103, approved
judgment.) A main problem had been that the provision for bad debts was inadequate. The
court was saying, in summary, that had the auditors carried out the audit work thoroughly,
they would have found certain bookkeeping errors and would have made a greater and more
appropriate provision for bad debts. In consequence, the auditors were liable in damages. The
facts of the case showed that the auditors were aware of the user of their statements and the
use to which they would be put.
In Abbot v Strong (1998) The Times, 9 July, the High Court decided that a circular issued by
a company to its shareholders in connection with a rights issue – allegedly containing mis-
leading profit forecasts by the directors – together with an allegedly negligent letter from the
company’s accountants and management consultants confirming that the forecast statement
was properly compiled and in accordance with the company’s accounting policies did not
lead to the accountants having a duty of care in negligence to the shareholders who acquired
shares in the rights issue. Their attempt to claim against the accountants failed. Once again,
the court has decided that those advising companies owe no duty of care to the individual
shareholders of those companies. This maintains the Caparo line. Notably, there were 200
potential claimants in this case, so the court may also have been concerned not to open the
floodgates of liability in the public interest, bearing in mind that it is already difficult for
professionals to get adequate indemnity insurance.
Also of interest is the decision of the High Court in Sayers v Clarke-Walker (a Firm) [2002] 2
BCLC 16. It was decided that where a piece of professional work carried out by accounting
practitioners can be regarded as within the competence of general practitioners they cannot
absolve themselves from liability in negligence by advising the client that he/she should
consult also a higher specialist. In the case the issue was the tax consequences of a contract
of purchase of a company on which negligent advice was given with the advice also that
the client should consult tax counsel. The firm was liable. It should have done the work
competently and not required the client to spend more money on a further adviser.
An illustration of professional negligence liability in terms of solicitors and barristers is to
be found in Griffin v Kingsmill [2001] Lloyd’s Rep PN 716. The claimant’s claim, following
personal injury in a road accident, was settled on the basis of written advice from a barrister
to her solicitors which resulted in the conclusion that she had no real prospects of success.
The settlement was for £50,000 whereas the claim would have been worth at least £500,000.
The essence of the claimant’s case was that both her former lawyers had been negligent in
taking it that her prospects were so poor. There was an acute conflict of evidence as to fault
but the claimant alleged that her lawyers had wrongly evaluated it. The barrister had failed to
give logical and sensible reasons for his view of the conflict of evidence. The solicitor did not
try to hide behind counsel’s opinion, rightly so in the view of the Court of Appeal. Notwith-
standing that opinion she ought to have weighed up the evidence and formed an independent
view. The claimant’s action succeeded.
Avoiding and excluding liability

The most practical suggestion that can be made in terms of avoiding liability is for pro-
fessionals to follow strictly the recommendations of their professional bodies, e.g. the many
..
EL_C21.qxd 3/26/07 10:54 AM Page 573
SPECIFIC TORTS 573
financial reporting standards and other published material. If this is done the professional
will at least have the advantage of the judgment of McNair, J in Bolam v Friern Hospital Manage-
ment Committee [1957] 2 All ER 118. He said in connection with doctors: ‘A doctor is not guilty
of negligence if he has acted in accordance with a practice accepted as proper by a responsible
body of medical men skilled in that particular art . . . merely because there is a body of
opinion who would take a contrary view.’ The statement is, of course, equally applicable to
other professions.
On the other hand, as we have seen in discussing medical negligence, the above case
does rather suggest that accountants and lawyers and other professionals can set their own
standards. Doubt was thrown on the applicability of Bolam in Newell v Goldenberg [1995] 6
Med LR 371 which is considered earlier in this chapter.
However, it is worth noting that the view taken in Bolam was reinforced so far as account-
ants are concerned in Lloyd Cheyham & Co v Littlejohn & Co [1987] BCLC 303 where the judge
said SSAPs (i.e. Statements of Standard Accounting Practice, more recent ones known as
Financial Reporting Standards) ‘are very strong evidence as to what is the proper standard
which should be adopted and unless there is some justification a departure . . . will be
regarded as constituting a breach of duty.’ Nevertheless, these statements are also put in some
doubt by the Newell case.
There is also the case of Bolitho v City and Hackney Health Authority (1997) to consider, that
continues the development of the theme that professional persons cannot be the sole judges
of their own liability. The case was considered in that context earlier in this chapter.
As regards ability to exclude liability by notice under s 2(2) of the Unfair Contract Terms
Act 1977 (see Chapter 15), this will work only if the clause is reasonable. It would seem that
there are two factors of major importance in deciding the reasonableness or otherwise of
limitations or exclusion of liability for professional negligence and these are: (a) insurance,
and (b) the operation of a two-tier service.
As regards insurance, it would seem unreasonable for a professional person to try to exclude
total liability for negligence because that can hardly be regarded as best professional practice.
On the other hand, it would probably be reasonable for him to limit his liability to a specified
sum. In fact s 11(4) of the 1977 Act states that if a person seeks to restrict his liability in this
way the court must have regard to the resources which he would expect to be available to
him for the purposes of meeting the liability and also how far it was possible for him to cover
himself by insurance. It is thought, therefore, that a firm which takes out the maximum
insurance cover which is reasonable in the circumstances, being one where the cover is not
so great that the effect could be greatly to inflate the fees charged by the firm, then to limit 21
liability to that sum would satisfy the requirement of reasonableness. There is judicial support
for this argument in a number of cases, particularly George Mitchell v Finney Lock Seeds (1983)
(see Chapter 15).
As regards a two-tier service, a professional person could offer a full service at a full price
and a reduced service at a lower price. Again, it would seem so long as the user of the service
is aware that the two-tier service is available and that he is accepting a reduced service at a
reduced price without full liability, then the exclusion clause in a lower-tier service ought to
be regarded as reasonable.
It is, of course, worth bearing in mind in all of this that a limitation of liability for pro-
fessional negligence is much more likely to be regarded as reasonable in a contract with
a non-consumer, i.e. a business, than it is in a consumer contract. In fact we have
already seen in Smith v Eric S Bush (1987) that a disclaimer used by a professional person in
a consumer situation was not effective. However, as we have seen in McCullagh v Lane
Fox (1995) a more sophisticated consumer of a high-priced property may have to accept a
disclaimer.
..
EL_C21.qxd 3/26/07 10:54 AM Page 574
This theme was followed in Omega Trust Co Ltd v Wright Son and Pepper (1997) 73 P & CR
D39 where the Court of Appeal ruled that an exclusion clause under the Unfair Contract
Terms Act 1977 applied to exclude the liability of valuers to a lending bank for a negligent
valuation of three leases of small supermarkets. This, said the court, was a commercial trans-
action in which the parties where able to look after themselves. The identity of the bank was
not disclosed to the valuers when they made the valuation for the owners, so there is an ele-
ment of ‘unknown user’ in the case which, as we have seen, can prevent a duty of care arising
even in the absence of an exclusion clause.
It is also worth noting that as regards auditors engaged by a company to carry out a
Companies Act audit, s 310 of the Companies Act 1985 makes void any provision in a contract
of engagement of the auditors which purports to exclude them from liability for negligence
or breach of duty to the company, though the company can now pay the premiums on an
insurance policy both for auditors and directors.
Accountants: developments in exclusion of liability

The case of Royal Bank of Scotland plc v Bannerman Johnstone Maclay (a firm) 2003 SLT 181 has
raised issues in regard to accountants’ liability and also their ability to exclude that liability.
The bank lent money to a company APC Ltd on the strength of accounts audited by the
defendants. It was alleged by the claimant that the audited accounts were less than
adequately informative in terms, e.g., of the going concern factor. The bank had later to
appoint a receiver to the company which was insolvent.
The auditors had notice that under overdraft facility letters the bank was entitled to see
management accounts and annual audited accounts. However, they contended that the
claimant had to prove that as auditors they intended the bank to rely on the accounts to make
further loans or advances. The auditors said in effect ‘when auditing the accounts our only
intention was to carry out Companies Act duties to audit the accounts’. The Scottish Court of
Session (Outer House) in this case, equally applicable in England and Wales, ruled that the
case law did not support a requirement of intention. The compelling effect of the authorities
was that knowledge of user and use formed the basis of a duty of care for those making
information or advice available. The auditors had the requisite knowledge and therefore
owed a duty of care.
The bank had yet to prove that the accounts were prepared negligently. These duty of care
cases are decided without proof of the allegations of negligence. A major matter relating to
this case was that the auditors had not disclaimed liability to third parties such as the bank. In this
connection, the Institute of Chartered Accountants in England and Wales has stated that it is
clear that auditors assume reponsibility for the contents of the audit report to shareholders as
a body under s 235 of the Companies Act 1985 (now s 509 of the Companies Act 2006). It also
states that the absence of a disclaimer may in some cases enable a court to draw an inference
that the auditors have assumed responsibility for the audit report to a third party such as the
bank in this case. The ICAEW recommends that auditors include the following wording in
audit reports to clarify their duty of care to third parties by indicating that no such duty is owed.
This report is made solely to the company’s members as a body, in accordance with s 235
of the Companies Act 1985 (now s 509 of the Companies Act 2006). Our audit work has
been undertaken so that we might state to the company’s members those matters we are
required to state to them in an auditor’s report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility to anyone other than
the company and the company’s members as a body, for our audit work, for this report, or
for the opinions we have formed.
..
EL_C21.qxd 3/26/07 10:54 AM Page 575
SPECIFIC TORTS 575
Professional negligence insurance

Professional indemnity policies are available for a whole range of professional persons and
experts, e.g. accountants, solicitors, company directors and insurance brokers. These policies
carry an excess clause under which the insured bears the first part of the claim up to a fixed
amount. The risk covered is variously described but there is now a tendency to cover ‘full
civil liability’ followed by exclusions from cover of things such as libel. The policies usually
cover loss caused to a client (i.e. by breach of contract), and to a non-client (i.e. in the tort of
negligence).
Companies Act 2006

Insofar as a number of the illustrations of professional liability concern auditors of com-
panies, the provisions of the Companies Act 2006 are worth noting. Section 548 allows the
company and its auditors to enter into a liability limitation agreement to limit the liability
of the auditor in regard to damage caused to the company and occurring in the course of
auditing the accounts. The agreement must be approved by the members and can only limit
liability in terms of what is fair and reasonable in regard to the responsibilities of an auditor.
Disclosure of the existence of the agreement must be made in a note to the company’s
accounts or in the directors’ report.
Reform
The rule of joint and several liability of partners in a number of areas including professional
negligence has produced what might be regarded as unfairness, particularly with accountants
in the audit situation. Suppose that there is a major fraud by an employee of a company
which the auditors fail negligently to detect. The person primarily liable to replace the funds
fraudulently abstracted is the employee but even if he is caught the funds may have been
used up or impossible to find. Others responsible may be the directors who have not put in
place internal controls to prevent fraud. However, the directors will not in all cases have
insurance or at least not much and the best defendant will be the auditors (as by their having
the larger ‘pocket’) and the loss may well rest with them. Obviously the auditors will have a
contribution against other wrongdoers but they may not be able to contribute much or may
be insolvent and not contribute anything.
21
New limited liability partnerships
Parliament has passed the Limited Liability Partnerships Act 2000, which means that a new
limited liability partnership is available as a business organisation. These partnerships are
registered with the Registrar of Companies and, so far as liability is concerned, the liability of
the firm is limited to the capital provided by the partners, and the personal liability of the
partners individually is limited in the sense that if in a firm Bloggs, Snooks and Co, Snooks
prepares a set of accounts in a negligent fashion knowing that an outsider, say, a takeover
bidder, will rely on them, the firm is then liable up to the total of its assets and so are the
private assets of Snooks. Bloggs’ personal assets are not liable. They would be if the negligent
accounts were jointly prepared.
However, the private assets of persons such as Snooks should not often be at risk because it
will normally be made clear that he acts for the firm as its agent on all documents and letters
issued in connection with the preparation of the accounts. The assets of the firm will be at
risk but not the private assets of the partners. Where agency is not made clear there may be
liability in Snooks.
..
EL_C21.qxd 3/26/07 10:54 AM Page 576
The present position regarding duty of care – a summary

As we have seen, the duty of care in regard to negligent misstatements by auditors has been
considered in a number of cases since the early 1950s. However, the present position has
been the subject of comprehensive analysis by the House of Lords in Caparo Industries v
Dickman [1990] 1 All ER 568.
From this decision and two important later ones the position would appear to be as
follows:
(a) Auditors do not owe a duty of care to potential investors in the company, e.g. those who
reply on the audited accounts when contemplating a takeover bid. The fact that the accounts
and auditors’ report might foreseeably come into their hands and be relied on is not enough
to create a duty of care. In addition, it was decided in James McNaughton Paper Group v Hicks
Anderson [1991] 1 All ER 134 that even if an auditor knew that the audited accounts would be
used by a bidder as the basis of a bid, he would not be liable if he reasonably believed and
was entitled to assume that the bidder would also seek the advice of his own accountant.
(b) Auditors do not owe a duty of care to potential investors even if they already hold shares
in the company since, although they are shareholders and auditors are under a statutory duty
to report to shareholders, the duty of the auditors is to the shareholders as a whole and not to
shareholders as individuals.
(c) Even where the auditors are aware of the person or persons who will rely upon the
accounts, they are not liable unless they also know what the person or persons concerned
will use them for, e.g. as the basis for a takeover.
(d) Where there is knowledge of user and use, then in that restricted situation the Court of
Appeal held in Morgan Crucible Co plc v Hill Samuel Bank Ltd [1991] 1 All ER 142 that a duty of
care would exist in regard to the user. However, even in such a situation the auditor will not
be liable if, in the circumstances, he was entitled to assume that the user would also seek
the advice of his own accountant and not rely solely on the audited accounts (see the
McNaughton case, above). It is not necessary to prove intention in the auditors that a third-
party should rely on the audit report provided there is knowledge in the auditors of user and
use (Royal Bank of Scotland plc v Bannerman Johnstone Maclay (a firm) 2003 SLT 181).
(e) Coulthard v Neville Russell (1997) would seem to extend liability to mere omissions.
Negligence – occupiers’ liability

The question of the liability of occupiers of premises to persons suffering injury thereon may
be regarded as a further aspect of negligence. The occupier is the person who has de facto
control of the premises or the possession of them; it is a question of fact in each case and
does not depend entirely on title. It should also be noted that occupation may be shared
between two or more persons, and that an employer may be vicariously liable for the torts of
an employee who is acting within the scope of his employment. Thus in Stone v Taffe [1974]
3 All ER 1016, the owner of a hotel was liable when the manager failed to ensure that there
was adequate lighting on the premises so that a guest fell and was killed.
Wheat v Lacon & Co Ltd, 1966 – When two persons occupy (415)
..
EL_C21.qxd 3/26/07 10:54 AM Page 577
SPECIFIC TORTS 577
The Occupiers’ Liability Act 1957

A common duty of care is owed to all lawful visitors to premises, ‘visitor’ being a term which
includes anyone to whom the occupier has given, or is deemed to have given, an invitation
or permission to use the premises. It includes some persons who enter the premises by right
of law, such as inspectors, but not those who cross land in pursuance of a public or private
right of way. A person using a public or private right of way (the latter as an easement, see
Chapter 22) does so by right and cannot therefore be the visitor of the owner of the land over
which the way passes (McGeown v Northern Ireland Housing Executive [1994] 3 WLR 187) and
see now the Occupiers’ Liability Act 1984 where rights other than those of a visitor were
created (see below).
Implied permission to enter premises is a matter of fact to be decided in the circumstances
of each case, and the burden of proof is upon the person who claims implied permission.
However, persons who enter upon premises for purposes of business which they believe will
be of interest to the occupier, as where they wish to sell him a product, have implied permis-
sion to enter even though their presence is distasteful to the occupier.
Under the Act, an occupier of premises owes to all visitors the duty to take such care as, in
the circumstances of the case, is necessary to see that the visitor will be reasonably safe
in using the premises for the purpose for which he is invited or permitted to be there. If the
visitor uses the premises for some other purpose, the occupier does not owe him the same
duty; such a person is in effect a trespasser, and liability to him falls to be decided on that
basis (see below).
Under s 2(1) of the 1957 Act the occupier may restrict or exclude his liability, by giving
adequate warning or by contract. However, this section must be looked at in the light of the
Unfair Contract Terms Act 1977, which states that the common-law duty of care in regard to
liability for death or personal injury cannot be excluded in relation to business premises. In
addition, liability for other loss or damage occurring on such premises can only be excluded
where it is reasonable to do so. However, the owner of a path adjacent to self-evidently
dangerous cliffs is not under a duty to put up a notice giving warning that the cliffs are
dangerous (Court of Appeal in Cotton v Derbyshire Dales District Council (1994) The Times,
20 June). Furthermore, the Court of Appeal ruled in Darby v National Trust (2002) 3 LGLR 29
that there was no need to warn against swimming in a pond in the grounds of a stately home
which was under the control of the trust. The relevant pond was no more hazardous than
any other. The claim that there should have been a warning notice relating to the possibility
of contracting Weil’s disease from swimming in the pond was also turned down because the 21
claim was for causing death by negligence and there was therefore no causative loss in regard
to Weil’s disease.
Where the accident has arisen through the defective work of an independent contractor,
the occupier can avoid liability by showing that he behaved reasonably in the selection of the
contractor.
The defence of volenti non fit injuria is available to the occupier, though he must show
that the entrant assented to the risk, not that he merely knew of it: the entrant’s knowledge
is no longer a defence.
The occupier may also raise the defence of contributory negligence by the entrant which,
though not defeating his claim, may reduce damages.
Cook v Broderip, 1968 – Faulty work of an independent contractor (416)

Bunker v Charles Brand, 1969 – Knowledge is not assent (417)
..
EL_C21.qxd 3/26/07 10:54 AM Page 578
Trespassers
The main case on an occupier’s liability to a trespasser was British Railways Board v Herrington
[1972] 1 All ER 749 in which the House of Lords was unanimous in deciding that there could
be liability to a trespasser. Unfortunately the five judges concerned reached that decision in
different ways and the matter was referred to the Law Commission. Eventually Parliament
passed the Occupiers’ Liability Act 1984 which now governs the position of trespassers and
certain other non-visitors.
Section 1 deals with the duty of an occupier to persons other than his visitors – this
includes trespassers and persons entering land without the consent of the owner, but in
exercise of a private right of way or public access. In these cases the occupier owes a duty, if
he is aware of the danger which exists, or has reasonable grounds to believe that it exists. He
must also know, or have reasonable grounds to believe, that the non-visitor concerned is
in the vicinity of the danger – whether he has lawful authority for being in that vicinity or
not. Furthermore, the risk must be one which in all the circumstances of the case it is reason-
able to expect the occupier to offer the non-visitor some protection against. It was held, for
example, in Proffit v British Railways Board (1984) The Times, 4 February that British Rail had
no general duty to erect or maintain fences sufficient to keep trespassers out.
The duty is to take such care as is reasonable in all the circumstances of the case to see that
the non-visitor does not suffer injury because of the danger concerned. The duty may be dis-
charged by giving warning of the danger or taking steps to discourage persons from incurring
risk. Thus the defence of volenti is preserved.
A case in point is Ratcliff v McConnell [1999] 1 WLR 670 where the claimant sued for
tetraplegic injuries sustained by diving into the shallow end of a college swimming pool
when the pool was closed for the winter. He had climbed over a locked gate in the early
hours of the morning. There were warning notices and notices prohibiting use. The claimant,
who was an adult, did not recover any damages against the college (represented by a defend-
ant governor). He willingly accepted the risk, said the Court of Appeal.
The Court of Appeal reached a similar conclusion in Donoghue v Folkestone Properties [2003]
All ER (D) 382 where the claimant was rendered tetraplegic when after an evening drinking
with friends the claimant trespassed on to a slipway in Folkestone harbour, dived into the
water and struck his head on an underwater obstruction. The defendants had no duty of care
towards him. They would only have been liable if they knew that someone was likely to swim
from the slipway in the middle of the night in the depth of winter.
Again, in Tomlinson v Congleton BC [2003] 3 All ER 1122 the Court of Appeal refused the
claim of an 18-year-old who ignored a notice at a country park lake which said ‘Dangerous
Water: No Swimming’. He waded into the water and dived from a standing position striking
his head on the bottom of the lake. Once again, he became tetraplegic. The House of Lords
affirmed the decision of the Court of Appeal (see the above reference).
While these injuries are tragic the cases do seem to provide an injection of balance into
liability in tort at a time when there is a prevailing compensation culture. The decisions
indicate that there is a place for personal responsibility in these matters: something that can
be overlooked in an increasingly litigious society encouraged by the ‘no-win, no-fee’ litigation
arrangements.
Access to the countryside

Section 2 of the Occupiers’ Liability Act 1984 is designed to encourage access to the country-
side. The Unfair Contract Terms Act 1977 had discouraged landowners with, say, a mountain
crag, or potholes on their land, from admitting the public thereto because of the difficulty of
excluding liability which might result. Under the 1984 Act they can exclude liability, e.g. by
..
EL_C21.qxd 3/26/07 10:54 AM Page 579
SPECIFIC TORTS 579
notice, for the dangerous state of the land provided they are prepared to allow the public to
come on to it for nothing. So long as the actual letting in of the public is not part of a business,
as where access for recreational or educational purposes is charged for, the letting in of the
public for nothing will not constitute running a business for the purposes of the 1977 Act.
The provisions of the Countryside and Rights of Way Act 2000 are considered in Chap-
ter 21 but the ‘right to roam’, as it is called, created under certain conditions does not
increase the liability of landowners.
Children on premises
Dealings with children always demand a high degree of care, whether a person is sued in the
capacity of an occupier of premises or not. However, in the case of an occupier of premises,
the duty towards children was rather different from the corresponding duty to adults. If, with
knowledge of the trespass of children on his land, the occupier made no reasonable attempt
to prevent such trespass, e.g. by repairing fences, and a child was injured by something
on the land which was especially alluring to children, e.g. turntables, escalators, bright and
poisonous berries, then the occupier in general was liable, even though the child was on the
face of it a trespasser. The difference owed to child trespassers is no longer so great in view of
the broader rules laid down in the Occupiers’ Liability Act 1984. However, it should be noted
that what is adequate warning to an adult might not be so to a child. These rules will presum-
ably apply to the warnings which the 1984 Act allows the occupier to give.
Yachuk v Oliver Blais & Co Ltd, 1949 – Negligence liability and children (418)
Gough v National Coal Board, 1954 – Occupiers’ liability and children (419)
Mourton v Poulter, 1930 – Warning children (420)
Pannett v McGuinness & Co, 1972 – An alluring bonfire (421)
Landlord and tenant

As regards landlord and tenant, s 4 of the Occupiers’ Liability Act 1957 provided that a land-
lord would be liable to his tenants’ visitors who were injured or whose goods were damaged
on the leased premises because of some defect which resulted from his failure to repair.
However, s 4 only applied where the landlord was under an obligation express, implied or
statutory to repair, but the Defective Premises Act 1972 repeals s 4 and places liability on a
landlord who has merely reserved a right to enter and repair. A landlord who does not repair 21
where he has no obligation to do so, nor a power of entry, has no liability, under the Act or
at common law.
Thus, now that s 4 of the 1957 Act is repealed, the landlord’s liability is similar to his
liability in nuisance. Of course, only an occupier can sue in nuisance, but under the Defective
Premises Act 1972 the landlord is liable to all persons who might reasonably be expected to
be affected by defects in the state of the premises. This covers not only the tenant, his family
and his visitors, but also neighbours, passers-by and trespassers.
Furthermore, under the 1957 Act it became established that a landlord was only liable to
his tenants’ visitors if he had been notified of the defect by the tenant. However, s 4(2) of the
1972 Act provides that the duty is owed where the landlord knew or ought to have known of
the relevant defect, so notice given by the tenant is no longer essential. Where the lease or
tenancy expressly imposes on the tenant a duty to inform the lessor of defects but the tenant
fails to do so with the consequence that a third party is injured, then the landlord can still be
sued provided it can be shown that he ought to have known of the defect but in this case he
will have a right of indemnity against the tenant for what that may be worth.
..
EL_C21.qxd 3/26/07 10:54 AM Page 580
However, there are still gaps in the law because the duties imposed upon a landlord by s 4
relate only to the maintenance of a property which was satisfactory when let. If an owner
knows of a defect – not created by him – in the premises before he either sells or lets the premises
but does not repair it or warn about it the 1972 Act imposes no liability on him for harm
caused after the property is let or sold. Furthermore there is no liability at common
law (Cavalier v Pope [1906] AC 428, affirmed in McNerny v Lambeth Borough Council (1989) 139
NLJ 114).
Where the person injured is the tenant himself the 1972 Act allows a tenant to sue
his landlord for breach of his statutory duty but then the lessor would be able to allege
contributory negligence in that the tenant failed to notify him of the defect. Where,
however, the defect was due to a tenant failing to carry out an obligation expressly imposed
on him by the lease or tenancy, the landlord does not owe the tenant any duty, although he
would still owe a duty to third parties if they were injured, but in these circumstances could
recover an indemnity or contribution from the tenant who would be a joint tortfeasor. There
is little a landlord can do to exclude or restrict his liability. Section 6(3) of the 1972 Act
renders void any exclusion clause in a lease or tenancy agreement.
Highway authorities
A highway authority is liable for damage which is caused by its active misfeasance and, under
the Highways Act 1980, for damage which arises from its failure to repair.
In an action for damages against a highway authority based upon its failure to repair, it is a
defence to prove that the authority has in all the circumstances taken reasonable care to
ensure that the highway was not dangerous by reason of its failure to repair.
Griffiths v Liverpool Corporation, 1966 – Failure to repair a flagstone (422)
Defective Premises Act 1972

This Act brought about three major changes. In the first place a landlord’s liability for defects
in leased premises was increased. This has already been dealt with in occupiers’ liability.
Second, much of the common-law immunity of a vendor or landlord for negligence was abol-
ished. Third, there is a statutory duty on those concerned with providing dwellings to do the
work properly. Section 1 places a duty on builders and developers, sub-contractors, architects
and local authorities to see that building contracts are carried out in a workmanlike, or where
appropriate, professional manner with proper materials so that the dwelling is fit for habita-
tion. It should be noted that this statutory duty is owed not merely to the immediate client
but to everyone who acquires a legal or equitable interest in the dwelling. The liability does
not, of course, last for ever. It is subject to the Limitation Act, though s 1(5) of the 1972 Act
provides that a cause of action accrues at the time when the dwelling was completed, but
where further work has to be done to put right a fault then the cause of action accrues only
when the further work is completed. This means that from that date a claimant has six years
to start an action or three years where the defect has caused death or personal injury. Sec-
tion 6(3) of the 1972 Act renders void any term of an agreement which purports to exclude
or restrict this statutory duty.
..
EL_C21.qxd 3/26/07 10:54 AM Page 581
SPECIFIC TORTS 581
Under s 1(3) a mere agreement by a client to a particular design or specification being used
does not discharge the builder or other persons involved from this statutory duty. Section 2
offers an alternative by providing that no action can be brought where a state-approved
scheme has conferred rights on the first sale or letting to those who have or will have an
interest in the property in respect of defects in the state of the dwelling. Such schemes can be
approved or withdrawn by the Secretary of State by statutory instrument.
The National Housebuilders Registration Council scheme is approved under these arrange-
ments and where an NHRC scheme is in operation it applies rather than the Act. The
advantage of an NHRC scheme over the Act is that if the builder becomes bankrupt the
Council compensates the claimant. Section 3 of the Act sweeps away most of the old
common-law immunity from liability for negligence which was formerly enjoyed by sellers
of property and lessors of property; they are now liable within the wider rule of Donoghue v
Stevenson (1932). Thus, under the 1972 Act, the maxim caveat emptor no longer provides a
defence to a claim of negligence against a vendor or lessor in respect of defects in the
premises sold or let and this liability extends beyond the immediate purchaser or lessee and
can be brought by others who buy or rent the property within the constraints of the
Limitation Act 1980 and s 1(5) of the 1972 Act. Thus, there is now a law against building or
letting tumbledown properties.
It should be carefully noted, however, that s 3 has gaps. The defects have to be caused by
works of construction, repair, maintenance or demolition or other works. The section does
not apply at all to negligent omissions to repair and the common law provides in general no
redress (see McNerny v Lambeth Borough Council (1989) above).
Negligence – of employers
Where an employee’s case is based on his employer’s negligence at common law, he will have
to prove that his injury was the result of the employer’s breach of a duty of care. The
employee is assisted in this task because certain specific duties of an employer were laid down
by the House of Lords in the leading case of Wilsons and Clyde Coal Co v English [1938] AC 57,
and an employer must take reasonable care to provide:
(a) proper and safe plant and appliances for the work;
(b)
(c)
a safe system of work with adequate supervision and instruction;
safe premises; and
21
(d ) a competent staff of fellow employees.
The employer’s duty is a personal one so that he remains liable even though he has
delegated the performance of the duty to a competent independent contractor. Thus in Paine
v Colne Valley Electricity Supply Co Ltd [1938] 4 All ER 803, an employer was held liable for
injuries to his employee caused by the failure of contractors to install sufficient insulation in
an electrical kiosk.
However, in Davie v New Merton Board Mills [1958] 1 All ER 67, the House of Lords decided
that an employer was not liable for damage caused by a defective implement purchased from
a reputable manufacturer. The employee was thus left to sue the manufacturer and this could
prove difficult where the manufacturer had left the country or gone out of business or could
not for any other reason be identified. Now the Employers’ Liability (Defective Equipment)
Act 1969, provides that an employee who is injured because of a defect in his employer’s
equipment can recover damages from the employer if he can show that the defect is due
to the fault of some person, e.g. the manufacturer, but if no one is at fault damages are not
..
EL_C21.qxd 3/26/07 10:54 AM Page 582
recoverable. Agreements by employees to contract out are void, and rights under the Act are
in addition to common-law rights. Thus, an injured employee can sue a third party such as a
manufacturer if he wishes, e.g. as where the employer is insolvent, though the Employer’s
Liability (Compulsory Insurance) Act 1969, requires employers to insure against their liability
for personal injury to their employees. The injury must result from equipment provided for
the employer’s business. Thus, domestic servants injured by household equipment would not
be covered.
As regards a safe system of work, there is no duty on the employer to set up a system for a
‘one-off’ operation where the employee uses his own initiative. The Court of Appeal so ruled
in Chalk v Devises Reclamation Co Ltd (1999) The Times, 2 April, where a large piece of lead fell
from a wagon during unloading and, on his own initiative, Mr Chalk picked it up causing
himself back injuries. His claim for damages failed. An employee’s claim may also fail under
what is known as the ‘nursemaid’ school of negligence. In Makepeace v Evans Bros (Reading)
(2000) The Times, 13 June a painter and decorator was using a tower scaffold which fell over
while he was working on it. The Court of Appeal dismissed his claim because on the facts
it appeared that a tower scaffold was an ordinary piece of equipment used frequently by
painters on building sites, so that the claimant should have known that it might be danger-
ous to use such equipment in certain situations instead of, e.g., ladders. The employer had no
duty to ask him whether he knew how to use the scaffold safely.
Liability for stress-related injury

Over the years the employer’s duty to provide a safe system of work has almost exclusively
involved cases of physical injury. However, in Walker v Northumberland County Council (1994)
The Times, 24 November the High Court decided that psychiatric damage caused by over-
work, in this case as a social worker, was also included.
Another modern example of safe system requirements is in the field of repetitive strain
injury caused amongst other things by the operation of keyboards of one sort or another. The
Court of Appeal has held that an employer has a duty to instruct employees on the risk of
repetitive strain injury and the need to take breaks (see Pickford v ICI plc [1996] IRLR 622).
Breach of this duty by the employer can result in a successful action for damages by the
employee. Ann Pickford’s injury was caused by long periods of typing without adequate rest
breaks, on the need for which she had received no instruction, though typists in other
departments of the business had been given such instructions.
Employers have been facing an ever increasing number of claims for psychiatric damage
caused by stress at work. High awards of damages have been made but the Court of Appeal
in Hatton v Sutherland and Other Appeals [2002] 2 All ER 1 gave a ruling that gives some relief
to employers in terms of claims for occupational stress. The ruling was given in regard to
four test cases where the Court of Appeal gave a single unanimous judgment. The claimants
were two teachers, a local authority administrative assistant and a factory worker. The court
overturned awards of damages totalling £208,000 but upheld an award of £150,000 to the
administrative worker but ‘not without some hesitation’.
The Court of Appeal also gave important guidance on this type of claim as follows:
n there are no special controls that an employer must put into place in regard to stress;
n the ordinary principles of employers’ liability apply;
n stress must like other harm be foreseeable and attributable to stress at work as distinct from
other factors;
n an employer is normally entitled to assume that the employee can stand the normal
pressures of the job unless he or she knows of some particular vulnerability or problem;
..
EL_C21.qxd 3/26/07 10:54 AM Page 583
SPECIFIC TORTS 583
n the test is the same whatever the employment;

n there are no occupations that should be regarded as intrinsically dangerous to mental
health;
n finally where dismissal or demotion is the only reasonable and effective procedure open
to an employer but the employee wishes to work on and the employer lets him or her do
so he or she will not normally be liable if injury results.
It is worth noting that a differently constituted Court of Appeal threw some doubt on this last
statement at least so far as physical injury is concerned. In Coxall v Goodyear GB Ltd [2003]
1 WLR 536 the danger arose from a new paint put into use by the employer, the claimant
was allergic to it and in spite of using protective equipment provided by the employer he still
suffered from asthma. The employee wanted to go on working and the employer allowed
him to do so. The claimant became too ill to work and left his employment. He then claimed
damages for his employer’s negligence. The Court of Appeal ruled that his claim succeeded.
If there was no alternative to the claimant working with the paint the employer should have
dismissed him (even though the employee wanted to go on working) and could be in breach
of his duty as an employer if he did not. The only sensible resolution of these decisions is to
dismiss in mental and physical injury cases. The employer should have a good defence in
either case if there is no alternative employment. If the claim is for disability discrimination
as it might be the defence would apply with the difference that the employer is required to
consider and make if possible adjustments to the workplace to enable the disabled person to
do the job. There would appear to have been no such adjustments that could have been
made in the Coxall scenario.
Stress-related injury: the House of Lords rules

The House of Lords has now ruled on the liability of an employer for the occupational stress
injury of an employee. While the House of Lords finds Hatton to be a valuable contribution,
their Lordships depart in a significant way from certain parts of the Hatton judgment.
In Barber v Somerset County Council [2004] 2 All ER 385, it appeared that Mr Barber was an
experienced teacher. He had two jobs: one as head of maths and the other to market his
school. Between 1995 and 1996 he was working between 61 and 70 hours per week. This
workload caught up with him and he had three weeks off sick during the summer term. His
medical certificates referred to ‘stress’ and ‘depression’. He subsequently returned to work but
nothing was done to deal with his workload. The headmistress and senior staff were un- 21
sympathetic and eventually he left work. The only advice from the deputy headmaster was to
prioritise his workload. The House of Lords found this to be a totally inadequate response
and affirmed the trial judge’s award of damages against the employer.
Their Lordships considered in particular the ruling of the Court of Appeal in Hatton, which
was to the effect that an employer is normally entitled to assume that an employee can
stand the pressures of the job unless he or she knows of some particular vulnerability or
problem. This carries the suggestion that the onus is on the employee to complain about
stress problems. The House of Lords rejected this ruling and stated that employers must
be proactive by giving positive thought to the safety of the workforce in the light of what
they know or ought to know. The senior management team should have made enquiries
about the claimant’s problems and have discovered what they could have done to ease
them in both Mr Barber’s case and throughout the school. Their Lordships placed the onus
on the employer to develop a knowledge of occupational stress and to keep up to date
with effective precautions that can be taken to alleviate it. This is a significant change
of emphasis.
..
EL_C21.qxd 3/26/07 10:54 AM Page 584
Health and safety statutes

There are numerous statutes which are designed to protect the health, and provide for the
welfare and safety, of employees. The relevance of such statutes for our present purposes
is that where the breach of a statutory duty, e.g. failure to fence a dangerous machine, has
caused injury to a worker, he may be able to sue his employer for damages by using the
breach of statutory duty to establish the duty of care under the principles already discussed.
Millard v Serck Tubes Ltd, 1969 – A statutory duty of care (423)
Torts against business interests

It is a tort knowingly to induce a person to break his contract with a third party whereby that
party suffers damage. It is also an actionable wrong for two or more persons to combine
together (or conspire) for the purpose of wilfully causing damage to the claimant. There is also
an action for passing off which occurs where A represents his goods or services to be those of B.
Inducement of breach of contract

If A induces B to break his contract with C, C can sue A.
Trade union activity often involves interference with contract and the position as regards
the immunity or otherwise of trade unions in this context has already been considered in
Chapter 8.
Lumley v Gye, 1853 – Inducing a breach of contract (424)

Daily Mirror Newspapers v Gardner, 1968 – Boycotting a newspaper (425)
Conspiracy
Where two or more persons act without lawful justification for the purpose of wilfully caus-
ing damage to the claimant and actual damage results, they commit the tort of conspiracy.
The tort was fully considered in Crofter Hand Woven Harris Tweed Co Ltd v Veitch (1942) (see
below), where the following principles were laid down:
(a) the tort covers acts which would be lawful if done by one person;
(b) the combination will be justified if the predominant motive is self-interest or protection
of one’s trade rather than injury to the claimant;
(c) damage to the claimant must be proved.
Crofter Hand Woven Harris Tweed Co Ltd v Veitch, 1942 – The principles of
conspiracy (426)
Passing off – generally

Any person, company or other organisation which carries on or proposes to carry on business
under a name calculated to deceive the public by confusion with the name of an existing
..
EL_C21.qxd 3/26/07 10:54 AM Page 585
SPECIFIC TORTS 585
concern, commits the civil wrong of passing off. Other examples of passing off are the use of
similar wrappings, identification marks, and descriptions. Thus in Bollinger v Costa Brava Wine
Co Ltd [1959] 3 All ER 800, the champagne producers of France objected to the use of the
name ‘Spanish Champagne’ to describe a sparkling wine which was made in Spain and they
were granted an injunction to prevent the use of that term.
However, passing-off claims have become more frequent in recent times in the areas of
marking, style of trading and appearance of goods. For example, the House of Lords accepted
in Reckitt & Coleman Products Ltd v Borden [1990] 1 All ER 873 that lemon juice sold by the
defendants in lemon-shaped, lemon-coloured containers misled the public into thinking
they were buying ‘Jif’ lemon juice – the product of Reckitt and Coleman. In the leading case
of Erven Warnink BV v J Townend & Sons (Hull) Ltd [1979] AC 731 (the Advocaat Case) the
House of Lords decided that four characteristics must be present in order to create a valid
action for passing off:
(a) That there has been a misrepresentation. (To engage in the same line of business as the
claimant and use the same or a similar name may be passing off.)
(b) The misrepresentation was made by a trader in the course of trade, which includes a
profession such as lawyer or accountant. Thus in Kean v McGivan [1982] FSR 119 a claimant
who claimed that the defendant was wrongly calling a political party the Social
Democratic Party could not successfully sue in passing off.
(c) It was calculated to injure the business or goodwill of another trader (in the sense that
it is a foreseeable consequence). It is a matter for the judge to decide on the evidence
whether the defendant’s misrepresentation was calculated to deceive.
(d ) It has caused actual damage to the business or goodwill of the other trader or will
probably do so.
It will be seen from the above characteristics that mere confusion is not enough. An illustra-
tion is provided by the decision of the High Court in HFC Bank plc v Midland Bank plc (1999)
The Times, 22 September. The Midland Bank and many other companies within the Hong
Kong and Shanghai Banking corporation group rebranded their business, branches and services
as HSBC. HFC Bank plc brought an action to restrain Midland Bank from passing off its
business as HFC business by using the name HSBC which it claimed was confusingly similar.
The High Court ruled that the fact that customers might be confused by similar competing
brand names was not enough for a passing off action to succeed; there had to be a misrep-
resentation causing damage to goodwill. HFC had not proved this and its claim failed. The
judge seems to have taken the view that, although there had been some confusion, this could 21
be dealt with by managing it in terms of marketing. The solution should be commercial
not legal.
It is also necessary that the users of a name be in the same line of business. Thus, the High
Court held in Safeway Stores plc v Hachette Filipacchi Presse, 13 December 1999 (unreported)
that the defendant magazine owner could not prevent the name of its magazine ‘Elle’ from
being registered as a trade mark for the claimant’s sanitary products, as there was no real
tangible danger of a substantial number of members of the public being made to wonder
whether the sanitary products were connected with the magazine or its owner.
However, in Pfizer Ltd v Eurofood Link (UK) Ltd, 10 December 1999 (unreported) the High
Court held that naming a beverage that was to be marketed as an aphrodisiac ‘Viagrene’ was
an infringement of UK and Community trade marks protecting the well-known drug ‘Viagra’
and constituted passing off.
As regards remedies:
(a) An injunction is on general principles available to prevent the continuance of the wrong
but, being an equitable remedy, it is up to the court’s discretion whether to grant it.
..
EL_C21.qxd 3/26/07 10:54 AM Page 586
(b) The claimant may also recover damages for loss of profits incurred because business
is diverted away from him to the defendant and for loss of business reputation and
goodwill.
(c) As an alternative to an assessment of damages at common law, a court may direct the
equitable remedy of an account of profit actually made by the defendant because of the
passing off.
In connection with passing off, the effect of the Trade Marks Act 1994 should be noted.
It is now possible to register a business name as a trade mark as where Mr Ahmed trades as
‘Ahmed’s Barbican Tandoori’. Such geographical marks are registrable under the 1994 Act and
once the mark is registered any infringement is automatically illegal and the court can give
redress by means of damages, injunction, or an account and payment over of profits made
from illegal use of the trade mark.
As we have seen, passing off is a more difficult matter to prove. For example, proof of
deception is essential (Hodgkinson & Corby v Wards Mobility Services (1994) The Times,
3 August). Since the Act also applies to the registration of the shape of goods, things such as
the shape of a Coca-Cola bottle can also be protected in this easier way.
Passing-off: use of own name

It does not follow that because a person trades in his or her own name they will be able to
mount a successful defence against passing off. Thus in Asprey & Garrard Ltd v WRA (Guns) Ltd
[2001] All ER (D) 163 (Oct) the claimants for a passing off and infringement of trade mark
rights were a well known and established trader in luxury goods. The defendant company
traded in the same line of business in London, i.e. the same location as the claimants in the
business name of William R Asprey Esq. William Asprey who was a former employee of the
claimants effectively controlled the defendant company. The High Court granted an injunc-
tion against passing off and infringement of the claimant’s trade mark. The court dismissed
the defence of own name on the ground that it must not as here be used to cause deception.
Passing off – on the Internet

The High Court has shown itself willing to issue an injunction, to prevent the use of an
Internet domain name, in a passing-off claim (see Pitman Training Ltd v Nominet UK [1997]
Current Law 4875). An additional problem that has arisen because of the rapid growth of
the Internet and its use by business organisations for e-mail and commerce generally is the
parallel growth of a breed of speculators who register domain names that form a crucial part
of a particular business website and e-mail address in the hope for example of offering it for
sale to the business concerned with the possibility of receiving a high price for exclusivity.
In BT v One in a Million [1998] 4 All ER 476 the Court of Appeal affirmed the High Court’s
granting of injunctions to restrain the defendants who had registered company names and/or
trade marks, e.g. Marks and Spencer and J Sainsbury as domain names on the Internet on the
basis of passing off and trade-mark infringement. The decision means that, at least in the UK,
it should be easier to protect Internet domain names.
Defamation
Defamation is the publication of a statement which tends to lower a person in the estimation
of right-thinking members of society generally, or which tends to make them shun or avoid
that person.
..
EL_C21.qxd 3/26/07 10:54 AM Page 587
SPECIFIC TORTS 587
Byrne v Deane, 1937 – What is defamation? (427)
In order to constitute a tort the statement must be false and capable of bearing a defamatory
meaning. Lord Reid in Lewis v Daily Telegraph Ltd [1964] AC 234 at p 258 indicated how a
trial judge might proceed in deciding whether words in their ordinary and natural meaning
are capable of bearing a defamatory meaning.
What the ordinary person would infer without special knowledge has generally been called
the natural and ordinary meaning of the words. But the expression is rather misleading
in that it conceals the fact that there are two elements in it. Sometimes it is not necessary
to go beyond the words themselves, as where the [claimant] has been called a thief or a
murderer. But more often the sting is not so much in the words themselves as in what the
ordinary person will infer from them, and that is also regarded as part of their natural and
ordinary meaning . . . In this case it is, I think, sufficient to put the test in this way.
Ordinary men and women have different temperaments and outlooks. Some are unusually
suspicious, and some are unusually naive. One must try to envisage people between these
two extremes and see what is the most damaging meaning they would put on the words
in question.
In consequence, the ordinary and natural meaning of words is to be gathered not only by
considering a strictly literal interpretation but also from the inference which would be drawn
by the ordinary person who heard or read the words. Statements of opinion may be defam-
atory; defamation is not confined to statements of fact. Thus in Slazengers Ltd v Gibbs (C ) &
Co (1916) 33 TLR 35 the defendants stated during the First World War with Germany that
the claimants were a German company and would, in their opinion, be closed down. This
statement of opinion was held to be defamatory of the claimants.
It was held in Berkoff v Burchill [1996] 4 All ER 1008, by the Court of Appeal that derogatory
references to an actor’s physical appearance were capable of being defamatory and the matter
should go to trial. The actor was described as ‘hideously ugly’. The defendant’s appeal on the
basis that to be defamatory words had to cause injury to a person’s reputation was rejected by
the court. The words were capable of lowering the claimant’s standing in the estimation of
the public and of making him the object of ridicule.
21
Publication
The essence of the tort is the publication or communication of the falsehood to at least one
person other than the person defamed, and other than the author’s own husband or wife.
Obviously publication to the claimant’s spouse is defamatory (Wenman v Ash (1853) 13 CB
836). Every successive repetition of the statement is a fresh commission of the tort. Hence,
a defamatory statement written upon a postcard is published by the sender not only to the
ultimate recipient but also to the postal officials through whose hands it may pass, and to
every individual who legitimately handles the message, e.g. the secretary of the sender or the
receiver. Similarly a libel contained in a newspaper is published by the reporter or author,
and by the editor, the printer, the publisher, the proprietor, the wholesaler and the retail
seller of that newspaper.
However, at common law mere mechanical distributors, e.g. news vendors, booksellers,
libraries and the like, were not liable for their acts if they were unaware of the libel. However,
if, as in Viztelly v Mudie ’s Select Library Ltd [1900] 2 QB 170, the library had overlooked a
..
EL_C21.qxd 3/26/07 10:54 AM Page 588
publisher’s circular requesting return of copies of a libellous book, then there was and is a
liability. Persons lending books gratuitously or making gifts of them and tape and record
dealers were also protected if unaware of the defamation. There is, of course, no need to con-
sider the liability of the Post Office because it is exempt from any liability in tort in regard to
postal packets. Nor is there any need to consider the liability of British Telecommunications
because, although the telecommunications service is run under contract, there are excluding
terms.
Section 1 of the Defamation Act 1996 now deals with the defence of innocent dissemina-
tion and has constricted its ingredients in some respects. At common law the defence was
available to a distributor who did not know that the publication was a libel. Now the defence
will only apply where the distributor or other secondary publisher did not know or have reason
to believe that he was causing or contributing to the publication of a libel. This means that
secondary publishers will have difficulty in setting up the defence where the main publisher
has a track record of publishing defamatory material. However, under the Act Internet service
providers are protected from liability for defamation as are broadcasters of live programmes
in respect of statements made by persons over whom they have no control.
Under s 1(3) of the 1996 Act Internet service providers are not publishers under the Act,
i.e. in a statutory sense. However, it was held in Godfrey v Demon Internet Ltd [1999] 4 All ER
342 that they can nevertheless be publishers at common law in appropriate circumstances.
The High Court ruled in the case that an Internet service provider that was notified that
it was carrying a libellous statement on a Usenet newsgroup but took no action could face
defamation proceedings. It could not rely on the defence of innocent defamation under s 1
of the 1996 Act because, although it was not an author, editor or publisher under s 1(3),
it had published the statement at common law without taking reasonable care as required
by s 1(1)(b) of the 1996 Act. The posting in this case was made by an unknown person in
the USA and was said to be obscene and defamatory of the claimant, a lecturer resident
in England.
However, in Bunt v Tilley [2006] 3 All ER 336 the High Court ruled that as a matter of law
an Internet service provider that performed no more than a passive role in facilitating post-
ings on the Internet could not be regarded as a publisher at common law.
While on the subject of Internet defamation an Australian landmark case relating to the
liability of online publishers is worth considering. The case is entitled Dow Jones & Co Inc v
Gutnick [2002] HCA 56. Dow Jones published an article called ‘Unholy Gains’ in its publica-
tion Barron’s magazine. It carried the imputation that G, who was a well-known Australian
business man, was purporting to be a reputable citizen but was in fact money laundering and
evading tax. Dow Jones also placed the article on its website which was a subscriber website
called Barrons. Dow Jones had 550,000 subscribers to the site: 1,700 of these paid by
Australian credit cards. G refuted the allegations and sued Dow Jones for defamation in
Victoria, Australia for damage caused to his reputation by the Victoria publications. The
defendants contended that the case should be heard in New Jersey, USA where Barron’s online
server was located and the law there applied. G argued that the claim was validly brought in
Victoria where the article was viewed. The Australian High Court agreed with G. The case was
rightly brought in Victoria and Australian law would be applied. Under both English and
Australian law every communication creates a separate cause of action which arises in every
place where the defamatory matter is read or heard. It was near certain that UK courts would
have reached the same conclusion since English and Australian law on defamation is largely
the same.
In fact, a UK court did take that line in King v Lewis and Others [2004] All ER (D) 234 (Oct)
where the Court of Appeal affirmed the High Court’s ruling that the common law of England
and Wales takes the view that the act of defamation, i.e. publication of the defamatory
..
EL_C21.qxd 3/26/07 10:54 AM Page 589
SPECIFIC TORTS 589
material, takes place when the information is downloaded and if downloaded in England and
Wales by Internet users the proceedings in respect of it may be brought here even though the
statement was not originally made in the UK.
The case followed New York attorney Judd Berstein’s allegedly defamatory statements in
the US about the boxing promoter Don King. The court rejected Mr Berstein’s contention
that UK courts had no jurisdiction to try the matter, the statements having been made in the
US though downloaded in the UK. The court said it had jurisdiction. There was a real poten-
tial loss to Mr King in the UK because he had a substantial reputation to protect. US law is
more liberal.
The situation for online publishers could hardly be worse. They are potentially liable for
publication anywhere on their website and will be judged by local law. Where defamatory
material is published within the EU the position is the same and is reinforced by the provi-
sions of the Brussels Convention on Jurisdiction and Enforcement of Judgments in Civil and
Commercial Matters of 1968.
So far as defamation arising from a US online publisher is concerned a major difficulty will
be enforcing say a damages judgment in the USA. The US court may very well refuse to
enforce a foreign judgment on the grounds that it infringes the defendant’s right to free
speech.
As to what precautions can be taken the best approach for UK online publishers would
seem to be to have a material defamation reading by a UK specialist lawyer. UK defama-
tion law is amongst the most strict and conservative of any in the world and if the material
is cleared under UK law it should not be regarded as defamatory in other more liberal
jurisdictions.
A defendant is not liable when a father opens his son’s letter (Powell v Gelstone [1916] 2 KB
615), or the butler opens the unsealed letter of his employer (Huth v Huth [1915] 3 KB 32).
However, a correspondent should expect that clerks of the claimant, if a business person,
might in the ordinary course of business open letters addressed to him at his place of business
and not marked ‘personal’ or ‘private’, etc., and such a correspondent is responsible for
publication of a libel. It should also be noted that marking the communication ‘private’,
‘personal’, etc. may not prevent publication in the case of a very busy public figure such as
the Prime Minister.
The third person who receives the defamatory statement must be capable of appreciating
its significance. A written defamatory statement cannot be published to a blind person except
in Braille. It is not publication to repeat a defamatory statement in a foreign language in the
presence only of persons who cannot understand the tongue. But if X writes a defamatory 21
statement to Y in, say, German, knowing that Y cannot understand it, X will be responsible
for the publication which results from Y’s showing it to a linguist for the purpose of translation.
In addition, to constitute publication, the person to whom the statement is communicated
must understand that it refers to the claimant.
Republication
Problems can occur where the main damage emanating from defamatory material is caused
by reason of its republication. Can the republications be regarded as independent acts or
where the claimant is suing the maker of the defamatory statement can that person be made
liable for the damage resulting from republication? The matter was raised in McManus v
Beckham [2002] 4 All ER 497. It appeared that the defendant, a well-known singer, visited
the claimant’s shop which sold autographed memorabilia. It was alleged that while in
the shop she advised other customers that the signature on a photograph of her husband, a
well-known footballer, was a fake. The incident was widely reported in the tabloid press. The
..
EL_C21.qxd 3/26/07 10:54 AM Page 590
claimants’ case was that they had suffered loss to their business because of the negative press
coverage and that the defendant’s remarks suggested that they habitually sold memorabilia
with fake autographs. They said they bought their goods from reputable sources and had
offered to have this particular signature checked by Mr Beckham. The defendant asked the
court to strike out the claim for damages in respect of republication. The claimants were not
claiming against the media but seeking recovery of the wider media publication losses from
the defendant.
The matter reached the Court of Appeal which refused to strike out the claim for republication
damage. The whole matter rested, as in many tort situations, on foreseeability. Republication
was reasonably foreseeable here said the Court of Appeal. However, it must be said that in
these defamation republication cases the maker of the statement is only likely to be held
liable for republication damage where republication is, as in this case, a significant risk, arising
as it did here from the known interest of the media in the Beckhams.
Who may be defamed?

No action lies at civil law for defaming a dead person, no matter how much it may annoy or
upset his relatives. Although from time to time there have been discussions as to reform, the
same is currently true where either the victim of the defamation or the defamer dies after
publication of the defamation but before judgment has been obtained. There may possibly be
a prosecution for criminal libel if the necessary or natural effect of the words used is to render
a breach of the peace imminent or probable.
As regards criticism of a trader, it is not defamatory merely to criticise his goods so long as
the trader himself is not attacked. To say that a trader is bankrupt or insolvent is defamatory,
but to say that he has ceased to be in business is not, for it does not reflect on his reputation
(Ratcliffe v Evans [1892] 2 QB 254) nor as in Berkoff is it capable of lowering the claimant’s
standing in the estimation of the public or of making him the object of ridicule. As we have
seen, the law of defamation applies to corporations as it does to private individuals (D & L
Caterers Ltd v D’Anjou (1945) – see Chapter 20).
However, the House of Lords held in Derbyshire County Council v Times Newspapers (1993)
91 LGR 179 that a local authority could not sue for defamation. It was, said their Lordships,
in the highest interest of the public that a council should be subject to scrutiny and criticism
and it would be against such interest for such authorities to have any right under the
common law to bring a claim for defamation.
It should also be noted that in Goldsmith v Bhoyrul [1998] QB 459, it was held that it was
contrary to the public interest for a political party to have a right at common law to sustain
an action for defamation. In a free and democratic society parties which put up for office
should always be open to criticism. The public interest in freedom of speech should not be
fettered. Candidates could bring claims but to extend this to political parties was not in the
public interest.
Libel and slander

The form of publication determines whether the tort committed is libel or slander. Libel is
defamation in some permanent form; slander is a statement of a like kind in transient form.
Pictures, effigies, writing and print are clearly libel. Speech is slander, and probably gestures
and facial mimicry also. It has been held that a defamatory sound film was a libel, and legisla-
tion states that the broadcasting of defamatory matter is libel, whether sound or visual
images are transmitted (Defamation Act 1952, s 1). (See also Theatres Act 1968.) Publication
on the Internet is libel (see Godfrey v Demon Internet Ltd (1999) (above)).
..
EL_C21.qxd 3/26/07 10:54 AM Page 591
SPECIFIC TORTS 591
Youssoupoff v Metro-Goldwyn-Mayer, 1934 – A film is libel (428)
It is necessary to determine whether a tort is libel or slander for two reasons:
(a) libel may be a crime as well as a tort;
( b) libel is actionable without the claimant having to prove special damage, i.e. pecuniary
loss, whereas the claimant in an action for slander must as a general rule prove such special
damage.
Slander is actionable per se, i.e. without proof of special damage, in the following cases:
(a) Where there is an imputation that the claimant has been guilty of a criminal offence
punishable with imprisonment, e.g. a statement such as ‘I have enough information to put
John in gaol’.
(b) Where there is an imputation of unchastity to any woman or girl (Slander of Women Act
1891). This probably includes the case where a woman is alleged to have been the victim of
rape and seems to include a false allegation of lesbianism (Kerr v Kennedy [1942] 1 KB 409).
(c) Where there is an imputation that the claimant is suffering from venereal disease and pos-
sibly other contagious diseases, e.g. leprosy or plague, which might cause him to be shunned
and avoided. To say that a person has suffered from these diseases is not actionable per se.
(d) Where there have been words calculated to disparage the claimant in any office, pro-
fession, business or calling, by imputing dishonesty, unfitness or incompetence (Defamation
Act 1952, s 2). However, it is not necessary for the claimant to show, e.g., that he has lost his
job as a result, but the remark must be one likely to lower his standing in his trade or pro-
fession. Presumably, therefore, the old case of Lumbe v Allday (1831) 1 Cr & J 301 is still good
law. In that case the court decided that a statement that a clerk employed by a gas company
associated with whores was not actionable per se because his quality as a clerk would be in no
way diminished by his association with prostitutes.
A suggestion, therefore, that a clergyman has been found guilty of immoral conduct, or that
a solicitor knows no law, is actionable without proof of special damage. Spoken words in a
broadcast are actionable per se since they are regarded as libel (Defamation Act 1952, s 1).
It is not enough that the words are abusive. Thus to say of A, a bricklayer, that he is a legal
ignoramus is not defamatory, though the same words would be defamatory if said of B, a
solicitor. Difficulties might arise if the words were said of a chartered accountant who is
21
required to have a knowledge of certain branches of the law.
To resolve problems such as these, two questions must be answered:
(i) Are the alleged words capable of bearing a meaning which is defamatory of the
claimant? (This is a matter of law and is decided by the judge.)
(ii) If so, in this particular case are the words in fact defamatory of the claimant? (This is a
matter of fact to be decided by the jury.)
What is special damage?

Some material loss is required, e.g. refusal of persons to enter into contracts with the
claimant, or the loss of hospitality from friends who have provided food or drink on former
occasions (Storey v Challands (1837) 8 C & P 234). Illness resulting from mental suffering
is probably special damage. There were some early cases which said that it was not, but the
better view is that these would not be followed now.
..
EL_C21.qxd 3/26/07 10:54 AM Page 592
Innuendo
Cases may arise where the words are not at first sight defamatory, and only appear as such
when the surrounding circumstances have been explained. Again a statement may be ironical,
or accompanied by a wink or a gesture, or it may be ambiguous, e.g. the statement that
‘X drinks’. In such a case the claimant must show that the words contain an innuendo or
hidden meaning and that reasonable persons could, and in fact would, interpret the words
used in a defamatory sense. However, a newspaper article may be defamatory of a person
whom readers only identify from their own knowledge of extrinsic facts. The defamation
need not arise from words themselves. Evidence is admissible to show that innocent words
have a defamatory meaning. The judge decides as a matter of law whether the words are
capable of bearing the innuendo alleged by the claimant, and the jury decides whether in
fact the words do bear that meaning. The meaning sought to be placed upon the words by
the innuendo pleaded must be reasonable, and the court will not read into a statement a
defamatory sense which is not there on a reasonable interpretation. Furthermore, a claimant
who claims that the innuendo to be drawn by those with special knowledge of the facts from
a publication is libellous is bound to particularise those readers of the publication whom he
alleges to have such special knowledge.
Cassidy v Daily Mirror Newspapers, 1929 – Innuendo: at the racecourse (429)

Morgan v Odhams Press, 1971 – Innocent words may have a defamatory
meaning (430)
Tolley v Fry, 1931 – An amateur golfer defamed (431)
Sim v Stretch, 1936 – Defamation must appear on a reasonable interpretation (432)
Fulham v Newcastle Chronicle and Journal, 1977 – Who has special knowledge? (433)
Where a claimant relies on an innuendo he must prove that the words were published to a
specific person who knew at the time of the publication of specific facts enabling that person or
persons to understand the words in the innuendo sense. Facts which come into existence
afterwards do not make a statement defamatory.
Grappelli v Derek Block (Holdings) Ltd, 1981 – Innuendo must arise at the time
of publication (434)
Reference to the claimant

If the judge decides that the words are capable of bearing a defamatory meaning, he must
then consider whether the words are capable of referring to the claimant. This again is a ques-
tion of law. If he finds the answer to be yes, he must leave to the jury the question: ‘Do the
words in fact refer to the claimant?’ This is a simple matter where the claimant has been
referred to by name, and until recently the rule was that an author used a name at his peril if
it turned out that it could reasonably be taken to refer to the claimant. Indeed the more
obscure the name selected, the greater the chance of success of a claimant who bore that
name should he sue for libel. It is not uncommon to attach a disclaimer at the beginning of a
work of fiction: ‘The persons and events described in this book are wholly imaginary’, but it is
doubtful whether this affects the author’s liability.
Hulton v Jones, 1910 – Do the words refer to the claimant? (435)
..
EL_C21.qxd 3/26/07 10:54 AM Page 593
SPECIFIC TORTS 593
The practical restriction on so-called ‘gold-digging’ actions was the power of the jury to
award contemptuous damages of a farthing (when that coin was in existence), but the costs
involved in defending an action might well lead a defendant to settle out of court for a
substantial sum. The position has been modified by the Defamation Act 1996, ss 2–4, which
provide for an offer of amends.
It sometimes happens that a whole class of persons is the subject of a defamatory state-
ment. Here a member of the class may only sue if he can show that he himself is the person
pointed out by the defamatory statement.
Knupffer v London Express Newspaper Ltd, 1944 – A class libel fails (436)
Schloimovitz v Clarendon Press, 1973 – How ‘Jew’ was defined (437)
Words may, of course, be defamatory of the claimant without his being mentioned by
name, if the statement can be shown to apply to him (see Youssoupoff v M-G-M (1934)).
The defendant’s motives are generally immaterial. The most laudable motives will not by
themselves prevent a defamatory statement from being actionable. But where the defendant
puts his motives in issue, as where he pleads fair comment or qualified privilege, or relies on
ss 2–4 of the Defamation Act 1996 (unintentional defamation), the claimant may then prove
the malice of the defendant, or improper motive, to rebut the defence.
Defences
There are certain special defences which are peculiar to an action for defamation, but these
defences do not preclude a defendant from denying in addition that the words are defamat-
ory, or asserting that they do not refer to the claimant, or that they were not published.
Justification
There is no burden of proof on the claimant to establish that the defendant’s statement is
untrue; all the claimant has to do is to prove publication plus the defamatory nature of the
statement. However, as the essence of defamation is a false statement, a defendant may
always plead the truth of the statement as a defence in civil proceedings (but not in an action
for criminal libel, where the rule is: ‘The greater the truth, the greater the libel’, since true
libels are more likely to influence passions). If the statement is true, no injury is done to the 21
claimant’s reputation; it is simply reduced to its true level. It does not matter that the
statement was made maliciously or even that the defendant did not believe it to be true; so
long as it is true the defence of justification is complete.
In the defence of justification the defendant asserts that the statements are ‘true both in
substance and in fact’. He must show not merely that the words are literally true, but also
that there are no significant omissions which would affect the truth of the statement taken as
a whole. If, however, the statement is essentially true, an incidental inaccuracy will not
deprive the defendant of his right to justify.
Alexander v The North Eastern Railway Co, 1865 – The defence of

justification (438)
However, that which is proved to be true must tally with that which the defendant’s
statement is interpreted to mean. Thus in Wakley v Cooke (1849) 4 Exch 511 the defendant
called the claimant ‘a libellous journalist’. The defendant proved that the claimant had had
..
EL_C21.qxd 3/26/07 10:54 AM Page 594
one judgment against him for libel but the court held that the statement meant that the
journalist habitually libelled people and so the defendant had not justified it.
The defence of justification really amounts to a positive charge against the claimant, and
if it fails the damages may be increased, since the original wrong has been aggravated. The
defendant’s honest belief that the statement is true is no justification, though it may reduce
damages. Nor is it a justification to prove that a quoted statement was made, if the quotation
cannot be proved to be true. Suppose a statement is made: ‘Mrs A tells me that Dr B has been
committing adultery with a woman patient.’ It is no justification to show that Mrs A made
the statement to the defendant; he must show that Dr B is actually guilty of the conduct
alleged.
In connection with this defence, it is important to note s 5 of the Defamation Act 1952,
which provides that in an action for libel and slander in respect of words containing two or
more distinct charges against a claimant, a defence of justification shall not fail by reason
only that the truth of every charge is not proved if the words not proved to be true do not
materially injure the claimant’s reputation having regard to the truth of the remaining
charges.
In connection with justification it should be noted that under s 8 of the Rehabilitation of
Offenders Act 1974 (see further Chapter 4) a claimant who proves that the defendant has
maliciously published details of a spent conviction may recover damages. However, the
section does not affect the defences of absolute or qualified privilege and fair comment. Thus
an employer will, in the absence of malice, still be protected if he writes a reference which
mentions a spent conviction. It was decided in Herbage v Pressdram [1984] 2 All ER 769 by the
Court of Appeal that a rehabilitated offender who seeks an interlocutory injunction to pre-
vent publication of his conviction is in the same position as a person against whom a defence
of qualified privilege is raised. An injunction will only be granted if there is overwhelming
evidence of malice in the publication or some irrelevant, spiteful or improper motive.
Fair comment on a matter of public interest

Here the defendant must show that the statement alleged to be defamatory is in fact legiti-
mate comment. The defence is designed to cover criticism of matters of public interest in the
form of comment upon true, or privileged, statements of fact, such comment being made
honestly by a person who did not believe the statements to be untrue and who was not
otherwise actuated by malice. The malice element makes the defence similar to that of
qualified privilege (see below). The statement must be comment, i.e. the speaker’s opinion of
a true state of affairs; it must not be an assertion of facts, but a comment on known facts.
London Artists v Littler, 1969 – A comment on the wrong facts (439)
Comment is the individual reaction to facts, and the court and the jury require to be
satisfied only of the defendant’s honesty. The test is: ‘Would any honest person, however
prejudiced he may be, however exaggerated or obstinate his views, have said that which this
criticism has said of what is criticised?’ If the answer is ‘yes’, the comment is fair for the
purposes of raising this defence.
The matter upon which the comment is made must be one of legitimate public interest
such as the conduct of Parliament, the government, local authorities and other public
authorities, or the behaviour of a trade union whose actions affect supplies and services to
the public. Further, a matter may become the subject of public interest because the claimant
has voluntarily submitted himself and his affairs to public criticism. A person who makes a
..
EL_C21.qxd 3/26/07 10:54 AM Page 595
SPECIFIC TORTS 595
public speech or publishes a book or presents a play thereby submits the subject matter of
such thing for public comment, and cannot complain if the comment is adverse.
It should also be noted that the facts relied on to support a plea of fair comment must be
facts existing at the time of the comment and not facts which have occurred some time
before the comment was made (Cohen v Daily Telegraph [1968] 2 All ER 407).
It is important to distinguish fair comment from the defence of justification. In fair com-
ment it is not necessary to prove the truth of the comment but merely that the opinion was
honestly held; if justification is pleaded in regard to matters of opinion, the defendant must
prove not merely that he honestly held the views expressed but that they were correct views.
Thus, if we take the following statement – ‘X’s speech last night was inconsistent with
his profession of Liberalism’, in a plea of justification the defendant must prove that it was
inconsistent, but in a plea of fair comment the defendant need only show that he honestly
held this opinion of X’s speech.
Privilege
This defence protects statements made in circumstances where the public interest in securing
a free expression of facts or opinion outweighs the private interests of the person about
whom the statements are made. Privilege may be absolute – such a statement is never
actionable – or qualified, when privilege may be defeated by proof of the defendant’s malice.
Absolute privilege
The Bill of Rights 1689 protects statements in both Houses of Parliament. The Parliamentary
Papers Act 1840 affords a similar protection to reports, papers, etc., published by order of
either House, e.g. Hansard and government White Papers. The Defamation Act 1952, s 9 pro-
tects verbatim broadcasts and newspaper reports of parliamentary proceedings but Parliament
itself can fine or imprison those who abuse this privilege. Members of the European
Parliament also have immunity for statements made during sessions of the European
Parliament even if it is not actually sitting (Wybot v Faure Case 149/85 [1986] ECR 2391).
Section 13 of the Defamation Act 1996 allows waiver of parliamentary privilege. The matter
was raised in Hamilton v Al Fayed (2000) 26 Sol Jo LB 157. The claimant, a former Member of
Parliament, had waived his parliamentary privilege under s 13 and commenced libel proceed-
ings after the defendant had alleged that he had accepted payments as a reward for asking
questions in Parliament. The defendant asked for the action to be struck out on the basis that
the Committee on Standards and Privileges and the Parliamentary Commissioner for 21
Standards had already investigated the allegations and s 13 did not extend to waive
Parliament’s exclusive jurisdiction over its internal affairs. The House of Lords ruled that the
waiver applied and Mr Hamilton’s claim could proceed. The claimant’s waiver of his parlia-
mentary protection overrode any privilege belonging to Parliament as a whole and thus
allowed the parties to challenge the truthfulness of evidence given to the parliamentary
bodies without breaching parliamentary privilege. If that challenge could not have been
made by reason of privilege, the trial would have been impossible to pursue.
With regard to the courts, statements by the judge, members of the jury, counsel, and the
parties or witnesses are absolutely privileged, as are orders of court. Thus an order of court for
divorce, including a finding of adultery against a woman, is not actionable even though
reversed on appeal. A statement made by a witness is not actionable even though the judge
finds it untrue and malicious. The abuse of the above privilege is checked by (a) the law of
perjury (in the case of untrue statements by witnesses), (b) the power of the judge to report
improper behaviour on the part of counsel to the Benchers of his Inn, and (c) the judge’s
power to commit persons to prison for contempt of court.
..
EL_C21.qxd 3/26/07 10:54 AM Page 596
Communications between senior and responsible public officers in the course of their
duty are absolutely privileged. However, the defence of absolute privilege does not apply to
information given to a social security adjudication officer by a person applying for benefit,
and so allegations made by an employee against a former employer as to the manner of a
dismissal could be the subject of an action for libel (see Purdew v Seress-Smith [1993] IRLR 77).
Where in the course of legal proceedings (as distinct from the giving of legal advice), the
solicitor for one party requests the solicitor for the other party for information regarding the
case which his client will advance, the answer given is subject to absolute privilege (see Waple
v Surrey County Council [1997] 2 All ER 836).
It was held by the Court of Appeal in Mahon v Rahn (No 2) [2000] 2 All ER (Comm) 1 that a
letter from an informant to a financial services regulator, the Securities Association (a pre-
decessor to the Financial Services Authority), during an investigation into a person’s fitness to
carry out investment business attracted absolute privilege.
Absolute privilege and human rights

The European Court of Human Rights has ruled that absolute privilege does not infringe Art 6
(right to a fair trial) of the Convention. In A v United Kingdom (2002) The Times, 28 December
a young black woman tried to challenge the rule of absolute privilege in circumstances where
her MP had named her in a parliamentary debate, gave her full address and made adverse
comments concerning her behaviour and that of her children. The court ruled that absolute
privilege of parliamentary proceedings did not infringe Art 6. It was very limited and did not
impose a disproportionate restriction on an individual’s right of access to the courts. The MP
was protected by the Bill of Rights Act 1689, Art 9 of the Convention (freedom of thought,
conscience and religion) and press reports of the proceedings were protected by qualified
privilege.
Qualified privilege
Where such privilege exists, a person is entitled to communicate a defamatory statement so
long as he does so honestly and reasonably with regard to the words used and the means of
publication, and without malice. Qualified privilege has been held to arise in the following
cases:
(a) Common interest, i.e. where a statement is made by a person who is under a legal or
moral duty to communicate it to a person who has a similarly legitimate interest in receiving
it. This covers testimonials or references to prospective employers, or to trade protection
societies whose function it is to investigate the creditworthiness of persons who are the
objects of their enquiry.
London Association for the Protection of Trade v Greenlands, 1916 – A bad

report from a trade association (440)
(b) Statements in protection of one’s private interests are privileged.
Osborn v Thos Boulter, 1930 – An allegation of watering the beer (441)
(c) Statements by way of complaint to a proper authority, e.g. petitions to Parliament and
complaints to officials of local authorities and professional bodies. It was decided in Graff v
Panel on Take-Overs and Mergers (1980) Financial Times, 11 October that the Panel had a moral
duty to investigate alleged breaches of the code and that it followed from this that if the
..
EL_C21.qxd 3/26/07 10:54 AM Page 597
SPECIFIC TORTS 597
Panel had learned of an alleged breach of the code and had circularised copies of an article –
which was the subject of this libel action – in order to establish or to demolish the allegations,
the Panel was protected by the defence of qualified privilege.
Beach v Freeson, 1971 – An MP’s duty (442)
(d) Professional confidential communications between solicitor and client on legal advice. As
we have seen, correspondence during the course of legal proceedings between solicitors is
subject to absolute privilege (Waple v Surrey County Council [1997] 2 All ER 836).
(e) Newspaper reports on various public matters. The Defamation Act 1996, in s 15 and Sch 1,
confers qualified privilege upon fair and accurate newspaper reports of various matters of
public interest and importance. The Defamation Act 1996 extends this to fair and accurate
reports in all publications, provided the publisher has, if asked, published a reasonable letter
or statement by way of explanation or contradiction. Failure to do so rules out the defence.
These reports are of two classes:
(i) Those which are privileged without any explanation or contradiction being issued, e.g.
reports of public proceedings of colonial or dominion legislatures, reports of public
proceedings of the United Nations Organisation, of the International Court of Justice, or
of British courts martial, and fair and accurate copies of and extracts from British public
registers and notices.
(ii) Those which are privileged only if the newspaper concerned is prepared, on the claimant’s
request, to publish a reasonable letter or statement in explanation or contradiction of
the original report, e.g. semi-judicial findings of the governing bodies of learned soci-
eties, professional and trade associations, or authorities controlling games and sports.
This also applies to fair and accurate reports of public meetings, meetings of local and
public authorities, and the meetings of public companies. In this context a press con-
ference can be regarded as within the expression ‘public meeting’ so that press reports
emanating from it can be subject to the defence of qualified privilege (see McCarten
Turkington Breen (a firm) v Times Newspapers Ltd [2000] 4 All ER 913: a ruling of the House
of Lords).
(f ) Fair and accurate reports of parliamentary proceedings are the subject of qualified privi-
lege whether contained in a newspaper or not.
21
Cook v Alexander, 1973 – Privilege and a parliamentary sketch (443)
(g) Fair and accurate reports of public judicial proceedings are privileged. This does not pro-
tect reports of proceedings in domestic tribunals, e.g. the Law Society, unless the report is in
a newspaper. Such reports will not be privileged if the court has forbidden publication, as is
often done in cases affecting children, or if the matter reported is obscene or scandalous. It is
also a criminal offence to report indecent matter relating to judicial proceedings ( Judicial Pro-
ceedings (Regulation of Reports) Act 1926; Domestic and Appellate Proceedings (Restriction
of Publicity) Act 1968).
(h) An apology published in connection with defamation is not subject to qualified privilege
and if it contains further defamatory material this can be sued upon without the need for
proof of malice in the author and publisher (see Watts v Times Newspapers Ltd [1996] 2
WLR 427).
..
EL_C21.qxd 3/26/07 10:54 AM Page 598
Qualified privilege may be rebutted by proof of malice or some improper motive, and proof
of actual spite or ill will in the publication will defeat it. An improper motive may be inferred
from the tone of the statement or from the circumstances attending its publication, and malice
may also be inferred from abuse of the privilege, such as the giving of excessive publicity to
statements protected by qualified privilege. However, the gross and unreasoning prejudice of
the defendant will not defeat the defence of privilege if the defendant honestly believed that
what he published was true. But where a person without malice joins with a malicious person
in publishing a libel in circumstances of qualified privilege, the person without malice is not
liable to the person defamed.
Horrocks v Low, 1972 – Malice cannot be inferred (444)

Egger v Viscount Chelmsford, 1964 – A judge of Alsatian dogs (445)
Where there is a pressing obligation to communicate defamatory matter, a person may

communicate it, although he does not believe it to be true, and still claim qualified privilege.
Thus an accountant who, on going through the books of a firm, finds evidence that the
cashier has embezzled money, may communicate that view to authority and still claim
qualified privilege, even though the accountant does not believe that the cashier has, in fact,
embezzled the money.
The media: qualified privilege: developments

The categories of situations where the defence of qualified privilege is available have tended
to expand over the years. In this connection, the Lord Chancellor has power under the
Defamation Act 1996 to create new situations of qualified privilege (see Sch 1, para 15 to the
Act), though there has as yet been no extension under this power. However, journalists have
tried to get the courts to extend the defence to matters of ‘political importance’. This trend
has been brought to a halt by the decision of the House of Lords in Reynolds v Times
Newspapers Ltd [1999] 3 WLR 1010. The claimant was the former Taoiseach of Ireland. He
complained of an article appearing in the Sunday Times that gave the impression that he had
deliberately and dishonestly misled the Irish Dail. The defence that the article was subject to
qualified privilege by reason of being ‘political information’ was rejected.
An important aspect of the Reynolds case is the guidelines laid down by the House of Lords
in connection with the acceptance of the defence of qualified privilege when put forward by
newspapers and other media. Matters to be taken into account by a court are:
n the seriousness of the allegation;
n the nature of the information and the extent to which the subject matter was a matter of
public concern;
n the source of the information;
n the steps taken to verify the information;
n the status of the information;
n the urgency of the matter;
n whether comment had been sought from the claimant;
n whether the article contained the gist of the claimant’s side of the story;
n the tone of the article;
n the circumstances of the publication including the timing.
Loutchansky v Times Newspapers Ltd, 2002 – The Reynolds guidelines applied:

limitation and the Internet (445a)
..
EL_C21.qxd 3/26/07 10:54 AM Page 599
SPECIFIC TORTS 599
Reynolds liberalised
The tests in Reynolds were still difficult to pass but in Jameel v Wall Street Journal Europe [2006]
3 WLR 642 the House of Lords has liberalised the Reynolds guidance and heralded a new era
for British investigative journalism. The Jameel ruling is to the following effect:
n The publishers of an article of undoubted public concern are not to be denied the protec-
tion of qualified privilege where, having taken detailed steps to verify its contents, they fail
to obtain the claimant’s comments before publication.
n The key test is whether a media organisation or newspaper acted fairly and responsibly in
gathering and publishing the information. If the reporter and editor did so and the informa-
tion was of public importance then the fact that it contained relevant but defamatory
allegations against prominent people would not allow them to recover libel damages.
The story published by the Wall Street Journal Europe said that bank accounts associated
with a number of prominent Saudi citizens, including Mr Jameel’s family, had been moni-
tored by the Saudi government at the request of the US authorities to ensure that no money
was provided intentionally or knowingly to support terrorists. The High Court and the Court
of Appeal had not found that the Reynolds public interest test applied because, among other
things, no comment had been sought from the claimant. The House of Lords, however,
allowed the journal’s appeal and in doing so further liberalised the public interest test. What
the journal had published was clearly in the public interest.
Offer of amends
The Defamation Act 1996 sets out in ss 2–4 a new offer of amends defence. It is described as a
‘qualified offer’ and is an offer of amends which is limited to a specific defamatory meaning
which the defendant who makes the offer accepts that the statement which is complained of
conveys. A qualified offer is appropriate:
n where the defendant accepts that his defamatory statement is partially untrue; or
n where the defendant maintains that although the statement is defamatory it is not so in
the sense argued by the claimant.
If, for example, an accountant complained that an article in a newspaper relating to a
financial scandal in which he was involved accused him of fraud but the newspaper said that
in its view the article merely made an allegation of incompetence, the newspaper could make
a qualified offer of amends in regard to the less serious meaning and this would be a defence 21
if the offer was refused and the jury accepted that an allegation of incompetence was the true
meaning.
It was held in Watts v Times Newspapers Ltd [1996] 2 WLR 427 that the publication of an
apology is not protected by qualified privilege so that if the apology contains further accusa-
tions regarding the claimant or a third party a claim may be made without the need to prove
malice.
The offer may be made before proceedings or after proceedings commence but before
submission of defence. Thus, the publisher has under the 1996 Act rather longer than before
to investigate and assess his position before deciding whether to run an offer to make
amends. The offer is to make a suitable correction and sufficient apology in a reasonable and
practicable way and to pay compensation equivalent to defamation damages. However, the
major costs of proceeding to trial may be saved. Making such an offer is a defence and, if used
must be the only defence relied on. It is essential to the defence that the publisher did not
know and had no reason to believe that the statement complained of was likely to be under-
stood as referring to the aggrieved party and that it was false and defamatory of him.
..
EL_C21.qxd 3/26/07 10:54 AM Page 600
Under s 3(5) of the 1996 Act it is up to the court to quantify an unresolved issue as to the
amount of the offer. In this connection the defendant who is making the offer may rely on
evidence relevant to the claimant’s character such as previous convictions for violent offences
where the libel related to the claimant’s alleged violence on a woman in order to obtain
possession of certain tape recordings and recording equipment in her possession (see Abu v
MGN Ltd [2003] 2 All ER 864).
It is well worth a defendant’s while to use the offer of amends procedure because a prompt
acknowledgement of the defamation together with an unqualified offer of amends and pub-
lished apologies can reduce the damages significantly as for example in Nail v News Group
Newspapers Ltd [2005] 1 All ER 1040, where they were reduced by 50 per cent.
Consent of the claimant to publication

If the claimant has agreed to publication, he cannot subsequently sue in respect of that state-
ment. Consent may be given in respect of a particular publication or it may be general.
Chapman v Lord Ellesmere, 1932 – Where the claimant is a volunteer (446)
Theatres Act 1968

Section 4 of the Theatres Act 1968 amends the law of defamation (including the law relating
to criminal libel) by providing that the publication of words (including pictures, visual
images, gestures, and the like) in the public performance of a play shall be treated as publica-
tion in permanent form, i.e. libel. Performances given on a domestic occasion in a private
dwelling house are exempt (s 7(1)) and so are rehearsals and performances for broadcast or
recording purposes (s 7(2)) provided such rehearsals and performances are attended only by
the persons directly connected with the giving of them.
Section 5 of the Act creates an offence of incitement to racial hatred by presenting or
directing the public performance of a play though, again, rehearsals and performances
attended only by persons directly concerned are exempt. Prosecution under s 5 is with the
consent of the Attorney-General (s 8).
It is of interest to note also that s 1 of the Act abolishes the power of the Lord Chamberlain
to censor plays.
Summary procedure
Summary proceedings are already available under the Civil Procedure Rules 1998 where the
claim has no prospect of succeeding or there is no reasonable prospect of defending, though
the summary proceedings may reveal that this is not so and a trial will ensue. However, the
new machinery under the 1996 Act is now in force. The new machinery is available where
the claimant applies for all or any of the following reliefs:
n a declaration (of liability or no liability);
n an order for publication of an apology, or correction;
n damages not exceeding £10,000; and
n an order restraining repetition.
The court is entitled to dismiss the claim if it has no real prospect of success and there is no
reason why it should be tried. Additionally, the court may give judgment for the claimant if
there is no defence that has a reasonable prospect of success and there is no reason for a trial.
A trial may be required where there is a conflict of evidence and the seriousness of the wrong
in terms, e.g., of its extensive publication.
..
EL_C21.qxd 3/26/07 10:54 AM Page 601
SPECIFIC TORTS 601
Trial may be in the county court if the parties consent.

An example of the use of the summary procedure arose in Oryx Group v BBC (2002) High
Court, 17 July. The Oryx Group is an international corporation with investments and business
interests across a range of industries including banking, hotels, automotive, natural resources,
food production, construction and marketing. Oryx’s claim arose from a BBC broadcast on
the 10 o’clock news on 31 October 2001. It was a special report entitled ‘The diamonds that
pay for Bin Laden’s terror’. In the report Oryx was falsely accused of funding Bin Laden and
the Al Qaeda network. On 19 November 2001 the BBC broadcast an apology. The BBC did
not put forward the defence of justification using instead the defences of qualified privilege
and no defamatory meaning. On 10 May 2002 four days before the BBC was required to serve
its evidence it abandoned the defence of qualified privilege. Oryx then applied for summary
judgment on the basis that the BBC had no credible defence. This was granted and on 17 July
2002 the High Court awarded judgment and costs to Oryx. A fairly speedy conclusion in the
circumstances of the case.
It is important to note that the fact that a judge has agreed to a request for summary pro-
ceedings does not mean that the defendant is denied a jury trial. There may be an appeal to
the Court of Appeal on the issue and the Court of Appeal may require a jury trial where it is
of opinion, e.g. that the defendant has a reasonable prospect of success with the defence (see
Safeway Stores plc v Tate [2001] QB 1120).
Limitation period
Section 5 of the Defamation Act 1996 reduces the limitation period from three years to one
in actions for libel, slander or malicious falsehood, the reason being that one year is the
time within which most actions should be brought if the action is to minimise damage to
the claimant’s reputation. The court may allow a late claim if it is equitable to do so hav-
ing regard to prejudice to either party and taking into account, e.g., situations where the
claimant was not aware that he had a claim on the first anniversary of the publication of the
offending material and provided he has acted reasonably and promptly when he did find
out, and the availability of evidence which would have been available during the primary
12-month period – or in other words, is vital evidence still available?
The court has a jurisdiction to extend the one year period but will not normally do so
unless there is a satisfactory explanation of the delay (see Steedman v BBC [2001] Enter-
tainment and Media Law Reports 17: Court of Appeal). The position with regard to online
continuous libels has already been considered (see Dow Jones & Co Inc v Gutnick [2002] HCA 21
56 at p 588).
Criminal convictions
As regards criminal convictions, such a conviction of the claimant is regarded as conclusive
in defamation proceedings so that the possibility of a defamation action being used by a
convicted criminal to challenge his conviction is removed. However, a criminal conviction is
not conclusive where the defendant is not the criminal concerned. This will enable invest-
igative journalists to defend libellous statements about police irregularities connected with a
criminal’s case by means of evidence to show that the criminal concerned might not have
been guilty (see s 12 of the Defamation Act 1996).
Pre-trial interpretation of relevant material

It should also be noted that following changes to the Rules of Supreme Court judges are now
allowed, even before a case has been regarded as suitable for trial, to rule on the interpretation
..
EL_C21.qxd 3/26/07 10:54 AM Page 602
of words and phrases which are ambiguous before the start of full proceedings. ‘Are the words
capable of being defamatory?’ is the question. This will save time and money where, subject
to recommendation by the claimant’s advisers, the case does not proceed to full trial where
the preliminary ruling is that the words or phrases are not defamatory.
Damages
Although many slanders are actionable only on proof of special damage to the claimant,
actual damages awarded by the court will not be confined to the special damage so proved.
For example, if as a result of defamation a person loses his or her employment, he or she can
prove special damage in this connection, but the actual damages awarded may take in much
more than this particular loss. Damages for defamation tend to be high. Juries are often used
in such cases, and they are concerned with the quantum of damages. The damages awarded
for loss of reputation may often be higher than damages awarded for the loss of life. In this
connection, the case of John v Mirror Group Newspapers Ltd (1995) The Times, 14 December is
of interest. MGN appealed against a total libel award of £350,000 comprising £75,000 com-
pensatory damages and £275,000 exemplary damages awarded to Elton John in a libel action
in respect of an article in the Daily Mirror. The Court of Appeal reduced the damages to
£75,000 and stated that it was offensive to public opinion that awards for defamation should
often well exceed sums awarded for injury cases. There was no reason why counsel or the
judge should not indicate to the jury what might be a reasonable sum in a particular case.
However, damages should be compensatory and not punitive though they may be aggravated
by mental suffering arising from the defamation, or mitigated by a full apology, provocation
by the claimant, or the claimant’s bad reputation.
Davis v Rubin, 1967 – Where libel damages are excessive (447)
Injunctions
Apart from damages, a defamed person may seek an injunction restraining further publica-
tion. Such injunctions are of two kinds:
(a) a perpetual injunction, which is usually granted at the trial; and

(b) an interim injunction (or interlocutory injunction), which is granted pending the trial,
and may be quia timet, that is before the wrong is actually done.
However, publication of an article will not be restrained merely because it is defamatory

where the defendant says he intends to justify it or make fair comment on a matter of public
interest, or claim privilege and the claimant cannot show that the defence(s) concerned will
be likely to fail (Harakas v Baltic Mercantile and Shipping Exchange Ltd [1982] 2 All ER 701).
Before concluding the tort of defamation we should notice also the separate tort of injurious
falsehood. Just as defamation is an attack on a person’s reputation, so injurious falsehood is
an attack on his or her goods. To say that A’s goods are inferior in quality to B’s may be an
injurious falsehood. To say that A sells inferior goods as goods of superior quality may, on the
other hand, be a defamatory statement.
Reform
The Law Commission has recommended that there should be an urgent review of Internet
libel laws. There is evidence that Internet service providers are increasingly shutting down
..
EL_C21.qxd 3/26/07 10:54 AM Page 603
SPECIFIC TORTS 603
sites because of defamation allegations even where the information is true or in the public
interest. These difficulties are exposed by the cases considered in this chapter.
At the time of writing, no legislation was forthcoming.
The rule in Rylands v Fletcher

This celebrated rule was stated in the case of Rylands v Fletcher (1868):
Where a person for his own purposes brings and keeps on land in his occupation anything
likely to do mischief if it escapes, he must keep it in at his peril, and if he fails to do so he is
liable for all damage naturally accruing from the escape.
The rule has been held to apply whether the things brought on the land be ‘beasts, water,
filth or stenches’. The rule also applies to fire. It does not apply to the pollution of beaches by
oil because, inter alia, the oil does not escape from land but from the sea (see Southport
Corporation v Esso Petroleum Co (1954)).
In more recent times an element of foresight of consequences has been imported into the
rule so that, although liability does not require negligence and is strict in that sense, it does
require foresight of consequences, as where the defendant knew or ought to have known of
them, before there can be a liability (see Cambridge Water Co Ltd v Eastern Counties Leather plc
(1994) below).
This decision should be borne in mind when considering earlier case law appearing in this
text. It may be that in some of the older cases the defendants escaped liability by showing
that they had no foresight of consequences either subjectively (themselves) or objectively
(through the rule of the reasonable person). Development along these lines may convert the
rule in Rylands to an aspect of negligence.
Emanuel v Greater London Council, 1970 – An escape of fire (448)
In the case which gave rise to the rule, the defendant had constructed a reservoir on his
land, employing competent workmen for the purpose. Water escaped from the reservoir
and percolated through certain old mine shafts, which had been filled with marl and earth,
and eventually flooded the claimant’s mine. The defendant was held liable in that he had
collected water on his land, the water not being naturally there, and it had escaped and done
21
damage. Since the defendant employed competent workmen, it follows that the liability was
absolute and did not depend on negligence, and in any case, the defendant’s action was quite
innocent as there was no reason why he should know of, or even suspect the existence of, the
disused shafts. Thus, even in the leading case, there was no foresight of consequences.
In order for the rule to apply, there must be an escape of the thing which inflicts the injury
from a place over which the defendant has occupation or control to a place which is outside
his occupation or control. It is doubtful to what extent the rule covers personal injury.
Read v Lyons, 1947 – There must be an escape (449)
The rule is not confined to wrongs between owners of adjacent land and does not depend
on ownership of land but the claimant must have some interest in the land. Thus in McKenna
v British Aluminium Ltd (2002) The Times, 25 April the High Court dismissed an application to
strike out (or bring to an end) claims in strict liability under Rylands v Fletcher and nuisance.
..
EL_C21.qxd 3/26/07 10:54 AM Page 604
The judge stated that the 30 or so claimants who were alleging harm caused by emissions
could not succeed in an action in nuisance or Rylands because they did not have an interest
in the land affected by it. The judge concluded, however, that the claimants had an arguable
case because of the Human Rights Act 1998 and that this Act may well have extended the
common law (and see also Weller v Foot and Mouth Disease Research Institute (1965)). Neither
is it confined to the escape of water, but may cover the escape of any offensive or dangerous
matter arising out of abnormal use of land provided the defendant has control of it.
Charing Cross Electricity Supply Co v Hydraulic Power Co, 1914 – No need for
ownership of land (450)
Attorney-General v Corke, 1933 – An abnormal use of land (451)
In general, there is no liability under the rule for damage caused by the escape of things
naturally on the land, though there may be an action in nuisance or in negligence.
Giles v Walker, 1890 – Escaping thistles (452)

Davey v Harrow Corporation, 1957 – Escaping tree roots (453)
Although Rylands v Fletcher imposes strict liability, the following defences are still open to
the defendant:
(a) That the escape was the claimant’s fault. It should also be noted that there is no reason why
the Law Reform (Contributory Negligence) Act 1945 should not apply where the claimant is
partly to blame.
(b) That it was an act of God (see Nichols v Marsland (1876)), though the defence is not often
successfully pleaded.
Greenock Corporation v Caledonian Railway Co, 1917 – The defence of an act

of God fails (454)
(c) That the escape was due to the wrongful act of a stranger.
Rickards v Lothian, 1913 – An act of a stranger (455)
(d ) That the damage was caused by artificial works done for the common benefit of the
claimant and the defendant.
Peters v Prince of Wales Theatre (Birmingham) Ltd, 1943 – Property installed for
common benefit (456)
(e) That there was statutory authority for the act of the defendant, provided that the defendant
was not negligent. It should be noted that the defence of statutory authority is not available
in respect of reservoirs (Reservoirs Act 1975, s 28 and Sch 2).
The rule is liberalised – foresight required?

In more recent times the rule has been liberalised. In Cambridge Water Co Ltd v Eastern
Counties Leather plc (1991) The Times, 23 October, the High Court held that the storage
..
EL_C21.qxd 3/26/07 10:54 AM Page 605
SPECIFIC TORTS 605
of organochlorines by businesses involved in the tanning industry and based at Sawston, an

industrial village, was a natural use of land for the purposes of the rule in Rylands v Fletcher.
Sawston was properly described as an industrial village, said Mr Justice Ian Kennedy, and the
creation of employment was clearly for the benefit of that community. Storage in that place
was therefore natural use of land. He rejected a claim from the water company in regard to
the pollution of a nearby public water supply borehole.
The decision of Mr Justice Ian Kennedy was reversed by the Court of Appeal, which held
that the accidental spillage of chemicals gave rise to strict liability (see Cambridge Water v
Eastern Counties Leather plc [1994] 2 AC 664), so that Eastern Counties was liable. However,
the House of Lords reversed the Court of Appeal and found that Eastern Counties was not
liable (also reported at [1994] 2 AC 664). It based its decision on the need for foreseeability of
consequences and not non-natural user. In fact, Lord Goff stated that the storage of chem-
icals in substantial quantities on industrial land ‘. . . should be regarded as an almost classic
case of non-natural use’. It follows, therefore, that the element of foresight was built into
Rylands and, since Eastern Counties had not foreseen the consequences of the spillage, it was
not liable.
It may therefore be said that strict liability (i.e. non-negligent liability) for the escape from
land of things likely to do damage only arises under Cambridge Water if the defendant knew
or ought reasonably to have foreseen that those things might, if they escaped, cause damage.
Incidentally, the House of Lords doubted whether the fact that Eastern Counties’ activities gave
employment could lead to the conclusion that keeping chemicals on land was natural use.
The House of Lords rules

The latest position derives from Transco plc v Stockport Metropolitan Borough Council [2004] 1
All ER 589. The facts can be stated briefly. The claimants’ gas main was left without support
by the collapse of an embankment on which it stood. The collapse was caused by a leak of
water supplied by the defendants to a block of flats which they owned. The pipe carrying the
water was of correct size but failed and leaked water. This was undiscovered for a prolonged
period and a considerable quantity of water built up and escaped, causing the embankment
to collapse. The House of Lords found for the defendants, mainly because the supply of water
to the flats was nothing other than natural or ordinary user. However, since in all of the
above events it was accepted that the defendants had not been negligent, and in case Rylands
liability might succeed, the defendants asked the House of Lords to follow Australian author-
ity and absorb Rylands into the principles of ordinary negligence. 21
The House of Lords quite firmly refused to do this. Rylands, they said, was an aspect of the
law of private nuisance and would remain so. The main reasons given were:
n The age of the case the principles of which had been relied on for many years. To remove
it might cause some future claimant to lose a right which Rylands gave, i.e. strict liability in
the defendant where perhaps negligence could not be proved.
n The concern that the interpretation of statutes which do sometimes create strict liability
might be taken as requiring negligence once Rylands had been absorbed.
n Although to absorb Rylands into the law of negligence would unify the law of England and
Wales on this point with that of Australia it would effect disunity with Europe where some
states, e.g. Germany and France, do have not dissimilar forms of strict liability.
Their Lordships’ comments on the requirements of Rylands leave things much as they always
have been.
..
EL_C21.qxd 3/26/07 10:54 AM Page 606
..
EL_C22.qxd 3/26/07 1:07 PM Page 607
Part 4
THE LAW OF PROPERTY
..
EL_C22.qxd 3/26/07 1:07 PM Page 608
..
EL_C22.qxd 3/26/07 1:07 PM Page 609
22
THE LAW OF PROPERTY
English law divides property into real property and personal property. Real property includes
only freehold interests in land, and personal property comprises all other proprietary rights,
whether in land or chattels. This classification is not identical with the obvious distinction
between immoveables and moveables, and this is the result of the attitude of early law to the
nature of a lease.
The nature of property

Actions in respect of property fall into two kinds: actions in rem or real actions, and actions
in personam or personal actions. An action in rem in English law is an action in which a spe-
cific thing is recovered; an action in personam gives damages only.
It so happened that in early days the courts would allow a real action or actio realis only for
the specific recovery of land. If an owner was dispossessed of other forms of property, the per-
son who had taken the property had a choice; he could either restore the property taken or
pay damages to the rightful owner. Hence, land became known as real property or realty, and
all other forms of property were called personal property or personalty. So far the distinction
corresponds to that between moveables and immoveables, but this convenient classification
was disturbed by the lease for a term of years.
Although a lease of land was an interest in immoveable property, the real action was not
available to the dispossessed tenant. Leases did not fit into the feudal system of landholding
by tenure but were regarded as personal business arrangements whereby one person allowed
another the use of the land for a period in return for a rent.
These transactions were personal contracts and created rights in personam between the
parties, and not rights in rem which could affect feudal status. It was not an uncommon form
of investment to buy land and let it out on lease to obtain an income on capital invested, and
such transactions were more akin to commercial dealings than to landholding as it was
understood in early days. Moreover, the system had its advantages, since a lease was immune
from feudal burdens and could be left by will at a time when dispositions by will of other
land were still not permitted.
Leaseholds, therefore, come under the heading of personal property or chattels, but because
they partake so strongly of the character of land, they are often referred to as chattels real to
distinguish them from pure personalty, e.g. a watch or a fountain pen. Since the property
legislation of 1925 this distinction has lost much of its importance, but it is still true that if
in his will a testator says, ‘All my personalty to P and all my realty to R’, P would get the
leaseholds.
..
EL_C22.qxd 3/26/07 1:07 PM Page 610
610 PART 4 · THE LAW OF PROPERTY
Pure personalty itself comprises two different kinds of property known as choses in posses-
sion and choses in action. Choses in possession denote chattels, such as jewellery and furniture,
which are tangible objects and can be physically possessed and enjoyed by their owner.
Choses in action are intangible forms of property which are incapable of physical possession,
and their owner is usually compelled to bring an action if he wishes to enforce his rights over
property of this kind. Examples of choses in action are debts, patents, copyrights, trade marks,
shares, and negotiable instruments.
Up to now we have been considering the main rights which one has in one’s own things.
However, it is possible to have rights over the things of another. We have already mentioned
the lease, which is the right to possess another’s land for a term in return for a rent, but in
addition it is possible to become the owner of a servitude over the land of another, e.g. a right
of way, a right of light, or a right to the support of buildings. A servitude may also be a right
to take something from the land of another, e.g. the right to fish or collect firewood. Rights
of the first class are called easements, and of the second profits à prendre. Further, a person may
raise a loan on the security of his property either real or personal, and the lender has certain
rights over the property so used as a security if the loan is not repaid.
Ownership
Ownership is a term used to express the relationship which exists between a person and
certain rights which are vested in him. Ownership is the greatest right or collection of rights –
the ultimate right – which a person can have over or in a thing.
For example, X may own a fee simple (freehold) in Blackacre and may lease the land to Y,
so giving up possession. But however long the lease, the ultimate right of ownership is in X,
and eventually the right to possess, which he has for the moment forfeited, will return to
him or to his estate if he is dead. Z may have a right of way over Blackacre. This is not owner-
ship of Blackacre, but is ownership of a right over it which limits X’s enjoyment of the land.
B may have lent money to X on the security of the land, so that B is a mortgagee and, there-
fore, the owner of a right in Blackacre, but this does not constitute ownership of the land; it
is a mere encumbrance attached to it, limiting X’s enjoyment to the extent of the rights
given to B as mortgagee. Nevertheless, the supreme right is vested in X, and this right is
called ownership of Blackacre.
Ownership is a de jure (i.e. legal) relationship; there is no need to possess the thing.
Possession tends to be de facto (i.e. factual), that is evidenced by physical possession,
although, as we shall see, physical possession is not necessary in order to have legal possession.
It may be said that in a general sense all rights are capable of ownership, which is of many
kinds:
(a) Corporeal. That is, the ownership of a thing or chose in possession such as a watch or a
fountain pen.
(b) Incorporeal. That is, the ownership of a right only, e.g. the right to recover a debt of £20
from X by an action at law, or the ownership of a chose in action. A share certificate is a chose
in action, and ownership of it is incorporeal, for it is ownership of certain rights: the right to
dividends as and when declared, the right to vote at meetings, and so on.
(c) Sole ownership. That is, as where X is the sole owner of Blackacre.
(d) Co-ownership. That is, as where X and Y are simultaneously owners of Blackacre, as joint
tenants or tenants in common.
..
EL_C22.qxd 3/26/07 1:07 PM Page 611
THE LAW OF PROPERTY 611
(e) Legal or equitable ownership. A grant (by conveyance (transfer) or will) giving X the fee
simple absolute in possession of Blackacre constitutes him the legal owner. But a grant giving
X a life interest only constitutes him as equitable owner, whose interest can exist only behind
a trust, the legal estate being held by trustees.
(f ) Trust or beneficial ownership. In the grant set out above giving X a life interest, the
trustees hold the legal estate but not beneficially; the beneficial interest is in X and equity
will protect it.
(g) Vested (completed) or contingent ownership. In a grant to X for life with remainder to
Y, X and Y have equitable interests and both are vested. Admittedly Y will not become
entitled in enjoyment until X dies, but his interest is, nevertheless, vested, and if Y were to
die before X, the property would descend through Y’s estate on X’s death.
In a grant to X for life, with remainder to Y if he attains the age of 18 years, X’s interest is
equitable and vested, Y’s interest is equitable and contingent since he must satisfy the
requirement of majority before his interest vests. If Y does not reach 18 years the interest is
held by the trustees on what is known as a ‘resulting trust’ for the settlor (if alive). If he is
dead, the interest will go into his estate (or intestacy if there is no will), and in the case where
there is a will, the gift will go to the residuary beneficiary, i.e. the one who gets the balance
of the estate after particular gifts have been made.
Possession
The physical control of a thing by a person is what is normally known as possession, and if
the idea of possession had remained wedded to physical control, the position would have
been simple enough. But the widening sphere of legal activity made it necessary to attribute
to persons who were not actually in physical control some or all of the advantages enjoyed
by persons who were.
There are three possible situations at law:
(a) A person can have physical control without legal possession, as in the case of a porter
carrying a traveller’s suitcase in a station.
(b) A person can have possession and its advantages without actual physical control, e.g. a
person may have books at home which are still in his possession even when he is away
on holiday.
(c) A person can have both physical control and possession, e.g. a watch in his pocket or a
pen in his hand.
22
Possession, therefore, has acquired a technical legal meaning, and the separation of posses-
sion from physical control has given the concept a high degree of flexibility.
The old theory of possession, derived from the Roman Law, relies upon (a) corpus, i.e. physical
control, and (b) animus, i.e. the intention to exclude others. But although these concepts help
in deciding possession, they do not provide the complete answer. In fact, English law has
never worked out a completely logical and exhaustive definition of possession. The handing
over of a key may be sufficient by itself to pass the possession of the contents of a room or
box if it provides the effective means of control over the goods.
Wrongful interference
In the law of torts, wrongful interference to property is an invasion of possession. The policy
of this branch of the law is to compensate the party whose interests have been affected, and
..
EL_C22.qxd 3/26/07 1:07 PM Page 612
in order to enable such persons to recover, the court has contrived to attribute possession to
them.
A bailee is a person who gets possession of a chattel from another with his consent. A
bailment may be at will, i.e. revocable by the bailor at any time, or it may be for a term, i.e. for
a fixed period of time, as by hiring a television set for six months. Where a bailment is at will,
the bailee, who by definition has possession, can sue a third party for wrongful interference.
Since the bailment is revocable at will, the bailor also has an interest worth protecting, and in
order that he too may bring an action for wrongful interference, his right to possess is treated
as possession itself. Where, on the other hand, the bailment is for a term, only the bailee can
bring an action for wrongful interference and not the bailor, although, where the bailee
brings the action, he will have to account to the bailor for any damages obtained. If a third
person destroys or permanently injures the chattel while it is in the bailee’s possession, the
bailor may have an action against the third party for injury to his reversionary interest (Mears
v LSW Railway [1862] 11 CB (NS) 850).
Where an employer has temporarily handed a thing to his employee, possession remains
with the employer and the employee takes only custody. Thus an employer can sue for
wrongful interference for an injury to the goods by a third party.
A person who loses a thing retains his ownership in it, and for the purpose of suing
for wrongful interference someone who has taken it, his right to regain possession will suffice.
But for the purpose of claiming from an insurance company for loss, he will be regarded
as having lost possession, within the terms of the contract, if the thing cannot in fact be
found.
Trespass to land by relation is another example of the artificial manipulation of the concept
of possession to provide a remedy in trespass to one who needs to be compensated. When a
person, with a right to possess, enters because of that right, he is regarded as having been in
possession from the time when his right originally accrued, e.g. from the time when he made
the original contract for a purchase or a lease. He can, therefore, sue for any trespass that has
been committed between the accrual of the right and the actual entry.
As we have seen, difficulties have arisen over the requirement of the intention to
exclude others as a necessary ingredient of possession where property of one sort or
another has been found on the land of a person who was not its owner (see Parker v British
Airways Board (1982) and South Staffordshire Water Co v Sharman (1896) and the cases noted
with it).
However, it should be noted that unless an owner of chattels can be shown to have
abandoned or sold them he remains their owner and has a better title than a finder or a person
on whose property they are found.
Moffat v Kazana, 1968 – The rights of an owner (457)
Adverse possession
A person may sometimes acquire the ownership of land by adverse possession. This arises
from the occupation and use of land without the permission of, or any interference from, the
true owner, as where a stranger encloses and cultivates a portion of a neighbour’s land or
occupies another’s house. Under s 15 of the Limitation Act 1980 adverse possession for a
period of 12 years will give the possessor a title, but such adverse possession must take the
form of open and visible acts which are inconsistent with the title of the owner, and in this
case possession is viewed much more strictly than in the others we have been considering
above.
..
EL_C22.qxd 3/26/07 1:07 PM Page 613
Hayward v Challoner, 1967 – The period required (458)

Littledale v Liverpool College, 1900 – Acts must be inconsistent with owner’s
rights (459)
Whether adverse possession necessarily involves inconvenience to the true owner is not clear.
In Wallis’s Caton Bay Holiday Camp v Shell-Mex & BP [1974] 3 All ER 575, the defendants had
purchased land for development, though they had no immediate use for it. The claimants
used it for 12 years for the purposes of grazing cattle on it and cultivating it. The Court of
Appeal held that the claimants had not established a good possessory title because what they
had done was of no inconvenience to the defendants who had no immediate use for the land.
However, in Treloar v Nute [1977] 1 All ER 230, the claimant owned freehold land for which
he had no immediate use and which was left derelict. The defendants bought land adjacent
and occupied part of the derelict land for a period of 12 years. In holding that the defendants
had a good possessory title to that land the Court of Appeal said it was not necessary to import
into the definition of adverse possession a requirement that the owner must be inconvenienced
or affected by that possession.
This line of reasoning was adopted also in Buckinghamshire County Council v Moran [1989]
2 All ER 225 where the council had acquired a plot of land adjacent to some houses for
future use as a road diversion. They had no immediate use for it. Mr Moran (and previous
owners) treated it as part of the garden of the Moran residence. It was fenced in and the
grass was cut regularly and bulbs planted. This went on for more than 12 years and the Court
of Appeal eventually held that Mr Moran had a possessory title to the plot although the
council having no immediate use for the plot were not inconvenienced by what had been
done.
Where a tenant, during the currency of his tenancy, takes possession of other land belonging
to the landlord, the land is presumed to have been taken as part of the holding comprised in
the tenancy, and the tenant cannot acquire a good possessory title unless he communicates
to his landlord some disclaimer of the landlord’s title.
It should be noted that periods of successive trespass (for that is what it is) may be added
together. A trespasser who has occupied for, say, five years may add to that a period of seven
years enjoyed by the immediate previous trespasser in order to bar the claim of the true
owner provided there was no gap in adverse possession. However, each occupier must have
had exclusive possession. Thus where the landlord of a property adjoining the disputed strip
of land claimed adverse possession of it on the basis that his tenants had enjoyed exclusive
possession for the necessary time his claim failed because the tenants had from time to time 22
given the keys to others and that showed a lack of intention to exclude others which is a
requirement of the law of adverse possession (see Battersea Freehold and Leasehold Property Co
Ltd v Wandsworth LBC [2001] 20 LS Gaz R 41).
Rather than wait for a legal claim to be brought, a claim to legalise adverse possession can
be made to the Land Registry in London. It will then be up to the Registry to determine the
claim.
It should be noted that there are a few limited exceptions where the 12-year period is
increased, e.g. to 30 years in the case of acquisition of title by the Crown (Limitation Act
1980, s 15(1)).
Smirk v Lyndale Developments Ltd, 1974 – Taking possession of a landlord’s

land (460)
..
EL_C22.qxd 3/26/07 1:07 PM Page 614
Adverse possession: effect of Land Registration Act 2002

Landowners including business landowners will welcome restrictions on the acquisition of
squatters’ rights over registered land. There was some concern over the apparent ease with which
land could be acquired in this way – in some cases land belonging to companies. Squatters’
rights remain as stated above where the land is unregistered land.
The Act abolishes a squatter’s automatic right to register title after 12 years’ adverse posses-
sion. Instead the squatter will be entitled to apply for registration after 10 years but the Land
Registry will serve a notice of the application on the registered owner or proprietor. The
registered proprietor has three months to object. If there is no objection the squatter will be
registered. If there is an objection the squatter has to establish certain conditions before he
or she can be registered. The main condition on which a squatter may succeed in a claim for
registration is that the property over which adverse possession has been exercised is adjacent
to his or her own and the boundaries have never been properly and acceptably defined. More
importantly in order to obtain registration given no objection by the owner, the squatter will
have to establish that for at least 10 years of the period of adverse possession ending on the
date of the application for registration he or she reasonably believed that the land belonged
to him or her. This will defeat many claims by squatters.
If the squatter fails to establish one of the conditions for registration the proprietor has two
years in which to take action to remove the squatter or regularise his or her position, e.g. by a
lease. If the registered proprietor fails to remove the squatter or institute proceedings to effect
removal within the two years then the squatter can apply for registration of his or her posses-
sory interest. This time no one will be entitled to object. Section 96 and Sch 6 of the Act apply
to the above law.
The fact that the Act does not apply to unregistered land does not provide a long-term
difficulty since unregistered land is being converted to registered land as registrable events
occur over it at the Land Registry, e.g. a sale or mortgage. Consequently, little if any unregis-
tered land will remain in the medium or longer term.
Bailment
Bailments are concerned with pure personalty and not with real property. The bailment may
or may not originate in a contract. As to the source of the expression ‘bailment’, it derives
from the adoption by English law of an old French word to describe the handing over of
goods without passing the title and property, i.e. bailler – to deliver.
Possession
An essential feature of a bailment is the transfer of possession to the bailee. There is no pre-
cise definition of possession, but the basic features are control and an intention to exclude others.
However, a person can have possession of chattels which he does not know exist (see South
Staffordshire Water Co v Sharman (1896)). An employee who receives goods from his employer
to take to a third party has mere custody; possession remains with the employer and the
employee is not a bailee. If a third party hands goods to an employee for his employer, the
employee obtains possession and is the bailee.
In a bailment for a fixed term the bailee has possession to the exclusion of the bailor,
and is, therefore, the only person who can sue a third party for wrongful interference. In a
bailment at will, i.e. one which the bailor can terminate at will, the bailor retains either
..
EL_C22.qxd 3/26/07 1:07 PM Page 615
possession or an immediate right to possess and an action for wrongful interference is avail-
able to him as well as to the bailee. A bailee can sue a third party in tort for loss of or damage
to the goods even though the bailee is not liable to the bailor for the loss or damage.
The Winkfield, 1902 – Recovery of damages, bailee in possession (461)
Bailment and licence

The problem of distinguishing between bailment and licence has arisen mainly in connec-
tion with the parking of vehicles. If a vehicle is parked on land, either gratuitously or even on
payment of a charge, the transaction may amount to a mere licence and not a bailment
which gives rise to duties of care.
Ashby v Tolhurst, 1937 – Is it a bailment or a licence? (462)

Ultzen v Nicols, 1894 – A stolen coat (463)
Deyong v Shenburn, 1946 – An actor’s clothes (464)
Finders and involuntary recipients

For an act to constitute a bailment, the person who is given possession of goods must be
entrusted with them for a particular purpose, e.g., to use and return as in the case of loan or
hire, or to take from one place to another as in carriage. A banker is not a bailee of money
paid into a customer’s account, for his obligation is to return an equivalent sum and not the
identical notes and coins. However, a banker is a bailee of property (e.g. jewellery) deposited
with him for safe custody.
A finder is not a true bailee because he is not entrusted with the goods for a particular
purpose. However, if he takes them into his possession he will be liable for loss or damage
resulting from his negligence.
Newman v Bourne & Hollingsworth, 1915 – A finder and bailment (465)
A person cannot be made a bailee against his will. Where the receipt of the goods is
involuntary it is unlikely that the recipient is under any higher duty than to refrain from 22
intentional damage. However, he must not convert the goods, but although liability for con-
version is usually strict, an involuntary recipient will only be liable if he acts intentionally or
negligently.
Neuwirth v Over Darwen Industrial Co-operative Society, 1894 – An involuntary

bailee (466)
The Unsolicited Goods and Services Acts 1971 and 1975 are relevant in this connection.
The Acts are designed to deal with selling techniques involving the sending of unsolicited
goods, thus rendering the recipient an involuntary bailee. The Acts provide for fines to be
made on persons making demands for payment for goods they know to be unsolicited. If the
demand is accompanied by threats a higher scale of fines applies. Furthermore, unsolicited
goods may be kept by the recipient without payment after a period of 30 days provided the
..
EL_C22.qxd 3/26/07 1:07 PM Page 616
recipient gives notice to the sender asking that they be collected, or after six months even if no
notice has been given. The legislation applies to private, not business, recipients.
Obligations of the bailor

Where the bailment is gratuitous it has been said that the limit of the liability of the bailor
is to communicate to the bailee defects in the article lent of which he is aware. However, the
principle in Donoghue v Stevenson (1932) may apply to gratuitous bailments so that the bailor
would be liable if he had not taken reasonable care to ensure that the goods bailed were not
dangerous, even though he had no actual knowledge of a defect in the chattels lent.
When the bailment is for reward there is an implied warranty on the part of the bailor that
he has a title to the goods so that the bailee’s possession will not be disturbed, and that the
goods are fit and suitable for the bailee’s purpose. This does not mean that the bailee is liable
for all defects but only for those which skill and care can guard against. However, the
warranty as to fitness and suitability does not apply where the defect is apparent to the bailee
and he does not rely on the skill or judgement of the bailor.
Hyman v Nye, 1881 – A defective carriage (467)

Reed v Dean, 1949 – A fire on a motor launch (468)
Obligations of the bailee

When Lord Holt, in Coggs v Bernard (1703), established the liability of the bailee in negligence
he laid down different duties of care for different kinds of bailments. Thus, in a bailment for
the sole benefit of the bailee, such as a gratuitous loan, the bailee’s duty of care was much
higher than in a bailment for the benefit of both parties such as a hiring. However, in more
recent times there has been disapproval of Lord Holt’s different standards of care, and it is
now the better view that the standard of care required of a bailee is to take reasonable care in
all the circumstances of the case, which equates his duty with that owed by any person in the
law relating to negligence, though the burden of disproving negligence is on the bailee.
Houghland v R Low (Luxury Coaches) Ltd, 1962 – An old folks’ outing (469)
Global Dress Co v W H Boase & Co, 1966 – Goods stolen from the docks (470)
The main circumstances which the court is likely to consider when deciding the question of
negligence in a bailee are as follows.
The type of bailment

Although some current legal opinion is against a legal distinction between bailment for
reward and gratuitous bailment, reward or lack of reward will continue to be an important
circumstance in the matter of the bailee’s negligence. A gratuitous bailee must take the same
care of the property bailed as a reasonable man would take of his own property. It is no
defence for a bailee to show that he kept the goods with as much care as his own because
the test of reasonableness is objective. In a bailment for reward the duty of care tends to be
somewhat higher.
Doorman v Jenkins, 1843 – Negligence leading to theft (471)

Brabant v King, 1895 – Damage to explosives (472)
..
EL_C22.qxd 3/26/07 1:07 PM Page 617
The expertise of the bailee

If the bailee’s profession or situation implies a certain expertise he will be liable if he fails to
show it.
Wilson v Brett, 1843 – A horse and slippery turf (473)
The property bailed

If the goods bailed are, to the knowledge of the bailee, fragile or valuable, a high standard of
care will be expected. In addition a bailee may be liable in negligence if he does not give
notice to the bailor of a loss or try to recover lost or stolen property.
Saunders (Mayfair) Furs v Davies, 1965 – Valuable fur coat: the care
required (474)
Coldman v Hill, 1919 – Giving notice of loss of cows (475)
Bailor’s negligence
In some cases the court may regard the negligent or dilatory conduct of the bailor as negating
the liability of the bailee. Thus in Jerry Juhan Developments SA v Avon Tyres Ltd [1999] CLC 702
the claimants allowed the defendants to make and distribute tyres made from the claimants’
moulds. AT later terminated the contract and for two years thereafter made enquiries of the
claimants as to the disposal of the moulds but received no instructions. Some five years after
termination of the contract the claimants demanded the moulds which by that time had
been lost. The court implied a term into the contract that the owner would collect within six
months of their being available. The claimants being in breach of that term had relieved AT
of their obligations as bailees. The claimants’ case failed.
A bailee is vicariously liable for the torts of his employees, but an employee who becomes a
thief may not be regarded as acting within the scope of his employment. However, in Morris v
C W Martin & Sons Ltd (1965) it was held that a bailee for reward cannot necessarily escape
liability for loss of goods stolen by his employee because theft is not necessarily beyond the
scope of employment (see Chapter 20). The decision in Morris represents the better view.
A bailee may attempt to exclude his liability by an exemption clause in the contract of
bailment. This matter must now be considered in the light of the rules of construction of
contracts and the Unfair Contract Terms Act 1977 (see Chapter 15). 22
Delegation by bailee
Whether a bailee can delegate performance of the contract to another depends upon the
nature of the bailment and the particular contract which may authorise delegation. Contracts
involving the carriage, storage, repair or cleaning of goods often assume personal performance
by the bailee. Where there is a delegation, even though unknown to the bailor, the delegate is
a bailee and owes a duty of care directly to the bailor.
Davies v Collins, 1945 – Delegation by a bailee (476)

Edwards v Newland, 1950 – Where a bailee sub-contracts (477)
Learoyd Bros v Pope, 1966 – Duty of care following delegation (478)
..
EL_C22.qxd 3/26/07 1:07 PM Page 618
Estoppel and interpleader

A bailee is estopped at common law from denying the title of his bailor and if the bailor
demands the return of the goods it is no defence for the bailee to plead that the bailor is not
the owner. However, a bailee may defend an action for non-delivery of the goods:
(a) by showing that he has delivered them to another under an authorisation by the bailor;
(b) by showing that he has not got the goods because he has been dispossessed by a person
with a better title, as in a bailment of stolen goods which are reclaimed by the owner;
(c) if he still retains possession he may allege that a third party has a better title but he must
defend the action on behalf of, and with the authority of, the true owner.
Rogers, Sons & Co v Lambert & Co, 1891 – Defence of superior title (479)
Where adverse claims are made against the bailee by the bailor and a third party, the bailee
should take interpleader proceedings under the rules of the Supreme Court. The effect of this
will be to bring the bailor and the third party together in an action which will decide the
validity of their claims. The bailee can then hand over the goods to whichever party has
established his claims and will not risk liability for wrongful interference.
Lien
A bailee may, in certain circumstances, have a lien on the goods. The general nature of a lien
is described later in this chapter.
Land law
Since the Norman Conquest, absolute ownership of land has been impossible. William the
Conqueror considered himself owner of all land in England and parcelled it out to his barons
who became his tenants. In return for this ‘honour’, the barons had to render to the Crown
certain services, of either a military or other public nature, but an exception was made in the
case of land held by the Church. The ecclesiastics were not able to provide military services,
and special spiritual tenures were introduced.
In order to assist themselves in supplying the services required by the King, the barons
began to subgrant part of the land, and a series of tenures sprang up, all persons holding as
tenants of the Crown in the last analysis.
It is outside our scope to pursue the rise and fall of the system of tenures, but all land is
now held on a single tenure called ‘common socage’, and all obligations to the Crown have dis-
appeared, except for certain ceremonials preserved because of their antiquity. Even today,
however, a person does not own land; he holds an estate in land. The tenure answers the question
‘How is the land held?’ The term estate answers the question ‘For how long is the land held?’
The term ‘estate’ arises because in legal theory the Queen is still the owner of all land and
we can only have a part of what the Queen owns. This is called an ‘estate’. The matter is
purely traditional and theoretical since the Queen has no rights over our ‘estates’.
The legislation of 1925

Before this legislation, which is described below, there were many different ways of holding
land, referred to as estates in land. The existence of so many estates in land made the transfer
..
EL_C22.qxd 3/26/07 1:07 PM Page 619
of land most complicated. There might be a large number of legal owners of the same piece of
land, and before the land could be conveyed to a purchaser all the interests had to be got in.
Other problems arose on intestacy, which occurs where the deceased does not leave a will or an
effective will, because the rules for intestate succession were not the same for realty and per-
sonalty. In 1925 a thorough reform of land law was undertaken and was eventually achieved
by the following statutes: the Law of Property Act 1925, the Settled Land Act 1925, the Admin-
istration of Estates Act 1925, the Land Charges Act 1925 and the Land Registration Act 1925.
Legal estates – generally

The Law of Property Act 1925 reduced the number of legal estates which can exist over land
to two, and the number of legal interests or charges in or over land to five. All other estates,
interests and charges in or over land take effect as equitable interests, and can exist only
behind a trust, the trustees having the legal fee simple estate.
The difference between a legal estate and a legal interest is that the owner of the legal estate
is entitled to the enjoyment of the whole of the property, either in possession or receiving
rents, whereas the owner of a legal interest has a limited right in or over the land of another.
The three legal estates possible today are:
(a) a fee simple absolute in possession (or a freehold); and
(b) a term of years absolute (or a lease);
(c) a commonhold.
The word fee implies that the estate is an estate of inheritance, and the word simple shows
that the fee is capable of descending to the general class of heirs, and is not restricted to heirs
of a particular class. The word absolute distinguishes a fee simple which will continue for ever,
from a fee which may be determinable. The fee simple must be in possession, although this
does not imply only physical possession but also the right to receive rents and profits. Even
if a landlord has granted a lease he may still have a fee simple in possession because he is
entitled to the rent reserved by the lease.
The term of years absolute is what is normally understood by a lease. But a term of years
includes a term for less than a year, or for a year or years and a fraction of a year, or even a
tenancy from year to year. The essential characteristic is that a term of years has a minimum
period of certain duration. It seems, therefore, that a lease for life is no longer a legal estate;
nor is a tenancy at will or sufferance since there is no certainty as to the period of their con-
tinuance. A term of years may be absolute notwithstanding that it may be determined by
notice, re-entry, forfeiture or operation of law or other event.
22
Legal estates – the commonhold
The Commonhold and Leasehold Reform Act 2002 created a new form of landholding called
the ‘commonhold’.
Commonhold generally
A commonhold is defined as a freehold with special characteristics – mainly that it is not
necessary for the property to have foundations in the land, which is a requirement for the
ordinary freehold. This is why it is often referred to colloquially as a ‘flying freehold’.
The owners of commonhold units such a commonhold flats will be members automatically
of the commonhold association that will own the common parts such as lifts, entrance halls,
stairs, refuse areas, gardens and driveways. The association will be a company limited by
guarantee governed by the Companies Act 1985. The use and maintenance of the units will
..
EL_C22.qxd 3/26/07 1:07 PM Page 620
be governed by the commonhold community statement (CCS): the CCS is the constitution
of the commonhold land and must be registered at HM Land Registry, and a commonhold
assessment will fix the percentage payable for each unit. This in other situations, e.g. lease-
hold flats, would be a service charge.
Most commonholds will be a block of flats but they could be shop units in an arcade
or units on a business park. Therefore, property capable of becoming a commonhold unit is
residential or commercial property. A unit holder will have a registered freehold title to it.
The usual provisions for company winding-up will apply where a commonhold association
becomes insolvent and it will be necessary to dissolve an association where the unit holders
wish to sell the block for redevelopment.
Three major points about commonhold from a commercial aspect are:
(a) Although it is possible to convert from leasehold to commonhold it is necessary to obtain
the consent of all the existing leaseholders, which indicates that the legislation is aimed
mainly at new developments.
( b) In the case of a residential commonhold there is a restriction on the commonholder
letting the premises. A maximum of only seven years is permitted. This provision is most
unattractive to the property industry because it means in effect that investors will not want
to invest in commonhold property. The object of the restriction is to develop a commun-
ity and not encourage the absentee landlord syndrome which has often blighted leasehold
developments. Business leases, e.g. shops within the development, are subject to the terms of
the commonhold statement that is filed at the Land Registry when the commonhold arrange-
ment is set up, e.g. by the developer.
(c) It is anticipated that commonhold residential developments will become, in time,
more desirable than leasehold properties and will trade at a premium compared with such
properties.
Commonhold should not be confused with leasehold enfranchisement under which flat
owners in blocks of flats collectively buy out the freehold owner of the property and so
obtain control of the freehold of the block but not their individual flats in the sense that they
are still tenants. Implementation of commonhold will necessitate the passing of detailed
legislation much of it highly technical.
This subordinate legislation is clearly beyond the scope of this text and would not normally
be required by examinations at this level.
Comment It is the responsibility of the association to enforce any breaches of the CCS. In
effect this gives the association a role similar to that of a landlord in a landlord and tenant
relationship. In common with most leases the CCS will restrict the granting of leases in the
commonhold unit. In general a unit holder will not be able to grant a leasehold interest of the
unit unless the commonhold association is a party to the lease or gives its consent (CLRA 2002,
s 20(3)).
Advantages over leaseholds

The commonhold legislation is concerned to overcome certain weaknesses in leasehold
arrangements as follows:
n A lease is granted for a fixed term and admittedly the term may sometimes be lengthy.
However, the issue of renewal will arise and this may require troublesome negotiation that
can also be costly. A commonhold is a type of freehold and therefore permanent.
n Leasehold properties have no standard management structure as the commonhold has and
the structures offered can vary greatly in their quality.
..
EL_C22.qxd 3/26/07 1:07 PM Page 621
n Mistakes may occur in the documentation so that the terms of the various leases in, say, a
block do not match. This can cause difficulty in enforcing conditions that do not occur in
a commonhold development where one document, i.e. the CCS sets out the obligations
and terms of ownership for all units. There is thus no chance of mismatching provisions.
n Premature termination of a leasehold development can cause problems in terms of dividing
assets. However, commonhold arrangements have documentation laying down the terms in
advance of termination but the court has a power to vary these in a termination situation.
n A leasehold is a wasting asset. A leasehold is a term of years absolute that will eventually
come to an end even where there is a long term, e.g. 99 years. A freehold is a perpetual estate.
n A lease is subject to forfeiture if there is a breach of covenant, e.g. assigning or sub-letting
by the tenant.
A main business application is, therefore, that a freehold title in commonhold land is a better
security than a lease in terms of lending and borrowing.
Disadvantages over leaseholds

These are, first, that the commonhold association in spending money on the commonhold
property is not restricted by the ‘reasonableness’ of the expenditure requirement on the land-
lord of a lease. Secondly, the Commonhold and Leasehold Reform Act 2002 relies on alterna-
tive dispute resolution through an Ombudsman, so that there is no redress through the
courts. Therefore, commonhold developments will not offer the rights and protections avail-
able to leaseholders.
Setting up a commonhold
A commonhold may be established in two ways:
n It can be registered at the Land Registry with unit-holders where the identity of the unit-
holders is known. The freehold of the units vests in them and the commonhold arrangements
come into force on registration; this will occur where there is a conversion from a leasehold
arrangement but will otherwise be uncommon.
n A person developing by building afresh or converting an empty building with the inten-
tion of selling off the units will register a commonhold without unit-holders. The developer
retains ownership after registration for an interim period until the first unit is sold. The
developer has complete control during the interim period and can, if he wishes, abandon
the development and cancel the registration. Even after the initial sale the developer’s busi-
ness is protected in the sense that the CCS can give him rights to prevent early purchasers
from interfering with the process of marketing the units. 22
Comment The cost of establishing commonhold arrangements will not always justify conver-
sion of an existing leasehold arrangement unless the leases are near to termination. However,
since commonhold arrangements will put a premium on sale of the units, this might prove
an incentive to conversion from leasehold.
The nature of the property

Agricultural land cannot be registered as commonhold but an existing freehold or leasehold
can be converted. An existing freehold can be divided into parcels or plots and held under
commonhold arrangements.
Termination of commonhold
A commonhold arrangement is brought to an end by winding-up the commonhold associa-
tion. Since the units are not owned by the association they are not available to pay its debts.
..
EL_C22.qxd 3/26/07 1:07 PM Page 622
However, the court may make what is called a ‘succession order’ under which a new common-
hold association is substituted, the members being those who have met their liabilities to the
full. This has been called a ‘Phoenix association’ that takes over the management so that the
unit-holders can continue to hold and enjoy their properties. If no succession order is made
the commonhold arrangement ceases to exist and the properties will be dealt with in accordance
with the directions of the liquidator.
Joint owners
A commonhold unit can be held by joint owners.
Legal interests and charges

We have seen that there are only three possible legal estates: a fee simple absolute in posses-
sion, a term of years absolute and a commonhold but the Law of Property Act 1925 also lays
down a number of legal interests in land. The most important are:
(a) an easement, right or privilege for an interest equivalent to either of the above estates.
Thus, an easement for life would not be a legal interest;
(b) a charge by way of legal mortgage.
Equitable interests
All estates, interests or charges over land except those outlined above take effect as equitable
interests only and must exist behind a trust. Life interests, for example, are equitable.
The two major trust arrangements over land are called settled land and trusts of land.
Settled land
Settlements created after 1925 other than by will require, under the Settled Land Act 1925,
two deeds to be executed – the vesting deed and the trust instrument. The vesting deed must
contain a description of the settled land, a statement that the settled land is vested in the
tenant for life upon the trusts for the time being affecting the settled land, the names of the
trustees of the settlement, and a statement of any larger powers granted to the tenant for life
in addition to his statutory powers.
The trust instrument must contain the appointment of the trustees, the names of the
persons entitled to appoint new trustees, a statement of any additional powers conferred by
the settlement in extension of the statutory powers, and the trusts of the settlement. Where a
settlement is created by will, the will is regarded as the trust instrument, and the personal
representatives must execute a vesting instrument, vesting the legal estate in the tenant for
life. Thus, a purchaser of settled land is only concerned with the vesting deed or assent, since
it is from such documents that he derives his title. The trusts can remain secret since the trust
instrument need not be produced on sale.
Under the settlement the person obtaining the benefit from the estate is usually an adult
with a life interest and he is called the tenant for life. It is his function to manage the estate
and he has power to sell or exchange the settled land or any part of it with an adjustment of
any difference in value in the case of exchange. He may grant leases subject to certain restric-
tions, but in the absence of a contrary provision in the settlement, he has no power to
mortgage or charge the legal estate for his own benefit, although he can mortgage or assign
his own beneficial life interest.
..
EL_C22.qxd 3/26/07 1:07 PM Page 623
He has other powers which he can only exercise with the consent of the settlement trustees
or the court, e.g. the power to sell or otherwise dispose of the principal mansion house, the
power to cut and sell timber, the power to compromise claims and sell settled chattels. He
has the power to make improvements at his own expense, or the cost may be borne by the
capital money if he complies with the provisions of the Act. He has also power to select
investments for capital money.
The tenant for life is in a strong position, for he is subject to no control in the exercise
of his powers except that he must give notice to the trustees of his intention to exercise
the most important ones, he must obtain the consent of the trustees or leave of the court in
certain cases, and he is in fact himself a trustee for the other beneficiaries. There may be
joint tenants for life under a settlement and, where this is so, they must usually agree as to
the exercise of their joint powers. The court will exercise a power, e.g. by ordering a sale
of property, but only if the joint tenant who does not agree to sell is acting in bad faith
(Barker v Addiscott [1969] 3 All ER 685).
It is clear that under a settlement a proper balance must be preserved between the tenant
for life and the persons who will be entitled to the land or the proceeds of the land after
his death. He is not allowed, therefore, to run down the estate during his lifetime in order
to increase his own income, but is only allowed to take from the land the current income
and must pass on the estate substantially unimpaired.
Trusts of Land and Appointment of Trustees Act 1996

The above Act has effect upon strict settlements as described above.
The first effect is to prevent the creation of strict settlements over land. Formerly, if succes-
sive interests were created over land, as where land was left ‘to A for life with remainder to B’,
then unless a trust for sale (now a trust for land) (see below) was specified in the instrument
setting up the trust, e.g. a will, the land became settled land and subject to the Settled Land
Act 1925, the trust being managed by the life tenant A as described above. The scheme of the
Act is to stop the Settled Land Act applying even where no trust for land is specified in the
creating instrument but to allow it to apply to existing settled land arrangements. Therefore
these will exist for some time and so it is worth acquiring some knowledge of them
(see above).
Where successive interests are created now they will be regarded as trusts of land and
operate under the management of the trustees as a trust of personal property, e.g. as shares
would.
The second effect is to give trustees of trusts of land all the powers of an absolute owner in
regard to the land. There is now no need for the trust instrument to specifically confer such
22
powers on the trustees. The new arrangements do not apply to the power of trustees to invest
the trust property, e.g. rents, received as they wish. They were still subject to control in regard
to investment in, e.g., equity (or ordinary) shares in companies unless the trust instrument
gave them power to do so. However, the Trustee Act 2000 gives a full power of investment of
the trust property to trustees as if it were their own, subject to liability in negligence for
investing trust property in a risky investment. The power given in s 3 of the Act covers acquisi-
tion of freehold and leasehold land (s 8) and may be extended or restricted by the particular
trust instrument, i.e. the instrument setting up the trust. The rule of conversion formerly
applied to land in a trust is abolished. Thus, if a beneficiary under a trust leaves ‘all my realty
to R and all my personalty to P’, then P no longer gets the land but R does. The land is no
longer converted into personal property merely because it is held under a trust for land. This
does not affect what has been said in the chapter about the nature of a lease which remains
personal property.
..
EL_C22.qxd 3/26/07 1:07 PM Page 624
Trusts of land
A trust of land is an immediate binding trust for sale whether or not exercisable at the request
or with the consent of any person, and with or without a power of discretion to postpone the
sale. Such a trust may be either express or by operation of law. Trusts for sale are governed by
the Law of Property Act 1925, and not by the Settled Land Act 1925.
An express trust of land is almost always created by two documents – a conveyance to
trustees on an express trust of land (see the Trusts of Land and Appointment of Trustees Act
1996, above) and a trust instrument. But even where a trust of land is embodied in a single
document, a purchaser of the legal estate is not concerned with the trusts affecting the rents
and profits of the land until sale, or with the proceeds of the sale, provided he obtains a
receipt for the purchase money signed by at least two trustees or a trust corporation.
There are cases where a trust of land is imposed by statute. These are:
(a) where a person dies intestate, i.e. without leaving a will (or valid will);
(b) where two or more persons are entitled to land as joint tenants or tenants in common;
(c) where trustees lend money on mortgage and the property becomes vested in them free
from the right of redemption. Mortgages and the right of redemption are considered later
in this chapter.
Co-ownership
Two persons may own land simultaneously. In such a case they are either joint tenants or
tenants in common. Where they are joint tenants, there is no question of a share of the property
– each is the owner of the whole. Where there is a tenancy in common, each is regarded as
owning an individual share in the property, but that share has not positively been marked
out. Tenants in common hold property in undivided shares.
A joint tenancy arises where land is conveyed to two or more persons and no words of
severance are used. A tenancy in common arises when there are words of severance. Thus a
conveyance ‘to A and B’ would create a joint tenancy, whilst a conveyance ‘to A and B
equally’ would create a tenancy in common. The right of survivorship or jus accrescendi is a
distinguishing feature of joint tenancies, and upon the death of one joint tenant, his share in
the property passes to the survivors until there is only one person left and he becomes the
sole owner of the property. The jus accrescendi does not apply to tenancies in common and
such a tenant may dispose of his share by will. It will be appreciated also that the conveyance
(or a will) may, and usually does, actually state the type of co-ownership, e.g. ‘to A and B as
joint tenants’.
Both types of co-ownership have advantages and disadvantages. The jus accrescendi as
applied to joint tenancies prevents too many interests being created in the land, because
a joint tenant cannot leave any part of the property by will and so the number of interests
decreases. When the land is sold the number of signatures on the conveyance will not be
excessive. On the other hand, joint tenancies are unfair in that eventual sole ownership
depends merely on survival. Where there is a tenancy in common, each tenant can leave his
interest by will possibly by dividing it between two or more persons; thus the number of
interests increases and on sale many interests must be got in.
The common law preferred the joint tenancy. But equity preferred the tenancy in common
and would in certain circumstances treat persons as tenants in common rather than joint
tenants regardless of words of severance. For instance, where two persons lend money on
mortgage, equity regards them as tenants in common of the interest in the land subject to the
..
EL_C22.qxd 3/26/07 1:07 PM Page 625
mortgage; also where joint purchasers of land put up the purchase money in unequal shares;
and in the case of partnership land, the partners are treated as tenants in common in equity.
The Law of Property Act 1925 has combined the best features of both types of co-ownership
by providing that where land is owned by two or more persons they, or the first four of
them if there are more than four, should be treated as holding the legal estate as trustees
and joint tenants, for the benefit of themselves and other co-owners (if any) in equity. Thus
a purchaser of the property is never required to get more than four signatures on the con-
veyance, and the trusts attach to the purchase money for the benefit of the co-owners.
However, the Act does not state what shares the co-owners are to have and this should be
dealt with specifically in the conveyance or will, otherwise the court may have to decide in a
case of dispute. It does not follow from the provisions of the Act that the co-owners share
in equity equally. The statutory trusts on which the property is held are: to sell the property
with power to postpone the sale; and to hold the proceeds of sale, and the rents and profits
until sale, for those beneficially entitled under the trust. Thus, where there is a trust for sale
of land (now a trust for land), it does not mean that the land must be sold straightaway.
There is a power to postpone sale.
It should be noted that although the provisions set out in the above paragraph deal with
the problems which formerly arose in conveying land which was in joint ownership, it is
still possible to create a joint tenancy in both the land and the proceeds of sale. Where such
a joint tenancy exists, the jus accrescendi will apply to the equitable interests of the joint
tenants in the proceeds of sale, unless there has been a severance of the joint tenancy since
the creation of the estate. Severance is possible under s 36(2) of the Law of Property Act 1925,
which provides that:
where a legal estate (not being settled land) is vested in joint tenants beneficially, and any
tenant desires to sever the joint tenancy in Equity, he shall give to the other joint tenants
a notice in writing of such desire or do such other acts or things as would, in the case of
personal estate, have been effective to sever the tenancy in Equity, and thereupon under
the trust for sale affecting the land [now a trust for land] the net proceeds of sale, and
the net rents and profits until sale, shall be held upon the trusts which would have been
requisite for giving effect to the beneficial interest if there had been an actual severance.
A notice of severance may be regarded as properly served if sent by post even if it is not
received by the addressee (Re 88 Berkeley Road, London NW9; Rickwood v Turnsek [1971] 1 All
ER 254). Furthermore, the sending of a notice of severance operates to create a tenancy in
common, even where the sender of the notice has changed his or her mind and does not
desire severance (Kinch v Bullard [1998] 4 All ER 650).
The better view is that severance of a joint tenancy may be effected unilaterally by one
22
party other than by giving notice.
Re Draper’s Conveyance, 1967 – Unilateral severance (480)
It should be noted that one tenant in common is not entitled to rent from another tenant
in common, even though that other occupies the whole of the property ( Jones (A E) v Jones
(F W) [1977] 2 All ER 231).
Co-ownership and the law of trusts: Trustee Delegation Act 1999

An essential difficulty presented to co-owners has been that each of them is a trustee
for themselves and the others. Trustees have in the past had somewhat limited powers of
..
EL_C22.qxd 3/26/07 1:07 PM Page 626
delegation of their duty to act and so if, for example, it is thought necessary to sell the
co-owned land, each co-owner/trustee must sign the contract and the conveyance and any
other documents essential in law to the sale. This created particular difficulties in the case
of the matrimonial home where, if as is usual, husband and wife are joint tenants of the
property they are also and inevitably trustees. It is difficult where, say, the husband is
going away for a business trip of a few weeks for steps to be taken by the wife in regard,
for example, to the sale of the matrimonial home which has been put in train. Under
previous law the husband could not delegate to his wife because the law did not allow delega-
tion to a sole trustee. However, this situation is changed by the Trustee Delegation Act 1999
which received the Royal Assent on 15 July 1999. Section 1 of the Act provides for the
drafting of a power of attorney under which one of the two trustees can deal to some
extent with, e.g. the sale of property on his or her own, including agreeing to the contract
of sale. However, the sole trustee cannot complete the sale on his or her own. The statutory
rules that require the proceeds of sale to be paid to and receipted by at least two trustees
remain, as does the need for at least two trustees to sign the conveyance to convey title
(see s 7 of the 1999 Act). Section 8 provides for the appointment of other trustees by
the attorney and so, if a wife or husband wishes to complete the sale, another trustee must
be appointed, e.g. the couple’s accountant. This provides some safeguard in terms of an
unwise sale.
Party Wall, etc. Act 1996

Another form of joint ownership arises in connection with party walls dividing properties.
London has been covered by protective legislation for many years, the last Act in a line of
legislation being the London Building Act (Amendment) Act 1939.
The 1996 Act extends the London provisions to the rest of England and Wales. The Act was
inspired by the case of a woman in West Sussex who suffered considerable renovation work
by her neighbours who refused to tell her anything about the nature of the alterations. She
owned the wall to its mid-point and her neighbours owned the other half and they were, at
that time, entitled to do what they liked with it.
The basic principles of the 1996 Act are:
n if the ‘building owner’, as he is called, wants to carry out work to a party wall, he must
serve on the ‘adjoining owner’ notice of what is proposed;
n the adjoining owner then has the right to appoint a surveyor at the expense of the build-
ing owner, and in the case of dispute a further surveyor may be called in to adjudicate.
The procedure has been used regularly in London and has worked well. The legislation
applies also to walls which form boundary fences.
A leasehold or a term of years
The major characteristics of a term of years are that the lessee is given exclusive possession of
the land and that the period for which the term is to endure is fixed and definite. It is open
to the parties to decide whether their agreement shall be a lease or a licence, though the
words used by the parties are not conclusive. If there is no right to exclusive possession, then
there is a mere licence and not a lease. For example, a guest in a hotel does not normally
have a lease, because the proprietor retains general control over the room.
..
EL_C22.qxd 3/26/07 1:07 PM Page 627
Shell-Mex and BP Ltd v Manchester Garages Ltd, 1971 – Is it a lease or a

licence? (481)
Contractual licences
The parties may put the matter beyond doubt by a properly drafted and signed contract of
licence. These have a number of commercial uses as follows:
n for short-term trading, for example, during the Christmas period or during the summer
holiday period, either for retailing or storage purposes;
n where a prospective tenant wants early access to premises before a formal lease can be drafted
and granted or an existing tenant wishes to remain in occupation for a short period after
the lease expires (here the landlord will be anxious to retain rental income but will not
want the tenant to acquire security of tenure under, e.g. the Landlord and Tenant Act 1954).
The duration of leases

Leases must be for a fixed period of time, and in this case the commencement and termina-
tion of the lease must be ascertainable before the lease takes effect. Thus a lease ‘for the life
of X’ would not come under this heading. A lease may be for an indefinite period in the sense
that it is to end when the lessor or lessee gives notice. Even so such an arrangement would
operate as a valid lease, since the duration of the term can be made certain by the parties
giving notice.
In the absence of agreement, the period of a lease may be determined by reference to the
payment of rent. Thus, if a person takes possession of the premises with the owner’s consent
for an indefinite period, but the owner accepts rent paid, say, weekly, monthly, quarterly or
annually, the term may be based on that period, though from early times there has been a
presumption that the payment and acceptance of rent shows an intention to create a yearly
tenancy. A yearly tenancy requires half a year’s notice to terminate it if there has been no
agreement on the matter. Other periodical tenancies, in the absence of agreement, are deter-
mined by notice for the full period. Even where there has been a definite term, a periodical
tenancy can arise. Where X is granted a lease of 21 years and stays on after the expiration
of that term with the owner’s consent, there is a new implied term based on the period of
payment of rent.
However, where the tenant is permitted to stay in possession on the understanding that
there are to be negotiations for a new lease, there is a tenancy at will.
22
A tenancy at will may also arise by agreement where a person takes possession of property
with the owner’s consent, the arrangement being that the term can be brought to an end
by either party giving notice. However, the court will look at the transaction in order to
ascertain its true nature and will not be put off by ambiguous or wrong terminology.
Binions v Evans, 1972 – What is the true nature of the transaction? (482)
If there is no agreement as to rent, the tenancy can become a periodical tenancy if the
tenant pays and the owner accepts rent paid at given periods of time. A tenancy at will may
also arise by implication from the conduct of the parties. For example, a prospective purchaser
of land who is allowed to take possession before completion occupies the property as a tenant
at will until completion.
..
EL_C22.qxd 3/26/07 1:07 PM Page 628
Where a tenant stays on after the expiration of his term without the consent of the owner,
there is a tenancy by sufferance. No rent is payable under such a tenancy, but the tenant must
compensate the owner by a payment in respect of the use and occupation of the land. This
compensation is referred to as mesne profits. Such a tenancy can be brought to an end at any
time, though it may become a periodical tenancy if the owner accepts a payment of rent at
given intervals of time.
It should be noted that the law bases the duration of a periodical tenancy on the intervals
of time at which the rent has been paid and accepted, on the ground that this is evidence of
the parties’ intention. If there is other evidence of intention, then the court will also take this
into account, e.g. there may be a prior lease which negatives the intention to create the sort
of periodical tenancy which the payment of rent suggests.
Special protection for residential and business tenants

The material set out above is amended in certain situations by statutory provisions as follows:
Public-sector tenancies
Here there is a public-sector landlord, such as a local council. These tenancies are governed by
the Housing Act 1985. There is security of tenure in that the landlord must prove grounds for
possession, e.g. non-payment of rent, and requires a court order. There is no rent control.
Housing association tenancies

These are now generally assured tenancies with security of tenure in that the landlord must
prove grounds for possession, e.g. non-payment of rent, but rents are normally market rents.
They may also be assured shorthold tenancies with no security of tenure but some rent con-
trol. Where a housing association has taken over council tenants, there is security of tenure
but no rent control.
Residential tenancies protected by the Rent Act 1977 (private sector)

Many residential tenancies granted before 15 January 1989 remain protected by the Rent Act
1977. The main ingredients of the protection are security of tenure and rent control.
Rent control prevented the landlord from recovering more than a ‘fair rent’ as decided by
the Rent Officer disregarding scarcity value. The position now is that for the first application
to a Rent Officer for an increase in rent the increase is capped at the rate of inflation since
the previous rent was registered plus 7.5 per cent. For all subsequent applications the limit
is inflation plus 5 per cent.
Security of tenure prevents a landlord from evicting a tenant even after the tenancy has
expired without a court order which may only be granted on specified narrow grounds. The
parties may not contract out of protection unless, e.g., they use the machinery for shorthold
tenancies introduced by the Housing Act 1980 (see now the Housing Acts 1988 and 1996).
The Housing Act 1988 provides for new tenancies, but is concerned also to protect existing
Rent Act tenants. Therefore, a tenancy granted to a person with a subsisting Rent Act tenancy
by a person’s landlord or joint landlord will still be protected by the Rent Act, even if granted
on or after 15 January 1989. There must, however, be no gap between the Rent Act tenancy
and the new tenancy.
Assured residential tenancies under the Housing Act 1988 (private sector)
This is a new regime introduced for residential tenancies granted on or after 15 January
1989.
..
EL_C22.qxd 3/26/07 1:07 PM Page 629
The security provisions are similar but not identical to those of the Rent Act 1977. How-
ever, they are subject only to minimum control of rent and by and large the overriding rule
about rent is freedom of contract, i.e. payment of market rent.
Assured shorthold tenancies (private sector)

The Housing Act 1988 permits contracting out of security of tenure by granting an assured
shorthold tenancy. If the formalities are correctly followed the landlord has a mandatory
ground for possession at the end of the tenancy. The requirements included an initial fixed
term certain of not less than six months preceded by service of a shorthold notice in the form
prescribed. Unlike the assured residential tenancy, excessive rents may be referred to a Rent
Assessment Committee. The shorthold status continues for renewals but the power to refer
rents ceases.
Changes effected by the Housing Act 1996

From 28 February 1997 all tenancies which are assured tenancies are automatically to be
regarded as assured shorthold tenancies which will be able to run for less than six months
unless the parties specifically state otherwise. In addition landlords will be able to seek
repossession through the courts after:
(i) rent is in arrears for eight weeks where rent is payable weekly or fortnightly; or
(ii) rent is in arrears for two months where the rent is payable monthly.
The previous provisions were 13 weeks and three months respectively. The 1996 provisions
make eviction easier and are designed to encourage the letting of premises. There are also
provisions making the eviction of anti-social tenants quicker and easier.
Protection of business tenants by the Landlord and Tenant Act 1954

The 1954 Act is substantially amended by the Regulatory Reform (Business Tenancies)
(England and Wales) Order 2003 (SI 2003/3096). The position as regards protection in busi-
ness leases is as follows:
(a) The tenancy continues. Unless the parties agree otherwise before the lease is entered into,
then the tenancy will continue automatically after the term agreed by the parties expires.
(b) Ending by the landlord and renewal. The landlord can only end the tenancy by follow-
ing the strict notice procedures laid down in the Act. Even then, provided the tenant acts in
time, he or she is entitled to apply to the court for a new tenancy. The landlord can oppose
the application only on one of the grounds set out in the Act, e.g. his or her intention to
22
reconstruct or demolish the premises or the landlord’s intention to occupy the premises him-
self or herself either for the purposes of a business or as a residence.
(c) Request for a new tenancy. There is a procedure for a tenant or landlord to take the ini-
tiative and request a new lease.
(d) What are the terms of the new tenancy? The length of the new lease is as a maximum
15 years. This reflects the fact that rent reviews are now every five years and not seven years
as before.
(e) Compensation on quitting. If the landlord is successful in opposing renewal, the tenant
may be entitled to compensation.
(f ) Contracting out. There is a procedure by which a business tenancy may be excluded from
the protection of the Act.
..
EL_C22.qxd 3/26/07 1:07 PM Page 630
Creation of leases
Leases are normally created by deed. However, where the lease is not to exceed three years, a
written or oral lease will suffice, so long as the lease takes effect in possession at once at the
best rent obtainable without a premium or capital payment. It is usual to draw up an arrange-
ment such as a tenancy agreement, rather than execute a deed. Where a tenancy is in excess
of three years then, if the agreement is not by deed, it will operate at common law as a yearly
tenancy if the tenant enters into possession and pays rent on a yearly basis, i.e. by reference
to a year, even if the rent is paid in quarterly instalments.
The position in equity is rather different. In equity, if a person has entered into an agree-
ment for a lease but has no deed, then, if he has entered and paid rent or carried out repairs,
i.e. if there is a sufficient act of part performance, equity will insist that the owner of the
property execute a formal lease by deed. The equitable maxim, ‘Equity looks upon that as done
which ought to be done’, applies. The contract must be in writing and comply with the form-
alities of the Law of Property (Miscellaneous Provisions) Act 1989 (see further Chapter 11). It
should be noted that the above exceptions apply only to the creation of a lease. Subsequent
assignment or transfer requires a deed even for a short lease which could be created orally
or in writing.
Walsh v Lonsdale, 1882 – Effect of an agreement for a lease (483)
It may seem that the above rule makes an agreement for a lease as effective as a lease by
deed, and certainly, as between the parties to the agreement, absence of a deed is not vital.
However, the rights of the tenant under the rule are equitable and not legal rights, and the
tenant can be turned out by a third party to whom the landlord sells the legal estate, if the third
party purchases the property for value with or without notice of the existence of the lease.
Nevertheless, since the property legislation of 1925, the tenant can register the agreement
as an estate contract, and, once the agreement is so registered, all subsequent purchasers of the
legal estate are deemed to have notice of the lease and are bound to honour it.
A lease which is to commence from the date of the lease is called a lease in possession.
However, a reversionary lease may be created under which the term is to commence at some
future date. A restriction is imposed by s 149(3) of the Law of Property Act 1925 which pro-
vides that the creation of a reversionary lease which is to take effect more than 21 years from
the execution of the lease, e.g. a lease signed in 1997 for a term of 10 years to run from 2033,
is void. This does not affect the granting of a lease with an option to renew in the future.
In considering the words ‘writing’, ‘signature’ and ‘deed’ in the above material the passing
of the Electronic Communications Act 2000 should be noted. Section 7, which is already in
force, allows electronic signatures to be adduced and acceptable as evidence of a signature.
However, delegated legislation will be required to make changes in statutes, such as the Law
of Property Act 1925, to eliminate the ‘paper’ requirements. The relevant areas are being
identified for change.
Rights and liabilities of landlord and tenant

The rights and liabilities of the parties depend largely upon the lease though a landlord has a
special right at common law to distrain for rent, i.e. to move in on the tenant’s personal
property and remove it for sale to satisfy the amount owing for rent. Where the lease is by
deed, the deed will usually fix the rights and liabilities by express clauses which are called
covenants. Certain covenants are also implied by law where there is no provision in the lease.
The most usual express covenants are covenants to pay rent, covenants regarding repairs and
..
EL_C22.qxd 3/26/07 1:07 PM Page 631
renewals, and a covenant that the tenant will not assign or sub-let without the landlord’s
consent. In this connection, s 1 of the Landlord and Tenant Act 1988 imposes a duty upon a
landlord to give consent unless he has good reason to withhold it and within a reasonable
period of a written application for consent. An action for damages arises if consent is not
given or is unreasonably withheld.
The Landlord and Tenant (Covenants) Act 1995 (see later in this chapter) provides that in
respect of leases entered into on or after 1 January 1996 (other than wholly residential leases
or farm leases) the landlord can agree with the tenant the terms on which an assignment will
be permitted, e.g. that the assignee satisfies certain prescribed conditions, as where he is not
a dealer in scrap metal. The landlord will not be taken as withholding consent unreasonably
if the conditions are not fulfilled. This is a major concession to landlords.
The main implied covenants are as follows:
Implied obligations of the landlord

(a) Quiet enjoyment. This means that the tenant shall be allowed to take possession and will
be able to recover damages if his enjoyment of the property is disturbed by acts of the
landlord, as in one case where the landlord removed the doors and windows of the property
(see Lavender v Betts [1942] 2 All ER 72).
This implied covenant does not extend to requiring the landlord to have sufficient sound-
proofing to protect the tenant from the sounds of ordinary domestic life in neighbouring
flats, said the House of Lords in Southwark LBC v Mills [1999] 4 All ER 449. A covenant for quiet
enjoyment cannot be converted into a covenant to improve the premises. Thus:
n rent a terraced house where you can hear your neighbours through the walls – no liability
in the landlord to correct this;
n rent a flat with a large overhanging balcony above affecting privacy – no obligation on the
landlord here;
n rent a bed-sit with no double glazing overlooking a busy and noisy main road – no
concern of the landlord.
(b) Landlord and Tenant Act 1985. A provision in this Act implies a condition that a house
let for human habitation is fit for human habitation at the beginning of the tenancy and will
be kept fit during the tenancy. This Act applies to fewer and fewer properties because the
premises concerned must be let at a very low rent, i.e. £80 a year in Greater London and £52
elsewhere (s 8 of the 1985 Act). Inflation and its effect on rents over the years has made the
Act almost obsolete.
(c) Landlord and Tenant Act 1985. Under ss 11–16 of the Act landlords have implied repairing
22
obligations when premises are let wholly or mainly as a dwelling house under a lease for a
term of less than seven years. This includes a longer term which the landlord can bring to an
end within seven years. The implied obligations are:
(i) to repair the structure and exterior including drains, gutters and external pipes;
(ii) to repair and keep in working order the services and sanitary installations;
(iii) to repair and keep working the installations for room heating and heating water.
There is no liability to remedy a latent defect until the landlord knows of it.
It should not be assumed that the above provisions of the 1985 Act work well. There is no
obligation to keep the premises fit for human habitation. In particular, condensation has
been regarded as a design fault and not a matter of disrepair although it can do untold harm,
e.g. to furniture. The Law Commission has recommended reform (see Landlord and Tenant:
Responsibility for State and Condition of Property (Law Com No 238)).
..
EL_C22.qxd 3/26/07 1:07 PM Page 632
(d) Defective Premises Act 1972. As we have seen, there is under this Act a duty to build
dwellings properly and a duty to take reasonable care to keep the premises reasonably safe
(see further Chapter 21). This Act relates, of course, to injuries as a result of defective premises
which result in a claim for compensation in the civil courts. It does not provide a direct
method of getting defects put right.
(e) Non-derogation from the grant. This means that the landlord must not take action to pre-
vent the use for which the premises were let, e.g. by letting a substantial part of a residential
block for business purposes.
Implied obligations of the tenant

(a) General. There is a general obligation to keep and deliver up the premises in a tenant-like
manner. This means that the tenant must take proper care of the premises, e.g. by doing
small jobs such as replacing fuses and cleaning windows. There may be a duty to keep the
premises wind tight and water tight but this was doubted in Warren v Keen [1954] 1 QB 15
by the Court of Appeal. If it does exist, it does not require the tenant to do anything of a
substantial nature.
(b) Waste. A tenant must not commit waste, i.e. he must not do deliberate damage to the
premises.
O’Brien v Robinson, 1973 – Latent defects (484)
Breach of covenant by the tenant can result in forfeiture of the lease. A landlord’s covenant
to repair can be enforced by specific performance ( Jeune v Queens Cross Properties Ltd [1973] 3
All ER 97). However, since specific performance is a discretionary remedy, it is advisable for
tenants to rely on doing their own repairs and recouping from the rent for relatively trivial
breaches rather than to approach the courts for specific performance.
Privity of contract
Liability of original parties: leases granted before 1 January 1996
It sometimes comes as a surprise to a tenant that the original landlord and the original tenant
remain liable on the lease throughout its term. Thus, if A leases property to B and B with A’s
consent assigns the remainder of the lease to C, if C then defaults on the covenants in the
lease, e.g. payment of rent, the landlord A can sue B for the amount due.
The problem is particularly acute where C becomes insolvent and cannot pay rent. In
W H Smith Ltd v Wyndram Investments Ltd [1994] 2 BCLC 571 the insolvency of an assignee
and a disclaimer of liability by the insolvency practitioner dealing with the insolvency
left W H Smith, the original tenant, liable to the landlord on the substantial part of a 25-year
lease.
The Landlord and Tenant (Covenants) Act 1995: leases granted

on or after 1 January 1996
The above rules deriving from privity changed when the above Act came into force on
1 January 1996. The key elements of reform are as follows:
..
EL_C22.qxd 3/26/07 1:07 PM Page 633
Abolition of privity
The Act abolishes liability arising under the privity law in respect of leases granted on or after
1 January 1996 so that a landlord will only be able to pursue the tenant for the time being
unless there is an authorised guarantee agreement in force.
Authorised guarantee agreement

A landlord may require an assigning tenant to enter into a guarantee with the landlord as a
condition of the landlord giving his consent to the assignment. Under such an agreement the
outgoing tenant guarantees the performance of the lease by his immediate (but not subsequent)
assignee.
Landlord’s release
Landlords are allowed to apply for a release from liability when they dispose of their interest
in the premises. This would occur when the landlord sold the freehold reversion in the
property to another. Release is obtained by serving a statutory notice on the current tenant.
Notice requirement
In both existing and new leases a landlord must notify a former tenant (or guarantor, e.g. of
rent) within six months of a breach of a covenant in order to be able to take action against
him in respect of the breach.
Limitation on increase in liability

A former tenant will be liable only for rent increases due to rent review clauses in the original
lease and not for increases due to changes in the terms of the lease since he assigned it.
Overriding leases
In both existing and new leases a former tenant (or his guarantor) who is called upon to
remedy the default of the current tenant is given a right to call for an ‘overriding lease’ thus
enabling him to reacquire the premises. This means that a former tenant will have the right
to re-enter the premises if he is paying for them. This was not the case in previous law.
Main commercial effects of tenant release from liability

The 1995 Act has the following main commercial effects:
n Landlords will impose stricter criteria before consenting to the assignment of a lease. This
22
affects the ‘consent will not be unreasonably withheld’ principle. Consequently, a business
entering into a new lease as a tenant will need to take advice as to the covenants relating
to assignment.
n Those involved in property investment will be concerned about the effect on investment
values resulting from loss of privity. An investor will tend to choose an older lease since
the original tenant and subsequent assignees will remain liable for the whole term since
the 1995 Act is not retrospective.
n Difficulties in relation to assignment may result in businesses going for shorter term leases.
Landlord selling freehold: release from covenants

Where a landlord disposes of his reversion as by selling the freehold so that the tenant has a
new landlord the selling landlord may under ss 7 and 8 of the 1995 Act seek release from his
..
EL_C22.qxd 3/26/07 1:07 PM Page 634
covenants so that the incoming landlord alone is liable on them. The outgoing landlord must
serve notice on the tenant within four weeks of the transfer of his interest and the tenant
has four weeks thereafter to serve an objection. If there is no tenant objection the former
landlord is released. If the tenant serves an objection the landlord must make application to
the court for a ruling that it is reasonable for the covenants to be released.
In BHP Petroleum Great Britain Ltd v Chesterfield Properties Ltd [2001] 2 All ER 914 the High
Court ruled that only covenants appearing in the lease could be released under the 1995 Act.
Thus where a landlord had, as in this case, given a personal covenant to repair defective glass
cladding on office premises this liability could not be released. It was a personal covenant.
This ruling was affirmed by the Court of Appeal in BHP Petroleum Great Britain Ltd v
Chesterfield Properties [2002] 1 All ER 821.
So far as those in business are concerned, there is no reason why both parties to a lease
should not state in it that personal covenants also end on assignment.
Contracts (Rights of Third Parties) Act 1999

This Act is given a more detailed consideration in Chapter 10. Briefly the Act enables a third
party to enforce a term of a contract where the contract expressly gives him that right. In
addition, a third party is able to enforce a term of a contract where that term purports to con-
fer a benefit on him and on a proper construction of the contract it appears that the parties
to the contract intended to give him that right, even if there is no express provision in the
contract to that effect.
As regards the law of landlord and tenant, the Act could apply where the tenant has sub-
let enabling the subtenant to enforce a provision against the head or main landlord, e.g. an
obligation in the head lease to decorate. This could be done without the involvement of the
intermediate landlord. No doubt lawyers will bear this in mind when drafting leases to make
sure that the rights, if any are to be given, are made clear in the lease.
Tenants’ rights to acquire the freehold

of houses and blocks of flats
The Leasehold Reform Act 1967, the Leasehold Reform, Housing and Urban Development Act
1993 and the Commonhold and Leasehold Reform Act 2002 together contain the relevant
rights. Although as we have seen it is possible to convert from leasehold to commonhold it
is necessary for such a conversion to get the consent of 100 per cent of the existing lease-
holders and/or other owners of what would become units in the commonhold. Thus many
leaseholders are unlikely to convert to commonhold so that there is a need to address the
rights of leaseholders under the above legislation. The main rights and requirements appear
below. The chapters referred to are chapters in the 2002 Act and the relationship of that Act
and the 1967 and 1993 Acts are explained under the headings set out below to give the
current legal regime.
Chapter 1. Right to manage

This introduces a new right for leaseholders of flats to manage their building. The qualifying
conditions are that they must hold a ‘long lease’ of a flat in the building, which is principally
any lease granted originally for a term exceeding 21 years. Eligible leaseholders must set up a
company known as a RTM (Right to Manage) company in order to exercise the right. The Act,
..
EL_C22.qxd 3/26/07 1:07 PM Page 635
combined with a power to make regulations, specifies the constitution of the company. In
outline an RTM company must be a private company limited by guarantee and must include the
acquisition and exercise of the right to manage as one of its objects. A company that is also a
commonhold association cannot be a RTM company. Any person who is a qualifying tenant
of a flat in the premises is entitled to be a member of the RTM company at any time. A landlord
is entitled to be a member but only after the RTM takes over the management of the premises.
Chapter 1 also provides for the service on all qualifying tenants of a notice of invitation to
participate. There are also provisions relating to the service upon the landlord of a claim
notice and of counter notices by the landlord. Where a counter notice contends that the RTM
company is not entitled to manage the dispute will be settled by an application to the
Leasehold Valuation Tribunal (LVT). The Act provides that a RTM company may apply to an
LVT to acquire the right to manage where the landlord cannot be traced. The chapter also
provides for the termination of the right to manage where the company wishes to cease the
right and the landlord agrees or where the company becomes insolvent.
Chapter 2. Collective enfranchisement by tenants of flats

This chapter amends the Leasehold Reform, Housing and Urban Development Act 1993 that
deals with the right of leaseholders to buy collectively the freehold of their building. The
eligibility criteria are simplified. In particular the requirement that at least two-thirds of the
leaseholders in the block must participate and that at least half of the participating group
must have lived in their flats for the previous 12 months (or periods totalling three years in
the last ten) are removed. The proportion of participating leaseholders who must participate
is reduced to one-half. The low rent test is abolished in the few situations where it applied
(i.e. leases of less than 35 years). Formerly, the rent had not to exceed £250 pa (£1,000 pa in
London). The chapter also increases the proportion of the building that can be occupied for
non-residential purposes from 10 per cent to 25 per cent and reduces the scope of the exemp-
tion for certain resident landlords. Currently, premises converted into four or fewer flats
where the landlord or an adult family member has occupied one of the flats as their only or
principal home for at least 12 months are exempt. Under the CLRA 2002 the exemption will
apply only if the landlord has owned the freehold since before the conversion and carried out
the conversion.
The business application. Enfranchisement claims will increase. For example, in the case of a
block of flats that contains 12 flats, it was necessary under previous provisions for at least
eight leaseholders to participate and at least four had to be resident. Under the CLRA 2002 only
six have to participate and none will have to be resident. Also, more leaseholders with flats
22
over shop premises will be able to claim.
Formerly the freehold of the building was acquired by a ‘nominee purchaser’, but there
were no provisions as to the nature and constitution of this purchaser. The 2002 Act amends
the 1993 Act so that the freehold is acquired under the tenants’ right to exercise the purchase
by a RTE company of which the participating leaseholders are members. The RTE company
must be a private company limited by guarantee and its memorandum must include as one
of its objects the exercise of the right to collective enfranchisement. A company that is a
commonhold association cannot be a RTE company. All qualifying leaseholders have a right
to participate in the purchase by joining the company.
The price of the freehold should also be cheaper under the 2002 Act. This chapter amends
the valuation principles of the 1993 Act. It provides that where marriage value exists it
should be divided equally between the landlord and the leaseholders in all cases. It also pro-
vides that where the unexpired term of the leases held by qualifying leaseholders exceeds
..
EL_C22.qxd 3/26/07 1:07 PM Page 636
80 years no marriage value is payable. The marriage value relates to the fact that on acquisition
the tenant has, in effect, merged the freehold and leasehold interest having a lease and also con-
trolling the landlord function by a collective ownership of the freehold. This obviously increases
the value payable to the old landlord but the above rules reduce or eliminate this extra value.
It is not necessary for all the leases to have at least 80 years unexpired. Those that have will
have the marriage value ignored.
Chapter 3. New leases for tenants of flats

This chapter amends the provisions of the 1993 Act covering the right of individual lease-
holders to buy a new lease. The low rent test is abolished and the same provisions apply to
marriage values as those set out above. The former requirement that the leaseholder must
have lived in the flat for the last three years (or periods totalling three years in the last 10) is
replaced by the requirement to have held the lease for at least two years. Where deceased
leaseholders would have been eligible to buy a new lease immediately before death their personal
representatives will qualify for a period of two years after the date of granting probate of the
will or letters of administration as for example where there is an intestacy.
The business application. Personal representatives can increase the value of the estate by extend-
ing a lease that might otherwise be difficult to sell or mortgage.
Chapter 4. Leasehold house

The chapter amends the provisions of the Leasehold Reform Act 1967 that covers the right of
leaseholders of houses to buy their freeholds or extend their lease. Qualifying leaseholders
have the right to an extended lease 90 years longer than the original terms. The provisions of
Chapter 4 reflect those of Chapters 2 and 3 as follows:
n the low rent test is abolished;

n the marriage value provisions are the same as those set out above;
n under the new provisions a leaseholder is required only to have held the lease for at least
two years;
n acquisition by the personal representatives of a deceased leaseholder are the same as those
set out above.
This chapter also provides new rights for leaseholders who have extended their leases under
the 1967 Act. They will be able to buy their freehold after the extended lease has commenced.
The price will be determined by s 9(1A) of the 1967 Act. Where they do not buy the freehold
they will become entitled to an assured tenancy under the Housing Act 1988 Part I when the
extended lease expires.
The chapter also amends the 1967 Act in order to simplify the procedure where the land-
lord cannot be found. Leaseholders can apply to the county court (rather than the High
Court) for a vesting order and the price payable will be determined by an LVT rather than a
surveyor appointed by the President of the Lands Tribunal. The relevant procedures are the
same as those applying to flats under the 1993 Act.
Chapter 5. Other provisions about leases

n The definition of ‘service charge’ is extended to cover improvement costs. This means
that improvement costs must be reasonable and that unreasonableness can be challenged
at an LVT.
..
EL_C22.qxd 3/26/07 1:07 PM Page 637
The business application. Tenants will find that this provision deals with a number of
notorious landlord scams particularly where all manner of works have been bundled into
‘improvement works’ because this head of charge was unchallengeable under previous law.
n LVTs are given jurisdiction to decide whether leaseholders are liable to pay service charges
as well as whether these are reasonable. Formerly LVTs had no jurisdiction to consider
the reasonableness of service charges once they had been paid. They now have that right
(CLRA 2002, s 155).
n The chapter introduces new accounting and inspection provisions to tighten up the Land-
lord and Tenant Act 1985. Leaseholders get a new right to withhold payment of service
charges if accounts are not provided by the landlord. In future the landlord must hold
service charge money, that is subject to a trust to defray the relevant costs, in a separate
bank account and it will not be permissible to run a number of properties through one
general account. However, the Secretary of State is given power to exempt certain payees
from this requirement (CLRA 2002, s 151). This could be used to exempt managing agents
whose general client accounts are audited in accordance with statutory requirements.
n Charges that are to be paid under leases for approvals, for the provision of information
as a result of a failure to pay rent or other charges on time or as a result of a breach of a
covenant or condition of a lease are contained in a new concept called ‘administration
charges’. These must be reasonable and can be challenged in terms of liability to pay or
reasonableness before an LVT.
n Section 20 of the Landlord and Tenant Act 1985 under which landlords must consult
tenants before carrying out works above a prescribed sum recoverable through service
charges is replaced. The consultation requirements are extended to cover contracts for
works or other services of more than 12 months’ duration. LVTs (rather than county
courts) can grant dispensation if they think that it is reasonable to do so.
n The chapter also introduces a requirement that ground rent is not payable unless it has
been demanded by giving the tenant prescribed notice. Application of any provisions in
the lease relating to late or non-payment is prevented if the rent is paid within 30 days of
the demand being issued.
n Forfeiture procedures for non-payment of service or administration charges are prohibited
unless the charge has be agreed or admitted by the tenant or a court or LVT has determined
that it is reasonable. Forfeiture proceedings for other breaches cannot be commenced
unless a court or LVT has determined that the breach has occurred.
n As regards insurance of long leasehold houses, e.g. those exceeding 21 years, leaseholders
can insure wherever they choose provided that the policy is issued by an authorised
insurer, i.e. authorised under the Financial Services and Markets Act 2000. The policy
must cover the landlord and the leaseholder and provide the cover required by the lease.
22
This provision overrules covenants under which the insurer must be nominated by the
landlord, the use of which often gave him large commissions. Owners of other dwellings,
e.g. maisonettes, must continue to rely on the Landlord and Tenant Act 1985 and apply to
the county court or the LVT for an order requiring the landlord to nominate another
insurer but only on the grounds that the cover is inadequate or the premiums excessive.
The CLRA 2002 however makes it clear that this ability to apply to the county court or the
LVT applies where the insurer has to be approved by the landlord as well as cases where the
insurer must be nominated by him.
Chapter 6. Leasehold Valuation Tribunals

There are important new powers here to make regulations to exclude the case of a party
before an LVT, in whole or in part, where the party fails to comply with the directions of the
..
EL_C22.qxd 3/26/07 1:07 PM Page 638
LVT. Costs can be awarded of up to £500 or any higher amount that regulations might
prescribe against frivolous, vexatious or disruptive parties and those who act unreasonably.
Effect of Human Rights Act 1998 (HRA)

This legislation came into force in October 2000. In terms of its effect upon the law of
landlord and tenant, the following material should be noted.
Forfeiture and distraint

These self-help remedies of landlords may be subject to challenge under the HRA.
Forfeiture. It is the better view so far that forfeiture will survive a challenge under the HRA.
This is based upon the fact that both landlord and tenant have agreed in the lease that
forfeiture will be the consequence of breach of covenant, e.g. non-payment of rent. Also the
state has provided a method of relief through the courts.
Distraint. This remedy, widely known as distress for rent, is seen as unfair in terms of the fact
that the tenant’s goods can be taken and sold at cheap prices by the landlord because of prob-
lems of title in sheriffs’ sales. There is statutory intervention by the state, and the state sanctions
the mechanism for distraint by certifying bailiffs. Third parties’ goods on the premises may
also be taken. For these reasons, exercise of this remedy appears threatened by the HRA.
The Competition Act 1998

This Act came into force on 1 March 2000. Property transactions are subject to the competi-
tion rules.
Penalties for infringing the Act

Those who infringe the Act with their property documents will find that these documents,
i.e. leases, will be void and there may be exposure to significant fines or litigation brought by
a third party claiming to have suffered loss through the anti-competitive behaviour. Fines can
be up to 10 per cent of annual turnover for the previous three years.
Exclusions
The Competition Act 1998 (Land and Vertical Agreements Exclusion) Order 2000 (SI 2000/310)
applies, and gives a specific exclusion for ‘land agreements’ covering transfers of freeholds,
leases, assignments of leasehold interests, easements, licences and agreements to enter into any
of these. The exemption will apply if the restriction is concerned to protect the interest in
land, but not if it is intended to protect trading interests.
Examples
n A landlord is an insurance company. The lease requires the tenant to insure the premises
with the landlord’s company. This restriction would not benefit from the exclusion because the
landlord is protecting his business, which is insurance, and not his interest in the land.
n A landlord is the owner of the only retail park outside a particular town. He proposes to
increase the rents under his business leases by 200 per cent. This increase is not within the
exception. The landlord is abusing a dominant position within the market.
There will, of course, be many fine distinctions made, but until we have case law, it is
difficult to be precise in marginal cases.
..
EL_C22.qxd 3/26/07 1:07 PM Page 639
Servitudes
Servitudes are rights over the property of another and may be either easements or profits à prendre.
Easements
An easement may be defined as a right to use or restrict the use of the land of another person
in some way. There are various classes of easement and these include:
(a) rights of way;

(b) rights of light;
(c) rights to abstract water;
(d ) rights to the support of buildings.
To be valid an easement must satisfy the following conditions.
There must be a dominant and servient tenement

The land in respect of which, and for the benefit of which, the easement exists is called
the dominant tenement, and the land over which the right is exercised is called the servient
tenement. A valid easement cannot exist in gross, i.e. without reference to the holding of
land. A right of way enjoyed by members of the public generally is a public right of way but
not an easement.
Hill v Tupper, 1863 – No easement ‘in gross’ (485)
The grant of a right of way over his land by a landowner to be exercised by the grantee
personally, and without reference to any land capable of deriving benefit from the right of
way, is merely a licence and not an easement.
The easement must accommodate the dominant tenement

The easement must confer some benefit on the land itself so as to make it a better and more
convenient property; it is not enough that the owner obtains some personal advantage. A
right of way over contiguous (adjoining) land generally benefits the dominant tenement, and
an easement can exist even where two tenements do not actually adjoin, provided it is clear that
the easement benefits the dominant tenement.
Thus it is not possible to have a right of way over land in Kent as the result of owning land 22
in Northumberland. There is no connection between the two. Equally the sole and exclusive
right given to the leaseholder of land on a canal bank to let out pleasure boats on the canal
does not constitute an easement; it is not beneficial to the land on the canal bank as such
(see Hill v Tupper (1863), above).
The dominant tenement and the servient tenement must not be both owned
and occupied by the same person
Thus, if P owns both Blackacre and Whiteacre and habitually walks over Blackacre to reach
Whiteacre, he is not exercising a right of way in respect of Blackacre, but merely walking
from one part of his land to another. For this rule to apply, P must have simultaneously both
ownership and possession of the two properties concerned. It is not enough that he owns the
two if they are leased to different tenants, or that he is the tenant of both if they are owned
by different owners.
..
EL_C22.qxd 3/26/07 1:07 PM Page 640
The easement must be capable of forming the subject of a grant

This means that the right must be sufficiently definite. There must be a capable grantor and a
capable grantee, and the right must be within the general nature of the rights capable of
existing as easements.
Bass v Gregory, 1890 – Is the easement definite enough? (486)
An easement is a right to use or restrict the use of a neighbour’s land which should not
normally involve him in doing any work or spending any money, though the Court of
Appeal has recognised an easement of fencing.
Crow v Wood, 1970 – An easement of fencing (487)
The categories of easements are not closed and new rights have from time to time been
recognised as easements, though in general the courts are still reluctant to extend the
categories.
Re Ellenborough Park, 1956 – Expansion of easements (488)

Phipps v Pears, 1964 – No easement of property protection (489)
Grigsby v Melville, 1972 – No easement giving exclusive right of user (490)
Profits à prendre
A profit à prendre is the right to take something of legal value from the land of another, e.g.
shooting, fishing and grazing rights; the right to cut turf or take wood for fuel. The exception
is a right to take water from a stream which is treated as an easement because running water
cannot be privately owned and is not therefore a thing of legal value.
A profit necessarily involves a servient tenement but there may or may not be a dominant
tenement, for a profit can exist in gross. A profit may be a several profit, where enjoyment is
granted to an individual as is often the case with shooting and fishing rights; or a profit may
be in common which may be enjoyed by more than one person, as is often the case with
grazing rights and the right to take various materials for use as fuel.
The expression is legal French for ‘profit to take’. An acceptable legal pronunciation of the
third word is ‘prawn-dra’.
Acquisition of servitudes
Servitudes may be acquired (a) by statute, (b) by express or implied grant, (c) by prescription,
(d ) by equitable estoppel (see Crabb v Arun District Council (1975) (Chapter 10)).
Easements created by statute are usually in connection with local Acts of Parliament.
When land is sold, a servitude may be expressly reserved in favour of another tenement of
the seller, or may be expressly granted in similar circumstances by deed; and under the Law
of Property Act 1925, s 62, a conveyance, if there is no contrary express intention, operates to
convey servitudes appertaining to the land conveyed (see Crow v Wood (1970)).
Under the rule in Wheeldon v Burrows (1879) 12 Ch D 31 where a vendor sells part of his
land, the purchaser will have rights over the vendor’s retained land if:
..
EL_C22.qxd 3/26/07 1:07 PM Page 641
n such rights were previously used by the vendor for the benefit of the land conveyed and either;
n they were reasonably necessary for the land conveyed; or
n were continuous and apparent.
Section 62 has, therefore, a similar effect to the rule in Wheeldon but, whereas s 62 applies
only where the property is transferred by conveyance, Wheeldon applies to other transfers,
e.g. where property is left by a will.
Where an owner of two plots conveys one of them, then certain easements are implied.
These are easements of necessity, as where the piece of land would be completely surrounded
and inaccessible without a right of way; intended easements, which would be necessary to carry
out the common intentions of the parties; ancillary easements, which would be necessary in
view of the right granted, as the grant of the use of water implies the right of way to reach
the water. Where part of a tenement is granted, then the grantee acquires easements over the
land which are continuous and apparent, are necessary to the reasonable enjoyment of the
land granted, and have been and are used by the grantor for the benefit of the part granted.
An example of this is a window enjoying light.
Ward v Kirkland, 1966 – An easement for reasonable enjoyment (491)
It will be appreciated therefore that easements do not always show up in the title deeds.
Although the Law Society’s National Conditions of Sale put the seller under a duty to disclose
latent easements, this only applies if they are known to him. The purchaser must take the risk
of unknown easements such as an underground sewer the existence of which was unknown
to the seller (William Sindall plc v Cambridge County Council [1993] NPC 82).
Even where there is no easement, access to adjacent land may in certain circumstances be
obtained under the Access to Neighbouring Land Act 1992 which is further considered in
Chapter 21.
Prescription
Prescription may be based on a presumed grant or alternatively may be established by use
as of right.
Prescription at common law depended on use since time immemorial, which at law means
since 1189. Clearly in most cases it is out of the question to show continuous use for this
period, and so the courts were prepared to accept 20 years’ continuous use as raising the pre-
sumption of a grant. This presumption may be rebutted by showing that at some time since
1189 the right could not have existed, and it follows that an easement of light cannot be
22
claimed by prescription at common law in a building erected since 1189. This serious
difficulty was met in part by the presumption of a lost modern grant, and juries (when they
were in use in civil matters) were told that if there had been use during living memory or
even for 20 years, they might presume a lost grant or deed, and this ultimately became
mandatory, even though neither judge nor jury had any belief that such instrument had ever
existed.
The position is now clear under the Prescription Act 1832, which was passed to deal
with the difficulties arising under the common law. Under this Act, which supplements the
common law, we must distinguish easements other than light from easements of light and
easements from profits.
Tehidy Minerals v Norman, 1971 – Lost modern grant (492)
..
EL_C22.qxd 3/26/07 1:07 PM Page 642
Easements other than light

Twenty years’ uninterrupted use as of right will establish an easement. Use as of right means
nec vi, nec clam, nec precario, i.e. without force, stealth or permission. The law of prescription
rests upon the acquiescence of the owner of the servient tenement. Thus he must have
knowledge of the exercise of the right claimed. If the owner of the so-called servient tene-
ment can prove that he has given verbal permission, i.e. that the easement is precario, then it
cannot be claimed. Nevertheless 40 years’ similar use will establish the easement, and in this
case, if the owner of the servient tenement wishes to prove that the right was exercised by
permission, he must produce a written agreement to that effect. To establish a right of way by
prescription, periods of use of an original and a substituted way may be added together.
Diment v Foot, 1974 – Where there is no knowledge (493)

Davis v Whitby, 1974 – Original and substituted ways (494)
Easements of light
These can be established by 20 years’ use, the defences being that the owner of the servient
tenement gave permission and that there is a deed or written agreement to this effect, or that
the owner of the servient tenement interrupted the enjoyment of the right for a continuous
period of a year by erecting something which blocked the light. Under the Rights of Light Act
1959 (as amended by the Local Land Charges Act 1975), it is no longer necessary to erect
something of this nature; the owner of the servient land may now register on the local land
charges register a statutory notice indicating where he would have put up a screen, and this
operates as if the access of light had been restricted for one year. Use as of right is not neces-
sary, and oral consent will not bar the claim even if the claimant has made regular money
payments for the use of the right.
The right can only be claimed having regard to the type of room affected. A bedroom
does not require the amount of light that other rooms do, and if the claimant has used the
bedroom to repair watches for 20 years, he will still only be able to claim that amount of light
appropriate to a bedroom. There is no right to receive unlimited light but in Ough v King
[1967] 3 All ER 859, the Court of Appeal held that in determining whether there was an
infringement of a right to light regard must be had to the nature of the locality and to the
higher standard of lighting required in modern times.
However, in Allen v Greenwood [1979] 2 WLR 187, the Court of Appeal held that the
measure of light which can be acquired by prescription can, so far as a greenhouse used for its
normal purposes is concerned, include the right to an extraordinary amount of light, and also
to the benefits of that light, including the rays of the sun. Nevertheless, there is no claim to a
view or a prospect which can be seen from a window.
The right to light is not limited to a freeholder and may be claimed by a tenant.
Artificial light
In Midtown Ltd v City of London Real Property Co Ltd; Joseph v City of London Real Property
Ltd [2005] 1 EGLR 65 the High Court appears to have dealt a severe blow to those trying to
protect the right of light to their properties. On the facts of the case it was accepted by
the parties that the activities of a developer would have a significant effect on the claimant’s
right to light to its property. Nevertheless, the court refused an injunction to prevent the
development on the basis of the presence of artificial light which the claimant could use. The
court did not rule that the existence of artificial light would prevent all claims for infringe-
ment of a right to light, but the case will no doubt be raised by defendants in future cases.
..
EL_C22.qxd 3/26/07 1:07 PM Page 643
The ruling suggests that there is no absolute right to natural light as some previous cases
have suggested.
Distinction between presumption of grant and Prescription Act 1832

It is worth noting that the period of user under the 1832 Act is a period of enjoyment imme-
diately before a claim to establish the right is made by bringing an action. However, the period
under prescription by lost modern grant is not limited to the period next before the claim
is made.
For example A uses a track over B’s land giving access to a wood from A’s house. A uses
the vehicular access for 20 years. It is then interrupted by B who orders A to stop using the
track. A acquiesces in this for 14 months while he tries to negotiate a compromise with B.
This fails and A goes back to using the track. It was held in these circumstances in Smith v
Brudenell-Bruce [2002] 2 P & CR 51 that A succeeded under the rules of lost modern grant but
failed under the Act of 1832.
Profits à prendre
The general period for prescription here is 30 years under the Act of 1832, though 20 years is
enough if the court is presuming a lost modern grant (see Tehidy Minerals v Norman (1971)).
If an easement is denied or threatened, it would be necessary to ask the court for an injunction
to prevent the owner of the servient tenement from acting contrary to the easement, and its
existence would have to be proved under one of the headings given above. The court may then:
(a) find the easement not proved; or

(b) grant an injunction to restrain the owner of the servient tenement from acting contrary
to it; or
(c) if the infringement is not serious, award damages once and for all, in which case the
servient owner will have bought his right to act contrary to the easement.
Reduction of easements
The court has power to reduce the scope of an easement when insistence on full use of it is
unreasonable. Thus in B & Q plc v Liverpool and Lancashire Properties Ltd [2000] 39 LS Gaz R 41
the defendants wished to extend their premises over part of an easement of access possessed
by B & Q. The easement of way would not be extinguished but reduced. B & Q asked for an
injunction to prevent the extension and the court granted it. B & Q had shown that they
22
would be placed in a difficult access situation otherwise and it was not unreasonable of them
to resist a reduction in their easement of way. The High Court made clear however that
where the holder of an easement would not be placed in difficulty by its reduction and was
unreasonably resisting a reduction the court would not grant relief.
Termination or extinguishment of servitudes

Servitudes may be extinguished by statute, as where the property concerned is compulsorily
purchased under statutory powers, or by express or implied release. At law a deed is necessary
for express release, but in equity an informal release will be effective if it would be inequitable
for the dominant owner to claim that the right still exists.
An example of an easement being extinguished under statutory authority is provided by
Jones v Cleanthi [2006] 1 All ER 1029.
..
EL_C22.qxd 3/26/07 1:07 PM Page 644
The claimant had a leasehold interest in a flat. The lease gave her access down the hall of
the block to a place from which refuse was collected by the local authority. She sub-let the
flat and while she was away the local authority, acting under Part XI of the Housing Act
1985, and in connection with the fact that the property was in multi-occupation, served a
notice on the landlord to carry out works on the premises. These included building a fire wall
across the hall so that that form of access to the refuse are was denied to the claimant. When
she returned to the flat she raised before the High Court her right to an easement of way
down the hall. The High Court ruled that, since the work had been done under statutory
power and in compliance with a statutory duty, the easement of way had been extinguished.
The landlord had no alternative but to carry out the instructions of the local authority. The
claimant would have to reach the refuse area by a longer route.
If the dominant owner shows by his conduct an intention to release an easement, it will be
extinguished. The demolition of a house to which an easement of light attaches may amount
to an implied release, but not if it is intended to replace the house by another building. Mere
non-use is not enough (see Tehidy Minerals v Norman (1971)).
We have already seen that an easement is extinguished when the dominant and servient
tenements come into simultaneous ownership and possession of the same person, since a
person cannot have an easement over his or her own land.
Indemnity insurance. If the existence of an easement is crucial to the purchase of land and its
existence is not crystal clear, it will generally be advisable to obtain indemnity insurance
from a company specialising in such business, compensating the landowner if the ‘easement’
is successfully challenged.
Declarations by the court. Although no question of extinguishing the easement arises, it is
possible to ask the court for a judgment declaring that the dominant owner will not be able
to prevent a particular development on the servient land before the development goes ahead.
Thus, in Greenwich Healthcare NHS Trust v London Quadrant Housing Trust (1998) The Times,
11 June the court made such a declaration where the proposed development was the realign-
ment of a dangerous road in the public interest.
Restrictive covenants
A restrictive covenant is essentially a contract between two owners of land whereby one
agrees to restrict the use of his land for the benefit of the other. We are not concerned here
with covenants in leases, which are governed by separate rules already outlined.
Such covenants were not adequately enforced by the common law because the doctrine of
privity of contract applied, and as soon as one of the parties to the covenant transferred his
land, the covenant was not enforceable by the transferee because he had not been a party to
the original contract. However, the common law realised that this was rather too rigid and
went so far as to allow a transferee to enforce the benefit of the covenant against the original
party to it. Thus, if A, the owner of Blackacre, agreed with B, the owner of Whiteacre, that he
would not use Blackacre for the purposes of trade, if B then sold Whiteacre to C, C could
enforce the covenant against A. However, if A sold Blackacre to D, C could not enforce the
covenant against D, because the common law would not allow D to bear the burden of a
covenant he did not make.
Equity takes a different view, and allows C to enforce the sort of covenant outlined above
by injunction, if the following conditions are fulfilled.
(a) The covenant must be substantially negative. Much depends upon the words used in
the covenant, and an undertaking which seems prima facie to be positive may imply a
..
EL_C22.qxd 3/26/07 1:07 PM Page 645
negative undertaking and this may then be enforced (see Tulk v Moxhay (1848), Chapter 10).
A covenant to use a house as a dwelling house implies that it will not be used for other
purposes, and would be enforceable in the negative sense. If the covenant requires the
covenantor to spend money, it is not a negative covenant. Thus in Rhone v Stephens [1994]
2 WLR 429 it was held by the House of Lords that a positive covenant to repair the roof of
an adjacent property did not run with the land, i.e. it did not pass the repairing duty to a
subsequent owner.
(b) The covenant must benefit the land. It is often said that the covenant must ‘touch and
concern’ the land and must not be merely for the personal benefit of the claimant. Restrictive
covenants usually endeavour to keep up the residential character of the district and benefit
the land by preserving value and amenities as a residential property.
(c) The person claiming the benefit must retain land which can benefit from the
covenant taken. If X owns a piece of land which he splits up into two plots, selling one plot
to Y and taking a restrictive covenant in favour of the plot he has retained, then he can
enforce the covenant so long as he retains the land to be benefited. If X now sells the plot he
had retained, he will not be able to enforce the covenant for the future, although the
purchaser from X will be able to do so.
Kelly v Barrett, 1924 – Restrictive covenants: land must benefit (495)
There is an exception to this rule in the case of building schemes involving an estate of houses.
Here the covenants are taken by the owner of the land from each person purchasing a house,
and although the owner does not retain any of the land, the covenants may be enforced by
the purchasers as between themselves. However, a building scheme will not be implied simply
because there is a common vendor and the existence of common covenants. It was at one time
thought that there must be a defined area and evidence of laying out in lots (Re Wembley Park
Estate Co Ltd’s Transfer [1968] 1 All ER 457). However, in Re Dolphin’s Conveyance [1970] 2 All
ER 664, Stamp, J held that so long as the covenants held in the conveyances were, as a matter
of construction, intended to give the purchasers of the parcels mutual rights, this was
sufficient to make them enforceable and there was no need, in particular, to consider lotting.
Since restrictive covenants are in general enforceable only in equity, the question of notice
arises. In fact, restrictive covenants created after 1925 are void against a purchaser of the legal
estate, even one who has notice of them, unless they are registered as land charges. There is
an exception as regards covenants between lessor and lessee. These cannot be registered and
will be binding only if known to an assignee of the lease. In practice, it is usual for an assignee
22
to inspect the lease. As regards covenants created before 1 January 1926, they bind all persons
who acquire the land which is subject to them with the exception of a purchaser for value of
the legal estate in the land without notice, actual or constructive, of the covenants.
The general position regarding assignment of leases and the enforcement of covenants
against the assignee is also dealt with by the Landlord and Tenant (Covenants) Act 1995,
which has already been considered.
Under s 84 of the Law of Property Act 1925 (as amended by the Law of Property Act 1969,
s 28(1) and Sch 3), the Lands Tribunal has power, on the application of any person interested,
to discharge or modify a restrictive covenant. However, a developer may try to obtain indem-
nity insurance against restrictions on development caused by possible restrictive covenants.
The time and expense factors involved in a Lands Tribunal application often mean that the
developer will choose the insurance route, and get his compensation for his loss that way if
the covenant is enforceable against him.
..
EL_C22.qxd 3/26/07 1:07 PM Page 646
Whether a covenant runs with the land depends upon the words. In Roake v Chadha [1983]
3 All ER 503 the covenant between plots of land was that no more than one house should be
built on each plot. The covenants were expressed to pass only if specifically assigned. A plot was
sold to the defendant but the covenant was not assigned. He proposed to build more than
one house on the plot and the claimant, who owned an adjacent plot, tried to enforce the
‘one house’ covenant. It was held that he could not do so because the covenant had not been
specifically assigned as the agreement required.
Restrictive covenants and competition law

Situations have occurred where the owner of a building has sold it to a purchaser subject to
an anti-competitive covenant. For example, suppose a cinema company sells one of its
art deco listed cinemas to a purchaser with a covenant that it cannot be used as a cinema
again and this is to support an out-of-town multiplex that the cinema company has set up.
The purchaser may find that since the building is listed he or she cannot get permission for
a change of use to other activities e.g. a health club, and since it cannot be used as a cinema
the purchaser is in difficulties in regard to the purchase. The government may have to
consider a change in the law otherwise properties may be left unsold or unused which is
undesirable. Problems relating to land agreements are not really resolved by the Competition
Act 1998 and the Enterprise Act 2002 which are considered in Chapter 16.
Enforcing restrictive covenants

Restrictive covenants may be enforced by an action for damages or a claim for an injunction
prohibiting breach. As we have seen, an action for an injunction may be lost by delay and/or
acquiescence leaving a claim for damages only (see further Chapter 18).
In Gifford v Graham (1998) The Times, 1 May a landowner had the benefit of a restrictive
covenant over adjoining land. With full knowledge of his legal rights he failed to seek relief
to restrain the unlawful erection of an indoor riding school and to prevent the unlawful use
of the covenanted land by its owner. It was held that he could not be granted an injunction
for the demolition of the building and to prevent the use of the land for the riding school
business. The landowner was only entitled to damages for the injury to his legal rights.
Acquiescence had barred his right to injunctive relief.
There is a presumption that restrictive covenants are intended to bind subsequent owners
but this presumption is rebutted (does not apply) if the conveyance states that the relevant
covenants are not binding. In any case, the conveyance should refer to successors in title
otherwise the covenant might be regarded as operative only between the parties to the con-
veyance and not beyond. This is particularly likely where some covenants are stated to apply to
successors and others remain silent as to this. In such a case, the presumption in s 79 of the Law
of Property Act 1925 will not apply. The silence indicates a contrary intention as in Morrells of
Oxford Ltd v Oxford United Football Club Ltd [2001] Ch 459, a ruling by the Court of Appeal.
The transfer of land

The material in this section will be changed in parts under the provisions of the Electronic
Communications Act 2000 that received the Royal Assent on 25 May 2000. The Cabinet
Office has identified some of the departmental priorities for using the Act to update legisla-
tion to allow for the electronic option in conveyancing which could cut the time for buying
..
EL_C22.qxd 3/26/07 1:07 PM Page 647
property from months to weeks, at least so far as the legal process is concerned. The ambiti-
ous proposals include the setting up of nationwide databases allowing the buying, selling
and mortgaging of homes online. Without this updating, electronic conveyancing would
not be possible since the contract of sale of the land and the deed required to convey the
title to it must be in writing and signed. The Law of Property Act 1925 and related statutes
passed in that year, together with the Law of Property (Miscellaneous Provisions) Act 1989,
are the main measures requiring change. However, since the change to electronic methods
may take some time, the following materials should be studied since they represent current
procedures.
As regards developments, the paper conveyancing process is speeded up by the Land Regis-
tration Act 2002 which came into force on 13 October 2003 in terms of electronic searching
of title at the Land Registry. The Registry began piloting e-conveyancing as such in 2006.
The latest position is as follows:
n e-conveyancing will be set up in five tranches between 2006 and 2010.

n Tranche one began in the autumn of 2006 and was placed before a small and controlled
number of pilot users in Portsmouth, Fareham and Bristol. The pilot had only limited fea-
tures for users. It ran for six months and was not extended beyond the pilot areas.
n Tranche 2 will take place as a pilot in 2007. Features will be expanded to include, for
example, electronic signatures.
n Tranches 3, 4 and 5 will come in in 2008, 2009 and 2010, each adding more electronic
facilities, including electronic transfer of funds, until a complete e-conveyancing service
exists. Relevant changes in the text will be incorporated as the service moves to comple-
tion. The issue is mainly one for solicitors in practice and there seems little point in going
into depth here about the changes while they are merely at a limited pilot stage.
It is usual, when a disposition of land is contemplated, to draw up a contract. For a contract

of sale to be valid both parties must have contractual capacity, the contract must be legal,
there must be clear agreement on all the essential terms, and acceptance of the offer must be
unconditional. As we have seen, contracts for the sale or other disposition of land are invalid
unless they are in writing (Law of Property (Miscellaneous Provisions) Act 1989 (see further
Chapter 11)).
When a valid contract for sale exists, the purchaser acquires an equitable interest in the
property and the vendor is in effect a qualified trustee for him. Thus, if the property increases
in value between contract and completion, the purchaser is entitled to the increase and similarly
he must bear any loss. This is particularly important in cases where property is destroyed by
fire between contract and completion, since the purchaser would still have to pay the
purchase money, even though he only received a conveyance of the land with the useless
22
buildings on it. It is now provided by s 47 of the Law of Property Act 1925 that in such a case
the purchaser may become entitled to money payable on an insurance policy maintained
by the vendor. However, it is prudent for the purchaser to take out his own insurance in case
the vendor has none or his policy is defective. If, as is usual, the Law Society’s Standard
Conditions of Sale are used, they expressly state that the risk of damage to the property stays
with the seller until completion. Thus they impose an obligation on the seller to transfer the
property in the same physical state as it was at the date of the contract (subject to fair wear
and tear). If between contract and completion there is a change in the physical state of the
property which makes it unusable for the contract purpose, the buyer is given an unlimited
right to rescind.
On a sale of business property it is fair to say that the above provisions have been resisted,
e.g. by modifying the Standard Conditions. For business property, therefore, the buyer will
usually need to insure from exchange.
..
EL_C22.qxd 3/26/07 1:07 PM Page 648
The vendor has a lien on the property sold to the extent of the unpaid purchase money
and may enforce this by an order for sale; this lien may be registered as a general equitable
charge. The purchaser has a similar lien in respect of money paid under the contract prior to
conveyance.
On a sale of land it is usual to use a standard form of contract prepared by the Law Society
since this saves much trouble in drafting. In what is called an open contract for the sale of
land, the vendor must under s 23 of the Law of Property Act 1969 show a title for at least
15 years, beginning with a good ‘root of title’, i.e. a document dealing with the whole legal
and equitable interests in the land. It may be necessary to go back more than 15 years in order
to find such a document. The vendor prepares an abstract of title, listing all the relevant
documents in connection with its establishment, and he must produce these documents
in order to justify the abstract of title he has prepared. It should be noted that all the above
matters are attended to by the parties’ solicitors.
The Administration of Justice Act 1985 and the Courts and Legal Services Act 1990 have
removed the monopoly on conveyancing which has been possessed by solicitors for many
years (see Chapter 3).
A contract for the sale of land will normally contain a completion date which is the time by
which the transaction must be concluded. The transfer of land involves the following stages:
(a) The preparation of the contract by the seller’s solicitor.
(b) The exchange of contracts between the vendor’s and purchaser’s solicitors, when the pur-
chaser pays a deposit, usually 10 per cent of the purchase money though the matter is one for
negotiation and deposits of only 5 per cent are sometimes taken. It should be noted that a
high deposit which is not returnable if the contract does not go through can be set aside by the
court as a penalty (see Chapter 18). In Workers Trust and Merchant Bank v Dojap Investments
[1993] 2 WLR 702 a non-returnable deposit of 25 per cent was set aside.
The Standard Conditions of Sale provide that the deposit is to be held by the seller’s solici-
tors as stakeholders and paid to the seller on completion together with accrued interest. This
keeps it safe in the remote event of the buyer being entitled to rescind the contract and claim
return of the deposit. Where there is a related purchase by the seller the Standard Conditions
allow the seller to use the deposit in the related purchase. If there was to be a rescission by
the buyer the buyer’s claim for a return of deposit would then shift from the seller’s solicitor
to the seller personally. Except at auction the Standard Conditions require a deposit to be
paid by a banker’s draft or cheque drawn on the solicitor’s bank account. Consequently, the
solicitor will ask a buyer for the deposit funds, made payable to the solictor’s firm, some days
before exchange of contracts is expected.
(c) The delivery by the vendor’s solicitors of an abstract of title, or as is more usual today,
copies of the documents, e.g. previous conveyances, upon which the vendor bases his title.
(d) The examination of this title by the purchaser’s solicitors and the checking of the abstract
against the actual deeds to see that it is correct.
In any case, the Law of Property (Miscellaneous Provisions) Act 1994 provides for title guar-
antees which apply on a transfer of land whether for consideration or not. The Act applies to
leases and property other than land such as intellectual property, e.g. copyright. Transferors
of the relevant property will give implied guarantees.
If the property is sold with a ‘full title guarantee’ or with a ‘limited title guarantee’, there
will be implied the following covenants:
n that the person making the disposition has the right (with the agreement of any other
person conveying the property) to dispose of the property as he purports to; and
..
EL_C22.qxd 3/26/07 1:07 PM Page 649
n that that person will, at his own cost, do all he reasonably can to give the person to whom
he disposes of the property the title he purports to give.
The full guarantee, in addition, warrants freedom from encumbrances, e.g., mortgages,
while the limited guarantee gives freedom from encumbrances limited to matters occurring
since the last disposition for value. The limited title guarantee is intended for lenders and
receivers not ordinary purchasers. Furthermore, the title warranties are only implied in full in
the absence of contrary specific provisions.
(e) After all outstanding queries have been solved, a conveyance is prepared by the purchaser’s
solicitors which is sent to the vendor’s solicitors for approval. The draft conveyance may be
exchanged a number of times before agreement is reached. Where the land is registered, a
simpler form of transfer deed is used.
(f ) Just before completion, the purchaser’s solicitors will make the necessary searches in the
Land Charges Register and in the register maintained by the appropriate local authority to
see what encumbrances are registered in respect of the property.
( g) An appointment is then arranged for completion and the purchaser hands over the
money, the vendor handing over the conveyance, which he has signed, together with the
title deeds. This brings the transaction to a conclusion. However, today there need not be
attendance at an office. Completion is very often carried out by post and payment is by bank
telegraphic transfer.
The above procedure refers to unregistered land where the need to examine title is to
some extent cumbersome and expensive. The Land Registration Act 1925 provides that the title
to land can be examined by and registered with the state and that this is followed by the issue
of a certificate guaranteeing ownership. Where there is a sale of registered land, the certificate
is handed over and the name of the new owner registered. A transfer, rather than a conveyance,
is prepared. This is a more simple procedure than the one outlined above for unregistered
land and the legal fees for the transaction are less.
Entry of price paid or value declared

The Land Registration (No 3) Rules 1999 (SI 1999/3462) provide that from first registration
of land and on subsequent changes of proprietorship the Land Registry will, whenever
practicable, enter on the register the price paid or the value declared. The entry will be
removed when the next transfer is registered. The information should be helpful to creditors
and former spouses seeking settlements. The Land Registry has announced that house price
information is available in regard to any property sold in England and Wales since 1 April
22
2000 on the Land Registry website at www.landreg.gov.uk. There is a charge (currently £2)
for each search.
Home Information Packs

The Housing Act 2004 introduces, among other things, the Home Information Pack (HIP),
scheduled to come into force in June 2007 as an essential ingredient of the sale of domestic
property. It must be prepared by or on behalf of the seller. Its contents were originally to be
quite extensive and its cost high, estimated at £800 for a semi-detached house and £1,000 for
a detached house. After much protest and lobbying of Parliament, the HIP will come into
force as planned in June 2007 but will no longer be required to contain home condition
reports. Instead, it will contain only energy performance certificates (introduced by EU law)
and local planning searches.
..
EL_C22.qxd 3/26/07 1:07 PM Page 650
Personal property
We have already mentioned that personal property is divided into two classes – choses in
action and choses in possession, the latter being divided into chattels real (i.e. leaseholds) and
chattels personal. We have already dealt with leaseholds, and the sale of chattels personal
has been codified by the Sale of Goods Act 1979, a full study of which would not be appro-
priate to a book of this nature. The assignment of choses in action is considered later in this
chapter.
Mortgages of land
The following types of mortgage are relevant.
Legal mortgage of freeholds

Under the 1925 legislation the mortgagor (the borrower) does not divest himself of his legal
estate, but grants to the mortgagee (the lender) a demise (i.e. a lease) for a term of years
absolute. Thus, if X owns Blackacre and borrows money on mortgage from Y, he will grant Y
a term of usually 3,000 years in Blackacre, both agreeing that the term of years will end when
the loan is repaid. X will also agree to pay interest on the loan at a stipulated rate.
Alternatively, under the provisions of s 87 of the Law of Property Act 1925 it is possible to
create a legal mortgage of freeholds by means of a short deed stating that a charge on the
land is created. Such a charge does not give a term of years, but the mortgagee has the same
rights and powers as if he had received a term of years under a mortgage by demise.
Before 1926 mortgages were created by conveying the freehold to the mortgagee. Since
1925 an attempt to create a mortgage by this method operates as a grant of a mortgage lease
of 3,000 years, subject to cesser on redemption (Law of Property Act 1925, s 85). This is how
solicitors arrived at the enormously long period of lease in a mortgage by demise. There is no
need to use such a long term.
Legal mortgage of leaseholds

If X, the owner of a 99-year lease of Blackacre, borrows money on mortgage from Y, he
may grant Y a sub-lease of, say, 99 years less 10 days, both agreeing that when the loan is
repaid the term shall cease. X also agrees to pay interest. Such a term is known as a mortgage
by demise.
Alternatively, a legal mortgage of leaseholds may be created by a charge by way of legal
mortgage under s 87 of the Law of Property Act 1925, if made by deed. No sub-lease is created
but the remedies of the mortgagee are the same as if it had been.
When a person has borrowed money by mortgaging property, he may still be able to
borrow further sums, if the amount of the charge is not equal to the full value of the property
and there seems to be adequate security for further loans. The owner of freehold land may
grant a term of 3,000 years plus one day to another mortgagee, whilst the owner of a lease
may grant a second sub-lease of, say, 99 years less nine days. Alternatively, a second charge
by way of legal mortgage may be created by a further deed.
The only limit to further borrowing on second and subsequent mortgages is that of finding
a lender who is prepared to become a second, third or fourth mortgagee.
..
EL_C22.qxd 3/26/07 1:07 PM Page 651
Equitable mortgage
A mortgagee who receives a mere equitable interest in the land is said to have an equitable
mortgage. Thus, if the borrower’s interest is equitable, e.g. a life interest, then any mortgage
of it is necessarily equitable. Such an interest may be mortgaged by lease or charge, as in legal
mortgages, or by a deposit of title deeds with the lender, usually accompanied by a memor-
andum explaining the transaction. Such mortgages must be in writing and signed by the
borrower or his agent (Law of Property Act 1925, s 53). The requirement of writing is reinforced
by s 2 of the Law of Property (Miscellaneous Provisions) Act 1989 (see Chapter 11). So writing
is required to accompany the deposit of title deeds. A mere deposit of the deeds is not enough
(see United Bank of Kuwait v Sahib (1996) The Times, 13 February; Court of Appeal).
An informal mortgage of a legal estate or interest creates an equitable mortgage, e.g. an
attempt to create a legal mortgage otherwise than by deed.
Where there is a binding agreement to create a legal mortgage, but the formalities necessary
to do so have not been carried out, equity regards the agreement as an equitable mortgage.
The agreement can be enforced by specific performance so that the mortgagee can obtain a
legal mortgage from the borrower under the rule in Walsh v Lonsdale (1882). Bexfore there is
a binding agreement there must be either written evidence of the agreement, signed by the
borrower or his agent, or a sufficient act of part performance by the lender. Given the above
requirements the parties can be required to execute a legal mortgage by suing in equity for
specific performance.
Joint borrowers: liability

Where for example a business partnership obtains a joint facility for the business secured on
property jointly owned by the partners who are joint borrowers and if the lender has to sell
the mortgaged property to recoup the loan and there is a shortfall between what is owed and
the sale price then where, as is usual, the mortgage contains a joint and several liability clause
each borrower is liable under the provision for several liability to pay off the whole balance
to the lender with a right to seek a contribution against the other joint borrower(s) (see
AIB Group (UK) plc v Martin [2002] 1 All ER 353). The same would be true of a non-business
mortgage that carried a joint and several liability clause.
Rights of the mortgagor or borrower

The borrower has a right to occupy the land, unless the lender has taken possession as where
the borrower has defaulted on the repayments. There is also a statutory right in s 99 of the Law
22
of Property Act 1925 to grant leases which bind the lender and the borrower for up to 50 years
or a building lease for 999 years. In practice, however, the mortgage invariably excludes the right
except with the consent of the lender as s 99(13) allows. The business application can arise
where a borrower who cannot currently sell the property wishes to rent it but the lender
refuses to allow this. The borrower may challenge this decision in court. For example in
Citibank International plc v Kessler [1999] 2 CMLR 603 the borrower challenged the right of the
lender to exclude the letting power on the basis that it was contrary to what is now Art 39 of
the Treaty of Rome. Mr Kessler had bought a house in England with a view to assisting with
BMW’s operations here. He moved back to Germany and wished to let it since structural
defects and a boundary dispute made it impossible to sell. Article 39 deals with restriction on
movement of workers within the EU. The Court of Appeal ruled that his case failed. It was not
the object of Art 39 to hinder a bank’s financial judgements in this way when it was protect-
ing its security.
..
EL_C22.qxd 3/26/07 1:07 PM Page 652
A major right of the mortgagor is the right to redeem (or recover) the land. Originally at
common law the land became the property of the lender as soon as the date decided upon for
repayment had passed, unless during that time the loan had been repaid. However, equity
regarded a mortgage as essentially a security, and gave the mortgagor the right to redeem the
land at any time on payment of the principal sum, plus interest due to the date of payment.
What is more important, this rule applied even though the common-law date for repayment
had passed. This right, which still exists, is called the equity of redemption, and there are two
important rules connected with it:
(a) Once a mortgage always a mortgage. This means that equity looks at the real purpose
of the transaction and does not always have regard to its form. If equity considers that the
transaction is a mortgage, the rules appertaining to mortgages will apply, particularly the right
to redeem the property even though the contractual date for repayment has passed, or has not
yet arrived. In the latter case, however, the mortgagor must generally give six months’ notice
of his intention to redeem, or pay six months’ interest in lieu, so that the mortgagee may
find another investment. However, if the parties contract at arm’s length, and there is no
evidence of oppression by the mortgagee, the court will endeavour to uphold the principle of
sanctity of contract and will enforce any reasonable restriction on the right to redeem.
Knightsbridge Estates Trust Ltd v Byrne, 1939 – Right of redemption

postponed (496)
(b) There must be no clog on the equity of redemption. This means that:
(i) the court will not allow postponement of the repayment period for an unreasonable
time; and
(ii) the property mortgaged must, when the loan is repaid, be returned to the borrower in
the same condition as when it was pledged.
Noakes v Rice, 1902 – No clog on the equity of redemption (497)
Nevertheless, particularly in modern times, so long as the parties are at arm’s length when
the loan is negotiated, equity will allow a collateral transaction.
It is worth noting that the mortgagor may, where he is in possession of the land, grant
leases to third parties subject to any special agreement to the contrary.
In practice, the right in the borrower to lease the property is excluded in accordance with
the lender’s wishes and the terms of the mortgage require his consent, as s 99(13) of the Law
of Property Act 1925 allows. The validity of this exclusion has been challenged in the courts
when properties subject to a mortgage cannot be sold in a flat market and the borrower wishes
to move to other premises and lease the old one. These challenges have failed (see e.g. Citibank
International plc v Kessler [1999] 2 CMLR 603 where the challenge that failed was based on
infringement of the Treaty of Rome, Art 48 (now 39) (free movement of workers)). The Court of
Appeal ruled that the Article was not intended to hinder the financial judgement of lenders.
Kreglinger v New Patagonia Meat, 1914 – Collateral transaction (498)

Cityland and Property v Dabrah, 1967 – An unreasonable collateral
advantage (499)
(c) Sections 140A and 140B of the Consumer Credit Act 1974 (as inserted by the Consumer
Credit Act 2006) allow the court to make orders in regard to unfair relationships between
..
EL_C22.qxd 3/26/07 1:07 PM Page 653
creditors and debtors where a term or terms of an agreement are taken to be unfair to the
debtor. The court can make a variety of orders to redress the situation, including altering the
terms of the agreement and reducing or discharging any sum payable under the agreement by
the debtor.
Companies and partnerships of more than four partners are excluded from the unfair rela-
tionship test.
(d) A term must not be in restraint of trade. This has already been considered in Chapter 16
where the case of Esso v Harper ’s Garage (1967) was discussed.
(e) Undue influence. A mortgage may be set aside for undue influence by the lender or his
agent (see Chapter 13).
Powers and remedies of the legal mortgagee

A legal mortgagee (the lender) has the following concurrent powers and remedies.
To take possession
This right does not depend upon default by the mortgagor, but the mortgagee will normally
only enter into possession of the property under the term of years granted to him, or under
the charge by way of legal mortgage, when he is not being paid the sum due, and when he
wishes to pay himself from the proceeds of the property. In addition, the court will grant a
possession order where an insurance policy which is the security has been allowed to lapse by
the borrower (Western Bank v Schindler [1976] 2 All ER 393). This is not a desirable remedy,
however, because when the mortgagee takes possession he is strictly accountable to the
mortgagor, not only for what he has received but for what he might have received with the
exercise of due diligence and proper management.
White v City of London Brewery Co, 1889 – When a mortgagee takes

possession (500)
In recent times mortgage lenders have been extracting from the courts at the sale time not
only an order for possession but also a money judgment. If during a period of negative equity
the sale of the property does not cover the loan, the money judgment can be used to attack
other property of the borrower and there is no need to go back to court. This approach was
approved by the Court of Appeal in Cheltenham & Gloucester Building Society v Grattidge (1993)
25 HLR 454.
22
If the mortgagee is simply concerned to intercept rents, where the mortgaged property is
let and the mortgagor is a landlord, he will do better to appoint a receiver under the Law
of Property Act 1925, s 109. Most mortgagees who ask for a possession order do so in order
to sell with vacant possession. The Administration of Justice Act 1970, which is concerned,
amongst other things, with mortgage possession actions, reinstates the old practice of the
Chancery masters by allowing the court to make an order adjourning the proceedings, or sus-
pending or postponing a possession order provided it appears that the mortgagor is likely to
be able to pay within a reasonable time any sums due under the mortgage (s 36). However, the
court cannot suspend the execution of an order for possession indefinitely and must specify
the period of suspension (Royal Trust Co of Canada v Markham [1975] 3 All ER 433).
The Act applies wherever a mortgage includes a dwelling house even though part may be
used for business purposes. Unfortunately, it was held in Halifax Building Society v Clark
[1973] 2 All ER 33 that where, as is often the case, the mortgage provided that the whole sum
..
EL_C22.qxd 3/26/07 1:07 PM Page 654
should become payable on default by the mortgagor, the court’s power to adjourn or stay
execution under s 36 could only be exercised if it appeared likely that the mortgagor could
pay the whole sum within a reasonable period. This plainly defeated the intention of the 1970
Act in most cases as the period of the stay envisaged is short, and the likelihood of the
mortgagor being able to repay the entire redemption figure remote. Accordingly, s 8 of
the Administration of Justice Act 1973 now provides that a court may treat as due under
the mortgage only those instalments actually in arrear, but shall not exercise the power to
postpone the order for possession unless the mortgagor will be able to catch up within a
reasonable period. This means that not only must he be able to pay the instalments due
month by month but also the arrears within a reasonable time.
It should be noted that where a house is owned by a husband and is mortgaged to secure
the loan, the interest of the wife occupying the home overrides the lender’s claim under the
mortgage and the court may refuse a possession order (Williams & Glyn’s Bank Ltd v Boland
(1980) (see later in this chapter)).
It is worth noting that the discretion of the court to refuse an order for possession has been
widened by the Trusts of Land and Appointment of Trustees Act 1996, s 15. In general terms,
before this Act the primacy of the lender seeking the order was indicated by the case law.
However, now where, say, the matrimonial home is charged as security for a mortgage and is
held on trust by husband and wife as joint tenants, the court may consider to a greater degree
than before, e.g., the potential homelessness of children of the family and the general welfare
of the family in residence. Having used this wider discretion in Mortgage Corporation v Shaire
[2001] Ch 743 the court refused to grant a possession order to the claimants for mortgage
arrears.
However, there is nothing to stop the lender from suing the borrower on his personal
undertaking to pay the debt, even though if he or she cannot pay the judgment there may be
a bankruptcy and the trustee in bankruptcy may seek an order to sell the property. A claim
on the borrower’s covenant to repay is not an abuse of process said the Court of Appeal in
Alliance and Leicester plc v Slayford [2000] NLJR 1590.
Taking possession without a court order

In Ropaigealach v Barclays Bank plc [2000] 1 QB 263 the Court of Appeal ruled that a lender
could take possession at common law without a court order. In the case the lender served a
valid demand for payment to which the borrower did not respond and then wrote to him
telling him that the house was up for sale. The sale was later declared by the court to be
valid. The borrower was not living in the house at the time and although this undoubtedly
facilitated the sale it does not seem essential to the possession ruling.
Possession order and money judgment

Lenders have been extracting from the courts in the same proceedings an order for possession
and also a money judgment. If the sale of the property does not cover the loan then the
money judgment can be used to attack other property of the borrower to get in the shortfall
and there is no need to go to court again. This approach was sanctioned by the Court of
Appeal in Cheltenham and Gloucester Building Society v Grattidge (1993) 25 HLR 454. It is a
particularly useful approach in times of negative equity.
Foreclosure
The mortgagee may obtain a foreclosure order from the court if the mortgagor fails to pay for
an unreasonable time. The first order is a foreclosure order nisi providing that the debt must be
..
EL_C22.qxd 3/26/07 1:07 PM Page 655
paid within a stated time. If it is not so paid, the order is made absolute and the property
becomes that of the mortgagee, the mortgagor’s equity of redemption being barred, and the
property vesting in the mortgagee, free from any right of redemption either in law or equity.
Such orders are seldom used, for it is still open to the court to reopen the foreclosure, i.e. to
give the mortgagor a further opportunity to redeem. In addition, the court has power to
order a sale instead of foreclosure on the application of any interested party. An order for
sale is likely to be made, e.g., if the value of the property exceeds the mortgage debt.
Section 36 of the Administration of Justice Act 1970 excluded the power to postpone a fore-
closure order because it was considered that the court’s power to give the mortgagor time
to redeem when granting the decree nisi was an adequate remedy. The Payne Committee
recommended including actions for foreclosure, and they are now included by the
Administration of Justice Act 1973, s 8(3). Thus the courts now have power to postpone an
order for foreclosure.
Right of sale
Normally this is the most valuable right of the mortgagee. Subject to certain conditions
he can, on the default of the mortgagor, sell and convey to a purchaser the whole of the
mortgaged property, and recoup himself out of the proceeds. Unless the mortgagee is a build-
ing society (Building Societies Act 1986, Sch 4), he is not a trustee of the power of sale for the
benefit of the mortgagor. However, he must not fraudulently, wilfully or recklessly sacrifice
the property of the mortgagor (Kennedy v De Trafford [1897] AC 180) and in addition owes a
duty to the mortgagor to take reasonable care to obtain the best price that can be had in the
circumstances (Cuckmere Brick Co Ltd v Mutual Finance [1971] 2 All ER 633).
Strictly speaking, the power of sale only arises when the money lent on mortgage has
become due and the fixed date for redemption is past. However, most mortgages are drafted
to provide that the mortgage money is due immediately on the signing of the mortgage
deed, though the lender will not try to recover it at once if the terms of the mortgage are
complied with.
The general rule is that a mortgagee cannot sell to himself or to his nominee. Although a
mortgagee is not a trustee of the power of sale and need not get the best possible price
(though a building society must), the conflict of interest where he sells to himself is one
which equity generally forbids. However, it is thought that the mortgagee could purchase the
property, subject to the mortgage, if he had leave from the court, which is the general rule for
trustees who wish to buy the trust property, and provided the mortgagor did not object and
possibly also if no other purchaser at an adequate price could be found. It is also probable
that a mortgagee could buy the property at an auction since in that event the sale is not
directly to himself but through an intermediary, i.e. the auctioneer, and given that there
22
is no collusion between the mortgagee and the auctioneer there would seem to be no good
reason why the mortgagee should not buy the property in.
In Tsi Kwong Lam v Wong Chit Sen [1983] 3 All ER 54, the Privy Council decided that a sale
by a mortgagee exercising his power of sale to a company in which he had an interest would
not necessarily be banned by the law provided the sale was made in good faith and that the
mortgagee had taken reasonable precautions to obtain the best price reasonably obtainable at
the time, namely by taking expert advice as to the methods of sale and the steps which ought
reasonably to be taken to make the sale a success.
It should be noted that the court may, at its discretion, under s 91 of the Law of Property
Act 1925, order the sale of a mortgaged property at a value insufficient to repay the mortgage
(see Palk v Mortgage Services Funding [1993] Ch 330). This at least enables the borrower to clear a
large amount of his borrowing so that interest accruing on the balance is reduced to manage-
able proportions.
..
EL_C22.qxd 3/26/07 1:07 PM Page 656
The Palk case was applied in Polonski v Lloyds Bank Mortgages Ltd [1998] 1 FCR 282, where
the High Court held that in addition to financial matters relating to the clearing of the mort-
gage it could also take into account social considerations. The claimant was a single parent
living in a run-down area who wished to sell her property to move to an area where she
would have a better chance of employment and her children would have better schooling.
Sale price and guarantors

Failure to obtain the current market value is a breach of duty certainly in the case of a build-
ing society, but it does not release a guarantor of the loan from all liability but rather reduces
to that extent the amount for which the guarantor is liable (see Skipton Building Society v
Bratley (2000) The Times, 12 January and Stott v Skipton Building Society [1999] All ER (D) 1408).
To sue for the money owing

The mortgage is a pledge for the repayment of the money, but mortgagors almost invariably
give a personal covenant to repay. This is of value should the property be destroyed or lose
its value. When the date fixed for redemption is passed, the mortgage money is due and
the mortgagee can sue for it. He will rarely do so, for in most cases the other remedies will be
more satisfactory. (But see above possession orders and money judgments which may be
asked for.)
An action to recover the sum lent is barred unless it is brought within 12 years from the
date when the right to receive the money accrues which is the date fixed by the mortgage
deed for repayment. However, on each occasion that some part of the sum lent or interest on
it is paid or the borrower gives a written acknowledgement of his liability to pay the period of
12 years begins to run again so far as what is left to pay is concerned. In the case of interest,
only arrears for six years are recoverable (Limitation Act 1980).
The right to appoint a receiver

The Law of Property Act 1925, s 109 gives the mortgagee the right to appoint a receiver to
receive the rents and profits on the mortgagee’s behalf in order to pay the money due.
However, since the powers under the Law of Property Act 1925 are limited, the mortgage deed
frequently contains a power to appoint a receiver with wide powers given in the deed. The
receiver is deemed to be the agent of the mortgagor, who is liable for his acts and defaults
unless otherwise provided by the mortgage. The mortgagee thus avoids the disadvantage
of strict accountability to which he would be subject if he entered himself because it is the
borrower not the lender who is responsible for the acts and defaults of the receiver.
Remedies of equitable mortgagees

Where the mortgage is equitable and is created by deed, then the mortgagee has virtually the
same remedies as have been set out above. Otherwise, if the mortgage is by a deposit of title
deeds and a written mortgage instrument, then the mortgagee must ask the court:
(a) for an order to sell; or

(b) for an order appointing a receiver.
Other rights of mortgagees

A mortgagee has other rights and he may, where the mortgage is created by deed, insure the
mortgaged property against loss by fire up to two-thirds of its value, and charge the premiums
on the property in the same way as the mortgage money.
..
EL_C22.qxd 3/26/07 1:07 PM Page 657
A mortgagee has a right to the title deeds of the property, and if the mortgage is redeemed
by the mortgagor, the mortgagee must return the deeds to him in the absence of notice of
a second or subsequent mortgage, in which case the deeds should be handed to the next
mortgagee.
There are other important rights which a mortgagee may exercise in appropriate circum-
stances as follows.
Consolidation
Where a person has two or more mortgages, he may refuse to allow one mortgage to be
redeemed unless the other or others are also redeemed. This right is particularly valuable
where property might fluctuate in value, and where a mortgagor might redeem one mortgage
where the security was more than adequate, leaving the mortgagee with a debt on the other
property not properly secured.
Consolidation is only possible if the right to consolidate was reserved in one of the
mortgage deeds. The contractual date for redemption must have passed on all mortgages
and they must have been created by the same mortgagor, though not necessarily in favour of
the same mortgagee. Nevertheless, in such cases where it is proposed to consolidate two
mortgages, both the mortgages must have been vested in one person at the same time, as
both the equities of redemption were vested in another.
Tacking
The right to tack may bring about a modification of the priority of mortgages. It is now
confined to the tacking of further advances. Thus, where a person has lent money on a first
mortgage and there are second and third mortgages, if the first mortgagee agrees to advance
a further sum, he may tack this to his first mortgage and thus get priority over the second and
third, which would normally rank before the tacked mortgage. This can now only be done if the
intervening mortgagees agree, or if the further advance is made without notice of an interven-
ing mortgage, or if the prior mortgage imposed an obligation to make further advances.
Attornment clause
A mortgage may contain an attornment clause by which the borrower attorns or acknow-
ledges himself as a tenant at will, or from year to year, of the lender at a nominal rent such
as a peppercorn. The advantage of such a clause was that it entitled the lender to evict the
borrower for failure to pay the mortgage instalments and so obtain possession more
speedily. However, changes in the rules of court from 1933 to 1937 made a speedy procedure
available to mortgagees as such, and there is now no substantial advantage in an attorn-
22
ment clause.
Solicitor disclosure
Legal action by mortgage lenders against solicitors has prompted the Law Society and the
Council of Mortgage Lenders to agree a standard set of conveyancing instructions under
which solicitors are obliged to disclose relevant information on borrowers as part of the
conveyancing service they offer to lenders. This will involve disclosure by solicitors of
information in their possession to the effect that the borrower has, e.g., existing mortgage
arrears. This will mean that borrowers with a record of bad debts will find it harder to get a
mortgage. Solicitors have been successfully sued, and on an increasing scale, for failing to
make these disclosures to mortgage lenders on the grounds of confidentiality which will now
no longer apply, at least in this context.
..
EL_C22.qxd 3/26/07 1:07 PM Page 658
Priority of mortgages
The Land Charges Act 1925 introduced the principle of registering charges on land. The
object of searching the Land Charges Register is to discover the rights, if any, of third parties
which are enforceable against the land. It is a general principle that a purchaser or mortgagee
of land is deemed to have actual notice of all third-party rights capable of registration and actu-
ally registered, whereas he acquires his interest in the land free from third-party rights capable
of registration and not registered. There are five separate registers kept in the Land Charges
Department of the Land Registry. Search is usually done by filling in an appropriate form and
sending it to the Land Charges Superintendent. This results in an official search certificate.
Where there is a mortgage of a legal estate with deposit of title deeds, the mortgage ranks
from the date of its creation and such a mortgage cannot be registered.
Where there is a mortgage of a legal estate without deposit of title deeds, the mortgage
ranks from its date of registration as a land charge.
Regarding mortgages of equitable interests, the question of priority is based on the rule in
Dearle v Hall (1828) 3 Russ 1, and such mortgages rank from the date on which the mortgagee
gave notice of his mortgage to the trustees of the equitable interest, though such notice will
not postpone a previous mortgage of which the mortgagee giving notice was aware. Equitable
mortgages of interests other than equitable interests rank in priority according to the date
of creation. Thus, an equitable mortgage created in January 1996, would take priority over
one created in May 1998. Legal mortgages take precedence over equitable mortgages, but
an equitable mortgagee who obtains a legal interest does not thereby gain priority over an
equitable interest of which he has constructive notice. Thus, if A obtains an equitable interest
in property, e.g. a contract to purchase land, in January 1996, and fails to register it as an
estate contract until May 1998, and B, in February 1998, obtains an equitable mortgage over
the land which is converted into a legal mortgage in April 1998, at a time when B knows or
ought to know that A has an interest, as where A is on the land and carrying out works, then
B’s mortgage, although legal, will not rank over A’s equitable interest (McCarthy and Stone v
Julian S Hodge & Co [1971] 2 All ER 973).
Where there are two or more lenders with a mortgage on the same property, they can alter
the priority of their mortgages without the consent of the borrower, who is not affected since
he must pay both mortgages off in order to recover his property loan-free (see Cheah v
Equiticorp Finance Group Ltd [1991] 4 All ER 989).
The Leasehold Reform Act 1967

Where, under the provisions of this Act, a leaseholder buys the freehold, the conveyance
automatically discharges the premises from any mortgage even though the lender is not a
party to the conveyance (s 12(1)). However, the leaseholder must apply the money which he
is using to buy the freehold, in the first instance, in or towards the payment (or redemption)
of the mortgage (s 12(2)). If the lender raises difficulties, the tenant may, in order to protect
his interest, pay the money into court (s 13). The lender (or mortgagee) must accept not
less than three months’ notice to pay off the whole or part of the principal secured by the
mortgage, together with interest to the date of payment regardless of any provisions to the
contrary in the mortgage (s 12(4)).
The court is also given power, under s 36, to alter the rights of the parties to a mortgage
in order to mitigate any financial hardship which may arise as a result of the purchase of a
freehold under the provisions of the Act.
If it is desired that a mortgage of the former leasehold interest should be extended to cover
the freehold, this may be done by requesting the borrower to execute a deed of substituted
..
EL_C22.qxd 3/26/07 1:07 PM Page 659
security. If a tenant acquires an extended lease a lender is entitled to possession of the docu-
ments of title relating to the new lease (s 14(6)) and should ask for them when the borrower
obtains an extended lease. The borrower should also be required to execute a mortgage of the
extended lease.
Leasehold Reform, Housing and Urban Development Act 1993

Similar provisions relating to discharge of mortgages on interests acquired under this Act
apply as in the acquisition of the freehold in the 1967 Act. Mortgage interests are discharged
and payment of the mortgage is governed by similar rules to those in the 1967 Act. The 1993
Act references are s 35 and Sch 8. In the case of both Acts, failure to observe the mortgage
pay-off procedures means that the mortgage is not discharged.
Registration of land charges

The object of searching the Land Charges Register is to discover the rights, if any, of third
parties which are enforceable against the land.
The present system of registration of land charges is governed by the Land Charges Act
1972 in the case of unregistered land, and by the Land Registration Act 2002 in the case of
registered land.
Registration of rights affecting unregistered land

Registration at the Land Registry constitutes notice to buyers, lenders or other interested
persons, whether they search the relevant register or not. Failure to register means that a
buyer in good faith takes free of the charges or right, i.e. is not affected by it.
The most usual types of rights to be registered are:
(a) pending actions, including a petition in bankruptcy;

(b) claim forms and orders affecting land, including a bankruptcy order;
(c) deeds of arrangement affecting land, as where a creditor has used the land as an asset in
reaching a compromise for his debts to creditors, e.g. to pay over a period up to 75p in
the pound;
(d ) land charges, such as mortgages, estate contracts, restrictive covenants and equitable
easements (an estate contract could be a contract to buy freehold land but as yet there is 22
no completion);
(e) Class F rights of occupation of a dwelling house given, e.g. to a spouse or civil partner
under the Family Law Act 1996 (as amended).
Compulsory registration of title

Titles which are not yet registered must become so. Freehold sales or leases granted for
seven years or more must be registered within two months of the transaction at HM Land
Registry, the title then becoming registered. This rule applies to the whole of England
and Wales.
The Land Registration Act 2002 (LRA 2002) extended compulsory registration to leases
on creation where the term is for seven years or more. Formerly only leases with terms of
21 years or more were compulsorily registrable. The effect for business is that most office leases
will now be registrable. Section 4 of the LRA 2002 applies. In addition, under that section
..
EL_C22.qxd 3/26/07 1:07 PM Page 660
compulsory registration applies on the assignment of leases with more than seven years left
to run. The above provisions apply to leases entered into after the LRA 2002 came into force,
i.e. 13 October 2003. However, it is possible to register voluntarily as distinct from compuls-
orily an existing lease that has more than seven years to run. Voluntary first registration also
applies now to franchises and profits à prendre such a fishing and shooting rights.
Land Registration Act 2002

The major aim of s 4 of this Act is to increase the rate at which unregistered land is brought
on to the register of title kept by the Land Registry. This will simplify the transfer of the
property. Unregistered land must be registered on sale and purchase, but under the Land
Registration Act 1997 transfers by way of gift trigger registration, as does the creation of a first
mortgage which is protected by deposit of the documents of title with written memorandum.
There is also a fairer provision for those who suffer loss by reason of some error or omission
in the register. This covers losses that continue even after an error is rectified, as where a
restrictive covenant in a conveyance is omitted from the register which is later rectified but
the covenant is ineffective against a lease granted before rectification. Section 3 LRA 2002
gives a more flexible regime for charges for voluntary registration as a basis for doing a ‘deal’
with the Land Registry on charges.
Registered land
Registration is under the Land Registration Act 2002 and provides a record at HM Land
Registry of the owners of registered land and of rights affecting it.
It is not, however, a complete record of all rights. In particular, rights known as ‘overriding
interests’ affect land whether or not they are mentioned in the Land Registry entries.
The Register
This is in three parts:
(a) The property register. This gives a short description of the land and a reference to a filed
map, together with rights which may benefit the land or affect it such as rights of access.
However, there may be overriding interests which are not mentioned.
(b) The proprietorship register. This indicates whether the land is freehold or leasehold, and
shows the registered proprietor and whether there are any restrictions on dealings with the land.
(c) The charges register. This gives details of third party rights, such as those of lenders who
have taken a mortgage on the land, and, e.g., restrictive covenants.
Classes of title
The main ones are as follows:
(a) Absolute freehold or leasehold title. This gives an effective guarantee that the registered
proprietor owns the land subject to any matters shown on the register and to ‘overriding
interests’.
(b) Good leasehold title. This is similar to the absolute title except that it does not guarantee
that the lease was validly granted.
(c) Possessory freehold or leasehold title. This deals with titles under the Limitation Act
1980. A squatter can register a possessory title when he has successfully barred the rights of
the true owner and subsequently. Sections 96–98 of the Land Registration Act 2002 now deal
with adverse possession registration. The provisions are considered at p 614.
..
EL_C22.qxd 3/26/07 1:07 PM Page 661
The squatter is subject to all the terms of a lease over which he has acquired rights by
adverse possession. An example of acquisition by adverse possession is provided by Central
London Commercial Estates Ltd v Kato Kagaku Ltd [1998] 4 All ER 948 where Kato acquired
a title to the west courtyard of Bush House in London in this way. The adverse possession
consisted of use as a car park.
Inspection by public
The Land Registration Act 1988 allows any person to apply to the Land Registry or a District
Registry for an office copy of entries. This can be of use to creditors in establishing whether a
particular piece of land is owned by a debtor and whether there are any charges over it. This
facility is not available for unregistered land.
Overriding interests
These may not be mentioned on the register and yet para 3 of Sch 3 of the Land Registration
Act 2002 states that all registered land is subject to overriding interests listed in the section.
Easements and profits are or may be overriding interests because they can be created without
the use of documents, as by implication or long user. However, an easement or profit will be
an overriding interest only if it is within the actual knowledge of the person acquiring the
land or would have been obvious on a reasonable and careful inspection of the land subject
to the easement or profit (para 3 Sch 3, LRA 2002). The position where an express grant of an
easement or profit is made is that it should now be registered since these express grants are
no longer overriding interests. If not registered, these interests take effect only in equity.
Specific grants were regarded as overriding interests before the LRA 2002 and for that reason
were often not registered. They should now be registered to obtain legal status. Most import-
ant, however, are ‘rights of occupation’.
Overriding interests and the Land Registration Act 2002

The LRA 2002 deals in Schs 1 and 3 with overriding interests. The Act adds profits such as
shooting and fishing rights to the list of registrable rights. Leasehold interests of not more
than seven years are now overriding on first registration. Leases of more than seven years
must be registered. The rights of persons in actual occupation are preserved. However, the
overriding rights of an individual who receives rents and profits of registered land but is not
in actual possession remain overriding only while that individual continues to receive the
rents and profits.
22
The matrimonial home
The Family Law Act 1996 contains a type of land charge referred to as Class F. It restores the
legal position to what it was before the decision of the House of Lords in National Provincial
Bank Ltd v Ainsworth [1965] 2 All ER 472. In that case it was decided that a deserted wife had
no special right or ‘equity’ to continue to occupy the matrimonial home though there had
formerly been such a right. The effect of the decision in Ainsworth’s case was that a husband
who was the owner of the matrimonial home could, having deserted his wife and children,
sell or mortgage the house to a third party who would in most cases be able to get an order
for possession in order to enforce his rights. In these circumstances the deserted wife
and children would have to give up occupation of the matrimonial home and find other
accommodation.
The 1996 Act provides that where one spouse owns or is the tenant of the matrimonial
home, the other spouse has certain ‘rights of occupation’ (s 30) and cannot be evicted without
..
EL_C22.qxd 3/26/07 1:07 PM Page 662
an order of the court. Where a spouse is not in occupation of the matrimonial home he
or she has a right, with the leave of the court, to enter and occupy the house. However, the
court may order a spouse who is occupying the matrimonial home by reason of the Act to
make periodical payments to the other spouse in respect of that occupation. It should be
noted that the Act protects husbands as well as wives.
It should be noted that s 1 of the Act 1996 provides that either of the spouses may apply
to the court for an order prohibiting, suspending, or restricting the exercise by either spouse
of the right to occupy the dwelling house or requiring either spouse to permit the exercise by
the other of that right.
The Family Law Act 1996 provides that the rights of occupation provided for in s 30 are a
charge on the estate or interest of the other spouse (s 31), registrable as a type of land charge
(Class F) under the Land Charges Act 1972. Where the land is registered land, a notice or
caution must be registered under the LRA 2002. A purchaser or mortgagee is deemed to have
notice of rights of occupation which have been properly registered. Rights of occupation may
be registered on marriage though in most cases registration will not take place unless and
until the marriage breaks down.
Where a spouse registers rights of occupation, the house is unlikely subsequently to be an
acceptable security for a loan because the rights of occupation represent a prior charge on the
property which cannot be sold with vacant possession. However, a spouse who is entitled to
rights of occupation may, under Sch 4 of the 1996 Act, agree in writing that any other charge
shall rank in priority to his or her charge.
However, even if the spouse’s right of occupation is not registered, it may still be recog-
nised by the court.
Williams & Glyn’s Bank Ltd v Boland, 1980 – An overriding interest (501)
The Land Registration Act 2002 and boundaries

Under ss 60 and 61 of the LRA 2002 provision is made for a registered owner to have a
boundary determined. Boundary disputes between neighbours may become a thing of the
past under the new rules. Prior to the enactment of the new rules general boundary lines were
drawn and loosely marked on Ordnance Survey maps held with the title deeds of the relevant
property. The procedure requires the submission of the relevant form accompanied by a plan
or a plan with a verbal description identifying the exact line of the boundary. The procedures
to be followed on receipt of these documents by the Registrar are set out in rules. However,
any ensuing dispute will be settled by the Registrar at the expense of those who want a
boundary exactly fixed. The procedure could be time consuming and costly and the Registrar
is likely to try to dissuade people from the boundary fixing exercise and agree a boundary.
The existence of the procedure may encourage agreement. A previous procedure under the
Land Registration Rules 1925 was used from time to time.
Land certificates and charge certificates

Instead of issuing a certificate to the registered proprietor of land or a charge over it the Registry
will issue an official copy of the register showing all the entries that exist on the register on
completion of the application for registration together with an official copy of the title plan
and a Title Information Document giving the title number, property description and names
of registered proprietors. Existing certificates will cease to have any legal significance.
..
EL_C22.qxd 3/26/07 1:07 PM Page 663
Land Registry Adjudicator

The Land Registration Act 2002, Part 11 (ss 107–114), which is now in force, sets up the judi-
cial office of Adjudicator to HM Land Registry. The office provides an independent dispute
resolution procedure for land registration matters, both in regard to paper conveyancing
and the e-conveyancing network. Unfortunately, it does not deal with disputes between
applicants and the Land Registry but only with disputes between applicants to the Registry.
Disputes with the Registry, e.g. whether a title satisfies the requirements for registration as
an absolute title, are still matters for the ordinary courts and the method of proceeding is
by judicial review of a Registry decision. The Registry procedure will deal with applicants’
disputes regarding such matters as boundaries, squatters and claims to ownership of or rights
to land.
Local land charges

Search on a transfer of property will also be made in the local land charges register kept by
the local authority. A common example of a local land charge is road charges, i.e. charges
against land which the local authority incurs in regard to the cost of making up a road which
adjoins that land.
Planning matters also appear, though it should be emphasised that the standard enquiries
ask questions which concern the property and not the neighbourhood. They will not, e.g.,
disclose planning permissions granted on adjoining property. A buyer who needs informa-
tion outside the standard search should make special enquiries of the planning office or
instruct his solicitor to do so.
Mortgages of personal chattels

Just as land can be used as a means of securing debts, so also can personal chattels. There are
two principal ways in which this can be done.
(a) By mortgage. In this case the borrower retains possession of his goods but transfers their
ownership to the lender to secure the loan.
This raises a problem because, since the borrower retains the chattels, he also retains an
appearance of wealth, and this may mislead others into giving him credit. Accordingly the
Bills of Sale Acts 1878–82 were passed, and under the statutory provisions, where chattels are
retained by the mortgagor, a bill of sale must be made out. Where ownership of the chattel
passes to the mortgagee conditionally upon its being reconveyed to the mortgagor on repay-
22
ment of the loan, the bill of sale is called a ‘conditional bill’. An absolute bill of sale is one
which transfers completely the ownership in chattels by way of sale, gift or settlement.
All bills of sale must be attested and registered within seven days of execution. Registration
is currently in the Central Office of the Supreme Court. Conditional bills of sale must be
reregistered every five years if they are still operative.
A conditional bill of sale is totally void if it is not registered, whilst an unregistered absolute
bill of sale is void against the trustee in bankruptcy and judgment creditors of the grantor so
that the chattels represented by the bill are available to pay the grantor’s debts. However, an
absolute bill of sale will not be void for want of registration unless the chattels remain in the
sole possession, or apparent possession, of the transferor (or grantor) of the bill.
Koppel v Koppel, 1966 – What is apparent possession? (502)
..
EL_C22.qxd 3/26/07 1:07 PM Page 664
(b) By pledge, or ‘pawn’. In this case the lender obtains possession of the goods, the borrower
retaining ownership. Thus there is no danger that the borrower will obtain credit on the
strength of his possession of the chattels, and the law relating to pledges is mainly concerned
to protect the interests of the borrower (or pledger) against dishonest pawnbrokers.
Mortgages of choses in action
It is possible to use a chose in action as security for a loan, and mortgagees frequently take
life assurance policies as security, e.g. a bank in the case of an overdraft. However, shares in
companies are perhaps the commonest chose in action to be used as security.
Shares may be made subject to a legal mortgage, but here the shares must actually be
transferred to the mortgagee so that his name is in fact on the company’s share register. An
agreement is made out in which the mortgagee agrees to retransfer the shares to the mortgagor
when the loan is repaid.
It is also possible to have an equitable mortgage of company shares, and this is in fact the
usual method adopted. The share certificate is deposited with the mortgagee, together with a
blank transfer signed by the registered holder, the name of the transferee being left blank. The
shares are not actually transferred, but the agreement accompanying the transaction allows
the mortgagee to sell the shares by completing the form of transfer and registering himself as
the legal owner or selling the shares to a third party if the mortgagor fails to repay the loan.
Other forms of security
A security is some right or interest in property given to a creditor so that, if the debt is not
paid, the creditor can obtain the amount of the debt by exercising certain remedies against
the property, rather than by suing the debtor by means of a personal action on his promise to
pay. Securities, therefore, create rights over the property of another and since we have already
discussed mortgages of land, chattels and choses in action it remains only to consider the lien.
Lien
A lien is a right over the property of another which arises by operation of law and independ-
ently of any agreement. It gives a creditor the right (a) to retain possession of the debtor’s
property until he has paid or settled the debt, or (b) to sell the property in satisfaction of the
debt in those cases where the lien is not possessory. Where the parties agree that a lien shall
be created, such agreement will effectively create one.
Possessory or common-law lien

To exercise this type of lien the creditor must have actual possession of the debtor’s property,
in which case he can retain it until the debt is paid or settled. It should be noted that the
creditor cannot ask for possession of the debtor’s goods in order to exercise a lien.
A common-law lien may be particular or general:
..
EL_C22.qxd 3/26/07 1:07 PM Page 665
(a) Particular lien. This gives the possessor the right to retain goods until a debt arising in
connection with those goods is paid.
(b) General lien. This gives the possessor the right to retain goods not only for debts speci-
fically connected with them, but also for all debts due from the owner of the goods however
arising.
The law favours particular rather than general liens.
If X sends a clock to R to be repaired at a cost of £5, R may retain the clock under a particular
lien until the £5 is paid. If, however, X owed R £10 for the earlier repair of a watch, R cannot
retain the clock to enforce payment of £15 unless, as is unlikely, he can claim a general lien.
The following are cases of particular lien:
(i) A carrier can retain goods entrusted to him for carriage until his charges are paid.
(ii) An innkeeper has a lien over the property brought into the inn by a guest and also over
property sent to him while there, even if it does not belong to him. The lien does not
extend to motor cars or other vehicles, or to horses or other animals.
Robins v Gray, 1895 – An innkeeper’s lien (503)
(iii) A shipowner has a lien on the cargo for freight due.

(iv) In a sale of goods, the unpaid seller has a lien on the goods, if still in his possession, to
recover the price.
(v) Where a chattel is bailed in order that work may be done on it or labour and skill
expended in connection with it, it may be retained until the charge is paid. Such liens
may arise, e.g., in favour of a car repairer over the car repaired, by an arbitrator on an
award and by an architect over plans he has prepared.
A general lien may arise out of contract or custom, and the following classes of persons have
a general lien over the property of their customers or clients – factors, bankers, solicitors,
stockbrokers, and in some cases insurance brokers.
Caldwell v Sumpters, 1971 – A solicitor’s lien (504)
In the course of their professional work accountants have at least a particular lien for unpaid
fees over any books, files and papers delivered to them by clients and also over any other
documents which come into their possession while acting for clients. The documents must be
the client's property (see Woodworth v Conroy [1976] 1 All ER 107), but not the statutory books
22
of a registered company since these are in many cases open to inspection by members and in
some cases by the public. This rule derives from the decision of the High Court in DTC (CNC)
Ltd v Gary Sargeant & Co [1996] 2 All ER 369, where it was held that an accountant could not
exercise a lien over the accounting records of a company for unpaid fees since the records
were required by statute (i.e. the Companies Act 1985) to be kept in specific places, e.g. the
registered office, for certain periods for inspection.
Again, in Harrison v Festus [1998] CLY 4 the High Court doubted whether an accountant’s
lien could extend to a client’s VAT records as they were statutory records to be preserved at
the taxpayer’s principal place of business.
Although a common-law lien normally gives no power of sale, there are some exceptional
cases in which a right of sale is given by statute. Such a right is given to innkeepers (Innkeepers
Act 1878), unpaid sellers of goods (Sale of Goods Act 1979) and bailees who accept goods for
repair or other treatment for reward (Torts (Interference with Goods) Act 1977). Briefly, the
..
EL_C22.qxd 3/26/07 1:07 PM Page 666
latter Act provides for the sale of goods accepted for repair or other treatment or for valuation
or appraisal or for storage and warehousing provided the bailee gives notice to the bailor
specifying the date on or after which he proposes to sell the goods. The period between the
notice and the date specifying sale must be such as will afford the bailor a reasonable oppor-
tunity of taking delivery of the goods. However, if he does not do so, the bailee may sell them
but must account to the bailor for the balance of the proceeds of sale after deduction of
charges and expenses.
It should also be noted that the High Court has a discretion to order the sale of goods if it is
just to do so, e.g. where the goods are perishable.
Larner v Fawcett, 1950 – Power of court to order a sale (505)
A common law lien is discharged:
(a) by payment of the sum owing;

(b) by parting with the possession of the goods or other property upon which the lien is
being exercised (but see Caldwell v Sumpters (1971), above);
(c) by an agreement to give credit for the amount due;
(d ) by accepting an alternative security for the debt owing.
Maritime lien
A maritime lien does not depend on possession. It is a right which attaches to a ship in con-
nection with a maritime liability. It travels with the ship and may be enforced by the arrest
and the sale of the ship through the medium of a court having Admiralty jurisdiction.
Examples of such liens are:
(a) liens of salvors;

(b) the lien of a master for his outgoings;
(c) liens which arise from damage due to collision;
(d ) liens of bottomry bond holders. A bottomry bond is a form of security under which a
ship and/or its cargo is pledged for the repayment of money borrowed for the purposes of
a voyage.
The order of attachment is important and depends on circumstances.

Successive salvage liens attach in inverse order, later ones being preferred to earlier ones,
since the earlier lien would be useless if the later salvage had not preserved the ship from loss.
Claims for collision damage are treated as of equal rank. Liens for wages, in the absence of
salvage liens, have priority over other liens; however, liens for wages earned before a salvage
operation are postponed to the lien for salvage, since the value of such a lien has been pre-
served by the salvage operation.
If a ship which is subject to lien is sold, the purchaser takes it subject to the lien and is
responsible for discharging it.
Equitable lien
An equitable lien is an equitable right, conferred by law, whereby one person acquires
a charge on the property of another until certain claims have been met. It differs from a
common-law lien which is founded on possession and does not confer a power of sale. An
equitable lien is independent of possession and may be enforced by a judicial sale.
..
EL_C22.qxd 3/26/07 1:07 PM Page 667
An equitable lien may arise out of an express provision in a contract or from the relation-
ship between parties. Thus a partner has an equitable lien upon the partnership assets for the
purpose of ensuring that they are applied, on dissolution, to paying partnership debts.
Furthermore, an unpaid vendor of land has an equitable lien on the property even after
conveyance of ownership to the purchaser, or a third party who has taken it with notice of
the lien, under which he may ask the court for an order to sell the property so that he may
obtain the purchase money owing to him.
An equitable lien can, like all equitable rights, be extinguished by the owner selling the
property to a bona fide purchaser for value who has no notice of the lien.
An equitable lien differs from a mortgage. A mortgage, as we have seen, is always created by
the act of parties, and an equitable lien may arise by operation of law.
Banker’s lien
At common law a banker has a general possessory lien on all securities, and, e.g., bills of
exchange, promissory notes and bonds, deposited with him by customers in the ordinary
course of business unless there is an agreement, express or implied, to the contrary. The lien
does not extend to property or securities deposited for safe custody. However, a customer
may deposit a security as collateral for a loan, in which case the banker has rights over it, but
the transaction is an equitable mortgage rather than a lien.
A banker’s lien gives a right of sale, at least of negotiable securities subject to the lien,
because s 27 of the Bills of Exchange Act 1882 provides that a person having a possessory lien
over a bill is deemed a holder for value to the extent of the lien, and can, therefore, sell and
transfer the bill.
Assignments of choses in action
The common law does not recognise assignments of choses in action, but equity does and so
does statute.
Assignment by act of parties

There are four possible categories. 22
A legal assignment of a legal chose under s 136 of the Law of Property
Act 1925
To be effective such an assignment, e.g. to the debtors of a business, must be absolute and
not partial; must be in writing signed by the assignor; and must be notified in writing to the
debtor, generally by the assignee. If the above requirements are complied with, the assignee
can sue the debtor without making the assignor a party to the action. Failure to give notice to
the debtor means that there is no legal assignment; the debtor can validly pay the assignor,
and the assignee is liable to be postponed to a later assignee for value who notifies the
debtor. However, it is not necessary for the date of the assignment to be given in the notice
of assignment as long as the letter, or other form of written notice, states clearly that there
has been an assignment and identifies the assignee (Van Lynn Developments Ltd v Pelias
Construction Co Ltd [1968] 3 All ER 824).
..
EL_C22.qxd 3/26/07 1:07 PM Page 668
Equitable assignments of legal choses

Equitable assignments of equitable choses
The difference between a legal and an equitable chose is historical in that an equitable
chose is a right which, before 1875, could only be enforced in the Court of Chancery, e.g. the
interest of a beneficiary under a trust fund.
In equitable assignments of legal choses the assignor must be made a party in any action
against the debtor, but if the chose is equitable this is not necessary. No particular form is
required; all that is necessary is evidence of intention to assign. Notice should be given to the
debtor or the trustees, as the case may be, in order to preserve priority as outlined above.
Thus the transfer of a debt by word of mouth, although invalid under statute, may never-
theless be good and enforceable in equity.
Equitable assignments of mere expectancies

These are mere hopes of future entitlement, e.g. a legacy under the will of a living testator.
The rules regarding such assignments are the same as those set out under the previous two
sub-headings, but no notice to the debtor can be given because there is none. Value is not
needed for assignments within s 136 of the Law of Property Act 1925, or for equitable
assignments of equitable choses in action. It is probably not needed for an equitable assign-
ment of a legal chose, though the position is not clear. Value is needed for the assignment
of mere expectancies; a document by deed is not enough. Value is also needed to support
an agreement to assign an equitable chose, but if the assignee lawfully takes delivery of the
property assigned, the assignor cannot recover it.
Assignments are said to be ‘subject to equities’; the person to whom the right is assigned
takes it subject to any right of set off which was available against the original assignor. So if X
assigns to Z a debt of £10 due from Y, and X also owes Y £5, then in any action brought by Z
for the money, Y can set off the debt of £5. But the assignee is not subject to purely personal
claims which would have been available against the assignor, e.g. damages for fraud, though
the remedy of rescission is available against the assignee where the assignor obtained the
contract by fraud.
Assignments of certain choses in action are governed by special statutes so that the rules
outlined above do not apply. In such cases the special statute must be complied with.
Examples are:
(a) bills of exchange, cheques and promissory notes – Bills of Exchange Act 1882;
(b) shares in companies registered under the Companies Act 2006 and previous Acts – Companies
Act 2006;
(c) policies of life assurance – Policies of Assurance Act 1867.
Rights of a personal nature under a contract cannot be assigned. If X contracts to write

newspaper articles for a certain newspaper, it cannot assign its rights under the contract to
another. The right to recover damages in litigation cannot be assigned, for reasons of public pol-
icy. Liabilities under a contract cannot be assigned; the party to benefit cannot be compelled
by mere notice to accept the performance of another, though a liability can be transferred by
a novation (a new contract), if the party to benefit agrees.
Assignment by operation of law

The involuntary assignment of rights and liabilities arises in the case of death and
bankruptcy.
..
EL_C22.qxd 3/26/07 1:07 PM Page 669
Death
The personal representatives of the deceased acquire his rights and liabilities, the latter to the
extent of the estate. Contracts of personal service are discharged.
Bankruptcy
The trustee in bankruptcy has vested in him all the rights of the bankrupt, except for actions
of a purely personal nature which in no way affect the value of the estate, e.g. actions for
defamation. The trustee is liable to the extent of the estate for the bankrupt’s liabilities,
though the trustee has a right to disclaim onerous or unprofitable contracts.
22
..
EL_C22.qxd 3/26/07 1:07 PM Page 670
..
EL_C23.qxd 3/26/07 10:55 AM Page 671
Part 5
CRIMINAL LAW
..
EL_C23.qxd 3/26/07 10:55 AM Page 672
..
EL_C23.qxd 3/26/07 10:55 AM Page 673
23
CRIMINAL LAW:
GENERAL PRINCIPLES
Crime and civil wrongs distinguished
As we have indicated in Chapter 1 the distinction does not lie in the nature of the act itself.
For example, if a railway porter is offered a reward to carry A’s case and runs off with it, then
the porter has committed one crime, that of theft, and two civil wrongs, i.e. the tort of
wrongful interference and a breach of his contract with A. Again, a signalman who carelessly
fails to operate signals so that a fatal accident occurs will have committed one crime, i.e.
manslaughter, because persons are killed, and two civil wrongs, the tort of negligence in
respect of those who died and those who are merely injured, and a breach of his contract of
service with the employing rail company in which there is an implied term to take due care.
It should also be noted that in this case the right of action in tort and the right of action in
contract are vested in different persons.
The distinction does depend on the legal consequences which follow the act. If the wrongful
act is capable of being followed by what are called criminal proceedings, that means that it is
regarded as a crime. If it is capable of being followed by civil proceedings, that means that it
is regarded as a civil wrong. If it is capable of being followed by both, it is both a crime and a
civil wrong. Criminal and civil proceedings are usually easily distinguishable, they are gener-
ally brought in different courts, the procedure is different, the outcome is different and the
terminology is different. A major consequence of classifying proceedings as criminal is that
the burden of proof is on the Crown.
Terminology and outcome of criminal and civil proceedings
In criminal proceedings a prosecutor prosecutes a defendant. If the prosecution is successful,

it results in the conviction of the defendant. After the conviction the court may deal with the
defendant by giving him a custodial sentence, e.g. prison or some other form of detention
(see Chapter 4) or a non-custodial sentence, e.g. a supervision order under a probation officer
or a community order imposing e.g. an unpaid work requirement. In rare cases the court may
discharge the defendant without sentence.
As regards civil proceedings, a claimant sues ( brings an action against) a defendant. If the
claimant is successful, this leads to the court entering judgment ordering, for example, that
the defendant pay a debt owed to the claimant or damages. Alternatively, it may require the
..
EL_C23.qxd 3/26/07 10:55 AM Page 674
674 PART 5 · CRIMINAL LAW
defendant to transfer property to the claimant or to do or not to do something (injunction)

or to perform a contract (specific performance). Some of these remedies are legal, others
equitable. The matter of remedies for breach of contract and for torts has already been dealt
with in detail in the chapters on those topics.
Nulla poena sine lege – no punishment unless by law

This important maxim means that a person should not be made to suffer criminal penalties
except for a clear breach of existing criminal law, that law being precise and well defined.
The maxim thus prohibits:
(a) the introduction of new crimes which operate retrospectively under which a person
might be found guilty of a crime for doing an act which was not criminal when he did it;
(b) wide interpretation of precedents to include by analogy crimes which do not directly fall
within it. Thus the extension of the criminal law in the way, for example, in which the
civil law of negligence has been extended (see Chapter 21) is undesirable;
(c) the formulation of criminal laws in wide and vague terms.
The last rule has in general terms been observed in England, with perhaps the major excep-
tion of the law of conspiracy under which there has been a tendency to charge persons with
criminal conspiracy rather than with specific criminal offences. Thus a conviction might be
obtained for conspiracy to do an act even though there were doubts as to whether the act was
or ought to be criminal.
Under ss 1–5 of the Criminal Law Act 1977, the offence of conspiracy at common law is
abolished and the new statutory offence of conspiracy is restricted to agreements to commit
criminal offences, though the common-law offences of conspiracy to defraud and conspiracy
to corrupt public morals or outrage public decency are retained. The consent of the Director
of Public Prosecutions to mount a prosecution is required.
The purpose in retaining conspiracy to defraud at common law is that it enables the courts
to keep up with the increasing methods of fraud which may outpace legislation such as
the Theft Act 1968 which may not cover them. Acts outraging public decency are offences
in themselves as the Court of Appeal decided in R v Gibson [1991] 1 All ER 439, where the
defendant exhibited earrings made from freeze-dried human foetuses of three to four months’
gestation. In view of the fact that acts outraging public decency are crimes in themselves
a conspiracy to outrage public decency would also be covered by s 1 of the 1977 Act as a
conspiracy to commit a criminal offence.
Woolmington v DPP, 1935 – Burden of proof in crime (506)

Shaw v DPP, 1961 – No punishment except for breach of existing law (507)
Constituent elements of a criminal offence

The commission of a crime necessarily involves two elements:
(a) the actus reus (guilty act); and

(b) the mens rea (guilty mind).
..
EL_C23.qxd 3/26/07 10:55 AM Page 675
CRIMINAL LAW: GENERAL PRINCIPLES 675
Therefore, a guilty act does not make a person guilty of crime unless the mind is guilty
and vice versa. The essential key to proving criminal charges generally is to show that the
defendant had the necessary state of mind at the required time. The coincidence of the state
of mind with the criminal act is crucial. The exception to this rule of mental attitude is a
group of offences referred to as crimes of strict liability.
The actus reus

The defendant’s conduct must in general be voluntary. If a person is made to act, there is
no actus reus. Sir Matthew Hale says in his treatise on the criminal law entitled Pleas of the
Crown written in 1682: ‘If A takes the hand of B in which is a weapon and therewith kills C,
A is guilty of murder but B is excused.’ Duress as by threats which cause a person to act is not
in fact regarded as involuntary conduct, but may be a defence for some crimes (see further
Chapter 25).
In addition, if a person acts instinctively in response to some stimulus and in so doing
commits a criminal offence, he will not be liable. A famous example was given in Hill v Baxter
[1958] 1 All ER 193 in connection with a prosecution for dangerous driving where the court
said that a person would not be guilty of such an offence if ‘the car was temporarily out of
control by his being attacked by a swarm of bees’. It will be found, however, that in the case
of some statutory offences no voluntary act is required.
The act must be causative

In order to convict a person of a crime, it is necessary to show that the act which he did was
the substantive cause of the crime. In this connection, it should be noted that the accused takes
his victim as he finds him so that the abnormal state of the victim’s health or his or her age
will not normally excuse a person who by his acts has accelerated the death of such a victim.
However, the Court of Appeal ruled in R v Bollom [2004] 2 Cr App R 50 that, in considering
whether injuries amounted to grievous bodily harm and not actual bodily harm, the age and
health of the victim should be brought into account. Thus, injuries to a baby or young child
or an old person might well constitute grievous bodily harm whereas they would not in the
case of a young adult in the fulness of health. (See further Chapter 24.)
R v Towers, 1874 – Need to prove causation (508)

R v Hayward, 1908 – Accused cannot successfully plead the victim’s state of
health (509) 23
Intervening acts and events

It may be that between the initial act of the defendant and the criminal event with which he
is charged a new act or event occurred and contributed to the criminal event. The defendant
will nevertheless be liable unless the intervening event was unforeseeable and would have
brought about the consequence on its own.
Sometimes the intervening act is that of the victim but the accused will still be guilty if
it was reasonably foreseeable that the victim would act in the way he did as a result of the
behaviour of the accused. Finally, the intervening act may be the improper medical treatment
of an injury inflicted upon the victim by the accused. Here the general rule is that the
..
EL_C23.qxd 3/26/07 10:55 AM Page 676
court will be reluctant to blame doctors and other medical personnel for a death where the
condition which they were called upon to treat was brought about by the unlawful act of
the accused.
R v Curley, 1909 – Intervening act of victim (510)

R v Smith, 1959 – Improper medical treatment (511)
It should be noted that it is not necesary for the Crown to establish which of the accused’s
actions caused the death. Thus in Attorney-General’s Reference (No 4 of 1980) [1981] 1 WLR 705
the accused pushed his girlfriend downstairs and, believing her to be dead, dragged her
upstairs by a rope around her neck, cut her throat, and dismembered and disposed of the
body. He was charged with manslaughter and it was held by the Court of Appeal that he
could be convicted, provided the jury was satisfied that one of the actions did cause the
death, notwithstanding that it was impossible to say which of the culpable acts did so.
Omissions or failure to act

In general terms, a mere failure to act cannot lead to criminal liability. However, there may
be liability for an omission in the following situations.
Moral obligations arising from particular relationships

Sometimes where a person is in a particular relationship with another which is either
imposed by law such as parent or child or voluntarily assumed as where A is looking after an
old aunt, the relationship may give rise to an obligation to act. Failure to discharge the respons-
ibilities arising from the relationship may result in criminal liability at common law.
R v Instan, 1893 – Liability for omissions at common law (512)
While R v Instan (1893) and the cases set out in the comment to it illustrate the position at
common law, the statutory position should also be noted. The Domestic Violence, Crime and
Victims Act 2004 closes a loophole in the law that could allow those jointly accused of the
murder of a child or vulnerable adult to escape liability by remaining silent and blaming each
other. This has occurred where husband and wife or partners have adopted this approach
where a child or vulnerable person has been the victim. The Act now puts legal responsibility
on adult household members who have frequent contact with a child or vulnerable adult to
take reasonable steps to protect that person if they knew, or ought to have known, they were at
significant risk of serious physical harm. Persons can be guilty for not doing so.
Contractual duties
A person may incur criminal liability because a contract, e.g. of employment, places upon
him a duty to act. The duty is not confined to the other party to the contract but may extend
also to third parties.
R v Pittwood, 1902 – A crossing gate is left open (513)
..
EL_C23.qxd 3/26/07 10:55 AM Page 677
Previous conduct creating a dangerous situation

Where the defendant has by his previous acts created a potentially dangerous situation and
later comes to realise this, he has a duty to act to prevent the danger.
R v Miller, 1983 – A smoking mattress (514)
Duty to act under statute

Some modern statutes make failure to act a crime. For example, s 170 of the Road Traffic Act
1988 makes it an offence if those involved in road accidents fail to report the accident to the
police within 24 hours or give relevant details to any other person who being at the scene of
the accident reasonably requests them. It is necessary, however, that personal injury is caused
to a person other than the driver of the vehicle or to an animal other than one in the driver’s
vehicle or in a trailer being pulled by him or her.
A further example is provided by the decision of the Queen’s Bench Divisional Court in
Greener v DPP (1996) The Times, 15 February. G’s Staffordshire bull terrier was chained up in
his garden. It escaped into a nearby garden and attacked a child. Section 3(3) of the
Dangerous Dogs Act 1991 states that an offence is committed if the owner ‘allows’ a dog to
enter a private place where it is not permitted and it then injures some person. G submitted
that the section required a mental element and, since he had not taken any positive step to
release the dog, he was not guilty. It was held that since the section did not require intention,
negligence or knowledge, but was a strict liability offence the offence could have and had
been committed by an omission to take adequate precautions to keep the dog in.
The mens rea – generally

The actus reus must be accompanied by an appropriate state of mind which is referred to as
mens rea. The mens rea and the actus reus must coincide in order to constitute a crime. Before
looking at the different states of mind involved it should be noted that as in the law of torts
motive, i.e. the reason why the defendant did the act, is irrelevant in regard to his guilt or
innocence if his direct intention was to commit the offence.
Chandler v DPP, 1962 – Impeding the operation of an airfield (515)
The following states of mind are relevant. 23

Direct intent
This occurs where there exists in the mind of the defendant a desire to commit the crime, as
where A shoots at B foreseeing and desiring and wishing that B will be killed, or as where A
deliberately fails to feed an aged parent in the hope and expectation of bringing about that
parent’s death.
Oblique intent
Here the consequence is not desired as such. The defendant may even hope that what happened
would not happen but has nevertheless gone ahead with the harmful activity, in what one is
..
EL_C23.qxd 3/26/07 10:55 AM Page 678
tempted to say is a reckless fashion. Indeed, the concepts of oblique intent and recklessness as
states of mind are at times quite close and not readily distinguishable. In homicide cases an
oblique intent will normally result in a conviction for manslaughter and not murder, and the
major change brought about by modern case law is that intent is no longer established by a
kind of objective foresight of consequences as is liability in tort, although the mental element
of recklessness may be.
R v Maloney, 1985 – Larking with guns (516)
Recklessness: Cunningham and Caldwell

In some crimes it is necessary to find a direct intent. Included here would be murder and
wounding with intent under s 18 of the Offences Against the Person Act 1861 (causing
grievous bodily harm). The House of Lords has reaffirmed that to establish an offence under s 20
(malicious wounding) it is necessary for the prosecution to prove either that the appellant
intended to or that he actually foresaw his act might cause physical harm, even if only of a
minor character. This is oblique intent (see R v Savage [1991] 2 All ER 220).
In other cases, e.g. criminal damage and rape, intention or recklessness is enough. So far
as manslaughter is concerned, either an oblique intent or recklessness would seem to
suffice. The line between oblique intent and recklessness in the decided cases is, as we
have seen, often very difficult to draw. Recklessness, so far as the earlier cases were concerned,
was to be decided subjectively, i.e. the defendant must have appreciated the risk which is
close to oblique intent. Objective tests, i.e. the defendant ought to have appreciated the
risk, were to be reserved for the civil law. However, in more recent times the courts have
developed an objective test for recklessness though at the moment this test seems to be
applied largely in cases involving criminal damage, though a fairly recent case applied it to
manslaughter.
R v Cunningham, 1957 – Recklessness: the subjective test (517)

R v Caldwell, 1981 – Recklessness: the objective test (518)
The two tests are therefore available and it seems that the Cunningham test survives in cases
of rape (see Chapter 24) while the Caldwell test is to be found in statutory crimes such as
criminal damage and in motor manslaughter now referred to as causing death by dangerous
driving (see Chapter 24).
However, in the crime of rape the recklessness required is as to the victim’s non-consent to
the act of sexual intercourse, which places such recklessness virtually in a category of its own.
Gross negligence
In modern law the objective test of recklessness has not progressed beyond the mens rea for
causing death by dangerous driving (see Chapter 24) and criminal damage. It was rejected in
R v Adomako (1994), a case of involuntary manslaughter, in favour of a ‘gross negligence’ test
(see Chapter 24), in a crime now referred to as gross negligence manslaughter.
The Road Safety Act 2006 creates a new offence of causing death by careless driving, with a
penalty of up to five years’ imprisonment. The definition of careless driving in the Act puts it
beyond doubt that causing death by reckless or careless driving (the bad driving offences),
can be used by the courts as an alternative to manslaughter.
..
EL_C23.qxd 3/26/07 10:55 AM Page 679
Negligence
It is extremely rare to find that negligence is a state of mind for a criminal offence. However,
the fact that a person has not been negligent can be a defence in some statutory crimes. For
example, where foreign matter has got into food it is a defence for a person involved in its
sale to show that he acted with due diligence to prevent the commission of the offence (Food
Safety Act 1990, s 21). Thus only persons who are negligent will be successfully prosecuted.
Where intent is transferred

Provided the defendant has the necessary mens rea and commits the intended actus reus it
does not matter that the victim is not the person he intended to harm. However, the mens rea
for one offence cannot be transferred to another.
R v Latimer, 1886 – A different victim (519)

R v Pembliton, 1874 – A different crime (520)
The rule of transferred malice can also be relevant in regard to the liability of accessories or
secondary parties to crime. Thus, if A incites B to attack C, A will be liable for the attack along
with B. If, however, B decides to attack someone else instead, A will not be liable for that
attack. If in trying to attack as by throwing a stone or chair at him B injures D, A will be liable
for the attack on D.
Mens rea and actus reus must coincide

There must be a coincidence of these two elements. However, it may be that although at the
outset the act did not carry with it the necessary mens rea this came later during what the
court regards as a continuing act or one transaction.
It is not necessary that the requisite state of mind should remain unaltered throughout.
A later change of mind will not prevent the commission of an offence. Thus, if A steals B’s
goods with the intention to deprive him permanently of them, A will still commit the
offence of theft even if he later changes his mind and gives the goods back to B.
In regard to the concept of the continuing act, in Fagan (see below) the actus reus preceded
the mens rea, whereas in Thabo Meli (see below) the mens rea preceded the actus reus.
Fagan v Metropolitan Police Commissioner, 1968 – A car on a policeman’s

foot (350)
Thabo Meli v R, 1954 – A killing in one transaction (521) 23
Mens rea in statutory offences

The principles applied in regard to mens rea where the offence is set out in a statute are
somewhat different from those applied in common-law offences. Some statutory criminal
offences are said to be offences of strict liability which means that there may be a need only to
prove the commission of the offence, the state of mind of the defendant being immaterial.
They are usually regulatory offences where no major moral issue is involved, but where there
is some social danger or concern involved in the regulated conduct.
..
EL_C23.qxd 3/26/07 10:55 AM Page 680
The topic may be considered under the headings which follow.
Mens rea implied

As Lord Reid said in Sweet v Parsley (1969) (see below), ‘There has for centuries been a
presumption that Parliament did not intend to make criminals of persons who were in no
way blameworthy in what they did. This means that whenever a section of an Act is silent as
to the requirement of mens rea there is a presumption that, in order to give effect to the will
of Parliament, we must read in words appropriate to require mens rea.’
Sweet v Parsley, 1969 – Statutory offences: presumption of requirement of mens

rea (522)
R v Tolson, 1889 – A bigamous wife (523)
However, as we have seen, statutes which regulate public conduct and which cannot be
enforced effectively if mens rea is required, e.g. pollution of the environment, are sometimes
excepted from the rule that statutory crimes require mens rea by implication.
Alphacell v Woodward, 1972 – Strict liability for pollution (524)

Cundy v Le Cocq, 1884 – Selling liquor to a drunk (525)
Particular words connoting mens rea

The use of words such as ‘maliciously’, ‘knowingly’, ‘wilfully’, ‘permitting’ and ‘suffering’ in a
statute is usually an indication that mens rea is required to establish the offence. However, the
absence of such words does not necessarily mean that no mens rea is required, as we have
seen from cases such as Sweet v Parsley (1969), above.
Gaumont British Distributors Ltd v Henry, 1939 – Where a record was not
knowingly made (526)
R v Lowe, 1973 – A charge of wilful neglect (527)
Somerset v Wade, 1894 – Permitting drunkenness (528)
Vicarious liability
If the offence is one which does not require mens rea so that it is an absolute offence, an
employer may be liable where an employee commits the offence in the course of his employ-
ment. It is no defence for the employer to say that he had no mens rea because none is
required.
However, if the offence requires mens rea as where, for example, it is one involving
‘permitting’, an employer will not be liable vicariously if it is the employee who does the
permitting.
Griffiths v Studebakers Ltd, 1924 – Vicarious liability: an absolute offence (529)

James v Smee, 1955 – Vicarious liability: where mens rea is required (530)
..
EL_C23.qxd 3/26/07 10:55 AM Page 681
If a person carries on a business which requires a licence which is issued subject to the
observance of certain conditions, he cannot escape liability by delegating the duty of seeing
that those conditions are observed to either an employee or a stranger. However, where the
offence requires knowledge, i.e. mens rea, the holder of the licence will not be liable for the
acts of his delegate unless the delegation is of the whole function of the licensee as where he
leaves the premises to take a holiday so that the management of the business is in the hands
of the delegate.
An employer cannot, it would appear, be liable vicariously for aiding and abetting an offence
unless he has knowledge of the offence. The knowledge of an employee in regard to such a
charge is not imputed to the employer in order to make him liable.
Vane v Yiannopoullos, 1965 – Delegation of duties (531)

Ferguson v Weaving, 1951 – Aiding and abetting (532)
Finally, there is no vicarious liability for an offence which is merely attempted but not
completed (Gardner v Ackroyd [1952] 2 QB 743).
The mental element – corporations

In October 1987 an application was made for leave to apply for judicial review against the
decision of the coroner for East Kent made on 18 and 19 September 1987 in the course of
an inquest into the deaths of 188 people arising out of the capsize on 6 March 1987 of the
Herald of Free Enterprise off Zeebrugge (see ex parte Spooner and Others; ex parte de Rohan and
Another (1987) The Times, 10 October).
As we have seen, application can be made to the Queen’s Bench Division for judicial review
to correct an alleged defect in a proceeding in a lower court, tribunal or public body. The
coroner had decided as a matter of law that:
(a) A corporate body could not be guilty of manslaughter.

(b) Where the individual acts or omissions of individuals employed by a corporate body or
engaged in its management were insufficient to render them guilty of manslaughter,
those acts or omissions could not be aggregated in order to make the corporate body
guilty.
(c) The acts and omissions of the company, Townsend Car Ferries Ltd, were not the direct
cause of the deaths.
23
The applicants, who were seeking to have the coroner’s decisions reviewed, relied on three
points made against the company in the Sheen Report published in July 1987 following an
inquiry under Mr Justice Sheen. These were that:
(a) the company had failed to consider seriously a proposal to fit a warning light system on
the ferry;
(b) five or six previous incidents of ferry doors being left open had not been properly
reported and collated by the company; and
(c) it lacked any proper system to ensure that the highest standards of safety were observed.
In hearing the application for judicial review, Lord Justice Bingham said that he was
prepared tentatively to accept that a corporate body was capable of being found guilty of
manslaughter and Mr Justice Mann and Mr Justice Kennedy agreed.
..
EL_C23.qxd 3/26/07 10:55 AM Page 682
However, the court refused leave to apply for judicial review. No substantial case had been
made against named directors of the company and in any case the court was always reluctant
to intervene in inquests.
So far the proceedings may seem to have been rather ordinary and straightforward but in
fact the tentative acceptance of corporate liability for serious crime is far from innocuous. Up
to now corporations have been convicted of crimes as follows:
(a) Those for which no guilty mind (mens rea) or even recklessness as to consequences
is necessary. Some Acts of Parliament which regulate public conduct cannot be enforced
effectively if an intentional or reckless state of mind is required, either in an individual or a
corporation, e.g. statutory crimes relating to the pollution of the environment are sometimes
excepted from the rule that even statutory crimes require mens rea, either expressly or by
implication even though no state of mind is mentioned in the statute. An example is pro-
vided by Alphacell v Woodward (1972).
(b) Crimes which require a state of mind. Here, if the appropriate human decision-making
organ within the company has the necessary state of mind the company may be found
guilty. Examples are to be found in Director of Public Prosecutions v Kent & Sussex Contractors
Ltd [1944] 1 All ER 119 where a company was convicted under statutory defence regulations
for using a document with intent to deceive and for making a false statement, since those
managing the company had the necessary state of mind.
Again, in R v ICR Haulage Ltd [1944] KB 551 the company was successfully prosecuted for a
common-law conspiracy to defraud because of the state of mind of its managing director.
Finally, in Moore v Bresler Ltd [1944] 2 All ER 515 a company was successfully prosecuted for
using a document with intent to defraud when the acts and state of mind were those of the
company secretary and a branch manager, not those of the directors.
The requirements were clearly laid down by Lord Denning in H L Bolton (Engineering) Ltd v
T J Graham & Sons Ltd [1956] 3 All ER 624 where he said:
A company may in many ways be likened to a human body. It has a brain and nerve centre
which controls what it does. It also has hands which hold the tools and act in accordance
with directions from the centre. Some of the people in the company are mere servants and
agents who are nothing more than hands to do the work and cannot be said to represent
the mind or will. Others are directors and managers who represent the directing mind and
will of the company and control what it does. The state of mind of these managers is the
state of mind of the company and is treated by the law as such.
The above material represents what is called the attribution rule which means that the court
must be able to indentify a guilty directing mind and will so that the crime can be attributed
to the corporation. The rule was retained by the Court of Appeal in Attorney-General’s
Reference (No 2 of 1999) (2000) The Times, 29 February following a failed attempt to convict
Great Western Trains of manslaughter after a major rail disaster at Paddington. The court felt
unable to move to personal liability as a basis for corporate manslaughter.
(c) If there is to be a third category of corporate liability it would be based upon the fact that
although no single individual is criminally culpable, he or she is nevertheless part of a com-
plex and collective corporate mind which, when aggregated, gives the necessary culpability.
These non-culpable people may be regarded by the courts in the future as part of a group
lacking, say, a proper system of control and supervision to ensure observance of safety
elements which, in a particular case, could lead to a conviction of the organisation involved –
the company – for a crime as serious as manslaughter where death of a person or persons has
ensued. Since manslaughter can be punishable by a fine, which is at the discretion of the
..
EL_C23.qxd 3/26/07 10:55 AM Page 683
court and has no limit, there would be no problem in punishing the corporation (see now the
Corporate Manslaughter and Corporate Homicide Act 2007 below).
If such a prosecution were successful, it would bring Salomon v Salomon (1897) (see Chapter
8) full circle. Since that case, people have accepted gradually that it is companies that do things,
such as make contracts, obtain licences and so on. The last frontier is the corporate doing of a
crime where the necessary state of mind is not derived from any particular individual but
from all those individuals involved in the failure of the system in general. The admission by
the court in ex parte Spooner and Others (above) that a corporate body is capable of being
guilty of manslaughter suggests that if appropriate circumstances arise the law will take the
final leap in the personification of corporate entities.
It has to be said, however, that the great leap forward did not take place in the Spooner case.
The Director of Public Prosecutions decided in 1989 to prosecute in regard to the Zeebrugge
disaster. The prosecution collapsed because the Crown was unable to prove that the senior
officers involved had any specific duties and responsibilities for certain areas of safety which
they had failed to carry out.
However, the development of the law relating to corporate manslaughter took a step
forward in the case of R v OLL (1994) The Times, 9 December where the managing director
of an activity centre was sentenced to three years’ imprisonment for manslaughter following
the deaths of four teenagers in the Lyme Bay canoe disaster on 22 March 1994. In a landmark
decision, the judge (Ornall, J) also decided that Mr Kite’s company OLL, formerly Activity
Leasing and Leisure, was guilty of manslaughter and was fined £60,000. Mr Kite’s sentence
was later reduced to one year by the Court of Appeal. It should be borne in mind that it was
fairly easy to regard Mr Kite as the company’s alter ego because he was a majority shareholder
and a director. OLL was virtually a ‘one-person company’.
Following the above successful conviction, a jury at Bradford Crown Court returned a
verdict in Jackson Transport (Ossett) Ltd (1994) (unreported) that the company and the com-
pany’s former director, Alan Jackson, were guilty of manslaughter. James Hodgson, one of the
company’s former employees, was unlawfully killed by his employer in 1994 (so found the
jury). He died after being sprayed in the face with chemicals which had solidified inside a
tanker which he had been cleaning under steam pressure. There were no first aid facilities
available and he was not given any protective clothing. Three months before Mr Hodgson
had been hospitalised for three days following a similar incident, except on that occasion he
had become exposed to dangerous fumes. This evidence demonstrated that the company,
through its former managing director, Mr Jackson, was aware of the dangers but failed to do
anything about them. The company was fined and Mr Jackson received a prison sentence of
one year.
It will have been noted that a company can be liable for an offence of strict liability because
no menetal element is required (see Alphacell v Woodward (1972) at p 650).
23
Reform
The Corporate Manslaughter and Corporate Homicide Act 2007
The above material shows the background to this legislation. The 2007 Act makes provision
for a new offence of corporate manslaughter (to be called corporate homicide in Scotland).
The Act was introduced in the Commons on 20 July 2006.
Under common law, a company can, as we have seen, only be convicted of corporate
manslaughter if there is enough evidence to find a senior individual within the company
guilty. This does not reflect the reality of modern corporate life, certainly in larger companies,
and to date only small organisations have been convicted, as in R v OLL (1994) The Times,
..
EL_C23.qxd 3/26/07 10:55 AM Page 684
9 December, where the company and its managing director were found guilty of manslaugh-
ter following the deaths of four teenagers in the Lyme Bay canoe disaster. Significantly, the
managing director was also the sole shareholder in the one-man company and it was easy to
impute his conduct also to that of the company. He was imprisoned for one year and the
company was fined.
The new criminal offence addresses this situation by allowing the courts to consider the
overall picture of how an organisation’s activities were managed by its senior managers,
rather than focusing on the actions of one individual. Section 2 defines a senior manager as
an individual who plays a significant role in the making of decisions about how the whole or
a substantial part of those activities are to be managed or organised or actually managed.
Failings at junior management level will not lead to the prosecution of the company.
An organisation will be guilty of the new offence where the gross failure of senior manage-
ment has led to the death of an employee or a member of the public. It will include failure
to ensure safe working practices for employees and failure to maintain the safety of premises.
It will cover the provision of goods and services to members of the public and the construc-
tion, use and maintenance of the infrastructure or vehicles when operating commercially.
Crown organisations are included.
Companies found guilty of corporate manslaughter will be subject to an unlimited fine.
The court will also be able to impose a remedial order to take specified steps to remedy the
breach within a specified period.
The Act does not include a directors’ offence carrying with it the possibility of impris-
onment, as has been proposed in the past.
..
EL_C24.qxd 3/26/07 10:56 AM Page 685
24
SPECIFIC OFFENCES
The intention here is to include only specific offences against the person. These are set out
below.
Homicide
Homicide is the unlawful killing of a human being. There are three main homicides, i.e.
murder, voluntary manslaughter and involuntary manslaughter, which includes causing
death by dangerous driving.
Murder
This is basically a common-law offence and to constitute it there must be an unlawful killing
of another human being under the Queen’s peace with malice aforethought. Formerly, the
victim had to die within a year and a day of the defendant’s criminal conduct.
The year and a day rule prevented the prosecution of defendants for murder as
medical science developed techniques for keeping seriously injured persons alive for long
periods.
The Law Reform (Year and a Day Rule) Act 1996 abolished the year and a day rule, i.e. the
irrebuttable presumption that applied for the purposes of offences causing death where more
than a year and a day had elapsed. The Act abolishes the rule in regard to murder, man-
slaughter, abetting suicides, infanticides, causing death by dangerous driving when under the
influence of drink, and aggravated vehicle taking causing death (s 1). It does not affect the
application of the rule to acts or omissions occurring before the relevant part of the Act came
into force, i.e. 17 June 1996 (s 3).
Section 2 restricts the bringing of proceedings in that the consent of the Attorney-General
is required before a prosecution can be brought in cases where the injury alleged to have
caused the death did in fact occur more than three years before the death and also where the
person to be prosecuted for a fatal offence has already been convicted of an offence, e.g.
grievous bodily harm, connected to the circumstances of the death.
..
EL_C24.qxd 3/26/07 10:56 AM Page 686
The actus reus

Since the killing must be of a human being, the unlawful killing of an unborn child is not
murder. However, such killings are covered and made criminal in appropriate circumstances
by s 58 of the Offences Against the Person Act 1861, s 1 of the Infant Life (Preservation) Act
1929 and the Abortion Act 1967. The detail of these offences is not considered here. The
expression ‘another human being’ includes a child that has been born alive and has an existence
independent of the mother. Where a person injures a child while it is in its mother’s womb
and it dies later from those injuries after being born, it may be appropriate to bring a charge
of murder. The fact that the victim must be ‘under the Queen’s peace’ prevents the killing of
the enemy in wartime from being murder. This refers to killing in action. It is murder to kill
prisoners of war. Under the Offences Against the Person Act 1861 any British citizen who
commits murder anywhere in the world may be tried in England or Wales. In addition, a
killing in self-defence may be lawful and so not murder (see further Chapter 25).
R v Dyson, 1908 – Death within a year and a day; Attorney-General’s consent now
required (533)
The mens rea

Some consideration has already been given to this. However, the mens rea for murder is
defined as ‘malice aforethought’. According to the House of Lords in Maloney (1985), murder
is a crime which requires a specific intent, either direct as where the defendant desired the
consequences, or oblique as where he foresaw the consequences as near certain. Recklessness is
not enough. The court must be satisfied of the presence of such an intent either to kill or
cause grievous bodily harm.
In this connection, it should be noted that the decision in Maloney (1985) confirms that it
is enough malice if the intention is not to kill but to cause grievous bodily harm.
Maloney thus decides that intent to kill and intention to cause grievous bodily harm are the
only forms of mens rea for murder.
In so far as the expression ‘malice aforethought’ suggests evidence of premeditation or plot,
it is misleading since this is not necessary, provided the specific intent to kill is present.
Manslaughter
Manslaughter is divided into voluntary manslaughter and involuntary manslaughter.
Voluntary manslaughter
This is murder reduced to manslaughter by the presence under the Homicide Act 1957 of
provocation, diminished responsibility or suicide pact. Once it is shown that one of these
partial defences exists, the crime ceases to be murder and the fixed penalty of life imprison-
ment goes, giving the judge a discretion as to sentence.
The mens rea is, therefore, the mens rea for murder, but with the mitigating factors of
provocation, diminished responsibility or suicide pact.
..
EL_C24.qxd 3/26/07 10:56 AM Page 687
SPECIFIC OFFENCES 687
Provocation generally
Section 3 of the Homicide Act 1957 applies. It provides as follows.
Where on a charge of murder there is evidence on which the jury can find that the person
charged was provoked (whether by things done or by things said or by both together) to
lose his self control, the question whether the provocation was enough to make a reason-
able man do as he did shall be left to be determined by the jury; and in determining that
question the jury shall take into account everything both done and said according to the
effect which, in their opinion, it would have on a reasonable man.
The questions to consider

There are two questions to consider, as follows:
n Was the defendant actually provoked? This is a matter for the jury, as the Homicide Act
1957 states. If the jury decides that the defendant was not provoked, the second question
does not arise and the defence of provocation will fail.
n If the jury does decide that the defendant was provoked, then that provocation must be
such that it would have caused a reasonable person to be provoked. The problem here has
been whether any particular characteristics of the defendant are to be taken into account
so that, although a reasonable person would not have been provoked, the defence must be
allowed because of the particular characteristics of the defendant. Bad temper is clearly not
a characteristic that counts because it is a character defect not an excuse.
The problems have arisen in regard to what characteristics apart from the above should be
taken into account and what should not or whether they should be taken into account at all
being regarded as defects which would not be possessed by the reasonable man which the
1957 Act uses as the yardstick.
The relevant case law is given in the Comment to R v Camplin (1978), see Case 534 on
p 904.
Was there provocation?

Although the issue of provocation is normally raised by the defence, the burden of proving
that there was no provocation is on the prosecution once it is raised. Where, therefore, the
jury has a reasonable doubt about the matter, it must be taken that the defendant was
provoked. The judge can put the matter to the jury if it is not raised by the defence. In fact
it was decided by the Court of Appeal in R v Cambridge (1994) The Times, 15 February that in
a murder trial a judge is obliged to leave the matter of provocation to the jury if he decides
that there is evidence of it, even if provocation has not been put forward by the defence and
is contrary to it. The test here is subjective, i.e. was the particular defendant provoked? If the 24
jury finds that he was not, then it is not relevant that a reasonable man would have been.
In Franco v The Queen (2001) The Times, 11 October the Privy Council added a further point
which is that a court cannot infer what a jury might have decided in terms of provocation. In
Franco the conviction of the defendant for murder was quashed and a conviction of
manslaughter substituted on the ground that there was evidence of provocation that was not
put to the jury. It should have been even though the defendant had relied on self-defence.
However, it is the role of the judge to determine whether there is enough evidence for a
jury to find that there was a reasonable possibility of specific provoking words or conduct
which caused the defendant to lose self-control. If so, the judge must leave the question of
provocation to the jury, no matter whether the source of the evidence came from the defence
..
EL_C24.qxd 3/26/07 10:56 AM Page 688
or the prosecution. If in the view of the trial judge, taken on reasonable grounds that there
was no such evidence, he had no need to put the defence to the jury, an appeal on the
grounds that he should will normally fail (see R v Acott (Brian Gordon) [1997] 1 WLR 306
where the defendant had killed his mother in a violent attack and the prosecution had
referred in cross-examination to the fact that he had lost his self-control).
It was decided by the Court of Appeal in R v Stewart [1995] 4 All ER 999 that if the defence
of provocation is not raised but the judge nevertheless decides to refer it to the jury, he
should give the jury some assistance as to what evidence they have to consider in relation to
provocation, i.e. did the defendant lose his self-control as a result of things done or said, and
whether a reasonable man would have been provoked by such things.
How would a reasonable person react?

The next stage in the test is objective. If the jury decides that the defendant was provoked, then
it must go on to decide how a reasonable person would have responded to that provocation
and whether any particular characteristics of the defendant should be brought into account, if
at all, having received the judge’s summing up. The reasonable person test means in effect
that the defendant’s reaction will normally have to bear some proportion to the provocation.
R v Camplin, 1978 – Taunting a 15-year-old (534)
Other matters
A relevant provocation can be induced by the defendant himself. This covers the case where
the defendant started the trouble and caused his victim to provoke him. In addition, there
must be a ‘sudden and temporary loss of self-control’, which means that there must not be a
significant ‘cooling-off’ period between the provocation and the killing.
R v Johnson, 1989 – Where provocation is self-induced (535)

R v Thornton, 1991 – A slow wearing down of control (536)
As regards domestic homicides, the government has considered proposals for change in
regard to the defence of provocation which is raised by women who have killed their male
partners but claim to have been provoked. The defence by no means always succeeds. It is
often raised by men who kill their partners and the stance taken by government ministers is
that in these cases the crime is too often reduced to manslaughter. Crown prosecutors would
be issued with guidance that domestic homicides should carry a charge of murder not man-
slaughter together with a new category of self-defence for women who kill their partners after
years of abuse. There is currently no legislation on these proposals.
Diminished responsibility
By reason of s 2(1) of the Homicide Act 1957 this defence is available in respect of a murder
charge only. The burden of proof is on the defence which must show that the defendant ‘was
suffering from such abnormality of mind (whether arising from a condition of arrested or
retarded development of mind or any inherent causes or induced by disease or injury) as
substantially impaired his mental responsibility for his acts and omissions in doing or being
a party to the killing’.
..
EL_C24.qxd 3/26/07 10:56 AM Page 689
The question whether the requirement that the defence must prove diminished responsib-
ility in terms of Art 6 of the Human Rights Convention (right to a fair hearing) was raised in
R v Lambert [2001] 1 All ER 1014. The Court of Appeal ruled that this burden of proof was not
contrary to Art 6. The presumption of innocence still applied. This was a special defence and
did not interfere with the general rule that the burden of proof is on the prosecution.
The defence is wider than that of insanity (see Chapter 25) and covers other mental con-
ditions. In fact the defendant may know what he is doing and that it is wrong. His alleged
problem is that he finds it substantially more difficult to control his actions than would a normal
person, and this difficulty is caused by some abnormality of his mind.
It is not correct for a judge to direct the jury that only partial or borderline insanity
amounts to diminished responsibility (R v Seers [1984] 79 Cr App R 261).
A killing arising from drink or drugs is not covered because these conditions do not come
within ‘disease or injury’. However, where the taking of excessive drink or drugs over a period
have, in effect, caused mental disease then the defence has been applied.
R v Tandy, 1987 – Use of alcohol not involuntary (537)

R v Gittins, 1984 – Where the taking of drink and drugs is a disease (538)
It was held in R v Hobson (Kathleen) (1997) The Times, 25 June that since battered woman’s
syndrome was added to the British classification of mental diseases in 1994, it could now be
raised as forming the basis of the defence of diminished responsibility.
A person who is unfit to plead cannot raise the diminished responsibility defence because
he is not liable to be convicted of murder (see R v Antoine [2000] 2 WLR 703, which is con-
sidered more fully in Chapter 25).
Suicide pact
The Homicide Act 1957 states in s 4(1) that:
It shall be manslaughter and not murder, for a person acting in pursuance of a suicide pact
between him and another to kill the other or be a party to the other being killed by a third
person.
The defendant must show:
n that a suicide pact was made; and

n that he or she intended to die at the time the killing took place.
A suicide pact is defined by the Homicide Act 1957 in s 4(3) as:
A common agreement between two or more persons having for its object the death of all of
them, whether or not each is to take his own life, but nothing being done by a person who
24
enters into a suicide pact shall be treated as done by him in pursuance of the pact unless
it is done while he has a settled intention of dying in pursuance of the pact.
It is relevant to mention here the offence of aiding suicide. In this connection, s 2 of the
Suicide Act 1961 states that a person who aids, abets, counsels or procures the suicide
of another or an attempt by another to commit suicide shall be liable to a maximum of
14 years’ imprisonment. The crime is triable on indictment and is an arrestable offence. It is
an alternative verdict on a charge of murder or manslaughter. It was formerly an offence for
a person to commit suicide but this was repealed by s 1 of the above Act. The House of Lords
has ruled that the 1961 Act is not incompatible with the Convention on Human Rights.
..
EL_C24.qxd 3/26/07 10:56 AM Page 690
In the same case their Lordships upheld the decision of the Director of Public Prosecutions
to prosecute in a case where a woman suffering from motor neurone disease wanted her
husband to help her die. The DPP had no power to give an undertaking that he would not
prosecute in advance of the offence being committed. Even if the power existed using it for
that purpose would be an abuse of due process because the circumstances of the offence
would not be known before it took place (see R (on the application of Pretty) v DPP (2001) The
Times, 23 October). Mrs Pretty was also unsuccessful in her attempt to have the Lords’ ruling
overturned by the European Court of Human Rights.
Involuntary manslaughter
It is apparent from the case law that involuntary manslaughter is based upon either an
unlawful act resulting in death, sometimes called constructive manslaughter, or death result-
ing from gross (or criminal) negligence.
Manslaughter from an unlawful act (constructive manslaughter)

Constructive manslaughter has three ingredients as follows:
n An unlawful act committed by the defendant that results in the death of another person:
as in the law of tort, the chain of causation can be broken and, in particular, this has resulted
in drug dealers being regarded as not liable for the deaths of those supplied, as in R v Dalby
[1982] 1 All ER 916. However, there may be liability where there is, in fact, little if any
break in the chain of causation. Thus, in R v Kennedy [1999] Crim LR 739 the victim asked
the defendant to get him something that would make him sleep. The defendant prepared a
syringe filled with heroin and handed it to the victim. The victim paid the defendant and
injected himself and left. He died less than an hour later and the defendant was convicted
of manslaughter.
The ruling in Kennedy was doubted but not overruled by the Court of Appeal in R v
Rogers (Stephen) (2003) The Times, 20 March. Rogers held a tourniquet around the arm of a
drug abuser so that the abuser could inject himself. This was regarded by the Court of
Appeal as sufficient involvement in the activity of injection as to make Rogers guilty of
manslaughter when the abuser died following cardiac arrest. The Court of Appeal doubted
whether there was sufficient participation by the defendant in the mechanics of the injec-
tion to have found Kennedy guilty of manslaughter. There is no question of aiding and
abetting in such a situation because self-injection is not a crime other than being in pos-
session of the relevant drug. Much turns therefore on the circumstances of the case. Those
involved in, say, handing drugs to the abuser in this sort of case are not parties to his or
her obtaining them. Rogers was not a party but the dealer in Kennedy was and the death
quickly followed. It could be said therefore that the issue of whether the dealer caused the
death of the user by the unlawful act of supplying the drug should have been left to the
jury but it was not. There are cases stating that drug dealers cannot, in general, be held
liable for the ultimate as distinct from proximate death of their user victims (see R v Dalby
[1982] 1 All ER 916).
Nevertheless, when Kennedy appealed to the Court of Appeal, that court affirmed
his conviction, saying that there was no error in the trial judge’s judgment. Those
involved were acting in concert in administering the heroin (see R v Kennedy [2005] 1 WLR
2159).
..
EL_C24.qxd 3/26/07 10:56 AM Page 691
n The act must have involved a risk that someone would be harmed: the risk is judged
objectively i.e. would a reasonable and sober person observing the act see an apparent risk.
The harm must be physical. The risk of psychological or emotional harm is not enough.
n The defendant must have had the mens rea for the unlawful act, such as an assault,
that led to the victim’s death: thus, in R v Lamb [1967] 2 QB 981 the defendant pointed a
gun at his friend believing, as was the case, that the two rounds in the gun were not in the
firing chamber. The defendant pulled the trigger, but with no intention of harming his friend.
However, the barrel rotated so that a bullet moved into the firing chamber and the friend
was shot and killed. The defendant did not know how the gun worked and saw the incident
as a joke. He lacked the mens rea for assault and, therefore, was not guilty of manslaughter.
R v Church, 1966 – The unlawful act must create the risk of physical harm (539)
R v Lowe, 1973 – Unlawful omission not generally enough (527)
Manslaughter by gross negligence

To cause death by any lack of due care will not amount to manslaughter. A very high degree
of negligence is necessary for the establishment of a crime. Whether the appropriate degree of
negligence exists is a matter for the jury, following direction by the judge. The test according
to the House of Lords in R v Adomako [1994] 3 All ER 79 is that a defendant is properly
convicted of involuntary manslaughter by breach of duty if the jury is directed and finds
that the defendant was in breach of a duty of care towards the victim who died, that the
breach of duty caused the death of the victim and that the breach of duty was such as to be
characterised as gross negligence and, therefore, a crime. Lord Mackay LC said, giving an
analysis of the law:
. . . in my opinion the ordinary principles of the law of negligence apply to ascertain
whether or not the defendant has been in breach of a duty of care towards the victim who
has died. If such breach of duty is established the next question is whether that breach of
duty should be characterised as gross negligence and therefore as a crime. This will depend
on the seriousness of the breach of duty committed by the defendant in all the circum-
stances in which the defendant was placed when it occurred. The jury will have to consider
whether the extent to which the defendant’s conduct departed from the proper standard of
care incumbent upon him, involving as it must have done a risk of death to the patient,
was such that it should be judged criminal.
The circumstances to which a charge of involuntary manslaughter may apply are so various
that it is unwise to attempt to categorise or detail specimen directions, but certainly civil
liability, although sufficient to establish the duty of care, is not sufficient to amount to ‘gross
negligence’, nor is Caldwell recklessness. The test as stated in Adomako is enough. In the case 24
the defendant was an anaesthetist during an eye operation on a patient. A tube supplying
oxygen to the patient became disconnected but the defendant failed to notice this for some
six minutes. The patient suffered cardiac arrest and died. The defendant was convicted of
manslaughter and his appeal to the House of Lords was dismissed. There would, of course,
have been an action in negligence as a fatal accident (see Chapter 20) but it is interesting to
note that, because the negligence here is gross, criminal liability can also result.
Manslaughter by gross negligence and human rights

The definition of manslaughter by gross negligence continues to produce cases mainly in
the field of medical treatment and care. Counsel for the defence in this sort of case have
..
EL_C24.qxd 3/26/07 10:56 AM Page 692
challenged the House of Lords’ definition in Adomako as being circular and uncertain. The
Adomako ruling is, as we have seen, to the effect that the jury are to be directed that in order
to find gross negligence they must find that there has been a departure from the expected
standard of professional practice so serious as to amount to a criminal act. Some lawyers say
this direction is circular, in that, in order to find the defendant guilty of a crime, you must
find that he or she is guilty of a crime.
This direction to the jury was challenged in R v Misra [2005] Crim App Rep 328 on the
grounds that it contravened the Convention on Human Rights, Art 6 (right to a fair trial) and
Art 7 (creation of criminal offences after the event). In other words, it is impossible to obey
an uncertain law.
The defendants in the case were doctors. The patient had toxic shock syndrome. The defend-
ants failed to appreciate how ill the patient was, so that he did not get the proper treatment
and died. The jury convicted both doctors of gross negligence manslaughter on the basis of
the Adomako direction. The doctors appealed to the Court of Appeal which dismissed the
appeal, ruling that:
n The requirement for legal certainty of an offence was not absolute certainty but sufficient
certainty. This common law principle had not been changed by the Convention.
n The offence of manslaughter by gross negligence was based on well-established principles,
i.e. death resulting from a negligent breach of a duty of care owed by the defendant to the
deceased; that in the negligent breach of that duty the victim was exposed to the risk of
death; and that the circumstances were so reprehensible as to amount to gross negligence
(Adomako applied).
n Gross negligence manslaughter should not be replaced by or confined to cases of reckless
negligence.
n On the issue that a criminal offence normally requires mens rea, the court said that the
requirement for gross negligence provided the necessary element of culpability.
Gross negligence manslaughter was not incompatible with the Convention.
Causing death by dangerous or careless driving

Under s 1 of the Road Traffic Act 1988 as substituted by s 1 of the Road Traffic Act 1991
the offence of causing death by dangerous driving replaces the offence of causing death by
reckless driving in earlier legislation. It was thought that while the general remarks about
criminal recklessness in case law had relevance in regard to manslaughter generally, they
were not entirely suitable in the road traffic situation. In particular, it was felt to be too sub-
jective so that there was a need to move to an objective assessment of the standard of driving of
the defendant. The offence of causing death by dangerous driving has two elements as follows:
(a) there must be a standard of driving which falls far below that to be expected of a com-
petent and careful driver; and
(b) the driving must carry a potential or actual danger of physical injury or serious damage to
property.
The standard of driving will be judged objectively taking no account, e.g., of inexperience,
age or disability – though these will be reflected in the sentence. The requirements of the
section would be met where the state of the vehicle was such that a competent and careful
driver would not drive it at all. If a driver was in an unfit condition to drive, e.g. by reason of
drink or drugs, this would not be a defence if he drove dangerously as defined above.
..
EL_C24.qxd 3/26/07 10:56 AM Page 693
In addition to the cases of dangerous driving, it should be noted that successful prosecu-
tions have been brought on the basis of the state of the vehicle and the state of the driver. Thus
in R v Skelton [1995] Crim LR 635 the defendant was a lorry driver who drove his lorry on a
motorway after receiving a warning from another driver that the air pressure gauges were
low. While on the motorway the pressure problem activated the handbrake which is an
effect of such a problem and another lorry driver was killed when he ran into the back of the
defendant’s lorry. Although the crash was not immediate but some 10 minutes after
the defendant’s lorry stopped blocking the lane the Court of Appeal ruled that the chain of
causation had not been broken and the defendant was rightly convicted. In R v Marison
[1996] Crim LR 909 a diabetic was successfully charged with causing death by dangerous
driving. He had suffered periods of unconsciousness in the previous six months. As regards
this prosecution, he went into an unconscious state and veered on to the wrong side of the
road hitting an oncoming vehicle and killing its driver. He was convicted of causing death by
dangerous driving.
Section 3A of the Road Traffic Act 1988 contains an offence of causing death by careless
driving under the influence of drink or drugs. It creates an objective test of negligence that
requires merely that the defendant’s driving has fallen below the reasonable standard of care
and that drink or drugs were involved.
Violent offences which are not fatal

Under this heading we must consider the following crimes.
Assault and battery

It has already been pointed out in Chapter 21 on the law of specific torts that assault is
a threat to apply force immediately to the person of the victim and a battery is the actual
application of that force. This distinction also exists in the criminal law. Assault and battery
are summary offences under s 39 of the Criminal Justice Act 1988.
Assault
The actus reus of assault consists of an act which gives the victim reasonable cause to believe
that there will be an immediate infliction of violence. Assault requires basic intent and so
actual intention or Cunningham recklessness is enough.
24
Battery
The actus reus consists in the actual application of force however slight to another without
that other’s consent. As we have seen, a battery can consist of an omission (see Fagan v
Metropolitan Police Commissioner (1968) in Chapter 21).
The mens rea is a basic intent and so once again actual intention or Cunningham reckless-
ness will suffice.
Defences
The following defences are available.
..
EL_C24.qxd 3/26/07 10:56 AM Page 694
Chastisement
Chastisement of children, which is the main scenario, is considered in Chapter 21 (trespass to
the person).
Self-defence
This is also called the ‘private defence’. Where an attack which is, e.g., of a violent or inde-
cent nature, is made against a person who is put in fear of his life or the safety of his person,
then that person is entitled to protect himself and repel the attack but must not use more
force than is necessary or reasonable in the circumstances. If the defence is accepted, it is a
complete and not a partial defence because it negates the unlawful nature of the assault carried
out in self-defence – in fact, there is no actus reus and mens rea (see further Chapter 25).
Statutory offences against the person

Assault and battery are common-law offences, but the more serious offences against the
person are contained in the Offences Against the Person Act 1861 as follows.
Assault occasioning actual bodily harm

Under s 47 of the Offences Against the Person Act 1861 it is an offence punishable with
imprisonment for a term not exceeding five years for a person to assault another thereby
‘occasioning actual bodily harm’. Actual bodily harm merely means that the victim has
suffered some injury. Bruising or abrasions are enough. Psychiatric injury can amount to
actual bodily harm as where, e.g., this results from harassment of a woman by obscene phone
calls, but there must be properly-qualified expert evidence before it can be left to the jury,
since it must be something more than mere emotion such as fear, distress or panic (see Court
of Appeal decision in R v Chan-Fook [1994] 2 All ER 552).
The mental state of the defendant is set out in the judgment of the House of Lords in
Parmenter (see p 907).
The Queen’s Bench Divisional Court has concluded that the lopping of hair without con-
sent can constitute an offence under s 47 (see DPP v Smith (Michael Ross) [2006] 2 All ER 16
(Chapter 21)).
DPP v K, 1990 – Acid in the hand washer (540)
Malicious wounding
Section 20 of the Offences Against the Person Act 1861 provides as follows:
Whosoever shall unlawfully and maliciously wound or inflict any grievous bodily harm
upon any person either with or without any weapon or instrument shall be guilty of an
offence and being convicted thereof shall be liable to imprisonment for five years.
The word ‘unlawfully’ indicates that acts of genuine self-defence are excluded. As regards
the actus reus, there are two possibilities, i.e. (a) wounding and (b) inflicting grievous bodily
harm. Wounding is fairly straightforward and requires a breaking of the skin, though a graze
..
EL_C24.qxd 3/26/07 10:56 AM Page 695
would be enough. Grievous bodily harm must be some serious harm and where only slight
harm is inflicted a prosecution under s 47 would be more appropriate.
As regards inflicting grievous bodily harm, while one normally thinks of the application of
force to the person of the victim the concept does not necessarily require an assault.
R v Martin, 1881 – Inflicting grievous bodily harm: no assault (541)
As regards the mens rea, this is set out in the judgment of the House of Lords in Parmenter
(below).
R v Parmenter, 1991 – Injury to a child (542)
Sexually transmitted diseases and ss 20 and 47

The growth of sexually transmitted diseases including HIV in society may well lead to an
alteration in the criminal law landscape and in civil claims. The Victorian legal contribution
to this problem was unhelpful to persons who had been infected with disease following
sexual intercourse with a person who knowingly had the disease but did not inform the other
person who consented to sexual intercourse without the relevant knowledge. The doctrine of
informed consent that has been brought into civil cases has now it would appear been intro-
duced into the criminal law of offences against the person. The Victorian case is R v Clarence
(1888) 22 QBD 23. Clarence knew he had gonorrhoea. He had consensual intercourse with
his unknowing wife. She contracted the disease and Clarence was prosecuted under ss 20 and
47 of the Offences Against the Person Act 1861. He was convicted at his trial because the jury
did not believe that his wife who did not know about his condition had truly consented. His
conviction was quashed by the appeal court. The wife had consented to sexual intercourse
and that was enough.
More recently in R v Dica ( Mohammed) (2003) (unreported) D was convicted of
causing grievous bodily harm to two women he infected with HIV. He knew he was HIV-
positive and appreciated the risk of unprotected sex. The women consented to unprotected
sexual intercourse but said that they would not have done so if they had known of D’s infec-
tion. The jury at the Inner London Crown Court seems to have bypassed Clarence and
accepted that there may be a biological offence under ss 47 or 20 of the 1861 Act. This would
seem to cover a person who knows he or she is infected or possibly is reckless regarding
whether or not there is an infection that has caused the actual or grievous bodily harm of
the disease.
Dica appealed against his conviction (see R v Dica [2004] QB 1257) and that appeal suc- 24
ceeded because the trial judge withdrew from the jury the issue of whether the female com-
plainants in the case consented to sexual intercourse knowing of his condition, as he alleged
they did. He was granted a re-trial where the issue of consent was turned down. It is a general
rule of law that, unless the activity is lawful, the consent of the victim does not provide a
defence to grievous bodily harm and the trial judge felt bound by this. Dica was convicted at
his re-trial. He again appealed against this conviction but his appeal to the Court of Appeal
failed and he was refused permission to appeal to the Lords (see R v Dica (2005) The Times,
7 September). While the case impacts mainly on sexual behaviour, it could affect the liability
of practitioners in the medical and dental professions. Certainly it is a new development for
these old statutory provisions.
..
EL_C24.qxd 3/26/07 10:56 AM Page 696
Causing grievous bodily harm

Section 18 of the Offences Against the Person Act 1861 provides as follows:
Whosoever shall unlawfully and maliciously by any means whatsoever wound or cause
grievous bodily harm to any person with intent . . . to do some grievous bodily harm to
any person or with intent to resist or prevent the lawful apprehension or detainer of any
person shall be guilty of an offence and being convicted thereof shall be liable to imprison-
ment for life.
The expressions ‘wounding’ and ‘grievous bodily harm’ (GBH) carry the same meanings as
they do for the purposes of s 20. The expression ‘cause grievous bodily harm’ is used in s 18
whereas the expression ‘inflict grievous bodily harm’ is used in s 20. It might have been
assumed that s 18 applied to cases of grievous bodily harm caused by any means, whereas the
expression ‘inflict’ in s 20 meant that it had to be as the result of an assault. However, since it
seems that a s 20 offence can be committed without an assault the distinction between s 20
and s 18 is not really clear. The judgment of the House of Lords in R v Mandair [1994] 2 All
ER 715 considered the two sections. D was tried under s 18 for ‘causing grievous bodily harm
with intent’. Counsel and the judge agreed that the jury could convict on the lesser charge of
‘inflicting grievous bodily harm’. The judge in referring to the s 20 offence in his direction to
the jury said it consisted of ‘causing’ GBH. The jury acquitted the defendant on the s 18
charge but convicted him on the s 20 count of ‘causing’ GBH. The Court of Appeal quashed
the conviction on the ground that the defendant had been convicted of an offence not
known to law.
The prosecution appealed to the House of Lords which held that it was open to a jury
trying a charge of causing GBH with intent contrary to s 18 of the Offences Against the
Person Act 1861 to convict of the lesser s 20 charge even where this had been expressed to be
‘causing’ (rather than ‘inflicting’) GBH contrary to s 20. ‘Causing’ GBH was wide enough to
include ‘inflicting’ GBH.
Since a conviction under s 18 carries a maximum sentence of imprisonment for life, it is
reserved for the more serious assaults. There are two forms of intent, as follows:
(a) an intent to do some grievous bodily harm; or

(b) an intent to resist or prevent a lawful detention or arrest.
In both cases the intent must be accompanied by an intention to cause really serious bodily
harm as distinct from slight harm. Recklessness even of the Cunningham variety is not suffi-
cient mens rea. The wounding must be deliberate and without justification and committed
with intent; foresight is not enough. The test of intent is subjective.
R v Belfon, 1976 – Causing grievous bodily harm: recklessness not enough (543)
Statutory offences against the person and stalking: case law

Stalking, particularly of women, has become an increasing problem in our society and,
although Parliament has responded in terms of remedial measures, there has been a significant
response by the courts which has resulted from the development of the statutory offences
discussed above into the field of psychological injury. As we have seen, a start had been made
in R v Chan-Fook (1993) The Times, 19 November. This case was applied again in R v Burstow
[1996] Crim LR 331, where it was held that a stalker could be convicted of the offence of
unlawfully and maliciously inflicting grievous bodily harm contrary to s 20 of the Offences
..
EL_C24.qxd 3/26/07 10:56 AM Page 697
Against the Person Act 1861, even though he had not applied physical violence directly or
indirectly to the body of the victim. B had become obsessed with a woman who worked with
him and after she ended the relationship he made telephone calls and sent letters and pho-
tographs and visited the victim’s home; all of this had a profound psychological effect on
her. There is no doubt that this decision of the Court of Appeal has made a major break-
through in anti-stalking law.
In R v Ireland [1997] 1 All ER 112 the defendant made unwanted telephone calls to three
women on a number of occasions and remained silent when the telephone was answered.
He was convicted of an offence under s 47 of the 1861 Act and the Court of Appeal later dis-
missed his appeal holding that psychological injury could amount to actual bodily harm.
As regards the possibility of a prosecution for public nuisance, we have already noted the
decision in R v Johnson (Anthony Thomas) (1996) (see Chapter 21).
In R v Constanza [1997] 2 Cr App Rep 492 the defendant wrote more than 800 letters to a
23-year-old computer operator and also engaged in many telephone calls and the daubing of
paint. The Court of Appeal held that his conviction at Luton Crown Court was correct. The
offence of causing actual bodily harm by psychological assault could be sustained and words
alone were enough. Once again this is an important conviction.
Where a custodial sentence is to be imposed, the judge should take into account any report
from a psychiatrist stating that the defendant will not if at liberty represent a continuing
threat to the victim (see R v Smith (Leonard) [1998] 1 Cr App Rep (S) 138).
Before leaving the case law it is important to note that it is necessary to prove psycho-
logical injury resulting from the defendant’s activities. Fear, distress or panic is not enough to
found a criminal conviction.
Stalking and harassment: statute law

Two Acts of Parliament are relevant as follows.
Section 4A of the Public Order Act 1986

This creates the offence of intentional harassment. The penalty on conviction by magistrates
is imprisonment for up to six months and/or a fine of up to £5,000.
It covers harassment on the grounds of race, sex, disability, age and sexual orientation.
The present conviction rate against stalkers under this Act is poor. Very few defendants have
been convicted for intentional harassment under s 4A of the Act.
The Protection from Harassment Act 1997

This Act makes it an offence to pursue a course of conduct which the person pursuing it
knows or ought to know amounts to the harassment of another. There is thus an element of
objectivity in the offence, i.e. ‘knows or ought to know’. The course of conduct must involve 24
conduct on at least two occasions and conduct is defined as including speech, e.g. nuisance
telephone calls. The penalty on conviction by magistrates is the same as that under the 1986
Act (see above).
A civil tort is also created under which an order restraining harassment may be sought.
Criminal courts are also given power to make an order preventing further harassment, breach
of which will constitute a criminal offence.
The problem with the 1986 Act has been defining harassment, a word which every-
body understands but nobody can define. The 1997 Act also avoids a definition stating
only that references to harassment include alarming a person or causing them distress,
and that conduct can include speech. However, the 1997 Act states that the test of whether
..
EL_C24.qxd 3/26/07 10:56 AM Page 698
conduct amounts to harassment is that of the reasonable man, which should make the test
more objective.
In connection with the requirement of harassing conduct on two occasions the following
cases provide illustrations. In Pratt v DPP (2001) 165 JP 800 Pratt engaged in two incidents of
offensive conduct towards his wife in their home. In one he threw water at her and in the
second chased her threateningly around the house. The incidents were three months apart
and different in detail. The High Court upheld P’s conviction under the 1997 Act on his
appeal from a magistrates’ court, ruling that incidents of harassment did not need to exceed
two incidents but the fewer and wider apart the incidents were the less likely it would be that
harassment could be proved. In this case the second incident was sufficiently similar to the
first to amount to a course of conduct but it was a borderline case. In R v Hills [2001] Crim LR
318 H & W lived together. H assaulted W on two occasions at their home. The first was in the
nature of an indecent assault and the second was a fight. Between the incidents the pair
appeared to have been reconciled at least for a while. The Court of Appeal quashed H’s
conviction. The incidents were too far apart and the claimed similarity of the events, i.e.
pulling W’s hair on both occasions was tenuous. The Court of Appeal pointed out that by
charging harassment under the 1997 Act the prosecution had lost its case. It should have
charged the incidents as two separate assaults since conviction on those charges could not
have been challenged.
In two further cases the fact of harassment was not in question but the method was. In
R (a child) v DPP [2001] 3 Current Law 127 the High Court held that a person can be harassed
by threats to her dog. In Kellett v DPP [2001] All ER (D) 124 (Feb) the High Court held on
judicial review that a person can be harassed by malicious telephone calls to her employer.
Sexual offences
We shall be concerned here only with the offences of rape and assault by penetration. There
are, of course, other sexual offences, but because of the developments in both the actus reus
and the mens rea of rape, it provides a further opportunity to consider in yet another context
these ingredients of crime.
Rape
Section 1 of the Sexual Offences Act 2003 defines rape. It provides that a person (A) commits
an offence if:
n he intentionally penetrates the vagina, anus or mouth of another person (B) with his penis
where;
n B does not consent to the penetration; and
n A does not reasonably believe that B consents.
Whether a belief is reasonable is to be determined having regard to all the circumstances

including any steps A has taken to ascertain whether B consents.
Thus, where the defendant asserts an honest belief, the jury will have to assess all the sur-
rounding circumstances of a case before deciding whether or not the belief was reasonable.
So, for the first time, the common law defence of honest but mistaken belief appears in a
statute but will not in itself entitle the defendant to an acquittal.
It remains unclear as to whether the personal characteristics of the defendant should be
taken into account by the jury, e.g. mental impairment.
The situation is further complicated by rebuttable and irrebuttable presumptions that rape
has been committed set out in ss 75 and 76. These are concerned with the victim’s consent.
..
EL_C24.qxd 3/26/07 10:56 AM Page 699
Section 75 presumptions
These can be rebutted by evidence to the contrary. They are:
n use of violence by the defendant or fear of the defendant’s violence, either towards the
victim or another person, e.g. the child of the victim;
n where the complainant was unlawfully detained;
n where the victim was asleep or otherwise unconscious at the time of the relevant act;
n where the victim’s physical disability prevented communication to the defendant, whether
or not there was consent;
n where the defendant or another person had administered or caused to be administered
a substance enabling the victim to be stupified or overpowered at the time of the relevant
act.
Section 76 presumptions
These are conclusive presumptions and cannot be rebutted. They are:
n where the defendent intentionally deceived the victim as to the nature or purpose of the
relevant act;
n where the defendant impersonated someone personally known to the victim.
These presumptions will cover intercourse by deception and intercourse with a married
woman by impersonating her husband. This can occur where, for example, the woman
has gone to bed and the defendant has intercourse with her when she is in a drowsy state by
pretending to be her husband just returned from work.
A husband can now be guilty of raping his wife and would commit rape by aiding or assist-
ing others to rape her.
It will be noted that the s 1 offence can only be committed by a man and covers anal rape
of women or men and oral sex with a woman or a man.
It should also be noted that the ruling of the House of Lords in DPP v Morgan (1975) (see
below), where a defendant believed that there was consent and that belief need not be based
on reasonable grounds, is replaced by the requirements of the 2003 Act.
No degrees of penetration
It is not necessary to constitute the crime of rape that sexual intercourse should be completed
by male ejaculation of semen. In fact, the slightest penetration by the penis of the vagina (or
vulva), anus or mouth of another person will suffice.
R v R, 1991 – A husband can rape his wife (544)

R v Williams, 1923 – Intercourse by deception (545)
DPP v Morgan, 1975 – Rape: a subjective test (546) 24
Assault by penetration
Section 2 of the Sexual Offences Act 2003 creates a new offence of assault by penetration.
Previously this was a form of indecent assault.
Section 2 provides that a person (A) commits this offence if:
n he or she intentionally penetrates the vagina or anus of another person (B) with a part of
his or her body or anything else;
n the penetration is sexual;
..
EL_C24.qxd 3/26/07 10:56 AM Page 700
n B does not consent to the penetration; and

n A does not believe that B consents.
Whether a belief is reasonable is to be determined having regard to all the circumstances,

including any steps A has taken to ascertain whether B consents. The ss 75 and 76 presump-
tions apply.
This offence can be committed by a man or woman and in fact penile penetration may be
charged as assault under this section, so there is some duplication with the s 1 offence.
However, this section is intended for penile penetration where the victim is not certain that
the penis was used, as where the victim is blindfolded. Note also that the penetration must be
sexual, which excludes intimate searching and medical procedures.
..
EL_C25.qxd 3/26/07 10:57 AM Page 701
25
AGE AND RESPONSIBILITY
– GENERAL DEFENCES
In this chapter we shall consider the liability of minors in the criminal law, together with the
general defences which are available in regard to all prosecutions for crime.
Liability of minors
For the purposes of criminal liability minors are divided into three classes as follows:
(a) Those under 10 years of age. It is presumed that minors under 10 years of age are incap-
able of any crime and the presumption is irrebuttable (Children and Young Persons Act 1963,
s 16). Consequently, no evidence to the contrary will be accepted by a court so that children
under 10 cannot be convicted of a criminal offence. Their actions may, however, result in a
parenting order being made under the Crime and Disorder Act 1998.
(b) Those between 10 and 14 years of age. The presumption here was wholly dependent
on the common law and is that the minor was incapable of forming a guilty intent, but this
could be rebutted by proving ‘mischievous discretion’, i.e. knowledge that what was done was
morally or seriously wrong.
This rebuttable presumption was abolished by s 34 of the Crime and Disorder Act 1998
so that children aged 10 or over have full criminal responsibility, though this is mitigated by a
number of factors as follows:
n the general requirement that a defendant should, in a subjective sense, be aware of

circumstances;
n the special provisions for dealing with youth crime; and
n the part played by the Crown in deciding whether or not to bring prosecutions.
The child’s age may be a relevant factor in deciding on the reasonableness of his or her
actions where such a factor is relevant.
(c) There is a special provision in relation to sexual offences. The Sexual Offences Act 1993
abolishes the previous presumption that a boy under the age of 14 is incapable of sexual
intercourse. This means that it is now possible for rape cases to be brought against boys under
the age of 14, since they are no longer presumed incapable of vaginal or anal penile inter-
course. However, young boys can still seek the protection of the general rules relating to
minors set out above.
..
EL_C25.qxd 3/26/07 10:57 AM Page 702
Insanity
The leading case is R v M’Naghten (1843) 10 Cl & Fin 200. M’Naghten was charged with
murder and acquitted on the grounds of insanity. The acquittal became the subject of debate
in the House of Lords and it was decided to ask the opinion of the judges on the law govern-
ing insanity. The following rules arose.
(a) Every defendant is presumed to be sane until the contrary is proved.
(b) To establish a defence on the ground of insanity, it must be clearly proved that, at the
time of the committing of the act, the party accused was labouring under such a defect of
reason, from disease of mind, as not to know the nature and quality of the acts he was doing;
or, if he did know it, that he did not know he was doing what was wrong. It is a question of
the party’s knowledge of right and wrong in respect of the act with which he is charged.
The defence is required to show on a balance of probabilities that the defendant is insane.
The right to raise the issue of insanity at a trial is generally a matter for the defence and not
the prosecution. However, it was held in R v Dickie [1984] 3 All ER 173 that exceptionally the
trial judge may raise it and leave the decision to the jury if the evidence suggests that the
accused was insane. Furthermore, the prosecution can raise the matter if the defendant has
pleaded diminished responsibility (see Chapter 24) and where he has brought in evidence of
mental incapacity.
In DPP v H [1997] 1 WLR 1406 it was held by a Queen’s Bench Divisional Court that insan-
ity can only be a defence where mens rea is required. Because driving with excess alcohol is an
offence of strict liability the defence of insanity is not available on a prosecution for that
offence.
If the defence of insanity is successful, the verdict is ‘Not guilty by reason of insanity’ as
provided for by s 2(1) of the Trial of Lunatics Act 1883. The judge was then required to order
the defendant to be detained in a special hospital, e.g. Broadmoor. This was often a worse
form of sentence than might be given for a finding of guilty. For this reason persons who
might have pleaded insanity did not do so, pleading guilty instead, and the defence became
confined in practical terms to cases of murder. Now the Criminal Procedure (Insanity and
Unfitness to Plead) Act 1991 inserts a new s 5 into the Criminal Procedure (Insanity) Act
1964, under which the court can make guardianship or supervision or treatment orders or an
order for absolute discharge. However, in the case of murder, the court is still bound to make
an admission order as before.
Before returning to the defence of insanity, it should be noted that the defendant’s sanity
or mental state is also relevant:
(a) When he is put up for trial. Although there may be no doubt that the accused was
sane when he did the act with which he is charged, he may be too insane to stand trial or as
it is usually put – ‘unfit to plead’. If this is found to be so by the judge (not now the jury:
s 22, Domestic Violence, Crime and Victims Act 2004), the court’s options on a finding
of unfitness to plead are:
n to make a hospital order under s 37 of the Mental Health Act 1983, which can also be
accompanied by a restriction order under s 41 of the same Act;
n to make a supervision order;
n to order the defendant’s absolute discharge.
If the court wishes the defendant to be detained in hospital, the appropriate order will be a
hospital order.
..
EL_C25.qxd 3/26/07 10:57 AM Page 703
AGE AND RESPONSIBILITY – GENERAL DEFENCES 703
The above options are inserted into the Criminal Procedure (Insanity) Act 1964 by the
Domestic Violence, Crime and Victims Act 2004. The main differences under the new system
are that the Secretary of State no longer has a role in deciding whether or not the defendant
is admitted to hospital, and a court can no longer order the defendant’s admission to a psy-
chiatric hospital without medical evidence.
It is not possible to avoid the above orders where the defendant raised diminished respons-
ibility as a defence but the judge found unfitness to plead (see R v Antoine (Pierre Harrison)
[2000] 2 WLR 703).
A further example is provided by R v Grant (Heather) [2002] QB 1030. Heather Grant had
been found unfit to stand trial for the murder of her boyfriend. She appealed against the find-
ing of the jury (now the judge) that she had committed the act as charged. She said she should
have been allowed to raise the defences of lack of intent (i.e. appropriate mens rea) and pro-
vocation. The Court of Appeal dismissed her appeal. It was clear from the Criminal Procedure
( Insanity) Act 1964 (as amended) that the jury, in reaching conclusions as to unfitness to
plead, was not required to consider the defendant’s state of mind at the time of commission
of the criminal act. Thus the defences of lack of intent and provocation could not be raised at
a fitness to plead hearing (R v Antoine (2000) above applied).
(b) On conviction. Here the accused’s mental condition is relevant to punishment. Under the
Mental Health Act 1983, the court can make a variety of hospital and guardianship orders,
though not in the case of murder.
(c) After sentence. If the accused is found to be suffering from mental disorder after receiving
a sentence of imprisonment, he may be transferred to a mental hospital under the Mental
Health Act 1983.
We can now look at the essential ingredients of the defence of insanity.
Disease of the mind

The judiciary has never been entirely swayed by the evidence of practitioners in this field of
medicine. The matter is, the judiciary says, basically one of responsibility for the act. In other
words, a person may be suffering from a defect of reason due to a disease of the mind and
yet be responsible, in the view of the court, for what has been done or not according to the
circumstances of the case. The test is thus legal not medical.
It may be for this reason that the courts have considered as part of the issue of responsibility
a variety of mental states which do not truly come within the normal definition of insanity.
R v Kemp, 1956 – A sufferer from arteriosclerosis (547)

R v Hennessy, 1989 – A sufferer from diabetes (548)
Defect of reason
The disease of the mind must cause a defect of reason so that the defendant (a) did not know
25
the nature and quality of his act or (b) did not know that what he was doing was wrong. This
means essentially that to establish the M’Naghten defence the defendant must be deprived
of reason. The defence does not, therefore, apply to those who have retained the powers of
reasoning but who in a moment of forgetfulness, confusion or absent-mindedness have failed
to use those powers properly or to the full.
R v Clarke, 1972 – A shoplifter (549)
..
EL_C25.qxd 3/26/07 10:57 AM Page 704
Knowing that the act is wrong

It is this branch of the M’Naghten defence which has produced difficulty, not the rarely
pleaded branch which relates to not knowing what was being done, i.e. failure to understand
the physical nature of the act. The problems have arisen in regard to whether, if the act is
contrary to law, there might be a successful plea of insanity because the defendant thought
the act to be morally right. It would appear that knowledge that the act is legally wrong
means the defence fails.
R v Windle, 1952 – A fatal dose of aspirin (550)
Automatism
As we have seen, it is a general rule of the common law that a voluntary act is required before
liability for a crime can be established in terms of the actus reus. In addition, it is necessary
that the defendant be conscious of his acts, otherwise there is no mens rea.
Sometimes a defendant will plead automatism as a defence which, if established, will
negative the essential ingredients of the crime and result in an acquittal. The defence of
automatism is difficult to establish but seeks to prove that the crime was committed by an
involuntary act caused by an external factor.
Hill v Baxter, 1958 – A sudden illness while driving (551)
Distinguished from insanity

Where automatism is induced by a disease of the mind, this is insanity and the judge may
withdraw the defence of automatism from the jury (Bratty v Attorney-General for Northern
Ireland [1963] AC 386).
However, an overdose of insulin in diabetes leading to hypoglycaemia (a medical state with
side-effects, e.g. double vision, and leading eventually to coma) is not a malfunction of the
mind and may be put to a jury as automatism.
R v Quick, 1973 – Defence of automatism admissible (552)
Where automatism is self-induced

A court will not accept the defence of automatism if it is self-induced as by drink or drugs.
This is clearly based upon public policy and is considered further below.
In other cases self-induced automatism may be put to the jury as a defence, as where a
diabetic does not take sufficient precautions to prevent reduction of blood sugar (see Moses v
Winder (1980)).
R v Lipman, 1969 – Automatism induced by drugs (553)
..
EL_C25.qxd 3/26/07 10:57 AM Page 705
Drunkenness and drugs

Automatism induced voluntarily by drink or drugs could well prevent the defendant from
committing a voluntary act or from being conscious of what he was doing. Nevertheless, on
grounds of public policy it is not normally a complete defence to allege automatism by drink
or drugs (see Finegan v Heywood (2000) The Times, 10 May where the defence of drink-induced
automatism failed on a charge of drink driving). It can be partially successful where the crime
requires a specific intent which the drink or drugs can negative. However, in offences against the
person where the drink/drugs defence is most usually raised this does not result in an acquittal
because these crimes are often bolstered up by a similar crime which does not require a
specific intent. Thus, drink or drugs may reduce murder to manslaughter and wounding with
intent to unlawful wounding under ss 18 and 20 of the Offences Against the Person Act 1861
respectively, but there will still be a conviction for the lesser crime which does not require a
specific intent. The jury can be asked to consider drink or drugs as a defence where reckless-
ness is involved.
The reason why drunkenness is not and never will be a general defence in crime is a matter of
public policy because so many crimes are committed under the influence of alcohol that a high
proportion of crimes would go unpunished. The same is true, on an increasing scale, of drugs.
DPP v Majewski, 1976 – Where no specific intent is required (554)

R v Hardie, 1984 – Drugs and recklessness (555)
The drink/drugs defence is certainly not applicable to rape where the issue before the court
is the defendant’s intent or the issue of the victim’s consent nor in situations where the
defence of mistake is raised.
R v O’Grady, 1987 – A mistaken self-defence (556)
In addition, where the defendant takes drink or drugs in order to pluck up courage to com-
mit the offence, the drink/drugs defence will not be accepted by the court even as nullifying
a specific intent. Thus murder remains murder and is not reduced to manslaughter.
Attorney-General for Northern Ireland v Gallagher, 1963 – Drinking to get

‘Dutch courage’ (557)
Drink/drugs states not self-induced

Here the court will consider the defence of automatism by drink or drugs where the defendant
has lost control by drink or drugs administered to him without his knowledge.
25
Ross v HM Advocate, 1991 – Drugs in a can of lager (558)
Effect of drink on defence of diminished responsibility

The House of Lords ruled in R v Dietschmann [2003] 1 All ER 897 that a defendant is
entitled to be convicted of manslaughter rather than murder on the grounds of diminished
..
EL_C25.qxd 3/26/07 10:57 AM Page 706
responsibility even though he has been drinking if he can satisfy the jury that despite the
heavy alcohol consumption his mental abnormality substantially impaired his respons-
ibility for his acts. It would appear from the ruling of the House of Lords that the defence
of diminished responsibility operates as a separate defence even in circumstances of drunken-
ness. The defence of diminished responsibility can be established even though the defendant
has failed to prove that he would not have killed if he had not taken drink. The drunken
state is no defence but the underlying mental state can still be. The Homicide Act 1957, said
the House of Lords, does not require the abnormality of mind to be the sole cause of the
defendant’s acts. Drink may be an unacceptable contributory cause but the mental state
defence remains.
Duress
Duress when raised as a defence may be said to amount to a defence of no voluntary actus
reus. It may also negative mens rea because a person who is made to do an act by threats of a
serious nature, e.g. death or serious personal injury, can hardly be said to intend to do the
criminal act.
Duress by threats
Duress is not available as a defence to murder (R v Howe [1987] 1 All ER 771) or attempted
murder. It is, however, available in offences of strict liability as in Eden DC v Braid [1998]
Crown Office Digest (now Administrative Court Digest) 259 where a taxi driver was forced
by threats to carry an excessive number of persons in breach of the licensing conditions. The
defence of duress applied.
R v Gotts, 1991 – Attempted murder under duress (559)
The essential ingredients of duress by threats are as follows:

(a) The threats must be serious such as threats of death or serious personal injury. Threats to
property are probably not enough. The threat of serious psychological injury is not it seems
included. Thus in R v Baker [1997] Crim LR 497, the father of a child refused to return her
after a contact visit. Her mother and her husband went to the father’s house and hearing a
child crying and fearing for her psychological health banged on the door and caused criminal
damage. They were convicted of criminal damage and the defence of duress of circumstances
was rejected.
(b) The response of the defendant to those threats must be reasonable. He must have acted as
a sober person of reasonable firmness (R v Graham [1982] 1 All ER 801).
(c) Where the defence of duress is applicable it must also be shown that the overpowering
of the defendant’s will was operative at the time when the crime was actually committed by
him, though this general rule is not always applied.
R v Hudson, 1971 – Duress and perjury (560)
(d) There is also a duty to neutralise the threat as by informing the police where this is pos-
sible, having regard to the age of the defendant and the circumstances and risks involved.
..
EL_C25.qxd 3/26/07 10:57 AM Page 707
It should be noted that the defence of duress does not apply where the defendant volunt-
arily entered a situation likely to end in duress. (See also Membership of a gang, below.) Thus, if
A owes his drug dealer money, he can expect that pressure might be brought to bear upon
him by the dealer to clear the debt by helping him to supply drugs to others on the basis of
threats of violence (see R v Heath (Patrick Nicholas) [2000] Crim LR 109). The House of Lords
gave a similar ruling in R v Hasan (Aytach) [2005] 2 AC 467, where the defendant alleged
duress in that a drug dealer with a reputation for violence had threatened him and his family
unless he carried out the burglary with which he was charged. The dealer was the boyfriend
of his employer, who ran an escort agency, and was involved in prostitution. The House of
Lords ruled that the defence of duress was excluded because of his voluntary association with
criminals who he foresaw or ought to have forseen might make threats of violence.
It is not, however, necessary for the defendant to prove that a perceived threat is real. Thus,
in R v Cairns ( John) [1999] 2 Cr App R 137 the victim climbed on the bonnet of C’s car. As he
drove away, he saw a group of the victim’s friends following in what he took to be a hostile
way. He braked and threw the victim off the bonnet and ran over him inflicting serious
injuries. The defence of duress was accepted by the Court of Appeal. It appeared that the vic-
tim’s friends meant no harm, they said, to C but merely wished to prevent the victim from
acting as he was; nevertheless, the perceived threat was enough to make C’s conviction
unsafe.
Duress and low intelligence

In R v Bowen (Cecil) [1996] 4 All ER 837 the Court of Appeal dealt with the defence of duress
in the case of persons of low intelligence. The defendant had obtained electrical goods on
credit by deception as to his intention to pay for them in due course. He was charged with
obtaining goods by deception and claimed that he had been under duress because of threats
to petrol bomb his home by the two men for whom he obtained the goods. The Court of
Appeal held that although the defendant was a person of low intelligence, this was not a relev-
ant factor in duress since it would not necessarily make an accused person more timid or
suggestible to threatening behaviour. The defence of duress failed.
Membership of a gang – an aspect of voluntary exposure to threats

In some recent cases the court has had to consider whether the voluntary joining of a gang
of persons by the defendant affects his ability to raise the defence of duress when he is caused
to become involved in gang crime by threats from other members of the gang. It would
appear that the defence is not available to a person who knows when he voluntarily joins a
gang that he might be put under some pressure to commit an offence. It can be available if at
the time of joining the defendant failed to appreciate the risk of violence.
R v Sharp (David), 1987 – The risk of violence was known (561)

R v Shepherd, 1988 – Risk of violence not appreciated (562)
25
Duress of circumstances
In some recent cases there has been a blurring of the so-called defence of necessity (see below)
with that of duress. This form of duress has been referred to as ‘duress of circumstances’.
This is probably a more accurate analysis of certain necessity cases. Thus, if A who is
disqualified from driving drives his son to work because he will otherwise be late and might
..
EL_C25.qxd 3/26/07 10:57 AM Page 708
lose his job because his wife becomes hysterical and threatens to kill herself unless he does so,
this situation of ‘threat’ is called ‘duress of circumstances’ and can operate as a defence.
R v Martin, 1989 – A threat of suicide (563)
Duress – the special case of a wife

Duress is clearly a defence for a wife. Section 47 of the Criminal Justice Act 1925, which
abolished the presumption that a wife who committed a crime in her husband’s presence did
so under such compulsion as entitled her to an acquittal provides as follows:
Any presumption of law that an offence committed by a wife in the presence of her hus-
band is committed under the coercion of the husband is hereby abolished, but on a charge
against a wife for any offence other than treason or murder it shall be a good defence to
prove that the offence was committed in the presence of and under the coercion of the
husband.
It was decided in R v Shortland [1995] Crim LR 893 that in applying s 47 of the 1925
Act and to invoke a defence of marital coercion it was necessary for a defendant to prove
on a balance of probabilities (as distinct from beyond a reasonable doubt) that the offence
was committed because her will had been overborne by the wishes of her husband and
that she was therefore forced unwillingly to take part in the offence. However (and
importantly), the defence did not necessarily require proof of physical force or the threat of
physical force.
The Court of Appeal allowed an appeal by Malena Iris Shortland against a conviction for two
offences of making a false statement to procure a passport. It appeared that she had applied
for a visitor’s passport and a 10-year passport, the latter in the name of Valerie Lopez, a dead
child. All of this was done under the coercion and in the presence of her husband.
Necessity
English law does in extreme circumstances recognise a defence of necessity, but when it does
so it arises from some pressure on the defendant’s will from the wrongful threats or violence
of another. Equally, however, it can arise from other objective dangers threatening the defend-
ant or others when it is called by the judiciary ‘duress of circumstances’ (see R v Martin (1989),
above and A (Children) (2000) The Times, 10 October: necessity to separate conjoined twins –
court consents to inevitable death of one twin).
In the absence of the elements of threat or objective danger where the defence is probably
better regarded as duress, there is no general defence of necessity in English law.
It is, therefore, murder to take another’s life to save one’s own unless it is a case of self-
defence (see below).
R v Dudley and Stephens, 1884 – Killing a member of the crew (564)
However, situations of genuine necessity not set in a background of duress can be taken
into account by the court in the sentence imposed and at an earlier stage, where there is
discretion, by the authorities in not bringing a prosecution.
..
EL_C25.qxd 3/26/07 10:57 AM Page 709
Mistake
It will be appreciated that a normal sane and sober person may make a mistake and it is the
effect of such mistakes on criminal liability with which we must now deal.
Suppose that a defendant X saw A apparently attacking B. X believed that A was mugging
B and fought A off. It then turned out that A was trying to arrest B who had just mugged an
old lady. Can X raise the defence of mistake, i.e. that he believed he was acting to prevent
crime (see below)?
The only major problem arising in the case law from attempts to establish the defence of
mistake have been as to whether it is enough that the defendant had an honest belief that
the facts were as he mistakenly thought them to be or whether that belief must be not only
honest but also reasonable. The defence of mistake should therefore be put to the jury in the
trial of our defendant X. Indeed, his mistake may be both honest and reasonable – not that
the latter is relevant in law rape apart.
However, although the courts do not require as a matter of law that an honest mistake be
at the same time reasonable, it is unlikely that a jury will accept that the defendant made an
honest mistake in circumstances where an ordinary person would not or could not reason-
ably have made the mistake. So whatever the test, it can be said with some confidence that a
defendant is unlikely to be acquitted following a pleading of ‘honest’ mistake in ‘unreason-
able’ circumstances. Finally, and as would be expected, a mistake as to law is no defence.
R v Kimber, 1983 – An indecent assault (565)

R v Bailey, 1800 – A mistake as to law (566)
In R v Lee (Dennis Percival) [2001] 1 Cr App R 19 the Court of Appeal reviewed the law in
this area. The defendant was convicted of assault on police with intent to resist arrest. He mis-
takenly believed he had passed a roadside breath test and punched one of the police officers
during the course of an arrest. His appeal on the grounds of mistake was dismissed. The Court
of Appeal ruled:
n that persons under arrest are not entitled to form their own view as to the lawfulness of an
arrest; they have a duty to comply with the police and hear the details of the charge;
n a belief that one is innocent however honestly or genuinely held cannot afford a defence
to a charge of assault with intent to resist arrest.
Consent
Genuine consent of the victim may negate liability for offences such as assault (properly
called battery) and rape, though consent must be genuine (see R v Williams (1923) in Chap-
25
ter 24). However, even where consent is genuine there may be a successful prosecution for
reasons of public policy. Thus in R v Brown [1993] 2 All ER 75 the House of Lords held that,
in the absence of good reason, the consent of the victim was no defence to a charge under
ss 20 and 47 of the Offences Against the Person Act 1861 (see Chapter 24). In that case the
appellants belonged to a group of sado-masochistic homosexuals who over a period of
10 years willingly participated in acts of violence against each other including genital torture
for the sexual pleasure which it induced by reason of the giving and receiving of pain. The
acts were committed in private. However, video tapes were made and the case was largely
..
EL_C25.qxd 3/26/07 10:57 AM Page 710
conducted on these. The House of Lords held that the above activities constituted offences
contrary to ss 20 and 47 of the 1861 Act regardless of the consent of the victims. Public policy
required that society be protected against cults of violence.
However, in R v Wilson (1996) The Times, 5 March, the Court of Appeal decided that con-
sensual activity between husband and wife in the privacy of their home was not a proper
matter for criminal investigation or prosecution.
In that case the wife had undergone a medical examination which revealed that there was
a scar on both her buttocks. On her right buttock, as photographs before the court showed,
there was the capital letter W and the left buttock the capital letter A. It appeared that her
husband had burnt these initials into her buttocks by using a hot knife. She had consented
and even instigated the branding because she wanted his initials on her body. A prosecution
under s 47 of the 1861 Act failed. The Court of Appeal distinguished R v Brown (above) on the
basis that the facts in that case were truly extreme.
Consent of the victim is raised in the civil law by way of the defence of volenti non fit injuria
(or the rule of assumption of risk) and more rarely in the criminal law, where the courts are
more reluctant to allow consent as a defence at least where there is infliction of bodily harm
the ground being public policy (see R v Brown [1993] 2 All ER 75) (above). However, the Court
of Appeal has now ruled and set out guidance in relation to the criminal prosecution of
alleged offences resulting from sporting injuries.
In R v Barnes [2005] 2 All ER 113, the Court of Appeal quashed the conviction of the defend-
ant, who had been found guilty of causing a serious injury to the leg of an opponent following
a tackle during an amateur soccer match. The prosecution had contended that the tackle was
late, unnecessary, reckless and high up on the legs. The defence contended unsuccessfully at
the trial that the tackle, while ‘hard’, was a fair sliding tackle in the course of play, resulting
in an unintended accidental injury. The defendant was convicted of inflicting grievous bodily
harm under s 20 of the Offences against the Person Act 1861.
In quashing that conviction, the Court of Appeal ruled that criminal proceedings should be
reserved for grave cases; sufficiently grave to be classified as criminal. Those who take part in
sports said the court consented to physical injury that was an inevitable risk and an instinc-
tive error, reaction or misjudgement in the heat of the game was not to be classed or categor-
ised as criminal activity.
This judgment will go a long way to stopping the growing practice of disgruntled players
using the criminal law to compensate for defeat or humiliation on the field of play.
Self-defence
A person may use such force as is reasonable in all the circumstances in his own defence.
What is reasonable force is a matter of fact for the jury, but there must be some reciprocity or
mutuality between the force being offered and the force used in defence. If A kissed B against
her will, she may not succeed with self-defence if she stabbed A in the chest with her hatpin!
There is no duty to retreat or run away in the face of force. Failure to do so before providing
countervailing force is merely a factor to be taken into account when deciding whether
(a) force was necessary at all and (b) if so, whether it was reasonable or whether backing off
might have solved the problem.
If excessive force is used and death results, the defence fails. Murder is not reduced to
manslaughter unless the defendant is regarded as having acted reasonably on the spur of the
moment and under stress.
..
EL_C25.qxd 3/26/07 10:57 AM Page 711
The test of whether the force used was reasonable or not is, however, objective. So if the
prosecution shows that in fact excessive force was used, the defence fails. The use of excessive
force is not at present decided in terms of the defendant’s perception of events, which would be
a subjective test.
R v McInnes, 1971 – Greasers and skinheads: an affray (567)
Apprehended imminent attack

There is no need for an attack to be taking place. A person can make preparations for
self-defence where there is an apprehension of imminent attack.
Attorney-General’s Reference (No 2 of 1983), 1984 – Fear of a riot (568)
Self-defence and mental states

In dealing with the defence of provocation the court may take into account the mental state
of the defendant. In R v Martin (Anthony Edward) [2002] 2 WLR 1, Mr Martin appealed against
his conviction for murder. He shot two people who were engaged in burglary at his home. He
killed one and wounded the other. When tried he pleaded unsuccessfully self-defence. After
conviction he was found to be suffering from a longstanding paranoid personality disorder.
Mr Martin said that this had affected the risk he perceived to his safety from the burglars.
This he said was relevant in deciding whether the force he used against the burglars was
reasonable. The Court of Appeal ruled that the defences of provocation and self-defence were
distinguishable. A mental condition that affected the degree of self-control could not except
in exceptional circumstances be relied upon when dealing with reasonable force in self-
defence. However, Mr Martin’s mental state had resulted in diminished responsibility and
his conviction for murder was quashed and a conviction of manslaughter substituted with a
sentence of imprisonment for five years. It is also worth noting that as regards protection of
property, Art 2(2) of the European Convention on Human Rights does not permit the taking
of life in order to protect property.
Preventing crime
Section 3 of the Criminal Law Act 1967 provides that: ‘A person may use such force as is
reasonable in the circumstances in the prevention of crime or in effecting or assisting in the 25
lawful arrest of offenders or suspected offenders or of persons unlawfully at large.’ This
provision would, given reasonable force, cover acts in defence of other persons whether
relatives or not. It would also cover defence of property as where reasonable force is used by A
against B to prevent B from stealing A’s briefcase.
R v Rose, 1884 – A son shoots his father (569)
..
EL_C25.qxd 3/26/07 10:57 AM Page 712
Genuine religious belief

Finally, it should be noted that the defendant’s genuine belief that he is carrying out God’s
instructions will not provide a defence. Thus, in Blake v DPP (1993) The Times, 19 January
Blake (who was a vicar) had, during a protest at the use of military force in the Gulf, written
words from the Bible on a concrete pillar. He was charged with criminal damage and said that
he had been carrying out God’s instructions to him. A Divisional Court held that this could
not provide a defence of lawful excuse.
..
EL_Z01.qxd 3/26/07 1:51 PM Page 713
Part 6
CASES AND MATERIALS
..
EL_Z01.qxd 3/26/07 1:51 PM Page 714
..
EL_Z01.qxd 3/26/07 1:51 PM Page 715
CASES 1– 4 THE NATURE AND DEVELOPMENT OF ENGLISH LAW 715
commencement of the Act (1 January 1949) became a

THE NATURE AND DEVELOPMENT
OF ENGLISH LAW citizen of the United Kingdom and Colonies. The
claimant was born in 1914 in Hanover and was lin-
Where common law and equity are in conflict eally descended from the Electress. He now claimed a
equity prevails declaration that he was a British subject immediately
before the commencement of the British Nationality
1 The Earl of Oxford’s Case (1615) 1 Rep Ch 1 Act. It was necessary for him to establish this in order
to make a claim on a fund, put up by the Polish govern-
Merton College, Oxford, had been granted a lease of ment, to compensate Britons who had lost property
Covent Garden for 72 years at £9 a year, and some in Poland because of nationalisation. It was held at
50 years later sold the lease to the Earl for £15 a year. first instance that the statute had not lost its force
Later the college retook possession of part of it, on the merely because of its age, but nevertheless, although
ground that a statute of Elizabeth prevented the sale the statute was unqualified and plain in its meaning,
of ecclesiastical and college lands so that the con- its words taken alone produced an absurd result,
veyance to the Earl was void. The Earl brought a claim since, under the statute, the Kaiser, who led Germany
to eject the college from the land, and the common in the 1914–18 world war, would have been a British
law judges found in favour of the college, saying that subject. Parliament must, therefore, have intended
they were bound by the statute. The Earl filed a Bill in some limitation on the operation of the words used.
Equity for relief, and Lord Ellesmere granted it, stating By referring to the preamble it seemed possible to
that the claim of the college was against all good draw the conclusion that the purpose of the Act
conscience. This brought law and equity into open was to be effected in the lifetime of Anne, and that
conflict and resulted in the ruling of James I that, after that time its purpose was spent and the claimant
where common law and equity are in conflict, equity was not entitled to his declaration. On reaching the
should prevail. (See now s 49 of the Supreme Court Court of Appeal, it was held that the appellant was
Act 1981.) a British subject under the statute of Anne which
had remained law until repealed by the 1948 Act,
The court must apply an Act of Parliament and the statute being so clear in its meaning that it was
cannot declare it illegal unnecessary to apply rules of interpretation to it.
Rules of interpretation were to be used only in case
2 Cheney v Conn [1968] 1 All ER 779 of ambiguity or doubts as to meaning. The decision
of the Court of Appeal was affirmed by the House of
Cheney objected to his tax assessments under the Lords.
Finance Act 1964, on the ground that the government
was applying part of the tax collected to the making
of nuclear weapons. Cheney alleged that this was
Parliament may specifically abolish or alter statute
contrary to the Geneva Conventions – which had
law by a later enactment. This will take place by
been incorporated into the Geneva Conventions Act
implication if the later enactment is wholly
1957 – and conflicted with international law.
inconsistent with the former
Held – even if there was a conflict between the 1964 Vauxhall Estates Ltd v Liverpool Corporation
4
and 1957 Acts, the 1964 Act gave clear authority to [1932] 1 KB 733
collect the taxes in question and being later in time In 1928 the Minister of Health made a street improve-
prevailed. ‘It is not for the court to say that a parliament scheme order for a certain area of Liverpool.
mentary enactment, the highest law in this country, The order required the compulsory purchase of
is illegal,’ said the judge. property, and the question of compensation payable
to owners arose. Under s 2 of the Acquisition of Land
A statute remains law until repealed by (Assessment of Compensation) Act 1919, the claimants
Parliament would receive £2,370, but if s 46 of the Housing Act
Prince of Hanover v Attorney-General [1957] 1925 applied, the claimants would receive £1,133. A
3
1 All ER 49 provision of the Act of 1919 stated that other statutes
A statute of Anne in 1705 provided for the naturalisa- inconsistent with the 1919 Act were not to have
tion of Princess Sophia, Electress of Hanover, and the effect.
issue of her body. The statute was repealed by the Held – the 1925 Act impliedly repealed the 1919 Act.
British Nationality Act 1948, s 34(3), but by s 12 a per- It was inconsistent with it. Compensation was to be
son who was a British subject immediately before the assessed under the latest enactment.
..
EL_Z01.qxd 3/26/07 1:51 PM Page 716
716 THE NATURE AND DEVELOPMENT OF ENGLISH LAW CASES 5 – 5A
Comment (i) It was held in Re Berry [1936] 1 Ch 274 that 1965, p 202) which in relation to that case stated: ‘A
the court will not construe a later Act as repealing an person may “permit” though he is not the owner.’
earlier Act by implication unless it is impossible to make Counsel for the defence objected that unless the
the two Acts, or certain sections of them, stand together, justices were referred to the case itself they were not
i.e. if a section of the later Act can only be given a sensible allowed to look at the textbook. The inspector did not
meaning, as in Vauxhall, if it is treated as impliedly have a report of the case with him. The justices
repealing the relevant section of the earlier Act. dismissed the case and the prosecution appealed to
(ii) The matter of repeal by implication was raised in A v the Divisional Court. The court allowed the appeal
DPP [2002] 4 Current Law 124. As noted in Chapter 4, the and remitted the case to the justices to continue the
Powers of Criminal Courts (Sentencing) Act 2000 allows a hearing of it. Parker, LCJ said: ‘They are entitled to
youth court to subject an offender to a period of deten- and should look at the textbook; and if they then feel
tion and training in a Young Offenders Institution that is in doubt they should, of their own motion, send for
followed by a period of supervision. The 2000 Act limits the authority, and if necessary, adjourn for it to be
the making of such orders to persons under 18. The obtained.’
Children and Young Persons Act 1963 allows a youth
court to sentence a person as if they were of the age at Comment Modern texts are not books of authority as
which they committed the offence even if because of the older texts are because in modern times we have
delays in proceedings they are over 18 at the time of statutes and law reports to give that authority but they
conviction. The issue in the above case was whether are a useful source of reference in the case of the major
these statutes could be reconciled or whether the 1963 practitioners’ titles.
Act was repealed by implication by the 2000 Act.
A appealed to the Queen’s Bench Divisional Court in ADR rejected by a party: no award of costs
regard to the imposition of a detention and training
order on him even though at the time of sentence he 5A Dunnett v Railtrack plc [2002] 2 All ER 850
was over 18. He had, however, been under 18 at the time
he committed the offence of wounding with intent and The claimant Susan Dunnett had lost a claim in negli-
common assault. He claimed that sentence was invalid gence against the defendants in connection with the
since the 1963 Act had been repealed by implication. death of three of her horses when they were struck by
The Divisional Court dismissed the appeal. The 1963 an express train near Bridgend in terms of failure to
Act was concerned mainly with procedure in the youth restrict access to the line. She was given permission to
court, whereas the 2000 Act was purely concerned with appeal to the Court of Appeal but in giving permis-
sentencing. It was not irrational to apply the 1963 Act sion the judge said she should explore the possibility
where a young person reached the age of 18 before con- of ADR. She approached Railtrack concerning this but
viction, and Parliament’s intention was to be construed they rejected it, though they did offer to settle the
so as to allow the 2000 Act to be interpreted subject to claim prior to the appeal being heard. Ms Dunnett
the 1963 Act. lost her appeal and in the ordinary course of events
Railtrack would have recovered its costs from Ms
Modern texts as a point of reference Dunnett but the Court of Appeal refused to make an
order as to costs which meant that each party paid
5 Boys v Blenkinsop [1968] Crim LR 513 their own costs. This said the Court of Appeal was
because Railtrack had refused to even contemplate
Mrs Nellie Blenkinsop was charged at Lewes with hav-
ADR. In the circumstances it was not appropriate to
ing ‘permitted’ her son Donald to drive a car without
take into account the fact that Railtrack had made
third-party insurance. The registered owner of the car
offers to settle the claim.
was the driver’s father whose insurance policy did not
cover driving by his son. However, it appeared that Comment (i) A firm decision from an appeal court that
the son had asked his mother’s permission to drive the Civil Procedure Rules 1998 must be followed in
and she had given it and had said she was the owner regard to ADR, otherwise the party concerned will be
when asked by a constable. The defence submitted punished by the refusal to award costs even though they
that there was no case to answer because only the succeed with a claim or a defence.
registered owner could permit use of the vehicle. The (ii) More recent cases show that the courts are prepared
prosecution submitted that this was wrong because to use their powers under procedural rules to penalise
Mrs Blenkinsop might have been, if not joint owner, parties to litigation who do not consider ADR where
at any rate responsible for care, management or con- appropriate or who unreasonably refuse an offer from
trol of the car within Lloyd v Singleton [1953] 1 All ER a party to mediate or who, having agreed to mediate
291. The prosecuting inspector had asked the justices withdraw without proper excuse (see Leicester Circuits
to refer to Wilkinson’s Road Traffic Offences (5th edn, Ltd v Coates Brothers plc [2003] EWCA Civ 333). This was
..
EL_Z01.qxd 3/26/07 1:51 PM Page 717
CASE 6 OTHER COURTS AND TRIBUNALS AND LEGAL SERVICES 717
a contract dispute as to the suitability of goods supplied n where a successful party has acted unreasonably in
by Coates. The parties had agreed to mediate but before refusing ADR then the court can displace the nor-
the commencement of this procedure Coates withdrew. mal costs rule and require the successful party to
The trial proceeded and Coates was successful. Normally pay the costs;
Coates would have obtained the usual costs against n the burden of showing ‘reasonableness’ lies with
Leicester but because of Coates’ withdrawal from the the successful party;
agreed mediation Leicester was ordered to pay the costs n while most cases are suitable for ADR, there should
up to the time when Coates withdrew from mediation. not be a presumption in favour of mediation.
Thereafter each party paid its own costs thus penalising
Coates. Comment The Court of Appeal did, however, recognise
However, in Wyatt Co (UK) Ltd v Maxwell Batley (a that some disputes are ‘intrinsically unsuitable’ for ADR.
firm) Ch D, Lawtel, 15 November 2002 a successful party These include cases which involve allegations of fraud,
who refused several offers to mediate was not penalised cases where an injunction may be required as a remedy,
in costs because in particular the offer to mediate was cases where it would be useful to have a judicial preced-
made too late for the party to whom it was made to pre- ent, and cases where the parties wish the court to
pare for it. To do so would have provided a distraction determine an issue of law or construction.
from the main proceedings that were well advanced. Also
the motives of the party making the offer were question-
able. It seemed that the motive of the party making the OTHER COURTS AND TRIBUNALS AND
offer of mediation was to extract a more substantial set- LEGAL SERVICES
tlement in their favour than the court might award.
The courts can control the defective jurisdiction
Again, in Corenso (UK) v Burden Group plc [2003]
of a tribunal or administrative authority by the
EWHC 1805 (QB) a successful party that had refused
doctrine of ultra vires
to mediate was not penalised by having to pay the
costs because it had entered into another form of ADR Attorney-General v Fulham Corporation [1921]
i.e. Part 36 of the Civil Procedure Rules 1998 offers had 6
1 Ch 440
been made. This means they had paid sums of money
The local authority was authorised by the Baths and
into court to try to settle the dispute without trial.
Wash-houses Acts 1846–78 to establish a wash-house
In Halsey v Milton Keynes General NHS Trust; Steel v
where people could come and wash their own
Joy [2004] 4 All ER 920, the Court of Appeal gave
clothes. The Corporation decided to run a municipal
guidance as to when it is reasonable to refuse ADR. In
laundry where people could bring their clothes to be
Halsey the claim was for clinical negligence involving
washed by employees of the Corporation.
an elderly patient. The claimant made invitations to
mediate, but the trust refused on the grounds that the Held – the statutory powers did not cover running a
claim had no prospects of success before a court and laundry. The action of the authority was, therefore,
the low value of the claim which meant that the costs ultra vires and an injunction was granted to prevent
of mediation would be disproportionate. The claim the Corporation from running the laundry.
was brought before the court and failed. The judge
Comment (i) The ultra vires principle was used in
refused to penalise the trust in costs because of its fail- Bromley London Borough Council v Greater London
ure to mediate. The Court of Appeal agreed and found Council [1982] All ER 153, where the House of Lords
that the trust’s position was not unreasonable. decided that the Labour-controlled GLC had no power
The Steel case, which was a conjoined appeal, was a under the Transport (London) Act 1969 to pass resolu-
personal injury claim where the defendant felt he had tions to enforce a 25 per cent cut in London’s bus and
a strong defence and refused to compromise. The tube fares. It was also decided that a public authority is
Court of Appeal found that the defendant’s stance under a fiduciary duty to hold the balance fairly between
was a reasonable one and, the claim having failed, the the various interests of those who are within its care, i.e.
defendant was entitled to recover the defence costs in this case between the ratepayers and the transport
from the claimant. users. The effect of the resolutions was to pass on the
The Court of Appeal then offered some general cost of the reduction to ratepayers. The Labour Party’s
guidelines on the matter of ADR, as follows: manifesto, which had advocated a reduction in fares, was
n the court has no power to order litigants to mediate: no justification. It could not be assumed that all who
to do so would be a violation of their human rights; voted Labour agreed with the whole of the manifesto. A
n the court does, however, have a role to encourage manifesto is not a binding contract between a party and
ADR; its supporters.
n all parties should consider as a matter of routine (ii) In R v Lewisham BC, ex parte Shell UK [1988] 1 All ER
whether their claims are suitable for ADR; 938 the Council passed a resolution to boycott all Shell
..
EL_Z01.qxd 3/26/07 1:51 PM Page 718
718 OTHER COURTS AND TRIBUNALS AND LEGAL SERVICES CASES 7– 9
products where suitable alternatives were available as (ii) Judicial review may be granted in exceptional
part of the Council’s anti-apartheid policy and on the cases. Thus in R v Inspector of Taxes, ex parte Kissane
basis of alleged activities by Shell in South Africa. The [1986] 2 All ER 37 taxpayers were granted leave to
court granted Shell a declaration that the resolution was apply for judicial review against the decision of a tax
ultra vires. The Council had no power to put pressure on inspector, even though they could have appealed
Shell in this way no matter how reasonable its desire to to the Special Commissioners, because they could
promote good race relations might be. not recover costs on an appeal to the Commissioners
(iii) In R v Lord Chancellor, ex parte Witham [1997] 2 All (and see R v Wiltshire CC, ex parte Lazard Bros [1998] CLY
ER 779 the Lord Chancellor made an order repealing 95).
previous provisions so that those on income support and
who were litigants in person were no longer excused An application for judicial review will not be
from paying court fees. W wished to bring a claim in granted unless the applicant has a sufficient
defamation for which there is no legal aid and he interest in the matter to which the application
claimed that the further requirement for him to pay relates
court fees, even though he was on income support,
was a violation of his right to access to the courts and, Inland Revenue Commissioners v National
8
therefore, ultra vires as being beyond the order-making Federation of Self-Employed and Small
powers vested in the Lord Chancellor under s 130 of Businesses Ltd [1981] 2 All ER 93
the Supreme Court Act 1981. The court allowed W’s The Federation asked for an order of mandamus on
application. The order was ultra vires. There was nothing the Commissioners of Inland Revenue to assess and
in s 130 to suggest that court fees might be imposed in a collect arrears of income tax said to be due from
manner that could deny absolutely a person’s access to casual employees on national newspapers. The long-
the courts and thus the relevant Article of the Supreme standing practice of Fleet Street employers had been
Court Fees (Amendment) Order 1996 was ultra vires. to pay the casuals without deduction of tax and for
the casuals to supply fake names and addresses when
The supervisory jurisdiction of the High Court drawing their pay in order to avoid tax. Their true iden-
cannot normally be invoked if other and more tities were known only to their union which operated
appropriate procedures for appeal exist a closed shop and controlled all casual employment
Note. The order of mandamus is, since July 2000, on the newspapers.
referred to as a mandatory order, an order of prohibi- Held – by the House of Lords – the Federation could
tion is called a prohibitory order and certiorari becomes not be granted the order of mandamus. The Federation
a quashing order. This should be borne in mind when had no locus standi. ‘The total confidentiality of
referring to cases heard before the above date. assessments and of negotiations between individuals
and the Revenue is a vital “element in the working of
R v Brighton Justices, ex parte Robinson [1973] the system”. As a matter of general principle I would
7
1 WLR 69 hold that one taxpayer has no sufficient interest in
The defendant was convicted and ordered to pay a asking the court to investigate the tax affairs of
fine in her absence for failing to give information another taxpayer or to complain that the latter has
about a driver’s identity. She applied for certiorari on been underassessed or overassessed; indeed there is a
the grounds that she had not received the summons. strong public interest that he should not. And this
principle applies equally to groups of taxpayers: an
Held – by the Queen’s Bench Divisional Court – the
aggregate of individuals each of whom has no inter-
application would be granted but the court would
est cannot of itself have any interest.’ (Per Lord
not be minded to grant certiorari in such cases in
Wilberforce)
the future since a statutory procedure existed under
s 24(3) of the Criminal Justice Act 1967 (see now,
Magistrates’ Courts Act 1980 s 14(1)).
A quashing order is also available to control
tribunals which have acted beyond their powers
Comment (i) Section 14(1) provides that the defend-
ant may make a statutory declaration that he did not R v London County Council, ex parte
9
Entertainment Protection Association
know of any summons or proceedings until after the
Ltd [1931] 2 KB 215
trial commenced. The statutory declaration must be
served on the clerk to the justices within 14 days of the date The Council granted a new licence, under s 2 of the
when the defendant came to know of the proceedings Cinematograph Act 1909, in respect of a cinema
whereupon the summons and subsequent proceedings called the Streatham Astoria. One of the conditions
are void. contained in the Act was that the premises were not
..
EL_Z01.qxd 3/26/07 1:51 PM Page 719
CASES 10 – 11 OTHER COURTS AND TRIBUNALS AND LEGAL SERVICES 719
to be opened on Sundays, Christmas Day or Good R v Bingham Justices, ex parte Jowitt, The Times,
11
Friday. Subsequent to the grant of the licence, a com- 3 July 1974
mittee of the Council considered an application that
In announcing the conviction of the defendant for
the Streatham Astoria be allowed to open on the
speeding, the chairman of the justices said: ‘Quite the
above-mentioned days. The committee resolved that
most unpleasant cases that we have to decide are
‘no action be taken for the present in the event of the
those where the evidence is a direct conflict between
premises being opened . . . on Sundays, Christmas Day
a police officer and a member of the public. My
and Good Friday’, subject to the applicants paying a
principle in such cases has always been to believe the
sum of money to a selected charity. The Association
evidence of the police officer, and therefore we find
challenged the ruling of the committee by certiorari.
the case proved.’ Mr Jowitt applied to the Divisional
Held – the Council was usurping its jurisdiction in Court for certiorari and it was held that the attitude
breaking a condition of the licence, and that this was of the chairman clearly amounted to bias and the
prohibited by the Act of 1909. Certiorari lay to quash conviction was quashed.
the committee’s ruling.
Comment (i) More recently, in R v Liverpool City Justices,
ex parte Topping [1983] 1 All ER 490, a conviction by
A court or other authority must not act if there magistrates was quashed by certiorari on the basis of bias
is bias in the sense of any substantial pecuniary, where it was shown that they had gone on to try a case
personal or proprietary interest in the dispute of criminal damage after becoming aware from court
before it. Natural justice also embraces the right computer sheets of T’s previous convictions.
to be heard
(ii) A famous case of non-pecuniary bias is R v Bow
Street Metropolitan Stipendiary Magistrate, ex parte
10 Dimes v Grand Junction Canal (1852) 3 HLC 759
Pinochet Ugarte (No 2) [1999] 1 WLR 272. Following
Dimes was the Lord of a manor through which the a House of Lords decision that PU as former head of
canal passed, and he had been concerned in a case the state of Chile did not have immunity from arrest
with the proprietors of the canal in which he disputed and extradition, PU discovered that one of the judges,
their title to certain land. Dimes had obtained an Lord Hoffmann, had been an unpaid director and
order of ejectment, but the canal company appro- chairman of the Amnesty International charity since
ached the Lord Chancellor (Lord Cottenham) to pre- 1990. The charity was a party to the proceedings and
vent Dimes enforcing the order and to confirm the in favour of PU’s extradition. In a subsequent deci-
company’s title. The Lord Chancellor granted the sion recorded above, PU’s application to a differently
constituted House of Lords to set the decision aside
relief sought. Dimes now appealed to the House of
was granted on the basis of Lord Hoffmann’s possible
Lords on the ground that the Lord Chancellor was a
bias.
shareholder in the company and was therefore biased.
(iii) As regards the right to be heard, see R v Wear Valley
Held – the Lord Chancellor’s order granting the relief
District Council, ex parte Binks [1985] 2 All ER 699 where
must be quashed because, although there was no
B operated a hot-food take-away caravan at a market
evidence that his pecuniary interest had influenced
under an informal arrangement with the Council. She
him, yet it should not appear that any court had
was given notice to quit without reasons or warning.
laboured under influences of this nature.
Taylor, J quashed the Council’s decision on the grounds
Comment (i) This case was distinguished in R v Mulvihill of denial of natural justice. B had a right to be heard and
[1990] 1 All ER 436 which was an appeal from a convic- to prior notification and reasons.
tion in connection with bank robberies. It appeared that (iv) Again, in R v Board of Governors of London
the trial judge had 1,650 shares in one of them – Oratory School, ex parte R, The Times, 17 February 1988
National Westminster Bank plc. The Court of Appeal the rules of natural justice were applied to an expul-
would not accept a plea of bias. This was a criminal trial sion of a child from school. The child must have an
with a jury, which had found M guilty so that the judge opportunity to state his case and know the nature of the
was bound to give effect to the verdict of the jury accusations.
whether he personally agreed with it or not. Dimes was a (v) The right to be heard was also raised in R v Secretary
civil matter without a jury, the decision being a matter of State for the Environment, ex parte Slot [1998] CLY
for the judge alone. 2873. A landowner asked the county council to divert a
(ii) The Court of Appeal ruled in AT & T Corp v Saudi bridleway on her land. There was an objection to this.
Cable Co [2000] 2 All ER (Comm) 625 that the common The matter was resolved by written submissions but Ms
law test of bias applies to an arbitrator conducting Slot was not allowed to make representations nor to see
arbitration proceedings. the objector’s submissions. The decision not to divert the
..
EL_Z01.qxd 3/26/07 1:51 PM Page 720
720 OTHER COURTS AND TRIBUNALS AND LEGAL SERVICES CASES 12– 14
bridleway was quashed by the Court of Appeal because a unions, was acting in the interests of national security,
rule of natural justice had been infringed. and was entitled to act irregularly as regards procedure
by not consulting its employees. Procedural propriety
Rules of natural justice need not be applied must give way to national security, when personal rights
where matters of national security are taken away by the action of the executive conflict with
involved that security.
R v Secretary of State for Home Department, The decision of a tribunal acting in breach of the
12
ex parte Hosenball [1977] 3 All ER 452 rules of natural justice (or ultra vires) is void
Mr Hosenball was an American journalist working
in London. He received a letter from the Home 13 Ridge v Baldwin [1963] 2 All ER 66
Department saying that the Home Secretary had
Mr Ridge, who was the Chief Constable of Brighton,
decided to deport him in the interests of national
had been acquitted on a charge of conspiring with
security. The statement said that Mr Hosenball had
other police officers to obstruct the course of justice,
tried to obtain and, indeed, had obtained, informa-
though the trial judge, Donovan, J said that Mr
tion harmful to the United Kingdom and relating to
Ridge had not given the necessary professional or
security arrangements and that that information
moral leadership to the Brighton Police Force. The
was prejudicial to the safety of servants of the Crown.
Brighton Watch Committee subsequently dismissed
Mr Hosenball was given no further particulars and
Mr Ridge from his post as Chief Constable under a
was told that he could not appeal but might make
power in the Municipal Corporations Act 1882, giving
representations and appear before an independent
them a right to dismiss ‘any constable whom they
advisory panel. Mr Hosenball did so but he did not
think negligent in the discharge of his duty or other-
see the panel’s report, though the Home Secretary
wise unfit for the same’. Ridge was not given a chance
gave it his personal consideration. A deportation
to answer the charges or appear before the Watch
order was made under the Immigration Act 1971, s 5,
Committee.
and Mr Hosenball applied for an order of certiorari to
quash the Home Secretary’s decision. The Court of Held – by the House of Lords – the action taken, i.e.
Appeal held unanimously that the application would the dismissal, was void; Mr Ridge should have been
be refused. Mr Hosenball had not been given enough heard.
information to enable him to meet the charge made
against him. However, this was a case in which national A mandatory order lies to compel the exercise
security was involved, and where the state was in of a discretionary power but not in any
danger, even the rules of natural justice must take particular way
second place.
R v Commissioner of Police of the Metropolis,
In addition, there was no infringement of Art 6 of 14
ex parte Blackburn [1973] 1 All ER 324
the Convention for the Protection of Human Rights
and Fundamental Freedoms. The European Commis- Blackburn sought what was then an order of man-
sion of Human Rights in the case of Mr Philip Agee, damus requiring the Commissioner of Police to secure
whose deportation had been ordered by the Home the enforcement of the law against pornography
Secretary at the same time as Mr Hosenball, had con- upon various publishers and booksellers, and to
sidered his application against the United Kingdom reverse his decision that no prosecution should be
under the Convention as manifestly ill-founded. The undertaken without the prior consent of the Director
Commission considered that where the public author- of Public Prosecutions.
ities of a state decided to deport an alien on grounds Held – by the Queen’s Bench Divisional Court –
of security that constituted an Act of State falling although the evidence showed that pornography
within the public sphere this did not constitute a was widely available, the Commissioner, because
determination of his civil rights or obligations within of an under-manned force, had to decide an order
the meaning of Art 6. of priorities to deal with various offences. In these
Comment In R v Secretary of State for the Foreign and circumstances it was perfectly proper for the
Commonwealth Office, ex parte The Council of Civil Commissioner to seek the Director’s advice before
Service Unions, The Times, 23 November 1984 (and [1984] embarking on a prosecution, so long as he did not
3 All ER 935) the House of Lords decided that the govern- consider himself bound to follow his advice, and,
ment, in preventing its employees at Government accordingly, the situation in London was not attribut-
Communication Headquarters (GCHQ) from joining trade able to any breach of legal duty by the Commissioner
..
EL_Z01.qxd 3/26/07 1:51 PM Page 721
CASES 15 – 17 OTHER COURTS AND TRIBUNALS AND LEGAL SERVICES 721
and the court would not interfere with the legitim- Airways. The Act also gave the Secretary of State power
ate exercise of his discretion in the matter of police to give policy guidance in regard to civil aviation and
powers. it was under this power that the Secretary of State
announced in 1976 by a White Paper that future
A mandatory order is not available against policy would be to license only one UK airline on any
the Crown itself but it can issue against a given long route. Paragraphs 7 and 8 of the White
Minister Paper contained an instruction to the Civil Aviation
Authority to revoke the licence for ‘Skytrain’. Laker
R v Secretary of State for Social Services,
15 Airways now claimed a declaratory judgment that
ex parte Grabaskey, The Times,
15 December 1972 paras 7 and 8 were ultra vires and that the Secretary of
State was not entitled to withdraw their licence.
A dentist treating a patient with a broken tooth
Mocatta, J granted the declaration sought, holding
claimed payment not only for crowning the tooth
among other things that the power given to the
but also for an amalgam filling. The latter claim was
Secretary of State to issue policy guidance did not
disallowed by the Dental Estimates Board and the
extend to the revocation of licences in this way. On
Minister dismissed the appeal as unarguable under
appeal to the Court of Appeal by the Department of
the proviso to reg 18 of the National Health Service
Trade it was held, dismissing the appeal, that Laker
(Service Committees and Tribunals) Regulations
Airways were entitled to the declaration sought. The
1956.
Secretary of State could not lawfully use the procedure
Held – by the Queen’s Bench Divisional Court – the of ‘guidance’ for the revocation of licences.
dentist’s case was reasonably arguable and accord-
ingly the Minister had no jurisdiction to dismiss the Comment (i) An example of the use of a declaratory
judgment against a Minister is to be found in Congreve v
appeal and mandamus would be granted requiring
Home Office [1976] 1 All ER 697. Mr Congreve, on discover-
him to refer the matter to two dental referees.
ing that the price of a TV licence was to be increased
Comment In Padfield v Minister of Agriculture, Fisheries shortly, bought a new one at the old rate before his old
and Food [1968] 1 All ER 694 the House of Lords decided one expired thereby saving about £6. Some 25,000 others
that an order of mandamus should issue to the Minister did the same. The Home Secretary claimed to revoke the
of Agriculture, requiring him to refer a complaint by milk licences under s 1(4) of the Wireless Telegraphy Act 1949,
producers against the working of a Milk Marketing under which he had power. Mr C asked for a declaratory
Board Scheme to a committee of investigation in the judgment that he could not do so. This was granted by
exercise of a discretionary power conferred on him by s 19 the Court of Appeal. Mr C had done nothing unlawful and
of the Agricultural Marketing Act 1958. the revocation was a misuse by the Home Secretary of the
powers in the 1949 Act.
A simple declaration of what the law on a (ii) Note the use of the declaratory judgment in R v
particular matter is may sometimes be an Secretary of State for Employment, ex parte Equal Oppor-
appropriate remedy against an administrative tunities Commission (1994) in Chapter 19.
authority or a Minister
Where discretionary powers are entrusted to the
Laker Airways v Department of Trade [1977]
16 executive by statute, the courts may examine the
2 All ER 182
exercise of those powers in order to ensure that
The Civil Aviation Authority granted Laker Airways a
they have not been exercised mistakenly or
licence for 10 years from 1973 for a cheap passenger
improperly
service between the UK and the USA called ‘Skytrain’.
Laker Airways was then designated as an airline under Secretary of State for Education and Science
17
the Bermuda Agreement of 1946 made between the v Tameside Metropolitan Borough Council
UK and the USA. Such designation was essential to [1976] 3 All ER 665
get ‘Skytrain’ across the Atlantic. The Civil Aviation Tameside, a local education authority, submitted
Act 1971, gave the Secretary of State for Trade wide proposals for a comprehensive system of education to
powers to revoke licences without reference to anyone the Secretary of State in March 1975. These proposals
and subject only to questions being asked in were approved and Tameside planned to implement
Parliament. However, these powers were restricted to them by September 1976. In May 1976, local elections
time of war or great national emergency or where were held and the membership of Tameside changed
international relations might be affected. This part of from a Labour to a Conservative authority. The
the Act could not, therefore, have been applicable in Conservative council decided not to implement the
regard to the revocation of the licence granted to Laker scheme for comprehensive education fully and on
..
EL_Z01.qxd 3/26/07 1:51 PM Page 722
722 OTHER COURTS AND TRIBUNALS AND LEGAL SERVICES CASE 18
7 June 1976 notified the Secretary of State of that they should have advised him to settle. In the second
intention. The Secretary of State was given a supervi- case, Mr Barrett claimed his solicitors, involved in
sory role by s 68 of the Education Act 1944. The sec- matrimonial proceedings out of court, negligently
tion provides: ‘If the Secretary of State is satisfied, advised him to settle his divorced wife’s claim for a
either on complaint by any person or otherwise, that share of the matrimonial home on disadvantageous
any local education authority or the managers or the terms. In the third case, Mrs Harris complained
governors of any county or voluntary school have about the terms on which her solicitors, involved in
acted or are proposing to act unreasonably with matrimonial proceedings out of court, advised her to
respect to the exercise of any power conferred or the settle her maintenance claim against her ex-husband.
performance of any duty imposed by or under this The solicitors applied for the claims to be struck out,
Act, he may, notwithstanding any enactment render- relying on the advocates’ immunity from suit in
ing the exercise of the power or the performance of negligence. The Court of Appeal heard the cases
the duty contingent upon the opinion of the author- together and ruled that in none of them were the
ity or of the managers or governors of the authority, solicitors immune from suit and ordered that
give such directions as to the exercise of the power or the claims be reinstated. The solicitors appealed to
the performance of the duty as appear to him to be the House of Lords. The main issue for the House of
expedient.’ On 11 June the Secretary of State replied Lords to decide was whether the current immunity of
to Tameside saying that it had acted, or was propos- both solicitors and barristers in relation to the con-
ing to act, unreasonably within s 68 of the 1944 Act duct of legal proceedings as set out in Rondel should
and accordingly directed Tameside to implement the continue.
1975 scheme. Tameside refused, so the Secretary of The judges stated that the issue was relevant to
State applied for mandamus. The Divisional Court both barristers and solicitor advocates. The Court of
of Queen’s Bench granted the order but the Court of Appeal had decided that in all three cases the alleged
Appeal and the House of Lords reversed that decision. negligence of the solicitors was not within the scope
Before giving directions under s 68, the Secretary of of the immunity as extended to out-of-court work.
State had to be satisfied that Tameside was acting The solicitors’ advice was not closely connected with
unreasonably, i.e. that its conduct was such that no the way in which the cases would have been con-
authority could reasonably engage in it. It had been ducted in court if not settled. However, in the House
alleged that there was insufficient time to carry out of Lords, counsel on behalf of the three clients made a
the necessary selection procedure for entry into basic attack on the immunity in general and argued
grammar school. However, the House of Lords said that it should be abolished.
that there were no grounds for concluding that the The judges considered the changes in society and
authority was acting unreasonably in taking the view in the law that have taken place since the decision
that there was sufficient time available to carry out in Rondel and decided that it was appropriate to
the necessary selection procedure. Although the review the whole matter of advocates’ immunity
Secretary of State might legitimately take the view from liability for the negligent conduct of a case in
that the authority’s proposal to retain the grammar court. Maintaining such immunity depended on the
schools and to implement the selection procedure for balance between, on the one hand, the normal
the two schools where places were available was right of the individual to be compensated for a legal
misguided or wrong, there were no grounds which wrong done to him and, on the other, the advantages
could justify a conclusion that the proposal was such which accrued to the public interest from such an
that no education authority, acting reasonably, would immunity.
carry it out. It followed that the Secretary of State’s As regards the decision, the public interest in the
direction was ultra vires and of no effect. administration of justice no longer required that
advocates enjoy immunity from suit for alleged
Advocates and litigators are now liable in negligence in the conduct of litigation. The appeal
contract or tort for negligence in connection was dismissed.
with litigation
Comment (i) Advocates therefore no longer enjoy
Arthur J. S. Hall & Co (a firm) v Simons [2000] immunity from suit in respect of their conduct of civil and
18
3 WLR 543 criminal proceedings, although three of the seven judges
As regards the facts, three clients sued their solicitors dissented on the conduct of criminal proceedings,
for negligence. In the first case, Mr Simons claimed thinking that the immunity should be preserved in such
his solicitors negligently allowed him to become proceedings. It will not be easy to sue advocates success-
involved in lengthy and expensive litigation when fully since Lord Hoffmann, in particular, suggested that
..
EL_Z01.qxd 3/26/07 1:51 PM Page 723
CASES 19 – 20 CRIMINAL PROCEDURE 723
the collateral attack principle would be applied, certainly or omit to deliver packets and messages in the course
in criminal proceedings and to some extent in civil of transmission and for any person to solicit or end-
matters. This means that the court may strike out claims eavour to procure another to commit such an offence.
that involve the same issues being tried again as part of The Council of the Union of Post Office Workers
proving an advocate’s negligence. It is also unclear as to called on its members not to handle mail to South
whether the immunity is retrospective, as case law can Africa for a week because they disapproved of South
be. Lord Hope expressed the view (without reasons) that Africa’s policies. The claimant, who was the Secretary
the abolition of immunity would only apply to future of the National Association for Freedom, asked the
cases.
Attorney-General for his consent to act as claimant in
(ii) In Moy v Pettman Smith (a firm) and another [2005] relator proceedings for an injunction to restrain the
1 All ER 903 the House of Lords ruled that when giving Union from soliciting or endeavouring to procure any
clients advice as to whether to accept a settlement offer person wilfully to detain or delay a postal packet
at the door of the court and given that the advice was in the course of transmission to South Africa. The
not negligent barristers need not spell out all the factors Attorney-General refused. The claimant took the matter
and reasons behind their advice. The claimant builder to court and eventually the House of Lords decided
sustained fractures of the left leg. The surgical treatment that proceedings to prevent the infringement of public
was he alleged carried out negligently. He brought a
rights can only be instituted by the consent of the
claim against the relevant health authority. In this claim a
Attorney-General unless an individual has a special
necessary report by a consultant orthopaedic surgeon
interest as where his private rights are threatened.
was not obtained by the claimant’s solicitors in time.
Mr Gouriet had no such interest and was not entitled
Eventually a report was made and the claimant’s barris-
to the relief sought. Presumably, a company which dealt
ter, Ms Perry, asked for an adjournment of the proceed-
ings to adduce further evidence. A county court judge on a regular basis with South Africa by mail would have
turned her request down and the proceedings went on. had the necessary locus standi.
The health authority had made an offer to settle out of
court in the sum of £150,000. However Ms Perry advised
her client, the claimant, to refuse it, as he would get CRIMINAL PROCEDURE
more by proceeding to trial. The offer was made by the
health authority on the day of the trial. Ms Perry had in Excessive reporting of criminal proceedings:
mind that the claimant would have a separate action no need to show prejudice to accused
against the solicitors which would make up any shortfall.
This was the claimant’s safety net but this did not form The Eastbourne Herald Case, The Times,
20
part of Ms Perry’s advice to continue to trial. The offer of 12 June 1973
£150,000 was turned down by the claimant. When the The Eastbourne Herald published an article upon the
health authority realised that the report would not be
committal proceedings of a case in which a man was
available in this trial, they dropped their offer to
charged with unlawful sexual intercourse. The prosecu-
£120,000, which the claimant accepted contrary to
tion of the editor and proprietors which followed was
advice. He then claimed against Ms Perry for negligent
based on the following matters which appeared in the
advice and made a separate claim against the solicitors
articles:
for alleged negligence in failing to obtain the report
in time to comply with the timetable set for the pro- (a) a headline reading ‘New Year’s day Bridegroom
ceedings. Their Lordships ruled that Ms Perry was not Bailed’;
in breach of her duty to the claimant. She was not
(b) a description of the offence charged as being
obliged to spell out all the factors and reasons behind
‘serious’;
her advice.
(c) a description of the alleged offender as ‘bespec-
tacled and dressed in a dark suit’;
Criminal conduct cannot be prevented by (d ) a note to the effect that he had been ‘married at
injunction unless the Attorney-General is St Michael’s Church on New Year’s Day’;
prepared to take or agree to the taking of (e) a reference to the way in which the prosecuting
proceedings solicitor had handled the case.
Gouriet v Union of Post Office Workers [1977] The editor and proprietors were each found guilty by
19
3 All ER 70
the Eastbourne magistrates on the five counts relating
Under ss 58 and 68 of the Post Office Act 1953, it is to these different passages and were each fined a total
an offence punishable by fine and imprisonment for of £2,000 and ordered to pay £37.50 costs. This
persons employed by the Post Office wilfully to delay strange decision stems initially from the fact that
..
EL_Z01.qxd 3/26/07 1:51 PM Page 724
724 THE LAW-MAKING PROCESS I CASES 21–22
liability may be incurred under what is now s 8(4) of preamble recited that plans and books of reference
the Magistrates’ Courts Act 1980 where a report of had been deposited with Somerset County Council.
committal proceedings contains any details other Pickin, who objected to the closing of the line, pur-
than those permitted by s 8(4) and quite irrespective chased a few feet of land adjoining the track in 1969
of whether or not the details are potentially prejudi- and sought a declaration that he owned the land as
cial in nature. All that the prosecution is required to far as the middle of the track, the railway having been
show is: abandoned within s 259. In reply to the Board’s
defence that the land was vested in it by virtue of s 18
(a) that the defendant published a report of com-
of the Act of 1968, Pickin pleaded that that Act had
mittal proceedings to which the restrictions
contained a false recital in that the requisite docu-
apply; and
ments had not been deposited, that the Board had
(b) that the report contained matters for which no
misled Parliament in obtaining the Act ex parte (in
specific provision is made in s 8(4).
effect, without hearing other views) and that it was
Thus, in this case it was an offence under the Act to ineffective to deprive him of his land.
describe unlawful sexual intercourse as a ‘serious’ Held – by the House of Lords – the courts had no
offence for s 8(4) permits of no such qualifying power to examine proceedings in Parliament in
adjective. Equally, it was an offence to describe the order to determine whether the passing of an Act
defendant as ‘bespectacled and dressed in a dark suit’ was obtained by means of any irregularity or fraud;
for s 8(4) only provides for reference to his name, Mr Pickin failed.
address and occupation. Furthermore, it is not neces-
sary for the prosecution to show that the offending Comment (i) As regards delegated legislation, in
item purported to be an account of what transpired R v Immigration Appeal Tribunal, ex parte Joyles [1972]
in court, provided only that it is contained within a 3 All ER 213 it was alleged that some regulations made
report of committal proceedings. Thus, in this case under the Immigration Appeals Act 1969 had not been
the magistrates held that it was an offence under the properly laid before Parliament as required by s 24(2) of
Act to refer to the fact that the defendant had been the 1969 Act. A Divisional Court of the Queen’s Bench
married at St Michael’s Church on New Year’s relied on letters from the Clerks of the Journal to the
Commons and Lords stating that the rules had been duly
Day although this piece of background information
presented and laid. The court was not prepared to go
does not appear to have been adduced as evidence
further and examine the internal proceedings of
in court.
Parliament.
(ii) Of course, if it is argued that the legislation conflicts
THE LAW-MAKING PROCESS I: with EC law, the court is obliged to give interim relief
THE UK PARLIAMENT and suspend the operation of the legislation until a final
ruling is obtained (see Factortame Ltd v Secretary of
The courts cannot examine the proceedings of State for Transport (No 2) [1991] 1 All ER 70).
Parliament to see whether an act or delegated
legislation can be regarded as invalid on the Delegated legislation – judicial control;
ground that it was obtained by some the application of the doctrine of
irregularity or fraud ultra vires
British Railways Board v Pickin [1974] Hotel and Catering Industry Training
21 22
1 All ER 609 Board v Automobile Proprietary Ltd
[1969] 2 All ER 582
Section 259 of the Bristol and Exeter Railways Act
1836 provides that if the railway, which it set up, This was a test case brought by the Board to decide
should at any time be abandoned, the land acquired whether the Industrial Training (Hotel and Catering
for the track should vest in the adjoining landowners; Board) Order 1966 made by the Minister of Labour pur-
the same provision was contained in the Act setting suant to powers conferred upon him by the Industrial
up the Yatton to Clevedon line. The British Railways Training Act 1964, was ultra vires in so far as it purported
Board, in whom the railways had become vested, to extend to any members’ clubs. If the order was
closed the line in the early 1960s and took up the ultra vires, the RAC club in Pall Mall was not liable to
tracks in 1969. A private Act of Parliament, the British pay a levy to the Board by reason of its activities in
Railways Act, was passed in 1968 cancelling the effect providing midday and evening meals and board and
of s 259 and vesting the track in the Board; the Act’s lodging for reward. The relevant order was made
..
EL_Z01.qxd 3/26/07 1:51 PM Page 725
CASES 23–25 THE LAW-MAKING PROCESS I 725
under s 1(1) of the Act of 1964, which provides that Interpretation Act 1978: application to statutory
the Minister may ‘for the purpose of making better interpretation
provision for . . . training . . . for employment in any
activities of industry or commerce’ make an order Hutton v Esher Urban District Council [1973]
24
2 All ER 1123
specifying ‘those activities’, and establishing a board to
exercise the functions of an industrial training board. The Council proposed to construct a sewer to drain
The 1966 order specified ‘the activities’ as including surface water from houses and roads and also to take
the supply of main meals and lodgings for reward by flood water from a river. The most economical line
a members’ club. Nevertheless, this provision was of the sewer would take it straight through the
only valid if the activities of members’ clubs were claimant’s bungalow, which would have to be demo-
activities of ‘industry or commerce’. lished but might be rebuilt after the sewer had been
constructed. The Public Health Act 1936 empowered
Held – by the House of Lords – the general object of the Council to construct a public sewer ‘in, on, or
the Act of 1964 was to provide employers in industry over any land not forming part of a street’. The
and commerce with trained personnel and to finance claimant argued that the expression ‘land’ did not
the training by a levy on employers in the industry, include buildings and, therefore, the Council had no
and that it was not intended to allow a levy to be power to demolish his bungalow. However, s 3 of the
made on private institutions like members’ clubs. Interpretation Act of 1889 (see now the Interpretation
Although such institutions might pursue activities Act 1978, s 5 and Sch 1) provided that unless a con-
not unlike those of a hotel keeper, they could not be trary intention appears, the expression ‘land’ includes
regarded as within the phrase ‘activities of industry or buildings. It was held – by the Court of Appeal – that
commerce’. the Interpretation Act was applicable and ‘land’,
Comment The question of ultra vires was raised in R v therefore, included buildings. In consequence, the
Secretary of State for the Environment, ex parte Spath Council had the power to demolish the claimant’s
Holme Ltd [2000] 1 All ER 884 where Spath Holme, the bungalow.
landlord of flats, challenged the validity of the Rent Acts
(Maximum Fair Rent) Order 1999 made under the
Judicial interpretation of statutes: the mischief
Landlord and Tenant Act 1985, s 31. The 1985 Act gave
rule: a statute is to be construed so as to suppress
power to cap rent increases to tenants to combat
the mischief in the common law and advance
inflation, but the 1999 Order, which was made at a time
of very low inflation, was intended purely to cap rent
the remedy
increases. The Court of Appeal, dealing with judicial
review asked for by Spath Holme, ruled that the 1999 Gardiner v Sevenoaks RDC (1950)
25
Order was ultra vires and of no effect. 66 TLR 1091
This decision was subsequently affirmed by the House
The local authority served a notice under the
of Lords (see R v Secretary of State for the Environment
Celluloid and Cinematograph Film Act 1922 on the
ex parte Spath Holme Ltd [2001] 1 All ER 195).
occupier of a cave where film was stored, requiring
him to comply with certain safety regulations.
Local authority by-laws can be challenged in the
Obviously, the common law had no such rules. The
courts as being unreasonable
cave was described in the notice as ‘premises’.
Burnley Borough Council v England, The Times, Gardiner, who was the occupier, appealed against the
23 notice on the ground that a cave could not be con-
15 July 1978
sidered ‘premises’ for the purposes of the Act.
In this case it was held that a by-law of the Council
Held – whilst it was not possible to lay down that
prohibiting any person from causing any dog belong-
every cave would be ‘premises’ for all purposes, the
ing to him or in his charge to enter or remain in
Act was a safety Act and was designed to protect
specified pleasure grounds other than a guide dog in
persons in the neighbourhood and those working in
the charge of a blind person was not unreasonable.
the place of storage. Therefore, under the ‘mischief
The Council was concerned about the fouling of
rule’, this cave was ‘premises’ for the purposes of the
pleasure grounds by dogs. The court went on to say
Act.
that a by-law could be unreasonable if so unjust and
oppressive that no reasonable council could have Comment The mischief rule is very close to the more
made it – for example, a by-law directed against dog recent recommendation of the Law Commission for a
owners with red hair. purposive interpretation of statutes.
..
EL_Z01.qxd 3/26/07 1:51 PM Page 726
726 THE LAW-MAKING PROCESS I CASES 26–29
The golden rule of interpretation: extends the The expressio unius est exclusio alterius rule
literal rule where the application of that rule of statutory interpretation: the expression
leads to an absurd result of one thing implies the exclusion of
another
26 Keene v Muncaster [1980] RTR 377
R v Immigration Appeals Adjudicator, ex parte
28
Regulation 115 of the Motor Vehicles (Construction Crew, The Times, 26 November 1982
and Use) Regulations 1973 provides that a motorist An Immigration Appeals Tribunal had, in interpreting
may only park a motor vehicle on the road during the the Immigration Act 1971, ruled that a woman who
hours of darkness with the nearside of the vehicle to was born in Hong Kong of a Chinese mother and
the kerb. There is an exception to this if he has the putative English father was not entitled to a certificate
permission of a police officer in uniform to do other- of patriality (a certificate allowing immigration).
wise. The defendant, a police officer in uniform, There was an appeal to the Court of Appeal where the
parked his vehicle with the offside to the kerb during sole question was whether the word ‘parent’ used in
the hours of darkness. When he was charged with an the 1971 Act included the father of an illegitimate
offence under reg 115, he claimed that he had given child. The father in this case was unknown. It was
himself permission to park that way. He was convicted held that since the definition section in the 1971 Act
by the magistrates and appealed to the Divisional specifically mentioned the mother alone in the
Court of Queen’s Bench. context of an illegitimate child, the rule expressio
Held – dismissing the appeal – under the golden rule unius est exclusio alterius served to exclude the father
of interpretation the word ‘permission’ meant per- of an illegitimate child for these purposes as a
mission had to be requested by one person from ‘parent’. The appeal was dismissed. The Act required
another. The permission could not be given by the patriality to be decided on the basis of the mother
person whose vehicle was parked with the offside to alone. The daughter of a Chinese mother was not a
the kerb. patrial.
Comment The golden rule of interpretation was con-

sidered in Prince of Hanover v Attorney-General (1957) to The noscitur a sociis rule of statutory
which reference could usefully be made again at this interpretation: the meaning of a word may
point. be gathered from its context
The ejusdem generis rule 29 Muir v Keay (1875) LR 10 QB 594

Lane v London Electricity Board [1955]
27
1 All ER 324 Section 6 of the Refreshment Houses Act 1860 stated
The claimant was an electrician employed by the that all houses, rooms, shops or buildings, kept open
defendant to install additional lighting in one of for public refreshment, resort and entertainment
its sub-stations. While inspecting the sub-station, during certain hours of the night, must be licensed.
he tripped on the edge of an open duct and fell, The defendant had premises called ‘The Café’, and
sustaining injuries. The claimant claimed that the certain persons were found there during the night
defendant was in breach of its statutory duty under when the café was open. They were being supplied
the Electricity (Factories Act) Special Regulations in with cigars, coffee and ginger beer which they were
that the part of the premises where the accident seen to consume. The justices convicted the defendant
occurred was not adequately lighted to prevent because the premises were not licensed. He appealed
‘danger’. to the Divisional Court by case stated, suggesting that
a licence was required only if ‘entertainment’ in terms,
Held – it appeared that the word ‘danger’ in the regu-
e.g., of music or dancing was going on. The Divisional
lations meant ‘danger from shock, burn or other
Court, applying the noscitur a sociis rule, held – that
injury’. Danger from tripping was not ejusdem generis,
‘entertainment’, because of the context in which it
since the specific words related to forms of danger
appeared in the Act of 1860, meant matters of bodily
resulting from contact with electricity.
comfort and not matters of mental enjoyment such
Comment This summary is concerned only with the as theatrical or musical performances with which
claimant’s claim under the Regulations. The failure of this the word ‘entertainment’ is so often associated in
claim did not prevent a claim for damages for negligence other contexts. The justices were, therefore, right to
at common law. convict.
..
EL_Z01.qxd 3/26/07 1:51 PM Page 727
CASES 30–31 THE LAW-MAKING PROCESS II 727
principle. At first instance Bristow, J held that the

THE LAW-MAKING PROCESS II: CASE LAW
decision in Schorsch had been decided per incuriam,
AND THE LEGISLATIVE ORGANS OF
THE EUROPEAN UNION the Court of Appeal having been bound by the
Havana case. Consequently, he felt able to give a
judgment only in sterling. From his judgment an
Since its declaration of 1966 the House of Lords is
appeal was made to the Court of Appeal and his
not bound by its own decisions: application of
decision was reversed by a court presided over by
the declaration
Lord Denning, who had been in the majority in the
Court of Appeal when Schorsch was decided. From
Schorsch Meier Gmbh v Hennin [1975] the judgment of the Court of Appeal a further appeal
30
1 All ER 152
was made to the House of Lords. Their Lordships
The claimant, which carried on business in West quickly reached the conclusion that the Havana case
Germany, had sold goods to the defendants in had not been overruled, since the only means by
England. They had not been paid in full for the goods which that could have been done was by the House
and DM 3,756 remained owing. At the date of the of Lords itself under the declaration of 1966 and,
invoice the sterling equivalent of this sum was £452, accordingly, the Court of Appeal should have felt
but between the invoice date and the date of the bound by the case. It was, however, now open for the
county court summons sterling had been devalued so House of Lords to re-examine its previous decision in
that the value of £452 was only £266. Consequently, Havana. The House of Lords concluded that as the
the claimant asked for judgment in deutschmarks. situation regarding currency stability had sub-
The difficulty facing the claimant was that the House stantially changed since 1961 when the Havana case
of Lords had decided in Re United Railways of Havana was decided, there was justification for a departure
[1960] 2 All ER 332 that an English court could not from that decision under the 1966 declaration.
give judgment for an amount in foreign currency. Accordingly, the House refused to follow the Havana
The claimant challenged this on the ground that the case and held that an English court may give judg-
Havana case ran contrary to Art 106 (now 107) of the ment in a foreign currency. However, the majority
EEC Treaty (now EC Treaty). The county court judge of their Lordships were highly critical of the wide
held that he was bound by the Havana case and could interpretation of Art 106 (now 107) adopted by the
only give judgment in sterling. On appeal, however, Court of Appeal, Switzerland not being a member of
the Court of Appeal with Lord Denning, MR came to the Common Market, and it remains to be seen when
a different decision and found for the claimant on the matter comes before the courts again whether
two grounds – (i) as an English court had since that Article is adequate to sustain the view taken in
Beswick v Beswick (1967) the power to order specific this case.
performance of a contract to make a money payment,
Comment (i) In Fitzleet Estates Ltd v Cherry (Inspector
there was no longer a justification for the rule in
of Taxes) [1977] 3 All ER 996, a case concerned with the
Havana that judgment could only be given for a sum
tax treatment of interest paid on a loan used to buy
of money in sterling; (ii) the effect of Art 106 (now
property, the House of Lords refused to depart from its
107) of the EEC Treaty (now EC Treaty) was to require previous decision in Chancery Lane Safe Deposit and
the English courts to give judgment in favour of Offices Co Ltd [1966] 1 All ER 1 and stated that, in the
a creditor of a member state in the currency of that absence of a change of circumstances, it would not
state. normally depart from a previous decision unless there
were serious doubts as to its correctness. So change of
circumstances would seem to be the major factor. It will
Miliangos v George Frank (Textiles) Ltd [1975]
31 be noted that in the Miliangos case the circumstances
3 All ER 801
were very different from those which applied when the
This case was concerned with a contract for the sale of Havana case was decided. The situation regarding
polyester yarn and, in particular, the money of pay- currency stability had changed. Currency values were
ment and the money of account in the contract were much more volatile and this justified a departure from
in Swiss francs. The Swiss seller, who was unpaid, was the Havana case.
allowed in view of the decision in Schorsch Meier to (ii) A further example of the use of the 1966 declaration
claim payment in Swiss francs. Sterling had fallen in can be seen in Murphy v Brentwood District Council
value against the Swiss franc and if the new rule in (1990) (see Chapter 21) where the House of Lords
Schorsch were to be applied, the claimant stood to departed from a previous decision because there were
gain £60,000 as opposed to £42,000 under the Havana serious doubts as to its correctness.
..
EL_Z01.qxd 3/26/07 1:51 PM Page 728
728 THE LAW-MAKING PROCESS II CASES 32–34
Precedent: Court of Appeal Criminal Division: such a decision in regard to the 1988 review. The
considerations applying on a criminal bank said the court could not give such a decision
appeal because the matter had been decided in 1983 and
must stand for the whole of the lease in terms of the
32 R v Gould [1968] 1 All ER 849 interpretation of the rent review clause. The Court of
Appeal said that the issue could be looked at again in
The appellant was convicted of bigamy although regard to the 1988 review. This was not cause of
when he remarried he believed on reasonable grounds action estoppel but only issue estoppel and the issue
that a decree nisi of divorce in respect of his previous could be litigated again.
marriage had been made absolute which it had not,
so that he was still married at the time of the second Comment It is worth noting that cause of action estoppel
ceremony. The Court of Criminal Appeal in R v Wheat would prevent the overruling of the 1983 decision but at
and Stocks [1921] 2 KB 119 had decided on similar least the issue which was at the root of the 1983 decision
facts that a reasonable belief in the dissolution of could be looked at again for the future.
a previous marriage was no defence. In this appeal to
the Court of Appeal (Criminal Division) the court Supremacy of EC law
quashed the conviction holding that in spite of the
decision in R v Wheat and Stocks, a defendant’s honest Factortame Ltd v Secretary of State for
34
belief on reasonable grounds that at the time of his sec- Transport (No 2) [1991] 1 All ER 70
ond marriage his former marriage had been dissolved
The problem in this case was the Merchant Shipping
was a good defence to a charge of bigamy. Diplock, LJ,
Act 1988. This required 75 per cent of directors and
giving the judgment of the court, said that in its crim-
shareholders in companies operating fishing vessels in
inal jurisdiction the Court of Appeal does not apply
UK waters to be British. This effectively barred certain
the doctrine of stare decisis as rigidly as in its civil
ships owned by UK companies controlled by Spanish
jurisdiction, and if it is of the opinion that the law
nationals from fishing in British waters. This was
has been misapplied or misunderstood it will depart
alleged to be in conflict with the Treaty of Rome
from a previous decision.
because it deprived Spanish-controlled companies
Comment In this case a three-judge court expressly and, by implication, their Spanish directors and mem-
overruled Wheat and Stocks which was itself a decision bers, of their EC rights under the common fishing
of a five-judge Court of Criminal Appeal. policy. The matter was going to take up to two years
to sort out. The Spanish would suffer financial loss
Cause of action and issue estoppel distinguished during that time. They asked the court for a suspen-
sion of the operation of the 1988 Act until the final
Arnold v National Westminster Bank plc [1990] issue had been determined. The House of Lords even-
33
1 All ER 529 tually decided to refer the matter to the European
The bank leased premises to the claimants for a term Court which gave an unequivocal answer. It laid
of years. The lease had rent review clauses in it. The down that Community law must be fully and uni-
reviews were to take place every five years. The review formly applied in all the member states and that a
was to give the bank as landlords a ‘fair market rent’ relevant Community law rendered automatically
according to a formula in the lease. At the first review inapplicable any conflicting provision of national law.
in 1983 the judge who was called upon to interpret It followed that the courts were obliged to grant
the review clause decided that upon its wording he interim relief in cases of alleged conflict, where as in
had to give a rent on the basis that there were no this case the only obstacle was a rule of national law.
review clauses in the lease. This meant a rent which Accordingly, the House of Lords granted interim relief
would last until the end of the lease and such a rent by suspending the relevant provision of the 1988 Act
would have to be some 20 per cent more than if the until a final ruling on the issue of conflict could be
fair rent was based on a lease with regular reviews of obtained.
rent.
The parties went to court again on the 1988 review Comment (i) The supremacy of EC law has been upheld,
and that litigation produced this decision. It appeared not only where there is a conflict, but even where there
that following the judge’s decision on the 1983 might be. The decision makes a big dent in parliamentary
supremacy, to say the least.
review other cases interpreting similar review clauses
decided that the wording meant a fair rent based on a (ii) It is worth noting that the UK Parliament repealed the
lease with regular rent reviews. The claimants wanted relevant sections of the 1988 Act in 1993.
..
EL_Z01.qxd 3/26/07 1:51 PM Page 729
CASES 35–37 PERSONS AND THE CROWN 729
(iii) In 1999 the House of Lords held that Factortame Ltd Domicile: a person who abandons a domicile of
and 96 other companies or shareholders or directors choice without acquiring another reverts to the
which had been operating British-registered fishing domicile of origin
vessels that were barred when the 1988 Act was imple-
mented were entitled to damages from the UK govern- 36 Tee v Tee [1973] 3 All ER 1105
ment for breach of the EC common fisheries policy (see
R v Secretary of State for Transport, ex parte Factortame The parties were married in England in November
Ltd and Others [1999] 4 All ER 906). 1946 when the husband was a domiciled Englishman
and the wife was an American citizen. In 1951 they
went to the United States and in 1953 the husband
PERSONS AND THE CROWN
became an American citizen and acquired a domicile
Domicile of origin and choice: effect on taxation of choice in that country. In 1960 the husband was
posted to Germany by his employer, and in 1965 he
35 IRC v Bullock [1976] 3 All ER 353 left his wife and set up home with a German woman
by whom he had two children. Some time during
Mr Bullock was born in Nova Scotia in 1910 and 1966/7 the husband decided to make his permanent
had his domicile of origin there. In 1932 he came home in England, but it was not until November
to England to join the RAF, intending to go back to 1972 that the husband with his mistress and children
Canada when his service was completed. In 1946 actually took up residence in the house he had
he married an Englishwoman and they went on a bought in England in May 1972. The husband had
number of visits to Mr Bullock’s father in Canada. In been granted a permit to work in England in 1969. In
1959 Mr Bullock retired from the RAF and took up July 1972, he presented a petition for divorce. The
civilian employment in England. In 1961 he was able wife challenged the jurisdiction of the English court
to retire fully, having become entitled to money from to hear this petition, and the question for the court
his father’s estate on the latter’s death. Mr Bullock was whether the husband was domiciled in England
had always tried to persuade his wife to live in in July 1972.
Canada but she would not do so. Even so, Mr Bullock
Held – by the Court of Appeal – the husband was
always hoped she would change her mind. In 1966 he
domiciled in England. He had left the United States
made a will subject to Nova Scotian law under which
in 1960 and the intention not to return there was
he said that his domicile was Nova Scotia and that he
formed over the period 1966/7. In consequence, the
intended to return and remain there if his wife died
two elements necessary to establish the abandon-
before him. The Crown claimed that he had acquired
ment of a domicile of choice had been proved. When
a domicile of choice in England and that all his
a domicile of choice was lost, the domicile of origin
income from Canada was chargeable to income tax. If
revives; the fact that the husband did not actually
Mr Bullock was not domiciled in England, tax would
take up permanent residence in England until 1972
be chargeable only on that part of the income from
was immaterial since it is not necessary for the revival
his father’s estate which was actually sent to him in
of a domicile of origin that residence should also be
England. This was less than all the income. It was
taken up in that country.
held – by the Court of Appeal – that the fact that
Mr Bullock had established a matrimonial home in
Domicile: evidence of change: naturalisation:
England was evidence of his intention, but was not
purchase of business
conclusive. On the evidence of his retention of
Canadian citizenship and of the terms of a declara- Steiner v Inland Revenue Commissioners [1973]
37
tion as to domicile in his will, it was impossible not to STC 547
hold that Mr Bullock had always maintained a firm Steiner was born in the former Austro-Hungarian
intention to return to Canada in the event of his sur- Empire. He lived in Berlin from 1906 but was driven
viving his wife, and there was a sufficiently substan- out of Germany by the Nazis in 1939 and came to
tial possibility of his surviving his wife to justify England. He acquired a flat in London in 1941 and by
regarding the intention to return as a real determina- the end of 1948 had established a business in England
tion to do so, in that event, rather than a vague hope and was naturalised in 1948. From 1948 to 1963 he
or aspiration. Accordingly, Mr Bullock could not be spent six months of each year in Berlin where he had
said to have formed the intention to acquire an a property. He was assessed to income tax for the years
English domicile of choice. Thus, he could be taxed 1960/61 to 1966/7 on rents on properties in West Berlin,
only on that part of the Canadian estate which was the Special Commissioners holding that he had
remitted to England. acquired an English domicile of choice. He appealed.
..
EL_Z01.qxd 3/26/07 1:51 PM Page 730
730 PERSONS AND THE CROWN CASES 38– 41
Held – by the Court of Appeal – the appeal would be (ii) In McConomy v Croft Inns [1992] IRLR 561 the com-
dismissed; there were no grounds for holding the plainant was refused a drink in a public house because he
Special Commissioners’ decision to be wrong in law. wore two earrings in his left ear. He was awarded £250
The court refused to grant leave to appeal to the House damages for sex discrimination since clearly there would
of Lords. have been no question of not serving a woman because
she was wearing earrings.
Comment (i) If a person is domiciled or resident in
England and Wales, tax is charged on the full amount (iii) The Race Relations Act 1976, s 25 prohibits racial dis-
of income arising within a given year wherever made crimination in relation to membership of political and
or received (Income and Corporation Taxes Act (1988), social clubs with a membership of more than 25. The Sex
ss 334–336). Discrimination Act 1975 does not carry such a prohibition.
Sex discrimination by private clubs is not outlawed under
(ii) See also IRC v Bullock (1976) for other examples of
the provisions of the SDA 1975 relating to provision of
evidence of change of domicile, e.g. by a will.
services or facilities to the public or a section of it since
private membership clubs cannot be said to provide such
Racial discrimination: inducement to facilities or services. As the Gill case shows the position is
discrimination on racial grounds different in relation to pubs or clubs open to the public.
The Commission for Racial Equality v Imperial
38
Society of Teachers of Dancing [1983] ICR 473 Sex discrimination: credit: a requirement that
The Society wished to employ a filing clerk. A tele- a woman must have her husband’s guarantee
phone call was made to a local girls’ school to find a is unlawful
suitable applicant. During the course of the phone
call it was made clear that a ‘coloured girl’ would be 40 Quinn v Williams Furniture Ltd [1981] ICR 328
out of place because there were no coloured employees.
It was held by the Employment Appeal Tribunal that Mrs Quinn wanted to buy certain goods from a shop
the words ‘to induce’ in s 31 of the Race Relations Act on hire-purchase terms. She was told by the shop
1976 meant to persuade or to prevail upon or to bring assistant that if she took out a hire-purchase agree-
about, and the words used did constitute an attempt ment her husband would have to give a guarantee for
to induce the head of careers at the girls’ school not the credit allowed, but if he took out the agreement
to send a coloured girl. In consequence, the Society she would not be required to give a guarantee of his
had contravened s 31. liability. She bought the goods and took out the
agreement herself, her husband acting as guarantor.
Sex discrimination: facilities and services She then complained that the shop’s refusal to give
her credit facilities on the same basis as they would
39 Gill v El Vino Co Ltd [1983] 1 All ER 398 to a man in her position was a breach of the Sex
Discrimination Act 1975. The Court of Appeal held
The claimants, both women, entered a wine bar and that it was. On the facts Mrs Quinn had not been
stood at the bar and ordered wine. They were refused allowed credit facilities in the same way as they would
service under house rules but were told that if they normally be offered to men. Even a suggestion or
would sit at a table their drinks would be brought to advice such as this to get her husband’s guarantee was
them. The claimants brought an action alleging unlawful. There did not have to be an outright refusal
breach of the 1975 Act. It was held – by the Court of of credit.
Appeal – that applying the simple words of the Act
the defendants had failed to provide the claimants Comment The case shows that credit restrictions based
with facilities afforded to men and by doing so they on sex, at one time usual in business, may now infringe
had treated women less favourably than men contrary the 1975 Act.
to the 1975 Act.
A registered company has a separate legal entity
Comment (i) In James v Eastleigh Borough Council [1990]
2 All ER 607 the claimant and his wife, who were both
retired and aged 61, went to a leisure centre run by the 41 Salomon v Salomon & Co [1897] AC 22
Council. The wife was admitted to the swimming pool
free because she was of pensionable age. The claimant Salomon carried on business as a leather merchant
had to pay because he was not. He brought proceedings and boot manufacturer. In 1892 he formed a limited
alleging discrimination. Eventually the House of Lords company to take over the business. The memoran-
ruled that the distinction operated by the Council was dum of association was signed by Salomon, his wife,
unlawful direct discrimination on the grounds of sex. daughter and four sons. Each subscribed for one
..
EL_Z01.qxd 3/26/07 1:51 PM Page 731
CASES 42– 45 PERSONS AND THE CROWN 731
share. The company paid £38,782 to Salomon for Held – the expenditure of the funds of the society in
the business and the mode of payment was to give the formation of an industrial committee, to attempt to
Salomon £10,000 in debentures, secured by a floating regulate hours of work and wages and conditions of
charge, 20,000 shares of £1 each and £8,782 in cash. work between employers and employee members of
The company fell on hard times and a liquidator was the society, was ultra vires the charter, because it was a
appointed. The debts of the unsecured creditors trade union activity which was not contemplated by
amounted to nearly £8,000, and the company’s assets the Charter of 1843. Further, the expenditure of
were approximately £6,000. The unsecured creditors money on an insurance scheme for members was also
claimed all the remaining assets on the ground that not within the powers given in the charter, for it
the company was a mere alias or agent for Salomon. amounted to converting the defendant society into
Held – the company was a separate and distinct an insurance company. The claimant, a member of
person. The debentures were perfectly valid and, the society, was entitled to an injunction to restrain
therefore, Salomon was entitled to the remaining the society from implementing the above schemes.
assets in part payment of the secured debentures held
by him. Disclosure of documents: Crown or public interest
privilege
Comment In a company winding-up such as this, secured
creditors such as Mr Salomon must be paid before the Norwich Pharmacal Co v Commissioners of
44
unsecured (or trade) creditors. Customs and Excise [1973] 2 All ER 943
The claimants held the patent of a chemical compound
Looking behind the corporate mask used in animal foods, which they discovered was
being infringed by unknown importers. The Com-
42 Gilford Motor Company v Horne [1933] Ch 935 missioners of Customs and Excise were allowing the
importation and charging duty thereon, and conse-
Mr Horne had been employed by Gilford. He had
quently knew the identity of the importers concerned.
agreed to a restraint of trade in his contract under
The claimants brought proceedings against the Com-
which he would not approach the company’s
missioners for infringement of their patent, and for an
customers to try to get them to transfer their custom
order that they disclose the identity of the importers.
to any similar business which Mr Horne might run
The order was granted by the judge but reversed by
himself. Mr Horne left his job with Gilford and set
the Court of Appeal. On appeal to the House of Lords
up a similar business using a registered company
by the claimants it was held – allowing the appeal – that
structure. He then began to send out circulars to the
the interests of justice outweighed any public interest
customers of Gilford inviting them to do business
in the confidential nature of such information. The
with his company. Gilford asked the court for an
Commissioners were under a duty to assist a person
injunction to stop Mr Horne’s activities and he said
wronged by disclosing the identity of the wrongdoer.
he was not competing but his company was and that
the company had not agreed to a restraint of trade.
However, an injunction was granted against both Alfred Crompton Amusement Machines v
45
Customs and Excise Commissioners (No 2)
Mr Horne and his company to stop the circularisation
[1973] 2 All ER 1169
of Gilford’s customers. The corporate structure could
not be used to evade legal responsibilities. The appellants had paid purchase tax on the
wholesale value of amusement machines for some
A member may obtain an injunction to restrain a years on the basis of a formula negotiated with the
company from acting in a manner inconsistent Commissioners of Customs and Excise. The appel-
with its constitution lants claimed that the assessments were too high and
thereupon the Commissioners investigated the appel-
Jenkin v Pharmaceutical Society [1921] lants’ books and obtained from customers and other
43 sources information bearing on the ascertainment of
1 Ch 392
the wholesale value of the machines. The appellants
The defendant society was incorporated by Royal did not agree with the opinion of the Commissioners
Charter in 1843 for the purpose of advancing chem- as to the way in which the tax should be computed and
istry and pharmacy and promoting a uniform system in subsequent arbitration proceedings Crown privilege
of education of those who should practise the same, was claimed in respect of documents received by the
and for the protection of those who carried on the Commissioners from third parties. It was held – by the
business of chemists or druggists. House of Lords – that the considerations for and
..
EL_Z01.qxd 3/26/07 1:51 PM Page 732
732 MAKING THE CONTRACT I CASE 46
against disclosure were evenly balanced. In these cir- adequacy. (e) Finally, the defendants suggested that
cumstances it was held that the court ought to uphold there had been no communication of acceptance but
the claim to privilege and trust the Executive to mitigate here the court, looking at the reward cases, stated that
the ill-effects of non-disclosure. in contracts of this kind acceptance may be by conduct.
Comment It seems that where there is a doubt in regard Comment (i) An offer to the public at large can only be
to disclosure, the benefit of the doubt is unfortunately to made where the contract which eventually comes into
be allowed in favour of the Executive and against dis- being is a unilateral one, i.e. where there is a promise on
closure. On considering the issue of Crown privilege, one side for an act on the other. An offer to the public
their Lordships indicated by way of preface that the title at large would be made, for example, where there was
is a misnomer; a more accurate term would be privilege an advertisement offering a reward for services to be
on the ground of ‘public interest’, since privilege extends rendered such as finding a lost dog. It is interesting to
beyond cases against the Crown. note that an invitation to treat may be put to the world
at large, as where A advertises his car for sale in the local
press, inviting offers which may eventually lead to a
MAKING THE CONTRACT I bilateral contract, but an offer cannot be unless designed
to produce a unilateral contract.
(ii) Most business contracts are bilateral. They are made
Offer and unilateral agreements
by an exchange of promises and not, as here, by the
exchange of a promise for an act. Nevertheless, Carlill’s
46 Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256
case has occasionally provided a useful legal principle in
the field of business law (see, e.g., New Zealand Shipping
The defendants were proprietors of a medical prepara-
Co Ltd v AM Satterthwaite & Co Ltd [1974] 1 All ER 1015
tion called ‘The Carbolic Smoke Ball’. They inserted
(Case 181) ). As regards motive, presumably Mrs Carlill
advertisements in various newspapers in which they
used the ball to prevent influenza and not to recover
offered to pay £100 to any person who contracted
£100. However, she had seen the offer and her motive
influenza after using the ball three times a day for two was immaterial.
weeks. They added that they had deposited £1,000 at
(iii) A deposit of money from which to pay is not
the Alliance Bank, Regent Street, ‘to show our sincer-
essential. In Wood v Lectrik Ltd, The Times, 13 January
ity in the matter’. The claimant, a lady, used the ball
1932 the defendants who were makers of an electric
as advertised, and was attacked by influenza during
comb had advertised: ‘What is your trouble? Is it grey
the course of treatment, which in her case extended
hair? In ten days not a grey hair left. £500 Guarantee.’
from 20 November 1891 to 17 January 1892. She now
Mr Wood used the comb as directed but his hair remained
sued for £100 and the following matters arose out of grey at the end of ten days of use. All the comb had
the various defences raised by the company: (a) It was done was to scratch his scalp. There was no bank deposit
suggested that the offer was too vague since no time by the company but Rowlatt, J held that there was a
limit was stipulated in which the user was to contract contract and awarded Mr Wood the £500.
influenza. The court said that it must surely have
(iv) Where the offer is made to a particular person it may
been the intention that the ball would protect its user
only be accepted by that person. Thus in Boulton v Jones
during the period of its use, and since this covered the
(1857) 2 H & N 564 the defendant ordered (offered
present case it was not necessary to go further. (b) The to buy) 50 feet of leather hose from Brocklehurst (a
suggestion was made that the matter was an advertis- business). Boulton had earlier on the same day bought
ing ‘puff’ and that there was no intention to create the Brocklehurst business of which he had been the man-
legal relations. Here the court took the view that the ager. Boulton ‘accepted’ the offer and supplied the hose.
deposit of £1,000 at the bank was clear evidence of an It was held that there was no contract since the offer was
intention to pay claims. (c) It was further suggested made to Brocklehurst personally. It was important to
that this was an attempt to contract with the whole Jones that he was dealing with Brocklehurst because he
world and that this was impossible in English law. was owed money by him and was intending to deduct
The court took the view that the advertisement was that sum from the price of the goods (called a set-off ).
an offer to the whole world and that, by analogy with Since Jones had used the hose before he received
the reward cases, it was possible to make an offer of Boulton’s invoice, he could not be required to return it
this kind. (d) The company also claimed that the and Boulton failed in his claim for the purchase price.
claimant had not supplied any consideration, but the (v) In Boulton v Jones the problem would not have arisen
court took the view that using this inhalant three if the Brocklehurst business had been a company in
times a day for two weeks or more was sufficient which Boulton had acquired, by way of its purchase, a
consideration. It was not necessary to consider its controlling interest in its shares. Why?
..
EL_Z01.qxd 3/26/07 1:51 PM Page 733
CASES 47– 49 MAKING THE CONTRACT I 733
Offer and invitation to treat – auction sales a customer selected goods from the shelves, but when
the company’s employee at the cash desk accepted
47 Harris v Nickerson (1873) LR 8 QB 286 the offer to buy what had been chosen. There was,
therefore, supervision in the sense required by the Act
The defendant, an auctioneer, advertised in London at the appropriate moment of time.
newspapers that a sale of office furniture would be
held at Bury St Edmunds. A broker with a commission Comment (i) The fact that a price ticket is not regarded
to buy furniture came from London to attend the as an offer is somewhat archaic, being based, perhaps,
on a traditional commercial view that a shop is a place
sale. Several conditions were set out in the advertise-
for bargaining and not a place for compulsory sales.
ment, one being: ‘The highest bidder to be the buyer.’
However, because currently there is a return to bargain-
The lots described as office furniture were not put up
ing in some areas of purchase, e.g. cars, white goods and
for sale but were withdrawn, though the auction itself
electrical goods, the price ticket is perhaps rightly
was held. The broker sued for loss of time in attend-
regarded in those areas as an invitation to treat; a start-
ing the sale. ing point for the bargaining.
Held – he could not recover from the auctioneer.
(ii) Although a trader can refuse to sell at his wrongly
There was no offer since the lots were never put up for advertised price, he commits a criminal offence under
sale, and the advertisement was simply an invitation ss 20 and 21 of the Consumer Protection Act 1987 for giv-
to treat. ing a misleading price indication where the price ticket
Comment (i) A sensible decision, really. The statement, ‘I shows a lower price than that at which he is prepared
intend to auction some office furniture’ is not the same to sell.
as an offer for sale, and in any case there seems to be no (iii) The relevant provisions of the 1933 Act are now in ss
way of accepting the ‘offer’ in advance of the event. 2 and 3 of the Poisons Act 1972.
(ii) In British Car Auctions v Wright [1972] 3 All ER 462 the (iv) See also Esso Petroleum Ltd v Customs and Excise
auctioneers sold an unroadworthy vehicle. An attempt to Commissioners [1976] 1 All ER 117 where the House of
charge them with the offence of ‘offering’ the car for Lords decided that price indications at a petrol filling
sale contrary to road traffic legislation failed. The bidder station were invitations to treat.
made the offer and not the auctioneer (and see Partridge
(v) The concept of invitation to treat also applies to goods
v Crittenden (1968)).
displayed with a price ticket in a shop window (Fisher v
Bell [1960] 3 All ER 731).
Invitation to treat: price indications, circulars, etc.
Pharmaceutical Society of Great Britain v Boots
48 49 Partridge v Crittenden [1968] 2 All ER 421
Cash Chemists (Southern) Ltd [1953] 1 QB 401
The defendants’ branch at Edgware was adapted to Mr Partridge inserted an advertisement in a publica-
the ‘self-service’ system. Customers selected their tion called Cage and Aviary Birds containing the words
purchases from shelves on which the goods were ‘Bramblefinch cocks, bramblefinch hens, 25s each’.
displayed and put them into a wire basket supplied by The advertisements appeared under the general
the defendants. They then took them to the cash desk heading ‘Classified Advertisements’ and in no place
where they paid the price. One section of shelves was was there any direct use of the words ‘offer for sale’. A
set out with drugs which were included in the Poisons Mr Thompson answered the advertisement enclosing
List referred to in s 17 of the Pharmacy and Poisons a cheque for 25s, and asking that a ‘bramblefinch
Act 1933, though they were not dangerous drugs and hen’ be sent to him. Mr Partridge sent one in a box,
did not require a doctor’s prescription. Section 18 of the bird wearing a closed ring.
the Act requires that the sale of such drugs shall take Mr Thompson opened the box in the presence
place in the presence of a qualified pharmacist. Every of an RSPCA inspector, Mr Crittenden, and removed
sale of the drugs on the Poisons List was supervised at the ring without injury to the bird. Mr Crittenden
the cash desk by a qualified pharmacist, who had brought a prosecution against Mr Partridge before the
authority to prevent customers from taking goods out Chester magistrates alleging that Mr Partridge had
of the shop if he thought fit. One of the duties of the offered for sale a brambling contrary to s 6(1) of the
Society was to enforce the provisions of the Act, and Protection of Birds Act 1954 (see now s 6(1) of the
the action was brought because the claimants alleged Wildlife and Countryside Act 1981), the bird being
that the defendants were infringing s 18. other than a close-ringed specimen bred in captivity
Held – the display of goods in this way did not consti- and being of a species which was resident in or visited
tute an offer. The contract of sale was not made when the British Isles in a wild state.
..
EL_Z01.qxd 3/26/07 1:51 PM Page 734
The justices were satisfied that the bird had not to treat at a minimum price of £900. The third telegram
been bred in captivity but had been caught and could not, therefore, be an acceptance resulting in a
ringed. A close-ring meant a ring that was completely contract.
closed and incapable of being forced or broken except Comment (i) The point was also raised in Clifton v
with the intention of damaging it; such a ring was Palumbo [1944] 2 All ER 497 where the owner of a very
forced over the claws of a bird when it was between large estate wrote to the other party to the case as
three and 10 days old, and at that time it was not follows: ‘I am prepared to offer you or your nominee my
possible to determine what the eventual girth of the Lytham estate for £600,000.’ The letter was regarded as
leg would be so that the close-ring soon became an invitation to treat and not an offer. The Court of
difficult to remove. The ease with which the ring was Appeal said of the letter: ‘It is quite possible for persons
removed in this case indicated that it had been put on on a half sheet of notepaper, in the most informal
at a much later stage and this, together with the fact and unorthodox language, to contract to sell the most
that the bird had no perching sense, led the justices extensive and most complicated estate that can be
to convict Mr Partridge. imagined. This is quite possible, but, having regard to the
He appealed to the Divisional Court of the Queen’s habits of the people in this country, it is very unlikely.’
Bench Division where the conviction was quashed. (ii) The matter of invitation to treat and offer in the
The court accepted that the bird was a wild bird, but context of the alleged sale of land produced the most
since Mr Partridge had been charged with ‘offering for interesting case of Gibson v Manchester City Council
sale’ the conviction could not stand. The advertise- [1979] 1 All ER 972. The City Treasurer wrote to Mr
ment constituted in law an invitation to treat, not an Gibson saying that the Council ‘may be prepared’ to sell
offer for sale, and the offence was not, therefore, the freehold of his council house to him at £2,725 less
established. There was of course a completed sale for 20 per cent, i.e. £2,180. The letter said that Mr G should
which Mr Partridge could have been successfully pro- make a formal application, which he did. Following local
secuted but the prosecution in this case had relied on government elections three months later the policy of
selling council houses was reversed. The Council did not
the offence of ‘offering for sale’ and failed to establish
proceed with the sale to Mr Gibson. He claimed that a
such an offer.
binding contract existed. The House of Lords said that it
Comment (i) The case shows how concepts of the civil did not. The Treasurer’s letter was only an invitation to
law are sometimes at the root of criminal cases (and see treat. Mr G’s application was the offer, but the Council
British Car Auctions v Wright (1972)). had not accepted it. In the Court of Appeal Lord Denning
(ii) In Spencer v Harding (1870) LR 5 CP 561 the defend- said that there was an ‘agreement in fact’ which was
ants were selling off a business and issued a circular enforceable. It was not always necessary, he said, to
inviting submission of tenders to buy the goods listed. stick to the strict rules of offer and acceptance in order to
It was held that the circular was merely an invitation produce a binding agreement. The House of Lords would
to submit offers and not an offer. The defendants need not accept this and Lord Denning’s view has not, as yet,
not accept any tender, even the highest. found a place in the law.
(iii) The above cases are unlikely to occur on their own
Offer and invitation to treat – alleged contracts facts, at least in modern law. Under s 2 of the Law of
for the sale of land Property (Miscellaneous Provisions) Act 1989 a contract
for the sale of land has to be in writing and must contain
all the terms expressly agreed by the parties and each of
50 Harvey v Facey [1893] AC 552
those terms must be set out in the written agreement,
although the Act does allow terms of the agreement to
The claimants sent the following telegram to the
be incorporated in the document where it refers to some
defendant: ‘Will you sell us Bumper Hall Pen?
other document or documents containing the terms. So,
Telegraph lowest cash price.’ The defendant tele-
because people now have to go through that procedure
graphed in reply: ‘Lowest price for Bumper Hall Pen
to get a valid contract for the sale of land, they are surely
£900.’ The claimants then telegraphed: ‘We agree to not going to be able to say that they did not intend to
buy Bumper Hall Pen for £900 asked by you. Please offer (or accept) and plead invitation to treat.
send us your title deeds in order that we may get early Nevertheless, the cases do provide examples of invita-
possession.’ The defendant made no reply. The tions to treat in other areas, as where A says to B, ‘The
Supreme Court of Jamaica granted the claimants a lowest price for my BMW is £20,000’ and B tries to
decree of specific performance of the contract. On ‘accept’ or where A says to B, ‘I may be prepared to sell
appeal the Judicial Committee of the Privy Council you my BMW for £20,000’ and B tries to ‘accept’.
held that there was no contract. The second telegram Examination questions may well be set involving these
was not an offer, but was in the nature of an invitation principles in regard to sales other than land.
..
EL_Z01.qxd 3/26/07 1:51 PM Page 735
CASES 51–54 MAKING THE CONTRACT I 735
Acceptance of no effect until communicated to the would not consider any further offers on the basis
offeror: agreement may be inferred from conduct that contracts would be exchanged within two weeks
of the receipt of draft contracts.
Brogden v Metropolitan Railway (1877)
51 However, after sending the contract to Mr Pitt PHH
2 App Cas 666
sold at a higher price to the other contender before
The claimant had been a supplier of coal to the the end of the two-week period. Mr Pitt sued PHH for
railway company for a number of years, though there breach of contract.
was no formal agreement between them. Eventually The matter eventually reached the Court of Appeal
the claimant suggested that there ought to be which decided that there was no contract for the sale
one, and the agents of the parties met and a draft of land nor any option for the sale of land but there
agreement was drawn up by the railway company’s was a lock-out agreement which was enforceable in
agent and sent to the claimant. The claimant inserted law. The effect of the agreement was that PHH could
several new clauses into the draft, and in particular not negotiate with other prospective purchasers for a
filled in the name of an arbitrator to settle the parties’ short stipulated period. PHH was liable to pay damages
differences under the agreement should any arise. He to Mr Pitt.
then wrote the word ‘Approved’ on the draft and
returned it to the railway company’s agent. There was Comment It will be appreciated that at the end of the
no formal execution, the draft remaining in the agent’s lock-out period the vendor can sell elsewhere if he
desk. However, coal was supplied according to the wishes. The agreement only stops him from dealing with
prices mentioned in the draft, though these were not anyone else during that period. It is also worth noting
that the lock-out agreement which was made orally was
the market prices, and prices were reviewed from time
not unenforceable under s 2 of the Law of Property
to time in accordance with the draft. The parties
(Miscellaneous Provisions) Act 1989. It was not a sale or
then had a disagreement and the claimant refused to
other disposition of land. As Bingham, LJ said, ‘The
supply coal to the railway company on the ground
vendor does not agree to sell to that purchaser – such an
that, since the railway company had not accepted the
agreement would be covered by s 2 of the 1989 Act – but
offer contained in the amended draft, there was no he does give a negative undertaking that he will not for
binding contract. the given period deal with anyone else.’ So writing was
Held – not required.
(a) The draft was not an express binding contract Counter-offer: if an offeree makes a counter-offer
because the claimant had inserted new terms he cannot then effectively accept the original
which the railway company had not accepted; offer: what constitutes a counter-offer:
but the offeror can accept a counter-offer
(b) the parties had indicated by their conduct that
they had waived the execution of the formal 53 Hyde v Wrench (1840) 3 Beav 334
document and agreed to act on the basis of the
draft. There was, therefore, an implied or inferred The defendant offered to sell his farm for £1,000.
binding contract arising out of conduct, and its The claimant’s agent made an offer of £950 and the
terms were the terms of the draft. defendant asked for a few days for consideration, after
which the defendant wrote saying he could not
The effect of lock-out agreements accept it, whereupon the claimant wrote purporting
to accept the offer of £1,000. The defendant did not
Pitt v PHH Asset Management Ltd, The Times,
52 consider himself bound, and the claimant sued for
30 July 1993
specific performance.
In September 1991 Tim Pitt made an offer to buy a
cottage in a Suffolk village. The vendor was PHH Asset Held – the claimant could not enforce this ‘acceptance’
Management. The offer was initially accepted subject because his counter-offer of £950 was an implied
to contract but rejected when another prospective rejection of the original offer to sell at £1,000.
purchaser made a higher offer.
Mr Pitt made a second offer which was initially 54 Stevenson v McLean (1880) 5 QBD 346
accepted by PHH’s estate agent but the acceptance
was withdrawn when the other contender again made On Saturday the defendant offered to sell to the
a higher offer. After further communications between claimants a quantity of iron at 40s nett cash per ton
Mr Pitt and the estate agent it was agreed that PHH open till Monday (close of business). On Monday the
would stay with Mr Pitt’s offer subject to contract and claimants telegraphed asking whether the defendant
..
EL_Z01.qxd 3/26/07 1:51 PM Page 736
would accept 40s for delivery over two months, or if conditions stated therein – and undertake to deliver
not what was the longest limit the defendant would by . . . date . . . signed.’ This slip was completed and
give. The claimants did not necessarily want to take signed on behalf of Butler and returned with a cover-
delivery of the goods at once and pay for them. They ing letter to Ex-Cell-O on 5 June 1969.
would have liked to have been able to ask for delivery The machine was ready by September 1970, but
and pay from time to time over two months as they Ex-Cell-O could not take delivery until November
themselves found buyers for quantities of the iron. 1970 because it had to rearrange its production sched-
The defendant received the telegram at 10.01 am but ule. By the time Ex-Cell-O took delivery, costs had
did not reply, so the claimants, by telegram sent at increased and Butler claimed £2,892 as due under the
1.34 pm, accepted the defendant’s original offer. The price variation clause. Ex-Cell-O refused to regard the
defendant had already sold the iron to a third party, variation clause as a term of the contract.
and informed the claimants of this by a telegram The Court of Appeal, following a traditional analysis,
despatched at 1.25 pm arriving at 1.46 pm. The decided that Butler’s quotation of 23 May 1969 was
claimants had therefore accepted the offer before the an offer and that Ex-Cell-O’s order of 27 May 1969 was
defendant’s revocation had been communicated to a counter-offer introducing new terms and that Butler’s
them. If, however, the claimants’ first telegram con- communication of 5 June 1969 returning the slip was
stituted a counter-offer, then it would amount to a an acceptance of the counter-offer: so the contract was
rejection of the defendant’s original offer. on Ex-Cell-O’s terms and not Butler’s, in spite of the
Held – the claimants’ first telegram was not a counter- statement in Butler’s original quotation.
offer, but a mere inquiry for different terms which did Thus, there was no price variation clause in the
not amount to a rejection of the defendant’s original contract, and Ex-Cell-O did not need to pay the
offer, so that the offer was still open when the claimants £2,892.
accepted it. The defendant’s offer was not revoked Comment (i) Most commonly the parties will exchange
merely by the sale of the iron to another person. terms relating to delivery dates, rights of cancellation,
Comment The case shows that a distinction must the liability of the supplier for defects, fluctuations
be drawn between a rejection by counter-offer and in price (as here), and arbitration clauses to settle
a request for information. A common example of this differences.
distinction occurs in business when an offer to sell at a (ii) Title retention clauses (where goods are delivered to a
stated price is not regarded as rejected, where, as here, buyer with a clause stating that he does not own the
the seller is asked whether he is prepared to give credit goods until he has paid for them) may also be exchanged
or even whether he is prepared to reduce the price. in this way. For example, in Sauter Automation v
Goodman (HC) (Mechanical Services) [1987] CLY, para
Butler Machine Tool Co Ltd v Ex-Cell-O 451, Sauter tendered to supply the control panel of a
55
Corporation (England) Ltd [1979] 1 All ER 965 boiler. The tender contained a title retention clause.
Goodman accepted on the basis of their standard
In this case it appeared that on 23 May 1969 Butler
contract which did not contain retention arrangements.
quoted a price for a machine tool of £75,535, delivery
Sauter did not formally accept what was in effect a
to be within 10 months of order. The quotation gave
counter-offer by Goodman but they did deliver the panel
terms and conditions which were stated expressly to
which was deemed acceptance. Goodman went into
prevail over any terms and conditions contained in the
liquidation but the court held that Sauter could not
buyer’s order. recover the panel or the proceeds of its sale. The contract
One of the terms was a price variation clause which was on Goodman’s terms. Goodman’s terms did not
operated if costs increased before delivery. Ex-Cell-O contain a retention arrangement. Sauter were left to
ordered the machine on 27 May 1969, its order stating prove in the liquidation of Goodman with little, if any,
that the contract was to be on the basis of Ex-Cell-O’s prospect of getting paid.
terms and conditions as set out in the order. These
(iii) It is not uncommon in business to find price variation
terms and conditions did not include a price varia- and fluctuation clauses in longer-term contracts, as
tion clause but did contain additional items to the where the contract involves the manufacture or delivery
Butler quotation, including the fact that Ex-Cell-O of goods over, say, a period in excess of one year. These
wanted installation of the machine for £3,100 and allow for changes in wages and/or the cost of materials.
the date of delivery of 10 months was changed to The alternative would be to try to get a variation to the
10–11 months. original contract but this may be more difficult since a
Ex-Cell-O’s order form contained a tear-off slip business may not be willing to pay more and the change
which said: ‘Acknowledgment: please sign and return cannot be made unilaterally by the supplier. This way the
to Ex-Cell-O. We accept your order on the terms and variation arrangements are in the original contract
..
EL_Z01.qxd 3/26/07 1:51 PM Page 737
following what is acceptance of a qualified offer, i.e. ‘I The contract also contained an option allowing the
will supply these goods for £X but they might cost more claimants to take up 100,000 standards as above dur-
before the contract ends’. An offer, unlike an acceptance, ing the season 1931. The parties managed to perform
may be conditional. the contract throughout the 1930 season without any
argument or serious difficulty, in spite of the vague
Effect of accepting a tender for the supply of words used in connection with the specification of
goods of an indefinite amount: the standing offer the wood. However, when the claimants exercised
their option for 100,000 standards during the season
Great Northern Railway v Witham (1873)
56 1931, the defendants refused to supply the wood,
LR 9 CP 16
saying that the specification was too vague to bind
The company advertised for tenders for the supply for
the parties, and the agreement was therefore inchoate
one year of such stores as they might think fit to order.
as requiring a further agreement as to the precise
The defendant submitted a tender in these words: ‘I
specification.
undertake to supply the company for 12 months with
Held – by the House of Lords – the option to supply
such quantities of [certain specified goods] as the
100,000 standards during the 1931 season was valid.
company may order from time to time.’ The company
There was a certain vagueness about the specification,
accepted the tender, and gave orders under it which
but there was also a course of dealing between the
the defendant carried out. Eventually the defendant
parties which operated as a guide to the court regard-
refused to carry out an order made by the company
ing the difficulties which this vagueness might pro-
under the tender, and this action was brought.
duce. Since the parties had not experienced serious
Held – the defendant was in breach of contract. A tender difficulty in carrying out the 1930 agreement, there
of this type was a standing offer which was converted was no reason to suppose that the option could not
into a series of contracts as the company made an have been carried out without difficulty had the
order. The defendant might revoke his offer for the defendants been prepared to go on with it. Judgment
remainder of the period covered by the tender, but was given for the claimants.
must supply the goods already ordered by the company.
Comment (i) In these cases the defendant is trying
Comment (i) Tendering by referential bid is invalid. In to avoid damages for failing to perform the contract by
Harvela Investments Ltd v Royal Trust Co of Canada Ltd saying: ‘I would like to perform the contract but I don’t
[1985] 2 All ER 966 the claimants submitted a tender for know what to do.’ If there are, e.g., previous dealings
the purchase of shares in the following form: ‘2,100,000 then he does know what to do and the defence fails.
dollars or 100,000 dollars in excess of any other offer’.
(ii) The case of Baird Textile Holdings Ltd v Marks and
The House of Lords held that such a bid was invalid. The
Spencer plc [2001] All ER (D) 352, provides a good illustra-
decision is obviously a sensible one since, if all tenderers
tion of the law relating to vague and inchoate contracts,
had bid in this way, there would not have been an ascer-
the requirement of certainty of terms in the context
tainable offer to accept.
of intention to create legal relations and promissory
(ii) If a person submits a tender which conforms in estoppel. It also provides a timely reminder to those in
all respects with the rules laid down for submission of business of the need to ensure that contracts are made in
tenders, i.e. as to date, time, form and so on, this may writing even though this may not be a legal requirement.
give rise to an obligation on those asking for the tenders Baird had been a major supplier of garments to M & S
at least to consider all those that are properly submitted. for some 30 years. There had never been a written con-
It was held in Blackpool and Fylde Aero Club Ltd v tract between them. M & S terminated the agreement at
Blackpool BC [1990] 3 All ER 25 that failure to do so could short notice costing Baird some £50 million. Baird
lead to a successful action for damages for what is, in claimed that it was entitled to reasonable notice which it
effect, a breach of a contract to consider all tenders, at suggested should be three years at least. M & S declined
least if properly submitted. and Baird sued for breach of contract. But what were the
terms of the contract? Baird contended from the way the
Vague or incomplete agreements: treatment by contract had been performed M & S were obliged to
the courts place orders ‘in quantities and at prices which in all the
circumstances were reasonable’. Baird also claimed that if
57 Hillas & Co Ltd v Arcos Ltd [1932] All ER 494 an enforceable contract did not exist at common law
equitable principles should be applied, i.e. promissory
The claimants had entered into a contract with the estoppel where the court will prevent a person from
defendants under which the defendants were to sup- going back on his or her word. The Court of Appeal ruled
ply the claimants with ‘22,000 standards of soft wood that there was no enforceable contract at common law.
(Russian) of fair specification over the season 1930’. There were no objective criteria to enable the court to
..
EL_Z01.qxd 3/26/07 1:51 PM Page 738
738 MAKING THE CONTRACT I CASES 58–59
assess what was reasonable in terms of quantity, quality broiler chickens agreed with certain retailers to supply
or price. Furthermore, the lack of certainty showed that between 30,000 and 80,000 chickens a week during the
the parties did not intend to create legal relations. This first year of the agreement and afterwards ‘such other
was not said the court an appropriate case in which to figures as might be agreed’. The agreement was to last
apply promissory estoppel. The rule was essentially a for not less than five years, and it was agreed that any
defence and could not be used to create an enforceable differences between the parties should be referred to
right in the circumstances of this case. Of course, in Hillas arbitration. Eventually the retailers contended that the
the court did imply a contract where only the quality of agreement was void for uncertainty.
the timber was vague. Here the quantity, quality and Held – by the Court of Appeal – that it was not, because
price were not ascertained by the agreement and to have in default of the further agreement envisaged, the
filled in all these matters would have brought the court number of chickens should be such reasonable number as
into a position where it was making the contract for the might be decided by the arbitrator.
parties – a power the courts do not possess. (iii) In Rafsanjan Pistachio Producers Co-operative v
Kauffmanns Ltd, The Independent, 12 January 1998 the
High Court decided that a contract which specified that
58 Foley v Classique Coaches Ltd [1934] 2 KB 1
the price was to be ‘agreed before each delivery’ was an
agreement to agree and unenforceable. There was no
F owned certain land, part of which he used for the
provision for arbitration.
business of supplying petrol. He also owned the
adjoining land. The company wished to purchase (iv) A price fluctuation or variation clause in the original
contract could be used in this situation. The parties could
the adjoining land for use as the headquarters of their
agree in the original contract that the price from time to
charabanc business. F agreed to sell the land to the
time of the goods as the contract proceeds shall be
company on condition that the company would buy
increased (or exceptionally decreased) on the basis of
all their petrol from him. An agreement was made
relevant indices of labour and materials costs. This is less
under which the company agreed to buy its petrol
expensive than reference to arbitration.
from F ‘at a price to be agreed by the parties in writing
and from time to time’. It was further agreed that any Scammell (G) and Nephew Ltd v Ouston [1941]
dispute arising under the agreement should be sub- 59
AC 251
mitted ‘to arbitration in the usual way’. The agree-
Ouston wished to acquire a new motor van for use in
ment was acted upon at an agreed price for three
his furniture business. Discussions took place with the
years. At this time the company felt it could get petrol
company’s sales manager as a result of which the
at a better price, and the company’s solicitor wrote to
company sent a quotation for the supply of a suitable
F repudiating the petrol contract.
van. Eventually Ouston sent an official order making
Held – although the parties had not agreed upon a the following stipulation, ‘This order is given on the
price beyond three years, there was a contract to understanding that the balance of the purchase price
supply petrol at a reasonable price and of reasonable can be had on hire-purchase terms over a period of
quality, and although the agreement did not stipulate two years.’ This was in accordance with the discus-
the future price, but left this to the further agreement sions between the sales manager and Ouston, which
of the parties, a method was provided by which the had taken place on the understanding that hire pur-
price could be ascertained without such agreement, chase would be available. The company seemed to be
i.e. by arbitration. content with the arrangement and completed the
van. Arrangements were made with a finance com-
Comment (i) The court awarded the claimant damages, a
declaration that the agreement was binding, and an
pany to give hire-purchase facilities, but the actual
injunction restraining the company from buying petrol terms were not agreed at that stage. The appellants
elsewhere, thus giving the company an enormous incen- also agreed to take Ouston’s present van in part
tive to agree a price or go to arbitration as the contract exchange, but later stated that they were not satisfied
provided. Generally speaking, of course, if the contract with its condition and asked him to sell it locally. He
is silent as to price, the court is prepared to use s 8(2) of refused and after much correspondence he issued a
the Sale of Goods Act 1979 and imply and ascertain ‘a writ against the appellants for damages for non-
reasonable price’. It would not have been appropriate in delivery of the van. The appellants’ defence was that
Foley to use this provision of sale of goods legislation there was no contract until the hire-purchase terms
(which in those days was in the 1893 Act) because the had been ascertained.
contract in Foley was not in fact silent as to price. Held – the defence succeeded; it was not possible to
(ii) A similar problem arose in F & S Sykes (Wessex) v Fine- construe a contract from the vague language used by
Fare [1967] 1 Lloyd’s Rep 53. In that case producers of the parties.
..
EL_Z01.qxd 3/26/07 1:51 PM Page 739
Comment (i) If there is evidence of a trade custom, yet to be agreed. There was nothing left to further
business procedure or previous dealings between the negotiation. All that happened was that the parties
parties, which assists the court in construing the vague agreed that ‘the usual conditions of acceptance
parts of an agreement, then the agreement may be apply’. That clause was so vague and uncertain as to
enforced. Here there was no such evidence. It should also be incapable of any precise meaning. It is clearly
be noted that the hire-purchase term was essential to the severable from the rest of the contract. It can be
contract which could not be enforced without it. rejected without impairing the sense or reasonable-
(ii) It is worth noting the quite common use in business ness of the contract as a whole, and it should be so
contracts of the expressions ‘best endeavours’ and rejected. The contract should be held good and the
‘reasonable endeavours’. It would be too easy to fall into clause ignored. The parties themselves treated the
the Scammell trap and assume that these expressions contract as subsisting. They regarded it as creating
made the contract in which they were used inchoate or binding obligations between them; and it would be
uncertain but this is not the case. The courts have in a
most unfortunate if the law should say otherwise.
number of cases held that the use of these expressions
You would find defaulters all scanning their con-
does not have that effect. These are useful rulings
tracts to find some meaningless clause on which to
because it is not possible in many business situations to
ride free. (Per Denning, LJ)
necessarily achieve performance. For example, suppose
an agent makes a contract to find a publisher to publish Comment (i) In this case there was no evidence of
an author’s book. The agent cannot say that he will find any usual conditions either in the trade or between the
such a publisher, but he can, and often will, use the ‘best parties as a result of previous dealings. Therefore, the
endeavours’ or ‘reasonable endeavours’ formula. If the expression ‘the usual conditions of acceptance apply’ had
agent has, on the facts, used best or reasonable endeav- to be regarded as meaningless.
ours and not obtained a publisher, he will be entitled to It should also be noted that it was possible to enforce
his contractual fee. If the agent, on the facts, has not the contract without the meaningless term. (Compare
done so, any claim by him will fail. Clearly, best endeav- Scammell above.)
ours also requires more effort than reasonable endeav-
(ii) In view of the general policy to reduce litigation
ours (see Lambert v HTV Cymru ( Wales) Ltd, The Times,
in court, clauses in contracts providing for alternative dis-
17 March 1998 where an all reasonable endeavours con-
pute resolution may more readily be found to be binding
tract in connection with book publishing was held to be
even where the form of ADR to be used is left vague (see
enforceable).
Cable & Wireless plc v IBM (United Kingdom) Ltd [2002] 2
All ER (Comm) 1041). In that case where the ADR clause
60 Nicolene Ltd v Simmonds [1953] 1 All ER 882 did not specify the type of ADR to be followed Mr Justice
Coleman ruled that for the court not to enforce con-
The claimants alleged that there was a contract for the tractual references to ADR would ‘fly in the face’ of
sale to them of 3,000 tons of steel reinforcing bars public policy. There were, he said, clearly recognised and
and that the defendant seller had broken his contract. well-developed processes of ADR. As such, a reference to
When the claimants sought damages, the seller set up ADR in a contract was certain enough to enforce. His
the defence that, owing to one of the sentences in the judgment seems to suggest, though not specifically
letters which constituted the contract, there was no stated, that mediation in accordance with the Centre
contract at all. The material words were: ‘We are in for Effective Dispute Resolution’s Model Mediation pro-
agreement that the usual conditions of acceptance cedure would be regarded as the method to adopt. In
apply.’ In fact, there were no usual conditions of practical terms, of course, an ADR clause should state
whether ADR is optional or not and the form of ADR
acceptance so that the words were meaningless, but
should be spelled out.
the seller nevertheless suggested that the contract was
unenforceable since it was not complete.
Communication of acceptance
Held – by the Court of Appeal – the contract was enforce-
able and that the meaningless clause could be ignored: 61 Felthouse v Bindley (1862) 11 CB (NS) 869
In my opinion a distinction must be drawn
between a clause which is meaningless and a clause The claimant had been engaged in negotiations with
which is yet to be agreed. A clause which is mean- his nephew John regarding the purchase of John’s
ingless can often be ignored, whilst still leaving the horse, and there had been some misunderstanding
contract good; whereas a clause which has yet to be as to the price. Eventually the claimant wrote to his
agreed may mean that there is no contract at all, nephew as follows: ‘If I hear no more about him I con-
because the parties have not agreed on all the essen- sider the horse is mine at £30.15s.’ The nephew did not
tial terms. . . . In the present case there was nothing reply but, wishing to sell the horse to his uncle, he
..
EL_Z01.qxd 3/26/07 1:51 PM Page 740
740 MAKING THE CONTRACT I CASES 62– 63
told the defendant, an auctioneer who was selling would be made permanent had no contractual effect
farm stock for him, not to sell the horse as it had because, among other things, the deputy head had no
already been sold. The auctioneer inadvertently put authority to make a contract that would bind the school
the horse up with the rest of the stock and sold it. The governors (see Pantis v Governing Body of Isambard
claimant now sued the auctioneer in conversion, the Brunel School [1997] 573 IRLB 15).
basis of the claim being that he had made a contract
with his nephew and the property in the animal was Where the mode of acceptance is prescribed:
vested in him (the uncle) at the time of the sale. must the offeree comply?
Held – that the claimant’s action failed. Although the Yates Building Co v R J Pulleyn & Sons (York)
62
nephew intended to sell the horse to his uncle, he (1975) 119 SJ 370
had not communicated that intention. There was, An option to purchase a certain plot of land was
therefore, no contract between the parties, and the expressed to be exercisable by notice in writing by or
property in the horse was not vested in the claimant on behalf of the intending purchaser to the intend-
at the time of the auction sale. ing vendor ‘such notice to be sent by registered or
Comment (i) The rule that silence cannot amount Recorded Delivery post’. It was held – by the Court
to acceptance does not necessarily mean that words of of Appeal – that the form of posting prescribed
acceptance have to be spoken or written to the offeror. was directory rather than mandatory, or alternatively
In a unilateral contract situation such as Carlill’s case (see permissive rather than obligatory, and the option
Chapter 9), an acceptance may be inferred from the way was validly exercised by a letter from the purchaser’s
in which the offeree behaves and communication of solicitors to the vendor’s solicitors sent by ordinary
acceptance may be dispensed with. However, in this case post and received within the option period.
the contract was bilateral so that the conduct of John
Felthouse in removing the horse from the sale was not Comment The fact that the letter arrived within the
relevant, as it might have been in a unilateral situation. option period shows that there was no prejudice to the
In a bilateral situation the rule against acceptance by offeror.
silence means only that the offeror is unable to impose
on the offeree a stipulation that the offeree will be Use of telephone and telex as a means of
bound if he merely ignores the offer. communicating acceptance
Nevertheless, while the general principle laid down in
Entores Ltd v Miles Far East Corporation [1955]
this case, i.e. that an offeree who does not wish to accept 63
2 QB 327
an offer should not be put to the trouble of actively
refusing it, is quite acceptable the decision is difficult to The claimants, who conducted a business in London,
support on its own facts. John wanted to accept the offer made an offer to the defendants’ agent in Amsterdam
and intended to accept it and his uncle had waived his by means of a teleprinter service. The offer was
right to receive an acceptance in his letter – so why no accepted by a message received on the claimants’
contract? teleprinter in London. Later the defendants were in
It should be noted, however, that although the breach of contract and the claimants wished to sue
approach in Felthouse appears unfair, it does run fairly them. The defendants had their place of business in
consistently through English law in regard to positive New York and in order to commence an action the
obligations involving the payment of money for goods claimants had to serve notice of writ on the defend-
and services. Thus, if A asks B to clean his (A’s) car but ants in New York. The Rules of Supreme Court allow
B by mistake cleans A’s neighbour’s car, the neighbour service out of the jurisdiction when the contract
cannot be required to pay B even though the neighbour was made within the jurisdiction. On this point the
is not prejudiced because, as it happens, he did want his defendants argued that the contract was made in
car cleaned.
Holland when it was typed into the teleprinter there,
(ii) It should also be noted that the communication of stressing the rule relating to posting.
acceptance must be authorised. In Powell v Lee (1908)
Held – where communication is instantaneous, as where
99 LT 284 P offered his services to the managers of a school
the parties are face to face or speaking on the tele-
as headmaster. The secretary to the managers told P that
phone, acceptance must be received by the offeror.
he had been appointed which was true. The secretary
had no authority actual or otherwise to do this. The The same rule applied to communications of this kind.
managers later decided to offer the post to another Therefore, the contract was made in London where
candidate. P’s action for breach of contract failed. the acceptance was received.
(iii) In a not dissimilar case a deputy headteacher’s verbal Comment (i) The suggestion was made that the doctrine
assurance that a member of staff’s temporary promotion of estoppel may operate in this sort of case so as to bind
..
EL_Z01.qxd 3/26/07 1:51 PM Page 741
the offeror, e.g. suppose X telephones his acceptance to Office cannot be an agent for communication since the
Y, and Y does not hear X’s voice at the moment of accept- Post Office and its servants do not know what is in the
ance, as where there is a break in the line or Y simply puts letter.
the phone down on his desk for a while without telling (ii) In Re London and Northern Bank [1900] 1 Ch 220 the
X, then Y may be estopped from denying that he heard court decided that the letter of acceptance must be properly
X’s acceptance and may be bound in contract. It is stamped and addressed. If not, there is no communica-
thought that the conversation prior to the acceptance tion until the letter arrives. The case also decides that the
which is not heard must suggest the possibility of an letter must be actually posted and not given to a person
impending acceptance. It should be noted that this to post, even a postman. If this happens, the acceptance
estoppel theory amounts to an exception to the rule that takes place when the person concerned actually posts the
silence cannot amount to acceptance. letter. This is a matter of evidence. As regards handing a
(ii) The House of Lords approved the Entores decision in letter of acceptance to a postman, this may operate as an
Brinkibon v Stahag Stahl [1982] 1 All ER 293. The acceptance in a country district where the custom of
claimant wanted leave to serve a writ out of the jurisdic- postmen taking letters in this way is better established.
tion, as in Entores. The message accepting an offer had (iii) Bramwell LJ’s point is well taken since the post rule
been sent by telex from London to Vienna. The House of places the risk of accidents in the post on the offeror, as
Lords held that the writ could not be served because the can be seen from Grant’s case. Furthermore, it was
contract was made in Vienna and not London. decided in Dunlop v Higgins (1848) 1 HL Cas 381 that
(iii) These decisions presumably apply to acceptances by there was a good contract on posting even where a
fax and e-mail. correctly addressed, stamped and posted acceptance
was not delivered in due course of post because of an
Use of the post in offer and acceptance accident in the post office.
Household Fire Insurance Company v Grant (iv) The case has some unusual features. First the initial
64 deposit on application for the shares was not, in
(1879) 4 ExD 216
fact, paid. Instead the defendant was credited with an
The defendant handed a written application for
equivalent sum due to him from the company. Second,
shares in the company to the company’s agent in the dividends declared by the company were not actually
Glamorgan. The application stated that the defend- paid to the defendant but merely credited to his account
ant had paid to the company’s bankers the sum of £5, with the company, but for the above circumstances, the
being a deposit of 1s per share on an application for defendant would have known long before the end of
100 shares, and also agreed to pay 19s per share three years that he was being regarded as a shareholder.
within 12 months of the allotment. The agent sent
the application to the company in London. The com- Holwell Securities Ltd v Hughes [1974]
65
pany secretary made out a letter of allotment in 1 All ER 161
favour of the defendant and posted it to him in By an agreement of 19 October 1971 Dr Hughes, a
Swansea. The letter never arrived. Nevertheless, the medical practitioner of Wembley, had granted to the
company entered the defendant’s name on the share claimants an option to purchase his premises in
register and credited him with dividends amounting Wembley for £45,000. The agreement provided that
to five shillings. The company then went into liquida- the option should be exercisable ‘by notice in writing’
tion and the liquidator sued for £94 15s, the balance to Dr Hughes at any time within six months of the date
due on the shares allotted. It was held by the Court of of the agreement. On 14 April 1972, the claimants’
Appeal that the defendant was liable. Acceptance was solicitors sent to Dr Hughes by ordinary post a written
complete when the letter of allotment was posted on notice exercising the option. That notice was never
the ground that, in this sort of case, the Post Office delivered to Dr Hughes nor left at his address.
must be deemed the common agent of the parties, Held – by the Court of Appeal – on a construction of
and that delivery to the agent constituted acceptance. the agreement – notice in writing had to be given to
Bramwell, LJ, in a dissenting judgment, regarded Dr Hughes in the sense that he had either to have
actual communication as essential. If the letter of actually received it or to be deemed to have received
acceptance does not arrive, an unknown liability is it under s 196 of the Law of Property Act 1925 which
imposed on the offeror. If actual communication is provides for service of notices by registered post, or
required the status quo is preserved, i.e. the parties within the Recorded Delivery Service Act 1962, which
have not made a contract. applies a similar rule to Recorded Delivery. This was
Comment (i) Not all lawyers would accept the point that not the case, said Russell, LJ, where the basic principle
the Post Office is the common agent of the parties. Those of the need for communication to the offeror was dis-
who do not accept this point would say that the Post placed by the artificial concept of communication by
..
EL_Z01.qxd 3/26/07 1:51 PM Page 742
742 MAKING THE CONTRACT I CASES 66– 67
the act of posting: the language of the agreement does not reach B until 2 July, it is doubtful whether B
‘notice . . . to’ was inconsistent with the theory that could accept it.
acceptance could be constituted by posting and s 196
of the Law of Property Act 1925 also impliedly Revocation of offer: the effect of an option
excluded such a mode of acceptance.
67 Routledge v Grant (1828) 4 Bing 653
Comment (i) The case illustrates that the rule of accept-
ance by post does not apply in all situations to which
The defendant made an offer to take a lease of the
it might logically be applied. As the court said in this case
claimant’s premises: ‘a definitive answer to be given
the rule would not be applied where it led to ‘manifest
within six weeks from 18 March 1825’. On 9 April the
inconvenience and absurdity’. In each case, therefore, it is
a matter of fact for the court to decide whether the rule defendant withdrew his offer and on 29 April the claim-
should be applied, the test being whether it produces, on ant purported to accept it. The Court of Common
balance, a convenient and reasonable result. Pleas held that there was no contract. Best, CJ held
that the defendant could withdraw at any moment
(ii) This agreement for an option over land was governed
before acceptance, even though the time limit had
by the Law of Property Act 1925 and s 196 deals with the
expired. The claimant could only have held the
method of serving ‘notices’ under the Act. It implies that
defendant to his offer throughout the period, if he
they must be received. So here both the agreement and
statute law required actual delivery. had bought the option, i.e. given consideration for it.
(iii) On a related point it was held in Miss Sam (Sales) Ltd Comment (i) The consideration need not be adequate.
v River Island Clothing Co Ltd [1994] NLJR 419 that a For example, let us suppose that on Monday Fred offers
cheque sent through the post is not payment unless it to sell Joe his house for £30,000 and Joe says ‘Give me
arrives and there can be no extension of the postal rule until Friday to think it over and I will buy you a pint.’ The
to this situation unless by express agreement between purchase of the pint for Fred or the promise to buy him a
the parties. pint is enough to give Joe an enforceable option on the
house. Again, in Mountford v Scott [1974] 1 All ER 248
the Court of Appeal held that a West Indian who signed
66 Adams v Lindsell (1818) 1 B & A 681 an agreement in consideration of £1 giving the claimant
an option to purchase his house for £10,000 within six
The defendants were wool dealers in business at St months, was bound by the option in spite of the fact that
Ives, Huntingdon. By letter dated 2 September they only £1 was given for it.
offered to sell wool to the claimants who were wool
(ii) The option is really a separate contract to allow time
manufacturers at Bromsgrove, Worcestershire. The
to decide whether to accept the original offer or not. It
defendants’ letter asked for a reply ‘in course of post’
was thought at one time that, where the option to buy
but was misdirected, being addressed to Bromsgrove, property was not supported by consideration, the offer
Leicestershire. The offer did not reach the claimants could be revoked by its sale to another, but in modern
until 7 pm on 5 September. The same evening the law it is necessary for the offeror to communicate the
claimants accepted the offer. This letter reached the revocation to the offeree either himself, or by means of
defendants on 9 September. If the offer had not been some reliable person. (See Stevenson v McLean (1880)
misdirected, the defendants could have expected a where the defendant’s offer was not revoked merely by
reply on 7 September, and accordingly they sold the the sale of the iron to another.)
wool to a third party on 8 September. The claimants (iii) Before leaving the topic of options, it should be
now sued for breach of contract. noted that the Law Commission in Working Paper No 60
Held – where there is a misdirection of the offer, as in entitled Firm Offers and published in 1975 criticised the
this case, the offer is made when it actually reaches present position under which a promise to keep an offer
the offeree, and not when it would have reached him open will not be binding on the offeror unless considera-
in the ordinary course of post. The defendants’ mis- tion for the promise is given by the offeree (though of
take must be taken against them and for the purposes course this is not necessary where the option is made in
of this contract the claimants’ letter was received ‘in a deed), on the grounds that it is contrary to business
course of post’. practice and also contrary to the law of most foreign
countries. The Law Commission makes a provisional recom-
Comment The position may be different if the fact of mendation that ‘an offeror who has promised that he
delay is obvious to the offeree so that he is put on notice will not revoke his offer for a definite time should be
that the offer has lapsed, e.g. A writes to B offering bound by the terms of that promise provided that the
to sell him certain goods and saying that the offer is promise has been made in the course of business’. No
open until 30 June. If A misdirects the offer so that it action has so far been taken on this recommendation.
..
EL_Z01.qxd 3/26/07 1:51 PM Page 743
Revocation of an offer must be communicated. (ii) This decision as it stands could cause hardship because
It is not effective on posting it may mean that the offeree will have to accept as
revocation all kinds of rumour from people who may not
68 Byrne v Van Tienhoven (1880) 5 CPD 344 necessarily appear to be reliable and well informed. It
would be nice to think that in modern law the third
On 1 October the defendants in Cardiff posted a letter party would have to be apparently reliable and likely
to the claimants in New York offering to sell them tin to know the true state of affairs, as where he is the
plate. On 8 October the defendants wrote revoking offeror’s agent, but as we have seen there is no actual
their offer. On 11 October the claimants received the clear statement in this case that this is so.
defendants’ offer and immediately telegraphed their ac-
ceptance. On 15 October the claimants confirmed their Lapse of offer after a reasonable time
acceptance by letter. On 20 October the defendants’
Ramsgate Victoria Hotel Co v Montefiore (1866)
letter of revocation reached the claimants who had by 70
LR 1 Exch 109
this time entered into a contract to resell the tin plate.
The defendant offered by letter dated 8 June 1864 to
Held – (a) revocation of an offer is not effective until it
take shares in the company sending part-payment of
is communicated to the offeree, (b) the mere posting
1 shilling (5p) a share. No reply was made by the com-
of a letter of revocation is no communication to the
pany, but on 23 November 1864, they allotted shares
person to whom it is sent. The rule is not, therefore,
to the defendant. The defendant refused to take up
the same as that for acceptance of an offer. Thus, the
the shares.
defendants were bound by a contract which came
into being on 11 October. Held – his refusal was justified because his offer had
lapsed by reason of the company’s delay in notifying
Revocation of offer: may be by a third party if a their acceptance. He also recovered his part-payment.
reasonable person would rely on that party’s
Comment The question of ‘reasonable time’ is a matter
knowledge of the facts
of fact to be decided by the court on the basis of the
subject matter of the contract and the conditions of the
69 Dickinson v Dodds (1876) 2 Ch D 463
market in which the offer is made. Offers to take shares
The defendant offered to sell certain houses by letter, in companies are normally accepted quickly because the
price fluctuates in the market. The same would be true of
stating, ‘This offer to be left over until Friday 9 am’.
an offer to sell perishable goods. An offer to sell a farm
On Thursday afternoon the claimant was informed by
might well not lapse so soon. The form in which the offer
a Mr Berry that the defendant had been negotiating
is made is also relevant so that an offer by mobile phone
a sale of the property with one Allan. On Thursday
could well lapse quickly.
evening the claimant left a letter of acceptance at the
house where the defendant was staying. This letter
Conditional offer: termination on failure of
was never delivered to the defendant. On Friday
condition
morning at 7 am Berry, acting as the claimant’s agent,
handed the defendant a duplicate letter of acceptance
71 Financings Ltd v Stimson [1962] 3 All ER 386
explaining it to him. However, on the Thursday the
defendant had entered into a contract to sell the On 16 March 1961, the defendant saw a motor car on
property to Allan. the premises of a dealer and signed a hire-purchase
Held – since there was no consideration for the prom- form provided by the claimant (a finance company),
ise to keep the offer open, the defendant was free this form being supplied by the dealer. The form was
to revoke his offer at any time. Further, Berry’s com- to the effect that the agreement was to become bind-
munication of the dealings with Allan indicated that ing only when the finance company signed the form.
Dodds was no longer minded to sell the property to It also carried a statement to the effect that the hirer
the claimant and was in effect a communication of (the defendant) acknowledged that before he signed
Dodds’ revocation. There was, therefore, no binding the agreement he had examined the goods and had
contract between the parties. satisfied himself that they were in good order and
Comment (i) The question of whether the person who condition, and that the goods were at the risk of the
communicates the revocation is a reliable source and hirer from the time of purchase by the owner. On 18
should be relied on is a matter of fact for the court, but it March the defendant paid the first instalment and
could, e.g., be a mutual friend of the offeror and offeree. took possession of the car. However, on 20 March, the
There is in fact no general statement in this case as to defendant, being dissatisfied with the car, returned it
what is reliability or even that it is necessarily required. to the dealer, though the finance company was not
..
EL_Z01.qxd 3/26/07 1:51 PM Page 744
744 MAKING THE CONTRACT I CASES 72–74
informed of this. On the night of 24 –25 March the took the S Bank over. Duff held 100 £20 shares on
car was stolen from the dealer’s premises and was which £5 had been paid, but he did not reply to the
recovered badly damaged. On 25 March the finance circular and died shortly afterwards. The option was
company signed the agreement accepting the defend- exercised on behalf of his executors, Muttlebury,
ant’s offer to hire the car. The defendant did not Bridges and Watts, and a certificate was made out in
regard himself as bound and refused to pay the instal- their names and an entry made in the register in
ments. The finance company sold the car, and now which they were entered as shareholders, described as
sued for damages for the defendant’s breach of the ‘executors of William Duff, deceased’. The executors
hire-purchase agreement. objected to having the share certificates in their
Held – the hire-purchase agreement was not binding names, so the directors of the Cheshire Banking Co
on the defendant because: cancelled the certificate and issued a fresh one in the
name of William Duff. On 23 October 1884, the com-
(a) he had revoked his offer by returning the car, and
pany went into liquidation.
the dealer was the agent of the finance company
to receive notice; Held – the liquidator acted rightly when he restored the
(b) there was an implied condition in the offer that the executors’ names to the register. The executors wished
goods were in substantially the same condition to enter into a new contract which had not previously
when the offer was accepted as when it was made. existed. They could not make a dead man liable and
so could only make themselves personally liable. Their
Death of offeror before acceptance names were improperly removed and must be restored.
Although they had a right of indemnity against the
72 Bradbury v Morgan (1862) 1 H & C 249 estate, they were personally liable for the full amount
outstanding on the shares, regardless as to whether
The defendants were the executors of J M Leigh who the estate was adequate to indemnify them.
had entered into a guarantee of his brother’s account
Comment This case probably has more to do with the
with the claimants for credit up to £100. The
liability of personal representatives in the law of succes-
claimants, not knowing of the death of J M Leigh,
sion than the law of contract. Personal representatives,
continued to supply goods on credit to the brother,
like receivers, can be personally liable on contracts which
H J Leigh. The defendants now refused to pay the they make, subject to a right of indemnity from the
claimants in respect of such credit after the death of estate. The benefit of the contract is held on trust for the
J M Leigh. estate. This personal liability rule is essential in order to
Held – the claimants succeeded, the offer remaining ensure that personal representatives cannot subject the
open until the claimants had knowledge of the death estate to further debt without risk to themselves. There
of J M Leigh. seems to be no direct contract law authority as to the
effect of the death of the offeree. In Reynolds v Atherton
Comment This was a continuing guarantee which is
(1922) 127 LT 189, Warrington, LJ said: ‘The offer having
in the nature of a standing offer accepted piecemeal
been made to a living person who ceases to be a living
whenever further goods are advanced on credit. Where
person before the offer is accepted, there is no longer an
the guarantee is not of this nature, it may be irrevocable.
offer at all. The offer is not intended to be made to a
Thus, in Lloyds v Harper (1880) 16 Ch D 290, the defend-
dead person, nor to his executors, and the offer ceases to
ant, while living, guaranteed his son’s dealings as a
be an offer capable of acceptance.’ There is, however,
Lloyds underwriter in consideration of Lloyds admitting
some Canadian authority. In Re Irvine [1928] 3 DLR 268
the son. It was held that, as Lloyds had admitted the
an offeree gave his son a letter of acceptance to post.
son on the strength of the guarantee, the defendant’s
The son did not post it until after the offeree’s death.
executors were still liable under it, because it was irrevoc-
The Supreme Court of Ontario held that the acceptance
able and was not affected by the defendant’s death. It
was invalid.
continued to apply to defaults committed by the son
after the father’s death.
Offer and acceptance not essential:
Death of offeree before acceptance the collateral contract
Re Cheshire Banking Co, Duff’s Executors’ Case 74 Rayfield v Hands [1958] 2 All ER 194
73
(1886) 32 Ch D 301
In 1882 the Cheshire and Staffordshire Union The articles of a private company provided by Art 11
Banking Companies amalgamated, and Duff received that: ‘Every member who intends to transfer his
a circular asking whether he would exchange his shares shall inform the directors who will take the said
shares in the S Bank for shares in the C Bank which shares . . . at a fair price.’ The claimant held 725 full-paid
..
EL_Z01.qxd 3/26/07 1:51 PM Page 745
CASES 75–76 MAKING THE CONTRACT II 745
shares of £1 each, and he asked the directors to buy £1 per year for so long as she remained unmarried.
them but they refused. The claimant remained in possession of the house
Held – the directors were bound to take the shares. Hav- until the death of one of the executors, Samuel
ing regard to what is now s 14(1) of the Companies Act Thomas. The other executor then turned her out. She
1985, Art 11 constituted a binding contract between sued him for breach of contract. It was held that the
the directors, as members, and the claimant, as a claimant’s promise to pay £1 per year was considera-
member, in respect of his rights as a member. The tion and need not be adequate. The action for breach
word ‘will’ in the Article did not import an option in of contract succeeded.
the directors. Vaisey, J did say that the conclusion he Comment The rule that consideration need not be ade-
had reached in this case may not apply to all compan- quate allows virtually gratuitous promises to be binding
ies, but it did apply to a private company, because even though not made by deed (and see Mountford v
such a company was an intimate concern closely Scott, above).
analogous with a partnership.
Comment (i) Although the articles placed the obligation Chappell & Co Ltd v Nestlé Co Ltd [1959]
76
to take shares of members on the directors, Vaisey, J con- 2 All ER 701
strued this as an obligation falling upon the directors in The claimants owned the copyright in a dance tune
their capacity as members. Otherwise, the contractual
called ‘Rockin’ Shoes’, and the defendants were using
aspect of the provision in the articles would not have
records of this tune as part of an advertising scheme.
applied, since the articles are not a contract between the
A record company made the records for Nestlés which
company and the directors.
advertised them to the public for 1s 6d each but
(ii) The leading case is Clarke v Dunraven [1897] AC 59 required in addition three wrappers from their 6d bars
where it was held that competitors in a regatta had of chocolate. When Nestlé received the wrappers,
made a contract not only with the club which organised
they were thrown away. The claimants sued the
the race but also with each other so that one competitor
defendants for infringement of copyright. It appeared
was able to sue another for damages when his boat was
that under s 8 of the Copyright Act of 1956 a person
fouled and sank under a rule which said that each com-
recording musical works for retail sale need not get
petitor was liable ‘to pay all damages’ that he might cause.
the permission of the holder of the copyright, but had
(iii) Section 14(1) of the Companies Act 1985 provides merely to serve him with notice and pay 61/4 per cent
that the provisions in the company’s articles and mem-
of the retail selling price as royalty. The claimants
orandum form a contract between the company and its
asserted that the defendants were not retailing the
members, which the parties are bound to observe.
goods in the sense of the Act and must therefore get
Incidentally, the Contracts (Rights of Third Parties) Act
permission to use the musical work. The basis of the
1999, which is further considered in Chapter 10, clearly
claimants’ case was that retailing meant selling
excludes the operation of s 14(1) from its provisions
so that third parties cannot acquire rights under the entirely for money, and that as the defendants were
contract. Thus, the appointment of a person as solicitor selling for money plus wrappers, they needed the
or accountant to the company would not operate as a claimants’ consent. The defence was that the sale was
contract enforceable against the company. for cash because the wrappers were not part of the
consideration. The House of Lords by a majority gave
judgment for the claimants. The wrappers were part
MAKING THE CONTRACT II of the consideration since the offer was to supply a
record in return, not simply for money, but for the
wrappers as well. On the question of adequacy, Lord
Consideration need not be adequate so long as Somervell said: ‘It is said that, when received, the
it has some economic value wrappers are of no value to the respondents, the
Nestlé Co Ltd. This I would have thought irrelevant.
75 Thomas v Thomas (1842) 2 QB 851 A contracting party can stipulate for what considera-
tion he chooses. A peppercorn does not cease to be
The claimant’s husband had expressed the wish that
good consideration if it is established that the
the claimant, if she survived him, should have use of
promisee does not like pepper and will throw away
his house. He left a will of which his brothers were
the corn.’
executors. The will made no mention of the testator’s
wish that his wife should be given the house. The Comment (i) There seems to be no doubt that the
executors knew of the testator’s wish and agreed to wrappers could, on their own, have formed the
allow the widow to occupy the house on payment of consideration.
..
EL_Z01.qxd 3/26/07 1:51 PM Page 746
746 MAKING THE CONTRACT II CASES 77–79
(ii) The statutory licence to copy records sold by retail that the later agreement was unsupported by con-
under s 8 of the Copyright Act 1956 was repealed by the sideration and that the wife could sue only on the
Copyright, Designs and Patents Act 1988, Sch 1, para 21. earlier deed. The Court of Appeal held that there was
Permission to reproduce is now required even by those consideration to support the later agreement. It was
retailing the records. However, the case remains a classic clear that the original deed did not implement the
example of an adequacy of consideration ruling by the intention of the parties. The wife, therefore, might
House of Lords. have sued to rectify the deed and the later agreement
represented a compromise of this possible action.
77 White v Bluett (1853) 23 LJ Ex 36 Whether such an action would have succeeded was
irrelevant; it sufficed that it had some prospect of
This action was brought by White who was the ex- success and that the wife believed in it.
ecutor of Bluett’s father’s estate. The claimant White, Comment It will be seen from the facts of this case that
alleged that Bluett had not paid a promissory note although the person who forbears to sue may actually
given to his father during his lifetime. Bluett admitted promise not to do so, there may be implied forbearance
that he had given the note to his father, but said that on the facts. A promise is not essential, provided there is
his father had released him from it in return for a evidence to show that there was some causal connection
promise not to keep on complaining about the fact between the forbearance and the way in which the
that he had been disinherited. parties acted.
Held – the defence failed and the defendant was liable
Adequacy of consideration: the position
on the note. The promise not to complain was not
in bailment
sufficient consideration to support his release from
the note. Gilchrist Watt and Sanderson Pty v York
79
Products Pty [1970] 1 WLR 1262
Comment This case illustrates the general point that on
Two cases of German clocks were bought by the
formation of contract consideration must be capable of
respondents and shipped to Sydney. The shipowners
expression in terms of value. On its facts, of course, the
arranged for the appellant stevedores to unload the
case is concerned with consideration on discharge of
ship. The goods were put in the appellants’ shed but
contract, i.e. the promissory note, where the rule is the
when the respondents came to collect them one case
same. In addition, the decision seems to be based upon
the fact that the son had no right to complain of his dis- of clocks was missing. It was admitted that this was
inheritance, so he was not giving up anything which he due to the appellants’ negligence.
had a right to do. ‘The son had no right to complain, for Held – by the Privy Council – that the appellants were
the father might make what distribution of his property liable. Although there was no contract between the
he liked; and the son’s abstaining from doing what he parties an obligation to take due care of the goods was
had no right to do can be of no consideration’, said the created by delivery and voluntary assumption of
judge, Chief Baron Pollock, in the old Exchequer Division possession under the sub-bailment.
of the High Court.
Comment (i) The matter of consideration and bailment
was first raised in Coggs v Bernard (1703) 2 Ld Ray 909
Adequacy of consideration: implied forbearance to where the defendant had agreed to take several
sue can support a promise hogsheads of brandy, belonging to the claimant, from
the cellar of one inn to another. One of the casks was
78 Horton v Horton [1961] 1 QB 215 broken and the brandy lost and the claimant alleged
that this was due to the defendant’s carelessness. The
The parties were husband and wife. In March 1954, defendant denied liability on the ground that there
by a separation agreement by deed the husband was no consideration to support the agreement to move
agreed to pay the wife £30 a month. On the true con- the casks.
struction of the deed, the husband should have Held – the claimant’s suit succeeded. The case seems to
deducted income tax before payment but for nine have been decided on the ground that once the relation-
months he paid the money without deductions. In ship of bailor and bailee is established certain duties fall
January 1955, he signed a document, not by deed, upon the bailee independently of any contract.
agreeing that instead of ‘the monthly sum of £30’ he (ii) It should be borne in mind, of course, that if a person
would pay such a monthly sum as ‘after deduction of agrees to take charge of goods gratuitously he could
income tax should amount to the clear sum of £30’. not be sued if he fails to take them into his custody. The
For over three years he paid this clear sum but then duty seen in this case arises only when the goods are in
stopped payment. To an action by his wife he pleaded the custody of the gratuitous bailee.
..
EL_Z01.qxd 3/26/07 1:51 PM Page 747
CASES 80– 82 MAKING THE CONTRACT II 747
Sufficiency of consideration: promise to perform the main contract, made an oral promise to pay Mr
or performance of an existing public or Williams a further sum of £10,300 to be paid at the rate
contractural duty will not support a further of £575 for each flat on which work was completed.
promise: acts in excess of the duty may Mr Williams was not paid in full for this work and later
brought this claim for the additional sum promised. The
80 Collins v Godefroy (1831) 1 B & Ad 950 Court of Appeal held that he was entitled to it because
where a party to a contract agrees to make an additional
The claimant received a witness summons (previously payment to secure its performance on time this may
a subpoena) to give evidence for the defendant in an provide sufficient consideration contractually to support
action to which the defendant was a party. The claim- the extra payment, if the agreement to pay is obtained
ant now sued for the sum of six guineas which he said without economic duress or fraud (see further Chapter
the defendant had promised him for his attendance. 13) and where it ensures the completion of the contract
to the paying party’s satisfaction and benefit as by avoid-
Held – the claimant’s action failed because there was ing a penalty which was the position here. Apparently,
no consideration for the promise. Lord Tenterden Stilk survives only where the person making the promise
said: ‘If it be a duty imposed by law upon a party receives no benefit for it. It would seem to have been
regularly subpoenaed to attend from time to time to possible to find benefit in Stilk so that it may well be
give his evidence, then a promise to give him any overruled on its own facts though the Court of Appeal
remuneration for loss of time incurred in such attend- would only say that the principle had been ‘refined’.
ance is a promise without consideration.’ (ii) The Court of Appeal took a more traditional approach
and did not apply the decision in Williams in a case en-
81 Stilk v Myrick (1809) 2 Camp 317 titled Re Selectmove, The Times, 13 January 1994, where
a company was having difficulty paying its taxes and
A sea-captain, being unable to find any substitutes for agreed with the Revenue, through one of its officers,
two sailors who had deserted, promised to divide the to pay by instalments. Some instalments were paid but
wages of the deserters among the rest of the crew if then, while sums were still owing, the Revenue
they would work the ship home shorthanded. demanded the balance at once and on failing to get it
started proceedings to wind up the company. The Court
Held – the promise was not enforceable because of
of Appeal held that the agreement to take instalments
absence of consideration. In sailing the ship home the
was not binding because it was not supported by con-
crew had done no more than they were already
sideration. The Williams case was distinguished because
bound to do. Their original contract obliged them to it was concerned with an obligation to supply goods and
meet the normal emergencies of the voyage of which services, whereas the Selectmove case was an obligation
minor desertions were one. Compare Hartley v to pay money. It was well established by the House of Lords
Ponsonby (1857) 7 E & B 872, where a greater remunera- in Foakes v Beer (1884) (see Case 92) that an agreement
tion was promised to a seaman to work the ship home to pay an existing debt by instalments was not enforce-
when the number of deserters was so great as to render able in the absence of either consideration or a deed.
the ship unseaworthy. (iii) The facts of Selectmove were virtually the same as
Held – this was a binding promise because the sailor those in Foakes, i.e. payment of debt by instalments
had gone beyond his duty in agreeing to sail an without consideration or a deed. Therefore, the Court
unseaworthy ship. In fact, the number of desertions was of Appeal could hardly have decided differently.
so great as to discharge the remaining seamen from Nevertheless, it seems a pity that a promise to pay by
their original contract, leaving them free to enter into instalments made in good faith and accepted, initially, by
a new bargain. both parties should be ineffective on the technicality of
the absence of consideration or a deed.
Comment (i) It must be said that the decision in Stilk
(iv) The company in Selectmove could, of course, have
took a nasty knock in Williams v Roffey Bros and Nicholls
protected itself by agreeing to pay the Revenue a slightly
(Contractors) Ltd [1990] 1 All ER 512. The defendants in
higher rate of interest on the money owed by way of dim-
that case were building contractors. They made a con-
inishing balance which would have amounted to good
tract to refurbish a block of 27 flats and engaged
consideration for the agreement to pay by instalments.
Mr Williams to carry out carpentry work for £20,000. This
turned out to be too low to enable Mr Williams to oper-
ate at a profit and after completing some of the flats and Glasbrook Bros Ltd v Glamorgan County Council
82
receiving interim payments of £16,000 he got into finan- [1925] AC 270
cial difficulties. The defendants, concerned that the job In 1921 the Glamorgan police were asked to provide
might not be finished on time and that they would in 100 police officers to be billeted on the premises of
that event have to pay money under a penalty clause in Glasbrook’s colliery near Swansea because it was
..
EL_Z01.qxd 3/26/07 1:51 PM Page 748
748 MAKING THE CONTRACT II CASE 83
feared that striking miners were going to prevent football ground over 15 months was allowed. The Court
safety men going into the mine with the consequence of Appeal later affirmed this ruling.
that it would be flooded. The owners of the mine (ii) The issue of exceeding a statutory duty was also
signed a document saying that they would pay not raised in Ward v Byham [1956] 2 All ER 318. In that case
only for the services of the officers but also their an unmarried mother sued to recover a maintenance
travelling expenses. Glasbrook’s also undertook to allowance by the father of the child. The defence was
provide them with food and sleeping accommoda- that, under s 42 of the National Assistance Act 1948, the
tion. Eventually a bill amounting to £2,200 11s 10d mother of an illegitimate child was bound to maintain it.
was rendered to the claimants by the Glamorgan However, it appeared that in return for the promise of
County Council, for the above services. Glasbrook’s an allowance the mother had promised:
refused to pay the bill, alleging that the police were (a) to look after the child well and ensure that it was
doing no more than was their duty and therefore happy; and
there was no consideration for Glasbrook’s written (b) to allow it to decide whether it should live with her or
promise to pay for the protection which they had the father.
had. Held – there was sufficient consideration to support the
Held – by the House of Lords – Glasbrook’s promise promise of an allowance because the promises given in
was binding on them on the ground that the number (a) and (b) above were in excess of the statutory duty,
of constables provided was in excess of what the local which was merely to care for the child.
police superintendent thought was necessary and, (iii) ‘Is a promise to make a child happy adequate con-
therefore, provided consideration over and above the sideration?’ (Compare White v Bluett (1853).) This point is
obligation resting on the police to take all steps neces- not taken in the case and shows the considerable power
sary for protecting property from criminal injury. In which judges have to find or not to find contractual
the course of his judgment Viscount Cave, LC said: obligations.
(iv) Cases such as Ward v Byham (1956) show that the
No doubt there is an absolute unconditional obliga-
concepts of the law of contract are not confined to
tion binding the police authorities to take all steps
business arrangements and so students should have a
which appear to them to be necessary for keeping
knowledge of adequacy and sufficiency rulings. However,
the peace, preventing crime, or for protecting
the concepts are not likely to be met with in business or
property from criminal injury; and the public, who
at least not often. The reason is simple: those in business
pay for this protection through the rates and taxes, seldom if ever (perhaps never) enter into commercial
cannot lawfully be called upon to make a further transactions for nothing or for inadequate prices or fees.
payment for that which is their right. . . . But it has The problem for those in business (and the consumer) is
always been recognized that, where individuals to prevent other businesses charging customers too
desire that services of a special kind which, though much!
not within the obligations of a police authority, can
most effectively be rendered by them, should be Sufficiency of consideration: performance of a
performed by members of the police force, the contractual duty owed by X to Y can support a
police authorities may . . . ‘lend’ the services of promise made by Z to X
constables for that purpose in consideration of
payment. Instances are the lending of constables 83 Shadwell v Shadwell (1860) 9 CB (NS) 159
on the occasions of large gatherings in and outside
private premises, as on the occasions of weddings, The claimant was engaged to marry a woman named
athletic or boxing contests or race meetings, and Ellen Nicholl. In 1838 he received a letter from his
the provision of constables at large railway stations. uncle, Charles Shadwell, in the following terms: ‘I am
glad to hear of your intended marriage with Ellen
Comment (i) This case was applied in Harris v Sheffield
Nicholl and, as I promised to assist you at starting,
United Football Club [1987] 2 All ER 838, where Boreham,
J held that the provision of policemen at a football I am happy to tell you that I will pay you one hundred
ground to keep law and order was the provision of and fifty pounds yearly during my life and until your
special services by the police. The police authority is income derived from your profession of Chancery
under a duty to protect persons and property against barrister shall amount to six hundred guineas, of
crime or threatened crime for which no payment is due. which your own admission will be the only evidence
However, the police have no public duty to protect that I shall receive or require.’ The claimant duly
persons and property against the mere fear of possible married Ellen Nicholl and his income never exceeded
future crime. The claim of the police authority for some six hundred guineas during the 18 years his uncle lived
£70,000 for police services provided at the defendants’ after the marriage. The uncle paid 12 annual sums and
..
EL_Z01.qxd 3/26/07 1:51 PM Page 749
part of the thirteenth but no more. On his death, the Comment (i) The rule applied also in Roscorla v Thomas
claimant sued his uncle’s executors for the balance of the (1842) 3 QB 234 where a horse was sold and the seller
18 instalments to which he suggested he was entitled. after the sale gave a warranty as to its quality, i.e. that it
was not vicious whereas it was. There was no action on
Held – the claimant succeeded even though he was
the warranty by the buyer.
already engaged to Ellen Nicholl when the promise
was made. His marriage was sufficient consideration (ii) If Mrs McArdle had actually been paid by a cheque,
she would not have been able to sue upon it under s 27
to support his uncle’s promise, for, by marrying, the
of the Bills of Exchange Act 1882 because her acts were
claimant had incurred responsibilities and changed his
gratuitous and did not create an antecedent (or previous)
position in life. Further, the uncle probably derived
debt or liability, for which she could have claimed to be
some benefit in that his desire to see his nephew settled
paid in legal tender or otherwise.
had been satisfied.
Comment (i) In this case the consideration is a little Re Casey’s Patents, Stewart v Casey [1892]
85
dubious in that it is in part a sentimental benefit to the 1 Ch 104
uncle. This type of consideration, e.g. the ‘love and affec- Patents were granted to Stewart and another in respect
tion’ variety, has often been regarded as ineffective to of an invention concerning appliances and vessels for
support a contract. Nevertheless, the principle of the case transporting and storing inflammable liquids. Stewart
is a good one and makes more sense in a business con- entered into an arrangement with Casey, whereby
text. (See New Zealand Shipping Co Ltd v Satterthwaite Casey was to introduce the patents. Casey spent two
(1974), Chapter 15.) years ‘pushing’ the invention and then the joint
(ii) An engagement to marry is no longer binding as a owners of the patent rights wrote to him as follows:
contract: see s 1 of the Law Reform (Miscellaneous ‘In consideration of your services as the practical
Provisions) Act 1970. manager in working both patents we hereby agree to
give you one-third share of the patents.’ Casey also
Past consideration: where a particular activity received the letters patent. Some time later Stewart
is undertaken without any promise of payment, died and his executors claimed the recovery of the let-
a subsequent promise to pay is not actionable. ters patent from Casey, suggesting that he had no
If there is a request to carry out the act in a interest in them because the consideration for the
commercial situation where a promise to pay promise to give him a one-third share was past.
can be implied, the subsequent promise may
Held – the previous request to render the services
be enforceable
raised an implied promise to pay. The subsequent
promise could be regarded as fixing the value of the
84 Re McArdle [1951] Ch 669
services so that Casey was entitled to a one-third
Certain children were entitled under their father’s will share of the patent rights.
to a house. However, their mother had a life interest
in the property and during her lifetime one of the
Privity of contract: effect of the rule: remedies
children and his wife came to live in the house with
(if any) available to a person not in privity
the mother. The wife carried out certain improve-
86 Tweddle v Atkinson (1861) 1 B & S 393
ments to the property, and, after she had done so, the
children signed a document addressed to her stating: ‘In William Tweddle, the claimant, was married to the
consideration of your carrying out certain alterations daughter of William Guy. In order to provide for the
and improvements to the property . . . at present couple, Guy promised the claimant’s father to pay
occupied by you, the beneficiaries under the Will of the claimant £200 if the claimant’s father would pay
William Edward McArdle hereby agree that the execu- the claimant £100. An agreement was accordingly
tors, the National Provincial Bank Ltd, . . . shall repay drawn up containing the above-mentioned promise,
to you from the said estate when so distributed the and giving William Tweddle the right to sue either
sum of £488 in settlement of the amount spent on promisor for the sums promised. Guy did not make
such improvements . . .’. On the death of the testator’s the promised payment during his lifetime and the
widow the children refused to authorise payment of claimant now sued Guy’s executor.
the sum of £488, and this action was brought to Held – the claimant’s action failed because he had not
decide the validity of the claim. given any consideration to Guy in return for the
Held – since the improvements had been carried out promise to pay £200. The provision in the agreement
before the document was executed, the consideration allowing William Tweddle to sue was of no effect
was past and the promise could not be enforced. without consideration.
..
EL_Z01.qxd 3/26/07 1:51 PM Page 750
750 MAKING THE CONTRACT II CASES 87– 88
claim by a buyer who has taken goods under the contract

87 Dunlop v Selfridge [1915] AC 847
for breach of condition or warranty in regard to the
quality of the goods. The Act does not specifically set out
The appellants were motor tyre manufacturers and
a right of private action as was seen in the Dunlop case.
sold tyres to Messrs Dew & Co who were motor
However, s 60(6)(b) says, in effect, that there is a private
accessory dealers. Under the terms of the contract,
right of action under the Act (which mirrors EU law) if,
Dew & Co agreed not to sell the tyres below Dunlop’s
and only if, there is a similar right under EU competition
list price, i.e. £4.05 per tyre, and as Dunlop’s agents,
law. Most of those who have commented on the Act
to obtain from other traders a similar undertaking. In believe that EU law provides a right to damages and as
return for this undertaking Dew & Co were to receive appropriate an injunction. So damages and injunctions
special discounts, some of which they could, if they are clearly available to those who have suffered as a
wished, pass on to retailers who bought tyres. result of infringements of the 1998 Act. These individual
Selfridge & Co accepted two orders from customers claims are further considered in Chapter 16.
for Dunlop covers at a lower price. They obtained the
(iii) The case will live on because of the definition of con-
covers through Dew & Co and signed an agreement sideration given in it. It is not such a good example of
not to sell or offer the tyres below the list price. For privity on its own facts because in the modern context
giving this undertaking, Dew & Co gave them part of the contract is unenforceable because it is void under
the discount received by Dew & Co from Dunlop. It was competition law.
further agreed that £5 per tyre sold should be paid to
Dunlop by way of liquidated damages. Selfridge sup-
plied one of the two tyres ordered below list prices, 88 Jackson v Horizon Holidays [1975] 3 All ER 92
i.e. at £3.65 per tyre. They did not actually supply the
other, but informed the customer that they could Mr Jackson had booked a four-week holiday in a hotel
only supply it at list price. The appellants claimed an in Ceylon for himself and his family, everything to be
injunction and damages against the respondents for ‘of the highest standard’. The brochure issued by the
breach of the agreement made with Dew & Co, claim- defendants described the hotel as enjoying many
ing that Dew & Co were their agents in the matter. facilities including a mini golf course, a swimming
Held – there was no contract between the parties. pool, and beauty and hairdressing salons. None of
Dunlop could not enforce the contract made between these in fact materialised and the food was distasteful.
the respondents and Dew & Co because they had not It was held that Mr Jackson could sue on the contract
supplied consideration. Even if Dunlop were undis- not only for his own loss and disappointment but
closed principals, there was no consideration moving also for that of his family. The decision was based on
between them and the respondents. The discount the fact that Mr Jackson had entered into the contract
received by Selfridge was part of that given by Dunlop partly for the benefit of his family. On that basis an
to Dew & Co. Since Dew & Co were not bound to give award of damages of £1,100 was not excessive. In the
any part of their discount to retailers, the discount course of his judgment Lord Denning, MR said: ‘The
received by Selfridge operated only as consideration case comes within the principle stated by Lush, LJ in
between themselves and Dew & Co and could not be Lloyd’s v Harper [1880] 16 Ch D 290 at p. 321: “. . . I
claimed by Dunlop as consideration to support a consider it to be an established rule of law that where
promise not to sell below list price. a contract is made with A for the benefit of B, A can
sue on the contract for the benefit of B and recover all
Comment (i) It was in this case that the House of Lords that B could have recovered if the contract had been
adopted the definition of consideration given by made with B himself.” ’ Speaking of these words, Lord
Sir Frederick Pollock, i.e.: ‘An act or forbearance of one Denning said: ‘I think they should be accepted as cor-
party, or the promise thereof, is the price for which the rect, at any rate so long as the law forbids the third
promise of the other is bought and the promise thus
persons themselves to sue for damages. It is the only
given for value is enforceable.’
way in which a just result can be achieved.’
(ii) The case would now be dealt with under the
Competition Act 1998. A resale price agreement is out- Comment (i) This judgment of Lord Denning has been
lawed by s 2(2)(a) of the Act as an agreement preventing, much criticised since it infringes a very old rule of English
restricting or distorting competition. The automatic contract law which states that if A contracts with B in
result of breaching the 1998 Act is to make the offending return for B’s promise to do something for C, if B then
parts of the agreement null and void so that the resale repudiates the contract, C has no enforceable claim, and
price aspect would not be enforceable. If it is possible to A is restricted to an action for nominal damages by
sever other legal provisions in the contract, these may be reason of his having suffered no loss. The judgment in
enforced and it may well be that the court would allow a Jackson was criticised by the Lords in Woodar v Wimpey
..
EL_Z01.qxd 3/26/07 1:51 PM Page 751
CASE 89 MAKING THE CONTRACT II 751
[1980] 1 All ER 571 and they assumed that only nominal more. On 30 June 1964, the widow became the
damages were available in Beswick (see below) so that it administratrix of her husband’s estate, and on 15 July
must be regarded with caution. 1964, she brought an action against the nephew for
The House of Lords said that the Jackson case could be arrears of the weekly sums and for specific perform-
justified on the basis that Mr Jackson actually saw his ance of the agreement for the future. She sued in her
family suffering discomfort and disappointment. Their capacity as administratrix of the estate and also in her
Lordships would not, however, accept that there was a personal capacity. Her action failed at first instance
general rule in contract that A could recover damages and on appeal to the Court of Appeal, [1966] 3 All ER
from B in respect of loss suffered by C.
1, it was decided amongst other things that:
(ii) If damages are recovered under the ruling given by
Lord Denning in Jackson, the recipient must hand over (a) specific performance could in a proper case be
the relevant shares to the other members of the family, ordered of a contract to pay money;
and if he does not they can sue him in quasi-contract (see (b) ‘property’ in s 56(1) of the Law of Property Act
Chapter 18). 1925 included a contractual claim not concerned
(iii) The House of Lords ruling in Linden Gardens Trust Ltd with realty and that, therefore, a third party could
v Lenesta Sludge Disposals Ltd [1993] 3 All ER 417 is sue on a contract to which he was a stranger. The
worth nothing. The owner of a site made a building widow’s claim in her personal capacity was, there-
contract with a contractor to erect offices, shops and fore, good ( per Denning, MR and Danckwerts, LJ);
flats. The site when developed was transferred to a third (c) the widow’s claim as administratrix was good
party who suffered loss because of the contractor’s bad because she was not suing in her personal capa-
workmanship. The site owner sued for damages and was city but on behalf of her deceased husband, who
awarded full damages even though he had parted with had been a party to the agreement;
the site but only because their Lordships found on the (d) that no trust in her favour could be inferred.
facts that the parties had envisaged that the site would
be transferred to the third party and the contractor had There was a further appeal to the House of Lords,
impliedly taken on liability to him. The damages were though not on the creation of a trust, and there it was
held by the site owner for the benefit of the third party held that the widow’s claim as administratrix suc-
who had suffered the loss. The case provides an excep- ceeded, and that specific performance of a contract to
tion to the general rule that a claimant can only recover pay money could be granted in a proper case. However,
damages for his own loss and that a claimant who sues having decided the appeal on these grounds, their
on behalf of others will only recover nominal damages. Lordships went on to say that the widow’s personal
The implication of liability to the third party made the claim would have failed because s 56 of the Law of
difference. Property Act 1925 was limited to cases involving
(iv) The solution is now clear: make sure that your third- realty. The 1925 Act was a consolidating not a codify-
party beneficiaries (here the family) are named in the ing measure, so that if it contained words which were
contract and then they will be able to sue in their own capable of more than one construction, effect should
right under the Contracts (Rights of Third Parties) Act be given to the construction which did not alter the
1999. In fact, the 1999 Act may well have applied here law. It was accepted that when the present provision
without naming the third parties specifically since the was contained in the Real Property Act 1845, it had
1999 Act allows identification to be by description, e.g. applied only to realty. Although s 205(1) of the 1925
‘Mr J Bloggs and family’. That expression in a contract Act appeared to have extended the provision to
could well cover those members of Mr Bloggs’ family personal property, including things in action, it was
accompanying him. expressly qualified by the words ‘unless the context
otherwise requires’, and it was felt that Parliament
89 Beswick v Beswick [1967] 2 All ER 1197 had not intended to sweep away the rule of privity by
what was in effect a sidewind.
A coal merchant agreed to sell the business to his Comment (i) Here the problem of whether or not to
nephew in return for a weekly consultancy fee of £6 award nominal damages to the claimant referred to in
10s payable during his liftime, and after his death an Jackson’s case was overcome because the court awarded
annuity of £5 per week was to be payable to his specific performance. However, four Law Lords said that
widow for her lifetime. After the agreement was if damages had been awarded they would have been
signed, the nephew took over the business and paid nominal only, though Lord Pearce would have awarded
his uncle the sum of £6 10s as agreed. The uncle died substantial damages. Furthermore, it is unlikely that s 56
on 3 November 1963, and the nephew paid the does have a very wide application. The sub-section says
widow one sum of £5 and then refused to pay her any that a person may take the benefit of an agreement
..
EL_Z01.qxd 3/26/07 1:51 PM Page 752
although he is not ‘named as a party’. The legislation claimed that he was not bound by it because he had
does not say that he need not be a party. There are not himself entered into it.
those who take the view, therefore, that s 56(1) is
Held – an injunction to restrain building would be
designed to cover the situation where there is a covenant
granted because there was a jurisdiction in equity
over land in favour of, say, ‘the owner of Whiteacre’, so
that the owner of Whiteacre could benefit from the
to prevent, by way of injunction, acts inconsistent
covenant, provided he could be ascertained, even though with a restrictive covenant on land, so long as the
he was not named in the instrument creating the land was acquired with notice of the covenant, and
covenant. If this interpretation is correct, then s 56(1) the claimant retains land which can benefit from the
of the 1925 Act has little effect on the law of contract covenant.
generally.
Comment (i) Such notice may now be constructive where
(ii) The circumstances of this case are ideal for the the covenant is registered under land charges legisla-
application of the Contracts (Rights of Third Parties) Act tion. Knowledge need not be actual. It is assumed every-
1999. If the contract between the coal merchant and his one knows, whether they have seen the register or
nephew had expressly provided that the widow could not.
sue, she would have succeeded in her personal capacity
and the case would probably have never come to (ii) It was held in Roake v Chadha [1983] 3 All ER 503 that
court. In any case, s 1(1)(b) of the Act applies in that the whether a covenant runs with the land depends upon its
contract conferred a benefit on her, which in itself would wording. If the words used in it prevent the benefit of
have allowed her to claim in a personal capacity on the the covenant, in this case that the plot holder of land
assumption that her rights had not been excluded, as the would not build more than one house on it, passing to a
1999 Act allows. subsequent owner of the land unless specifically assigned
to him by the present owner, then the covenant would
not run with the land as such but would depend upon
Privity of contract: exceptions in the case of
assignment.
benefits and burdens attaching to land
Smith and Snipes Hall Farm Ltd v River Douglas The common law rule of accord and satisfaction:
90
Catchment Board [1949] 2 KB 500 agreed variations in contractual obligations are
In 1938 the defendants entered into an agreement generally unenforceable without consideration
with 11 persons owning land adjoining a certain
stream, that, on the landowners paying some part of 92 Foakes v Beer (1884) 9 App Cas 605
the cost, the defendants would improve the banks of
the stream and maintain the said banks for all time. Mrs Beer had obtained a judgment against Dr Foakes
In 1940 one landowner sold her land to Smith, and in for debt and costs. Dr Foakes agreed to settle the
1944 Smith leased the land to Snipes Hall Farm Ltd. In judgment debt by paying £500 down and £150 per
1946, because of the defendant’s negligence, the banks half-year until the whole was paid, and Mrs Beer
burst and the adjoining land was flooded. agreed not to take further action on the judgment.
Held – the claimants could enforce the covenant given Dr Foakes duly paid the amount of the judgment plus
in the agreement of 1938 even though they were costs. However, judgment debts carry interest by
strangers to it. The covenants were for the benefit of statute, and while Dr Foakes had been paying off the
the land and affected its use and value and could debt, interest amounting to £360 had been accruing
therefore be transferred with it. on the diminishing balance. In this action Mrs Beer
claimed the £360.
91 Tulk v Moxhay (1848) 2 Ph 774 Held – she could do so. Her promise not to take fur-
ther action on the judgment was not supported by
The claimant was the owner of several plots of land in any consideration moving from Dr Foakes. Pinnel’s
Leicester Square and in 1808 he sold one of them to a Case applied.
person called Elms. Elms agreed, for himself, his heirs Comment (i) In view of the possible development of
and assigns, ‘to keep the Square Garden open as a equity envisaged by Lord Denning in the D & C Builders
pleasure ground and uncovered with buildings’. After case, see below, it might be better to restrict the applica-
a number of conveyances, the land was sold to the tion of this case to situations where the promise has been
defendant who claimed a right to build on it. The extorted and not freely given. If this were so, Foakes v
claimant sued for an injunction preventing the develop- Beer would be reconcilable with any development of the
ment of the land. The defendant, whilst admitting that equitable rule of promissory estoppel on the lines envis-
he purchased the land with notice of the covenant, aged by Lord Denning in D & C Builders v Rees.
..
EL_Z01.qxd 3/26/07 1:51 PM Page 753
(ii) However, in Re Selectmove (1994) the Court of Appeal that, on payment of the lesser sum, the creditor will
followed Foakes by deciding that a promise to allow not enforce payment of the balance, and on the
payment by instalments was invalid because it was not faith thereof the debtor pays the lesser sum and the
supported by consideration and even though the promise creditor accepts it as satisfaction: then the creditor
to accept instalments had in no way been extorted. will not be allowed to enforce payment of the
balance when it would be inequitable to do so. . . .
Accord and satisfaction: payment by cheque is But he is not bound unless there has been truly an
not substituted performance: promissory estoppel accord between them.
may, in appropriate circumstances, extinguish as
distinct from suspend contractual rights In the present case there was no true accord. The
debtor’s wife had held the creditors to ransom, and
93 D & C Builders Ltd v Rees [1965] 3 All ER 837 there was no reason in law or equity why the claim-
ants should not enforce the full amount of debt.
D & C Builders, a small company, did work for Rees
Comment (i) The case also illustrates the requirements
for which he owed £482 13s 1d. There was at first no
of equality of bargaining power and the absence of
dispute as to the work done but Rees did not pay. In
economic duress in the negotiation (or as here, the re-
August and October 1964, the claimants wrote for the
negotiation) of a contract. (See also Lloyds Bank v Bundy
money and received no reply. On 13 November 1964, (1974), Chapter 13.)
the wife of Rees (who was then ill) telephoned the
(ii) It was held in Stour Valley Builders (a Firm) v Stuart, The
claimants, complained about the work, and said, ‘My
Times, 22 February 1993 that the fact that a cheque for a
husband will offer you £300 in settlement. That is all
lesser sum, said to be given in full satisfaction but with-
you will get. It is to be in satisfaction.’ D & C Builders,
out consideration, was cashed by the recipient did not
being in desperate straits and faced with bankruptcy
prevent him from suing for the balance, even though the
without the money, offered to take the £300 and
cashing of the cheque might indicate agreement to take
allow a year to Rees to find the balance. Mrs Rees a lesser sum. The decision serves to confirm that, at com-
replied: ‘No, we will never have enough money to pay mon law, an agreement, express or implied, to change
the balance. £300 is better than nothing.’ The claim- existing obligations is ineffective unless it is a contract.
ants then said: ‘We have no choice but to accept.’
(iii) The same rule was applied in Inland Revenue
Mrs Rees gave the claimants a cheque and insisted on
Commissioners v Fry [2001] STC 1715 where a cheque in
a receipt ‘in completion of the account’. The claimants,
payment of only half the tax bill was sent to the Revenue
being worried about their financial position, took
‘in full and final settlement’. The Revenue was able to sue
legal advice and later brought an action for the for the balance even though the cheque had been cashed.
balance. The defence was bad workmanship and that
there was a binding settlement. The question of settle- Accord and satisfaction: compromises between
ment was tried as a preliminary issue and the judge, creditors
following Goddard v O’Brien [1880] 9 QBD 33, decided
that a cheque for a smaller amount was a good dis- 94 Good v Cheesman (1831) 2 B & Ad 328
charge of the debt, this being the generally accepted
view of the law since that date. On appeal it was held The defendant had accepted two bills of exchange of
( by the Master of the Rolls, Lord Denning) that which the claimant was the drawer. After the bills
Goddard v O’Brien was wrongly decided. A smaller sum became due and before this action was brought,
in cash could be no settlement of a larger sum and the claimant suggested that the defendant meet his
‘no sensible distinction could be drawn between the creditors with a view perhaps to an agreement. The
payment of a lesser sum by cash and the payment of meeting was duly held and the defendant entered
it by cheque’. into an agreement with his creditors whereby the
In the course of his judgment Lord Denning said of defendant was to pay one-third of his income to a
High Trees: trustee to be named by the creditors, and that this was
It is worth noting that the principle may be applied, to be the method by which the defendant’s debts were
not only so as to suspend strict legal rights, but also to be paid. It was not clear from the evidence whether
so as to preclude the enforcement of them. the claimant attended the meeting, though he cer-
This principle has been applied to cases where a tainly did not sign the agreement. There was, however,
creditor agrees to accept a lesser sum in discharge evidence that the agreement had been in his posses-
of a greater. So much so that we can now say that, sion for some time and it was duly stamped before the
when a creditor and a debtor enter on a course of trial. No trustee was in fact appointed, though the
negotiation, which leads the debtor to suppose defendant was willing to go on with the agreement.
..
EL_Z01.qxd 3/26/07 1:51 PM Page 754
Held – the agreement bound the claimant and the debtor as distinct from a third party. (See Stour Valley
action on the bills could not be sustained. The consid- Builders (a firm) (1993).)
eration, though not supplied to the claimant direct,
existed in the forbearance of the other creditors. Each Promissory estoppel: variation of contractual
was bound in consequence of the agreement of the rest. rights without consideration: the approach of
equity: suspension of rights
Comment (i) The better view is that the basis of this
decision is to be found not in the law of contract but Central London Property Trust Ltd v High Trees
96
in tort, in the sense that once an agreement of this kind House Ltd [1947] KB 130
has been made it would be a fraud on the other creditors In 1937 the claimant company granted to the defend-
for one of their number to sue the debtor separately. ants a lease of 99 years of a new block of flats at a rent
This also applies to joint debtors. A payment from one of £2,500 per annum. The lease was by deed. During
debtor of part of the sum owing with the agreement of the period of the war the flats were by no means fully
the creditor and ‘in full and final settlement’ of the debt let owing to the absence of people from the London
operates to release other joint debtors, such as partners, area. The defendant company, which was a subsidiary
from liability and although such joint debtors are jointly of the claimant company, realised that it could not
and severally liable, a compromise with one in regard to
meet the rent out of the profits then being made on
the total sum owing prevents a claim against other joint
the flats, and in 1940 the parties entered into an
debtors under the Civil Liability (Contribution) Act 1978 (see
agreement which reduced the rent to £1,250 per
Morris v Wentworth-Stanley, The Times, 2 October 1998).
annum, this agreement being put into writing but
Both the joint and several aspects of liability are released.
not by deed. The defendants continued to pay
(ii) The Good v Cheesman arrangements would more
the reduced rent from 1941 to the beginning of 1945,
usually be made today under the Insolvency Act 1986.
by which time the flats were fully let, and they con-
Section 260 of that Act states that such an arrangement
tinued to pay the reduced rent thereafter. In Sep-
binds every creditor if it is approved by a meeting of
tember 1945, the receiver of the claimant company
creditors at which three-quarters in value vote in favour
of the arrangement. Therefore, s 260 really provides an investigated the matter and asked for arrears of £7,916,
exception to the rule of accord and satisfaction. suggesting that the liability created by the lease still
existed, and that the agreement of 1940 was not
Accord and satisfaction: payments by third parties supported by any consideration. The receiver then
brought this action to establish the legal position.
95 Welby v Drake (1825) 1 C & P 557 He claimed £625, being the difference in rent for the
two quarters ending 29 September and 25 December
The claimant sued the defendant for the sum of £9 1945.
on a debt which had originally been for £18. The Held – (a) a simple contract can in equity vary a deed
defendant’s father had paid the claimant £9 and the (i.e. the lease), though it had not done so here because
claimant had agreed to take that sum in full discharge the simple contract was not supported by considera-
of the debt. tion; ( b) as the agreement for the reduction of rent
Held – the payment of £9 by the defendant’s father had been acted upon by the defendants, the claimant
operated to discharge the debt of £18. was estopped in equity from claiming the full rent
Comment (i) Here again, the basis of the decision is that from 1941 until early 1945 when the flats were fully
it would be a fraud on the third party to sue the original let. After that time it was entitled to do so because
debtor. ‘If the father did pay the smaller sum in satisfac- the second agreement was only operative during the
tion of this debt, it is a bar to the [claimant’s] now continuance of the conditions which gave rise to it.
recovering against the son; because by suing the son, he To this extent the limited claim of the receiver suc-
commits a fraud on the father, whom he induced to ceeded. If the receiver had sued for the balance of rent
advance his money on the faith of such advance being from 1941, he would have failed.
a discharge of his son from further liability.’ (Per Lord
Tenterden, CJ) Tool Metal Manufacturing Co Ltd v Tungsten
97
(ii) Also, of course, the creditor breaks his contract with Electric Co Ltd [1955] 2 All ER 657
the third party. The appellants were the registered proprietors of
(iii) Where there is a payment by a third party, the British letters patent. In April 1938, they made a con-
acceptance of, say, a cheque by the creditor will be tract with the respondents whereby they gave the latter
regarded as an acceptance of the payment in discharge a licence to manufacture ‘hard metal alloys’ in accord-
of the debtor’s liability. This is not the case where the ance with the inventions which were the subject of
creditor accepts a smaller payment by cheque from the patent. By the contract the respondents agreed to pay
..
EL_Z01.qxd 3/26/07 1:51 PM Page 755
‘compensation’ to the appellants if in any one month variation of the sale contract, and that a party who has
they sold more than a stated quantity of metal alloys. waived his rights cannot afterwards insist on them if
Compensation was duly paid by the respondents the other party has acted on that belief differently
until the outbreak of war in 1939 but thereafter none from the way in which he would otherwise have
was paid. It was found as a fact that in 1942 the appel- acted; and the other party need not show that he has
lants agreed to suspend the enforcement of compensa- acted to his detriment. In the course of his judgment
tion payments pending the making of a new contract. Lord Denning, MR said:
In 1944 negotiations for such new contracts were If one party, by his conduct, leads another to
begun but broke down. In 1945 the respondents sued believe that the strict rights arising under the con-
the appellants for breach of contract and the appel- tract will not be insisted on, intending that the
lants counterclaimed for payment of compensation other should act on that belief, and he does act on
as from 1 June 1945. As regards the arguments on the it, then the first party will not afterwards be allowed
counterclaim, it was eventually held by the Court of to insist on the strict legal rights when it would
Appeal that the agreement of 1942 operated in equity be inequitable for him to do so. . . . There may be
to prevent the appellants demanding compensa- no consideration moving from him who benefits
tion until they had given reasonable notice to the by the waiver. There may be no detriment to him
respondents of their intention to resume their strict acting on it. There may be nothing in writing.
legal rights and that such notice had not been given. Nevertheless, the one who waives his strict rights
In September 1950, the appellants themselves cannot afterwards insist on them. His strict rights
issued a writ (now claim form) against the respondents are at any rate suspended so long as the waiver
claiming compensation as from 1 January 1947. The lasts. He may on occasion be able to revert to his
respondents pleaded the equity raised by the agree- strict legal rights for the future by giving reasonable
ment of 1942 and argued that reasonable notice of its notice in that behalf, or otherwise making it plain
termination had not been given. When this action by his conduct that he will thereafter insist on
reached the House of Lords it was held – affirming them. . . . I know that it has been suggested in some
Hughes v Metropolitan Railway Co and the High Trees quarters that there must be a detriment. But I can
case – that the agreement of 1942 operated in equity find no support for it in the authorities cited by the
to suspend the appellants’ legal rights to compensa- judge. The nearest approach to it is the statement
tion until reasonable notice to resume them had been by Viscount Simonds in the Tool Metal case that the
given. However, the counterclaim in the first action other must have been led ‘to alter his position’
in 1945 amounted to such notice and since the appel- which was adopted by Lord Hodson in Emmanuel
lants were not now claiming any compensation as Ayodeji Ajayi v RT Briscoe (Nigeria) Ltd [1964] 3 All
due to them before 1 January 1947, the appellants ER 556. But that only means that he must have
succeeded in this second action and were awarded been led to act differently from what he otherwise
£84,000 under the compensation claim. would have done. And, if you study the cases in
which the doctrine has been applied, you will see that
Promissory estoppel: the meaning of reliance all that is required is that one should have ‘acted on
upon the promise the belief induced by the other party’. That is how
W J Alan & Co v El Nasr Export and Import Co Lord Cohen put it in the Tool Metal case and it is
98
[1972] 2 All ER 127 how I would put it myself.
A contract for the sale of coffee provided for the price Comment Since, as in High Trees, a tenant who only pays
expressed in Kenyan shillings to be paid by irrevocable one-half of the rent cannot be said to be ‘acting to his detri-
letter of credit. The buyers procured a confirmed letter ment’, ‘detriment’ cannot be a requirement of equitable
expressed in sterling and the sellers obtained part pay- estoppel. It is a requirement of estoppel at common law.
ment thereunder. While shipment was in progress
sterling was devalued and the sellers claimed such Promissory estoppel: does not operate to create
additional sum as would bring the price up to the new contractual rights but merely to suspend
sterling equivalent of Kenyan shillings at the current existing ones
rate. Orr, J held that the buyers were liable to pay the
additional sum as the currency of account was 99 Combe v Combe [1951] 2 KB 215
Kenyan shillings. On appeal by the buyers it was held
– allowing the appeal – that the sellers by accepting The parties were married in 1915 and separated in
payment in sterling had irrevocably waived their 1939. In February 1943, the wife obtained a decree
right to be paid in Kenyan currency or had accepted a nisi of divorce, and a few days later the husband
..
EL_Z01.qxd 3/26/07 1:51 PM Page 756
entered into an agreement under which he was to enforcing Mr Jackson’s personal liability. The prin-
pay his wife £100 per annum, free of income tax. The ciple of equity upon which the promissory estoppel
decree was made absolute in August 1943. The hus- cases were based was applicable and barred the claim-
band did not make the agreed payments and the wife ants’ claim. That principle was formulated by Lord
did not apply to the court for maintenance but chose Cairns in Hughes v Metropolitan Railway Co (1877) 2
to rely on the alleged contract. She brought this action App Cas 439 at p 448, and although in his enuncia-
for arrears under that contract. Evidence showed that tion Lord Cairns assumed a pre-existing contractual
her income was between £700 and £800 per annum relationship between the parties, that was not essential
and the defendant’s was £650 per annum. Byrne, J, at provided that there was a pre-existing legal relation-
first instance, held that, although the wife had not ship which could in certain circumstances give rise to
supplied consideration, the agreement was neverthe- liabilities and penalties. Such a relationship was created
less enforceable, following the decision in the High by s 108.
Trees case, as a promise made to be acted upon and in
Comment (i) A holder other than the claimants might
fact acted upon.
have been able to bring an action against Mr Jackson
Held – (a) the High Trees decision was not intended to under s 108 since such a holder would not have been
create new actions where none existed before, and it affected by the equity in that he would not have drawn
had not abolished the requirement of consideration the bill in an incorrect name. The provisions are now in
in the formation of simple contracts. In such cases the Companies Act 1985, s 349.
consideration was a cardinal necessity; (b) in the (Note: s 108 provided: ‘(1) every company . . . (c) shall
words of Birkett, LJ, the doctrine was ‘a shield not a have its name mentioned in legible characters . . . in all
sword’, i.e. a defence to an action, not a cause of bills of exchange . . . purporting to be signed by or on
action; (c) the doctrine applied to the modification of behalf of the company . . . (4) If an officer of the com-
existing agreements by subsequent promises and had pany or any person on his behalf . . . (b) signs . . . on
no relevance to the formation of a contract; (d) it was behalf of the company any bill of exchange . . . wherein
its name is not mentioned in manner aforesaid . . . he
not possible to find consideration in the fact that the
shall be liable to a fine not exceeding £50, and shall
wife forbore to claim maintenance from the court,
further be personally liable to the holder of the bill of
since no such contractual undertaking by her could
exchange . . . for the amount thereof unless it is duly
have been binding even if she had given it. Therefore,
paid by the company.’)
this action by the wife must fail because the agree-
ment was not supported by consideration. (ii) A further application of the doctrine occurred
in Crabb v Arun District Council [1975] 3 All ER 865
where Arun represented to Mr Crabb that he had a right
Promissory estoppel: other applications of way across Arun’s land which gave access to the
Durham Fancy Goods Ltd v Michael Jackson public highway. It was held – by the Court of Appeal –
100 that Arun could not go back on that promise after
(Fancy Goods) Ltd [1968] 2 All ER 987
Mr Crabb had sold some of his land and had left
On 18 September 1967, the claimants drew a bill of himself without access to the public highway except
exchange on the first defendants in the following by the right of way across Arun’s land. He was granted
form, ‘M. Jackson (Fancy Goods) Co’. The bill was an injunction to enforce the right. When promissory
signed by Mr Jackson who was the director and estoppel is used in this situation, a claimant can raise it
company secretary. The bill was dishonoured and the and indeed base his action upon it. Thus, the expression
claimants brought an action against Mr Jackson con- of Birkett, LJ in Combe v Combe (1951) that the doctrine
tending that by signing the form of acceptance he is ‘a shield not a sword’ is not always applicable where
had committed a criminal offence under s 108 of the estoppel is used in situations other than the variation of
Companies Act 1948 and had made himself person- contractual rights.
ally liable on the bill because he should either have
returned the bill with a request that it be re-addressed Contractual intention: domestic agreements
to Michael Jackson (Fancy Goods) Ltd, or he should between husband and wife are in general
have accepted it ‘M. Jackson (Fancy Goods) Ltd p.p. terms unenforceable
Michael Jackson (Fancy Goods) Ltd, Michael Jackson’.
It was held – by Donaldson, J – that the misdescription 101 Balfour v Balfour [1919] 2 KB 571
was in breach of s 108 of the Companies Act 1948,
and that Mr Jackson was personally liable, under the The defendant was a civil servant stationed in Ceylon.
section, to pay the bill. However, since the error was In November 1915, he came to England on leave with
really that of the claimants, they were estopped from his wife, the claimant in the present action. In August
..
EL_Z01.qxd 3/26/07 1:51 PM Page 757
CASES 102–104 MAKING THE CONTRACT II 757
1916, the defendant returned alone to Ceylon because was a detriment to the wife and the husband had
his wife’s doctor had advised her that her health received the benefit of being relieved of liability
would not stand up to a further period of service to the building society.
abroad. Later the husband wrote to his wife suggest-
Accordingly, the wife was entitled to the relief she
ing that they remain apart, and in 1918 the claimant
claimed.
obtained a decree nisi. In this case the claimant
alleged that before her husband sailed for Ceylon he
Contractual intention: family agreements other
had agreed, in consultation with her, that he would
than those between husband and wife
give her £30 per month as maintenance, and she
now sued because of his failure to abide by the said
103 Simpkins v Pays [1955] 3 All ER 10
agreement. The Court of Appeal held that there was
no enforceable contract because in this sort of situa- The defendant and the defendant’s granddaughter
tion it must be assumed that the parties did not made an agreement with the claimant, who was
intend to create legal relations. The provision for a a paying boarder, that they should submit in the
flat payment of £30 per month for an indefinite defendant’s name a weekly coupon, containing a fore-
period with no attempt to take into account changes cast by each of them, to a Sunday newspaper fashion
in the circumstances of the parties did not suggest a competition. On one occasion a forecast by the
binding agreement. Duke, LJ seems to have based his granddaughter was correct and the defendant received
decision on the fact that the wife had not supplied a prize of £750. The claimant sued for her share of
any consideration. that sum. The defence was that there was no inten-
tion to create legal relations but that the transaction
Contractual intention: agreements between was a friendly arrangement binding in honour only.
husband and wife designed to regulate the
Held – there was an intention to create legal relations.
terms of their separation are usually regarded
Far from being a friendly domestic arrangement, the
as binding contracts
evidence showed that it was a joint enterprise and
102 Merritt v Merritt [1970] 2 All ER 760 that the parties expected to share any prize that was
won.
After a husband had formed an attachment for Comment A family agreement which went the other
another woman and had left his wife, a meeting way was Julian v Furby (1982) 132 NLJ 64. J was an
was held between the parties on 25 May 1966, in the experienced plasterer who helped F, his son-in-law, and
husband’s car. The husband agreed to pay the wife his wife (J’s favourite daughter) to buy, alter and furnish
£40 per month maintenance and also wrote out and a house for them. They later quarrelled and J sued
signed a document stating that in consideration of for £4,440. This included materials supplied and F was
the wife paying all charges in connection with the prepared to pay for these but not for J’s labour which, it
matrimonial home until the mortgage repayments was understood, would be free. It was held by the Court
had been completed, he would agree to transfer the of Appeal that there was never an intention to create a
property to her sole ownership. The wife took the legal relationship between the parties in regard to the
document away with her and had herself paid off labour which J and F jointly provided in refurbishing
the mortgage. The husband did not subsequently the house.
transfer the property to his wife and she claimed a
declaration that she was the sole beneficial owner and Contractual intention: family agreements:
asked for an order that her husband should transfer effect of vagueness
the property to her forthwith. The husband’s defence
was that the agreement was a family arrangement not 104 Jones v Padavatton [1969] 2 All ER 616
intended to create legal relations.
In 1962 the claimant, Mrs Jones, who lived in
Held – by the Court of Appeal:
Trinidad, made an offer to the defendant Mrs
(a) the agreement, having been made when the Padavatton, her daughter, to provide maintenance for
parties were not living together in amity, her at the rate of £42 a month if she would leave her
was enforceable (Balfour v Balfour (1919) job in Washington in the United States and go to
distinguished); England and read for the Bar. Mrs Padavatton was
(b) the contention that there was no consideration at that time divorced from her husband having the
to support the husband’s promise could not be sus- custody of the child of that marriage. The agreement
tained. The payment of the balance of the mortgage was an informal one and there was uncertainty as to
..
EL_Z01.qxd 3/26/07 1:51 PM Page 758
its exact terms. Nevertheless, the daughter came to but the vagueness of the arrangement negatived that
England in November 1962, bringing the child with intent as in Gould v Gould [1969] 3 All ER 728.
her, and began to read for the Bar, her fees and main-
tenance being paid for by Mrs Jones. In 1964 it Contractual intent: generally but not always
appeared that the daughter was experiencing some assumed in business agreements unless
discomfort in England occupying one room in Acton excluded by the parties
for which she had to pay £6 17s 6d per week. At this
stage Mrs Jones offered to buy a large house in Kleinwort Benson Ltd v Malaysia Mining
105
Corporation, Berhad [1989] 1 All ER 785
London to be occupied partly by the daughter and
partly by tenants, the income from rents to go to the In this case the High Court had decided that a letter
daughter in lieu of maintenance. Again, there was no of comfort (as they are called) stating that it was the
written agreement but the house was purchased for policy of Malaysia Mining to ensure that its subsidi-
£6,000 and conveyed to Mrs Jones. The daughter ary MMC Metals Ltd was ‘at all times in a position
moved into the house in January 1965, and tenants to meet its liabilities’ in regard to a loan made by
arrived, it still being uncertain what precisely was to Kleinwort to MMC had contractual effect. This meant
happen to the surplus rent income (if any) and what that Kleinwort was entitled to recover from Malaysia
rooms the daughter was to occupy. No money from the amount owed to it by the insolvent MMC which
the rents was received by Mrs Jones and no accounts went into liquidation after the tin market collapsed in
were submitted to her. In 1967 Mrs Jones claimed 1985. Malaysia appealed to the Court of Appeal which
possession of the house from her daughter, who had reversed the High Court ruling. The problem has
by that time married again, and the daughter counter- always been to decide whether a letter of comfort of
claimed for £1,655 18s 9d said to have been paid in the usual kind contains a legal obligation or only a
connection with running the house. At the hearing moral one. In the High Court Mr Justice Hirst decided
the daughter still had, as the examinations were then that there was a legal obligation: the Court of Appeal
structured, one subject to pass in Part I of the Bar decided that it was only a moral one. The letter, said
examinations and the whole of Part II remained to be the Court of Appeal, stated the policy of Malaysia. It
taken. gave no contractual warranty as to the company’s
Held – by the Court of Appeal: future conduct. In these circumstances there was no
need to apply the presumption of an intention to
(a) the arrangements were throughout family agree- create legal relations just because the transaction was
ments depending upon the good faith of the par- in the course of business as laid down in Edwards v
ties in keeping the promises made and not intended Skyways (1964).
to be rigid binding agreements. Furthermore, the
arrangements were far too vague and uncertain to be Comment The wording of the letter of comfort must be
enforceable as contracts (Per Danckwerts and Fenton looked at and if it appears to create a moral obligation
Atkinson, LJJ); only, then it has no contractual force. It is of course no bad
thing for those in business to honour moral obligations
(b) although the agreement to maintain while reading
but as Lord Justice Ralph Gibson said, moral responsibilit-
for the Bar might have been regarded as creating a
ies are not a matter for the courts.
legal obligation in the mother to pay (the terms being
sufficiently stated and duration for a reasonable time
being implied), the daughter could not claim any- 106 Jones v Vernon’s Pools Ltd [1938] 2 All ER 626
thing in respect of that agreement which must be
regarded as having terminated in 1967, five years The claimant said that he had sent to the defendants
being a reasonable time in which to complete studies a football coupon on which the penny points pool was
for the Bar. The arrangements in relation to the home all correct. The defendants denied having received it
were very vague and must be regarded as made with- and relied on a clause printed on every coupon. The
out contractual intent. (Per Salmon, LJ) said clause provided that the transaction should not
The mother was, therefore, entitled to possession of ‘give rise to any legal relationship . . . or be legally
the house and had no liability under the maintenance enforceable . . . but . . . binding in honour only’. The
agreement. The counterclaim by the daughter was left court held that this clause was a bar to any action in a
to be settled by the parties. court of law.
Comment In this case there was an inference of contrac- Comment This case was followed by the Court of Appeal
tual intent in the mother’s promise because it caused in Appleson v Littlewood Ltd [1939] 1 All ER 464, where
Mrs Padavatton to leave one job to study for another, the contract contained a similar clause.
..
EL_Z01.qxd 3/26/07 1:51 PM Page 759
CASES 107–108 MAKING THE CONTRACT III 759
Rose and Frank Co v Crompton (J R) & Brothers to do the work if the Board would see him paid. On
107
Ltd [1925] AC 445 5 April 1866, i.e. before the expiration of the 21
In 1913 the claimant, an American company, entered days, the claimant commenced work on the con-
into an agreement with the defendant, an English nections. However, before work commenced, it
company, whereby the claimant was appointed sole appeared that the claimant had had an interview with
agent for the sale in the USA of paper tissues supplied the defendant at which the following conversation
by the defendant. The contract was for a period of took place:
three years with an option to extend that time. The Defendant : ‘What objection have you to making the
agreement was extended to March 1920, but in 1919 connections?’
the defendant terminated it without notice. The Claimant: ‘I have none, if you or the Board will order
defendant had received a number of orders for tissues the work or become responsible for the payment.’
before the termination of the contract, and it refused Defendant : ‘Go on Mountstephen and do the work
to execute them. The claimant sued for breach of and I will see you paid.’
contract and for non-delivery of the goods actually
ordered. The agreement of 1913 contained an The claimant completed the connections in April
‘Honourable Pledge Clause’ drafted as follows: ‘This and May 1866, and sent an account to the Board on
arrangement is not entered into nor is this memor- 5 December 1866. The Board disclaimed responsibil-
andum written as a formal or legal agreement and shall ity on the ground that it had never entered into any
not be subject to legal jurisdiction in the courts of the agreement with the claimant nor authorised
United States of America or England . . .’. It was held any officer of the Board to agree with him for the
by the House of Lords that the 1913 agreement was performance of the work in question. It was held –
not binding on the parties, but that in so far as the that Lakeman had undertaken a personal liability to
agreement had been acted upon by the defendant’s pay the claimant and had not given a guarantee
acceptance of orders, the said orders were binding of the liability of a third party, i.e. the Board. In con-
contracts of sale. Nevertheless, the agreement was not sequence, Lakeman had given an indemnity which
binding for the future. did not need to be in writing under s 4 of the
Statute of Frauds 1677. The claimant was, therefore,
Comment Those in business have only rarely to address entitled to enforce the oral undertaking given by the
themselves to the concept of intention to create legal defendant.
relations, and this is why the law, as dispensed in the
courts, has created a presumption that business agree- Comment (i) Section 4 of the Statute of Frauds 1677
ments are to be regarded as binding in the absence of provides that: ‘No action shall be brought . . . whereby
something such as an ‘honourable pledge clause’, as in to charge the defendant upon any special promise to
this case. It is also worth noting that even these clauses answer for the debt default or miscarriage of another
are comparatively rare in the business world. person . . . unless the agreement upon which such action
shall be brought or some memorandum or note thereof
shall be in writing and signed by the party to be charged
therewith or some other person thereunto by him law-
MAKING THE CONTRACT III
fully authorized.’ It was held in Birkmyr v Darnell (1704)
1 Salk 27 that the words ‘debt default or miscarriage of
Formalities: contracts which must be evidenced in another person’ meant that the section applied only
writing: guarantee and indemnity: s 4, Statute of where there was some person other than the surety who
Frauds 1677 and its effect was primarily liable.
(ii) It should be noted that the absence of writing
108 Mountstephen v Lakeman (1871) LR 7 QB 196 makes a contract of guarantee unenforceable and
not void. This is because s 4 of the 1677 Act states in
The defendant was chairman of the Brixham Local
effect that ‘No action shall be brought . . .’ unless the
Board of Health. The claimant, who was a builder and guarantee is in writing. So if a person is defending an
contractor, was employed in 1866 by the Board to action and not bringing one and the existence of a
construct certain main sewage works in the town. On guarantee would provide a defence, the guarantee can
19 March 1866, notice was given by the Board to be proved orally and the judge will not require a written
owners of certain homes to connect their house memorandum of it.
drains with the main sewer within 21 days. Before the In Deutsche Bank AG v Ibrahim and Others, Financial
expiration of the 21 days Robert Adams, the surveyor Times, 15 January 1992, Mr Ibrahim’s two daughters were
of the Board, suggested to the claimant that he make the tenants of two leases. The leases were deposited with
the connections. The claimant said he was willing the bank to secure Mr Ibrahim’s overdraft. The daughters
..
EL_Z01.qxd 3/26/07 1:51 PM Page 760
760 MAKING THE CONTRACT III CASES 109–110
later regretted having done this and tried to get the that the clothes supplied were suitable to the defendant’s
leases back from the bank. If this were done the bank position in life. However, his father proved that the
would lose a good security since it would not be able defendant was amply supplied with such clothes when
to sell the leases to a third party in order to repay the claimant delivered the clothing now in question.
Mr Ibrahim’s overdraft. The bank brought this action to Held – the claimant’s claim failed because he had not
establish that it had a right to the leases. The daughters
established that the goods supplied were necessaries.
counterclaimed against the bank for the return of the
leases. They were thus, in effect, bringing an action
Minors: beneficial contracts
against the bank, which the bank was defending by
trying to establish its right to the leases. Part of the counter- 110 Roberts v Gray [1913] 1 KB 520
claim was that by depositing the leases the daughters
were guaranteeing their father’s overdraft and yet there The defendant wished to become a professional
was no memorandum in writing signed by the daughters. billiards player and entered into an agreement with
The court accepted that they had given a guarantee but the claimant, a leading professional, to go on a joint
allowed the bank to prove the contract, i.e. overdraft for tour. The claimant went to some trouble in order to
leases, orally because the bank was defending its right to organise the tour, but a dispute arose between the
retain the leases as security under the guarantee. The
parties and the defendant refused to go. The claimant
bank succeeded and was allowed to retain the leases.
now sued for damages of £6,000.
(iii) The Act of 1677 continues to be of relevance in
Held – the contract was for the minor’s benefit, being
modern commercial cases, and Actionstrength Ltd v
in effect for his instruction as a billiards player. There-
International Glass Engineering [2002] 1 WLR 566 shows
fore, the claimant could sustain an action for damages
it can still make an important commercial agreement
for breach of contract, and damages of £1,500 were
unenforceable. The defendants were contracted to build
awarded.
a glass factory. The defendants sub-contracted
Actionstrength to provide the workforce. The defendants Comment (i) In Chaplin v Leslie Frewin (Publishers) [1965]
were late making payments to Actionstrength and so 3 All ER 764 the claimant, the minor son of a famous
Actionstrength threatened to remove the workforce father, made a contract with the defendants under which
from the site. The owners of the factory agreed orally they were to publish a book written for him, telling his
with Actionstrength to pay them amounts due from the life story and entitled I Couldn’t Smoke the Grass on my
defendants if the defendants did not do so, if they would Father’s Lawn. The claimant sought to avoid the contract
keep the workforce on site. This they did but later the on the ground that the book gave an inaccurate picture
defendants failed to pay Actionstrength and this claim of his approach to life.
was brought against the owners of the factory who were Held – amongst other things – the contract was binding if
the second defendants for payment of the guarantee. it was for the minor’s benefit. The time to determine that
The claim failed, the Court of Appeal ruling that the oral question was when the contract was made and at that
contract was a guarantee not an indemnity and there time it was for the minor’s benefit and could not be
being no evidence in writing the claim failed. avoided.
(ii) Although this was not a contract of service, it could
Minors: necessaries: the general test be regarded as analogous to one, and was for the
claimant’s benefit because although he had a ghost
109 Nash v Inman [1908] 2 KB 1 writer the publishing contract could have helped him to
make a start as an author. So the court still thought it
The claimant was a Savile Row tailor and the defend- necessary to use the contract of service analogy and not
ant was a minor undergraduate at Trinity College, merely say that the contract was beneficial because it
Cambridge. The claimant sent his agent to Cambridge made Mr Chaplin money.
because he had heard that the defendant was spend- (iii) In Denmark Productions v Boscobel Productions
ing money freely, and might be the sort of person (1967) 111 Sol J 715 Widgery, J held that a contract
who would be interested in high-class clothing. As a by which a minor appoints managers and agents to look
result of the agent’s visit, the claimant supplied the after his business affairs is, in modern conditions,
defendant with various articles of clothing to the value necessary if he is to earn his living and rise to fame, and
of £145 0s 3d during the period October 1902 to June if it is for his benefit it will be upheld by analogy with a
1903. The clothes included 11 fancy waistcoats. The contract of service.
claimant now sued the minor for the price of the (iv) The case of De Francesco v Barnum (1890) 45 Ch D
clothes. Evidence showed that the defendant’s father 430 shows that so far as beneficial contracts are con-
was in a good position, being an architect with a cerned the subject matter of the contract is not decisive.
town house and a country house, and it could be said Two minors bound themselves in contract to the claimant
..
EL_Z01.qxd 3/26/07 1:51 PM Page 761
CASES 111–113 MAKING THE CONTRACT III 761
for seven years to be taught stage dancing. The minors unable to meet future calls, she repudiated the con-
agreed that they would not accept any engagements tract whilst still a minor and claimed:
without his consent. They later accepted an engagement
with Barnum, and the claimant sued Barnum for interfer- (a) rectification of the Register of Members to remove
ing with the contractual relationship between himself her name therefrom, thus relieving her from
and the minors, to enforce the apprenticeship deed liability on future calls; and
against the minors and to obtain damages for its breach. (b) the recovery of the money already paid.
The contract was, of course, for the minors’ benefit and
was prima facie binding on them. However, when the The company agreed to rectify the register but was
court considered the deed in greater detail, it emerged not prepared to return the money paid.
that there were certain onerous terms in it. For example, Held – the claim under (b) above failed because there
the minors bound themselves not to marry during the had not been total failure of consideration. The
apprenticeship; the payment was hardly generous, shares had some value and gave some rights, even
the claimant agreeing to pay them 9d per night and 6d though the claimant had not received any dividends
for matinee appearances for the first three years, and and the shares had always stood at a discount on the
1s per night and 6d for matinee performances during market.
the remainder of the apprenticeship. The claimant
did not undertake to maintain them whilst they were Comment In Davies v Beynon-Harris (1931) 47 TLR 424
unemployed and did not undertake to find them a minor was allowed to avoid a lease of a flat without
engagements. The minors could also be engaged in liability for future rent or damages but was not allowed
performances abroad at a fee of 5s per week. Further the to recover rent paid. However, in Goode v Harrison
claimant could terminate the contract if he felt that the (1821) 5 B & Ald 147 a partner who was a minor took no
minors were not suitable for the career of dancer. It steps to avoid the partnership contract while a minor or
appeared from the contract that the minors were at the afterwards. He was held liable for the debts of the firm
absolute disposal of the claimant. incurred after he came of age.
Held – the deed was an unreasonable one and was,
therefore, unenforceable against the minors. Barnum
113 Pearce v Brain [1929] 2 KB 310
could not, therefore, be held liable, since the tort of
interference with a contractual relationship presupposes
Pearce, a minor, exchanged his motor cycle for a
the existence of an enforceable contract.
motor car belonging to Brain. The minor had little
Minors: trading contracts are not binding on a use out of the car, and had in fact driven it only 70
minor unless exceptionally they are analogous miles in all when it broke down because of serious
to a contract of service defects in the back axle. Pearce now sued to recover
his motor cycle, claiming that the consideration had
Mercantile Union Guarantee Corporation v Ball wholly failed.
111
[1937] 2 KB 498
Held – (a) a contract for the exchange of goods, whilst
The purchase on hire-purchase terms of a motor lorry not a sale of goods, is a contract for the supply of
by a minor carrying on a business as a haulage con- goods, and that if the goods are not necessaries, the
tractor was held not to be a contract for necessaries, contract was void if with a minor (now not binding
but a trading contract by which the minor could not unless ratified); (b) the car was not a necessary good,
be bound. so the contract was void; (c) even so, the minor could
Comment It would be possible for the owner to recover only recover money paid under a void contract if the
the lorry without the assistance of s 3 of the Minors’ consideration had wholly failed. The court considered
Contracts Act 1987 because a hire-purchase contract is a that the minor had received a benefit under the con-
contract of bailment not a sale. Thus, ownership does not tract, albeit small, and that he could not recover the
pass when the goods are delivered. motor cycle.
Minors: contracts binding unless repudiated: Comment In Corpe v Overton (1833) 10 Bing 252 a minor
consequences of defective contracts agreed to enter into a partnership and deposited £100
with the defendant as security for performance of the
112 Steinberg v Scala (Leeds) Ltd [1923] 2 Ch 452 contract. The minor rescinded the contract before the
partnership came into existence.
The claimant, Miss Steinberg, purchased shares in the Held – he could recover the £100 because he had
defendant company and paid certain sums of money received no benefit having never been a partner. There
on application, on allotment and on one call. Being had been total failure of consideration.
..
EL_Z01.qxd 3/26/07 1:51 PM Page 762
762 REALITY OF CONSENT I CASES 114 –117
Contracting with persons of unsound mind connection with the contract. The Ashbury company
and drunkards later ran into difficulties, and the shareholders wished
the directors to take over the contract in a personal
114 Imperial Loan Co v Stone [1892] QB 599 capacity and indemnify the shareholders. The directors
thereupon repudiated the contract on behalf of the
This was an action on a promissory note. The defend- company and Messrs Riche sued for breach of contract.
ant pleaded that at the time of making the note he was
Held – the directors were able to repudiate because
insane and that the claimant knew he was. The jury
the contract to construct a railway system was ultra
found that he was, in fact, insane but could not agree
vires and void. On a proper construction of the
on the question of whether the claimant knew it. The
objects, the company had power to supply materials
judge entered judgment for the defendant.
for the construction of railways but had no power
Held – he was wrong. The defendant in order to suc- to engage in the actual construction of them. Further,
ceed must convince the court on both issues. the subsequent assent of all the shareholders
Comment (i) In Hart v O’Connor [1985] 2 All ER 880 the could not, in those days, make the contract binding,
Privy Council refused to set aside an agreement to sell for, at common law, a principal cannot ratify the
farmland in New Zealand because although the seller ultra vires contracts of his agent.
was of unsound mind, his affliction was not apparent.
The price paid was not unreasonable. If it had been, the
Privy Council said that the contract could have been set REALITY OF CONSENT I
aside for equitable fraud as an unconscionable bargain.
(ii) This case is retained to show the changes effected by Mistake: documents mistakenly signed:
the Mental Capacity Act 2005. The question of whether relevance of signer’s negligence
the other party knew of the mental incapacity does not
Saunders v Anglia Building Society [1970]
arise. There is a presumption of capacity unless and until 117
3 All ER 961
the person claiming not to have capacity (or his or her
representatives) can show otherwise. The knowledge re- Mrs Gallie, a widow aged 78 years, signed a document
quirement still applies in cases of drunkenness (see below). which Lee, her nephew’s friend, told her was a deed of
gift of her house to her nephew. She did not read the
document but believed what Lee had told her. In fact,
115 Matthews v Baxter [1873] LR 8 Exch 132 the document was an assignment of her leasehold
interest in the house to Lee, and Lee later mortgaged
Matthews agreed to buy houses from Baxter. He was so
that interest to a building society. In an action by
drunk as not to know what he was doing. Afterwards,
Mrs Gallie against Lee and the building society, it was
when sober, he ratified and confirmed the contract. It
held at first instance – (a) that the assignment was void
was held that both parties were bound by it.
and did not confer a title on Lee; (b) that although
Comment A contract with a drunken person must in Mrs Gallie had been negligent, she was not estopped
effect always be voidable by him because presumably the from denying the validity of the deed against the
fact that he is drunk will be known to the other party. building society for she owed it no duty. The Court of
This is not so in regard to unsoundness of mind which Appeal, in allowing an appeal by the building society,
might not be known to the other party. held that the plea of non est factum was not available
to Mrs Gallie. The transaction intended and carried
Registered companies: the ultra vires rule: out was the same, i.e. an assignment.
position at common law The appeal to the House of Lords was brought by
Ashbury Railway Carriage & Iron Co v Riche Saunders, the executrix of Mrs Gallie’s estate. The
116 House of Lords affirmed the decision of the Court of
(1875) LR 7 HL 653
Appeal but took the opportunity to restate the law
The company was formed for the purposes (stated
relating to the avoidance of documents on the ground
in the memorandum of association) of making and
of mistake as follows.
selling railway wagons and other railway plant and
carrying on the business of mechanical engineers (a) The plea of non est factum will rarely be available
and general contractors. The company bought a con- to a person of full capacity who signs a document
cession for the construction of a railway system in apparently having legal effect without troubling to
Belgium from Antwerp to Tournai and entered into read it, i.e. negligently.
an agreement whereby Messrs Riche were to construct (b) A mistake as to the identity of the person in whose
the railway line. Messrs Riche commenced the work favour the document is executed will not normally
and the company paid over certain sums of money in support a plea of non est factum though it may do if
..
EL_Z01.qxd 3/26/07 1:51 PM Page 763
CASES 118 –119 REALITY OF CONSENT I 763
the court regards the mistake as fundamental (Lord The principles set out in Saunders’ case apply also to
Reid and Lord Hodson). Neither judge felt that the those who sign blank forms as well as to those who sign
personality error made by Mrs Gallie was sufficient to completed documents without reading them (United
support the plea. Dominions Trust Ltd v Western [1975] 3 All ER 1017).
(c) The distinction taken in Howatson v Webb [1908]
1 Ch 1 that the mistake must be as to the class or char- Unilateral mistake: ingredients: A is mistaken and
acter of the document and not merely as to its contents B the other party to the contract knows or ought
was regarded as illogical. Under the Howatson test, if to know he is
X signed a guarantee for £1,000 believing it to be Higgins (W) Ltd v Northampton Corporation
118
an insurance policy he escaped all liability on the [1927] 1 Ch 128
guarantee, but if he signed a guarantee for £10,000
The claimant entered into a contract with the corpora-
believing it to be a guarantee for £100 he was fully
tion for the erection of dwelling houses. The claimant
liable for £10,000. Under Saunders the document
made an arithmetical error in arriving at his price,
which was in fact signed must be ‘fundamentally dif-
having deducted a certain rather small sum twice
ferent’, ‘radically different’, or ‘totally different’. The
over. The corporation sealed the contract, assuming
test is more flexible than the character/contents one
that the price arrived at by the claimant was correct.
and yet still restricts the operation of the plea of non
est factum. Held – the contract was binding on the parties.
Rectification of such a contract was not possible
Comment (i) The charge of negligence might be avoided because the power of the court to rectify agreements
where a person was told he was witnessing a confidential made under mistake is confined to common not
document and had no reason to doubt that he was. unilateral mistake. Here, rectification would only
Many such documents are witnessed each day and the
have been granted if fraud or misrepresentation had
witnesses would never dream of asking to read them nor
been present.
would they think themselves negligent because they had
not done so. Surely the Saunders decision is not intended Comment (i) Since this case was decided the courts have
to turn witnesses into snoopers. Thus the decision in the moved away from the idea that rectification of a contract
old case of Lewis v Clay (1898) 77 LT 653 would probably for unilateral mistake is permissible only if there is some
be the same under modern law. In that case Clay was form of sharp practice (Thomas Bates & Sons Ltd v
asked by Lord William Neville to witness a confidential Wyndham’s (Lingerie) Ltd (1981) – see Chapter 12,
document and signed in holes in blotting paper placed Rectification). Even so, rectification would not have been
over the document by Neville. In fact, he was signing two granted in this case because Northampton Corporation
promissory notes and two letters authorising Lewis to was not aware of the claimant’s error, which is still a
pay the amount of the notes to Lord William Neville. The requirement for rectification.
court held that the signature of Clay in the circumstances (ii) The rule of unilateral mistake does not seem to apply
had no more effect than if it had been written for an to mistakes as to the value of the contract. If you go into
autograph collector or in an album and he was not a junk shop and recognise a genuine Georgian silver
bound by the bills of exchange. teapot marked at £10, your contract of purchase,
In fact, the survival of the plea of non est factum if made, would be good in law, although it would be
in cases such as Lewis is recognised in certain of the obvious that the seller had made a mistake and that the
judgments in the House of Lords in Saunders (see Lord buyer was aware of it. This is the rule of caveat venditor
Pearson at p 979 where, because of the cunning decep- (let the seller beware) and applies provided the seller
tion of a friend and the supposedly confidential nature intends to offer the goods at his marked price.
of the documents in Lewis, he would have allowed the
plea in Lewis’s case to succeed, as indeed it did).
(ii) As between the immediate parties to what is always 119 Cundy v Lindsay (1878) 3 App Cas 459
in effect a fraud, there is, of course, no difficulty in
avoiding the contract or transaction mistakenly entered The respondents were linen manufacturers in Belfast.
into. The rules set out above are relevant only where the A fraudulent person named Blenkarn wrote to the
contract or transaction mistakenly entered into has respondents from 37 Wood Street, Cheapside, order-
affected a third party, as where he has taken a bill of ing a quantity of handkerchiefs but signed his letter
exchange bona fide and for value on which the defend- in such a way that it appeared to come from Messrs
ant’s signature was obtained under circumstances of Blenkiron, a well-known and solvent house doing
mistake (Foster v Mackinnon (1869) LR 4 CP 704) or has business at 123 Wood Street. The respondents knew
lent money on an interest in land obtained by a fraudu- of the existence of Blenkiron but did not know the
lent assignment under circumstances of mistake address. Accordingly, the handkerchiefs were sent to
(Saunders v Anglia Building Society (1970) – see above). 37 Wood Street. Blenkarn then sold them to the
..
EL_Z01.qxd 3/26/07 1:51 PM Page 764
764 REALITY OF CONSENT I CASES 120–121
appellants, and was later convicted and sentenced for £450 in the name of ‘RA Green’ and was allowed
for the fraud. The respondents sued the appellants to have the log book and drive the car away late the
in conversion claiming that the contract they had same night, when he produced a film studio pass in
made with Blenkarn was void for mistake, and that the name of ‘Green’.
the property had not passed to Blenkarn or to the Held – by the Court of Appeal – Mr Lewis had effec-
appellants. tively contracted to sell the car to the rogue and could
Held – the respondents succeeded; there was an opera- not recover it or damages from Mr Averay, a student,
tive mistake as to the party with whom they were who had bought it from the rogue for £200. The con-
contracting. tract between Mr Lewis and the rogue was voidable
for fraud but not void for unilateral mistake.
Comment (i) It is, however, essential that at the time of
making the apparent contract the mistaken party Comment (i) It is thought that the contract would be
regarded the identity of the other party as vital and that void for mistake in a case such as this if the dishonest
he intended to deal with some person other than the person assumed a disguise so that he appeared physically
actual person to whom in fact he addressed the offer, as to be the person he said he was.
in Cundy v Lindsay (1878) (see above). The mistake must
(ii) It should not be assumed that this case is of general
be as to identity, not attributes, e.g. creditworthiness. As
application. It does depend on the parties being face to
between the parties, the result is much the same since a
face. Therefore, if as in Shogun Finance Ltd v Hudson
mistake as to attributes may make the contract voidable,
[2000] CLY 2600 A buys a car on hire-purchase through a
but the difference may vitally affect the interests of third
dealer and claims to be someone else producing that
parties. Thus, in King’s Norton Metal Co Ltd v Edridge,
person’s driving licence A forging his signature on the
Merrett and Co Ltd (1897) 14 TLR 98, where the facts
HP documents sent to the finance company in order to
were similar to Cundy, a fraudulent person called Wallis
satisfy credit investigation, then the contract with the
ordered goods from the claimants using notepaper
finance company is void for mistake as to the person con-
headed Hallam & Co. The notepaper said that Hallam &
tracted with and the impersonator does not get a title to
Co had agencies abroad and generally represented the
the car nor can he give a title to a purchaser from him.
company as creditworthy. The claimants sold Hallam & Co
The finance company therefore can recover the vehicle.
some brass rivet wire on credit. The goods were never
Although the purchaser was not a trade purchaser, he
paid for but Wallis sold the goods on to Edridge Merrett
could not rely on Part III of the Hire Purchase Act 1964
who paid for them and were innocent of the way in
to get a good title because this applies only to sales by
which Wallis had obtained them. The claimants sued
persons who have cars on a hire-purchase agreement
Edridge Merrett in conversion saying that the contract
and since the contract was void there never was an
between them and Hallam/Wallis was void for mistake so
agreement.
that Edridge Merrett did not become owners of the wire
because Hallam/Wallis had not. The Court of Appeal held (iii) Part III of the Hire Purchase Act 1964 is designed to
that the contract between King’s Norton and Edridge protect bona fide purchasers for value of motor vehicles
was voidable for fraud but not void for mistake. The where the seller is a mere bailee under a hire-purchase
claimants could not show a confusion of entities. There agreement and where he sells the vehicle before he has
was no other Hallam or Wallis in their business lives with become the owner as where he has not paid all the
whom they could have been confused. instalments. A good title can be obtained by a private
purchaser but not a trade purchaser. However, the seller
(ii) The difference between Cundy and King’s Norton is
must have a valid agreement and therefore be what the
that in Cundy there was another entity to get mixed up
1964 Act describes as the ‘debtor’.
with. In King’s Norton there was no one else to get
mixed up with.
121 Ingram and Others v Little [1961] 1 QB 31
Unilateral mistake: where the parties are
face to face The claimants, three ladies, were the joint owners of a
car. They wished to sell the car and advertised it for
120 Lewis v Averay [1971] 3 All ER 907 sale. A fraudulent person, introducing himself as
Hutchinson, offered to buy it. He was taken for a
Mr Lewis agreed to sell his car to a rogue who called drive in it and during conversation said that his home
on him after seeing an advertisement. Before the sale was at Caterham. Later the rogue offered £700 for the
took place the rogue talked knowledgeably about the car but this was refused, though a subsequent offer of
film world giving the impression that he was the actor £717 was one which the claimants were prepared to
Richard Green in the ‘Robin Hood’ serial which was accept. At this point the rogue produced a cheque
running on TV at the time. He signed a dud cheque book and one of the claimants, who was conducting
..
EL_Z01.qxd 3/26/07 1:51 PM Page 765
CASES 122–124 REALITY OF CONSENT I 765
the negotiations, said that the deal was off and that offer was probably a slip because he knew that Cecil
they would not accept a cheque. The rogue then said had already refused an offer of £2,000, and in fact
that he was PGM Hutchinson, that he had business Cecil wished to offer the property at £2,250. Webster
interests in Guildford, and that he lived at Stanstead accepted the offer and sued for specific performance
House, Stanstead Road, Caterham. One of the of the contract. The court refused to grant the decree.
claimants checked this information in a telephone
Comment This is not merely a case of mistake as to the
directory and, on finding it to be accurate, allowed value of the contract because here Webster knew that
him to take the car in return for a cheque. The cheque Cecil did not intend to offer the property at £1,250. The
was dishonoured, and in the meantime the rogue had rule of ‘let the seller beware’ applies where the seller is
sold the car to the defendants and had disappeared mistaken as to the value but at least intends to offer the
without a trace. The claimants sued for the return of goods at his marked price.
the car, or for its value as damages in conversion,
claiming that the contract between themselves and Common mistake: the rules of res extincta and
the rogue was void for mistake, and that the property res sua
(or ownership) had not passed. At the trial judgment
was given for the claimants, Slade, J finding the con- 123 Couturier v Hastie (1856) 5 HLC 673
tract void. His judgment was affirmed by the Court
of Appeal, though Devlin, LJ dissented, saying that Messrs Hastie dispatched a cargo of corn from
the mistake made was as to the creditworthiness of the Salonica and sent the charterparty and bill of lading
rogue, not as to his identity, since he was before the to their London agents so that the corn might be
claimants when the contract was made. A mistake as sold. The London agents employed Couturier to sell
to the substance of the rogue would be a mistake as to the corn and a person named Callander bought it.
quality and would not avoid the contract. Devlin, LJ Unknown to the parties, the cargo had become over-
also suggested that legislation should provide for an heated and had been landed at the nearest port and
apportionment of the loss incurred by two innocent sold, so that when the contract was made the corn
parties who suffer as a result of the fraud of a third. was not really in existence. Callander repudiated the
contract and Couturier was sued because he was a del
Comment (i) The distinction drawn in some of these credere agent, i.e. an agent who, for an extra commis-
cases are fine ones. It is difficult to distinguish Ingram sion, undertakes to indemnify his principal against
from Lewis. As we have seen, the question for the court losses arising out of the repudiation of the contract by
to answer in these cases is whether or not the offeror at any third party introduced by him.
the time of making the offer regarded the identity of the
offeree as a matter of vital importance. The general rule Held – the claim against Couturier failed because the
seems to be that where the parties are face to face when contract presupposed that the goods were in existence
the contract is made identity will not be vital and the when they were sold to Callander.
contract voidable only. Ingram would appear to be the
exceptional case. 124 Cochrane v Willis (1865) LR 1 Ch App 58
(ii) The reader may wonder why the cheque did not give
the rogue away in the sense that it would carry his name Cochrane was the trustee in bankruptcy of Joseph
and not that of PGM Hutchinson. The reason is that Willis who was the tenant for life of certain estates in
cheques were not personalised in those days in the sense Lancaster. Joseph Willis had been adjudicated
of carrying the name of the account holder. The rogue bankrupt in Calcutta where he resided. The remainder
wrote the Hutchinson name and address on the back of of the estate was to go to Daniel Willis, the brother of
the cheque, whereas today, if a seller requests this, it is Joseph, on the latter’s death, with eventual remainder
only necessary to write the address of the account to Henry Willis, the son of Daniel. Joseph Willis had
holder, as the name appears on the front. the right to cut the timber on the estates during his
life interest, and the representative of Cochrane in
Unilateral mistake: effect in equity: refusal of England threatened to cut and sell it for the benefit
specific performance and rescission of Joseph’s creditors. Daniel and Henry wished to pre-
serve the timber and so they agreed with Cochrane
122 Webster v Cecil (1861) 30 Beav 62 through his representatives to pay the value of the
timber to Cochrane if he would refrain from cutting
The parties had been negotiating for the sale of it. News then reached England that when the above
certain property. Later Cecil offered by letter to sell agreement was made Joseph was dead, and, therefore,
the property for £1,250. Webster was aware that his the life interest had vested in (i.e. become owned by)
..
EL_Z01.qxd 3/26/07 1:51 PM Page 766
Daniel. In this action by the trustee to enforce the to Lever Bros because they were not directors of Lever
agreement it was held that Daniel was making a con- Bros but only of Niger. However, a director of, say, com-
tract to preserve something which was already his and pany A is under a duty to disclose his wrongdoing, if any,
the court found, applying the doctrine of res sua, that towards company A where he receives his compensation
the agreement was void for an identical or common from company A itself. Failure so to disclose will allow
mistake. the company to claim back a golden handshake of the
kind given to Bell and Snelling.
It is worth mentioning that an employee is under a
Common mistakes as to quality: no effect at
duty to disclose breaches of duty/misconduct of sub-
common law
ordinate employees, even though he is not under a duty
to disclose to his employer his own misconduct or
125 Bell v Lever Bros Ltd [1932] AC 161
breaches of duty. This follows from the decision of the
Court of Appeal in Sybron Corporation v Rochem Ltd
Lever Bros had a controlling interest in the Niger
[1983] 2 All ER 707.
Company. Bell was the chairman, and a person called
Snelling was the vice-chairman of the Niger Com-
pany’s Board. Both directors had service contracts 126 Leaf v International Galleries [1950] 1 All ER 693
which had some time to run. They became redundant
as a result of amalgamations and Lever Bros con- In 1944 the claimant bought from the defendants an
tracted to pay Bell £30,000 and Snelling £20,000 as oil painting of Salisbury Cathedral for £85. A label on
compensation. These sums were paid over and then it the back said that the painting had been exhibited as
was discovered that Bell and Snelling had committed by Constable. Five years later the claimant tried to sell
breaches of duty against the Niger Company during the drawing at Christie’s and was told that this was
their term of office by making secret profits of £1,360 not so. He now sued for rescission of the contract, no
on a cocoa pooling scheme. As directors of the Niger claim for damages being made. The following points
Company, Bell and Snelling attended meetings at of interest emerged from the decision of the Court of
which the selling price of cocoa was fixed in advance. Appeal. (a) It was possible to restore the status quo by
Both of them bought and sold on their own account the mere exchange of the drawing and the purchase
before the prices were made public. They could, there- money so that rescission was not prevented by inabil-
fore, have been dismissed without compensation. ity to restore the previous position. (b) The mistake
Lever Bros sought to set aside the payments on the made by the parties in assuming the drawing to be a
ground of mistake. Constable was a mistake as to quality and did not
Held – the contract was not void because Lever Bros had avoid the contract. (c) The statement that the drawing
got what they bargained for, i.e. the cancellation of was by Constable could have been treated as a war-
two service contracts which, though they might have ranty giving rise to a claim for damages, but it was
been terminated, were actually in existence when the not possible to award damages because the appeal
cancellation agreement was made. The mistake was as was based on the claimant’s right to rescind. (d ) The
to the quality of the two directors and such mistakes court, therefore, treated the statement as a representa-
did not avoid the contracts. The case is one of com- tion and, finding it to be innocent, refused to rescind
mon mistake because although Bell and Snelling the contract because of the passage of time since the
admitted that they were liable to account to the com- purchase.
pany for the profit made from office, they convinced Comment Mr Leaf might well have recovered damages if
the court that they had forgotten their misdemeanour he had sued for these under what is now s 13 of the Sale
of insider dealing when they made the contract for of Goods Act 1979 (sale by description – goods described
compensation. They thought they were good directors as by Constable). Mr Leaf asked for leave to amend his
who were entitled to that compensation. claim to include this when the case was in the county
court but leave was refused.
Comment The case also decided that an employee was
not under a duty to disclose to his employer his own
misconduct or breaches of duty towards his employer. Common mistake: the equitable approach
However, employee/directors do have a duty to disclose
their own breaches of contract to their companies. This is 127 Cooper v Phibbs (1867) LR 2 HL 149
because their fiduciary position as directors overrides the
ordinary employer/employee relationship. However, in Cooper agreed to take a lease of a fishery from Phibbs,
the Bell case the directors concerned kept the compensa- his uncle’s daughter who became apparent owner of
tion and were not required to disclose their wrongdoings it on her father’s death. Unknown to either party, the
..
EL_Z01.qxd 3/26/07 1:51 PM Page 767
CASES 128–129 REALITY OF CONSENT I 767
fishery already belonged to Cooper. This arose from a that contract was valid and enforceable on ordinary
mistake by Cooper’s uncle as to how the family land principles of contract law.
was held. The uncle innocently thought he owned
Comment (i) The better answer for the claimant in this
the fishery and before he died told Cooper so, but in
case would have been to make the statement about the
fact it was owned by Cooper himself. Cooper now
suitability of Great Peace a condition precedent of the
brought this action to set aside the lease and for
contract. It would not then have come into being given
delivery up of the lease.
the distance of the Great Peace from the damaged ship.
Held – the lease must be set aside on the grounds of
(ii) In spite of putting an end to rescission for common
common or identical bilateral mistake. However, since
mistake, other equitable approaches survive. Thus in Grist
equity has the power to give ancillary relief, Phibbs
v Bailey [1966] 2 All ER 875 a house was sold cheaply
was given a lien on the fishery for the improvements
because the parties thought that vacant possession could
she had made to it during the time she believed it to not be obtained as there was a tenant in it who was
be hers. This lien could be discharged by Cooper giving protected by rent legislation. This was not the case and
Phibbs the value of the improvements. the tenant gave up possession. The claimant asked for
the equitable remedy of specific performance but this
Equity has no power to rescind a contract on the was refused. The fact that the court did offer rescission
ground of mistake as to quality to the defendant is perhaps now more dubious.
Great Peace Shipping Ltd v Tsavliris Salvage
128
(International) Ltd (2002) 152 New Law Rectification: equity can rectify mistakes made
Journal 1616 by the parties in recording their agreement
A ship suffered damage in the Indian Ocean. Its
owners engaged the defendant salvors to assist in the 129 Joscelyne v Nissen [1970] 1 All ER 1213
recovery. The salvors found a tug through a firm of
London brokers. However, it was five or six days away The claimant, Mr Joscelyne, sought rectification of a
from the scene. Fearing the ship would be lost the written contract made on 18 June 1964, under which
salvors approached the brokers again. The brokers he had made over his car hire business to his daugh-
asked a third party. They suggested the claimant’s ter, Mrs Margaret Nissen. It had been expressly agreed
vessel Great Peace which the third party thought on during negotiations that in return for the car hire
the basis of false information was nearby. A contract business Mrs Nissen would pay certain expenses
of hire was made for Great Peace for a minimum of including gas, electricity and coal bills but the agree-
five days. In fact, Great Peace was several hundred ment on these matters was not expressly incorporated
miles from the damaged ship. The defendant can- in the written contract. Furthermore, the parties had
celled the contract and refused to pay the hire. There agreed that no concluded contract was to be regarded
was a minimum five-day hire clause in the contract as having been made until the signing of a formal
(called a charterparty). This claim for the hire was written document.
then brought. Mrs Nissen failed to pay the bills and the claimant
All parties to the arrangement were genuinely brought an action in the Edmonton County Court
mistaken as to the actual position of Great Peace. No claiming amongst other things a declaration that
warranties were given or representations made as to Mrs Nissen should pay the gas, electricity and coal
the actual position of Great Peace. A common mistake bills and alternatively that the written agreement of
as to quality therefore. Was she near or far? The 18 June 1964 should be rectified to include a provision
defendant’s case for rescission of the contract in to that effect. The county court judge allowed the
equity based on Solle v Butcher (1950) was refused by claim for rectification although there was no binding
the Court of Appeal. The court ruled that the contract antecedent contract between the parties on the issue
was enforceable and the claimant’s case succeeded. of payment of the expenses. The Court of Appeal,
The court concluded that it was impossible to recon- after considering different expressions of judicial
cile Solle v Butcher (1950) with the decision of the views upon what was required before a contractual
House of Lords in Bell v Lever Bros (1932). Solle had instrument might be rectified by the court, held that
not been developed. It had been a fertile source of the law did not require a binding antecedent contract,
academic debate but in practice had given rise to very provided there was some outward expression of agree-
few cases and caused confusion in the law. If coher- ment between the contracting parties. Rectification
ence was to be restored, it could only be done could be made even though there was no binding
by declaring that there could be no rescission of a contract until the written agreement which was to be
contract on the ground of common mistake where rectified was entered into.
..
EL_Z01.qxd 3/26/07 1:51 PM Page 768
Frederick Rose (London) Ltd v William Pim & agreement conform with the one actually made when it
130
Co Ltd [1953] 2 All ER 739 already does. The agreement is for the sale of A’s draw-
The claimants received an order from an Egyptian ing of Salisbury cathedral, not ‘a drawing of Salisbury
client for feveroles (a type of horsebean). The cathedral by John Constable’.
claimants did not know what was meant by feveroles
and asked the defendants what they were and Thomas Bates & Sons Ltd v Wyndham’s
131
(Lingerie) Ltd [1981] 1 All ER 1077
whether they could supply them. The defendants said
that feveroles were horsebeans and that they could The claimant granted in 1956 a lease to the defend-
supply them, so the claimants entered into a written ants with an option for renewal. This lease had a
agreement to buy horsebeans from the defendants clause under which the rent on renewal was to be
which were then supplied to the Egyptian client agreed by the parties or by arbitration. The option
under the order. In fact, there were three types of was exercised in 1963 for a seven-year lease, and again
horsebeans: feves, feveroles and fevettes, and the in 1970 for a 14-year lease at a rent of £2,350 per
claimants had been supplied with feves, which were annum for the first five years and thereafter subject to
less valuable than feveroles. The claimants were sued rent review every five years. This lease, which was
by the Egyptian client and now wished to recover the drafted by the claimants’ managing director, did not
damages they had had to pay from the defendants. contain an arbitration clause. The defendants knew
In order to do so, they had to obtain rectification of that it did not. At the end of the first five-year period
the written contract with the defendants in which the the claimants suggested that a new rent should be
goods were described as ‘horsebeans’. The word agreed. The defendants would not agree and took the
‘horsebeans’ had to be rectified to ‘feveroles’, other- view that the rent of £2,350 should continue for the
wise the defendants were not in breach. whole 14 years unless there was an agreement
between the parties to the contrary. Deputy Judge
Held –
Michael Wheeler QC, sitting in the High Court,
(a) Rectification was not possible because the contract ordered rectification and the Court of Appeal affirmed
expressed what the parties had agreed to, i.e. to buy that decision. The clause inserted by the court
and sell horsebeans. Thus, the supply of any of the allowed the rent to be settled by arbitration if the
three varieties would have amounted to fulfilment of parties did not agree.
the contract.
Comment At one time it was thought that rectification
(b) The claimants might have rescinded for misrep-
was available only for a common mistake by both parties.
resentation but they could not restore the status quo, However, as appears from this case, rectification can be
having sold the beans. given for unilateral mistake. The principles on which it is
(c) The claimants might have recovered damages for granted appear in the judgment of Buckley, LJ who said:
breach of warranty, but the statement that ‘feveroles ‘First, that one party, A, erroneously believed that the
are horsebeans and we can supply them’ was oral, and document sought to be rectified contained a particular
warranties in a contract for the sale of goods of £10 term or provision, or possibly did not contain a particular
and upwards had in 1953 to be evidenced in writing. term or provision, which, mistakenly, it did contain; second
This is not the case today. that the other party, B, was aware of the omission or the
inclusion and that it was due to a mistake on the part of
(d ) The defence of mistake was also raised, i.e. both
A; third that B has omitted to draw the mistake to the
buyer and seller thought that all horsebeans were
notice of A. And I think there must be a fourth element
feveroles. This was an identical bilateral or common
involved, namely that the mistake must be calculated to
mistake, but since it was not a case of res extincta or benefit B.’ The general principle upon which the judgment
res sua, it had no effect on the contract. is based would appear to be one of equitable estoppel.
Comment This case is quite complex on its facts but, to
put the rule in a simpler context, if A and B orally agreed Mutual mistake: effect at common law and
on the sale of A’s drawing of Salisbury cathedral, in equity: the sense of the promise
thought by A and B to be by John Constable, but in fact
by Fred Constable, an unknown Victorian artist, and then 132 Wood v Scarth (1858) 1 F & F 293
put that agreement into a written contract, the contract
could not be rectified simply because A and B thought The claimant was suing for damages for breach of
that the drawing was by John Constable, because the contract alleging that the defendant had entered into
written contract would be the same as the oral one, as in an agreement to grant the claimant a lease of a public
the above case. The approach is, after all, logical enough. house, but had refused to convey the property. It was
You cannot sensibly ask the court to make the written shown in evidence that the defendant intended to
..
EL_Z01.qxd 3/26/07 1:51 PM Page 769
CASES 133–135 REALITY OF CONSENT II 769
offer the lease at a rent, and also to include a pre- which clearly identified the agreement made. The
mium on taking up the lease of £500. The defendant claimants’ action failed.
had told his agent to make this clear to the claimant,
but the agent had not mentioned it. After discussions
with the agent, the claimant wrote to the defendant REALITY OF CONSENT II
proposing to take the lease ‘on the terms already
agreed upon’, to which the defendant replied accept-
Misrepresentation: effect of change of
ing the proposal. There was a mutual or non-identical
circumstances making a statement untrue
bilateral mistake. The defendant thought that he
was agreeing to lease the premises for a rent plus a
134 With v O’Flanagan [1936] 1 All ER 727
premium, and the claimant thought he was taking a
lease for rental only because he did not know of the The defendant was a medical practitioner who wished
premium. The claimant had sued for specific perform- to sell his practice. The claimant was interested and
ance in 1855, and the court in the exercise of its in January 1934 the defendant represented to the
equitable jurisdiction had decided that specific perform- claimant that the income from the practice was
ance could not be granted in view of the mistake, as £2,000 a year. The contract was not signed until May
to grant it would be unduly hard on the defendant. 1934, and in the meantime the defendant had been
However, in this action the claimant sued at common ill and the practice had been run by various other
law for damages, and damages were granted to him doctors who substituted for the defendant while he
on the ground that in mutual or non-identical was ill. In consequence, the receipts fell to £5 per
mistake the court may find the sense of the promise week, and no mention of this fact was made when the
and regard a contract as having been made on these contract was entered into. The claimant now claimed
terms. Here it was quite reasonable for the claimant to rescission of the contract.
suppose that there was no premium to be paid. Thus,
Held – he could do so. The representation made in
a contract came into being on the terms as understood
January was of a continuing nature and induced the
by the claimant, and he was entitled to damages for
contract made in May. The claimant had a right to be
breach of it. The contract clearly identified the agree-
informed of a change of circumstances, and the
ment made.
defendant’s silence amounted to a misrepresentation.
Comment This case shows that equitable remedies are
discretionary and not available as of right as damages at Comment An interesting modern example is provided
common law are. Also note the benefits of the Judicature by Spice Girls Ltd v Aprilia World Service BV, The Times,
Acts, 1873–75. In this case, which pre-dates those Acts, 5 April 2000, where the company agreed to a contract for
the action for specific performance was brought the Spice Girls to make a video promoting its goods on
in Chancery in 1855 and the action at common law for the basis that there were five Spice Girls, and logos and
damages in 1858. Common law and equitable remedies other material showed the five members of the band. In
could not be granted in one and the same action until fact, Geri Halliwell had already disclosed her intention
the Judicature Acts were passed. to leave the band, but this was not mentioned. The
company was awarded damages under s 2(1) of the
Misrepresentation Act 1967. The Spice Girls had no
133 Raffles v Wichelhaus (1864) 2 HC 906 reasonable grounds to believe that there would be five
of them to perform the contract.
The defendants agreed to buy from the claimants 125
bales of cotton to arrive ‘ex Peerless from Bombay’. Misrepresentation: statements of intention,
There were two ships called Peerless sailing from opinion or belief as actionable statements
Bombay, one in October and one in December. The of fact
defendants thought they were buying the cotton on
the ship sailing in October, and the claimants meant 135 Edgington v Fitzmaurice (1885) 29 Ch D 459
to sell the cotton on the ship sailing in December. In
fact, the claimants had no cotton on the ship sailing The claimant was induced to lend money to a com-
in October. The defendants refused to take delivery of pany by a representation made by its directors that
the cotton when the second ship arrived and were the money would be used to improve the company’s
now sued for breach of contract. buildings and generally expand the business. In fact,
Held – since there was a mistake as to the subject the directors intended to use the money to pay off the
matter of the contract, there was, in effect, no con- company’s existing debts as the creditors were press-
tract between the parties, or at least no contract ing hard for payment. When the claimant discovered
..
EL_Z01.qxd 3/26/07 1:51 PM Page 770
770 REALITY OF CONSENT II CASES 136–137
that he had been misled, he sued the directors for facts are equally well known to both parties, what
damages for fraud. The defence was that the state- one of them says to the other is frequently nothing
ment that they had made was not a statement of a but an expression of opinion. The statement of
past or present fact but a mere statement of intention such opinion is in a sense a statement of a fact
which could not be the basis of an action for fraud. about the condition of the man’s own mind, but
Held – the directors were liable in deceit. Bowen, LJ only of an irrelevant fact, for it is of no con-
said: ‘There must be a misstatement of an existing sequence what the opinion is. But if the facts are
fact: but the state of a man’s mind is as much a fact as not equally known to both sides, then a statement
the state of his digestion. It is true that it is very of opinion by the one who knows the facts best
difficult to prove what the state of a man’s mind at a involves very often a statement of a material fact,
particular time is, but if it can be ascertained, it for he impliedly states that he knows facts which
is as much a fact as anything else. A misrepresenta- justify his opinion.
tion as to the state of a man’s mind is, therefore, a Comment These principles are followed in claims for
misstatement of fact.’ negligent misrepresentation under the Misrepresentation
Act 1967. Thus in BG plc v Nelson Group Services
Smith v Land and House Property Corporation (Maintenance) Ltd [2002] EWCA Civ 547 the Court of
136
(1884) 28 Ch D 7 Appeal in dealing with statements of opinion as action-
able under s 2(1) stated: ‘When an opinion was expressed
The claimants put up for sale on 4 August 1882 the
where the person who expressed it did not know of facts
Marine Hotel, Walton-on-the-Naze, stating in the par-
that justified that opinion he is misrepresenting his state
ticulars that it was let to ‘Mr Frederick Fleck (a most
of knowledge sufficient to bring the case within s 2(1)’.
desirable tenant) at a rental of £400 for an unexpired
term of 271/2 years’. The directors of the defendant
Misrepresentation: must induce the contract:
company sent the Secretary, Mr Lewin, to inspect the
materiality
property and he reported that Fleck was not doing
much business and that the town seemed to be in the
137 Peek v Gurney [1873] LR 6 HL 377
last stages of decay. The directors, on receiving this
report, directed Mr Lewin to bid up to £5,000, and in Peek purchased shares in a company on the faith of
fact he bought the hotel for £4,700. Before com- statements appearing in a prospectus issued by the
pletion, Fleck became bankrupt and the defendant respondents who were directors of the company.
company refused to complete the purchase, where- Certain statements were false and Peek sued the dir-
upon the claimants sued for specific performance. It ectors. It appeared that Peek was not an original
was proved that on 1 May 1882 the March quarter’s allottee, but had purchased the shares on what is
rent was wholly unpaid, that a distress was then now called the ‘after-market’, though he had relied on
threatened, i.e. the landlord was threatening to the prospectus.
remove property from the hotel for sale to pay the
Held – Peek’s action failed because the statements in
rent, and that Fleck paid £30 on 6 May, £40 on 13
the prospectus were only intended to mislead the
June, and the remaining £30 shortly before the sale.
original allottees. Once the statements had induced
No part of the June’s quarter rent had been paid.
the public to be original subscribers, their force was
The chairman of the defendant company said that
spent.
the hotel would not have been purchased but for the
statement in the particulars that Fleck was a most Comment (i) The decision has a somewhat unfortunate
desirable tenant. effect because at those times when public issues are over-
subscribed it is most likely that persons who did not
Held – specific performance would not be granted. The
receive an allotment or an adequate allotment as sub-
description of Fleck as a most desirable tenant was
scribers will try to purchase further shares within a short
not a mere expression of opinion, but contained
time on the Stock Exchange (i.e. the ‘after-market’).
an implied assertion that the vendors knew of no
These people will clearly be relying on the prospectus,
facts leading to the conclusion that he was not. The but under this decision would have no claim in respect of
circumstances relating to the unpaid rent showed false statements in it.
that Fleck was not a desirable tenant and there was a
(ii) This decision, and the one in Re Northumberland (see
misrepresentation. Bowen, LJ said:
p 319), would appear to be seriously affected, at least
It is material to observe that it is often fallaciously on its own facts, by more recent legislation in the Finan-
assumed that a statement of opinion cannot cial Services and Markets Act 2000. As regards who can
involve the statement of a fact. In a case where the sue under an inaccurate prospectus, s 87(1) states: ‘any
..
EL_Z01.qxd 3/26/07 1:51 PM Page 771
CASES 138 –139 REALITY OF CONSENT II 771
person who has acquired securities to which the particu- Lightman, J’s statement being made in preliminary
lars apply and suffered loss in respect of them . . .’. This proceedings. It should be noted that purchasers on
would seem to include all subscribers whether they have the after-market following an issue with a listing are
relied on the prospectus (or listing particulars) or not. It already protected by the Financial Services and Markets
seems, therefore, that a subscriber need not be aware of Act 2000. The only advantage of suing under Possfund is
the error or even have seen the listing particulars. The that not all of the 2000 Act defences are available at
sub-section would also seem to cover subsequent pur- common law.
chasers after the first issue thus affecting Peek v Gurney
(above), at least on its own facts.
138 Redgrave v Hurd (1881) 20 Ch D 1
(iii) It should be noted, however, that s 87(1) is a
statutory remedy in company law. So far as the law of The claimant was a solicitor who wished to take a
contract is concerned, the purpose of the statements in partner into the business. During negotiations between
the listing particulars (or prospectus) is to invite persons the claimant and Hurd the claimant stated that the
to apply for shares in the company, i.e. to induce the
income of the business was £300 a year. The papers
contract with the company, and in contract law the
which the claimant produced showed that the
statement must have been relied on and be material. So
income was not quite £200 a year, and Hurd asked
far as remedies for contractual misrepresentation (includ-
about the balance. Redgrave then produced further
ing remedies under the Misrepresentation Act 1967) are
papers which he said showed how the balance was
concerned, the particulars cannot be relied upon by
those who purchase shares from some source other than made up, but which only showed a very small
the company or by persons who have not seen them. In amount of income making the total up to about £200.
contract law, therefore, Peek and Re Northumberland Hurd did not examine these papers in any detail, but
survive. However, most claimants will sue successfully agreed to become a partner. Later Hurd discovered the
under the statutory remedy in s 87(1). There are, none true position and refused to complete the contract.
the less, some special defences to a claim under s 87(1) The claimant sued for breach, and Hurd raised the
(see p 295) and where a particular defendant, e.g. a misrepresentation as a defence and counterclaimed
director of the company, can claim one or more of these, for rescission of the contract.
the claimant may have to revert to a remedy under the Held – Hurd had relied on Redgrave’s statements
Misrepresentation Act 1967. Under this Act these special regarding the income and the contract could be
defences, apart from reasonable grounds for believing
rescinded. It did not matter that Hurd had the means
the statement to be true, do not apply. Such a claimant
of discovering their untruth; he was entitled to rely
would be faced with the rulings in Peek and Re
on Redgrave’s statement.
Northumberland, though he would seem to be able to
sue under the Hedley Byrne case (see below) where, once Comment Relief is not barred simply because there is an
again, the statutory defences do not apply. The claim unsuccessful attempt by the person misled to discover the
there is in tort (negligence) and not contract. Section truth where the misrepresentation is fraudulent.
87(1) of the 2000 Act expressly reserves the right of
claimants to sue under the Misrepresentation Act 1967
and/or tort under Hedley Byrne. 139 Smith v Chadwick (1884) 9 App Cas 187
(iv) A claim in tort for damages for negligent misstate- This action was brought by the claimant, who was a
ment should also be available under Hedley Byrne (see steel manufacturer, against Messrs Chadwick, Adamson
p 773) in that those who publicly advertise a prospectus
and Collier, who were accountants and promoters
must surely in the modern context foresee that it will be
of a company called the Blochairn Iron Co Ltd. The
relied upon by subscribers and by those who purchase
claimant claimed £5,750 as damages sustained
from subscribers on the stock market for a reasonable
through taking shares in the company which were
time after the issue of the prospectus.
not worth the price he had paid for them because
(v) In fact, in the most recent decision Possfund Custodian of certain misrepresentations in the prospectus issued
Trustee Ltd v Victor Derek Diamond, Financial Times, 13 by the defendants. The action was for fraud. Among
April 1996 Mr Justice Lightman in the High Court stated
the misrepresentations alleged by Smith was that
that nowadays it is at least arguable that those who are
the prospectus stated that a Mr J J Grieves MP was a
responsible for issuing prospectuses owe a duty of care to
director of the company, whereas he had with-
those who purchase the shares in what can be described
drawn his consent the day before the prospectus was
as the after-market in reliance on the prospectus. This
issued.
could place liability on the company’s directors, the
company itself and its financial advisers if they are Held – the statement regarding Mr Grieves was untrue
negligent. The matter did not come to a full trial, but was not material to the claimant, because the
..
EL_Z01.qxd 3/26/07 1:51 PM Page 772
772 REALITY OF CONSENT II CASES 140 –141
evidence showed that he had never heard of Mr Thus in Humming Bird Motors v Hobbs [1986] RTR 276
Grieves. His action for damages failed. H was a young man whom the judge found to be an
amateur doing a bit of ‘wheeling and dealing’ in the
Misrepresentation: negligent misrepresentation: motor trade. He bought a car from a dealer who told him
that the mileage recorded, 34,900 miles, was correct. H
principal but not agent liable to third party for
sold the car on to the claimants making the same state-
agent’s negligence
ment, i.e. that the recorded mileage was, to the best of
his knowledge and belief, correct. The claimants dis-
140 Gosling v Anderson, The Times, 8 February 1972 covered that the vehicle had done 80,000 miles and tried
to claim damages for negligent misrepresentation. The
Miss Gosling, a retired schoolmistress, entered into Court of Appeal decided that H was not negligent;
negotiations for the purchase of one of three flats he was an amateur and was merely repeating what he
in a house at Minehead owned by Mrs Anderson. himself believed.
Mr Tidbury, who was Mrs Anderson’s agent in the
negotiations, represented to Miss Gosling by letter Misrepresentation: fraud: definition and
that planning permission for a garage to go with the burden of proof
flat had been given. Mrs Anderson knew that this
was not so. The purchase of the flat went through on 141 Derry v Peek (1889) 14 App Cas 337
the basis of a contract and a conveyance showing a
parking area but not referring to planning permission The Plymouth, Devonport and District Tramways
which was later refused. Miss Gosling now sought Company had power under a special Act of Parlia-
damages for misrepresentation under s 2(1) of the ment to run trams by animal power, and with the
Misrepresentation Act 1967. consent of the Board of Trade (now the Department
of Trade and Industry) by mechanical or steam power.
Held – the facts revealed a negligent representation by
Derry and the other appellants were directors of the
Mr Tidbury made without reasonable grounds for
company and issued a prospectus, inviting the public
believing it to be true. Mrs Anderson was liable for the
to apply for shares in it, stating that they had power
acts of her agent and must pay damages under the Act
to run trams by steam power, and claiming that
of 1967.
considerable economies would result. The directors
Comment (i) This action was against Mrs Anderson who had assumed that the permission of the Board of
was the other party to the contract. It was decided in Trade would be granted as a matter of course, but in
Resolute Maritime Inc and Another v Nippon Kaiji Kyokai the event the Board of Trade refused permission
and Others [1983] 2 All ER 1 that no action is available except for certain parts of the tramway. As a result,
against an agent such as Mr Tidbury under s 2(1) of the the company was wound up and the directors were
Misrepresentation Act 1967. Section 2(1) of the 1967 Act sued for fraud. The court decided that the directors
begins: ‘Where a person has entered into a contract after were not fraudulent but honestly believed the state-
a misrepresentation has been made to him by another ment in the prospectus to be true. As Lord Herschell
party thereto . . .’. Thus, the sub-section only applies said: ‘Fraud is proved when it is shown that a false
when the representee has entered into a contract after a representation had been made (a) knowingly, or (b)
misrepresentation has been made to him by another
without belief in its truth, or (c) recklessly, careless
party to the contract. Where an agent acting within the
whether it be true or false.’
scope of his authority makes a representation under
s 2(1), the principal is liable to the third party misled, but Comment (i) This case gave rise to the Directors’ Liability
not the agent. The agent will be liable to the third party Act 1890 which made directors of companies liable to pay
only if he is guilty of fraud or, under the rule in Hedley compensation for negligent misrepresentation in a
Byrne v Heller (1963) (see below), for negligence at com- prospectus, subject to a number of defences. The latest
mon law. Here the principal will be liable vicariously provisions are in the Financial Services and Markets Act
along with the agent for the latter’s fraud or negligence 2000.
if the agent is acting within the scope of his authority. (ii) It will be noticed from this case that the mere fact
(ii) As regards proving reasonable grounds, an expert will that no grounds exist for believing a false statement
be expected to verify his statements in a professional does not of itself constitute fraud. There must also be an
way. However, those without relevant technical know- element of dishonesty which was not present in this case.
ledge will often find that the court will accept a state- (iii) Fraud is the most difficult of all the forms of misrepres-
ment as made innocently if the maker of the statement entation to prove. It must be proved beyond a reasonable
had been induced to purchase the goods himself by the doubt which is the criminal standard. The civil standard is
same statement. proof on a balance of probabilities.
..
EL_Z01.qxd 3/26/07 1:51 PM Page 773
CASE 142 REALITY OF CONSENT II 773
(iv) There is something of a problem with the meaning of . . . Payment for information or advice is very good
the word ‘recklessly’ since it envisages a state of mind evidence that it is being relied upon and that the
short of actual knowledge. It seems that the maker of informer or adviser knows that it is. Where there is no
the statement must be almost sure that it is false, but is consideration, it will be necessary to exercise greater
nevertheless reckless and goes on to make it anyway. care in distinguishing between social and professional
relationships and between those which are of a con-
Misrepresentation: the contribution of the tractual character and those which are not. It may
often be material to consider whether the adviser is
tort of negligence
acting purely out of good nature or whether he is
Hedley Byrne & Co Ltd v Heller & Partners Ltd getting his reward in some direct form. The service
142 that a bank performs in giving a reference is not done
[1963] 2 All ER 575
simply out of a desire to assist commerce. It would
The appellants were advertising agents and the re- discourage the customers of the bank if their deals fell
spondents were merchant bankers. The appellants through because the bank had refused to testify to
had a client called Easipower Ltd who was a customer their credit when it was good . . .
of the respondents. The appellants had contracted to
Thus, the solicitor’s advice should not be actionable
place orders for advertising Easipower’s products on because there was no consideration to found contract
television and in newspapers, and since this involved liability and equally no ‘special relationship’ to found the
giving Easipower credit, they asked the respondents, tort claim. Of course, the absence of consideration and
who were Easipower’s bankers, for a reference as to a contract prevents s 2(1) of the Misrepresentation
the creditworthiness of Easipower. The respondents Act 1967 from applying. However, the requirement of a
said that Easipower Ltd was respectably constituted ‘special relationship’ as a substitute for consideration
and considered good, although they said in regard to brings the Hedley tort of negligence much closer to
the credit: ‘These are bigger figures than we have seen’ contract than the general law of negligence – a casual
and also that the reference was ‘given in confidence statement is not actionable, but there is obviously a claim
and without responsibility on our part’. Relying on by persons knocked over by a casual bad driver, who is,
this reply, the appellants placed orders for advertising of course, the worst kind! (For further developments in
time and space for Easipower Ltd, and the appellants professional liability see Chapter 21.)
assumed personal responsibility for payment to the (ii) The ease with which the duty to take care placed
television and newspaper companies concerned. upon the bank was excluded in this case by the disclaimer
Easipower Ltd went into liquidation and the appel- was disappointing. However, such a disclaimer of negli-
lants lost over £17,000 on the advertising contracts. gence liability would, these days, have to satisfy the test
The appellants sued the respondents for the amount of ‘reasonableness’ under the Unfair Contract Terms
of the loss, alleging that the respondents had not Act 1977 (see Chapter 15). It would seem that such a
informed themselves sufficiently about Easipower Ltd disclaimer would fall short of the reasonable expecta-
before writing the statement, and were therefore tions of those in business who naturally and reasonably
expect that a bank will have taken proper care before
liable in negligence.
giving a reference of this kind.
Held – in the present case the respondents’ disclaimer (iii) In this connection it was held in Smith v Eric S Bush
was adequate to exclude the assumption by them of [1987] 3 All ER 179 that it was unreasonable to allow a
the legal duty of care, but, in the absence of the dis- surveyor to rely on a general disclaimer of negligence
claimer, the circumstances would have given rise to a where he had been asked by a building society to carry
duty of care in spite of the absence of a contract or out a reasonably careful visual inspection of the property
fiduciary relationship. for valuation purposes (paid for by the would-be pur-
chaser) when the valuer knew that the purchaser would
Comment (i) The House of Lords stated that the duty of be likely to rely on his report and not get another one.
care arose where there was ‘a special relationship’ requir- The house was purchased but, because of defects, turned
ing care. out to be unfit for habitation. The surveyors when sued
The boundaries of the Hedley case are still not entirely could not escape liability for damages on the basis of
clear but the requirement of a ‘special relationship’ disclaimer.
between the maker of the statement and the recipient is The case suggests that in so far as such disclaimers
an attempt to mark some boundaries. Can one complain, are still used by professional persons they may not be
for example, if casual advice given on a train journey by effective, at least as regards ordinary consumers of
a solicitor turns out to be erroneous? An extract from professional services.
the judgment of Lord Devlin in the Hedley case is helpful. (iv) However, much would seem to depend on the sophis-
He said: tication of the person misled. In McCullagh v Lane Fox
..
EL_Z01.qxd 3/26/07 1:51 PM Page 774
774 REALITY OF CONSENT II CASES 143–144
and Partners, The Times, 22 December 1995 the Court and he used eight gallons of petrol on a journey of
of Appeal heard a claim against an estate agent for 40 miles. That evening the claimant told the defendant
negligently misrepresenting the size of a plot of land to a of the defects, and the defendant offered to pay half the
purchaser. The purchaser’s claims failed because the cost of a reconstructed dynamo, but denied any know-
agents had included a disclaimer in the sales particulars ledge of the other defects. The claimant accepted the
which negated the element of proximity and assumption offer and the dynamo was fitted straightaway. On
of responsibility required if negligence was to be estab- Thursday the lorry was driven by the claimant’s
lished. In addition, it was not unfair under s 11 of the brother to Middlesbrough, and it broke down on the
Unfair Contract Terms Act 1977 to allow the agents to
Friday night. The claimant, on learning of this, asked
rely on the disclaimer. The distinction between this case
the defendant for his money back, but the defendant
and Bush would appear to be the cost of the property
would not give it to him. The lorry was subsequently
(some £800,000) compared with the property in Bush
examined and an expert said that it was not road-
(some £17,000) and the normally worldly wise nature of
worthy. The claimant sued for rescission.
people who buy such expensive properties. Lord Justice
Hobhouse said: ‘Here the transaction involved a sophist- Held – at first instance, by Glyn-Jones, J – the defend-
icated member of the public who had had ample oppor- ant’s statements about the lorry were innocent and
tunity to regulate his conduct having regard to the not fraudulent because the evidence showed that the
disclaimer and who would have been assumed by all lorry had been laid up for a month and it might have
concerned to have had the benefit of legal advice before deteriorated without the defendant’s precise know-
exchanging contracts.’ The judge went on to say that ledge. The Court of Appeal affirmed this finding of
since disclaimers are usually inserted by estate agents fact and made the following additional points.
into their contracts it would have been unfair not to
allow the defendants to rely on theirs. (a) The journey to Rochester was not affirmation be-
cause the claimant was merely testing the vehicle
in a working capacity.
Misrepresentation: loss of the right to rescind (b) However, the acceptance by the claimant of the
defendant’s offer to pay half the cost of the re-
143 Long v Lloyd [1958] 2 All ER 402 constructed dynamo, and the subsequent journey
to Middlesbrough, did amount to affirmation,
The claimant and the defendant were haulage con- and rescission could not be granted to the
tractors. The claimant was induced to buy the defend- claimant.
ant’s lorry by the defendant’s misrepresentation as to
condition and performance. The defendant advertised Comment (i) Damages could now be obtained for
a lorry for sale at £850, the advertisement describing negligent misrepresentation under the Misrepresentation
the vehicle as being in ‘exceptional condition’. The Act 1967, s 2(1), for how could the seller say he had
claimant telephoned the defendant the same evening reasonable grounds for believing that the lorry was in
exceptional condition or first-class condition?
when the defendant agreed that his advertisement
was a little ambiguous and said that the lorry was ‘in (ii) It seems remarkable that Glyn-Jones, J did not find
first-class condition’. The claimant saw the lorry at fraud. However, fraud must be proved according to the
the defendant’s premises at Hampton Court on a criminal standard, i.e. beyond a reasonable doubt, and
Saturday. During a trial run on the following Monday not according to the civil standard which is on balance of
the claimant found that the speedometer was not probabilities. Fraud is, therefore, difficult to prove and in
this case there was presumably a reasonable doubt in the
working, a spring was missing from the accelerator
mind of the judge on the issue of fraud.
pedal, and it was difficult to engage top gear. The
defendant said there was nothing wrong with the (iii) The Court of Appeal would not accept that the state-
vehicle except what the claimant had found. He also ment that the lorry was in first-class condition was a term
said at this stage that the lorry would do 11 miles to of the contract (see Chapter 14) but decided that it was
the gallon. only a misrepresentation.
The claimant purchased the lorry for £750, paying
£375 down and agreeing to pay the balance at a later 144 Clarke v Dickson (1858) 27 LJQB 223
date. He then drove the lorry from Hampton Court to
his place of business at Sevenoaks. On the following In 1853 the claimant was induced by the misrepres-
Wednesday, the claimant drove from Sevenoaks to entation of the three defendants, Dickson, Williams
Rochester to pick up a load, and during that journey and Gibbs, to invest money in what was in effect a
the dynamo ceased to function, an oil seal was leak- partnership to work lead mines in Wales. In 1857 the
ing badly, there was a crack in one of the road wheels, partnership was in financial difficulty and with the
..
EL_Z01.qxd 3/26/07 1:51 PM Page 775
claimant’s assent it was converted into a limited com- Viscount Cave said: ‘The meaning and effect of the
pany and the partnership capital was converted into basis clause, taken by itself, is that any untrue state-
shares. Shortly afterwards the company commenced ment in the proposal, or any breach of its promissory
winding-up proceedings and the claimant, on dis- clauses, shall avoid the policy, and if that be the con-
covery of the falsity of the representations, asked for tract of the parties, the question of materiality has not
rescission of the contract. to be considered.’
Held – rescission could not be granted because capital Comment (i) The Unfair Contract Terms Act 1977 does
in a partnership is not the same as shares in a company. not apply to contracts of insurance. This resulted from a
The firm was no longer in existence, having been deal between the insurance companies and the govern-
replaced by the company, and it was not possible to ment under which the insurance companies agreed to
restore the parties to their original positions. abide by voluntary statements of practice. These have
no legal effect but some moral force. If the insurance
Comment (i) It should be noted that in addition to the
company follows these statements of practice, then
problem of restoration, third-party rights, i.e. creditors,
certainly in consumer, i.e. non-business, insurance the
had accrued on the winding-up of the company and this
worst effect of the basis clause (which is what they are
is a further bar to rescission.
called) should be eliminated.
(ii) However, the court still retains its power to rescind
(ii) However, even if we get rid of the basis clause
‘on terms’ where the problem is only one of deteriora-
problem, the rules of disclosure of material matters by
tion of the subject matter. In Erlanger v New Sombrero
the person seeking insurance remains a difficulty. It is
Phosphate Co (1878) 3 App Cas 1218 rescission was
based upon s 18(2) of the Marine Insurance Act 1906. This
granted of a contract to purchase a phosphate mine even
should not have been used as a basis for all insurances.
though some phosphate had been extracted from it since
Those seeking marine insurance are well aware of the
sale. The House of Lords granted rescission on terms that
risks they seek to insure. Those seeking, for example,
the purchaser must account to the seller for profits made
domestic fire insurance are not. The Law Commission
from the sale of the phosphate extracted since purchase.
Report entitled Non-Disclosure and Breach of Warranty
places a heavy burden on insurance companies to phrase
Contracts of utmost good faith: insurance:
their questions so as to elicit the kind and amount of
effect of contractual clauses
information they want and not to leave it, as at present,
to the person seeking insurance to make uninformed
145 Dawsons Ltd v Bonnin [1922] 2 AC 413
guesses as to what might be material to the insurers. The
common law has already taken steps in this direction in
Dawsons Ltd insured its motor lorry against loss by
Hair v Prudential Assurance [1983] 2 Lloyd’s Rep 667, the
fire with Bonnin and others, and signed a proposal
court deciding in that case that if a person seeking insur-
form which contained the following as Condition 4:
ance answered honestly all the questions put to him by
‘Material misstatement or concealment of any circum-
the proposal for insurance, he should not be required to
stances by the insured material to assessing the pre- disclose any other matters. The questions should reveal
mium herein, or in connection with any claim shall all material issues.
render the policy void.’ The policy also contained a
(iii) The courts continue to try to assist the insured in
clause saying that the ‘proposal shall be the basis of the
terms of the utmost good faith rule, which has for so
contract and shall be held as incorporated therein’.
long been the insurer’s best friend. In Pan Atlantic
Actually the proposal form was filled up by an insur-
Insurance Co Ltd v Pine Top Insurance Co Ltd [1994] 3 All
ance agent, and although he stated the proposer’s
ER 581 the House of Lords decided that whereas in the
address correctly as 46 Cadogan Street, Glasgow, he
past a mere innocent non-disclosure had enabled insurers
also stated that the vehicle would usually be garaged to avoid the contract, it was now necessary to show
there, although there was no garage accommodation that the insurer had actually been induced by the non-
at the Cadogan Street address and the lorry was disclosure to enter into a policy on its terms.
garaged elsewhere. Dawsons’ secretary, who signed the Their Lordships did decide, however, that there was a
proposal, overlooked this slip made by the agent. The presumption that an insurer would have been influenced
lorry was destroyed by fire and Dawsons claimed under by a non-disclosure of a material fact. This means that
the policy. the person insured will have the burden of proving that
Held – on appeal, by the House of Lords – the statement the insurer was not influenced by the non-disclosure.
was not material within the meaning of Condition 4. This rather weakens the decision so far as the insured is
However, the basis clause was an independent provi- concerned.
sion, and since the statement, though not material, was (iv) Further progress by the courts in defending the rights
untrue, the policy was void for breach of condition. of the consumer against the harsher application of the
..
EL_Z01.qxd 3/26/07 1:51 PM Page 776
776 REALITY OF CONSENT II CASES 146 –150
utmost good faith rule is to be seen in Economides v daughter became of age, her mother persuaded her to
Commercial Union Insurance Co plc [1997] 3 All ER 636 raise £2,000 on a property in which the daughter had
where the Court of Appeal ruled, at least so far as the an interest, and this was used to pay off the mother’s
private consumer buying insurance cover is concerned, debts. Twelve months later the mother and daughter
that the insured’s duty to the insurance company is signed a joint and several promissory note of £775 at
primarily one of honesty and he need only disclose those 85 per cent interest in favour of the moneylenders, and
material facts which are known to him. Mr E’s flat was the daughter created a further charge on her property
burgled and £31,000 worth of valuables stolen, mainly in order that the mother might borrow more money.
those belonging to his parents. His contents insurance
The daughter did not understand the nature of the
had been valued by Mr E, with his father’s consent, at
transaction, and the only advice she received was
£16,000 and the maximum cover for valuables was
from a solicitor acting for the mother and the money-
£5,333. The defendants repudiated liability on the
lenders. The moneylenders brought this action
grounds of misrepresentation as to value and failure to
against the mother and daughter on the note.
disclose material facts. Mr E was, of course, under-insured
and could only cover part of his loss, but the defendants Held – the daughter’s defence that she was under the
did not want to pay at all. The Court of Appeal ruled in undue influence of her mother succeeded, in spite of
favour of Mr E for recovery of the reduced sum. the fact that she was of full age and married with her
own home.
Fiduciary relationships: the duty to disclose
149 Allcard v Skinner (1887) 36 Ch D 145
146 Gordon v Gordon (1819) 3 Swan 400
In 1868 the claimant joined a Protestant institution
Two brothers made an agreement for division of the
called the sisterhood of St Mary at the Cross, promis-
family estates. The elder supposed he was born before
ing to devote her property to the service of the poor.
the marriage of his parents and was, therefore, illegit-
The defendant, Miss Skinner, was the Lady Superior
imate. The younger knew that their parents had been
of the Sisterhood. In 1871 the claimant ceased to be
married before the birth of the elder brother and the
a novice and became a sister in the order, taking
elder brother was, therefore, legitimate and his father’s
her vows of poverty, chastity and obedience. By this
heir. He did not communicate this information to his
time she had left her home and was residing with
elder brother. Nineteen years afterwards the elder
the sisterhood. The claimant remained a sister until
brother discovered that he was legitimate and the
1878 and, in compliance with the vow of poverty,
agreement was set aside following this action brought
she had by then given property to the value of £7,000
by him. He would have had no case if at the time of
to the defendant. The claimant left the order in 1879
the agreement both brothers had been in honest error
and became a Roman Catholic. Of the property she
as to the date of their parents’ marriage.
had transferred, £1,671 remained in 1885 and the
claimant sought to recover this sum, claiming that it
Duress: effect upon contracts
had been transferred in circumstances of undue
influence.
147 Welch v Cheesman (1973) 229 EG 99
Held – that the gifts had been made under pressure
Mrs Welch lived with the defendant, C, for many years of an unusually persuasive nature, particularly since
in a house which she owned. C was a man given to the claimant was prevented from seeking outside
violence, and after he threatened her Mrs Welch sold advice under a rule of the sisterhood which said, ‘Let
the house to him for £300. C died and his widow no sister seek the advice of any extern without the
claimed the house which was worth about £3,000. Mrs superior’s leave.’ However, the claimant’s suit was
Welch brought this action to set aside the sale of the barred by her delay because, although the influence
house to C on the grounds of duress and she succeeded. was removed in 1879, she did not bring her action
until 1885.
Undue influence: situations in which presumed:
special relationships Presumption of undue influence: other categories
148 Lancashire Loans Ltd v Black [1934] 1 KB 380 150 Hodgson v Marks [1970] 3 All ER 513
A daughter married at 18 and went to live with her Mrs Hodgson, who was a widow of 83, owned a
husband. Her mother was an extravagant woman and freehold house in which she lived. In 1959 she took
was in debt to a firm of moneylenders. When the in a Mr Evans as a lodger. She soon came to trust
..
EL_Z01.qxd 3/26/07 1:51 PM Page 777
Evans and allowed him to manage her financial Unconscionable bargains: protection against
affairs. In June 1960, she transferred the house to improper pressure and inequality of
Evans, her sole reason for so doing being to prevent bargaining power
her nephew from turning Evans out of the house. It
was orally agreed between Mrs Hodgson and Evans 151 Lloyds Bank v Bundy [1974] 3 All ER 757
that the house was to remain hers, although held in
the name of Evans. Evans later made arrangements to The defendant and his son’s company both banked
sell the house without the knowledge or consent of with the claimants, the defendant having been a
Mrs Hodgson. The house was bought by Mr Marks customer for many years. The company’s affairs
and Mrs Hodgson now asked for a declaration that he deteriorated over a period of years and at the son’s
was bound to transfer the property back to her. The suggestion the bank’s assistant manager visited the
following questions arose: defendant and said that the bank could not continue
to support an overdraft for the company unless the
(a) whether Evans held the house in trust for Mrs
defendant entered into a guarantee of the account.
Hodgson. It was held – by Ungoed-Thomas, J – that
The defendant received no independent advice, nor
he did. The absence of written evidence of trust as
did the bank’s assistant manager suggest that he
required by s 53 of the Law of Property Act 1925 was
should do so. The defendant charged his house as
not a bar to Mrs Hodgson’s claim. The section does
security for the overdraft and shortly afterwards the
not apply to implied trusts of this kind;
company went into receivership. The bank obtained
(b) whether Evans had exercised undue influence. possession of the house from the defendant in the
It was held that he had and that a presumption county court, where the assistant branch manager in
of undue influence was raised. Although the parties evidence said that he thought that the defendant had
were not in the established categories, Evans had a rela- relied upon him implicitly to advise him about the
tionship of trust and confidence with Mrs Hodgson charge.
of a kind which raised a presumption of undue The defendant appealed to the Court of Appeal in
influence. an attempt to set aside the guarantee and the security
However, Mrs Hodgson lost the case because and it was held – allowing the defendant’s appeal –
Mr Marks was protected by s 70 of the Land Registra- that in the particular circumstances a special relation-
tion Act 1925, which gives rights to a purchaser ship existed between the defendant and the bank’s
of property for value in respect of interests in that assistant manager, as agent for the bank, and the
property of which the purchaser is not aware. In this bank was in breach of its duty of fiduciary care in
case Mr Marks bought the house from Mr Evans, the procuring the charge which would be set aside for
house being in the name of Evans and he had no undue influence. The defendant, without any benefit
reason to suppose that Mrs Hodgson had any interest to himself, had signed away his sole remaining asset
in it. without taking independent advice.
Comment (i) While the majority of the Court of Appeal
Comment (i) Mrs Hodgson’s appeal to the Court of
(Cairns, LJ and Sir Eric Sachs) were content to decide that
Appeal in 1971 succeeded and she got her house back,
appeal on the conventional ground that a fiduciary
the court holding that in spite of s 70, a purchaser must
relationship existed between the bank and its customer,
pay heed to the possibility of rights in all occupiers. Mrs
which is to suggest that a new fiduciary relationship has
Hodgson was obviously in occupation with Mr Evans and
come into being, Lord Denning took the opportunity to
inquiries should have been made by the purchaser as to
break new ground by deciding that in addition to avoid-
her rights in the property.
ing the contract on the grounds of fiduciary relationship,
(ii) The application of the presumption in a relationship Mr Bundy could also have done so on the basis of
which was not one of the established ones is also ‘inequality of bargaining power’. Although inequality of
illustrated by Goldsworthy v Brickell [1987] 1 All ER 853, bargaining power obviously includes undue influence,
where a contract to grant a tenancy of a farm advant- Lord Denning made it clear that the principle does not
ageous to the defendant in that, for example, it did not depend on the will of one party being dominated or
allow the landlord, G, to make any rent increases, was set overcome by the other. This is clear from that part of the
aside. The defendant, B, who had become the tenant, judgment where he says: ‘One who is in extreme need
was a neighbour of G. G was 85 and had come to rely may knowingly consent to a most improvident bargain,
implicitly on the advice of B. Undue influence was solely to relieve the straits in which he finds himself.’ This
presumed although neighbours are not within the approach is, of course, at variance with the traditional
established categories where undue influence is gener- view of undue influence which was that it was based on
ally presumed. dominance resulting in an inferior party being unable to
..
EL_Z01.qxd 3/26/07 1:51 PM Page 778
778 REALITY OF CONSENT II CASE 151
exercise independent judgment or on a relationship of It was not because unlike a building society mortgage it
trust and confidence. covered all future borrowing by the husband. The bank
(ii) It should be noted that cases such as this which later tried to enforce the security. Eventually the Court
introduce into the law a requirement that a contract of Appeal held that the bank was liable in negligence
must be fair may eventually develop to the point where for the wrong advice of its clerk who made a negligent
adequacy of consideration is required in contract. This is misstatement causing damage, i.e. that £2,000 was the
not the case at the present time. borrowing limit when it was not. The mortgage was not
set aside for undue influence so that the bank was
(iii) In National Westminster Bank plc v Morgan [1983] 3 entitled to the proceeds of the sale of the farmhouse but
All ER 85 the Court of Appeal set aside a charge over a had to pay the claimant £11,231 damages plus interest
wife’s share in the matrimonial home after she executed for negligence. Thus, although it would be good practice
it without legal advice, in order to secure a loan from the for a bank to advise independent advice, it is not neces-
bank to clear a building society mortgage, and after the sary for it to do so. The security will be good and there
bank manager had assured her that the charge would is no presumption of undue influence. However, if an
not be used to secure her husband’s business advances, employee of the bank actually gives negligent advice or
whereas it did in fact extend to such advances. However, fails to explain the consequences of the charge and /or
the bank had no intention of using the charge other fails to advise the taking of independent advice ( see
than to secure the advance to clear the building society Midland Bank plc v Perry, The Times, 28 May 1987), the
mortgage, nor did it. bank will be able to enforce the security but will be liable
The above decision, which moved in the direction of in damages under the ruling in Hedley Byrne v Heller &
saying that banks would have to ensure that all their Partners (1963).
customers had independent legal advice before taking
out a bank mortgage was reversed by the House of Lords (v) This may in some cases make the security of little use
in National Westminster Bank plc v Morgan [1985] 1 All to the bank because it will have to set off the damages
ER 821. Undue influence, the House of Lords said, was it is required to pay against the money it receives from
the use by one person of a power over another person the sale of the security. Much depends, of course, on the
to take a certain course of action generally to his or her amount of damages awarded. Nevertheless, cases such
disadvantage. A bank manager need not advise independ- as Morgan, Cornish and Perry do seek to remove these
ent legal advice in a situation such as this. The manager security situations from the realm of undue influence,
in this case had stuck to explaining the legal effect of the and it seems that the courts which decided them were
charge which, though erroneous as to the terms of the moving away from the old rules previously provided by
charge, correctly represented his intention and that of equity for married women who provided security for
the bank. The security represented no disadvantage to their husbands’ debts. A security is a business transaction
Mrs Morgan. It was exactly what she wanted, to clear the and those giving securities must look after themselves as
building society loan on her home. The House of Lords others in business must. However, the older rules seem to
also rejected the view that a court would grant relief have survived and were stated in definitive form by the
where there was merely an inequality of bargaining House of Lords in Barclays Bank plc v O’Brien [1993] 4 All
power. Their Lordships rejected that view which was ER 417. Their Lordships decided that a married woman
expressed by Lord Denning in Bundy. The courts will not, (or cohabitee) must be treated as a special protected class
said the House of Lords, protect persons against what of guarantor when guaranteeing her husband’s (or
they regard as a mistake merely because of inequality of cohabitee’s) debts because of the emotional involvement
bargaining power. This is a much harder line. of which the bank is on constructive notice. Unless the
transaction is fully explained and understood by the
(iv) In Bundy, therefore, the Court of Appeal held that
protected guarantor, it will be void.
the bank in not advising the person giving the security to
get independent advice exercised undue influence and (vi) What then is new about O’Brien? First and most
for this reason set the security aside. In Morgan the importantly is the fact that the bank was fixed with con-
House of Lords held that no presumption of undue structive notice of the possibility that the wife may not
influence existed. In Cornish v Midland Bank [1985] 3 All have fully understood the transaction, either because she
ER 513 the Court of Appeal decided that the proper way had been misled by the husband or cohabitee, or had not
to deal with these cases was not through undue been fully informed. It was not necessary for the branch
influence but by using the law of negligence, though manager to have actual knowledge of this.
only where the bank had actually given wrong advice. What this means, in effect, is that when taking a
In Cornish the claimant had signed a second mortgage security on a property which is jointly owned, as in the
on a farmhouse jointly owned with her husband in order O’Brien case, by persons with an emotional involvement,
to secure £2,000 which her husband had borrowed from the person taking the security must assume that there
the bank. She did so because the bank clerk involved said may be deceit or undue influence upon the wife or
that the mortgage was like a building society mortgage. cohabitee, though the security will be good if the bank
..
EL_Z01.qxd 3/26/07 1:51 PM Page 779
CASES 152–153 CONTRACTUAL TERMS 779
official ensures that the wife or cohabitee fully under- negotiate for her. It is not acceptable practice to
stands the transaction and its risks, either by means of its assume that the arrangements are not negotiable.
own explanations or as a result of the receipt of independ- (ix) The amount of litigation involving occupiers who try
ent advice. If following explanation or advice the wife or to avoid eviction by relying on O’Brien shows no sign of
cohabitee signs a document to the effect that the trans- abating, despite the clear statement of principles both in
action and its risks are understood, the court is likely to O’Brien and Etridge. There is little point in proliferating
accept this as good evidence of the wife or cohabitee’s authorities. The rules to be applied lie mainly in the two
liability. cases mentioned above. It is, however, worth mentioning
This ‘counselling’ aspect is also new. At a time when that the mere presence of the family solicitor during the
counselling is regarded as a cure for all kinds of ills, it is transaction of loan is not enough. The lender must be
perhaps not surprising that the House of Lords should satisfied that proper advice has been given. This cannot
have put this forward as an answer to the problems of be assumed from the mere presence of a lawyer (see
lenders. Finally, there is a recognition by the court Lloyds TSB Bank plc v Holdgate [2002] EWCA Civ 1543).
that any variety of relationships comprised in the term
‘cohabitees’ can give rise to the constructive notice of
emotional involvement.
CONTRACTUAL TERMS
(vii) It is worth noting that in a similar case entitled CIBC
Mortgages plc v Pitt [1994] 4 All ER 433, handed down
Representations and terms distinguished
on the same day as O’Brien by the House of Lords, the
decision was that a wife who had been pressurised into
giving security over the jointly-owned family home was
152 Bannerman v White (1861) 10 CB (NS) 844
bound by it. The distinction was made in Pitt that the
The defendant was intending to buy hops from the
loan was made jointly to the husband and wife, and not
claimant and he asked the claimant whether sulphur
to the husband alone, so that the wife derived some
had been used in the cultivation of the hops, adding
benefit from it. In such cases, said the House of Lords, the
rule of constructive notice does not arise and in the that if it had he would not even bother to ask the
absence of actual knowledge of pressure, which was not price, by which he meant he would not make the
present in Pitt, the bank has not the same need to follow contract. The claimant said that no sulphur had been
the ‘counselling’ approach. used, though in fact it had. It was held that the
claimant’s assurance that sulphur had not been used
(viii) More recently the Court of Appeal gave guidance
was a term of the contract and the defendant was
including the extent of the O’Brien advice to be given by
justified in raising the matter as a successful defence
solicitors (see Royal Bank of Scotland plc v Etridge (No 2)
[1998] 4 All ER 705). The court made the assumption that to an action for the price.
the claimant is the wife (or cohabitee) and the person using
the influence is the husband (or cohabitee), although 153 Oscar Chess Ltd v Williams [1957] 1 All ER 325
similar principles would apply to a situation where the
wife or cohabitee used the undue influence. The guidance In May 1955, Williams bought a car from the claimants
appears below: on hire-purchase terms. The claimants took Williams’
n the client must be told that she is not under any Morris car in part exchange. Williams described the
obligation to enter into the transaction; car as a 1948 model and produced the registration
n the solicitor must be satisfied that the client is not book, which showed that the car was first registered
subject to any improper influence and then consider in April 1948, and that there had been several owners
whether the transaction is one which she ought to be since that time. Williams was allowed £290 on the
allowed to make, even if she was not subject to influ- Morris. Eight months later the claimants discovered
ence. If it is not, she should be advised not to enter that the Morris car was a 1939 model there being no
into it; change in appearance in the model between 1939 and
n if the lender is asking for an ‘all monies’ guarantee or 1948. The allowance for a 1939 model was £175 and
charge, the solicitor should make clear to the client the claimants sued for £115 damages for breach of
that she is being asked to undertake liability for any
warranty that the car was a 1948 model. Evidence
existing indebtedness, new debts and future debts and
showed that some fraudulent person had altered the
not merely the amount contemplated in the current
registration book but he could not be traced, and that
arrangements and that the client may be unable to
Williams honestly believed that the car was a 1948
control the amount of future indebtedness;
n if a wife is being asked to give an unlimited guarantee,
model.
she should be told of the option of giving a limited Held – the contract might have been set aside in
guarantee or charge and the solicitor should offer to equity for misrepresentation but the delay of eight
..
EL_Z01.qxd 3/26/07 1:51 PM Page 780
780 CONTRACTUAL TERMS CASES 154 –155
months defeated this remedy. This mistake was a Conditions and warranties distinguished
mistake of quality which did not avoid the contract
at common law and in order to obtain damages the 154 Poussard v Spiers and Pond (1876) 1 QBD 410
claimants must prove a breach of warranty. The court
was unable to find that Williams was in a position Madame Poussard had entered into an agreement to
to give such a warranty, and suggested that the play a part in an opera, the first performance to take
claimants should have taken the engine and chassis place on 28 November 1874. On 23 November
number and written to the manufacturers, so using Madame Poussard was taken ill and was unable to
their superior knowledge to protect themselves in appear until 4 December. The defendants had hired a
the matter. The claimants were not entitled to any substitute, and discovered that the only way in which
redress. Morris, LJ dissented, holding that the state- they could secure a substitute to take Madame
ment that the car was a 1948 model was a fundamental Poussard’s place was to offer that person the complete
condition. engagement. This they had done, and they refused
the services of Madame Poussard when she presented
Comment (i) No doubt Mr Williams would have herself on 4 December. The claimant now sued for
been liable for innocent and not negligent mis- breach of contract.
representation under the Misrepresentation Act
Held – the failure of Madame Poussard to perform the
1967 for he had reasonable grounds to believe
contract as from the first night was a breach of condi-
that the car was a 1948 Morris. He was merely repeat-
tion, and the defendants were within their rights in
ing an earlier deception made when he bought the
vehicle. regarding the contract as discharged.
(ii) Since the remedy of rescission had been lost by Comment This case merely illustrates the availability of
reason of delay, the court would not even now grant repudiation for serious breach of contract. Madame
that remedy or damages at the court’s discretion, which Poussard was not liable to pay damages for breach
the court can do even if the remedy of rescission is because unlike the defendants in Gill & Duffus SA
not available. The reluctance of the court to say that she could not help the breach, the contract being also
statements by non-dealers are contractual terms frustrated (see Chapter 17).
for breach of which damages can be recovered
leads to an unfair result as in this case. After all, Mr 155 Bettini v Gye (1876) 1 QBD 183
Williams obtained £115 more for his Morris than it
was worth. The claimant was an opera singer. The defendant
(iii) The case is not without its difficulties because it was the director of the Royal Italian Opera in London.
seems to be based on the fault of the agents of Oscar The claimant had agreed to sing in Great Britain in
Chess in not discovering the date of the vehicle. In most theatres, halls and drawing rooms for a period of time
cases the courts do not concern themselves with fault commencing on 30 March 1875, and to be in London
when dealing with the terms of a contract. If, as in for rehearsals six days before the engagement began.
Oscar Chess, A warrants to B that goods have certain The claimant was taken ill and arrived on 28 March
characteristics, it is no defence if they have not that 1875, but the defendant would not accept the claim-
the giver of the warranty honestly and reasonably ant’s services, treating the contract as discharged.
believed that they had. (Compare the law relating to
misrepresentation.) Nor is B normally expected to check Held – the rehearsal clause was subsidiary to the main
up on the statement. What this case shows is that it is purpose of the contract, and its breach constituted a
much harder for a private individual to give a warranty breach of warranty only. The defendant had no right to
to a dealer, and that the dealer may be regarded as at treat the contract as discharged and must compensate
fault in terms of the contract he made because he should the claimant, but he had a counterclaim for any
have known better! damage he had suffered by the claimant’s late arrival.
(iv) A contrast to Oscar Chess is provided by Dick Comment This case is also concerned with the availability
Bentley Productions Ltd v Harold Smith (Motors) of repudiation and the court decided that the breach
Ltd [1965] 2 All ER 65 where a dealer sold a Bentley to was not sufficiently serious. The court suggested that if
a customer, the instruments showing that it had done Gye wanted redress he should cross-claim for damages
only 30,000 miles since a replacement engine was fitted against Bettini. If and when he did, and there is
when, in fact, it had done 100,000 miles since that time. no report suggesting that he did, the matter of Bettini’s
The seller was held liable for breach of condition, illness excusing his breach would have had to be raised.
whereas in Oscar Chess the seller – who was not a dealer Presumably, it would have been a defence even though in
– was not. this case the contract was not discharged by frustration.
..
EL_Z01.qxd 3/26/07 1:51 PM Page 781
CASES 156 –157 CONTRACTUAL TERMS 781
Intermediate or innominate terms Contractual terms: terms implied by custom
Cehave NV v Bremer Handelsgesellschaft

156 157 Hutton v Warren (1836) 150 ER 517
mbH (The Hansa Nord) [1975] 3 All ER 739
The defendants sold citrus pulp pellets to the claim- The claimant was the tenant of a farm and the
ants. A term of the contract was ‘shipment to be made defendant the landlord. At Michaelmas 1833, the
in good condition’. The goods were not delivered all defendant gave the claimant notice to quit on
at once but in consignments, and when a particular the Lady Day following. The defendant insisted that
consignment arrived at Rotterdam, the market price the claimant cultivate the land during the period
of the goods had fallen and it was found that 1,260 of notice, which he did. The claimant now asked
tons of the goods out of a total consignment of 3,293 for a fair allowance for seeds and labour, of which
tons was damaged. The claimants rejected the whole he had had no benefit, having left the farm before
cargo on the ground that the shipment was not made harvest. It was proved that by custom a tenant was
in good condition. The claimants then sought the bound to farm for the whole of his tenancy and on
recovery of the price, which amounted to £100,000. quitting was entitled to a fair allowance for seeds and
In the event, a middle man bought the goods at the labour.
price of £33,720 and resold them to the claimants at Held – the claimant succeeded.
the same price. The claimants then used the pellets
We are of opinion that this custom was, by implica-
for making cattle food as was the original intention.
tion, imported into the lease. It has long been
The total result of the transaction, if it had been left
settled, that in commercial transactions, extrinsic
that way, was that the claimants had received goods
evidence of custom and usage is admissible to
which they had bought for £100,000 for the reduced
annex incidents to written contracts in matters
price of £33,720. The Court of Appeal decided in
with respect to which they are silent. The same rule
favour of the sellers. The court held that the contractual
has also been applied to contracts in other transac-
term ‘shipment to be made in good condition’ was
tions of life, in which known usages have been
not a contractual condition but was an intermediate
established and prevailed; and this has been done
or innominate term. As Lord Denning, MR said: ‘If a
upon the principle of presumption that, in such
small portion of the whole cargo was not in good
transactions, the parties did not mean to express
condition and arrived a little unsound, it should be
in writing the whole of the contract by which
met by a price allowance. The buyers should not have
they intended to be bound, but to contract with
the right to reject the whole cargo unless it was serious
reference to those known usages. (Per Parke B)
or substantial.’
Lord Denning also rejected the view that the goods Comment (i) Michaelmas Day is 29 September and is a
were not of merchantable (now satisfactory) quality quarter day for payment of rent as well as a Christian
simply because they were not perfect in every way. feast. Lady Day is 25 March. It is also a quarter day for
He said that the definition now contained in s 14(2) the payment of rent and is so called because it is a
of the Sale of Goods Act 1979 (as amended) was to be Christian feast.
preferred because it was more flexible than some of (ii) The case also provides an example of an exception
the eariler judicial decisions on previous legislation. to the parol evidence rule which has already been con-
In fact, the definition delegates to the court the task sidered. Outside evidence was admitted, though there
of deciding what is satisfactory quality in the circum- was a written agreement as Parke B explains.
stances of each particular case. (iii) A comparison is provided by the ruling in Lancaster v
Bird, The Times, 9 March 1999 where it was held that
Comment (i) This intermediate or innominate term although there was some evidence of a custom in the
approach was endorsed by the House of Lords in Reardon building trade that prices were quoted exclusive of VAT,
Smith Line v Hansen-Tangen [1976] 3 All ER 570. this customary term could not be applied to a contract
(ii) The breach did not seem to have affected the use of between a small builder and a part-time farmer for work
the goods and looks like a business ploy to get them and materials in connection with the erection of a farm
more cheaply. The views of Lord Denning in this case shed. The builder’s price had been quoted exclusive of
are now contained in s 15A of the Sale of Goods Act 1979 VAT but, of course, the account rendered added 171/2 per
(inserted by the Sale and Supply of Goods Act 1994) cent to that figure to cover VAT, the builder being regis-
under which the right to reject the goods for slight tered for VAT. This increased the bill by a percentage
breaches is retained in consumer contracts, but in non- which the farmer could not recover since he was not regis-
consumer contracts such as this, a buyer will, where the tered for VAT, his turnover being presumably below the
breach is slight, have to take delivery and sue for any loss. then VAT threshold.
..
EL_Z01.qxd 3/26/07 1:51 PM Page 782
The non-VAT price was payable by the farmer with the Comment (i) This statement of the law is to the effect
builder accounting for VAT on the reduced price. A bad that the court cannot imply a term because it is reason-
deal for him! able to do so but only when it is commercially necessary
to do so. Lord Denning, particularly, in Liverpool City
Judicial implied terms Council v Irwin [1977] put forward the view that the
court could imply a term whenever it was reasonable to
do so, even if it was not necessary to do so to make the
158 The Moorcock (1889) 14 PD 64
contract work in a commercial sense. This view is still not
entirely accepted by the judiciary in general.
The appellants in this case were in possession of a
wharf and a jetty extending into the River Thames, (ii) Although the court most often implies covenants or
and the respondent was the owner of the steamship terms which are positive, i.e. the party concerned has to
Moorcock. In November 1887, the appellants and do something, negative covenants can be implied. Thus,
the respondents agreed that the ship should be dis- in Fraser v Thames Television Ltd [1983] 2 All ER 101 the
charged and loaded at the wharf and for that purpose members of a group called Rock Bottom brought an
action alleging that Thames had broken an agreement
should be moored alongside the jetty. Both parties
with them about a TV series, an implied term of which
realised that when the tide was out the ship would
was that Thames would not use the idea for the series,
rest on the river bed. In the event the Moorcock sus-
which was based on the history of the group and its
tained damage when she ceased to be waterborne
subsequent struggles, unless the members of the group
owing to the centre of the vessel settling on a ridge
were employed as actresses in the series. Hirst, J implied
of hard ground beneath the mud. There was no this negative term on the ground that it was necessary
evidence that the appellants had given any warranty to give business efficacy to the agreement between the
that the place was safe for the ship to lie in, but it was parties.
held – by the Court of Appeal – that there was an
implied warranty by the appellants to this effect, for
Statutory implied terms: seller’s right to sell
breach of which they were liable in damages. Per
Bowen, LJ:
159 Rowland v Divall [1923] 2 KB 500
Now, an implied warranty, or as it is called, a
covenant in law, as distinguished from an express In April 1922, the defendant bought an ‘Albert’ motor
contract or express warranty, really is in all cases car from a man who had stolen it from the true
founded on the presumed intention of the parties, owner. One month later the claimant, a dealer, pur-
and upon reason. The implication which the law chased the car from the defendant for £334, repainted
draws from what must obviously have been the it, and sold it for £400 to Colonel Railsdon. In Sep-
intention of the parties, the law draws with the tember 1922, the police seized the car from Colonel
object of giving efficacy to the transaction and pre- Railsdon and the claimant repaid him the £400. The
venting such a failure of consideration as cannot claimant now sued the defendant for £334 on the
have been within the contemplation of either side; ground that there had been a total failure of consid-
and I believe if one were to take all cases, and they eration since the claimant had not obtained a title to
are many, of implied warranties or covenants in the car.
law, it will be found that in all of them the law is
Held – the defendant was in breach of s 12 of the
raising an implication from the presumed intention
Sale of Goods Act, which implies conditions and
of the parties with the object of giving to the trans-
warranties into a sale of goods relating to the seller’s
action such efficacy as both parties must have
right to sell, and there had been a total failure of
intended that at all events it should have. In busi-
consideration in spite of the fact that the car had
ness transactions such as this, what the law desires
been used by the claimant and his purchaser. The
to effect by the implication is to give such business
claimant contracted for the property in the car and
efficacy to the transaction as must have been
not the mere right to possess it. Since he had not
intended at all events by both parties who are busi-
obtained the property, he was entitled to recover the
ness men; not to impose on one side all the perils
sum of £334 and no deductions should be made for
of the transaction, or to emancipate one side from
the period of use.
all chances of failure, but to make each party
promise in law as much, at all events, as it must Comment (i) Although the court purported to deal with
have been in the contemplation of both parties that this case as a breach of s 12(1) of the Act, it would appear
he should be responsible for in respect of those that in fact it operated on common-law principles and
perils or chances. gave complete restitution of the purchase price because
..
EL_Z01.qxd 3/26/07 1:51 PM Page 783
CASES 160 –161 CONTRACTUAL TERMS 783
of total failure of consideration arising out of the seller’s advertisement and later visited the defendant to
lack of title. The condition under s 12(1) had by reason of inspect the car. During his inspection he noticed, on
the claimant’s use of the car and the passage of time the rear of the car, a metal disc with the figure 1200
become a warranty when the action was brought, and on it. The claimant purchased the car, paying the
if the court had been awarding damages for breach of agreed price. However, he later discovered that the car
warranty it would have had to reduce the sum of £334 by was made up of the rear of a 1961 Triumph Herald
a sum representing the value to the claimant of the use 1200 welded to the front of an earlier Triumph Herald
of the vehicle which he had had. 948. The welding was unsatisfactory and the car was
(ii) The drawback to making an allowance to the seller unroadworthy.
for use is that he gets an allowance for a car which is not
his and the owner might sue the buyer in damages for Held – by the Court of Appeal – the claimant’s case for
conversion so that he would have to pay an allowance damages for breach of the condition implied in the
and damages to the true owner in conversion. In other contract by s 13 of the Sale of Goods Act succeeded.
words, pay for use twice. The claimant had relied on the advertisement and on
(iii) It is also relevant to say that the court felt an the metal disc on the rear and the sale was one by
allowance for use should not be made because the description, even though the claimant had seen and
claimant had paid the price for the car to become its inspected the vehicle.
owner, and not merely to have use of it. So why should
he be subject to an allowance for use when that is not
Comment It is, however, necessary for the buyer to
what he wanted or bargained for? As Bankes, LJ said: ‘He
show that it was the intention of the parties that
did not get what he paid for – namely a car to which
the description should be relied upon by the buyer.
he would have title.’
In Harlingdon Ltd v Hull Fine Art Ltd [1990] 1 All ER
737 Hull was a firm of art dealers controlled by Mr
Niblett Ltd v Confectioners’ Materials Co Ltd Christopher Hull. It was asked to sell two oil paintings
160
[1921] 3 KB 387 described as being by Münter, a German artist of the
The defendants agreed to sell to the claimants 3,000 Impressionist School. Mr Hull had no knowledge of
cases of condensed milk to be shipped from New York the German Impressionist School. He contacted
to London. Of these, 1,000 cases bore labels with the Harlingdon: art dealers specialising in that field.
word ‘Nissly’ on them. This came to the notice of the Mr Hull told Harlingdon that the paintings were by
Nestlé Company and it suggested that this was an Münter. Harlingdon sent an expert to examine the
paintings and at this stage Mr Hull made it clear that
infringement of its registered trade mark. The
he was not an expert in the field. Following the inspec-
claimants admitted this and gave an undertaking not
tion, Harlingdon bought one of the paintings which
to sell the milk under the title of ‘Nissly’. They tried
turned out to be a forgery. Harlingdon sued for breach
to dispose of the goods in various ways but eventually
of s 13. It was held by the Court of Appeal that the
discovered that the only way to deal with the goods
claim failed. Harlingdon had not relied on the descrip-
was to take off the labels and sell the milk without tion of the painting, but had bought it after a proper
mark or label, thus incurring loss. and expert examination. The ‘description’ had not,
Held – by the Court of Appeal – the sellers were in therefore, become an essential term or condition of the
breach of the implied condition set out in s 12(1) of contract.
the Sale of Goods Act. A person who can sell goods only It should be noted that this matter was not raised
by infringing a trade mark has no right to sell, even in Leaf v International Galleries (1950) (see Chapter 12)
though he may be the owner of the goods. Atkin, LJ because Mr Leaf did not claim a breach of s 13.
also found the sellers to be in breach of the warranty Presumably, if he had done so, he would have been
required to show that it was the intention of the
under s 12(2) because the buyer had not enjoyed
parties that he should rely on the description
quiet possession of the goods.
that the painting was by John Constable. This will
normally be fairly easy to prove where the purchaser is
Sale by description: Sale of Goods Act 1979, an inexpert consumer. However, it was held in
s 13 applied Cavendish-Woodhouse v Manley (1984) 82 LGR 376
that a seller could show that the sale was not by
161 Beale v Taylor [1967] 3 All ER 253 description by using such phrases as ‘Sold as seen’ or
‘Bought as seen’. Such phrases do not, however, avoid
The defendant advertised a car for sale as being a 1961 the conditions of fitness and satisfactory quality because
Triumph Herald 1200 and he believed this descrip- the phrases are not regarded as general exclusion
tion to be correct. The claimant answered the clauses.
..
EL_Z01.qxd 3/26/07 1:51 PM Page 784
784 CONTRACTUAL TERMS CASES 162–165
Section 13 applies to packaging injuries for the defendant’s breach of s 14(3) of the
Sale of Goods Act. The circumstances showed that the
162 Moore & Co v Landauer & Co [1921] 2 KB 519 claimant had relied on the defendant’s skill and
judgement, and although he had not mentioned the
The claimants entered into a contract to sell the defend- purpose for which he required the bottle, he had in
ants a certain quantity of Australian canned fruit, the fact used it for the usual and obvious purpose.
goods to be packed in cases containing 30 tins each.
The goods were to be shipped ‘per SS Toromeo’. The Comment There was no question of the wife suing the
chemist under Sale of Goods legislation because she was
ship was delayed by strikes at Melbourne and in
not a party to the contract. She could today have sued
South Africa, and was very late in arriving at London.
the manufacturer or the chemist in negligence (see
When the goods were discharged about one-half of
Donoghue v Stevenson (1932)) if she could have proved
the consignment was packed in cases containing 24
negligence in either of them. A claim against the manu-
tins only, instead of 30, and the buyers refused to
facturers could now be brought under the Consumer
accept them. Protection Act 1987, even where negligence cannot be
Held – although the method of packing made no proved (see further Chapter 21).
difference to the market value of the goods, the sale
was by description under s 13 of the Sale of Goods
Act, and the description had not been complied with. 164 Griffiths v Peter Conway Ltd [1939] 1 All ER 685
Consequently, the buyers were entitled to reject the
The defendants, who were retail tailors, supplied the
whole consignment.
claimant with a Harris tweed coat which was made to
Comment (i) The court seems to have adopted a some- order for her. The claimant wore the coat for a short
what purist approach to s 13 in this case and had no real time and then developed dermatitis. She brought this
regard to the effect which the breach of description had action for damages alleging that the defendants were
on the contract, i.e. substantially none. Decisions such as in breach of s 14(3) of the Sale of Goods Act because
this were described by Lord Wilberforce in the Reardon the coat was not fit for the purpose for which it was
Smith case as ‘excessively technical’. bought. Evidence showed that the claimant had an
(ii) Under s 15A of the Sale of Goods Act 1979 (as inserted abnormally sensitive skin and that the coat would not
by the Sale and Supply of Goods Act 1994) the right of have affected the skin of a normal person.
rejection in the above circumstances is retained but a
Held – the claimant failed because s 14(3) did not
business buyer will, where (as in this case) the breach is
apply. The defendants did not know of the claimant’s
of slight or no effect, have to take delivery and sue for
loss if any. abnormality and could not be expected to assume
that it existed.
Fitness for the purpose: no need to reveal a usual Comment A claim against the manufacturer of the
purpose but a special purpose must be disclosed tweed under the Consumer Protection Act 1987 is not
appropriate here. Although the Act does not require
163 Priest v Last [1903] 2 KB 148 negligence to be proved, it is necessary to prove causa-
tion, and the effective cause here was the claimant’s
The claimant, a draper who had no special knowledge sensitive skin, not the coat.
of hot-water bottles, bought such a bottle from the
defendant who was a chemist. It was in the ordinary
Fitness for the purpose: reliance on the
course of the defendant’s business to sell hot-water
seller’s skill and judgement readily inferred
bottles and the claimant asked him whether the india-
unless the seller is known to sell only one
rubber bottle he was shown would stand boiling
brand of goods
water. He was told that it would not, but it would
stand hot water. The claimant did not state the pur- Grant v Australian Knitting Mills Ltd [1936]
165
pose for which the bottle was required. In the event AC 85
the bottle was filled with hot water and used by the This was an appeal from the High Court of Australia
claimant’s wife for bodily application to relieve to the Privy Council in England by a Dr Grant of
cramp. On the fifth time of using, the bottle burst and Adelaide, South Australia. He bought a pair of long
the wife was severely scalded. Evidence showed that woollen underpants from a retailer, the respondents
the bottle was not fit for use as a hot-water bottle. being the manufacturers. The underpants contained
Held – the claimant was entitled to recover the ex- an excess of sulphite, a chemical used in their manu-
penses he had incurred in the treatment of his wife’s facture. This chemical should have been eliminated
..
EL_Z01.qxd 3/26/07 1:51 PM Page 785
before the product was finished, but a quantity was applied, and since the beer was not of merchantable
left in the underpants purchased by Dr Grant. After (now satisfactory) quality, the claimant was entitled
wearing the pants for a day or two, a rash, which to recover damages.
turned out to be dermatitis, appeared on the appel-
lant’s ankles and soon became generalised, com- Fitness: second-hand goods: where defects occur
pelling the appellant to spend many months in fairly quickly after sale
hospital. He sued the retailers and the manufacturers
Crowther v Shannon Motor Company [1975]
for damages. 167
1 All ER 139
Held – (a) the retailers were in breach of the South
The claimant, relying on the skill and judgement
Australian Sale of Goods Act 1895 (which is in the
of the defendants, bought a second-hand car
same terms as the English Act of 1979). They were
from them. After being driven for over 2,000 miles
liable under s 14(3) because the article was not fit
in the three weeks after the sale, the engine seized
for the purpose; they were liable under s 14(2) because
and had to be replaced. In his evidence, the previous
the article was not of merchantable (now satisfact-
owner said that the engine was not fit for use on the
ory) quality; (b) the manufacturers were liable in
road when he sold it to the defendants, and on that
negligence, following Donoghue v Stevenson. This was
basis the Court of Appeal held that there was a breach
a latent defect which could not have been dis-
of s 14(3) at the time of resale. The fact that a car
covered by a reasonable examination. It should also
does not go for a reasonable time after sale is evidence
be noted that the appellant had a perfectly normal
that the car was not fit for the purpose at the time
skin. (Compare Griffiths v Peter Conway Ltd (1939)
of sale.
above.)
Comment This case makes clear that there is an obliga-
Comment (i) Section 13 (sale by description) also applied
tion of reasonable durability on the seller of goods.
even though this was a sale of a specific object which was
seen by the purchaser. On the issue of reliance, Lord
Wright said: ‘The reliance will be in general inferred Fitness and satisfactory quality: s 14(3) can
from the fact that a buyer goes to the shop in confidence operate independently
that the tradesman has selected his stock with skill and
judgement.’ 168 Baldry v Marshall [1925] 1 KB 260
(ii) This case provides an interesting contrast between
the liability of the supplier who was liable although not The claimant was the owner of a Talbot racing car
negligent, Sale of Goods Act liability being strict, and the and was anxious to change it for a touring car
liability of the manufacturer where the claimant was because his wife refused to ride in the Talbot. The
put to the extra burden of proving the manufacturer claimant wrote to the defendants asking for details
negligent (but see now Consumer Protection Act 1987 of the Bugatti car for which they were agents. The
in Chapter 21). claimant knew nothing of the Bugatti range, but
asked for a car that would be comfortable and
suitable for touring purposes. The defendants’
166 Wren v Holt [1903] 1 KB 610 manager said that a Bugatti would be suitable. The
claimant later inspected a Bugatti chassis and agreed
The claimant was a builder’s labourer at Blackburn,
to buy it when a body had been put on it. When
and the defendant was the tenant of a beerhouse in
the car was delivered it was to all intents and
the same town. The beerhouse was a tied house so
purposes a racing car and not suitable for touring. The
that the defendant was obliged to sell beer brewed by
claimant returned the car, but he had paid £1,000
a company called Richard Holden Limited. The
under the contract and now sued for its return on the
claimant was a regular customer and knew that the
ground that the defendants were in breach of s 14(3)
beerhouse was a tied house, and that only one type of
of the Sale of Goods Act, the car not being fit for
beer was supplied. The claimant became ill and it was
the purpose.
established that his illness was caused by arsenical
poisoning due to the beer supplied to him. He now Held – the claimant had relied on the skill and judge-
sued the tenant. ment of the defendants and it was in the course of
their business to supply cars. Therefore, there was a
Held – there was no claim under s 14(3) because the
breach of s 14(3).
claimant could not have relied on the defendant’s
skill and judgement in selecting his stock, because he Comment It will be appreciated that the Bugatti was of
was bound to supply Holden’s beer. However, s 14(2) merchantable (now satisfactory) quality.
..
EL_Z01.qxd 3/26/07 1:51 PM Page 786
Resale price has some bearing upon satisfactory the Sale of Goods Act. The fact that the bottles were
quality only bailed to the claimant was immaterial. There was
an implied warranty of fitness for the purpose for
BS Brown & Son Ltd v Craiks Ltd [1970]
169 which they were supplied, and the defendant was
1 All ER 823
liable in damages.
Brown and Son ordered a quantity of cloth from
Craiks who were manufacturers. Brown’s wanted it for Comment Bray, J was careful to point out that his
making dresses but did not make this purpose known decision was an interpretation of s 14 of the Sale of
to Craiks who thought the cloth was wanted for Goods Act only. It does not decide that the liability of a
industrial use. The price paid by Brown’s was 36.25p bailor is the same as that of a vendor.
per yard, which was higher than the normal price for
industrial cloth but not substantially so. The cloth Wilson v Rickett, Cockerell & Co Ltd [1954]
171
was not suitable for making dresses and Brown’s 1 QB 598
cancelled the contract and claimed damages. Both The claimant, a housewife, ordered from the defend-
parties were left with substantial quantities of cloth ants, who were coal merchants, a ton of ‘Coalite’. The
but Craiks had managed to sell some of their stock for Coalite was delivered and when part of it was put on
30p per yard. Having failed in the lower court to a fire in an open grate, it exploded causing damage
establish a claim under s 14(3), since they had not to the claimant’s house. In this action the claimant
made the purpose known to Craiks, Brown’s now sought damages for breach of s 14 of the Sale of Goods
sued for damages under s 14(2). Act. The county court judge found that the explosion
Held – by the House of Lords – the claim failed. The was not due to the Coalite but to something else, pos-
cloth was still commercially saleable for industrial sibly a piece of coal with explosive embedded in it,
purposes though at a slightly lower price. It was not which had got mixed with the Coalite in transit and
a necessary requirement of merchantable (now satis- had not come from the manufacturers of the Coalite.
factory) quality that there should be no difference Therefore, he held that s 14(3) applied only to the
between purchase and resale price. If the difference Coalite and dismissed the action since the Coalite
was substantial, however, it might indicate that the itself was fit for the purpose. The Court of Appeal,
goods were not of merchantable (now satisfactory) however, in allowing the appeal, pointed out that fuel
quality. The difference in this case was not so material of this kind is not sold by the lump but by the bag,
as to justify any such inference. and a bag containing explosive materials is, as a unit,
not fit for burning. The explosive matter was ‘goods
Comment (i) Even where the goods are not purchased supplied under the contract’ for the purposes of s 14
for resale the purchase price may be relevant. Thus, the and clearly s 14(2) applied, because the goods sup-
sale of a car with a defective clutch would be sale of plied were not of merchantable (now satisfactory)
unsatisfactory goods, but if the seller makes an quality. Damages were awarded to the claimant.
allowance in the price to cover the defect, it may not be Regarding the applicability of what is now s 14(3), the
(Bartlett v Sydney Marcus Ltd [1965] 2 All ER 753).
Court of Appeal did not think this applied since the
(ii) The case also decides that goods may be satisfactory if sale was under a trade name, and the claimant had
they are fit for one of the purposes for which they might not relied on the defendant’s skill and judgement in
be used even though they are unfit when used for selecting a fuel.
another purpose.
Comment The assumption of no reliance where goods
Implied terms relating to fitness and satisfactory are purchased under a trade name no longer applies
quality: items supplied with the goods under the 1979 Act.
170 Geddling v Marsh [1920] 1 KB 668 Wormell v RHM Agriculture (East) Ltd [1986]
172
1 All ER 769
The defendants were manufacturers of mineral waters Mr Wormell, an experienced arable farmer, was
and they supplied the same to the claimant who kept unable by reason of cold, wet weather to spray his
a small general store. The bottles were returnable winter wheat crop to kill wild oats until much later
when empty. One of the bottles was defective, and than usual in the spring of 1983. He asked the defend-
whilst the claimant was putting it back into a crate, it ants to recommend the best wild-oat killer which could
burst and injured her. be used later than normal. The agricultural chemical
Held – even though the bottles were returnable, they manager recommended a particular herbicide and
were supplied under a contract of sale within s 14 of Mr Wormell bought £6,438 worth of it.
..
EL_Z01.qxd 3/26/07 1:51 PM Page 787
The instructions on the cans stated that it ought Retailer does not warrant safety of goods used by
not to be applied beyond the recommended stage of the buyer after buyer knows of their defects
crop growth. It was said that damage could occur to
crops sprayed after that stage and the herbicide would 173 Lambert v Lewis [1981] 1 All ER 1185
give the best level of wild-oat control at the latest
stage of application consistent with the growth of the Mr Lewis owned a Land Rover and a trailer. His
crop. employee, Mr Larkin, was driving it when the trailer
Mr Wormell felt that the need to kill the wild oats broke away. It collided with a car coming from the
was so important that he would risk some damage to opposite direction. Mr Lambert, who was driving that
the crops by applying the herbicide quite late. From car, was killed and so was his son. His wife and daugh-
his understanding of the instructions the risk was not ter, who were also passengers, survived and then sued
that the herbicide would not be effective on the wild Mr Lewis for damages in negligence. He joined the
oats, but if the spray was used after the recommended retailer who sold him the towing hitch which had
time then the crop might be damaged. The herbicide become detached from the trailer and was basically
was applied but proved to be largely ineffective. the cause of the collision. The retailer was sued under
Mr Wormell claimed damages for breach of con- s 14 (goods not fit for the purpose nor of merchant-
tract in respect of the sale of the herbicide. He alleged able (now satisfactory) quality). The court found that
that it was not of merchantable (now satisfactory) the towing hitch was badly designed and a securing
quality contrary to s 14(2) of the Sale of Goods Act, nor brass spindle and handle had come off it so that only
was it fit for the purpose for which it was supplied, dirt was keeping the towing pin in position. It had been
namely to control weeds, and in particular, wild oats, like that for some months and Mr Lewis had coupled
contrary to s 14(3) of the same Act. and uncoupled the trailer once or twice a week during
RHM argued that since the herbicide would kill the that time and knew of the problem.
wild oats, the fact that the instructions caused it to be The claimants succeeded in their action against
applied at a time when it was not effective did not make Mr Lewis. He failed in his claim against the retailer. The
the herbicide itself unmerchantable (now unsatis- House of Lords decided that when a person first buys
factory) or unfit for the purpose. goods he can rely on s 14. However, once he discovers
Piers Ashworth QC sitting as a Deputy Judge of that they are defective but continues to use them and
the High Court, said that one had to look at how so causes injury, he is personally liable for the loss
Mr Wormell understood the instructions and how a caused. He cannot claim an indemnity under s 14
reasonable user would understand them. Mr Wormell from the retailer. The chain of causation is broken by
understood the instructions to mean that the herbi- the buyer’s continued use of the goods while knowing
cide would be effective if it was sprayed at any time, that they are faulty and may cause injury.
but if sprayed late there was a risk of crop damage. Comment The above summary does not concern itself
The judge concluded that a reasonable farmer would with the possible liability of the manfacturers in terms of
have understood the instructions in the same way. the design problem. However, a point of interest arises
He thought that the instructions were consequently in connection with it. The issue of the manufacturers’
misleading. liability was taken by an action in negligence. The court
For the purposes of the Sale of Goods Act, ‘goods’ refused to construe a collateral contract between Mr
included the container and packaging for the goods Lewis and the manufacturers although he bought the
and any instructions supplied with them. If the hitch on the strength of the manufacturers’ advertising.
instructions were wrong or misleading the goods (Compare Carlill (Chapter 9), where such a contract was
would not be of merchantable (now satisfactory) rather exceptionally construed.)
quality or fit for the purpose for which they were
supplied under s 14(2) and (3). This statement was Sale by sample: what is a reasonable
approved in a 1987 appeal to the Court of Appeal, examination?
though on the facts the court reversed the decision
of the High Court, having found the instructions 174 Godley v Perry [1960] 1 All ER 36
adequate.
The first defendant, Perry, was a newsagent who also
Comment The decision was reversed by the Court of sold toys, and, in particular, displayed plastic toy cata-
Appeal because the instructions were adequate but pults in his window. The claimant, who was a boy
merely misunderstood. However, the Court of Appeal aged six, bought one for 6d. While using it to fire a
agreed that there is a legal obligation to give adequate stone, the catapult broke and the claimant was struck
guidance as to how the product is to be used. in the eye, either by a piece of the catapult or the
..
EL_Z01.qxd 3/26/07 1:51 PM Page 788
788 EXCLUSION CLAUSES CASES 175 –176
stone, and as a result he lost his left eye. The chemist’s clause: ‘Any express or implied condition, statement or
report given in evidence was that the catapults were warranty, statutory or otherwise, is hereby excluded.’
made from cheap material unsuitable for the purpose The claimant signed the agreement but did not read
and likely to fracture, and that the moulding of the the relevant clause, apparently because she thought it
plastic was poor, the catapults containing internal was merely an order form, and she now sued for
voids. Perry had purchased the catapults from a breach of what is now s 14(3) of the Sale of Goods Act
wholesaler with whom he had dealt for some time, 1979 (goods not fit for the purpose) in respect of the
and this sale was by sample, the defendant’s wife unsatisfactory nature of the machine supplied which
examining the sample catapult by pulling the elastic. often jammed and soon became unusable.
The wholesaler’s supplier was another wholesaler who Held – the clause was binding on her, although the
had imported the catapults from Hong Kong. This defendants made no attempt to read the document
sale was also by sample and the sample catapult was to her nor call her attention to the clause. ‘Where a
again tested by pulling the elastic. In this action the document containing contractual terms is signed,
claimant alleged that the first defendant was in then in the absence of fraud, or I will add, misrepres-
breach of the conditions implied by s 14(2) and (3) of entation, the party signing it is bound, and it is wholly
the Sale of Goods Act. immaterial whether he had read the document or
The first defendant brought in his supplier as third not.’ (Per Scrutton, LJ)
party, alleging against him a breach of the conditions
implied by s 15(2)(c), and the third party brought in his Comment (i) The ruling in this case would appear to
supplier as fourth party, alleging breach of s 15(2)(c) apply even where the party signing cannot understand
against him. the document as where the signer cannot read or does
not understand the language in which the document is
Held –
written (The Luna [1920] P 22). This would not, of course,
(a) the first defendant was in breach of s 14(2) and apply if the person relying on the clause knew that the
(3) because: other party could not read (Geir v Kujawa [1970] 1
(i) the catapult was not reasonably fit for the Lloyd’s Rep 364). It will, of course, be realised that s 6(3)
purpose for which it was required. The of the Unfair Contract Terms Act 1977 would now apply
claimant relied on the seller’s skill or judge- so that the clause could only be effective if reasonable. In
ment, this being readily inferred where the addition, s 3 of the 1977 Act would require reasonable-
customer was of tender years (s 14(3)); ness because the contract was on the supplier’s standard
(ii) the catapult was not merchantable (now of terms which were applicable to everyone and could not
satisfactory quality) (s 14(2)); be varied.
(b) the third and fourth parties were both in breach of (ii) The ruling in the Geir case has assumed more import-
s 15(2)(c) because the catapult had a defect which ance now that business within Europe has expanded and
rendered it unmerchantable (now unsatisfactory) indeed because of the increase in international trade
and this defect was not apparent on reasonable generally. Where such trade is with a country in which
examination of the sample. The test applied, i.e. English is not the first language, exclusion clauses and
the pulling of the elastic, was all that could be other terms should be translated as appropriate. In a case
involving Allianz, a German company, the court decided
expected of a potential purchaser. The third and
that an exclusion clause in an insurance policy issued by
fourth parties had done business before, and the
Allianz in France but without a translation into French
third party was entitled to regard without suspi-
did not apply. However, illiteracy or failure to under-
cion any sample shown to him and to rely on the
stand English in the UK business scene is still no defence
fourth party’s skill in selecting his goods.
and an English clause will apply (see Thompson v LMS
Railway (1930) below).
EXCLUSION CLAUSES
Curtis v Chemical Cleaning and Dyeing Co [1951]
Exclusion clauses: the effect of signing a 176
1 All ER 631
document containing such a clause: effect of
The claimant took a wedding dress, with beads and
misrepresentation as to contents
sequins, to the defendant’s shop for cleaning. She was
175 L’Estrange v Graucob (F) [1934] 2 KB 394 asked to sign a receipt which contained the following
clause: ‘This article is accepted on condition that the
The defendant sold to the claimant, Miss L’Estrange, company is not liable for any damage howsoever
who owned a café in Llandudno, a cigarette slot arising.’ The claimant said in evidence: ‘When I was
machine, inserting in the sales agreement the following asked to sign the document I asked why? The assistant
..
EL_Z01.qxd 3/26/07 1:51 PM Page 789
CASES 177–180 EXCLUSION CLAUSES 789
said I was to accept any responsibility for damage to Held – the clause was not binding on Chapelton.
beads and sequins. I did not read it all before I signed The board by the chairs made no attempt to limit the
it.’ The dress was returned stained, and the claimant liability, and it was unreasonable to communicate
sued for damages. The company relied on the clause. conditions by means of a mere receipt.
Held – the company could not rely on the clause Comment The defendants would now have an additional
because the assistant had misrepresented the effect of problem, i.e. the 1977 Act outlaws such clauses.
the document so that the claimant was merely run-
ning the risk of damage to the beads and sequins. Exclusion clause: communication at or before the
Comment It will be appreciated that the assistant’s contract essential
statement was true as far as it went. As we have seen,
Olley v Marlborough Court Ltd [1949]
half-truths such as this can amount to misrepresentation 179
1 All ER 127
(see Chapter 13).
A husband and wife arrived at a hotel as guests and
Communication of exclusion clauses: paid for a room in advance. They went up to the
in contractual and non-contractual documents room allotted to them; on one of the walls was the
following notice: ‘The proprietors will not hold them-
177 Thompson v LMS Railway [1930] 1 KB 41 selves responsible for articles lost or stolen unless
handed to the manageress for safe custody.’ The wife
Thompson, who could not read, asked her niece to closed the self-locking door of the bedroom and took
buy her an excursion ticket to Manchester from the key downstairs to the reception desk. There was
Darwin and back, on the front of which was printed inadequate and, therefore, negligent staff supervision
the words, ‘Excursion. For conditions see back.’ On the of the keyboard. A third party took the key and stole
back was a notice that the ticket was issued subject to certain of the wife’s furs. In the ensuing action the
the conditions in the company’s timetables, which defendants sought to rely on the notice as a term of
excluded liability for injury however caused. Thompson the contract.
was injured and claimed damages. Held – the contract was completed at the reception
Held – her action failed. She had constructive notice desk and no subsequent notices could affect the
of the conditions which had, in the court’s view, been claimant’s rights.
properly communicated to the ordinary passenger.
Comment (i) It was said in Spurling v Bradshaw [1956]
Comment (i) The railway ticket was regarded as a con- 1 WLR 461 that if the husband and wife had seen the
tractual document. (Contrast Chapelton below.) notice on a previous visit to the hotel it would have been
(ii) The injuries, which were caused when the train on binding on them, though this is by no means certain in
returning to Darwin at 10 pm did not draw all the way view of cases such as Hollier v Rambler Motors [1972] 1
into the station so that the claimant fell down a ramp, All ER 399, which suggest that in consumer transactions
would have been the subject of a successful action at previous dealings are not necessarily incorporated unless
law today because the Unfair Contract Terms Act 1977 perhaps the dealings have been frequent.
outlaws exclusion clauses relating to death and personal (ii) A further illustration is provided by Thornton v Shoe
injury. Thus, on its own facts, this case is of historical Lane Parking Ltd [1971] 1 All ER 686 where the Court
interest only, though still relevant on the question of of Appeal decided that the conditions exempting the
constructive notice. company from certain liabilities on a ticket issued by an
automatic barrier at the entrance to a car park were
Chapelton v Barry Urban District Council [1940]
178 communicated too late. The contract was made when the
1 All ER 356
claimant put his car on the place which activated the
The claimant Chapelton wished to hire deck-chairs barrier. This was before the ticket was issued.
and went to a pile owned by the defendants, behind
which was a notice stating: ‘Hire of chairs 2d per Exclusion clause: ineffective where there is
session of three hours.’ The claimant took two chairs, an express undertaking running contrary to
paid for them, and received two tickets which he put the clause
into his pocket after merely glancing at them. One of
the chairs collapsed and he was injured. A notice on J Evans & Son (Portsmouth) Ltd v Andrea
180
the back of the ticket provided that: ‘The council will Merzario Ltd [1976] 2 All ER 930
not be liable for any accident or damage arising from The claimants imported machines from Italy. They
hire of chairs.’ The claimant sued for damages and the had contracted with the defendants since about
Council sought to rely on the clause in the ticket. 1959 for the transport of these machines. Before the
..
EL_Z01.qxd 3/26/07 1:51 PM Page 790
790 EXCLUSION CLAUSES CASES 181–182
defendants went over to the use of containers the consideration and so became parties to the contract
claimants’ machines had always been crated and when they unloaded the machine (Carlill v Carbolic
carried under deck. When the defendants went over Smoke Ball Co (1893) (see Chapter 9) applied). The
to containers they orally agreed with the claimants performance of services by the stevedores in discharg-
that the claimants’ goods would still be carried under ing the cargo was sufficient consideration to consti-
deck. However, on a particular occasion a machine tute a contract, even though they were already under
being transported for the claimants was carried in a an obligation to the carrier to perform those services
container on deck. At the start of the voyage the ship because the actual performance of an outstanding
met a swell which caused the container to fall off the contractual obligation was sufficient to support the
deck and the machine was lost. The contract was promise of an exemption from liability given by the
expressed to be subject to the printed standard con- makers of the drill to the shippers, who were in effect
ditions of the forwarding trade which contained an third parties to the contract between the carrier and
exemption clause excusing the defendants from liabil- the stevedores (Shadwell v Shadwell (1860) in Chapter
ity for loss or damage to the goods unless the damage 10 applied).
occurred whilst the goods were in their actual custody
Comment (i) It is not easy to see when and where the
and by reason of their wilful neglect or default, and relevant offers and acceptances were made in this case
even in those circumstances, the clause limited the but, as we have already noted, a court can construe a
defendants’ liability for loss or damage to a fixed contract from the circumstances without a precise
amount. The claimants sued for damages against the application of the offer and acceptance formula (see
defendants for the loss of the machine, alleging that Rayfield v Hands (1958) in Chapter 9).
the exemption clause did not apply. It was held by the (ii) The case is and will remain an example of the ingenu-
Court of Appeal that it did not apply. The printed ity of the common law to reach conclusions which are
conditions were repugnant to the oral promise for, if thought to be fair in the circumstances of the case. The
they were applicable, they would render that promise Contracts (Rights of Third Parties) Act 1999 now provides
illusory. Accordingly, the oral promise was to be the answer by allowing the contracting parties to
treated as overriding the printed conditions and the confer third-party rights as required in terms at least of
claimants’ suit succeeded, the exemption clause being exclusion clauses in these contracts. The rights of persons
inapplicable. involved in the performance of the contract may be
implied by the court unless it appears that the main
Comment The court may also regard these oral promises parties did not intend them to apply or they had
as collateral contracts (see also Chapter 9), i.e. in this specifically excluded the operation of the Act.
case a collateral contract to carry the machine under
deck, that collateral contract not having an exclusion An ambiguous exclusion clause is construed
clause in it.
against the party who put it in the contract
Exclusion clause: overcoming the privity rule Alexander v Railway Executive [1951]
182
2 All ER 442
The New Zealand Shipping Co Ltd v A M Alexander was a magician who had been on a tour
181
Satterthwaite & Co Ltd [1974] 1 All ER 1015 together with an assistant. He left three trunks at the
In this case the makers of an expensive drilling parcels office at Launceston station, the trunks con-
machine entered into a contract for the carriage of taining various properties which were used in an
the machine by sea to New Zealand. The contract of ‘escape illusion’. The claimant paid 5d for each trunk
carriage (the bill of lading) exempted the carriers from deposited and received a ticket for each one. He then
full liability for any loss or damage to the machine left saying that he would send instructions for their
during carriage and also purported to exempt any dispatch. Some weeks after the deposit and before the
servant or agent of the carrier, including independent claimant had sent instructions for the dispatch of the
contractors employed from time to time by the trunks, the claimant’s assistant persuaded the clerk in
carrier. The machine was damaged by the defendants, the parcels office to give him access to the trunks,
who were stevedores, in the course of unloading, and though he was not in possession of the ticket. The
the question to be decided was whether the defendant assistant took away several of the properties and was
stevedores, who had been employed by the carrier to later convicted of larceny (now theft). The claimant
unload the machine, could take advantage of the sued the defendants for damages for breach of con-
exemption clause in the bill of lading since they were tract, and the defendants pleaded the following term
not parties to the contract. It was decided by the Privy which was contained in the ticket and which stated
Council that they could. The stevedores provided that the Railway Executive was ‘not liable for loss
..
EL_Z01.qxd 3/26/07 1:51 PM Page 791
CASES 183–185 EXCLUSION CLAUSES 791
mis-delivery or damage to any articles where the various places in Australia. The carriers employed
value was in excess of £5 unless at the time of the a subcontractor to collect the parcels and take them
deposit the true value and nature of the goods was to the carriers’ depot in Melbourne. When the sub-
declared by the depositor and an extra charge paid’. contractor arrived late at the Melbourne depot it was
No such declaration or payment had been made. locked and so he drove the lorry full of packages to
Held – the claimant succeeded because, although his own house and left it in a garage there. This was
sufficient notice had been given constructively to the in accordance with the carriers’ instructions to their
claimant of the term, the term did not protect the subcontractors in the event of late arrival at the
defendants because they were guilty of a breach of a depot. There was a fire and some of the packages were
fundamental obligation in allowing the trunks to be destroyed. The cause of the fire was unknown.
opened and things to be removed from them by an However, the alleged negligence of the carriers con-
unauthorised person. sisted in their instruction to the subcontractors to
take the goods home. The court said it was unthink-
Comment (i) Devlin, J said that a deliberate delivery to able that valuable goods worth many thousands of
the wrong person did not fall within the meaning pounds should be kept overnight at a driver’s house,
of ‘mis-delivery’, and this may be regarded as the real regardless of any provision for their safety. The
reason for the decision, as it involved the application of owners sued the carriers who pleaded an exemption
the contra proferentem rule.
clause in the contract of carriage.
(ii) Note also that the receipt or ticket for the goods
Held – by the High Court of Australia – the claimants
deposited was held to be a contractual document.
(Contrast the Chapelton case.) succeeded. There had been a fundamental breach of
contract. The intention of the parties was that the
(iii) A further example of the use of the contra pro-
goods would be taken to the carriers’ depot and not to
ferentem rule is to be found in Williams v Travel
the subcontractor’s house, in which case the carriers
Promotions Ltd ( T/A Voyages Jules Verne), The Times,
could not rely on the clause.
9 March 2000, where the claimant spent part of the last
day of his holiday in Zimbabwe travelling to a different Comment (i) The decision, which was partly based on
hotel nearer to the airport to save an early start. The con- fundamental breach of contract (see below), is perhaps
tract allowed changes to be made in hotels ‘if necessary’. better founded on the four corners rule, i.e. the exclusion
This change, said the court, while it might be ‘sensible’ clause is available only so long as the contract is being
was not ‘necessary’. A wider expression should have been performed in accordance with its terms.
used to cover the change in this case. The claimant
(ii) For the avoidance of doubt, Australian courts’ deci-
succeeded.
sions are of persuasive authority in UK courts.
Rules of construction: repugnancy and the four

corners rule Exclusion clauses: no rule of fundamental breach
Photo Production Ltd v Securicor Transport Ltd
183 Pollock v Macrae [1922] SC (HL) 192 185
[1980] 1 All ER 556
The defendants entered into a contract to build and The claimant company had contracted with the defend-
supply marine engines. The contract had an exclusion ant security company for the defendant to provide
clause which was designed to protect them from security services at the claimant’s factory. A person
liability for defective materials and workmanship. The employed by the defendant lit a fire in the claimant’s
engines supplied under the contract had so many premises while he was carrying out a night patrol. The
defects that they could not be used. The House of fire got out of control and burned down the factory.
Lords struck out the exclusion clause as repugnant to The trial judge was unable to establish from the evid-
the main purpose of the contract, which was to build ence precisely what the motive was for lighting the
and supply workable engines. The claimant’s action fire – it may have been deliberate or merely careless.
for damages was allowed to proceed. The defendant relied on an exclusion clause in the
contract which read:
Thomas National Transport (Melbourne) Pty Ltd Under no circumstances shall the company
184
and Pay v May and Baker (Australia) Pty Ltd (Securicor) be responsible for any injurious act or
[1966] 2 Lloyd’s Rep 347 default by any employee of the company unless
The owners of certain packages containing drugs and such act or default could have been foreseen and
chemicals made a contract with carriers under which avoided by the exercise of due diligence on the part
the packages were to be carried from Melbourne to of the company as his employer . . .
..
EL_Z01.qxd 3/26/07 1:51 PM Page 792
792 EXCLUSION CLAUSES CASE 186
It was accepted that Securicor was not negligent in in Ailsa Craig Fishing Co Ltd v Malvern Fishing Co Ltd
employing the person who lit the fire. He came with [1983] 1 All ER 101. In that case the appellants’ ship sank
good references and there was no reason for Securicor while berthed in Aberdeen harbour. It fouled the vessel
to suppose that he would act as he did. It was held by next to it which was owned by Malvern. The appellants
the House of Lords that the exclusion clause applied sued Malvern. Securicor was the second defendant.
so that Securicor was not liable. All the judges in the Securicor had a contract with the appellants to protect
House of Lords were unanimous in the view that the ship. The accident happened as a result of a rising
there was no rule of law by which exclusion clauses tide. At the time, the Securicor patrolman had left his
post to become involved in New Year celebrations.
became inapplicable to fundamental breach of con-
Although there were arguments by counsel to the
tract, which this admittedly was. Although the Unfair
contrary, the House of Lords held that the exclusion
Contract Terms Act 1977 was not in force at the time
clause covered the circumstances of the case, provided
this action was brought and so could not be applied
the words were given their natural and plain meaning. It,
to the facts of this case, the existence of the Act and
therefore, applied to limit the liability of Securicor, and
its relevance was referred to by Lord Wilberforce who the appellants failed to recover all their loss.
said that the doctrine of fundamental breach had
(iii) The Unfair Contract Terms Act 1977 gives its
been useful in its time as a device for avoiding
strongest protection to those who deal as consumers. The
injustice. He then went on to say:
contracts in Photo Productions and Ailsa Craig were non-
But . . . Parliament has taken a hand; it has passed consumer contracts where both parties were in business.
the Unfair Contract Terms Act 1977. This Act It by no means follows that in a consumer transaction
applies to consumer contracts and those based on (see below) the court would have allowed a defendant
standard terms and enables exception clauses to be to rely on a ‘Securicor’ type of clause. It might well be
applied with regard to what is just and reasonable. regarded as unreasonable in that context.
It is significant that Parliament refrained from legis- (iv) The apportionment of loss referred to by Lord
lating over the whole field of contract. After this Wilberforce and as applied in the Photo Production case
Act, in commercial matters generally, when the par- and the Ailsa Craig case will result in the claimant’s insur-
ties are not of unequal bargaining power, and when ance company bearing the loss. Many cases, particularly
risks are normally borne by insurance . . . there is in business and personal injury, are, in effect, battles
everything to be said. . . . for leaving the parties free between insurance companies in regard to liability. They
to apportion the risks as they think fit. . . . always sue or defend through their clients since the loss
is not directly that of the insurance company but if the
Comment (i) In Harbutt’s Plasticine Ltd v Wayne Tank & loss is the fault of the individual or organisation insured
Pump Co Ltd [1970] 1 All ER 225 Lord Denning accepted the insurance contract requires the insurance company to
that the principle which said that no exclusion clause indemnify the client. That is the nature of the insurance
could excuse a fundamental breach was not a rule of law company’s interest in the case. An insurance contract will
when the injured party carried on with (or affirmed) the commonly contain an express condition that the insured
contract. Where this was so rules of construction must be can be required by the insurer to bring a claim before or
used and the exclusion clause might have to be applied. after the insurer has paid the insured.
However, if the injured party elected to repudiate the
contract for fundamental breach and, as it were, pushed Exclusion of inducement liability: reasonableness
the contract away, the exclusion clause went with it and
could never apply to prevent the injured party from 186 Walker v Boyle [1982] 1 All ER 634
suing for the breach. The same, he said, was true where
the consequences were so disastrous (as they were in The vendor of a house was asked in a pre-contract
Photo Production) that one could assume that the enquiry whether the boundaries of the land were the
injured party had elected to repudiate. The Photo subject of any dispute. The vendor asked her husband
Production case overrules Harbutt, as does s 9(1) of the to deal with the enquiries. He said that there were no
Unfair Contract Terms Act 1977. This provides that if a disputes. There were, in fact, disputes but the hus-
clause, as a matter of construction, is found to cover the band did not regard them as valid because he believed
breach and if it satisfies the reasonableness test, it can that he was in the right and his view could not be
apply and be relied on by the party in breach, even contradicted. His answers were nevertheless wrong
though the contract has been terminated by express and misleading. Contracts were later exchanged.
election or assumed election following the disastrous These contracts were on the National Conditions
results of the breach. of Sale (19th Edition) produced under the aegis of
(ii) The House of Lords also allowed a Securicor exemption the Law Society. Condition 17(1) excluded liability
clause to apply in circumstances of fundamental breach for misleading replies to preliminary enquiries. The
..
EL_Z01.qxd 3/26/07 1:51 PM Page 793
CASE 187 EXCLUSION CLAUSES 793
purchaser later heard of the boundary disputes and were usual in the trade. They were in the back of
claimed in the High Court for rescission of the con- Finney’s catalogue. They were on the back of the
tract and the return of his deposit. Dillon, J held that invoice. ‘The inference from the course of dealing
condition 17(1) did not satisfy the requirements of would be that the farmers had accepted the con-
reasonableness as set out in s 3 of the Misrepresenta- ditions as printed – even though they had never
tion Act 1967 (as substituted by s 8(1) of the Unfair read them and did not realize that they contained a
Contract Terms Act 1977). The claimant, therefore, limitation on liability . . .’.
succeeded.
(b) The wording of the clause. The relevant part of the
Comment (i) The National Conditions of Sale have been clause read as follows: ‘In the event of any seeds or
revised and, as regards misrepresentation, the contract plants sold or agreed to be sold by us not complying
now only attempts a total exclusion of the purchaser’s with the express terms of the contract of sale or
remedies if the misrepresentation is not material or sub- with any representation made by us or by any duly
stantial in terms of its effect and is not made recklessly or authorized agent or representative on our behalf prior
fraudulently. to, at the time of, or in any such contract, or any
(ii) The provisions relating to inducement liability were seeds, or plants proving defective in varietal purity we
also applied in South Western General Property Co Ltd v will, at our option, replace the defective seeds or
Marton, The Times, 11 May 1982; the court held that plants, free of charge to the buyer or will refund all
conditions of sale in an auction catalogue which tried to payments made to us by the buyer in respect of the
exclude liability for any representations made, if these defective seeds or plants and this shall be the limit of
were incorrect, were not fair and reasonable. The defend- our obligation. We hereby exclude all liability for any
ant had relied upon a false statement that some build- loss or damage arising from the use of any seeds or
ing would be allowed on land which he bought at an plants supplied by us and for any consequential loss
auction, even though the facts were that the local or damage arising out of such use or any failure in the
authority would be most unlikely to allow any building performance of or any defect in any seeds or plants
on the land. The clauses excluding liability for misrep- supplied by us for any other loss or damage what-
resentation did not apply and the contract could be soever save for, at our option, liability for any such
rescinded. replacement or refund as aforesaid.’
Lord Denning said that the words of the clause did
Exclusion clauses and reasonableness effectively limit Finney’s liability. Since the Securicor
Mitchell (George) (Chesterhall) Ltd v Finney cases (see Photo Production and Ailsa Craig), words were
187 to be given their natural meaning and not strained. A
Lock Seeds Ltd [1983] 1 All ER 108
judge must not proceed in a hostile way towards the
This case is a landmark. It was the last case heard by wording of exclusion clauses as was, for example, the
Lord Denning, one of the foremost opponents of case with the word ‘mis-delivery’ in Alexander v Railway
exclusion clauses that could operate unfairly, in the Executive (1951).
Court of Appeal. In it he gave a review of the develop-
ment of the law relating to exclusion clauses in his (c) The test of reasonableness. Lord Denning then
usual clear and concise way. The report is well worth turned to the new test of reasonableness which could
reading in full. Only a summary of the main points be used to strike down an exclusion clause, even
can be given here. though it had been communicated, and in spite of
George Mitchell ordered 30 lb of cabbage seed and the fact that its wording was appropriate to cover
Finney supplied it. The seed was defective. The the circumstances. On this he said: ‘What is the result
cabbages had no heart; their leaves turned in. The of all this? To my mind it heralds a revolution in our
seed cost £192 but Mitchell’s loss was some £61,000, approach to exemption clauses; not only where they
i.e. a year’s production from the 63 acres planted. exclude liability altogether and also where they limit
Mitchell carried no insurance. When sued Finney liability; not only in the specific categories in the
defended the claim on the basis of an exclusion clause Unfair Contract Terms Act 1977, but in other con-
limiting their liability to the cost of the seed or its tracts too. . . . We should do away with the multitude
replacement. In the High Court Parker, J found for of cases on exemption clauses. We should no longer
Mitchell. Finney appealed to the Court of Appeal. The have to harass our students with the study of them.
major steps in Lord Denning’s judgment appear We should set about meeting a new challenge. It is
below: presented by the test of reasonableness.’
(a) The issue of communication – was the clause part of the (d) Was the particular clause fair and reasonable? On
contract? Lord Denning said that it was. The conditions this Lord Denning said: ‘Our present case is very
..
EL_Z01.qxd 3/26/07 1:51 PM Page 794
794 ILLEGALITY AND PUBLIC POLICY CASES 188–190
much on the borderline. There is this to be said in Held – the action failed because it was an agreement
favour of the seed merchant. The price of this cabbage to commit a criminal offence and was, therefore,
seed was small: £192. The damages claimed are high: against public policy.
£61,000. But there is this to be said on the other side.
The clause was not negotiated between persons of
189 Pearce v Brooks (1866) LR I Exch 213
equal bargaining power. It was inserted by the seed
merchants in their invoices without any negotiation The claimants hired a carriage to the defendant for a
with the farmers. To this I would add that the seed period of 12 months during which time the defend-
merchants rarely, if ever, invoked the clause. . . . ant was to pay the purchase price by instalments. The
Next, I would point out that the buyers had no defendant was a prostitute and the carriage, which
opportunity at all of knowing or discovering that the was of attractive design, was intended to assist her in
seed was not cabbage seed: whereas the sellers could obtaining clients. One of the claimants knew that the
and should have known that it was the wrong seed defendant was a prostitute but he said that he did
altogether. The buyers were not covered by insurance not know that she intended to use the carriage for
against the risk. Nor could they insure. But as to the purposes of prostitution. The evidence showed to the
seed merchants the judge said [Lord Denning here contrary. The jury found that the claimant knew the
refers to Parker, J at first instance]: “I am entirely purpose for which the carriage was to be used and
satisfied that it is possible for seedsmen to insure thereupon the court held that the claimant’s action
against this risk . . .”. To that I would add this further for the sum due under the contract failed for illegality.
point. Such a mistake as this could not have hap-
pened without serious negligence on the part of the Comment (i) The contract would, of course, have been
seed merchants themselves or their Dutch suppliers. valid if the claimants had not known of the intended use
So serious that it would not be fair to enable them to of the carriage.
escape responsibility for it. In all the circumstances I (ii) It was decided by the Court of Appeal in Armhouse
am of the opinion that it would not be fair or reason- Lee Ltd v Chappell [1996] 1 CLY 1208, that contracts to
able to allow the seed merchants to rely on the clause advertise telephone sex lines for pre-recorded erotic one-
to limit their liability.’ to-one conversations did not amount to prostitution and
Oliver and Kerr, LJJ also dismissed the appeal. were not unenforceable as a matter of public policy. The
The suppliers asked for leave to appeal to the House whole matter of these advertisements was the subject of
of Lords but the Court of Appeal refused. However, regulation by the Independent Committee for the
the House of Lords granted leave and affirmed the Supervision of Standards of Telephone Information, and
decision of the Court of Appeal in 1983 (see [1983] 2 judges sitting as part of the civil jurisdiction should not
restrict the freedom of contract on the grounds of their
All ER 737).
own moral attitudes (Fender v St John Mildmay [1937] 3
Comment This is in effect an application of s 6(3) of the All ER 402 followed).
Unfair Contract Terms Act 1977. It was actually brought
under the Sale of Goods Act 1979 which contained trans-
itional provisions and s 55(3) of the 1979 Act plus para 11 190 Regazzoni v KC Sethia Ltd [1958] AC 301
of Sch 1 applied to this contract. For contracts made after
31 January 1978 the Unfair Contract Terms Act 1977, s 6(3) The defendants agreed to sell and deliver jute bags to
would apply. the claimant, both parties knowing and intending
that the goods would be shipped from India to Genoa
so that the claimant might then send them to South
ILLEGALITY AND PUBLIC POLICY Africa. Both parties knew that the law of India pro-
hibited the direct or indirect export of goods from India
to South Africa, this law being directed at the policy
Public policy: judiciary: illegal contracts
of apartheid adopted at the time by South Africa. The
defendants did not deliver the jute bags as agreed and
188 Dann v Curzon (1911) 104 LT 66
the claimant brought this action in an English court,
An agreement was made for advertising a play by the contract being governed by English law.
means of collusive criminal proceedings brought as a Held – although the contract was not illegal in English
result of a prearranged disturbance at the theatre. The law, it could not be enforced because it had as its
claimants, who agreed to create the disturbance and object the violation of the law of a foreign and
did in fact do so, sued for the remuneration due to friendly country in which part of the contract was to
them under the agreement. be carried out.
..
EL_Z01.qxd 3/26/07 1:51 PM Page 795
CASES 191–193 ILLEGALITY AND PUBLIC POLICY 795
Comment In an earlier case, Foster v Driscoll [1929] 1 KB plus £6 per week for expenses. Both parties were
470, decided on this ground, the court held that a aware that the claimant’s expenses could never
contract to smuggle whisky to the USA during the amount to £6 a week and in fact they never exceeded
period of prohibition was illegal and void. Again, in £1 per week. Income tax was deducted on £13 per
Soleimany v Soleimany [1999] 3 All ER 847 the Court week, and £6 per week was paid without deduction
of Appeal refused to deal with a dispute between of tax as reimbursement of expenses. The claimant,
father and son, who were Iranians, in regard to the having been summarily dismissed, claimed payment
shares of the proceeds of a business under which the of £13 as wages in lieu of notice.
son, in contravention of Iranian revenue and export
laws, arranged for the export from Iran of carpets that Held – the agreement was contrary to public policy
were subsequently sold by his father in England and and illegal. The claimant’s action failed.
other countries. Comment (i) In an earlier case on this point (Alexander v
Rayson [1936] 1 KB 169), Mrs Rayson took a lease of a
191 John v Mendoza [1939] 1 KB 141 service flat. The rent was £1,200 per annum and she
signed two forms: under one she agreed to pay £450 for
The defendant owed the claimant some £852. The the lease, under the other £750 for services provided
by the claimant landlord. His purpose in splitting the
defendant was made bankrupt and the claimant was
transaction was to defraud the rating authorities who
intending to prove for his debt in the bankruptcy.
assessed the flat for rates on the basis of a rent of
The defendant asked him not to do so, but to say that
£450 pa which was all the claimant disclosed. This was
the £852 was a gift whereupon the defendant would
unknown to the defendant. It was held that the contract
pay the claimant in full regardless of the sum received
was illegal. Mrs Rayson could not be sued for the rent.
by other creditors. In view of the defendant’s promise The service contract was also void.
the claimant withdrew his proof, but in the event all
(ii) In Salvesen v Simons [1994] 490 IRLB 3 the
the other creditors were paid in full and the bank-
Employment Appeal Tribunal decided that an arrange-
ruptcy was annulled. The claimant now sued for the
ment whereby part of an employee’s pay was paid to a
debt.
partnership that provided no services to the employer
Held – there was no claim, for the claimant aban- amounted to a fraud on the Inland Revenue and made
doned all right to recover on failure to prove in the the employment contract illegal and unenforceable so
bankruptcy, and the defendant’s promise to pay in that the employee had no right to bring a complaint of
full was unenforceable, being an agreement designed unfair dismissal. The arrangement resulted at the least in
to defeat the bankruptcy laws. a deferral of payment of tax and a potential evasion of
tax lawfully due under Schedule E (PAYE) because the
Parkinson v The College of Ambulance Ltd and partnership could offset legitimate business expenses
192 under Schedule D, whereas this was not possible under
Harrison [1925] 2 KB 1
Schedule E.
The first defendants were a charitable institution and
(iii) The public policy rules do not prevent genuine tax
the second defendant was the secretary, who fraudu-
planning. Thus, in Lightfoot v D & J Sporting Ltd [1996]
lently represented to the claimant, Colonel Parkinson,
IRLR 64 L was assisted in his duties as an employed game-
that the charity was in a position to obtain some
keeper by his wife who initially received no remunera-
honour (probably a knighthood) for him if he would
tion from L’s employer, the defendant. Eventually L made
make a suitable donation to the funds of the charity.
an agreement with his employer under which over a
The claimant paid over the sum of £3,000 and said third of his income was paid to his wife. The object of
he would pay more if the honour was granted. No this arrangement was to reduce L’s liability for income
honour of any kind was received by the claimant and tax and national insurance. He was later dismissed
he brought this action to recover the money he had and both he and his wife received P45s. He claimed
donated to the College. unfair dismissal but his employer said that his claim must
Held – the agreement was contrary to public fail because his contract was illegal as a result of the
policy and illegal. No relief could be granted to the agreement regarding his wife. The Employment Appeal
claimant. Tribunal decided that the arrangement in regard to the
wife was not illegal merely because its sole purpose was
to reduce L’s tax and national insurance liabilities. The
Napier v National Business Agency Ltd [1951]
193 scheme had been entered into in good faith and was a
2 All ER 264
proper method of reducing tax which had been or would
The defendants engaged the claimant to act as their be disclosed to the Revenue. The claim for unfair dis-
secretary and accountant at a salary of £13 per week missal could proceed.
..
EL_Z01.qxd 3/26/07 1:51 PM Page 796
796 ILLEGALITY AND PUBLIC POLICY CASES 194 –197
Illegal contracts: consequences: is performance 195 Edler v Auerbach [1950] 1 KB 359

necessarily unlawful or not? The in pari delicto
rule: the matter of repentance The defendant leased premises to the claimant for use
Bowmakers Ltd v Barnet Instruments Ltd as offices. The lease was contrary to the provisions of
194 the Defence Regulations of 1939, since the premises
[1944] 2 All ER 579
Bowmakers bought machine tools from a person had previously been used as residential accommoda-
named Smith. This contract was illegal because it tion and should have been let as such. The local
contravened an order made by the Minister of Supply authority discovered the illegal use and would not
under the Defence Regulations, Smith having no allow it to continue. The claimant now sued for
licence to sell machine tools. Bowmakers hired the rescission of the lease together with rent paid under
machine tools to Barnet Instruments under hire- it. The defendant counterclaimed for rent due and for
purchase agreements which were also illegal because damage done to the premises, including the removal
Bowmaker did not have a licence to sell machine of a bath.
tools. Barnet Instruments failed to keep up the instal- Held – the landlord could not enforce the illegal lease
ments, sold some of the machine tools and refused to but was entitled to damages for the claimant’s failure
give up the others. Bowmakers sued, not on the illegal to replace the bath.
hire-purchase contracts, but in conversion, and judg-
ment was given for Bowmakers. The Court of Appeal Hughes v Liverpool Victoria Legal Friendly
196
declared the contracts illegal but, since Bowmakers Society [1916] 2 KB 482
were not suing under the contracts but as owner, their John Henry Thomas, a grocer, had orginally taken out
action succeeded. The wrongful sales by Barnet five policies on customers who owed him money. It
Instruments terminated the hire-purchase contracts. was agreed that Thomas had an insurable interest in
Comment Although the contract between Smith and the customers because they were his debtors. Thomas
Bowmakers was illegal, ownership passed to Bowmakers let the policies drop and an agent of the defendant
by reason of delivery. When goods are delivered, the per- company persuaded a Mrs Hughes to take them up,
son receiving them has some evidence of title by reason assuring her that she had an insurable interest which
of possession and need not necessarily plead a contract. she had not. She now brought this action to recover
Where, in an illegal situation, the goods have not been the premiums paid.
delivered, there may be difficulty in establishing owner- Held – the contract was illegal but the claimant
ship without relying on the illegal contract. Nevertheless, could recover the premiums. She had been induced to
ownership was established without delivery in Belvoir
take up the policies by the fraud of the defendant’s
Finance Co Ltd v Stapleton [1970] 3 WLR 530. In this case
agent.
A (a dealer) sold certain cars to B (a finance company)
which let them on hire-purchase to C (a car-hire com- Comment In an earlier case on this point (Atkinson v
pany). C did not pay the minimum deposit required by Denby (1862) 7 H & N 934), the claimant was insolvent
regulation to B, thus the hire-purchase contract was and wished to compromise with his creditors by paying
illegal. Later, C’s manager, S, sold the cars to innocent 25p in the £1. One creditor would not agree unless the
purchasers. C did not pay the hire-purchase instalments claimant paid him £50. This sum was paid and was later
and B sued S in conversion, the company C having gone recovered by the claimant who had been forced to
into liquidation. It was held by the Court of Appeal that defraud his creditors. The money was then available for
B succeeded. It was the owner of the cars and S had distribution to creditors generally.
converted its property. The decision is of interest since B
(the finance company) had never taken delivery of the
cars; they were sent direct from A to C, as is usual in 197 Bigos v Bousted [1951] 1 All ER 92
these transactions. Nevertheless, B was accepted as
The defendant was anxious to send his wife and
owner, although the only means of proving ownership
open to B seems to have been the illegal hire-purchase daughter abroad for the sake of the daughter’s health,
contract with C. This was the only document which but restrictions on currency were in force so that a
showed how B came to acquire ownership of the cars. On long stay abroad was impossible. In August 1947, the
the assumption that this case means what it says, the rule defendant, in contravention of the Exchange Control
that there can be no enforcement of illegal contracts Act 1947, made an agreement under which the
loses much of its practical value since the major remedy claimant was to supply £150 of Italian money to be
of claiming the goods back appears to be available made available at Rapallo, the defendant undertaking
equally against a hirer in default, whether the contract is to repay the claimant with English money in
legal or illegal. England. As security, the defendant deposited with
..
EL_Z01.qxd 3/26/07 1:51 PM Page 797
CASES 198 –202 ILLEGALITY AND PUBLIC POLICY 797
the claimant a share certificate for 140 shares in a Illegal contracts: consequences: lawful on the
company. The wife and daughter went to Italy but face of it
were not supplied with currency, and had to return
Fielding and Platt Ltd v Najjar [1969]
sooner than they would have done. The defendant, 200
2 All ER 150
thereupon, asked for the return of his share certificate
but the claimant refused to give it up. This action The claimants entered into an agreement with a
was brought by the claimant to recover the sum Lebanese company to make and deliver an aluminium
of £150 which she insisted she had lent to the press. Payment was to be made by six promissory
defendant. He denied the loan, and counterclaimed notes given at stated intervals by the defendant
for the return of his certificate. In the course of the personally. The defendant, who was the managing
action the claimant abandoned her claim, but the director of the Lebanese company, told the claimants
defendant proceeded with his counterclaim saying that they ought to invoice the goods as part of a
that, although the contract was illegal, it was still rolling mill, his intention being to deceive the Lebanese
executory so that he might repent and ask the court’s import authorities into believing that the import of
assistance. the press was authorised whereas in fact it was not.
The first promissory note was dishonoured and the
Held – the court would not assist him because the fact claimants stopped work on the press and cabled a
that the contract had not been carried out was due to message to the Lebanese company to that effect. The
frustration by the claimant and not the repentance of second promissory note was then dishonoured and
the defendant. In fact, his repentance was really want the claimants sued upon the notes. The case eventu-
of power to sin. ally reached the Court of Appeal where it was held
that:
198 Taylor v Bowers (1876) 1 QBD 291 (a) since the first note covered work in progress
there was no defence based on failure of
The claimant was under pressure from his creditors consideration;
and in order to place some of his property out of (b) any illegality in connection with the importing of
their reach, he assigned certain machinery to a the press was not part of the contract or agreed to
person named Adcock. The claimant then called by the claimants;
a meeting of his creditors and tried to get them to (c) the claimants’ claim was not, therefore, affected
settle for less than the amount of their debts, rep- by illegality;
resenting his assets as not including the machinery. (d) since the claimants had repudiated the contract
The creditors would not and did not agree to a before the second note was dishonoured they had
settlement. The claimant now sued to recover his no claim for the amount of the note as such but
machinery from the defendants who had obtained it could only sue for damages; the defendant was
from Adcock. not liable on the second note.
Held – the claimant succeeded because the illegal Comment In an earlier case on this point (Clay v Yates
fraud on the creditors had not been carried out. (1856) 1 H & B 73) it was held that a printer who had,
without knowledge, printed a book containing libels
could recover his charges.
199 Kearley v Thomson (1890) 24 QBD 742
The claimant had a friend who was bankrupt and 201 Cowan v Milbourn (1867) LR 2 Ex 230
wished to obtain his discharge. The defendant was
likely to oppose the discharge and accordingly the A person hired a hall to deliver blasphemous lectures
claimant paid the defendant £40 in return for which and then was refused possession of it. His action
the defendant promised to stay away from the public claiming possession was refused on the ground that
examination and not to oppose the discharge. The no relief could be granted by the court where the
defendant did stay away from the public examina- purpose of the contract was illegal.
tion but before an application for discharge had
been made the claimant brought his action claiming
202 Berg v Sadler and Moore [1937] 1 All ER 637
the £40.
Held – the claim failed because the illegal scheme had The claimant was a hairdresser and sold tobacco and
been partially effected. cigarettes. He was a member of the Tobacco Trade
..
EL_Z01.qxd 3/26/07 1:51 PM Page 798
Association, the Association having as its object the Restraint of trade and the public interest
prevention of price cutting. Manufacturers would
supply tobacco to traders who agreed not to sell 204 Wyatt v Kreglinger and Fernau [1933] 1 KB 793
at less than the fixed retail price. The claimant sold
tobacco at cut prices and was put on the manu- In June 1923, the defendants wrote to the claimant,
facturers’ stop list which meant that he could not who had been in their service for many years, intim-
obtain supplies. The claimant made contact with a ating that upon his retirement they proposed to give
person named Reece who was a member of the him an annual pension of £200, subject to the con-
Association and Reece agreed to obtain goods from dition that he did not compete against them in the
manfacturers and hand them over to the claimant, in wool trade. The claimant’s reply was lost and he did
return for which Reece was to receive a commission not appear ever to have agreed for his part not to
from the claimant. One such transaction was carried engage in the wool trade, but he retired the following
out. On a later occasion the claimant’s assistant and a September and received the pension until June 1932
representative of Reece went to the defendant’s pre- when the defendants refused to make any further
mises to obtain a supply of cigarettes. The claimant’s payments. The claimant sued them for breach of
assistant handed over some £72 to Moore, who had contract. The defendants denied any contract existed
some doubt about the matter and said he would send and also pleaded that if a contract did exist, it was
the goods direct to Reece’s shop. Thereupon the void as being in restraint of trade. The Court of
claimant’s assistant demanded the return of the Appeal gave a judgment for the defendants and
money. Moore refused to give it back, and this action although there was no unanimity with regard to
was brought to recover it. the ratio decidendi, it appeared to two judges that the
contract was injurious to the interests of the public,
Held – this was an attempt by the claimant to since to restrain the claimant from engaging in the
obtain goods by false pretences and, since no action wool trade was to deprive the community of services
arises out of a base cause, the claimant’s action from which it might derive advantage.
failed.
Comment The basis of this decision seems to be that if
a contract did exist it was supported only by an illegal
Public policy: contracts to oust the jurisdiction consideration moving from Wyatt, i.e. an agreement not
of the courts; severance to engage in the wool trade. If he had been entitled to a
pension as part of his original contract of service, then
no doubt the pension arrangements would have been
203 Goodinson v Goodinson [1954] 2 All ER 255 severed and enforced.
A contract made between husband and wife, who had Restraints on employees: trade secrets
already separated, provided that the husband would
pay his wife a weekly sum by way of maintenance in 205 Forster & Sons Ltd v Suggett (1918) 35 TLR 87
consideration that she would indemnify him against
all debts incurred by her, would not pledge his credit, The works manager of the claimants, who were
and would not take matrimonial proceedings against mainly engaged in making glass and glass bottles, was
him in respect of maintenance. The wife now sued for instructed in certain confidential methods concern-
arrears of maintenance under this agreement. The last ing, amongst other things, the correct mixture of gas
promise was admittedly void since its object was to and air in the furnaces. He agreed that during the five
oust the jurisdiction of the courts, but it was held that years following the termination of his employment
this did not vitiate the rest of the contract; it was not he would not carry on in the United Kingdom, or be
the sole or even the main consideration, and the interested in, glass-bottle manufacture or any other
wife’s action for arrears succeeded, this promise being business connected with glass-making as conducted
severable. by the claimants. It was held that the claimants were
entitled to protection in this respect and that the
Comment In a later case on this point (Re Davstone restraint was reasonable.
Estates Ltd [1969] 2 All ER 849) it was decided that a
clause in a lease providing that, as regards certain pay- Comment (i) The Court of Appeal decided in PSM Inter-
ments to be made by tenants for services to common national and McKechnie v Whitehouse and Willenhall
parts, e.g. staircases, in a block of flats, the certificate of Automation [1992] IRLR 279 that the court has power to
the landlord’s surveyor was to be final and conclusive, prevent a contract made following an abuse of trade
could be regarded as void. secrets from being carried out. Thus, if A is employed by B
..
EL_Z01.qxd 3/26/07 1:51 PM Page 799
CASE 206 ILLEGALITY AND PUBLIC POLICY 799
and goes to work for C and, by using trade secrets obtained Comment (i) It was held by the Court of Appeal in John
while working for B, helps C to obtain a contract with D, Michael Design v Cooke [1987] 2 All ER 332 after referring
then the court can grant B an injunction to restrain C to Plowman v Ash that a restraint in a contract of employ-
from fulfilling its contract with D where there is evidence ment preventing an employee (A) from competing with
that B has lost the contract with D because of the misuse his former employer (B) could be enforced by an injunction
of its trade secrets, even though the effect on D appears even to prevent the former employee from doing business
unfair. C is not liable to D for breach of contract because with a customer (C) of his former employer who had made
it is frustrated (see further Chapter 17) since it could not it clear that he would not do business with (B) again. There
be carried out without C being in contempt of court. was always the possibility that (C) would change his mind.
(ii) A more recent example involving a famous name can (ii) It is better in these customer/client restraints to restrict
be found in Dyson Technology Ltd v Strutt [2005] All ER the restraint to not soliciting. If in addition the restraint
(D) 355 (Nov). Mr Strutt is an engineer who had been prevents the employee from working in a given area, it
employed by Dyson and possessed confidential know- may fail. Thus, in Office Angels Ltd v Rainer-Thomas and
ledge of a technical nature belonging to Dyson and O’Connor [1991] IRLR 214 the defendants were employed
relating to vacuum cleaners. Because of this, he was con- by the claimants at their employment agency in Bow
tractually restrained from being involved in a competing Lane in the City of London. Janette Rainer-Thomas and
business for 12 months from leaving his employment Elizabeth Ann O’Connor were employed as the manager
with Dyson. He left Dyson and joined Black & Decker, of the branch and temporaries consultant respectively.
known mainly for power tools but having a small busi- The defendants’ contracts of employment included a
ness in vacuum cleaners. The High Court granted Dyson clause which provided that, in order to protect Office
an injunction which prevented Mr Strutt from working Angels’ goodwill, for a six-month period following the
for any business that competed with Dyson for the 12- termination of employment, office managers and tempor-
month period. The judge took the view that Black & aries consultants should not solicit custom from people or
Decker could realistically be regarded as a competitor, in companies which had been a client of the company at
spite of the small business presence, and the 12-month any time during the period for which the employee was
term was reasonable in the circumstances. employed by the claimants. In addition, during those six
months the relevant employees agreed not to engage in
Restraints on employees: solicitation of the trade or business of any employment agency within a
customers and clients radius of 3,000 metres of the branch or branches of the
company at which they had been employed for a period
Home Counties Dairies v Skilton [1970]
206 of not less than four weeks during the six months prior
1 All ER 1227
to the date of termination of employment, or in the case
Skilton, a milk roundsman employed by the claimants, of a branch or branches in the Greater London area, then
agreed, amongst other things, not for one year after within a radius of 1,000 metres.
leaving his job ‘to serve or sell milk or dairy produce’ The defendants gave notice and left the claimants’
to persons who within six months before leaving his employment on 23 October 1990. On 1 November they
employment were customers of his employers. Skilton became directors and shareholders of a company called
left his employment with the claimants in order to Pertemps City Network (London) Ltd which operated an
work as a roundsman for Westcott Dairies. He then employment agency from Fenchurch Street.
took the same milk round as he had worked when he Injunctions preventing the defendants from so operat-
was with the claimants. ing were granted by the High Court. The defendants
Held – by the Court of Appeal – this was a flagrant appealed to the Court of Appeal. The Court of Appeal
allowed the appeal and discharged the injunctions,
breach of agreement. The words ‘dairy produce’ were
dismissing all the claimants’ claims for relief in the action.
not too wide. On a proper construction they must be
While the court would have been prepared to accept the
restricted to things normally dealt in by a milkman
restraint on the poaching of clients for a period of six
on his round. ‘A further point was taken that the cus-
months, it was not prepared to accept the area restraint,
tomer restriction would apply to anyone who had
and for this reason the whole of the clause setting out
been a customer within the last six months of the the restraints failed.
employment and had during that period ceased so to In the main judgment, Sir Christopher Slade said:
be, and it was said that the employer could have no ‘Looking at the matter broadly, a restriction which
legitimate interest in such persons. I think this point precludes the defendants, albeit only for a period of six
is met in the judgment in GW Plowman & Sons Ltd v months, from opening an office of an employment
Ash [1964] 2 All ER 10 where it was said that a cus- agency anywhere in an area of about 1.2 square miles,
tomer might have left temporarily and that his return including most of the City of London, is not an appro-
was not beyond hope and was therefore a matter of priate form of covenant for the protection of the
legitimate interest to the employer’. (Per Harman LJ) [claimants’] connection with its clients and is, in any
..
EL_Z01.qxd 3/26/07 1:51 PM Page 800
800 ILLEGALITY AND PUBLIC POLICY CASE 207
event, wider than is necessary for such protection. The (vi) Many covenants are drafted to apply on termination
City of London, where there are some 400 employment of the contract ‘for whatever reason’. It is clear from the
agencies, is clearly a particularly fertile area for persons decision in Rock that (a) such words do not prevent the
carrying on this class of business in view of the application of the rule in General Billposting, but (b) they
many thousands of potential clients and job-seekers who do not make the whole covenant unreasonable.
operate in that area. I fully understand the desire of the (vii) Of particular interest because it relates to a restraint
[claimants] to preclude the defendants from seeking placed upon an employee/partner of a professional firm
unfair advantage of the contacts with the 100 or so of is Taylor Stuart v Croft [1998] 606 IRLB 15. The High Court
the [claimants’] clients which the defendants had made had to deal with a contractual restraint of trade on an
during their employment by the [claimants]. In my judg- accountant/salaried partner which placed a three-year
ment, however, the restriction imposed by [the clause] restraint on him in terms of working for clients of the
placed a disproportionately severe restriction on the firm after his employment terminated. This restraint was
defendants’ right to compete with the [claimants] after regarded by the High Court as unreasonable and unen-
leaving [their] employment and went further than was forceable. Other restraints, namely soliciting, canvassing
reasonable in the interest of the parties.’ and enticing away clients, were enforceable. A liquidated
(iii) The case represents the modern approach to damages clause in the contract payable by the salaried
restraints of trade on ex-employees in regard to the partner for breach of the restraints was regarded as
poaching of customers and clients. If the employees penal and unenforceable being two-and-a-half times the
agree not to poach clients then it surely does not matter salaried partner’s gross annual income. However, since
whether they set up in business next door or not. The the salaried partner had after leaving the firm taken
area restraint does little to protect a customer/client some steps to canvass his former clients, e.g. by telephon-
connection and can lead to the unenforceability of the ing them, and some had taken their work to him, a
whole restraint clause, as in this case. claim for unliquidated damages would seemingly have
succeeded. The claimants had, however, relied on enforc-
(iv) Other cases of interest in this area are Morris Angel
ing the penal liquidated damages clause and, therefore,
and Son Ltd v Hollande and Lee [1993] IRLR 169 where
their action failed.
the Court of Appeal held that a covenant restraining
an employee from dealing with his employer’s business
contacts for a year after his employment could be Restraints on employees: exceptionally for life
enforced by the company to which the business was
transferred, but only in regard to the contracts of the 207 Fitch v Dewes [1921] 2 AC 158
original employer who took the covenant and not to
A solicitor at Tamworth employed a person who was
those of the transferee, who had no such covenant with
the employee. Briggs v Oates [1991] 1 All ER 411 is also of successively his articled clerk and managing clerk. In
interest in that it decided that if a contract containing an his contract of service, the clerk agreed, if he left the
employee restraint is repudiated by the employer all con- solicitor’s employment, never to practise as a solicitor
tractual obligations are discharged with the contract and within seven miles of Tamworth Town Hall.
the restraint cannot be enforced. Thus if an employer Held – the agreement was good because during his ser-
were unilaterally to reduce the restrained employee’s pay vice the clerk had become acquainted with the details
so that he left under a constructive dismissal (see further of his employer’s clients, and could be restrained even
Chapter 19) the employer could not subsequently legally for life from using that knowledge to the detriment of
enforce the restraint in the former employee’s contract. his employer.
(v) The decision in Briggs will not apply if the employee
Comment (i) Although the restraint was for life, it did
resigns and is not dismissed. In Rock Refrigeration Ltd v
cover a rather small area in which at the time there were
Jones [1997] 1 All ER 1 J was employed under a contract
comparatively few people. It is unlikely that such a
which imposed restrictions on future employment for
restraint would be regarded as valid today, particularly in
12 months following termination of the contract ‘how-
a more densely populated area.
soever occasioned’. He resigned and went to work for a
competitor and the restraint was held enforceable. The (ii) The Privy Council stated quite clearly in Deacons v
Court of Appeal said that if he had been dismissed, con- Bridge [1984] 2 All ER 19 that a restraint such as this
structively or otherwise, the clause would not have would only be applied in unusual circumstances. The
applied though it seemed to cover such a situation. A dis- decision seems confined to its own facts, though the
missal by the employer would mean that he had repudi- statements of principle in the case by the House of Lords
ated the contract and the restraint would then be are more enduring.
unenforceable under the rules of the House of Lords in (iii) Ignoring Fitch v Dewes (1921) which is a one-off deci-
General Billposting v Atkinson [1909] AC 118. But where sion, restraints of trade have not always found favour
there was a resignation, the restraint could be applied. with the smaller business, such as a small to medium firm
..
EL_Z01.qxd 3/26/07 1:51 PM Page 801
CASES 208 –210 ILLEGALITY AND PUBLIC POLICY 801
of accountants or lawyers, or with small traders such as Comment The restrictive agreement which was at the root
the owners of hair-styling salons. The canvassing of of Kores Manufacturing Co Ltd v Kolok Manufacturing Co
clients after leaving service can be damaging and does go Ltd is not covered by the Competition Act 1998 which is
on. However, the advice generally received by such busi- not concerned with agreements between traders in
ness organisations is that a six-month restraint is all that regard to their employees and was decided on common-
a court is likely to accept under the ‘reasonableness’ prin- law principles. These principles are that the agreement
ciples and since injunctive relief would be the best must be reasonable between the parties and reasonable
remedy to stop canvassing on pain of contempt of court in the public interest. Both of these points arose in Kores,
and possible fine or imprisonment (the latter being rather the Court of Appeal holding that the agreement was
unlikely) in this context, by the time the lawyers have got unreasonable as between the parties and also that it
a case in motion and to the court, the acceptable period was contrary to the public interest, though the ratio is
of six months is likely to be up anyway, though a claim based on the fact that the agreement was unreasonable
for damages is available if clients and customers as between the parties.
have been lost, the question being, of course, can the
ex-employee pay them? The three-year period allowed in Restraints on vendors of businesses
Taylor Stuart is, therefore, of value. It is longer than what
British Reinforced Concrete Co v Schelff
has in general been allowed and would give time to seek 209
[1921] 2 Ch 563
injunctive relief for a large part of the time.
In large concerns, and in respect of higher manage- The claimant carried on a large business for the manu-
ment, restraint clauses may well be worthwhile to protect facture and sale of BRC Road Reinforcements. The
the business and retain skilled employees (see Restraint defendant carried on a small business for the sale of
in the City at p 376). ‘Loop Road Reinforcements’. The defendant sold his
business to the claimant and agreed not to compete
Restraints on employees: taken in a contract with the defendant in the manufacture or sale of road
between their employers reinforcements in any part of the UK. It was held that
the covenant was void. All that the defendant trans-
Kores Manufacturing Co Ltd v Kolok
208 ferred was the business of selling the reinforcements
Manufacturing Co Ltd [1958] 2 All ER 65
called ‘Loop’. It was, therefore, only with regard to
The two companies occupied adjoining premises in that particular variety that it was justifiable to curb
Tottenham and both manufactured carbon papers, his future activities.
typewriter ribbons and the like. They made an agree-
Comment It would have been possible to sever the restraint
ment in which each company agreed that it would
by deleting the part relating to manufacture, but the
not, without the written consent of the other, ‘at any
court said that even if this were done it would still be too
time employ any person who during the past five
wide. Not to ‘sell any road reinforcement in any part of the
years shall have been a servant of yours’. The claim-
UK’ was much too wide for what was a very small business.
ant’s chief chemist sought employment with the
defendant, and the claimant was not prepared to con-
Nordenfelt v Maxim Nordenfelt Guns and
sent to this and asked for an injunction to enforce the 210
Ammunition Co [1894] AC 535
agreement.
Nordenfelt was a manufacturer of machine guns and
Held – by the Court of Appeal: other military weapons. He sold the business to a com-
(a) a contract in restraint of trade cannot be enforced pany, giving certain undertakings which restricted his
unless: business activities. This company was amalgamated
(i) it is reasonable as between the parties; and with another company and Nordenfelt was employed
(ii) it is consistent with the interest of the public; by the new concern as managing director. In his con-
(b) the mere fact that the parties are dealing on equal tract Nordenfelt agreed that for 25 years he would not
terms does not prevent the court from holding manufacture guns or ammunition in any part of the
that the restraint is unreasonable in the interests world, and would not compete with the company in
of those parties; any way.
(c) the restraint in this case was grossly in excess of Held – the covenant regarding the business sold was
what was required to protect the parties and valid and enforceable, even though it was worldwide,
accordingly was unreasonable in the interests of because the business connection was worldwide and it
the parties; was possible in the circumstances to sever this under-
(d) the agreement therefore failed to satisfy the first taking from the rest of the agreement (see further p 365).
of the two conditions set out in (a) above and was However, the further undertaking not to compete in
void and unenforceable. any way with the company was unreasonable and void.
..
EL_Z01.qxd 3/26/07 1:51 PM Page 802
Restraints on employee/shareholders: what is of a worldwide restriction which was also reasonable

the test? given that the business was completely international.
Systems Reliability Holdings plc v Smith [1990] The covenant would, therefore, be enforced.
211
IRLR 377 Comment As we have seen, the courts have traditionally
In 1986 Mr Smith commenced work with a company allowed wider restraints on competition to be placed on
called Enterprise Computer Systems (ECS). He was a the vendors of businesses than on employees. In Mr Smith
computer engineer engaged upon the reconfiguration we have a mix of the two and the court applied the
of IBM mainframe computers. He became highly wider vendor/purchaser approach.
skilled in the modification and rebuilding of the It must, of course, be significant that Mr Smith got
latest generation of IBM’s 3090 computer. His skill £247,000 for a comparatively small shareholding and it
was instrumental in making ECS a leading company must remain doubtful whether the court would apply the
providing computer services. He was dismissed on vendor/purchaser test to an employee whose sharehold-
ing was merely nominal. Presumably, here the tighter
1 February 1990.
employer/employee test of reasonableness would apply.
While he was employed by ECS Mr Smith had
The matter is one of some importance because the
purchased shares totalling 1.6 per cent of the holding
number of employee/shareholders has increased rapidly
in the company. After his dismissal Systems Reliability
over the past few years.
Holdings plc acquired all the shares in ECS and Mr
Smith received £247,000 for his 1.6 per cent holding.
The share sale agreement had a restrictive covenant.
Restraints on distributors or merchandise
Mr Smith had seen and initialled the agreement in final Esso Petroleum Co Ltd v Harper’s Garage
draft form. The covenant said: ‘None of the specific- 212
(Stourport) Ltd [1967] 1 All ER 699
ally restricted vendors will during the restricted period
directly or indirectly carry on or be engaged or inter- The defendant company owned two garages with
ested . . . in any business which competes with any attached filling stations, the Mustow Green Garage,
business carried on at the date of this agreement . . . Mustow Green, near Kidderminster, and the Corner
by the company or any of its subsidiaries.’ Garage at Stourport-on-Severn. Each garage was tied to
Mr Smith was one of the specifically restricted the claimant oil company, the one at Mustow Green
vendors and the restricted period was in effect one by a solus supply agreement only with a tie clause bind-
of 17 months from the date of the sale. There was a ing the dealer to take the products of the claimant
further covenant which provided that: ‘None of the company at its scheduled prices from time to time.
vendors will at any time after the date of this agree- There was also a price-maintenance clause which was
ment disclose or use for his own benefit or that of any no longer enforceable and a ‘continuity clause’ under
other person any confidential information which he which the defendant, if it sold the garage, had to per-
now possesses concerning the business or affairs or suade the buyer to enter into another solus agreement
products of or services supplied by the company or any with Esso. The defendant also agreed to keep the
of the subsidiaries or of any person having dealings garage open at all reasonable hours and to give prefer-
with the company or any of its subsidiaries.’ ence to the claimant company’s oils. The agreement
Soon after his dismissal and the share sale, Mr was to remain in force for four years and five months
Smith set up in business supplying computer services. from 1 July 1963, being the unexpired residue of the
Systems Reliability asked for an injunction to enforce 10-year tie of a previous owner. At the Corner Garage
the restrictive covenant in the share sale agreement. there was a similar solus agreement for 21 years and a
The High Court held that a restrictive covenant mortgage under which the claimant lent Harper’s
imposed upon the defendant as part of the claimant’s £7,000 to assist it in buying the garage and improv-
acquisition of the shares in the company in which he ing it. The mortgage contained a tie covenant and
was formerly employed was entirely reasonable and forbade redemption for 21 years. In August 1964,
would be enforced against him notwithstanding that Harper’s offered to pay off the loan but Esso refused
his shareholding in the company had amounted to to accept it. Harper’s then turned over all four pumps
only 1.6 per cent of the total. The present case was a at the Corner Garage to VIP, and later sold VIP at
true vendor and purchaser situation in which the Mustow Green. The claimant company now asked for
defendant had received £247,000 for his 1.6 per cent an injunction to restrain the defendant from buying
shareholding. There was no public policy to prevent or selling fuels other than Esso at the two garages dur-
the defendant taking himself out of competition for ing the subsistence of the agreements.
what was a comparatively short period of 17 months as Held – by the House of Lords – the rule of public pol-
required under the agreement which on the evidence icy against unreasonable restraints of trade applied to
was entirely reasonable, or to prevent the imposition the solus agreements and the mortgage. The shorter
..
EL_Z01.qxd 3/26/07 1:51 PM Page 803
CASES 213–214 ILLEGALITY AND PUBLIC POLICY 803
period of four years and five months was reasonable unenforceable. The Court of Appeal rejected that view
so that the tie was valid but the other tie for 21 years and with it the opinion of the Monopolies Commission
in the solus agreement and the mortgage was invalid, that it was not in the public interest that a petrol com-
so that the injunction asked for by the claimant could pany should tie a petrol filling station for more than five
not be granted. years in the circumstances of this case.
Therefore, the Lobb case seems to show that the courts
Comment The House of Lords appears to have been
may not be prepared to help the so-called weaker party,
influenced by the report of the Monopolies Commission
i.e. the garage owner, as they were in the past. In the
on the Supply of Petrol to Retailers in the United
Lobb case the Court of Appeal said that each case must
Kingdom (Cmnd 1965, No 264) which recommended the
depend on its own facts. In fact, the longer restriction in
period of five years.
this case seems to have been justified. The loan by Total
was a rescue operation greatly benefiting Lobb and
Cleveland Petroleum Co Ltd v Dartstone Ltd
213 enabling it to continue in business. There were also break
[1969] 1 All ER 201
clauses in the arrangement at the end of seven and 14
The owner of a garage and filling station at Crawley in years if Lobb wished to use them. In view of the ample
Sussex leased the property to Cleveland and it in turn consideration offered by Total, the restraint of 21 years
granted an underlease to the County Oak Service was not, according to the Court of Appeal, unreasonable
Station Ltd. The underlease contained a covenant and was, therefore, valid and enforceable.
under which all motor fuels sold were to be those of
(iii) These agreements would in any case appear to be
Cleveland. There was power to assign in the under- contrary to the prohibition contained in the Competition
lease and a number of assignments took place so that Act 1998. Section 2(2)(e) of the Act prohibits agreements
eventually Dartstone Ltd became the lessee, having which require the acceptance of supplementary trading
agreed to observe the covenants in the underlease, conditions which have no connection with the subject
but then challenged the covenant regarding motor matter of the contract. This would cover cases in which a
fuels, and Cleveland asked for an injunction to manufacturer or a supplier insisted that a retailer did not
enforce it. The injunction was granted. Dealing in stock the products of a rival manufacturer. This is at the
the Court of Appeal with Harper’s case Lord Denning, root of solus agreements and yet has nothing essentially
MR said: to do with the supply and sale of petrol and other prod-
It seems plain to me that in three at least of the ucts such as oil normally sold by a garage.
speeches of their Lordships a distinction is taken
between a man who is already in possession of the Involuntary restraints on members of trade
land before he ties himself to an oil company and a associations and the professions
man who is out of possession and is let into it by an
Pharmaceutical Society of Great Britain v
oil company. If an owner in possession ties himself 214
Dickson [1968] 2 All ER 686
for more than five years to take all his supplies from
one company, that is an unreasonable restraint The Society passed a resolution to the effect that the
of trade and is invalid. But if a man, who is out of opening of new pharmacies should be restricted and
possession, is let into possession by the oil combe limited to certain specified services, and that the
pany on the terms that he is to tie himself to that range of services in existing pharmacies should not be
company, such a tie is good. extended except as approved by the Society’s council.
The purpose of the resolution was clearly to stop the
Comment (i) The essential distinction is, as we have development of new fields of trading in conjunction
seen, that where the restraint on the use of the land is with pharmacy. Mr Dickson, who was a member of
contained in a conveyance or lease the common-law rules
the Society and retail director of Boots Pure Drug
of restraint of trade do not apply. The person who takes
Company Ltd, brought this action on the ground that
over the property under a conveyance or lease has given
the proposed new rule was ultra vires as an unreason-
nothing up. In fact, he has acquired rights which he never
able restraint of trade. A declaration that the resolu-
had before even though subject to some limitations.
tion was ultra vires was made and the Society appealed
(ii) In Alec Lobb (Garages) Ltd v Total Oil GB Ltd [1985] 1 to the House of Lords where the appeal was dismissed,
All ER 303 the claimant company borrowed from the
the following points emerging from the judgment.
defendant to develop a site. As part of the loan arrange-
ments, the claimant agreed to buy the defendant’s petrol (a) Where a professional association passes a resolu-
for 21 years. Since the company was already in occupation tion regarding the conduct of its members the validity
of the garage and filling station when the agreement of the resolution is a matter for the courts even if
was made, it was subject to the doctrine of restraint of binding in honour only, since failure to observe it is
trade, being a contract and not a lease. The High Court likely to be construed as misconduct and thus become
said that 21 years was too long and that the restraint was a ground for disciplinary action.
..
EL_Z01.qxd 3/26/07 1:51 PM Page 804
804 DISCHARGE OF CONTRACT CASES 215 – 216
(b) A resolution by a professional association regulat- completion of the voyage. He died when the ship was 19
ing the conduct of its members is ultra vires if not days short of Liverpool. The court held that the contract
sufficiently related to the main objects of the asso- was entire and his widow was not entitled to anything
ciation. The objects of the society in this case did not on behalf of his estate. While the case is valid as an
cover the resolution, being ‘to maintain the honour and illustration, it has been overtaken on its own facts by
safeguard and promote the interests of the members more recent law. The Merchant Shipping Act 1995 now
in the exercise of the profession of pharmacy’. provides for the payment of wages for partial perform-
ance in such cases and the Law Reform (Frustrated
(c) A resolution by a professional association regulat- Contracts) Act 1943 would also have assisted the widow
ing the conduct of its members will be void if it is an to recover because the seaman had conferred a benefit
unreasonable restraint of trade. on the master of the ship prior to his death (which would
Comment (i) Once again, the court is concerned with now frustrate the contract) giving the widow the right to
business efficiency and an arrangement under which sue the master of the ship for the benefit of the seaman’s
retail chemists are prevented from selling general work up to the time of his death.
merchandise is not likely to lead to greater efficiency
and competition. It was, therefore, struck down as too Discharge by performance: effect of substantial
restrictive. performance
(ii) Agreements which involve the rules relating to the
216 Hoenig v Isaacs [1952] 2 All ER 176
regulation of professional bodies are excluded from the
operation of the Competition Act 1998 (see s 3 and Sch 4)
The defendant employed the claimant, an interior
but their activities are subject to common-law principles
decorator and furniture designer, to decorate a one-
of restraint of trade.
room flat owned by the defendant. The claimant was
(iii) Without the benefit of exclusion, the exclusive right also to provide furniture, including a fitted bookcase,
of barristers and solicitors to practise law could be found a wardrobe and a bedstead, for the total sum of £750.
to be illegal. Nevertheless, the exclusion depends for its The terms of the contract regarding payment were
continuance upon the Secretary of State for Trade and as follows: ‘Net cash as the work proceeds and the
Industry ‘designating’ the profession concerned. In this
balance on completion’. The defendant made two
connection the Director-General of Fair Trading may
payments to the claimant of £150 each, one payment
carry out an investigation to see whether a particular
on 12 April and the other on 19 April. The claimant
profession should continue to be designated. An early
alleged that he had completed the work on 28 August,
investigation was of the legal and accountancy profes-
and asked for the balance, i.e. £450. The defendant
sions, which could lead to multi-disciplinary practices.
asserted that the work done was bad and faulty, but
sent the claimant a sum of £100 and moved into the
flat and used the furniture. The claimant now sued for
DISCHARGE OF CONTRACT the balance of £350, the defence being that the claim-
ant had not performed his contract, or in the alternative
Discharge by performance: entire contracts that he had done so negligently, unskilfully and in an
unworkmanlike manner.
215 Bolton v Mahadeva [1972] 2 All ER 1322 The court assessed the work that had been done,
and found that generally it was properly done except
Bolton installed a central heating system in the defend- that the wardrobe required replacing and that a book-
ant’s house. The price agreed was a lump sum of £560. shelf was too short and this meant that the bookcase
The work was not done properly and it was estimated would have to be remade. The defendant claimed that
that it would cost £179 to put the system right. The the contract was entire and that it must be completely
Court of Appeal decided that the lump-sum payment performed before the claimant could recover. The
suggested that the contract was entire, and since court was of the opinion that there had been substan-
Bolton had not performed his part of it properly and tial performance, and that the defendant was liable
in full, he could not recover anything for what he had for £750 less the cost of putting right the above-
done. mentioned defects, the cost of this being assessed at
£55 18s 2d. The court accordingly gave the claimant
Comment The case of Cutter v Powell (1795) 6 Term Rep
judgment for the sum of £294 1s 10d.
320 is sometimes used to illustrate the point about entire
contracts. The facts of the case were that a seaman Comment The case illustrates that while full perform-
agreed to serve on a ship from Jamaica to Liverpool ance is essential to the right to be paid in full, perfect
for the sum of 30 guineas (£31.50 today) to be paid on performance is not required in order to obtain a
..
EL_Z01.qxd 3/26/07 1:51 PM Page 805
CASES 217–220 DISCHARGE OF CONTRACT 805
part-payment. This contract had been performed but sell the tickets the defendant withdrew the claimant’s
badly. Nevertheless, a claim could be made for the price authority to sell them and in consequence the claim-
of the work less a deduction, like damages, for the ant did not sell any tickets and was prevented from
defendant’s breach of contract by bad work. earning his commission. The claimant now sued
upon a quantum meruit and his action succeeded.
Discharge by performance: partial performance
Discharge by performance: time of performance;
217 Sumpter v Hedges [1898] 1 QB 673 waiver
The claimant entered into a contract with the defend-
219 Bowes v Shand (1877) 2 App Cas 455
ant under the terms of which the claimant was to
erect some buildings for the defendant on the defend- The action was brought for damages for non-
ant’s land for a price of £565. The claimant did acceptance of 600 tons (or 8,200 bags) of Madras rice.
partially erect the buildings up to the value of £333, The sold note stated that the rice was to be shipped
and the defendant paid him that figure. The claimant during ‘the months of March and /or April 1874’. In
then told the defendant that he could not finish the fact, 8,150 bags were put on board ship on or before
job because he had run out of funds. The defendant 28 February 1874, and the remaining 50 bags on 2
then completed the work by using materials belonging March 1874. The defendants refused to take delivery
to the claimant which had been left on the site. The because the rice was not shipped in accordance with
claimant now sued for work done and materials sup- the terms of the contract.
plied, and the court gave him judgment for materials
Held – the bulk of the cargo was shipped in February
supplied, but would not grant him a sum of money
and therefore the rice did not answer the description
by way of a quantum meruit (an action for reasonable
in the contract and the defendants were not bound to
payment for work done), for the value of the work
accept it.
done prior to his abandonment of the job. The reason
given was that, before the claimant could sue success- Comment (i) A buyer can reject in these circumstances
fully on a quantum meruit, he would have to show even though there is nothing wrong with the goods and
that the defendant had voluntarily accepted the work he merely wants to reject because the market price has
done, and this implied that the defendant must be in fallen.
a position to refuse the benefit of the work as where a (ii) It is of interest to note that the rules about delivery
buyer of goods refuses to take delivery. This was not apply to early delivery as well as late delivery. Incid-
the case here; the defendant had no option but to entally, the defendants refused to take delivery early
accept the work done, so his acceptance could not be because they were not ready with their finance at that
presumed from conduct. There being no other evid- time.
ence of the defendant’s acceptance of the work, the
claimant’s legal action for the work failed.
220 Chas Rickards Ltd v Oppenhaim [1950] 1 KB 616
Comment In practice, this form of injustice to the builder
is avoided because a building contract normally provides The defendant ordered a Rolls-Royce chassis from the
for progress payments as various stages of construction claimants, the chassis being delivered in July 1947.
are completed, thus making it a divisible agreement. The claimants found a coachbuilder prepared to make
a body within six or at the most seven months. The
Discharge by performance: specification for the body was agreed in August 1947,
performance prevented so that the work should have been completed in
March 1948. The work was not completed by then
but the defendant still pressed for delivery. On 29
218 De Barnardy v Harding (1853) 8 Exch 822
June 1948, the defendant wrote to the coachbuilder
The claimant agreed to act as the defendant’s agent saying that he would not accept delivery after 25 July
for the purpose of preparing and issuing certain 1948. The body was not ready by then and the defend-
advertisements and notices designed to encourage ant bought another car. The body was completed in
the sale of tickets to see the funeral procession of the October 1948, but the defendant refused to accept
Duke of Wellington. The claimant was to be paid a delivery and counterclaimed for the value of the
commission of 10 per cent upon the proceeds of the chassis which he had purchased.
tickets actually sold. The claimant duly issued the Held – time was of the essence of the original contract,
advertisements and notices, but before he began to but the defendant had waived the question of time by
..
EL_Z01.qxd 3/26/07 1:51 PM Page 806
806 DISCHARGE OF CONTRACT CASES 221–223
continuing to press for delivery after the due date. Held – the evidence did not exclude the rule in
However, by his letter of 29 June he had again made Clayton’s Case, which applied, so that the bank’s
time of the essence, and had given reasonable notice mortgage had been paid off and the appellant, as
in the matter. Judgment was given for the defendant second mortgagee, was entitled to the proceeds of
on the claim and counterclaim. the sale.
Comment (i) That a waiver of a date of delivery without Comment The operation of Clayton’s Case is normally
consideration is binding can be based on promissory prevented by the bank stating in the mortgage that it is
estoppel (as in High Trees – see Chapter 10) said Denning, a continuing security given on a running account varying
LJ in Rickards, or on s 11(2) of the Sale of Goods Act 1979 from day to day and excluding the repayment of the
which states: ‘Where a contract of sale is subject to any borrower’s liability, which would otherwise take place as
condition to be fulfilled by the seller, the buyer may credits are paid in.
waive that condition.’ This section was used to justify a
waiver without consideration by McCardie, J in Hartley v Discharge by frustration: contracts of personal
Hymans [1920] 3 KB 475. service
(ii) This is an example of the doctrine of promissory
estoppel being used by a claimant, i.e. as a sword not a 222 Storey v Fulham Steel Works (1907) 24 TLR 89
shield, because a seller may tender delivery after the
originally agreed date relying on the buyer’s promise to The claimant was employed by the defendant as
accept such delivery by reason of his waiver. If the buyer manager for a period of five years. After he had
then refuses to accept the delivery the seller can claim been working for two years he became ill, and had to
damages and is in essence suing upon the waiver which is have special treatment and a period of convalescence.
unsupported by consideration. Six months later he was recovered, but in the mean-
time the defendant had terminated his employment.
(iii) Those in business often find it unsatisfactory to rely
on the willingness of the courts to imply that time is of The claimant now sued for breach of contract, and
the essence of the contract, in terms of delivery dates the defendant pleaded that the claimant’s period of
and other matters. An express provision in the contract is ill-health operated to discharge the contract.
the solution of which the following is an example: Held – the claimant’s illness and absence from duty
Time shall be of the essence of this agreement as regards did not go to the root of the contract, and was not so
times, dates or periods specified in this agreement and serious as to allow the termination of the agreement.
as to times, dates or periods that may by agreement
between the parties be substituted for them. Norris v Southampton City Council [1982]
223
IRCR 141
Discharge by performance: appropriation of Mr Norris was employed as a cleaner. He was
payments convicted of assault and reckless driving and was
sentenced to a term of imprisonment. His employer
221 Deeley v Lloyds Bank Ltd [1912] AC 756 wrote dismissing him and Mr Norris complained to
an employment tribunal that his dismissal was unfair.
A customer of the bank had mortgaged his property The tribunal held that the contract of employment
to the bank to secure an overdraft limited to £2,500. was frustrated and that the employee was not dis-
He then mortgaged the same property to the appel- missed and, therefore, not entitled to compensation.
lant for £3,500, subject to the bank’s mortgage. It is The Employment Appeal Tribunal to which Mr Norris
the normal practice of bankers, on receiving notice of appealed laid down that frustration could only arise
a second mortgage, to rule off the customer’s account, where there was no fault by either party. Where there
and not to allow any further withdrawals since these was a fault, such as deliberate conduct leading to
will rank after the second mortgage. In this case the an inability to perform the contract, there was not
bank did not open a new account but continued the frustration but a repudiatory breach of contract. The
old current account. The customer thereafter paid in employer had the option of whether or not to treat
sums of money which at a particular date, if they had the contract as repudiated and if he chose to dismiss
been appropriated in accordance with the rule in the employee, he could do so, regarding the breach as
Clayton’s Case, would have extinguished the bank’s repudiatory. The question then to be decided was
mortgage. Even so the customer still owed the bank whether the dismissal was fair. The case was remitted
money, and they sold the property for a price which to the employment tribunal for further consideration
was enough to satisfy the bank’s debt but not that of of whether there was unfair dismissal on the facts
the appellant. of the case.
..
EL_Z01.qxd 3/26/07 1:51 PM Page 807
CASES 224 –227 DISCHARGE OF CONTRACT 807
Discharge by frustration: government intervention the motive and contract were fused and could not
be separated: ‘. . . it is the coronation procession and the
Re Shipton, Anderson & Co and Harrison Bros’
224 relative position of the rooms which is the basis for the
Arbitration [1915] 3 KB 676
contract as much for the lessor as the hirer . . .’, said
A contract was made for the sale of wheat lying in a Vaughan-Williams, LJ.
warehouse in Liverpool. Before the seller could deliver Also a contract will remain binding even if it turns out
the wheat, and before the property in it had passed to to be more expensive or difficult to perform than was
the buyer, the government requisitioned the wheat thought. Thus a contract to ship ground nuts from the
under certain emergency powers available in time of Mediterranean to India was not frustrated by the closure
war. of the Suez Canal so that the goods would have to go
around the Cape of Good Hope, which was twice as far.
Held – delivery being impossible by reason of lawful
(See Tsakiroglou v Noblee Thorl GmbH [1961] 2 All ER
requisition by the government, the seller was excused
179.)
from performance of the contract.
Herne Bay Steamboat Co v Hutton [1903]
Discharge by frustration: destruction of 227
2 KB 683
subject matter
The claimant company agreed to hire a steamboat
to the defendant for two days, in order that the
225 Taylor v Caldwell (1863) 3 B & S 826
defendant might take paying passengers to see the
The defendant agreed to let the claimant have the use naval review at Spithead on the occasion of Edward
of a music hall for the purpose of holding four concerts. VII’s Coronation. An official announcement was
Before the first concert was due to be held the hall was made cancelling the review, but the fleet was assembled
destroyed by fire without negligence by any party, and the boat might have been used for the intended
and the claimant now sued for damages for wasted cruise. The defendant did not use the boat, and the
advertising expenses. claimant employed her on ordinary business. The
action was brought to recover the fee of £200 which
Held – the contract was impossible of performance
the defendant had promised to pay for the hire of
and the defendant was not liable.
the boat.
Comment A more modern example of the rule is to be Held – the contract was not discharged, as the review
found in Vitol SA v Esso Australia, The Times, 1 February of the fleet by the Sovereign was not the foundation
1988, where the buyers of petroleum were discharged of the contract. The claimant was awarded the differ-
from the contract by frustration when the vessel and
ence between £200 and the profits derived from the
cargo were destroyed by a missile attack during the Gulf
use of the boat for ordinary business on the two days
War.
in question.
Discharge by frustration: non-occurrence of Comment (i) It may be thought that it is difficult to
an event reconcile this case with Krell (see above). However,
whatever the legal niceties may or may not be, there is
226 Krell v Henry [1903] 2 KB 740 clearly a difference in fact. To cruise round the fleet
assembled at Spithead, even though the figure of the
The claimant owned a room overlooking the pro- Sovereign (minuscule to the viewer, anyway) would
posed route of the Coronation procession of Edward not be present, is clearly more satisfying as the subject
VII, and had let it to the defendant for the purpose of matter of a contract than looking through the window at
viewing the procession. The procession did not take ordinary London traffic.
place because of the King’s illness and the claimant (ii) In addition, Vaughan-Williams, LJ and the Court of
now sued for the agreed fee. Appeal thought that motive was less relevant here. The
judge said, ‘I see nothing that makes this case differ from
Held – the fact that the procession had been cancelled
a case where, for instance, a person has engaged a brake
discharged the parties from their obligations, since it
(the judge refers to a form of carriage) to take himself
was no longer possible to achieve the real purpose of
and a party to Epsom to see the races there, but for
the agreement.
some reason or other, such as the spread of an infectious
Comment This type of decision is rare since the court will disease, the races are postponed. In such a case it could
in general assume that the parties to a contract are not not be said that he could be relieved of his bargain.’
concerned with the motive for which it was made (see Romer, LJ added, ‘The ship (as a ship) had nothing
Herne Bay Steamboat Co v Hutton (1903) below). particular to do with the review of the fleet except as a
However, this seems to be an exceptional situation where convenient carrier of passengers to see it; and other
..
EL_Z01.qxd 3/26/07 1:51 PM Page 808
808 DISCHARGE OF CONTRACT CASES 228 – 230
ships suitable for carrying passengers would have done frustrating event was self-induced by the appellants
equally as well.’ and that therefore they were liable for the hire.
Discharge by frustration: commercial purpose Comment An otter trawl is a type of net which can,
because of its narrow mesh, pick up small immature fish.
defeated
Its use is restricted for environmental reasons.
Jackson v Union Marine Insurance Co (1874)
228
LR 10 CP 125 Discharge by frustration: contracts
The claimant was the owner of a ship called Spirit of concerning land
the Dawn which had been chartered to go with all
Cricklewood Property and Investment Trust Ltd
possible dispatch from Liverpool to Newport, and 230
v Leighton’s Investment Trust Ltd [1945] AC 221
there load a cargo of iron rails for San Francisco. The
claimant had entered into a contract of insurance In May 1936, a building lease was granted between
with the defendant insurance company, in order that the parties for 99 years, but before any building had
he might protect himself against the failure of the been erected war broke out in 1939 and government
ship to carry out the charter. The vessel was stranded restrictions on building materials and labour meant
in Caernarfon Bay whilst on its way to Newport. It that the lessees could not erect the buildings as they
was not refloated for over a month, and could not be intended, these buildings being in fact shops.
fully repaired for some time. The charterer hired Leighton’s sued originally for rent due under the lease
another ship and the claimant now claimed on the and Cricklewood, the builders, said the lease was
policy of insurance. The insurance company frustrated. The House of Lords held that the doctrine
suggested that since the claimant might claim against of frustration did not apply because the interruption
the charterer for breach of contract, there was no loss, from 1939 to 1945 was not sufficient in duration to
and the court had to decide whether such a claim was frustrate the lease, and so they did not deal specifically
possible. with the general position regarding frustration of
leases, basing their judgment on the question of the
Held – the delay consequent upon the stranding of degree of interruption. In so far as they did deal with
the vessel put an end, in the commercial sense, to the the general position, this was obiter, but Lord Simon
venture, so that the charterer was released from his thought that there could be cases in which a lease
obligations and was free to hire another ship. would be frustrated, and the example that he quoted
Therefore, the claimant had no claim against the was a building lease where the land was declared a
charterer and could claim the loss of the charter from permanent open space before building took place;
the defendants. here he thought that the fundamental purpose of the
transaction would be defeated. Lord Wright took
Discharge by frustration: where frustration is
much the same view on the same example. Lord
self-induced
Russell thought frustration could not apply to a lease
Maritime National Fish Ltd v Ocean Trawlers Ltd of real property, and Lord Goddard, CJ took the same
229
[1935] AC 524 view. Lord Porter expressed no opinion with regard to
The respondents were the owners and the appellants leases generally and so this case does not finally solve
the charterers of a steam trawler, the St Cuthbert. The the problem.
St Cuthbert was fitted with, and could only operate Comment (i) Even if the courts were prepared to apply
with an otter trawl. When the charterparty was the doctrine of frustration, it would not often apply to
renewed on 25 October 1932, both parties knew it leases, particularly long leases. In a lease for 99 years a
was illegal to operate with an otter trawl without a tenant temporarily deprived of possession as by requisi-
licence from the Minister. The appellants operated tion of the property would hardly ever be put out of
five trawlers and applied for five licences. The Min- possession long enough to satisfy the test of frustration
ister granted only three and said that the appellants (see below).
could choose the names of three trawlers for the (ii) In National Carriers v Panalpina (Northern) [1981] 1
licences. The appellants chose three but deliberately All ER 161 the House of Lords was of the opinion that
excluded the St Cuthbert though they could have a lease could be frustrated. The claimants leased a ware-
included it. They were now sued by the owners for house to the defendants for 10 years. The Hull City
the charter fee, and their defence was that the charter- Council closed the only access road to it because a listed
party was frustrated because it would have been illegal building nearby was in a dangerous condition. The access
to fish with the St Cuthbert. It was held that the con- road was closed for 20 months. The defendants refused
tract was not frustrated, in the sense that the to pay the rent for this period. The House of Lords said
..
EL_Z01.qxd 3/26/07 1:51 PM Page 809
CASES 231–233 DISCHARGE OF CONTRACT 809
that they must. A lease could be frustrated, they said, but longer required his services. The claimant com-
20 months out of 10 years was not enough to frustrate it menced an action for breach of contract on 22 May
in the particular circumstances of this case. Once again, 1852, and the defence was that there was no cause of
therefore, the decision of the House of Lords on the mat- action until the date due for performance, i.e. 1 June
ter of frustration of leases was obiter. 1852.
(iii) In Amalgamated Investment and Property Co Ltd v Held – the defendant’s express repudiation constituted
John Walker & Sons Ltd [1976] 3 All ER 509 Buckley, LJ an actionable breach of contract.
was prepared to presume that the doctrine of frustration
could be applied to contracts for the sale of land, though Comment (i) This decision should not be accepted as
once again this decision was obiter because he did not entirely logical. It is odd in a way to say that a person
have to apply the doctrine in this case. Walker sold a ware- who has stated that he will not perform a contract when
house to Amalgamated, both parties believing that the the time comes to perform it is for that reason in breach
property was suitable and capable of being redeveloped. of contract now and can be sued. This is particularly so
After the contract was made the Department of the where, as in this case, the defendant might still at the com-
Environment included it in a list of buildings of architec- mencement of the proceedings have performed the
tural and historic interest so that the development contract when the time came. Of course, by the time the
became more difficult. The Court of Appeal held that the case came to court it was obvious that the defendant had
contract was not frustrated. The listing merely affected not performed his part of the contract and the device of
the value of the property and the purchaser always took anticipatory breach at least prevented the claimant’s
the risk of this in terms of a listing order or, indeed, com- action from being defeated on the technicality that
pulsory purchase. The contract could be completed when he served his writ (now claim form) there was
according to its terms and specific performance was in fact no breach of contract as such. A case in which A
granted to Walkers. Nor was the contract voidable under was obliged to commence performance of a contract
Solle v Butcher (1950) (but see now Chapter 12) because in December and said in the previous January that he
the mistake did not exist at the date of the contract. would not do so, and which came before the court
in September, might be decided differently because
Discharge by frustration: effect at common law A would still have time to change his mind.
(ii) A more modern example of the application of the
231 Chandler v Webster [1904] 1 KB 493 rule in Hochster is to be found in Sarker v South Tees
Acute Hospitals NHS Trust [1997] ICR 673. The Trust sent a
The defendant agreed to let the claimant have a room letter of appointment to a post within the Trust to S. It
for the purpose of viewing the Coronation proces- stated that her employment was to begin on 1 October,
sion on 26 June 1902 for £141 15s. The contract but on 6 September the offer was withdrawn. The
provided that the money be payable immediately. Employment Appeal Tribunal ruled that S was an
The procession did not take place because of the employee and could bring a claim for wrongful
illness of the King and the claimant, who had paid dismissal based on breach of contract. A claim for unfair
£100 on account, left the balance unpaid. The dismissal could be brought in similar circumstances, but it
claimant sued to recover the £100 and the defendant would have to be a case not requiring one year’s service
counterclaimed for £41 15s. It was held by the Court as where dismissal was connected with pregnancy as
of Appeal that the claimant’s action failed and the where the offer was withdrawn because the employer
defendant’s counterclaim succeeded because the obliga- found out that the employee was pregnant (see further
tion to pay rent had fallen due before the frustrating Chapter 19).
event.
Omnium D’Enterprises and Others v Sutherland
Comment This case is included only to show how import- 233
[1919] 1 KB 618
ant the Law Reform (Frustrated Contracts) Act 1943
really is! The defendant was the owner of a steamship and
agreed to let her under a charter to the claimant for
a period of time and to pay the second claimants
Discharge by breach: anticipatory breach
a commission on the hire payable under the agree-
ment. The defendant later sold the ship to a purchaser,
232 Hochster v De la Tour (1853) 2 E & B 678
free of all liability under his agreement with the
The defendant agreed in April 1852 to engage the claimants.
claimant as a courier for European travel, his duties to Held – the sale by the defendant was a repudiation of
commence on 1 June 1852. On 11 May 1852, the the agreement and the claimants were entitled to
defendant wrote to the claimant saying that he no damages for breach of the contract.
..
EL_Z01.qxd 3/26/07 1:51 PM Page 810
810 DISCHARGE OF CONTRACT CASES 234–235
Comment (i) The charterer would have no claim against respondent. Thus, White and Carter may have had a
the purchaser of the vessel because restrictive covenants ‘legitimate interest’ in continuing with the contract.
do not pass with chattels (which a ship is) but only with Perhaps if evidence that mitigation was possible had
land. Compare Dunlop v Selfridge (1915) (see Case 87) been produced, the House of Lords would have applied
and Tulk v Moxhay (1848) (Case 91) (see Chapter 10). the principles of mitigation to the case, or held that
White and Carter had no ‘legitimate interest’ in continu-
(ii) This decision is more logical because by selling the
ing the agreement. This view is supported by a decision
ship the defendant had clearly put it beyond his power
of the Court of Appeal in Attica Sea Carriers Corporation
to perform the charter.
v Ferrostaal Poseidon Bulk Reederei GmbH [1976] 1
Lloyd’s Rep 250 where the charterer of a ship agreed to
White and Carter (Councils) Ltd v McGregor execute certain repairs before he redelivered it to the
234
[1961] 3 All ER 1178 owner and to pay the agreed hire until that time. He did
The respondent was a garage proprietor on Clydebank not carry out the repairs but the owner would not take
and on 26 June 1957, his sales manager, without redelivery of the ship until they had been done and later
specific authority, entered into a contract with the sued for the agreed hire. It was held that the owner was
appellants whereby the appellants agreed to advertise not entitled to refuse to accept redelivery and to sue for
the respondent’s business on litter bins which they the agreed hire. The cost of the repairs far exceeded the
supplied to local authorities. The contract was to last value which the ship would have if they were done and
for three years from the date of the first advertisement the owner had therefore no legal interest in insisting on
their execution and the payment of the hire. The court
display. Payment was to be by instalments annually
held that he should have mitigated his loss by accepting
in advance, the first instalment being due seven days
redelivery of the unrepaired ship so that his only remedy
after the first display. The contract contained a clause
was damages and not for the agreed hire.
that, on failure to pay an instalment or other breach
of contract, the whole sum of £196 4s became due. (iii) This line was followed also in the case of Clea
The respondent was quick to repudiate the contract Shipping Corporation v Bulk Oil International, The
Alaskan Trader [1984] 1 All ER 129. A vessel had been
for on 26 June 1957, he wrote to the appellants asking
chartered by the claimant owners to the defendants,
them to cancel the agreement, and at this stage the
the hire charge having been paid in advance. However,
appellants had not taken any steps towards carrying it
the ship broke down and required expensive repairs. The
out. The appellants refused to cancel the agreement
charterers thereupon gave notice that they intended to
and prepared the advertisement plates which they
end the contract. However, the claimants decided to
exhibited on litter bins in November 1957, and con- keep the agreement open and undertook the repairs and
tinued to display them during the following three then informed the defendants that the vessel was at
years. Eventually the appellants demanded payment, their disposal. The claimants said they were exercising
the respondent refused to pay, and the appellants their right of election conferred upon the innocent party
brought an action against him for the sum due under in such circumstances to keep the contract open, thus
the contract. entitling them to keep the hire money instead of suing
Held – the appellants were entitled to recover the con- for damages. Lloyd, J denied the existence of an unfet-
tract price since, although the respondents had repudi- tered right of election for an innocent party to keep the
contract running in such circumstances. He found that, in
ated the contract, the appellants were not obliged to
the absence of a ‘legitimate interest’ in the contract’s
accept the repudiation. The contract survived and the
perpetuation by the party faced with repudiation, the
appellants had not completed it. The House of Lords
party concerned could, though innocent, be forced to
said that there was no duty to mitigate loss until there
accept damages in lieu of sums falling due under the
was a breach which the appellants had accepted and
contract subsequent to the actionable event. This
they had not accepted this one. restraint is founded on general equitable principles, to
Comment (i) Although the respondent’s agent had no be based on what is reasonable on the facts of each case.
actual authority, he had made a similar contract with the
appellants in 1954, and it was not disputed that he had 235 Avery v Bowden (1855) 5 E & B 714
apparent authority to bind his principal.
(ii) It is worth pointing out that there was in this case no The defendants chartered the claimant’s ship Lebanon
evidence that the appellants could have mitigated their and agreed to load her with a cargo at Odessa within
loss. No evidence was produced to show that the demand 45 days. The ship went to Odessa and remained there
for advertising space exceeded the supply so it may be for most of the 45-day period. The defendant told the
that the appellants could not have obtained a new captain of the ship that he did not propose to load a
customer for the space on the litter bins intended for the cargo and that he would do well to leave, but the
..
EL_Z01.qxd 3/26/07 1:51 PM Page 811
CASES 236 –238 REMEDIES AND LIMITATION OF ACTIONS 811
captain stayed on at Odessa, hoping that the defend- Comment (i) A contrast is provided by Dunlop v New
ant would change his mind. Before the end of the Garage & Motor Co Ltd [1915] AC 79 where the contract
45-day period the Crimean War broke out so that provided that the defendants would have to pay £5 for
performance of the contract would have been illegal every tyre sold below the list price. The House of Lords
as a trading with the enemy. held that this was an honest attempt to provide for a
breach and was recoverable as liquidated damages.
Held – the claimant might have treated the defendant’s
Privity problems did not arise here (even though the
refusal to load a cargo as an anticipatory breach of
Contracts (Rights of Third Parties) Act 1999 was not in
contract but his agent, the captain, had waived that force, obviously) because the wholesalers were Dunlop’s
right by staying on at Odessa, and now the contract agents. (See further Chapter 10.)
had been discharged by something which was beyond
(ii) In Jeancharm Ltd (t/a Beaver International) v Barnet
the control of either party.
Football Club Ltd [2003] All ER (D) (Jan) the Court of
Comment A more modern application of the above rule Appeal ruled that a clause providing for a rate of interest
can be seen in Fercometal Sarl v Mediterranean Shipping of 260 per cent a year on late payments was unenforce-
Co Ltd [1988] 2 All ER 742. The claimants chartered a ship able as a penalty. Jeancharm contracted to supply foot-
to the defendants. The charterparty (i.e. the contract) ball kit to Barnet. The contract provided that any late
provided that if the ship was not ready to load during payments by Barnet would be subject to interest of 5 per
the period 3–9 July the defendants could cancel the con- cent per week (or some 260 per cent a year). Both of the
tract. On 2 July the defendants said that they were not parties had accepted this as a late payment penalty.
going on with the contract anyway but the claimants did Disputes arose regarding delivery and payment. The High
not accept that breach and provided the ship, but this Court applied the penalty rate set out in the contract on
was not ready to load until 12 July and the defendants the late payments. Barnet appealed to the Court of
said again that they would not go on with the contract. Appeal. The Court of Appeal allowed Barnet’s appeal
The claimants sued for damages and failed. They could ruling that while equality of bargaining power, as in this
have based an action on the first breach but had not case, was always a relevant factor it did not in every case
done so. Their action on the second ‘breach’ failed mean that a penalty clause could not be regarded as
because the ship was not ready to load. unenforceable. The rate of interest here was an ‘extra-
ordinarily large amount’ and far exceeded a genuine pre-
estimate of loss. The interest clause had only a deterrent
REMEDIES AND LIMITATION OF ACTIONS function and was unenforceable. This meant that
there was no enforceable rate of interest based on the
contract.
Damages: must be a genuine pre-estimate of loss
Ford Motor Co (England) Ltd v Armstrong Cellulose Acetate Silk Co Ltd v Widnes Foundry
236 237
(1915) 31 TLR 267 Ltd [1933] AC 20
The defendant was a retailer who received supplies The Widnes Foundry entered into a contract to erect a
from the claimant company. As part of his agreement plant for the Silk Co by a certain date. It was also
with the claimant the defendant had undertaken: agreed that the Widnes Foundry would pay the Silk
Co £20 per week for every week it took in erecting the
(a) not to sell any of the claimant’s cars or spares
plant beyond the agreed date. In the event, the plant
below list price;
was completed 30 weeks late, and the Silk Co claimed
(b) not to sell Ford cars to other dealers in the motor
for its actual loss, which was £5,850.
trade;
(c) not to exhibit any car supplied by the company Held – the Widnes Foundry was only liable to pay £20
without its permission. per week as agreed.
The defendant also agreed to pay £250 for every Damages: the object is to put the claimant in the
breach of the agreement as being the agreed damage same position financially as if the contract had
which the manufacturer will ‘sustain’. The defendant been properly performed
was in breach of the agreement and the claimant
sued. It was held by the Court of Appeal that the Beach v Reed Corrugated Cases Ltd [1956]
238
sum of £250 was in the nature of a penalty and not 2 All ER 652
liquidated damages. The same sum was payable for dif- This was an action brought by the claimant for
ferent kinds of breach which were not likely to produce wrongful dismissal by the defendant. The claimant
the same loss. Furthermore, its size suggested that it was the managing director of the company and he
was not a genuine pre-estimate of loss. had a 15-year contract from 21 December 1950 at a
..
EL_Z01.qxd 3/26/07 1:51 PM Page 812
812 REMEDIES AND LIMITATION OF ACTIONS CASE 239
salary of £5,000 per annum. His contract was termin- (iv) Damages have been awarded for the loss of a chance.
ated in August 1954 when he was 54 years old and This is not prevented by the rule that the claimant must
the sum of money that he might have earned would not be better off. Thus in Chaplin v Hicks [1911] 2 KB 786
have been £55,000, but the general damages awarded the claimant who had won earlier stages of a beauty con-
to him were £18,000 after the court had taken into test was, by error of the defendant organiser, not invited
account income tax, including tax on his private to the final. Although it was by no means certain that
investments. she would have won, the claimant was awarded £100
damages. In a similar case, though in tort, the Court of
Comment (i) In a later case and on similar reasoning Appeal affirmed an award of a sum of money for the loss
it was held that what the claimant would have paid of a chance where, because of personal injury suffered in
by way of national insurance contributions must also a road accident caused by the negligence of the defend-
be deducted (see Cooper v Firth Brown Ltd [1963] 2 All ant, the claimant was unable to qualify and obtain
ER 31). employment as a drama teacher. Once again, a percent-
(ii) It must be said that some of the ‘tax must be age of the damages was awarded for loss of a chance
deducted’ cases are far from clear in terms of how the (see Doyle v Wallace [1998] Current Law para 1447).
court reaches its final conclusion. The clearest of all is
Shove v Downs Surgical plc [1984] 1 All ER 7, where the Damages: for mental distress
claimant had been wrongfully dismissed 30 months
before the end of a fixed-term contract of employment 239 Jarvis v Swans Tours Ltd [1973] 1 All ER 71
as managing director. The figures involved as set out in
the judgment are as follows: Swans promised the claimant a ‘Houseparty’ holiday
£ in Switzerland. Some of the more important things
Gross pay for the 30 months 90,000 promised were a welcome party on arrival, afternoon
Court’s estimate of net pay 53,000* tea and cake, Swiss dinner by candlelight, fondue
Initial award 53,000 party, yodeller evening and farewell party. Also the
Of this £30,000 is tax free (see Income hotel owner was said to speak English.
Tax (Earnings and Pensions) Act 2003) 30,000 Among the matters which the claimant complained
23,000 about were that the hotel owner could not speak
This sum is taxable in Mr Shove’s hands English. This meant he had no one to talk to since,
(see IT(E and P)A 2003). The tax is although there were 13 people present during the first
estimated to be £6,000 on the £23,000 week, he was on his own for the second week. The
*Mr Shove’s highest tax rate used. cake for tea was potato crisps and dry nutcake. The
Therefore, the court’s final award to yodeller evening consisted of a local man who came
Mr Shove is 59,000 in his overalls and sang a few songs very quickly. The
Court of Appeal held that the claimant was entitled to
to give £53,000 net
an award of £125 damages. (Incidentally, the holiday
(iii) In C & P Haulage v Middleton [1983] 3 All ER 94, C & P had cost £63.)
let Mr Middleton have a licence for six months renewable
of premises from which he conducted a business as a Comment (i) Damages for disappointment, inconveni-
self-employed engineer. He lived in a council house and ence or loss of enjoyment are not awarded except
would have used his own garage there, but the Council in contracts such as the above which are for the provision
objected. There was a quarrel between the parties and M of pleasure. Such damage may be foreseeable in other
was evicted from the premises before the licence term contracts but is not awarded as a matter of public policy.
expired. This was a breach of contract by C & P. M Thus, in Alexander v Rolls-Royce Motor Cars, The Times,
stopped a cheque which was payable to C & P because of 4 May 1996 the Court of Appeal held that the owner of
his grievance. They sued him on it. He counterclaimed a Rolls-Royce car could not claim damages for disappoint-
for damages because of his eviction. In fact the Council ment, loss of enjoyment or distress as part of an award of
had let him use his own garage for the remainder of the damages for breach of a contract to repair. It was
six months’ term. accepted by the court that the car had been bought for
Held – by the Court of Appeal – since he had paid no rent pleasure, prestige and enjoyment but that was not
for the premises in which he had worked following his enough to bring the case outside the general rule that
eviction, he was no worse off than if the contract had damages for disappointment are not awarded for breach
been properly carried out. It was not the function of the of a commercial contract.
court to put a claimant in a better position than he (ii) Another case where the matter of damages for non-
would have been if the contract had not been broken. pecuniary loss was raised is Farley v Skinner [2001] 3 WLR
Only nominal damages were awarded. 899. The claimant bought a house that was surveyed
..
EL_Z01.qxd 3/26/07 1:51 PM Page 813
CASES 240–241 REMEDIES AND LIMITATION OF ACTIONS 813
by the defendant. It was 15 miles from Gatwick airport. as a reasonable man ought he to have known there
The claimant asked the defendant surveyor to deal with was not.
the possibility of aircraft noise. The defendant reported (ii) Damage caused by a supervening event may also be
that the property was unlikely to suffer to any great too remote. In Beoco v Alfa Laval Co, The Times, 12
extent from aircraft noise. After moving in, the claimant January 1994, Alfa installed a heat exchanger at Beoco’s
found that there was substantial interference from works. It developed a crack and a third party, S, was
aircraft noise. A claim for breach of contract was made. brought in to repair it. The work was done negligently
Damages for disappointment at the loss of a pleasurable and shortly afterwards the exchanger exploded, causing
amenity and disappointment at the loss of pleasure, damage to property and economic loss of profit until it
relaxation and peace of mind were asked for. The Court was put right. It was held that Alfa was liable in damages
of Appeal refused the claim because the contract was not for the costs of replacing the heat exchanger and for
for the supply of a pleasurable amenity but for a property loss of profit up to the time of the repair but not sub-
survey. sequently. Although the matter is not raised in the
On appeal the House of Lords ruled that a sum of report, presumably S would be liable for the subsequent
£10,000 was recoverable in the circumstances of the case loss. The position in regard to supervening events is,
even though the contract did not have the provision of therefore, the same in contract as in tort. For the latter
pleasure as its object. see Jobling v Associated Dairies (1980) in Chapter 20.
Damages: remoteness; loss must be proximate The Heron II (Koufos v Czarnikow) [1967]
and not too remote 241
3 All ER 686
Shipowners carrying sugar from Constanza to Basra
240 Hadley v Baxendale (1845) 9 Exch 341
delayed delivery at Basra for nine days during which
time the market in sugar there fell and the charterers
The claimant was a miller at Gloucester. The driving
lost more than £4,000. It was held that they could
shaft of the mill being broken, the claimant engaged
recover that sum from the shipowners because the very
the defendant, a carrier, to take it to the makers at
existence of a ‘market’ for goods implied that prices
Greenwich so that they might use it in making a new
might fluctuate and a fall in sugar prices was likely or
one. The defendant delayed delivery of the shaft
in contemplation.
beyond a reasonable time, so that the mill was idle for
much longer than should have been necessary. The Comment (i) The existence of a major sugar market at
claimant now sued in respect of loss of profits during Basra made it within the contemplation of the defend-
the period of additional delay. The court decided that ants that the claimant might sell the sugar and not
there were only two possible grounds on which the merely use it in a business.
claimant could succeed. (ii) As Lord Hodson said in his judgment: ‘Goods may be
(a) That in the usual course of things the work of the intended for the purpose of stocking or consumption at
mill would cease altogether for the want of the shaft. the port of destination and the contemplation of the
parties that the goods may be resold is not necessarily to
This the court rejected because, to take only one
be inferred.’ He went on to decide, however, that resale
reasonable possibility, the claimant might have had a
must be inferred as in contemplation because Basra was
spare.
a well-known sugar market. Damages of £4,183 were
(b) That the special circumstances were fully awarded, this being the fall in price of sugar between
explained, so that the defendant was made aware of the date when the ship did arrive and the date when it
the possible loss. The evidence showed that there had should have arrived.
been no such explanation. In fact, the only informa- (iii) The contemplation test was, of course, set out in
tion given to the defendant was that the article to be Hadley as the comment at (i) to the summary of the case
carried was the broken shaft of a mill, and that the shows. So what is new about the ruling of the House of
claimant was the miller of that mill. Lords in The Heron II? The Heron II deals with a problem
Held – the claimant’s case failed, the damage being that had arisen following the interpretation by sub-
too remote. sequent courts in subsequent cases that the test in Hadley
was foreseeability of damage. The Heron II merely
Comment (i) The loss here did not arise naturally from restores in an authoritative way the Hadley rule of con-
the breach because there might have been a spare. templation. This is a tighter test for loss. A person may
The fact that there was no spare was not within the foresee all sorts of things in terms of damage but not
contemplation of the defendant and he had not even actually contemplate them. This makes the ruling in, say,
been told about it, much less accepted the risk. negligent personal injury, where the claim is in tort and
The defendant did not know that there was no spare nor the foreseeability test applies, different from contract,
..
EL_Z01.qxd 3/26/07 1:51 PM Page 814
814 REMEDIES AND LIMITATION OF ACTIONS CASES 242–245
where the test for breach of contract damages is in later the partnership was dissolved by the retirement
contemplation. of two of the members and the business was trans-
ferred to the other two who offered to employ the
claimant on the same terms as before but he refused
242 Horne v Midland Railway Co (1873) LR 8 CP 131
the offer. The dissolution of the partnership con-
The claimant had entered into a contract to sell 4,595 stituted a wrongful dimissal of the claimant and he
pairs of boots to the French Army at a price above brought an action for breach of contract seeking to
the market price. The defendant railway company recover the salary that he would have received had he
was responsible for a delay in the delivery of the served the whole period of two years. It was held that
boots, and the purchasers refused to accept delivery, he was entitled only to nominal damages since it was
regarding time as the essence of the contract. The unreasonable to have rejected the offer of continued
claimant’s claim for damages was based on the con- employment.
tract price, namely 4s per pair, but it was held that
he could only recover the market price of 2s 9d Injunction: of a negative stipulation
per pair unless he could show the defendant was Warner Brothers Pictures Incorporated v Nelson
aware of the exceptional profit involved, and that 245
[1937] 1 KB 209
it had undertaken to be liable for the loss of that
profit. The defendant, the film actress Bette Davis, had
entered into a contract in which she agreed to act ex-
Comment In Simpson v London & North Western Rail clusively for the claimant corporation for 12 months.
Co (1876) 1 QBD 274 the claimant entrusted samples She was anxious to obtain more money and so she
of his products to the defendant for it to deliver them left America, and entered into a contract with a person
to Newcastle for an agricultural exhibition. The goods in England. The claimant now asked for an injunction
were marked ‘Must be at Newcastle on Monday certain’. restraining the defendant from carrying out the
The defendant did not get them to Newcastle on time
English contract.
and was held liable for the claimant’s prospective loss
of profit arising because he could not exhibit at Held – an injunction would be granted. The contract
Newcastle. The railway company had agreed to carry contained a negative stipulation not to work for
the goods knowing of the special instructions of the anyone else, and this could be enforced. However,
customer. since the contract was an American one, the court
limited the operation of the injunction to the area of
Victoria Laundry Ltd v Newman Industries Ltd the court’s jurisdiction, and although the contract
243
[1949] 2 KB 528 stipulated that the defendant would not work in any
The defendants agreed to deliver a new boiler to the other occupation, the injunction was confined to
claimants by a certain date but failed to do so, being work on stage or screen.
22 weeks late, with the result that the claimants lost
Comment (i) Even where, as here, there is a negative
(a) normal business profits during the period of delay, stipulation, the court will not grant an injunction if the
and (b) profits from dyeing contracts which were pressure to work for the claimant is so severe as to be for
offered to them during the period. It was held that (a) all practical purposes irresistible. In this case it was said
but not (b) were recoverable as damages. that Bette Davis could still earn her living by doing other
Comment The general loss of profit in this case work.
arises naturally from the breach and no further ‘con- (ii) The idea that persons such as Bette Davis or others
templation’ or ‘notice’ test need be applied. The loss of subjected to injunctions of negative stipulations would
profit on the dyeing contracts was not known to the take other work was challenged by the Court of Appeal
defendants nor as reasonable men ought they to have in Warren v Mendy [1989] 3 All ER 103 on the grounds
had it in contemplation. of ‘realism and practicality’. The Court of Appeal said
that it was unrealistic to suppose that such persons
Damages: the injured party must mitigate would take up other work, i.e. that boxers would
his loss become clerks and actresses secretaries. Thus, the making
of an injunction of a negative stipulation in this sort of
244 Brace v Calder [1895] 2 QB 253 case was, in general terms, likely to operate as a decree
of specific performance. This means that it is in modern
The defendant partnership, consisting of four mem- law less likely that such injunctions will be granted or
bers, agreed to employ the claimant as manager of a that the Warner Brothers case will be followed, though
branch of the business for two years. Five months it is not overruled.
..
EL_Z01.qxd 3/26/07 1:51 PM Page 815
CASES 246–248 REMEDIES AND LIMITATION OF ACTIONS 815
Whitwood Chemical Co v Hardman [1891] (ii) In Peco Arts Inc v Hazlitt Gallery Ltd [1983] 3 All
246
2 Ch 416 ER 193 the claimants bought from the defendants
The defendant entered into a contract of service with in November 1970 what purported to be an original
the claimant company and agreed to give the whole of drawing in black chalk on paper, Etude pour le Bain Turc
by JAD Ingres, for the price of $18,000. In 1976 it
his time to them. In fact, he occasionally worked for
was revalued by an expert for insurance purposes.
others, and the claimant tried to enforce the under-
No doubts were cast upon its authenticity. However, on a
taking in the service contract by injunction.
valuation in 1981 it was discovered that the drawing
Held – an injunction could not be granted because there was a reproduction. The claimants sought rescission
was no express negative stipulation. The defendant and recovery of the purchase price plus interest on
had merely stated what he would do, and not what he the grounds of mutual, common or unilateral mistake
would not do, and to read into the undertaking an of fact. The trial was adjourned on the first day because
agreement not to work for anyone else required the the parties wished to simplify the issues. After this
court to imply a negative stipulation from a positive the only defence was the Limitation Act 1980, i.e.
one. No such implication could be made. that the claimants’ claim was statute-barred. It was
held that it was not and judgment was given for the
Comment It is because of the fact that the granting of claimants. Webster, J decided that a prudent buyer in
an injunction of a negative stipulation is so close to the position of the claimants would not normally have
specific performance that it is restricted to cases where obtained an independent authentication but would
the negative stipulation is express. have relied on the defendant’s reputation, as the
claimants had done. Further, the claimants were entitled
Quantum meruit: as a quasi-contractual remedy to conclude that the drawing was an original as the
valuers who had examined it in 1976 had not questioned
247 Craven-Ellis v Canons Ltd [1936] 2 All ER 1066 its authenticity. There was no lack of diligence on the
part of the claimants. Accordingly, the action was not
The claimant was employed as managing director by time barred and there would be judgment for the
the company under a deed which provided for remu- claimants.
neration. The articles provided that directors must
(iii) The Peco case does not decide what the effect of
have qualification shares, and must obtain these
the mistake was, and to that extent does not go contrary
within two months of appointment. The claimant and
to Leaf and Bell (see Chapter 12). These matters were
other directors who appointed him never obtained
not contested by the defendants. In Leaf the court
the required number of shares so that the deed was was deciding how soon an action must be brought for
invalid. However, the claimant had rendered services, rescission for innocent misrepresentation. The issue
and he now sued on a quantum meruit for a reasonable here was how soon must an action be brought where
sum by way of remuneration. the claimant sought relief for the consequences of an
Held – he succeeded on a quantum meruit, there being operative mistake.
no valid contract. (iv) More recently the House of Lords has decided that
the normal period under the Limitation Act 1980 of six
Limitation of actions: effect of fraud, concealment years governing the start of legal claims can be extended
and mistake where information relevant to the possible claim is
deliberately concealed after the period of six years
248 Lynn v Bamber [1930] 2 KB 72 has started to run. (See Sheldon & Others v RHM
Outhwaite (Underwriting Agencies) Ltd and Others
In 1921 the claimant purchased some plum trees from [1995] 2 All ER 558.)
the defendant and was given a warranty that the trees The claimants, being Lloyds names on Syndicates 317
were ‘Purple Pershores’. In 1928 the claimant discovered and 661, brought an action against the first defendant
that the trees were not ‘Purple Pershores’ and sued for and other members’ agents. They claimed damages for
damages. The defendant pleaded that the claim was alleged breach of contract, breach of fiduciary duty, and
barred by the current Limitation Act. negligence. The central allegation was that the managers
of the syndicates had failed properly to perform their
Held – the defendant’s fraudulent misrepresentation
responsibilities in regard to writing and re-insuring a
and fraudulent concealment of the breach of war-
number of contracts in 1981 and 1982. Ordinarily, the
ranty provided a good answer to this plea, so that the
claims should have been made within six years of the
claimant could recover.
alleged default. However, the claimants issued their writ
Comment (i) The present jurisdiction is s 32 of the Limita- (now claim form) in 1992, well outside the normal six-year
tion Act 1980. period.
..
EL_Z01.qxd 3/26/07 1:51 PM Page 816
816 EMPLOYMENT RIGHTS CASES 249 –250
As regards this, the claimants said that the defendants

had, in 1984, deliberately concealed facts relevant to the EMPLOYMENT RIGHTS
claimants’ action. They had not discovered these facts
until a time, less than six years, prior to the issue of the Discrimination: direct discrimination:
writ (now claim form), so that s 32 of the 1980 Act
less favourable treatment of a person
applied and their action was not statute-barred and
on grounds of race
could proceed. Section 32 provides:
Johnson v Timber Tailors (Midlands) [1978]
(1) . . . where in the case of any action for which a 249
IRLR 146
period of limitation is prescribed by this Act, either –
(a) the action is based upon the fraud of the defend- When the claimant, a black Jamaican, applied for a
ant; or (b) any fact relevant to the [claimant’s] right of job with the defendants as a wood machinist, the
action has been deliberately concealed from him by defendants’ works manager told him that he would
the defendant; or (c) the action is for relief from the be contacted in a couple of days to let him know
consequences of a mistake; the period of limitation whether or not he had been successful. Mr Johnson
shall not begin to run until the [claimant] has dis- was not contacted and after a number of unsuccess-
covered the fraud, concealment or mistake . . . or could ful attempts to get in touch with the works manager,
with reasonable diligence have discovered it . . . was told that the vacancy had been filled. Another
The previous applications of s 32 were typically in advertisement for wood machinists appeared in the
situations where deliberate concealment has taken place paper on the same night as Mr Johnson was told that
at the time of the default and it was held, perhaps the vacancy had been filled. Nevertheless, Mr Johnson
straightforwardly, that time did not begin to run until applied again for the job and was told that the
the claimant discovered the facts. vacancy had been filled. About a week later he applied
A typical case under earlier identical legislation and again and was again told that the job had been filled
one referred to in the Sheldon judgment is Beaman v although a further advertisement had appeared for
ARTS (1949) (see Chapter 20) where, in 1935, the the job on that day. It was held by an employment tri-
claimant left some packages containing goods in store bunal that the evidence established that Mr Johnson
with the defendant. In 1940 the defendants disposed of had been discriminated against on the grounds of
them without the claimant’s consent or knowledge, thus race.
committing the tort of conversion. She was allowed to
bring a claim against the defendants more than six years Comment The other side of the coin is illustrated by
later when she discovered the facts. Panesar v Nestlé & Co Ltd [1980] ICR 144 where an ortho-
Despite the wording of s 32 in terms of the phrase dox Sikh who naturally wore a beard, which was required
‘begin to run’, the House of Lords decided that conceal- by his religion, applied for a job in the defendant’s
ment after time started to run was within the section. As chocolate factory. He was refused employment because
Lord Browne-Wilkinson said: the defendant company applied a strict rule under which
no beards or excessively long hair were allowed for reasons
There is no commonsense reason why Parliament should of hygiene. The claimant made a complaint of indirect
have wished to distinguish between cases where the discrimination but the defendant said that the rule was
concealment takes place at the time of commission of justified. The Court of Appeal held that as the defendant
the wrong and concealment at a later date. In both had supported the rule with scientific evidence there
cases the mischief aimed at would be the same – to was in fact no discrimination. There would seem to be no
ensure that the Act does not operate to bar the claim reason to doubt this decision even if the Religion and
of a [claimant] whose ignorance of the relevant facts is Belief Regulations were applied. These regulations do
due to the improper actions of the defendant. protect Sikhs in terms of requirements to wear helmets
Therefore, time now begins to run only when the claimant but provide, at any rate, no specific protection, in the
has discovered the facts or could, with reasonable diligence, circumstances of this case.
have discovered them.
Two of the Law Lords dissented, taking the view that Sex discrimination: genuine occupational
the words ‘shall not begin to run’ were inapt to cover a qualification: requirement of decency
case where time had already started to run.
Sisley v Britannia Security Systems [1983]
The case has major significance in regard to actions by 250
ICR 628
clients of, e.g., accountants and solicitors for breach of
contract and negligence where a potential dispute may The defendant employed women to work in a security
take a long time to arise and where material facts might control station. The claimant (a man) applied for a
well be concealed until after the six-year period has vacant job but was refused employment. It appeared
elapsed. that the women worked 12-hour shifts with rest
..
EL_Z01.qxd 3/26/07 1:51 PM Page 817
CASES 251–253 EMPLOYMENT RIGHTS 817
periods and that beds were provided for their use The employment tribunal was not right in assuming
during such breaks. The women undressed to their that a contract of employment must contain an
underwear during these rest breaks. The claimant implied term about sick pay. All the facts must be
complained that by advertising for women the considered and here the implied term was that wages
defendant was contravening the Sex Discrimination were not paid during sickness.
Act 1975. The defendant pleaded genuine occupa-
Comment The Employment Appeal Tribunal did not
tional qualification, i.e. that women were required
follow an earlier decision, i.e. Orman v Saville Sportswear
because the removal of uniform during rest periods
Ltd [1960] 3 All ER 105, under which it was said that the
was incidental to the employment. The Employment
court could imply a term relating to sick pay and that,
Appeal Tribunal accepted that defence. The defence indeed, in modern law there seemed to be a presump-
of preservation of decency was, in the circumstances, tion in favour of the employee being entitled to sick pay
a good one. It was reasonably incidental to the unless an employer could bring evidence to show that
women’s work that they should remove their clothing this was not the case.
during rest periods.
A man and a woman will be regarded as
Comment It should be noted that the SDA imposes a
duty on employers to take reasonable steps to avoid engaged in ‘like work’ even though there
relying on GOQ exceptions. Thus in Wylie v Dee & Co may be some differences between the jobs,
(Menswear) Ltd [1978] IRLR 103 a woman was refused but not if these differences are ‘material’
employment in a men’s tailoring establishment in which
the remainder of the staff were men because it was 252 Capper Pass v Lawton [1976] IRLR 366
inappropriate for her to measure the inside legs of
male customers. She complained to an employment A female cook who worked a 40-hour week preparing
tribunal and succeeded on the basis that this particular lunches for the directors of Capper was paid a lower
task could have been carried out by one of the male rate than two male assistant chefs who worked a
employees. 45-hour week preparing some 350 meals a day in
Capper’s works canteen. The female cook claimed
There is no presumption that a contract of that by reason of the EPA (as amended) she should
employment contains an implied term that be paid at the same rate as the assistant chefs since
sick pay will be provided she was employed on work of a broadly similar
nature.
It was held by the EAT that if the work done by a
251 Mears v Safecar Security [1982] 2 All ER 865
female applicant was of a broadly similar nature to
Mr Mears was absent from his employment through that done by a male colleague, it should be regarded
sickness for six months out of some 14 months’ as being like work for the purposes of the EPA unless
employment. He then resigned because of ill-health. there were some practical differences of detail
During the period of his sickness he made no claim between the two types of job. In this case the EAT
for wages, and the written statement of his terms of decided that the work done by the female cook was
employment under the EPCA, s 1 (see now s 1 of the broadly similar to the work of the assistant chefs and
ERA 1996) made no mention of sick pay. Indeed, he that the differences of detail were not of practical
was told by other employees who visited him while importance in relation to the terms and conditions
he was sick that the employer did not pay wages dur- of employment. Consequently, the female cook
ing periods when employees were off work through was entitled to be paid at the same rate as her male
sickness. After resigning Mr Mears applied to an colleagues.
employment tribunal to determine what particulars
regarding sick pay should have been included in the Navy, Army and Air Force Institutes v Varley
253
s 1 statement. The tribunal held that the contract of [1977] 1 All ER 840
employment included an implied term under which Miss Varley worked as a Grade E clerical worker in the
the employer would pay wages during sickness, sub- accounts office of NAAFI in Nottingham. NAAFI con-
ject to deducting any sickness benefit. There was an ceded that her work was like that of Grade E male
appeal against that decision by both parties. However, clerical workers employed in NAAFI’s London Office.
it is the employer’s appeal which is of concern here. However, the Grade E workers in Nottingham worked
The employer alleged that the term relating to sick a 37-hour week, while the male Grade E clerical
pay should not be implied at all. The Employment workers in the London office worked a 36 1/ 2-hour
Appeal Tribunal upheld the employer’s contention. week. Miss Varley applied to an employment tribunal
..
EL_Z01.qxd 3/26/07 1:51 PM Page 818
818 EMPLOYMENT RIGHTS CASE 253A
under the EPA for a declaration that she was less (iv) The fact that there is no sex discrimination is not
favourably treated as regards hours worked than the relevant in turning down an equal pay claim. There
male clerical workers in London and that her contract must be a ‘material difference’. Thus, if in a collective
term as to hours be modified so as to reduce it to 361/2 agreement made with a trade union, but with no
hours a week. The employment tribunal granted that element of sex discrimination, group A (mainly men)
declaration and NAAFI appealed. receives a higher hourly rate than group B (mainly
It was held by the EAT that the variation in hours women), the employer cannot successfully defend an
was genuinely due to a material difference other equal pay claim by the women merely because there is
no sex discrimination. There must be ‘material differ-
than the difference of sex. It was due to a real
ence’. This was decided in Barber v NCR (Manufacturing)
difference in that the male employees worked in
Ltd [1993] IRLR 95.
London where there was a custom to work shorter
hours. Accordingly NAAFI’s appeal was allowed (v) In Ratcliffe v North Yorkshire County Council
and Miss Varley was held not to be entitled to the [1995] 526 IRLB 12 the House of Lords decided that
declaration. a local authority was not justified in cutting women
school catering assistants’ pay in order to tender for
There is a geographical distinction between the
work at a commercially competitive rate. ‘Market forces’
conditions operated by NAAFI in respect of their do not necessarily amount to a genuine material factor
employees in London and those outside London. other than sex. The result of this case is likely to have
That is by no means a unique situation; it is com- ramifications for public-sector competitive tender-
mon to the Civil Service and to all sorts of other ing exercises by council agencies. If these agencies
employment. . . . In other words, the variation cannot reduce wages in this way, the chances of a
between her contract and a man’s contract is due private-sector employer who is paying staff less are
really to the fact that she works in Nottingham and greatly enhanced.
he works in London. It seems to us that it is quite
plain that that is the difference between her case Part-time firefighters: less favourable
and his case, namely that she works in Nottingham treatment
where this old custom operates and he works in
London where the custom of a shorter working Matthews v Kent and Medway Towns Fire
253a
Authority (2006) 2 All ER 171
week operates. (Per Phillips, J)
The House of Lords has considered the right of part-
Comment (i) Another common example of a sensible
time workers to equal treatment with full-time work-
material difference occurs where, for example, employee
ers in terms of pension and sick pay rights. The
A is a new entrant of, say, 21 and employee B is a long-
serving employee of, say, 50 and there is a system of ser- Part-Time Workers (Prevention of Less Favourable
vice increments; then it is reasonable to pay B more than Treatment) Regulations 2000 (SI 2000/1551) provide
A though both are employed on like work. Obviously, in essence that a part-time worker must not be treated
it is not enough to say that because at the present time less favourably than a comparable full-time worker
men are on average paid more than women this is a who at the time of the alleged less favourable treat-
material difference justifying paying a woman less in a ment is employed by the same employer under the
particular job. This was decided in Clay Cross (Quarry same type of contract and engaged in the same or
Services) Ltd v Fletcher [1979] 1 All ER 474. broadly similar work. Very often in the past, part-
(ii) It was decided in Rainey v Greater Glasgow Health timers have been unable to satisfy the comparison
Board [1987] 1 All ER 65 that it is in order to pay more requirements because, among other things, full-timers
to a man if this is necessary to meet skill shortages. In undertake extra tasks and there may be differences in
that case a man skilled at fitting artificial limbs qualifications and skills. However, while accepting
was brought in from the private sector because of this, the House of Lords has ruled that a tribunal
skill shortage and paid more than a female doing the should concentrate on the similarities in the work
same job who went straight into the public sector after rather than merely the differences in concluding
training. whether part-timers are engaged in the same or
(iii) Experience can be rewarded by giving a man with broadly similar work.
greater experience higher pay (McGregor v General Part-time firefighters represented by the Fire
Municipal Boilermakers and Allied Trade Unions [1987] Brigades Union contended that they were suffering
ICR 505) and an employer may also pay a man more for discrimination in comparison with their full-time col-
doing the same job if the man works nights and the leagues in terms of the right to join the Firefighters
women do not (Thomas v National Coal Board [1987] Pension Scheme and in terms of sick pay condi-
IRLR 451). tions. The claim failed before a tribunal and the
..
EL_Z01.qxd 3/26/07 1:51 PM Page 819
CASES 254 –255A EMPLOYMENT RIGHTS 819
Employment Appeal Tribunal and the Court of Comment The claimant was also held to be unfairly
Appeal, all of these ruling that the part-time retained dismissed, having received no warning that she would be
firefighters were not engaged in the same or broadly dismissed on marriage. The additional and discriminatory
similar work. However, the House of Lords allowed reason regarding the breadwinner cost the employer a
their appeal, though two out of the five Law Lords further £100. It was not the totality of the claimant’s
dissented. In broad terms, the judgment of the House award.
of Lords had two main planks. The first was that in
the lower court and tribunals there had been an over- Sexual and racial discrimination: indirect
concentration on differences instead of similarities. It discrimination; requirements or conditions
had been accepted by the original tribunal that both applied to all workers but the ability of some
sets of firefighters’ work at the site of a blaze was in persons to comply because of sex or race is
effect the same and that work was central to the work considerably smaller and cannot be justified
of a firefighter and to the enterprise of the Fire Price v The Civil Service Commission [1977]
Brigade as a whole. Secondly, while accepting that the 255
IRLR 291
full-timers carried out measurably additional job func-
The Civil Service required candidates for the posi-
tions and that there could be material differences in
tion of executive officer to be between 17 1/ 2 and
qualifications and skills, this did not prevent the work
28 years. Belinda Price complained that this age bar
of the part-timers in terms of the core function of a
constituted indirect sex discrimination against women
firefighter, being the same or broadly similar. The case
because women between those ages were more likely
was remitted to the tribunal for reconsideration at a
than men to be temporarily out of the labour market
second hearing, which should also decide how to
having children or caring for children at home. It
remedy the situation.
was held by the Employment Appeal Tribunal that
Comment The conditions on which, for example, the that age bar was indirect discrimination against
part-timers should be admitted to the pension scheme in women. The court held that the words ‘can comply’
terms of back-dating remained to be looked at. In gen-
must not be construed narrowly. It could be said that
eral terms, however, the ruling gives a green light to
any female applicant could comply with the condi-
many other part-time workers in other employments to
tion in the sense that she was not obliged to marry or
bring discrimination claims on the basis of the ‘core func-
to have children or to look after them – indeed she
tion’ ruling.
may find someone else to look after them or, as a last
resort, put them into care. If the legislation was
Sex discrimination: direct discrimination; less construed in that way it was no doubt right to say
favourable treatment of a person on grounds that any female applicant could comply with the
of sex or race condition. However, in the view of the court to con-
strue the legislation in that way appeared to be
Coleman v Skyrail Oceanic Ltd (1981) 131
254 wholly out of sympathy with the spirit and intention
NLJ 880
of the Act. A person should not be deemed to be able
The claimant, who was a female booking clerk to do something merely because it was theoretically
for Skyrail, a travel agency, was dismissed after possible, it was necessary to decide whether it was
she married an employee of a rival agency. Skyrail possible for the person to do so in practice, as distinct
feared that there might be leaks of information from theory.
about charter flights and had assumed that her
dismissal was not unreasonable since the husband Guidance on dependants’ leave
was the breadwinner. The Employment Appeal
Tribunal decided that the dimissal was reasonable on Qua v John Ford Morrison Solicitors (2003) 153
255a
the basis that the husband was the breadwinner. New Law Journal 95
However, there was an appeal to the Court of Appeal The claimant began work as a legal secretary in
which decided that those provisions of the January 2000. She was dismissed in October 2000. She
Sex Discrimination Act 1975 which dealt with direct then complained to an employment tribunal that her
discrimination and dismissal on grounds of sex had dismissal was because she had taken time off to deal
been infringed. The assumption that husbands with her son’s medical problems. It was agreed that
were breadwinners and wives were not, was based on the reason for her dismissal was her high level of
sex and was discriminatory. The claimant’s injury to absence. The employer contended that many
her feelings was compensated by an award of £100 absences had been unauthorised. She maintained that
damages. the majority of the absences were concerned with her
..
EL_Z02.qxd 3/26/07 10:58 AM Page 820
820 EMPLOYMENT RIGHTS CASE 256
son and that on each occasion she had informed the and one of the employees of the store was electro-
employer and that the time taken off was reasonable cuted because of a fault in the cable of one of the
so that there had been no unauthorised absences. The machines. The Court of Appeal held that the director
tribunal ruled that she had not informed her concerned was in breach of his duty and dismissed his
employer as soon as was reasonably practicable and appeal from the Warwick Crown Court where he had
so dismissed her claim. The tribunal went on to hold been fined £200. Mr Mara was the director of a small
that the time taken off was unreasonable. The company, Cleaning & Maintenance Ltd (CMS).
claimant appealed to the Employment Appeal In December 1983 CMS made a contract with
Tribunal. International Stores plc (IS) to clean its premises. The
The EAT allowed the appeal and remitted it for work required the use of certain electrical cleaning
a rehearing. In doing so it pointed to errors made machines provided by CMS and these were left on the
by the tribunal in construing the relevant legislation. IS premises when CMS employees were not there. The
The EAT first laid down that it was not possible machines included a polisher/scrubber.
to specify maximum periods of time that were reason- The cleaning of the loading bay for the store in
able and that it all depended on a study of the the morning was inconvenient and it was agreed that
circumstances of the case. The EAT then stated that its cleaning should be removed from the ambit of the
although the tribunal had found that the claimant contract and at that time CMS agreed at the request of
had been absent for a total of 17 days it had wrongly IS that its cleaning machines could be used by IS em-
regarded it as unnecessary to further identify those ployees for cleaning the loading bay, and to Mr Mara’s
occasions and the extent to which the claimant had knowledge they were so used.
over that period complied with the notice require- On 10 November 1984 an employee of IS was using
ments. The tribunal had also suggested that there a CMS polisher/scrubber for cleaning the loading bay
was a duty on the employee to report to her em- when he was electrocuted because of the defective
ployer ‘on a daily basis’ while off work. The EAT condition of the machine’s cable.
noted that there was no such duty under the relevant The legal point was one of construction of the
legislation. relevant section of the Health and Safety at Work Act
Perhaps most importantly as leading to an understand- which is set out in the headnote to this case. Mr Mara
ing as to the purpose of the leave the EAT said that it claimed that when the electrocution took place his
was to find a carer in the emergency and then return company, CMS, was not conducting its undertaking
to work. The leave was not intended to be used over at all; the only undertaking being conducted was that
a period so that the employee could provide the of IS whose employees were using the machine to
care. It is to deal with an emergency and then put clean the IS premises. The Court of Appeal did not
in place arrangements that will obviate absence for accept this. The undertaking of CMS was the provi-
an extended period. If this is not possible obviously sion of cleaning services. So far as IS was concerned,
time off will have to be taken but it will not qualify as the way in which CMS conducted its undertaking was
dependants’ leave. to do the cleaning and to leave its machines and
other equipment on the premises with permission for
The Health and Safety at Work Act 1974 IS employees to use the same, with the knowledge that
Section 3 provides that it shall be the duty they would use the same. The equipment included an
of every employer to conduct his undertaking unsafe cable. The failure to remove or replace that
in such a way as to ensure, so far as reasonably cable was clearly a breach by CMS of its duty both to
practicable, that persons not in his employment its own employees as well as under the Health and
who may be affected thereby are not thereby Safety at Work Act to the workers of IS.
exposed to risks to their health and safety Comment (i) This case shows the wide ambit of the
Health and Safety at Work Act 1974. The liability of a
director for offences by the company is set out in the
256 R v Mara, The Times, 13 November 1986
1974 Act which provides that where an offence under
any of the provisions of the Act is committed by a body
In this case it was alleged that the director of a com- corporate, then should it be proved to be committed
pany was in breach of his duty under the Health and with the consent or connivance of, or to have been
Safety at Work Act where machinery belonging to his attributable to any neglect on the part of any director,
cleaning and maintenance company was left at a store manager, secretary, or similar officer of the body
which the company was under contract to clean, and corporate, or a person who is purporting to act in such
the cleaning company agreed that employees of the capacity, he as well as the body corporate shall be guilty
store could use the machinery for part of the cleaning of that offence and shall be liable to be proceeded
..
EL_Z02.qxd 3/26/07 10:58 AM Page 821
CASES 257–258 EMPLOYMENT RIGHTS 821
against and punished accordingly. It should also be Ltd [1960] 3 All ER 420 where the director/controlling
remembered that there is a civil claim for damages for shareholder’s widow was claiming, in effect, against an
this kind of breach. This case is concerned solely with the insurance company which had insured the company in
criminal offence. respect of the death of its employees in the course of
(ii) It should be noted that fines are now much higher employment. Employment claims are met by the state
than the one in this case, both on the company and its and not by a company backed by insurers (see Buchan v
directors. Six-figure sums are not uncommon. Secretary of State for Employment [1997] IRLB 2).
(iii) There is a particular difficulty for the proprietor of a (ii) In addition to the public policy point, i.e. who is the
business in cases under s 3 of the 1974 Act in that the paymaster, there is also the legal point that the relation-
Court of Appeal ruled in Davies v Health and Safety ship of employer and employee requires an element of
Executive [2003] IRLR 170 that where an offence has control by the employer over the employee and there is
been committed under the section there is a reverse no way an employee who is the controlling shareholder
burden of proof on the employer. This means that a can be dismissed except by his agreement.
prosecution will succeed under the section unless the (iii) Nevertheless, the Court of Appeal in Secretary of
proprietor can show, on a balance of probabilities, that it State for Trade and Industry v Bottrill (1999) 615 IRLB 12
would not have been reasonably practicable for him or ruled that while a controlling shareholding is likely to be
her to have done more to ensure safety. If he or she a significant factor in all situations and in some may be
cannot produce such evidence the conviction stands. The decisive, it is only one of the relevant facts and is not to
allegation by Mr Davies that this reversed burden of be taken as determining the relationship without taking
proof was contrary to the Human Rights Convention into account all the relevant circumstances. Even so, in
(Art 6 (fair trial)) failed because, among other things, the most cases it is likely that a controlling shareholder will
1
proprietor was likely to have a unique knowledge of not be regarded as an employee.
the risk and the special measures needed to avoid it.
Mr Davies’s conviction resulted from the death of a self- Conduct justifying dismissal may be the way in
employed sub-contractor who was crushed by a JCB
which an employee dresses
being reversed by an employee after Mr Davies had
instructed him to put it into a garage and had then gone Boychuk v H J Symons (Holdings) Ltd [1977]
258
away to get on with his own work leaving the employee IRLR 395
unsupervised. The rear arm of the JCB was retracted thus
Miss B was employed by S Ltd as an accounts audit
obscuring the driver’s visibility. Mr Davies was fined
clerk but her duties involved contact with the public
£15,000 and had to pay £22,500 prosecution costs.
from time to time. Miss B insisted on wearing badges
Unfair dismissal: is the court or tribunal dealing which proclaimed the fact that she was a lesbian, and
with an employee? from May 1976 she wore one or other of the follow-
ing: (a) a lesbian symbol consisting of two circles
Massey v Crown Life Insurance Co [1978] with crosses (indicating women) joined together; (b)
257
2 All ER 576 badges with the legends ‘Gays against fascism’, and
Mr Massey was employed by Crown Life as the ‘Gay power’; (c) a badge with the legend ‘Gay switch-
manager of its Ilford branch from 1971 to 1973, the board’ with a telephone number on it and the words
company paying him wages and deducting tax. In 1973, ‘Information service for homosexual men and
on the advice of his accountant, Mr Massey registered women’; (d) a badge with the word ‘Dyke’, indicating
a business name of J R Massey & Associates and with to the initiated that she was a lesbian.
that new name entered into an agreement with These were eventually superseded by a white badge
Crown Life under which he carried out the same with the words ‘Lesbians ignite’ written in large letters
duties as before but as a self-employed person. The on it. Nothing much had happened in regard to the
Inland Revenue was content that he should change to wearing of the earlier badges, but when she began
be taxed under Schedule D as a self-employed person. wearing the ‘Lesbians ignite’ badge there were dis-
His employment was terminated and he claimed to cussions about it between her and her employer. She
have been unfairly dismissed. The Court of Appeal was told that she must remove it – which she was not
decided that, being self-employed, he could not be willing to do – and that if she did not she would be
unfairly dismissed. dismissed. She would not remove the badge and was
Comment (i) It should also be noted that the EAT has dismissed on 16 August 1976 and then made a claim
held that a director, even with a service contract, who for compensation for unfair dismissal.
controls the votes in general meeting cannot be an No complaint was made regarding the manner of
employee for the purposes of employment legislation. her dismissal in terms, e.g., of proper warning. The
The EAT distinguished the case of Lee v Lee’s Air Farming straight question was whether her employer was
.. ..
EL_Z02.qxd 3/26/07 10:58 AM Page 822
822 EMPLOYMENT RIGHTS CASES 259 –260
entitled to dismiss her because she insisted on wear- management defended the claim under another
ing the badge. An employment tribunal had decided provision in the 1981 Regulations which states that a
that in all the circumstances the dismissal was fair dismissal following a transfer of business is not to be
because it was within an employer’s discretion to regarded as automatically unfair where there was, as
instruct an employee not to wear a particular badge in this case, an economic reason for making changes
or symbol which could cause offence to customers in the workforce. If there is such a reason, unfairness
and fellow employees. Miss B appealed to the must be established on grounds other than the mere
Employment Appeal Tribunal which dismissed her transfer of the business.
appeal and said that her dismissal was fair. The EAT The Employment Appeal Tribunal decided that
said that there was no question of Miss B having been the reason for dismissal was an economic one under
dismissed because she was a lesbian or because of any- the Regulations and that the management had acted
thing to do with her private life or private behaviour. reasonably in the circumstances so that the barmaid’s
Such a case would be entirely different and raise dif- claim failed.
ferent questions. This was only a case where she had
been dismissed because of her conduct at work. That, Comment It should be noted that in Gateway Hotels Ltd
the EAT said, must be clearly understood. v Stewart [1988] IRLR 287 the Employment Appeal
Tribunal decided that on a transfer of business dismissal
Comment (i) The decision does not mean that an of employees of the business transferred prior to the
employer by a foolish or unreasonable judgement of transfer at the insistence of the purchaser of the business
what could be expected to be offensive could impose is not an ‘economic’ reason within the Regulations so
some unreasonable restriction on an employee. However, that the dismissals are unfair.
the decision does mean that a reasonable employer, who
is, after all, ultimately responsible for the interests of the
business, is allowed to decide what, upon reflection or
An employee who unreasonably refused an
mature consideration, could be offensive to customers offer of alternative employment is not entitled
and fellow employees, and he need not wait to see to a redundancy payment
whether the business would in fact be damaged before
he takes steps in the matter. 260 Fuller v Stephanie Bowman [1977] IRLR 7
(ii) In Kowalski v The Berkeley Hotel [1985] IRLR 40 the
EAT decided that the dismissal of a pastrycook for F was employed as a secretary at SB’s premises
fighting at work was fair though it was the first time he which were situated in Mayfair. These premises
had done it. attracted a very high rent and rates so SB moved its
offices to Soho. These premises were situated over a
(iii) On the issue of conduct, it was decided in Dryden
sex shop and F refused the offer of renewed employ-
v Greater Glasgow Health Board (1992) 447 IRLIB 11
ment at the same salary and she later brought a claim
that employees had no implied right under their
before an employment tribunal for a redundancy
contracts of employment to smoke at work. If, as in Ms
payment. The tribunal decided that the question of
Dryden’s case, the employee leaves because he or she is
unreasonableness was a matter of fact for the tribunal
not allowed to smoke there is no constructive dismissal.
The employer had in this case offered counselling and F’s refusal to work over the sex shop was unreas-
but without success. onable so that she was not entitled to a redundancy
payment.
Dismissal on a transfer of business Comment (i) It should be noted that in North East Coast
Ship Repairers v Secretary of State for Employment [1978]
Meikle v McPhail (Charleston Arms) [1983] IRLR 149 the Employment Appeal Tribunal decided that
259
IRLR 351 an apprentice who, having completed the period of his
After contracting to take over a public house and its apprenticeship, finds that the employer cannot provide
employees, the new management decided that him with work, is not entitled to redundancy payment.
This case has relevance for trainees and others com-
economies were essential and dismissed the barmaid.
pleting contracts in order to obtain relevant practical
She complained to an employment tribunal on the
experience.
grounds of unfair dismissal. Her case was based upon
the fact that the 1981 Regulations state that a dis- (ii) In Elliot v Richard Stump Ltd [1987] IRLR 215 the
missal is to be treated as unfair if the transfer of a EAT decided that a redundant employee who is offered
business or a reason connected with it is the reason or alternative employment by an employer who refuses to
principal reason for the dismissal. The pub’s new accept a trial period is unfairly dismissed.
..
EL_Z02.qxd 3/26/07 10:58 AM Page 823
CASES 261–263A LAW OF TORTS: GENERAL PRINCIPLES 823
(iii) In Cambridge and District Co-operative Society Ltd v

263 Roy v Prior [1969] 3 All ER 1153
Ruse [1993] IRLR 156 the EAT held that it was reasonable
for an employee to refuse alternative work if the new
job involved what he reasonably believed to be a loss of The claimant, a doctor, sued the defendant, a solicitor,
status. In that case the manager of a Co-op mobile for damages alleging, amongst other things, that the
butcher’s shop was offered a post in the butcher’s section defendant had caused his arrest and forcible attend-
of a Co-op supermarket which he refused to accept ance at court to give evidence in a criminal case by
because he was under another manager; quite reason- saying falsely in court that the claimant was evading a
ably, he felt it involved a loss of status. He was successful witness summons. The action failed, Lord Denning,
in his claim for a redundancy payment. MR saying in the course of his judgment:
It is settled law that, if a witness knowingly and

LAW OF TORTS: GENERAL PRINCIPLES maliciously tells untruths in the witness box, and
as a result an innocent person is imprisoned, never-
Nature of tort: not all harm is actionable theless no action lies against that witness. . . . The
reason lies in public policy. Witnesses must be able
261 Perera v Vandiyar [1953] 1 All ER 1109 to give their evidence without fear of the con-
sequences. They might be deterred from doing so if
The claimant was the tenant of a flat in Tooting, and they were at risk of being sued for what they said.
the defendant was the landlord. On 8 October 1952, the So the law gives a witness the cloak of absolute
landlord cut off the supply of gas and electricity to immunity from suit. This applies not only to state-
the flat in order to induce the claimant to leave. As a ments made by a witness in the box, but also to
result, the claimant was forced to move out of the flat statements made whilst he is giving his proof to
and lived elsewhere until the services were restored his solicitor beforehand. The reason is because the
on 15 October 1952. The claimant sought damages protection given to the witness in the box would be
for breach of implied covenant for quiet enjoyment, useless to him if it could be got round by an action
and for eviction. against him in respect of his proof. . . .
Held – the claimant was entitled to damages for
Comment The Criminal Justice Act 1988 gives prisoners
breach of the implied covenant, but punitive damages
whose convictions are quashed or pardoned a right
on the purported tort of eviction were not recoverable
to monetary compensation from the government. The
because the defendant had not committed a tort. It
matter of compensation was formerly a matter for the
had not been necessary for the defendant to trespass
discretion of the Home Secretary.
on any part of the demised premises in order to cut
off the services, and mere intention to evict was not
a tort. Nature of tort: no tort of invasion of privacy:
effect of the law of confidence
Comment This kind of conduct by a landlord is now
a criminal offence under s 1 of the Protection from Douglas and Others v Hello! Ltd [2005]
263a
Eviction Act 1977. However, there is no civil action for 4 All ER 128
breach of the statutory duty (McCall v Abelesz [1976]
1 All ER 727). The first two claimants are well-known film stars. They
married in November 2000. Before the ceremony they
made a contract with the third claimant, OK! magazine,
262 Hargreaves v Bretherton [1958] 3 WLR 463 under which that magazine acquired exclusive photo-
graphic rights to the event. Unauthorised photographs
The claimant pleaded that the defendant had falsely were taken at the event and sold to OK!’s rival maga-
and maliciously and without just cause or excuse zine Hello! which published them on the same day as
committed perjury as a witness at the claimant’s trial OK! magazine. The claimants asked for damages for
for certain criminal offences, and that as a result the breach of confidence and the film stars claimed addi-
claimant had been convicted and sentenced to eight tionally for breach of the law of privacy.
years’ imprisonment. A point of law arose because the The High Court ruled in 2003 that there was no
claimant’s case was, in effect, based on the purported existing tort of breach of privacy and refused
tort of perjury. to extend the common law into this area. There was
Held – no action lay on this cause, since there was no furthermore no need to introduce Art 8 of the
tort of perjury, and, therefore, the claimant’s claim Convention on Human Rights (right to respect for
must be struck out. private and family life) because English law was not
.. ..
EL_Z02.qxd 3/26/07 10:58 AM Page 824
824 LAW OF TORTS: GENERAL PRINCIPLES CASE 264
inadequate in regard to the circumstances of this case. Nature of tort: expanding role of negligence
It could be dealt with as a breach of commercial from the Atkinian neighbour test
confidence which was a recognised head of law. The
Donoghue (or M’Alister) v Stevenson [1932]
judge also awarded the Douglases compensation for 264
AC 562
damage and distress under the Data Protection Act
1998. The unauthorised pictures were to be regarded The appellant’s friend purchased a bottle of ginger
as personal data and Hello! magazine was a data con- beer from a retailer in Paisley and gave it to her. The
troller. Thus publication of the pictures was ‘process- respondents were the manufacturers of the ginger
ing’ by Hello! which was bound by the requirements beer. The appellant consumed some of the ginger beer
of the Act. The judge said however that damages for and her friend was replenishing the glass, when,
the data infringement would be nominal. The according to the appellant, the decomposed remains
amount of the other damages was left to be dealt with of a snail came out of the bottle. The bottle was made
on the basis of submissions by the parties at a later of dark glass so that the snail could not be seen
date. until most of the contents had been consumed. The
appellant became ill and served a writ (now claim
Comment (i) The High Court was of the opinion that if form) on the manufacturers claiming damages. The
a general law of invasion of privacy was to be created question before the House of Lords was whether the
it should be done by Parliamentary legislation and not facts outlined above constituted a cause of action in
by the judiciary since the latter did not have adequate negligence. The House of Lords held by a majority
consultation powers with interests that might be of three to two that they did. It was stated that a manu-
affected. facturer of products, which are sold in such a form
On appeal to the Court of Appeal in 2005 that court, in that they are likely to reach the ultimate consumer in
a landmark privacy ruling, found that Hello! had the form in which they left the manufacturer with no
breached the privacy rights of Michael Douglas and
possibility of intermediate examination, owes a duty
Catherine Zeta-Jones by taking unauthorised pictures of
to the consumer to take reasonable care to prevent
their wedding but had not tried to cause commercial
injury. This rule has been broadened in subsequent
damage to rival OK! by publishing the photos. Overruling
cases so that the manufacturer is liable more often
the 2003 High Court judgment, the Court of Appeal ruled
where defective chattels cause injury. The following
that Hello! need not pay OK! £1 million compensation
for commercial damage and a similar amount for legal important points also arise out of the case.
costs. However, the court upheld the Douglases’ award (a) It was in this case that the House of Lords formul-
of £14,750 but refused to increase it, as they had received ated the test that the duty of care in negligence is
£1 million from OK! for the authorised shots. As regards based on the foresight of the reasonable man. As Lord
the position between the magazines, the economic tort Atkin said:
relied upn by OK! had to be done with the intention of
The liability for negligence, whether you style it such
injuring the claimant, whereas Hello! merely intended to
boost its own sales. or treat it as in other systems as a species of ‘culpa’
It appears from this judgment that an individual has a [fault] is no doubt based upon a general public sen-
right to protect his or her privacy. timent of moral wrongdoing for which the offender
must pay. But acts or omissions which any moral
(ii) In A v B plc [2001] 1 WLR 2341 the claimant was a code would censure cannot in a practical world be
married professional footballer. He claimed an injunction treated so as to give a right to every person injured
against the first defendant newspaper to restrain it from
by them to demand relief. In this way rules of law
publishing or disclosing any information concerning
arise which limit the range of complainants and the
the sexual relationship he had had with the second
extent of their remedy. The rule that you are to love
defendant and another woman and to restrain any dis-
your neighbour becomes in law, you must not injure
closure by the women to anyone with a view to such
your neighbour; and the lawyer’s question, Who is
information being published in the media.
The High Court granted the injunction. Having said my neighbour? receives a restricted reply. You must
that the claimant succeeded on the basis of confidential- take reasonable care to avoid acts or omissions
ity there being no matter of public interest (in the legal which you can reasonably foresee would be likely to
sense) in the circumstances as there might be in revela- injure your neighbour. Who, then, in law, is my
tions of commercial fraud, the judge went on to say that neighbour? The answer seems to be – persons who
the claimant’s Convention right to privacy under Art 8 are so closely and directly affected by my act that I
of the Convention prevailed over the defendant news- ought reasonably to have them in contemplation as
paper’s right to freedom of expression under Art 10 of being so affected when I am directing my mind to
the Convention. the acts or omissions which are called in question.
..
EL_Z02.qxd 3/26/07 10:58 AM Page 825
CASES 265 –266 LAW OF TORTS: GENERAL PRINCIPLES 825
(b) Lord Macmillan’s remark in his judgment that the successful but his wife also claimed damages for loss
categories of negligence are never closed suggests that of her husband’s consortium through the defendant’s
the tort of negligence is capable of further expansion. negligence. The House of Lords held that her claim
That this has been so is revealed by the discussion failed because the damnum was not of a kind recognised
of later cases in Chapter 21. There are still some by law. ‘It is true that a husband is entitled to recover
difficulties in regard to the extension of the principle damages for loss of consortium against a person who
where physical damage to property causes a money negligently injures his wife, but this exceptional right
loss, e.g. a loss of profit. is an anomaly at the present day. A wife . . . was never
(c) The duty of care with regard to chattels as laid regarded as having any proprietary right in her hus-
down in the case relates to chattels not dangerous in band. . . .’ ( per Lord Morton of Henryton).
themselves. The duty of care in respect of chattels Comment Some American jurisdictions allow such
dangerous in themselves, e.g. explosives, is much a claim. The Best case is in no sense anti-female. The
higher. House of Lords simply took the view that the right of
(d ) The appellant had no cause of action against the consortium in both parties was an anachronism and
retailer in contract because her friend bought the bottle, took the opportunity to deny the right of consortium in
the wife. The Law Commissioners recommended giving
so that there was no privity of contract between the
equal rights to husband and wife by abolishing the
retailer and the appellant. Therefore, terms relating to
husband’s right to compensation for loss of his wife’s
fitness for purpose and merchantable (now satisfact-
consortium. (See Report No 56 on Personal Injury
ory) quality, now implied into such contracts by the
Litigation – Assessment of Damages (1973).) This has
Sale of Goods Act 1979, did not apply here.
been achieved by s 2(a) of the Administration of Justice
Comment (i) A remedy under the Sale of Goods Act Act 1982.
could have been given to the appellant if the reasoning
of Tucker, J in Lockett v A & M Charles Ltd [1938] 4 All ER Electrochrome Ltd v Welsh Plastics Ltd [1968]
266
170 had been applied in Donoghue. In Lockett, husband 2 All ER 205
and wife went into a hotel for lunch. The wife ordered A lorry driver employed by the defendants drove the
whitebait which was not fit for human consumption. She defendants’ vehicle into a fire hydrant near to the
only ate a small amount of the whitebait and was then
claimant’s factory. Water escaped from the damaged
taken ill. In the subsequent action against the hotel,
hydrant and the supply had to be cut off while repairs
Tucker, J held that although the husband ordered the
were carried out. The claimant lost a day’s work at its
meal there was an assumption in these cases that each
factory and sued for this loss. However, since it was
party would be, if necessary, personally liable for what
not the owner of the hydrant, it was held that no
he or she consumed. There was, therefore, a contract
between the hotel and the wife into which Sale of action lay. The claimant had suffered loss, but there
Goods Act terms could be implied and she was awarded had been no infringement of its legal rights.
damages because the whitebait was not fit for the
Comment (i) The case is a good example of the reluct-
purpose or of merchantable (now satisfactory) quality.
ance of a court to allow the law of tort to be used to
This approach is surprisingly modern in spite of the fact
compensate for economic loss, i.e. the mere loss of an
that the case was decided in 1938.
opportunity to make a profit, perhaps on the ground
(ii) The general statement of principles in this case is at that the law of contract is more concerned with the loss
the root of the tort of negligence. However, it should be of expectations. Furthermore, the decision in this case
noted that the Consumer Protection Act 1987 provides can be reached by way of damnum sine injuria or by
a statutory basis for claims against a manufacturer saying that there was no duty of care or, if there was,
for product liability and without the need to prove that the damage was too remote.
negligence (see further Chapter 21).
(ii) In Junior Books Ltd v Veitchi Co Ltd (1982) (see
Chapter 21) the House of Lords decided that if a claimant
Damage and liability: damnum sine injuria; was in sufficiently close proximity to the defendant, he
effect of malice and relevance of motive could recover foreseeable economic loss, even though
there was no physical damage either to a person or to
Best v Samuel Fox & Co Ltd [1952]
265 property. It would, however, be unwise to assume that
2 All ER 394
Junior Books covers all cases of economic loss, particularly
Best was a workman at the defendant’s factory and where, as in the Electrochrome case, proximity of the
because of an accident caused by the defendant’s negli- claimant and defendant does not exist in the Junior Books
gence he was emasculated and thus rendered incapable way. Anyway, the effect of the decision has been largely
of sexual intercourse. Best’s claim for damages was whittled away in more recent cases (see Chapter 21).
.. ..
EL_Z02.qxd 3/26/07 10:58 AM Page 826
826 LAW OF TORTS: GENERAL PRINCIPLES CASES 267–269
and the mental intention of the defendant to cause it.

267 Bradford Corporation v Pickles [1895] AC 587
The judge found that the video was not a cause of psy-
chiatric injury but the infirmary incident was. The ques-
The Corporation had statutory power to take water
tion was ‘did the defendant mean it?’ Was it possible to
from certain springs. Water reached the springs by
impute a bad motive under in the Wilkinson situation?
percolating (but not in a defined channel) through
The judge ruled that a less than innocent motive could
neighbouring land belonging to Pickles. In order to be imputed and was imputed as regards the infirmary
induce the Corporation to buy his land at a high incident on the basis that the defendant was at least
price, Pickles sank a shaft on it, with the result that reckless as to whether he caused psychiatric harm.
the water reaching the Corporation’s reservoir was There was little discussion of the vicarious liability of
discoloured and its flow diminished. The Corporation D’s employer, a local authority, but the authority was
asked for an injunction to restrain Pickles from collect- held vicariously liable, since sexual abuse had been
ing the subterranean water. regarded as within the course of employment in the
Held – an injunction could not be granted. Pickles sense that D’s employment gave him the opportunity to
had a right to drain from his land subterranean water carry out the abuse (see Lister v Hesley Hall Ltd [2001]
not running in a defined channel. (This right of a 1 AC 215 (Case 284a)).
landowner was established by the House of Lords in
Chasemore v Richards (1859) 7 HL Cas 349.) Any Minors: liability as defendant
malice which he might have had in doing it did not Williams v Humphrey, The Times,
affect that right, since English law knows no doctrine 269
20 February 1975
of abuse of rights. No use of property which would be
legal if due to a proper motive can become illegal The defendant, a youth of nearly 16, accompanied his
because it is prompted by an improper or malicious friend and the friend’s parents to a swimming pool.
motive. As part of the general fun, the defendant pushed the
friend’s father, the claimant, a middle-aged man, into
the shallow end of the pool, merely intending to
268 Wilkinson v Downton [1897] 2 QB 57 cause a big splash. The claimant’s left foot struck the
edge of the pool and he sustained severe injuries to
The defendant as a ‘practical joke’, called on Mrs his foot and ankle. He underwent five operations and
Wilkinson and told her that her husband had been ended up disabled. It was held – by Talbot, J – the
seriously injured in an accident while returning home claimant had not taken such part in the pool activ-
from the races and had had both his legs broken. ities that he could be said to have willingly accepted
Mrs Wilkinson travelled to see her husband at the risk of personal injury and the defendant was
Leytonstone and, believing the message to be true, guilty of both negligence and trespass to the person.
sustained nervous shock and in consequence was seri- The claimant succeeded.
ously ill. This action was brought for damages for
false and malicious representation. Damages were Comment (i) It may be puzzling to the reader why this
awarded. The court held that intentional physical action was worthwhile in terms of the fact that the
harm is a tort even though it does not consist of a defendant would not have had a lot of money in his
personal capacity. However, there was a household insur-
trespass to the person. Further, whether the act is
ance policy available. Most modern household insurance
malicious or by way of a joke is irrelevant.
policies have a public liability clause which provides
Comment (i) Although it is often stated that trespass cover, sometimes up to £1 million or more for accidents
lies only for direct damage, trespass is felt to be the basis caused by the householder or his family.
of this action and it clearly suggests that the tort of (ii) In Mullin v Richards [1998] 1 WLR 1304 the defendant
trespass is available for indirect physical damage caused was a 15-year-old schoolgirl, as was the claimant. A play
wilfully. fight between the two with plastic rulers ended with the
(ii) The Wilkinson case was the sole basis of liability in the claimant getting a piece of plastic in her eye and losing
defendant in C v D [2006] All ER (D) 329 (Feb). The case the sight in it. The matter of the defendant’s liability in
concerned the alleged sexual abuse of the claimant while negligence arose. The Court of Appeal ruled that she
a school pupil. The first incident involved showing a was not liable. There was not sufficient evidence to show
video of the claimant and others in the school showers that the accident was readily foreseeable by a ordinarily
and the second concerned an incident in the school prudent and reasonable 15-year-old schoolgirl. There was
infirmary where the defendant had allegedly pulled no dangerous force used over and above that which was
down the claimant’s trousers and underwear and had inherent in play fencing of this kind that the school had
stared at his genitals. The claim was for psychiatric injury not prohibited.
..
EL_Z02.qxd 3/26/07 10:58 AM Page 827
Minors: liability of parents and others in charge Carmarthenshire County Council v Lewis [1955]
272
of minors; negligent control 1 All ER 565
A boy aged four years was a pupil at a nursery school
270 Donaldson v McNiven [1952] 1 All ER 1213 run by the appellants who were the local education
authority. The boy and another were made ready to
The defendant lived in a densely populated area of go out for a walk with the mistress in charge who left
Liverpool and allowed his 13-year-old son to have an them for a moment in order to get ready herself. She
air rifle on condition that he did not use it outside the did not return for 10 minutes, having treated another
house. The defendant’s house had a large cellar and child who had cut himself. During her absence, the boy
the boy was told to use the rifle there. Without the got out of the classroom and made his way through
defendant’s knowledge, the boy fired the air rifle at an unlocked gate, down a lane, and into a busy high-
some children playing near to the house, injuring the way. He caused the driver of a lorry to swerve into a
claimant, a child of five. telegraph pole, as a result of which the driver was
killed. His widow brought an action for damages for
Held – in the circumstances the precautions taken negligence.
by the defendant were reasonable and would have
been adequate but for his son’s disobedience, which Held – in the circumstances of the case the mistress
could not have been foreseen because the boy was was not negligent so the liability of the local author-
usually obedient. The defendant was not guilty of ity was not vicarious. However, the local authority
negligence. was negligent itself because it had not taken reason-
able precautions to keep young children who used the
premises from getting out into the highway.
271 Bebee v Sales (1916) 32 TLR 413
Butt v Cambridgeshire and Isle of Ely County
273
A father allowed his 15-year-old son to retain a Council (1969) 119 NLJ 118
shotgun with which he knew he had already caused The claimant was a pupil in a class of 37 girls of nine
damage. The father was held liable for an injury to and 10 years of age. She lost an eye when another girl
another boy’s eye. in her class waved pointed scissors which the children
were using to cut out illustrations. The teacher was
Comment Cases 270 and 271 were decided on the giving individual attention to another child.
ordinary principles of negligence at common law.
Held – by the Court of Appeal – her claim for damages
However, since the Air Guns and Shot Guns Act 1962
failed. The teacher was not under a duty to require
(see now the Firearms Act 1968 and amending legisla-
all work to stop while she was giving individual atten-
tion), an action may lie against the parent for breach of
statutory duty. The Act makes it a criminal offence to tion to members of the class. She was not negligent
give an air weapon to a person under 14 years, and so that there was no vicarious liability in the local
restricts the use or possession of air weapons by young authority. The local authority was not liable for its
persons in public places except under supervision. own negligence in that evidence of experienced
In any case, breaches of these statutory duties could teachers showed that there was no fault in the system
be relied upon as evidence of negligence. Furthermore, of using pointed scissors.
a person injured might now claim compensation
from the Criminal Injuries Compensation Board. The Mental patients: liability in tort
age of the child causing the injury is not a bar to a
claim against the Board because payments will be 274 Morriss v Marsden [1952] 1 All ER 925
made even though the child inflicting the injury is
below the age of criminal responsibility. In Gorely v The defendant took a room at a hotel in Brighton,
Codd [1966] 3 All ER 891, the claimant was injured by a and whilst there he violently attacked the claimant,
pellet from Codd’s air rifle when they were larking
who was the manager of the hotel. Evidence showed
about in a field in open country. Codd was 161/2 years
that at the time of the attack the defendant was suffer-
of age, and when the claimant sued Codd’s father,
ing from a disease of the mind. He knew the nature
the court found that he had given proper instruc-
and quality of his act, but did not know that what he
tion to his son and was not liable at common law.
was doing was wrong. The claimant sued for damages
Since the shooting did not occur in a public place, there
was no breach of the Air Guns and Shot Guns Act for assault and battery.
1962 (see now the Firearms Act 1968 and amending Held – since the defendant knew the nature and
legislation). quality of his tortious act, it did not matter that he
.. ..
EL_Z02.qxd 3/26/07 10:58 AM Page 828
828 LAW OF TORTS: GENERAL PRINCIPLES CASES 275 –279
did not know what he was doing was wrong, and he Campbell v Paddington Borough Council [1911]
278
was liable in tort. 1 KB 869
The defendant Council, in accordance with a resolu-
Diplomatic immunity in tort: nature of tion duly passed, erected a stand in Burwood Place in
order that members of the Council might view the
275 Dickinson v Del Solar [1930] 1 KB 376 funeral procession of King Edward VII passing along
the Edgware Road. The claimant, who occupied cer-
The claimant had been knocked down by a car driven tain premises in Burwood Place, often let the premises
by the defendant’s servant. The defendant was the for the purpose of viewing public processions passing
First Secretary of the Peruvian Legation in London. along the Edgware Road. The stand obstructed the
The Head of the Legation directed the defendant not view of the funeral procession from the claimant’s
to plead diplomatic privilege, and the defendant house and she was unable to let the premises for that
entered an appearance in the action. The claimant purpose.
succeeded and the defendant’s insurance company
refused to indemnify its client, saying, in effect, Held – as the stand constituted a public nuisance, the
that his diplomatic immunity was immunity from claimant could maintain an action for the special
liability. damage which she had sustained through the loss of
view. The Council was properly sued, and the fact
Held – the insurer was liable to indemnify the
that the erection of the stand was probably ultra vires
defendant. Diplomatic agents are not immune from
did not matter.
liability for wrongful acts, but are merely immune
from suit. This immunity can be waived with the Comment The damages in this case must be regarded as
sanction of the sovereign of the state in question, or parasitical because the law does not recognise a right to
an official superior of the person concerned. The a view or prospect and it must be accepted therefore
defendant’s act in entering an appearance operated as that a claimant may recover as part of his damages for
a waiver of diplomatic privilege, and judgment was injury to a recognised interest a financial loss related to
properly entered against him. another interest which would not in itself be protected
by the law. (See also Spartan Steel and Alloys Ltd v
Corporations: as claimants in tort Martin & Co Ltd (1972) in Chapter 21.)
D & L Caterers and Jackson v D’Anjou [1945] Vicarious liability: who is a servant? Control and
276
1 All ER 563
other tests; transfer of employees
The claimant owned a West End restaurant called the
‘Bagatelle’. The defendant made certain statements Garrard v Southey (A E) and Co and Standard
279
alleging that the restaurant was operated illegally and Telephones and Cables Ltd [1952] 2 QB 174
obtained its supplies on the black market. Two persons employed by electrical contractors were
Held – the statements were defamatory and a limited sent to work in a factory on electrical installations.
liability company could sue for slander without The electrical contractors continued to employ the
proof of special damage. Where the slander related to men, paying their wages, stamping their insurance
its trade or business, the law implied the existence of cards, and retaining the sole right to dismiss them.
damage to found the action. The electricians worked exclusively at the factory and
used the factory canteen. The occupiers of the factory
Corporations: as defendants in tort supplied them with all materials, tools and plant,
except for certain special tools belonging to the
Poulton v London and South Western Railway electricians themselves. They were supervised by a
277
Co (1867) LR 2 QB 534 foreman employed by the occupiers and they fol-
The claimant was arrested by a stationmaster for lowed the system laid down in the factory. One of the
non-payment of carriage in respect of his horse. The electricians was injured when he fell from a defective
defendant (the employer of the stationmaster) had trestle owned by some building contractors who were
power to detain passengers for non-payment of their also working in the factory.
own fare, but for no other reason. Held – the occupiers of the factory, and not the
Held – since there was no express authorisation of electrical contractors, owed the injured electrician the
the arrest by the defendant, the stationmaster was common-law duty of a master to his servant (to provide
acting outside the scope of his employment and the proper plant and equipment) and they were liable to
defendant was not liable. him for breach of that duty.
..
EL_Z02.qxd 3/26/07 10:58 AM Page 829
Comment It is worth noting that the Garrard decision is and knew his job and would carry it out in his own
an extremely rare one. There is a very strong presump- way. Yet ultimately he would decline to carry it out in
tion that the general or permanent employer remains the appellants’ way at his peril, for in their hands lay the
liable. Thus in Morris v Breaveglen (t/a Anzac Construc- only sanction the power of dismissal.’
tion Co), The Times, 29 December 1993, the Court of
Appeal held that an employer was liable to his employee Wright v Tyne Improvement Commissioners
281
sent to work under a labour-only sub-contract, which was (Osbeck & Co Ltd, Third Party) [1968]
under the direction and control of the main contractor, if 1 All ER 807
the system of work was unsafe. Tyne Improvement Commissioners hired a crane to
Osbeck & Co Ltd, under a written contract whereby
Mersey Docks and Harbour Board v Coggins the hirer agreed ‘to bear the risk of and be responsible
280
and Griffiths (Liverpool) Ltd and McFarlane for all damage, injury or loss whatsoever, howsoever
[1947] AC 1 and whensoever caused arising directly or indirectly
A company of stevedores had hired from the Harbour out of or in connection with the hiring or use of the
Board the use of a crane together with its driver, said crane’. The claimant, who was a docker employed
Mr Newall, to assist in loading a ship lying in the by Osbeck & Co, was injured when a wagon, in
Liverpool docks. The contract of hire was subject to which he was standing to receive timber, was negli-
the Board’s regulations, one of which contained the gently moved forward by the capstan driver causing
clause: ‘The driver provided shall be the servant of the the claimant to collide with timber being lowered
applicants.’ The driver of the crane was a skilled man into the wagon by the crane. The claimant and the
appointed and paid by the Board, and the Board crane driver did all they could to avoid the accident
alone had power to dismiss him. The stevedores told but failed to do so and it was accepted that the
the driver what they wanted the crane to lift but had capstan driver, who was employed by the Commis-
no authority to tell him how to work the crane. sioners, was wholly to blame. Under the doctrine of
McFarlane, who was a checker employed by the vicarious liability, the Commissioners were also to
forwarding agents, was noting the number and marks blame. When the action was tried at Newcastle-
on a case which the crane had picked up when he was upon-Tyne Assizes, Waller, J awarded the claimant
trapped because of the negligence of the crane driver damages of some £2,985 against the Commis-
in failing to keep the crane still. sioners, but dismissed a claim by the Commissioners
The question to be determined was whether in against Osbeck & Co, as the hirer of the crane, for an
applying the doctrine of vicarious liability the general indemnity against the claimant’s claim by virtue of
employer of the crane driver or the hirer was liable for the clause quoted above. The Commissioners now
his negligence. The Board contended that, under the appealed against the dismissal of the claim for
terms of the contract between the Board and the indemnity.
stevedores, the stevedores were liable. Held – by the Court of Appeal – as the accident arose
Held – by the House of Lords: directly, or at least indirectly, out of or in connection
with the use of the crane, the indemnity clause
(a) The question of liability was not to be determined
entitled the Commissioners to an indemnity against
by any agreement between the general employer and
Osbeck & Co even though the use to which the crane
the hirer, but depended on the circumstances of the
was being put was not a blameworthy cause of the
case. The test to apply was that of control.
accident.
(b) The Board, as the general employer of the crane
driver, had not established that the hirer had such
control of the crane driver at the time of the accident 282 Cassidy v Ministry of Health [1951] 2 KB 343
as to become liable as employer for his negligence.
The claimant’s left hand was operated on at the defend-
Although the hirer could tell the crane driver where
ant’s hospital by a whole-time assistant medical
to go and what to carry, the hiring company had no
officer of the hospital. After the operation the claim-
authority to tell him how to operate the crane. The
ant’s hand and forearm were put in a splint for 14
Board was, therefore, liable for his negligence.
days. During this time the claimant complained of
Comment The answers given by Mr Newall to counsel’s pain but was merely given sedatives by the doctors
questions in this case were highly important. At one who attended him. When the splint was removed, it
point he said: ‘I take no orders from anybody.’ was found that all four fingers of the claimant’s hand
Commenting on this, Lord Simonds said that it was ‘a were stiff, and that his hand was virtually useless.
sturdy answer which meant that he was a skilled man Someone – either the doctor, the surgeon, or a nurse
.. ..
EL_Z02.qxd 3/26/07 10:58 AM Page 830
830 LAW OF TORTS: GENERAL PRINCIPLES CASES 283 –284A
– had been negligent, but the claimant could not in from the company, as the employer of her husband,
fact point to which of these it was. The claimant sued under the New Zealand Workers’ Compensation Act
the defendant for negligence. 1922. Since Mr Lee owned 2,999 of the company’s
Held – the defendant was liable, in spite of its absence 3,000 £1 shares and since he was its governing director,
of real control over the type of work done by the the question arose as to whether the relationship of
doctors it employed. Denning, LJ stated that only master and servant could exist between the company
where the patient himself selects and employs the and him. He was employed as the company’s chief
doctor will the hospital authorities escape liability for pilot under a provision in the articles at a salary to be
that doctor’s negligence. If the person causing the arranged by himself.
harm is part of the organisation, the employer is Held – Mrs Lee was entitled to compensation because
liable. her husband was employed by the company in the
sense required by the Act of 1922, and the decision in
Comment In this case Lord Denning used the doctrine Salomon v Salomon & Co was applied.
res ipsa loquitur (see Chapter 21) in order to help the
claimant to establish his case. In other words, he Comment The Employment Appeal Tribunal distin-
presumed negligence, thus relieving the claimant of the guished Lee’s case in Buchan v Secretary of State for
burden of actually having to point to a particular Employment (1997) 565 IRLB 2 (see Chapter 19). Policy
employee of the negligent Ministry. considerations were involved. Employment protection
claims are met by the state and not, as in Lee’s case, by a
Ferguson v John Dawson & Partners company backed up by an insurance company.
283
(Contractors) [1976] 3 All ER 817
Acts personal to the employee: a move towards
The claimant who was working ‘on the lump’ was
greater employer liability
injured whilst working for the defendants who were
contractors. No deductions were made by the defend-
284a Lister v Hesley Hall Ltd [2001] 2 All ER 769
ants for income tax or national insurance contributions
and the claimant had been told that he was working The claimants were boys at a school for children with
‘purely as a lump labour force’. The defendants’ site emotional difficulties. It was owned and managed by
agent was responsible for hiring and dismissing the the defendant company. The company employed a
workmen, including the claimant; he told them what warden and housekeeper to look after the claimants.
to do and moved them from site to site. If tools were He systematically abused them. They brought claims
required for the work, the defendants provided them. for personal injury against the company as vicariously
The claimant was injured when he fell off a roof liable for the acts of the warden. The case reached the
which had no guard rail and he brought this action House of Lords on appeal. Their Lordships were faced
against the defendants on the basis that they were by a defence that in essence stated that the warden in
liable as his employers for failing to provide a guard abusing the claimants was not acting in the course of
rail on the flat roof which was required by construc- his employment but was in abusing the claimants
tion regulations. It was held – by the Court of Appeal doing acts personal to himself. The abuse was no part
– that whatever label was put on the parties’ relation- of his employment. The employment merely gave
ship, other factors should be considered, such as the him the opportunity to abuse the claimants. The House
fact that the defendants could dismiss the workmen, of Lords did not accept this defence. Whatever may
including the claimant, and tell them what to do and be the grounds for this fact decision, it must be
where to do it. Accordingly, the claimant was the regarded as an essential background to the case that
employee of the defendants who were, therefore, the employers were better able to pay any damages
liable under the construction regulations and must awarded to the claimants. Nevertheless, it would now
pay the claimant damages for breach of that statutory seem to be the law that even though the act is not
duty. within the ordinary course of employment and where
the employment merely gives the employee an
Lee (Catherine) v Lee’s Air Farming Ltd [1960] opportunity to commit the tortious act the employer may
284
3 All ER 420 nevertheless be held liable for it. A previous decision
In 1954 the appellant’s husband formed the respond- by the Court of Appeal in Trotman v North Yorkshire CC
ent company which carried on the business of crop [1998] 1 CLY 2243 that acts of sexual abuse were bey-
spraying from the air. In March 1956, Mr Lee was ond the scope of employment so that the employer
killed while piloting an aircraft during the course of was not liable was overruled by the House of Lords in
topsoil dressing, and Mrs Lee claimed compensation the Lister case.
..
EL_Z02.qxd 3/26/07 10:58 AM Page 831
CASE 285 LAW OF TORTS: GENERAL PRINCIPLES 831
Comment The decision of the Court of Appeal in Vicarious liability: improper performance of acts
Fennelly v Connex South Eastern Ltd (2001) 675 IRLB 11 within scope of employment
further liberalises the attitude of the courts to what can
Century Insurance Co Ltd v Northern Ireland
be regarded as within the scope of employment. 285
Road Transport Board [1942] AC 509
The facts of the case occurred at Bromley South railway
station. Mr Fennelly had already shown his ticket to an A tanker belonging to the respondent, and driven by
inspector and refused to show it again to another one of its employees, was delivering petrol to a garage
inspector, a Mr Sparrow. There was an altercation that in Belfast. While the tanker was discharging petrol at
ended with Mr Sparrow assaulting Mr Fennelly by the garage, the driver lit a cigarette and threw away
putting a headlock on him and dragging him down a the lighted match. The resulting explosion caused
a few steps on the station stairway. On being sued as considerable damage. The contract under which the
vicariously liable for the assault, Mr Sparrow’s employer petrol was being delivered said that the respondent’s
Connex was held not liable because the trial judge said employees were to take their orders from a petrol
that Mr Sparrow had become angry and ‘was pursuing company to which the tankers were hired, a company
his own ends’. The Court of Appeal did not agree and named Holmes, Mullin and Dunn, though they were
found Connex liable. The judgment says that the High not by virtue of this to be deemed the hirer’s em-
Court from which the appeal was made had taken too ployees. The appellant had insured the defendant
narrow a view of the facts. What had occurred would
against liability to third parties, and pleaded that no
not have done so without Mr Sparrow’s power given by
claim could be made on it because, although the
his employers to inspect tickets while he was on his
driver was admittedly negligent, he was at the time
employer’s premises. The downside of decisions like this
the servant of the hirer.
is that the business employer, who is normally insured
against these risks has to pay higher insurance premiums. Held – the appellant must pay the third-party claim
They are not helpful to the consumer either since the because the terms of the contract as a whole did not
employer’s insurance costs are normally passed on to the involve a transfer of the employees to Holmes, Mullin
consumer by way of increased prices for the goods and/or and Dunn, therefore, the respondent was liable for
services. The third party benefits, of course, but ultimately the negligence of the driver and was entitled to claim
at the consumer’s expense. under its insurance.
A further and later example is to be found in the ruling
Comment (i) It would seem that, however improper the
of the Court of Appeal in Mattis v Pollock (t/a Flamingo’s
manner in which an employee is doing his work, whether
Nightclub), The Times, 16 July 2003. In that case the
negligently or fraudulently, or contrary to express orders,
defendant ran a nightclub and employed a doorman. The
his employer is liable.
defendant knew that the doorman was prepared to use
physical force when carrying out his duties. The claimant (ii) This case was followed in Harrison v Michelin Tyre
became involved in an altercation with the doorman. Company [1985] 1 All ER 918 where the claimant, a tool
Afterwards the doorman went home and armed himself grinder employed by the defendant, was injured at work
with a knife. He returned to the vicinity of the nightclub when standing on a duckboard of his machine talking to
intending to take revenge for the injuries he had a fellow employee. Another employee was pushing a
received earlier. He attacked the claimant with the knife. truck along a passage in front of the claimant and
The claimant’s spinal cord was severed and he was decided as a joke to suddenly turn it two inches outside
rendered a paraplegic. The claimant sued the defendant the chalk lines of the passageway and push the edge
as owner of the nightclub and so vicariously liable for the under the claimant’s duckboard. The duckboard tipped.
damage caused by the injuries. The claimant fell off and suffered injury. In an action
The Court of Appeal ruled that the defendant was against the defendant he claimed that the employee had
vicariously liable because: acted in the course of his employment and that the
defendant was vicariously liable. The defendant denied
n the doorman had been encouraged by the defendant to liability saying that the employee had embarked on a
carry out his duties in an aggressive and intimidatory frolic of his own. It was held by Comyn, J that the
manner. This had included man-handling the customers; employer was liable. The test for determining vicarious
n the stabbing represented the end of an incident that liability was whether a reasonable man would say either
had started in the club. It could not in any fair or just that the employee’s act was part and parcel of his
sense be treated in isolation from the earlier events. employment, even though unauthorised or prohibited,
It was not a separate and distinct incident; or that it was so divergent as to be plainly alien to it. In
n at the moment of the stabbing, the responsibility for this case the employee’s act was part and parcel of the
the acts of the aggressive doorman that rested with employment.
the defendant had not been extinguished and so the (iii) There will always be a tendency to make the
defendant was vicariously liable. employer liable because of his greater wealth and
.. ..
EL_Z02.qxd 3/26/07 10:58 AM Page 832
insurance. However, a contrast to Harrison is provided by Comment There is really very little difference in the facts
McCready v Securicor Ltd (1992) 460 IRLIB 12 where it of Rose v Plenty and Twine other than the fact that Leslie
was held that the employer (Securicor) was not vicari- Rose was more than a mere hitchhiker. His presence on
ously liable for the negligence of its employee in playing the milk-float was connected with the delivery of the
a prank. The employee concerned, as a prank, started to milk, which was the reason connected with the scope of
close the door of a secure vault, knowing Mr McCready employment, and this is why Lord Denning and Scarman,
was inside. Mr McCready rushed to get out and caught LJ felt able to distinguish Twine and other similar cases.
his hand in the door, suffering serious injury. The employee
alone was held liable. Unlike Harrison, the act was totally Vicarious liability: employee mixing employer’s
unauthorised. business with his own
Limpus v London General Omnibus Co (1862) 288 Britt v Galmoye and Nevill (1928) 44 TLR 294
286
1 H & C 526
The claimant’s omnibus was overturned when the The first defendant, who had the second defendant in
driver of the defendant’s omnibus drove across it so as his employment as a van-driver, lent him his private
to be first at a bus stop to take all the passengers who motor car, after the day’s work was finished, to take a
were waiting. The defendant’s driver admitted that friend to a theatre. The second defendant by his negli-
the act was intentional, and arose out of bad feeling gence injured the claimant.
between the two drivers. The defendant had issued Held – as the journey was not on the master’s business
strict instructions to its drivers that they were not to and the master was not in control, he was not liable
obstruct other omnibuses. for his servant’s act.
Held – the defendant was liable. Its driver was acting
within the scope of his employment at the time of Vicarious liability at civil law for criminal conduct
the collision, and it did not matter that the defendant of employee
had expressly forbidden him to act as he did. Morris v C W Martin & Sons Ltd [1965]
289
Comment As we have seen, the matter to be decided in 2 All ER 725
these cases is whether the employee was doing what he The claimant sent a mink stole to a furrier for the
was employed to do. If he is not, then the employer is purpose of cleaning. The furrier later told the claim-
not liable. Thus, in Beard v London General Omnibus Co ant by telephone that he did not clean furs himself
[1900] 2 QB 530 a bus conductor, who turned the bus but intended to send the stole to the defendants, one
round when the driver was absent and injured the of the biggest cleaners of fur in the country. The
claimant whilst he was doing this, was held by the Court claimant knew of Martin & Sons and agreed that the
of Appeal to have been acting outside the course of his stole be sent to them. Martin & Sons did work only
employment so that his employer was not liable. for the fur trade and had issued to the furrier printed
conditions which provided that goods belonging to
287 Rose v Plenty [1976] 1 All ER 97 customers were at customer’s risk when on the
premises of Martin & Sons, and that they should not
Leslie Rose, aged 13, was given to helping Mr Plenty, be responsible for loss or damage however caused,
a milkman, to deliver milk. Co-operative Retail Ser- though they would compensate for loss or damage to
vices Ltd, who employed Mr Plenty, expressly forbade the goods during the cleaning process by reason of
its milkmen to take boys on their floats or to get boys their negligence, but not by reason of any other
to help them deliver the milk. On one occasion, while cause. The furrier knew of these conditions when he
helping Mr Plenty, Leslie was sitting in the front of handed the stole to the defendants and the defend-
the float when his leg caught under the wheel. The ants knew that it belonged to a customer of the furrier,
accident was caused partly by Mr Plenty’s negligence. but they did not know that it was Morris. While
It was held – by the Court of Appeal (Lord Denning, in the possession of Martin & Sons, the fur was stolen
MR and Scarman, LJ) – that Mr Plenty had been by a youth named Morrisey, who had been employed
acting in the course of his employment so that his by them for a few weeks only, though they had
employer was liable to compensate Leslie Rose for no grounds to suspect that he was dishonest. The
his injuries. Lawton, LJ (dissenting) said that the claimant sued the defendants for conversion or
case of Twine v Bean’s Express (1946) and similar negligence but the county court judge felt bound by
cases were indistinguishable and that, in giving Leslie Cheshire v Bailey [1905] 1 KB 237 and held that the act
a lift, Mr Plenty had acted outside the scope of his of Morrisey, who had removed the stole by wrapping
employment. it round his body, was beyond the scope of his
..
EL_Z02.qxd 3/26/07 10:58 AM Page 833
employment. In the Court of Appeal it was held that the car at Monte Carlo, and the driving was done for
Cheshire v Bailey (1905) had been impliedly overruled his benefit. Accordingly, the owner was vicariously
by Lloyd v Grace, Smith & Co [1912] AC 716 (where it liable for his friend’s negligence.
was held that a solicitor was liable for the criminal
frauds of his managing clerk so long as the clerk was
acting in the apparent scope of his authority). The 291 Vandyke v Fender [1970] 2 All ER 335
defendants, as sub-bailees, were liable to the claimant,
and on the matter of the exemption clause the Court Mr Vandyke and Mr Fender were employed by the
of Appeal said that the terms of such a clause must be same company and lived 30 miles from the business
strictly construed, and since they referred only to premises. The employer agreed to supply a car to
goods ‘belonging to customers’ this could be taken to Mr Fender and to pay him 50p a day for petrol for the
mean goods belonging to the furrier and not to the journey. The journey could have been made by train
furrier’s customer, and because of this ambiguity the but was more convenient by car. Two other employees
clause was inapplicable. who lived in the same area were also carried. On one
occasion the car loaned to Mr Fender was not avail-
Comment (i) The above decision applies only to bailees able and he was allowed to use a car belonging to the
for reward and only in circumstances where the servant is company secretary. While driving this car, an accid-
entrusted with, or put in charge of, the bailor’s goods by ent occurred resulting in an injury to Mr Vandyke,
his master. The mere fact that the servant’s employment who claimed damages from the company. It was held
gave him the opportunity to steal the bailor’s goods is
that the company was liable because Mr Fender,
not enough. Thus, in Leesh River Tea Co v British India
though not a paid driver, was driving the car as the
Steam Navigation Co [1966] 3 All ER 593 a stevedore stole
company’s agent and it was liable for his negligence.
a brass cover plate from the hold of a ship when he was
The question then arose as to which of the insurance
unloading tea and the Court of Appeal held that he was
not acting in the course of his employment on the companies involved should indemnify the company.
ground that his job had nothing to do with the cover If the risk was to be borne by the employer’s liability
plate. Perhaps if the plate had been stolen by someone insurance, it was necessary to show that the accident
who was sent to clean it, that person would have been occurred during and in the course of Mr Vandyke’s
acting within the course of his employment. employment, otherwise the risk would be borne by
(ii) The tortious or criminal act must be committed as part a road traffic insurance policy of Mr Fender, which
of the employment, i.e. as an act within the scope of the covered him while driving someone else’s car. It was
employment. In Heasmans v Clarity Cleaning [1987] IRLR held – by the Court of Appeal – that a person going to
286 the Court of Appeal decided that the defendant was or from work as a passenger in a vehicle provided by
not liable when its employee, who was sent to the his or her employer for that purpose is not in the
claimants’ premises to clean telephones, made unauthor- course of employment unless he or she is obliged by
ised telephone calls on them to the value of £1,400. He the terms of his employment to travel in that vehicle.
was employed to clean telephones, not to use them. If not, then, as here, the liability must be borne by
the road traffic insurer and not by the employer’s
Vicarious liability: casual delegation to ‘agents’; liability insurer.
liability of ‘principal’
Ormrod v Crosville Motor Services Ltd [1953] Nottingham v Aldridge; Prudential Assurance
290 292
2 All ER 753 Co [1971] 2 All ER 751
By an arrangement between the owner of a motor In this case a Post Office trainee was returning to his
car and his friend, the friend was to drive the car normal work in his father’s van after spending the week-
from Birkenhead to Monte Carlo in order that the end at his home having attended a training course
owner, the friend and the friend’s wife might use the the previous week. He was carrying another trainee,
car during their holiday in Monte Carlo. The owner of Nottingham, as a passenger and was entitled to a
the car was travelling to Monte Carlo in another car mileage allowance from the Post Office for himself
as a competitor in the Monte Carlo Rally. Owing to and his passenger. Nottingham was injured as a result
the friend’s negligent driving, the car was involved in of an accident caused by the defendant’s negligent
a collision in which a motor bus was damaged. The driving.
question of the liability of the owner of the car for Held – by Eveleigh, J – the Post Office was not liable
the damage arose. because the two trainees were not in the course of
Held – the friend was acting as the owner’s agent in employment while travelling to work, nor was Aldridge
the matter. The owner had an interest in the arrival of the agent of the Post Office for the purposes of the journey.
.. ..
EL_Z02.qxd 3/26/07 10:58 AM Page 834
The vehicle did not belong to the Post Office, nor was
295 Klein v Calnori [1971] 2 All ER 701
it provided by it. The Post Office had not prescribed
the method of travel; admittedly a mileage allowance The defendant, Calnori, was the manager of a public
was payable, but travelling expenses of any other kind house at Sunbury-on-Thames. While he was busy at
would have been paid, e.g. bus or train fare. The the bar, a Mr Freshwater, who knew Calnori, took his
question of agency was one of fact and on the facts of car and drove it away without his permission. Later
this case Aldridge was not an agent. The company Freshwater telephoned Calnori and told him he had
which had insured the van was, therefore, liable to taken his car. Calnori told him to bring it back. On the
indemnify Aldridge in respect of his own liability to way back to Sunbury, Freshwater collided with Klein’s
Nottingham. stationary car severely damaging it. Klein alleged that
Calnori was liable for this damage because Freshwater
293 Morgans v Launchbury [1972] 2 All ER 606 was his agent. By asking Freshwater to bring the car
back, Freshwater was driving it partly for Calnori’s
In this case the family car was registered in the name purposes.
of the wife, though it was used mainly by the
Held – by Lyell, J – Calnori was not liable. If
husband who worked seven miles from home. The
Freshwater had borrowed the car with Calnori’s con-
wife had asked her husband not to drive the car home
sent, then the loan to Freshwater, for his own purposes,
himself if he had been drinking. On one occasion the
would have involved returning it. In these circum-
husband had been drinking heavily and asked a
stances Calnori would not have been liable for an
friend, C, to drive him home together with three
accident on the return journey. Therefore, Calnori’s
other passengers. There was an accident caused by the
liability could not be greater in circumstances in
negligent driving of C and the husband and he were
which the car had been taken without his consent
killed. The three passengers were injured and sued
and had been used solely for the taker’s purpose.
the wife claiming that she was liable vicariously for
the negligence of C, who had been appointed to drive Comment A similar result was obtained in Topp v
on her behalf by her husband. If the wife was held London Country Bus (South West) [1993] 1 WLR 976
liable, her insurance company would be liable to the where a bus belonging to the defendant company was
claimants. The House of Lords held that she was not stolen from a public car park, the keys being in the
liable. The concept of agency required more than mere ignition, and was then involved in a collision in which a
woman was killed. Her husband sued the bus company in
permission to use. Use must be at the owner’s request
negligence. The Court of Appeal held that, although the
or on his instructions.
bus company may have been negligent to leave the bus
Comment Before 1971 it was not compulsory for road with the keys in it in an accessible place, it could not
traffic insurance to cover passengers. In fact, Mrs be held responsible for the accident as it had occurred
Launchbury had an insurance policy which covered through the voluntary act of a third party over whom the
passengers, but only in respect of accidents which company had no control.
occurred while she or her agent was driving. The
claimants would have preferred to get their money from Liability for the torts of independent contractors
the insurance company than to sue the estate of C.
296 Bower v Peate (1876) 1 QBD 321
294 Rambarran v Gurrucharran [1970] 1 All ER 749
The claimant and defendant were the respective
In this case Rambarran, a chicken farmer in Guyana, owners of two adjoining houses, the claimant being
owned a car which was used by several of his sons, entitled to the support for his house of the defendant’s
Rambarran himself being unable to drive. One of his land. The defendant employed a contractor to pull
sons, Leslie, damaged Gurrucharran’s car by negli- down his house and to rebuild it after excavating the
gently driving the family car. The Privy Council foundations. The contractor undertook the risk of
found that Rambarran was not liable for Leslie’s negli- supporting the claimant’s house during the work and
gence because he did not know that Leslie had taken to make good any damage caused. The claimant’s
the car since he was away from home at his chicken house was damaged in the progress of the work
farm at the time in question. Furthermore, there was because the contractor did not take appropriate steps
no evidence to show what the purpose of Leslie’s to support it.
journey was, but it was clearly not for any business or Held – the defendant was liable. The fact that the
family purpose. Ownership of the vehicle was not injury would have been prevented if the contractor
enough in itself to establish liability. had provided proper support did not take away the
..
EL_Z02.qxd 3/26/07 10:58 AM Page 835
CASES 297–298 LAW OF TORTS: GENERAL PRINCIPLES 835
defendant’s liability. A person employing a contractor the paving stones outside the house to protect them
to perform a duty cast upon himself, in this case a against heavy lorries delivering materials to the site. The
duty of support, is responsible for the contractor’s contractors failed to remove them after the completion
negligence in performing it. of the job. R, while walking home at night, tripped over
the plates and suffered injury. His action against H failed
Comment It would appear that any work on a party wall because H had no control over how the contractor did his
is regarded as giving rise to a special risk of damage for work or how he cleared up afterwards. H was not under
which there may be liability for the negligent work of any special duty merely because his premises abutted the
an independent contractor. The matter was raised again highway.
in Johnson v BJW Property Developments Ltd [2002] 3 All
ER 574. The defendants used an independent contractor
General defences: volenti non fit injuria
to replace a fireplace in a party wall between them and
the claimant’s premises. The work was done negligently Simms v Leigh Rugby Football Club [1969]
298
in that the existing firebrick lining was removed and not 2 All ER 923
replaced with fire retardant material. The defendants lit
The claimant was a member of a visiting team playing
a fire in the new fireplace and it caused a fire and dam-
rugby football on the defendant club’s ground when his
age to the claimant’s premises. The defendants were held
leg was broken as he was tackled and thrown towards
liable vicariously for the negligence of the contractor.
a concrete wall which ran at a distance of 7ft 3ins
This was not based on the rule in Rylands v Fletcher (see
p 603) because that does not apply to the escape of a fire from the touch line. The League’s by-laws prescribed
from a domestic fireplace but rather on a rule of the that the distance had to be at least 7ft.
common law relating to work giving rise to a special risk Held – by Wrangham, J – the claimant must be taken
of damage. Bower v Peate (above) was quoted in willingly to have accepted the risks involved in
Johnson as an example of this rule in connection with playing on that field. The ground complied with the
work on party walls. by-laws of the Rugby Football League and the defend-
ants were not, therefore, liable under the Occupiers’
297 Salsbury v Woodland [1969] 3 All ER 863 Liability Act 1957, or in general negligence by reason
of the claimant’s consent.
The defendant employed, as an independent con-
Comment (i) In this connection, the decision of the Court
tractor, an experienced tree-feller to fell a large tree in of Appeal in Condon v Basi [1985] 2 All ER 453 is of
his front garden. The contractor was negligent and interest. In that case the defendant, a non-professional
the tree fell towards the highway bringing down player, made a late and reckless slide tackle upon the
telephone wires on to the highway. A car came along claimant resulting in the claimant sustaining a broken
too fast, and the claimant, who was a bystander right leg and the defendant being sent from the field of
watching the whole operation, was injured when he play. The county court judge awarded the claimant
dived out of the way of the inevitable collision £4,900 for damages for the injuries sustained and
between the car and the wire. the Court of Appeal dismissed an appeal against that
Held – by the Court of Appeal – the defendant was not decision. It was decided by the Court of Appeal that
liable though the contractor was. There was no special participants in competitive sport owe a duty of care to
each other to take all reasonable care having regard to
liability in the defendant merely because the contractor
the particular circumstances in which the participants are
was employed to work near, as distinct from on, the
placed. If one participant injures another, he will be
highway.
liable in negligence for damages at the suit of the
Comment (i) In Tarry v Ashton (1876) 1 QBD 314 the injured participant if it is shown that he failed to exercise
defendant employed an independent contractor to carry the degree of care appropriate in all the circumstances
out repairs to a lamp which, though attached to his or that he acted in a manner to which the injured par-
house, overhung the highway. The contractor failed to ticipant could not have been expected to consent. The
secure the lamp properly and it fell, injuring the law is clearly having to respond to the increasing amount
claimant. It was held that the defendant was liable of unnecessary violence in certain sports.
because it was his duty to make the lamp safe and he (ii) The rule in Condon also applies to professional foot-
was in breach of that duty because the contractor had ballers. Thus, in Watson v Gray, The Times, 26 November
not secured the lamp properly. 1998 the claimant, a professional footballer, suffered
(ii) The liability of occupiers for hazards on the highway injury in terms of a double fracture to his right lower leg
was considered in Rowe v Herman, The Times, 9 June following a high tackle on him after the ball had moved
1997. H engaged independent contractors to build a on. The defence of volenti did not apply and the
garage at his home. The contractors laid metal plates on claimant succeeded in a damages claim.
.. ..
EL_Z02.qxd 3/26/07 10:58 AM Page 836
(iii) Again, in Smolden v Whitworth, The Times, 18 Exclusion clauses: contractual assent and volenti
December 1996, the defence of volenti did not apply non fit injuria: the relationship
where S was seriously injured in an under-19 colts rugby
match in the course of which his neck was broken after a Burnett v British Waterways Board [1973]
301
scrum collapsed. The referee was held liable as having a 1 WLR 700
duty of care. His conduct had fallen below an acceptable Burnett was a lighterman working on his employer’s
standard in terms of observing rules designed to prevent barge. Due to the defendant Board’s negligence a cap-
scrum collapse. stan rope parted while the barge was docking, injuring
(iv) And, of course, there may be a criminal prosecution Burnett. At the dock office was a notice stating that
as in R v Lloyd [1989] Crim LR 513 where L was sentenced persons availed themselves of the dock facilities at
to 18 months’ imprisonment for kicking an opposing their own risk. Burnett had read the notice when he
rugby player in the face while he was down, fracturing a was a young apprentice. The defendant admitted negli-
cheekbone. gence but claimed that Burnett had voluntarily under-
taken the risk of injury.
299 Murray v Harringay Arena Ltd [1951] 2 KB 529 Held – by the Court of Appeal – Burnett was an
employee sent by his employer and it could not be
David Charles Murray, aged six, was taken by his said that he had freely and voluntarily incurred the
parents to the defendant’s ice rink to watch a hockey risk of negligence on the part of the defendant. In
match. They occupied front seats at the rink, and dur- the course of his judgment Lord Denning, MR said:
ing the game the boy was hit in the eye by the puck. ‘If there was a contract with Mr Burnett, of course, the
This action was brought against the defendant for Board could rely upon it. But there was no contract
negligence. with him. He was just one of the men working on the
barges. The contract was with the barge owners . . .’.
Held – the risk was voluntarily undertaken by the
claimants. The defendant had provided protection by Comment If the defence of volenti succeeds then, of
means of netting and a wooden barrier which, in the course, the claimant’s suit fails.
circumstances, was adequate, since further protection
would have seriously interfered with the view of the General defences: volenti – the claimant must
spectators. know of the risk, though knowledge is not
necessarily assent
Comment As the above case shows, it is possible to plead
volenti against a minor. It is not, however, possible to do
so against a person who is mentally disturbed. In 302 White v Blackmore [1972] 3 All ER 158
Kirkham v Anderton [1990] 2 WLR 987 a prisoner was
remanded in custody. He had suicidal tendencies known The husband of the claimant widow was a member of
to the police which they failed to pass on to the prison a ‘jalopy’ racing club. He went to a meeting organised
authorities. The prisoner killed himself and a claim for by the defendants as a competitor but stood outside
negligence was brought against the police authority. The the spectators’ ropes close to a stake. The wheel of a
police authority was held liable and the defence of car caught on one of the ropes some distance away so
volenti failed. that the stake was pulled up sharply and the husband
was killed when he was catapulted some 20 feet. The
Hall v Brooklands Auto-Racing Club [1933] defendants displayed notices warning the public of
300
1 KB 205 the danger and stating as a condition of admission that
The claimant paid for admission to the defendants’ they were absolved from all liabilities for accidents
premises to watch motor-car races. During one of the howsoever caused. The widow claimed damages for
races a car left the track, as a result of a collison with breach of s 2 of the Occupiers’ Liability Act 1957 and/or
another car, and crashed through the railings injuring general negligence.
the claimant. It was the first time that a car had gone Held – by the Court of Appeal – (a) even though the
through the railings, and in view of that the precau- deceased had been negligent in standing where
tions taken by the defendants were adequate. In this he did, the defence of volenti would not succeed as the
action by the claimant for personal injury, it was held deceased did not know of the risk that had caused
that the danger was not one which the defendants his death; (b) however, the claim would fail as the
ought to have anticipated, and that the claimant must defendants were at that time entitled to exclude
be taken to have agreed to assume the risk of such an their liability and this they had done by warning
accident. notices.
..
EL_Z02.qxd 3/26/07 10:58 AM Page 837
Comment The case is still an example of the point that (ii) It should be noted that the defence of contributory
for volenti to succeed the claimant must know of the negligence was not pleaded in Dann, although Asquith,
risk. However, it has been overtaken on its own facts J encouraged counsel for the defence to raise it, but
by the Unfair Contract Terms Act 1977. Where liability for he would not be drawn. However, it is now accepted
breach of obligations or duties arises from occupation of that although volenti may not apply in a situation such
premises which are used, as here, for business purposes, a as Dann, a claimant may be guilty of contributory negli-
person cannot by reference to any contract term or gence if he travels as a passenger when he knows the
notice exclude or restrict his liability for death or personal driver has consumed enough alcohol to impair his ability
injury resulting from negligence (1977 Act, s 1). In the to drive safely, or if he goes drinking with the driver
case of other loss or damage, there can be no exclusion knowing he will be a passenger later when the drink
or restriction of liability for negligence unless the term or deprives him of his own capacity to appreciate the danger
notice is ‘reasonable’ (1977 Act, s 2). Finally, the 1977 Act (so decided in Owens v Brimmell [1976] 3 All ER 765).
cannot be avoided by raising the defence of volenti even (iii) In Pitts v Hunt, The Times, 13 April 1990 it was held
if the risk is known (1977 Act, s 3). The above applies to that a passenger on a motor cycle could not sue the rider
occupiers and to actions in general negligence. whom he had aided and abetted in illegally driving a
motor cycle dangerously after they both got drunk
together. Further, in Morris v Murray, The Times, 18
303 Baker v James Bros [1921] 2 KB 674
September 1990 a claimant who knowingly and willingly
flew with a pilot who was drunk was not entitled to dam-
The defendants were wholesale grocers and they
ages for personal injury. The defence of volenti applied
employed the claimant as a traveller. He was supplied
in both cases.
by the defendants with a motor car, the starting
gear of which was defective. The claimant repeatedly
complained about this to the defendants, but nothing 305 Smith v Baker and Sons [1891] AC 325
was done to remedy the defect. While the claimant was
on his rounds, the car stopped, and he was injured Smith was employed by Baker and Sons to drill holes
whilst trying to restart. in some rock in a railway cutting. A crane, operated
by fellow employees, often swung heavy stones over
Held – notwithstanding the claimant’s knowledge of
Smith’s head while he was working on the rock face.
the defect, he had never consented to take upon him-
Both Smith and his employers realised that there was
self the risk of injury from the continued use of the
a risk the stones might fall, but the crane was never-
car. He was not guilty of any contributory negligence
theless operated without any warning being given at
and was entitled to recover damages.
the moment of jibbing or swinging. Smith was
injured by a stone which fell from the crane because
304 Dann v Hamilton [1939] 1 KB 509 of negligent strapping of the load. The House of Lords
held that Smith had not voluntarily undertaken the
The claimant had been with a party to see the risk of his employers’ negligence, and that his know-
Coronation decorations in London. They made the ledge of the danger did not prevent his recovering
journey in the defendant’s car. During the day and damages.
evening the defendant had consumed a quantity of
intoxicating liquor, but he drove the party back to General defences: volenti – actions against
Staines where they all got out. The claimant was at employers based on breach of statutory duty
this point a 2d bus ride from her home but she
Imperial Chemical Industries Ltd v Shatwell
accepted the defendant’s invitation to take her there. 306
[1964] 2 All ER 999
During this part of the journey there was an accident
caused by the defendant’s negligence, and the George and James Shatwell were certificated and
claimant was injured. She now sued in respect of experienced shot-firers employed by ICI. Statutory
these injuries and the defendant pleaded volenti non rules imposed an obligation on them personally (not
fit injuria. on their employer) to ensure that certain operations
connected with shot-firing should not be done unless
Held – the defence did not apply and the claimant
all persons in the vicinity had taken cover. They knew
succeeded. She had knowledge of a potential danger,
of the risks of premature explosion which had been
but that did not mean that she assented to it.
explained to them; they knew of the prohibition; but
Comment (i) The court left open the question whether on one occasion because a cable they had was too
the driver was ‘dead drunk’ or ‘very drunk’. In such a case short to reach the shelter, they decided to test with-
the maxim might have applied. out taking cover rather than wait 10 minutes for their
.. ..
EL_Z02.qxd 3/26/07 10:58 AM Page 838
companion Beswick who had gone to fetch a longer hand-operated pumps, but eventually a petrol-driven
cable. James gave George two wires, and George pump was employed. The exhaust from the engine on
applied them to the galvanometer terminals. An the pump resulted in a lethal concentration of carbon
explosion occurred and both men were injured. At monoxide forming inside the well. Two of the defend-
the trial it was found that James was guilty of negli- ants’ employees went down the well to carry on the
gence and breach of statutory duty for which the work of cleaning it and were overcome by the fumes.
employer was held vicariously liable, damages being Baker was a local doctor and, on being told what had
assessed at £1,500 on a basis of 50 per cent con- happened, he went along to give what assistance he
tributory negligence. The Court of Appeal affirmed, could. He was lowered down the well on a rope, and
but the House of Lords reversed, the decision and held on reaching the two men, he realised that they were
that, although James’s acts were a contributory cause beyond help. He then gave a prearranged signal to
of the accident to George, the employer was not those at the top of the well and started his journey to
liable. the surface. Unfortunately, the rope became caught
(a) The employer was not itself in breach of a statut- on a projection and Dr Baker was himself overcome
ory duty. by fumes and died. His executors claimed damages in
respect of Dr Baker’s death.
(b) It could plead volenti non fit injuria to a claim of
vicarious liability. Held – the defendants were negligent towards their
employees in using the petrol-driven pump and the
(c) It had shown no negligence. It had instilled the need
maxim volenti non fit injuria did not bar the claim of
for caution, made proper provision, and even arranged
Dr Baker’s executors. Although Dr Baker may have
a scale of remuneration in a way which removed a
had knowledge of the risk he was running, he did not
temptation to take short cuts.
freely and voluntarily undertake it, but acted under
(d ) The Shatwell brothers were trained men well the compulsion of his instincts as a brave man and
aware of the risk involved so the principle of volenti a doctor.
non fit injuria applied. Lord Pearce said: ‘The defence
[of volenti non fit injuria] should be available where the Comment In an earlier case, Haynes v Harwood [1935] 1
employer was not in himself in breach of a statutory KB 146, a policeman was injured while stopping a
duty and was not vicariously in breach of a statutory runaway horse and van in a crowded street. It was held
duty through the neglect of some person of superior that he could recover damages. Volenti and contributory
negligence did not apply.
rank to the [claimant] and whose commands the
[claimant] was bound to obey or who has some
special and different duty of care.’ Cutler v United Dairies (London) Ltd [1933]
308
2 KB 297
Comment (i) If the employer had been compelled to rely The defendant’s carman left the defendant’s horse
on the defence of contributory negligence, it might have and van, two wheels being properly chained, while
escaped liability if only one man were involved and
he delivered milk. The horse, being startled by the
treated as solely responsible, but where two men were
noise coming from a river steamer, bolted down the
involved, as here, it would have been vicariously liable
road and into a meadow. It stopped in the meadow
for James’s contribution to George’s injury and for
and was followed there by the carman who, being in
George’s contribution to James’s injury so it would have
an excited state, began to shout for help. The
been compelled partially to compensate each man.
claimant, a spectator, went to the carman’s assistance
(ii) Deliberate disobedience to regulations and the and tried to hold the horse’s head. The horse lunged
employer’s own orders is not to be excused by
and the claimant was injured. In this action by the
impatience to get on with the work. Anyone who does
claimant against the defendant for negligence it
so must be regarded as a volunteer in regard to any
was held that in the circumstances the claimant
resulting injury. That is the gist of this case.
voluntarily and freely assumed the risk. This was not
an attempt to stop a runaway horse so that there
General defences: volenti – the rescue cases; was no sense of urgency to impel the claimant.
generally He, therefore, knew of the risk and had had time to
Baker v T E Hopkins and Son Ltd [1959] consider it, and by implication must have agreed to
307 incur it.
3 All ER 966
The defendants were building contractors and were Comment Evidence showed negligence in that the horse
engaged to clean out a well. Various methods had had bolted before and should not have been used on the
been used in order to pump out the water, including milk round at all.
..
EL_Z02.qxd 3/26/07 10:58 AM Page 839
Hyett v Great Western Railway Co [1948] Held – on appeal, no negligence had been established
309
1 KB 345 because (a) any excessive speed at the corner was not
The claimant was employed by a firm of wagon the cause of the accident, and was not negligence but
repairers and he was on the defendant’s premises with merely an error of judgement; and (b) the judge’s
its authority to carry out his duties. While repairing a finding that the horse would have gone on to a cinder
wagon he saw smoke rising from one of the defendant’s track without harm to the claimant if the rider had
wagons in the same siding and went to investigate. allowed it to, was an inference from primary facts and
The floor of the wagon, which contained paraffin oil, unjustified, and in any event an attempt to control
was in flames. The claimant was trying to get the the horse did not amount to negligence.
drums of paraffin oil out, when one of them exploded If, in the course of a game or competition, at a
and injured him. Evidence showed that the defendant moment when he has not time to think, a parti-
railway company knew that there was a paraffin leak- cipant by mistake takes a wrong measure, he
age in the wagon, but had nevertheless allowed it to is not to be held guilty of any negligence. . . . A
remain in the siding. person attending a game or competition takes the
Held – the claimant was entitled to recover damages risk of any damage caused to him by any act of
from the defendant, and the maxim volenti non fit injuria a participant done in the course of and for the
did not apply. A man may take reasonable risks in purpose of the game or competition, notwithstand-
trying to preserve property put in danger by another’s ing that such act may involve error of judgement
negligence. or a lapse of skill, unless the participant’s conduct
is such as to evince a reckless disregard of the
General defences: volenti – duty to a rescuer spectator’s safety. The spectator takes the risk
because such an act involves no breach of the duty
Videan v British Transport Commission [1963] of care owed by the participant to him. He does
310
2 All ER 860
not take the risk by virtue of the doctrine expressed
A child managed to get on to a railway line and was or obscured by the maxim volenti non fit injuria. . . .
injured by a trolley. The Court of Appeal held that the The maxim in English law presupposes a tortious
child’s presence was not in the circumstances foresee- act by the defendant. The consent that is relevant
able and the defendant did not owe him a duty of is not consent to the risk of injury but consent to
care. However, a duty was owed to his father who was the lack of reasonable care that may produce that
injured trying to rescue him. risk. (Per Diplock, LJ)
Comment (i) It is difficult to follow the reasoning by
which the Court of Appeal held that the defendant General defences: volenti – public policy;
ought to have foreseen that a stationmaster would try to duty of care
rescue a minor on the line (the minor being the son of
the stationmaster) yet need not have foreseen the 312 Nettleship v Weston [1971] 3 All ER 581
presence of that minor himself.
The claimant, a non-professional driving instructor,
(ii) The situation where no duty of care is owed to the
gave the defendant driving lessons after having first
rescuer is dealt with by Frost v Chief Constable of South
satisfied himself that the car was insured to cover
Yorkshire [1998] 3 WLR 1509.
injury to passengers. The defendant was a careful
driver but on the third lesson she failed to straighten
General defences: volenti – defence irrelevant
out after turning left and struck a lamp standard
unless the defendant has committed a tort
breaking the claimant’s kneecap. The defendant was
convicted of driving without due care and attention.
311 Wooldridge v Sumner [1962] 2 All ER 978
Held – by the Court of Appeal – since the claimant had
A competitor of great skill and experience was riding a checked on the insurance position, he had expressly
horse at a horse show when it ran wide at a corner not consented to run the risk and there was no ques-
and injured a cameraman who was unfamiliar with tion of volenti. Furthermore, the duty of care owed by
horses and who had ignored a steward’s request to a learner-driver was the same as that owed by every
move outside the competition area. The rider was driver and the defendant was liable for the damages.
thrown, but later rode the horse again and it was A learner-driver owes a duty to his instructor to drive
adjudged supreme champion of its class. The camera- with proper skill and care, the test being the objective
man brought an action for damages, and at the trial one of the careful driver and it is no defence that he
was awarded damages on the ground of negligence. was doing his best.
.. ..
EL_Z02.qxd 3/26/07 10:58 AM Page 840
Comment (i) Nobody would suggest that a learner-driver across the land, and Evans & Co sub-contracted with
can do any more than his best. However, the mere fact of the second defendants to do this work. An electric
learning to drive a motor car is dangerous, at least in its cable passed under the land, but the Council, Evans
initial stages, and the risk of injury has to be upon the & Co, and the sub-contractors had no knowledge of
driver. This facilitates an insurance claim by the injured this and it was not marked on any available map.
party. In addition, the application of an objective During the course of the excavation a mechanical
standard of care facilitates a speedier and cheaper settle- digger damaged the cable so that water seeped into it
ment of the many road accident cases. These two points causing an explosion. The electricity supply to the
mean that in essence the learner-driver’s standard is a
claimant’s colliery was cut off, and it sued the defend-
matter of public policy.
ants in trespass and negligence. Donovan, J, at first
(ii) A passenger who knows that a driver is under the instance, found that the defendants were not negli-
influence of drink or drugs may, if he is injured, be barred gent, but were liable in trespass. The Court of Appeal
from recovering damages on the grounds of public policy held that the defendants were entirely free from fault
since he is aiding and abetting a criminal offence. As and there was no trespass by them.
Megaw, LJ said in this case: ‘There may in such cases
sometimes be an element of aiding and abetting a crim-
General defences: act of God
inal offence; or, if the facts fall short of aiding and abet-
ting, the passenger’s mere assent to benefit from the
commission of a criminal offence may involve questions of 315 Nichols v Marsland (1876) 2 Ex D 1
turpis causa.’ The phrase ‘turpis causa’ denotes something
For many years there had existed certain artificial
dishonourable or immoral about the claim.
ornamental lakes on the defendant’s land, formed by
damming up of a natural stream the source of which
General defences: inevitable accident
was at a point higher up. An extraordinary rainfall
‘greater and more violent than any within the mem-
313 Stanley v Powell [1891] 1 QB 86
ory of witnesses’ caused the stream and the lakes to
The defendant was a member of a shooting party, and swell to such an extent that the artificial banks burst,
the claimant was employed to carry cartridges and and the escaping water carried away four bridges
also any game which was shot. The defendant fired belonging to the county council. Nichols, the county
at a pheasant, but a shot glanced off an oak tree and surveyor, sued under the rule in Rylands v Fletcher (see
injured the claimant. Chapter 21).
Held – the claimant’s claim failed. The defendant’s Held – the defendant was not liable for this extra-
action was neither intentional nor negligent. ordinary act of nature which she could not reasonably
have anticipated. The escape of water was owing to
Comment The defence will not apply where the court the act of God, and while one is bound to provide
finds intention or negligence in the defendant. In against the ordinary operations of nature, one is not
Pearson v Lightning, The Times, 30 April 1998 the eighth bound to provide against miracles.
and ninth holes of a golf course ran parallel to each
other. The defendant was on the eighth fairway and Comment If the claim had been in negligence, the
being in the rough had to hit the ball over a coppice of defendant would not have been liable because she was
trees. His shot hit a tree and was deflected on to the not negligent. However, the claim was brought under
ninth fairway where it struck the claimant who was the rule in Rylands v Fletcher (see Chapter 21) where
injured in the eye. When the defendant saw the ball liability is strict and negligence is not required, though
heading for the claimant he shouted, ‘Fore’. The Court of foresight of consequences may be. Nevertheless, the
Appeal ruled that the claimant was entitled to damages. defendant was not liable because an act of God is a
Being aware of the position of the fairways, the defend- defence to Rylands liability.
ant should have asked the party before he made his shot
whether he should wait until the party had gone. He did General defences: necessity
not do so and was liable in negligence, particularly since
he knew that he was making a difficult shot. 316 Cresswell v Sirl [1948] 1 KB 241
National Coal Board v Evans (J E) & Co (Cardiff) The defendant, a farmer’s son, was awakened during
314
Ltd and Another [1951] 2 KB 861 the night by dogs barking, and on going out found
Evans & Co Ltd was engaged by Glamorgan County certain ewe sheep in lamb, penned up by the dogs in
Council to carry out certain work on land belonging a corner of a field. The dogs seemed about to attack
to the Council. It was necessary to excavate a trench the sheep and had been chasing them for an hour. A
..
EL_Z02.qxd 3/26/07 10:58 AM Page 841
light was turned on the dogs, who then left the sheep (iii) In Re A (Children) (Conjoined Twins: Medical
and started for the defendant. When they were about Treatment) (No 1) [2001] Fam 147 the Court of Appeal
40 yards away, the defendant fired and killed one of considered an application by the parents of six-week-old
the dogs. The owner of the dog sued the defendant Siamese twins appealing against a ruling granting
for damages. In the county court, judgment was given medical staff authority to proceed with surgical separa-
for the owner of the dog on the ground that such a tion. One of the twins had a good chance of developing
killing could be justified only if it took place while the normally. The other had severe brain abnormalities,
dog was actually attacking the sheep. In the view of no lung tissue and no properly functioning heart.
The blood supply of this twin emanated from the other
the Court of Appeal, however, the defendant could
and she would inevitably die on separation. The Court
justify his act by showing that it was necessary to
of Appeal ruled that the wishes of the parents which
avert immediate danger to property. It was not neces-
were against the separation could not be overriden on
sary that the dog actually be attacking the sheep. This
the basis of benefit to the children because it was
decision is affirmed by s 9 of the Animals Act 1971,
clear that separation would not be beneficial to
which now covers the situation. However, the section them both and both interests had to be considered
requires that the person shooting the dog must have equally. However, permission to go ahead with the
had reasonable grounds to believe that there were no separation was granted since the death of one of
other reasonable means of dealing with the problem the twins was inevitable and the operation that
or ascertaining the owner. Under s 9 the defendant would result in the death of one of the twins would
must notify the police within 48 hours of the killing not be a crime or actionable at civil law because
or injury. Section 9 does not specifically repeal the the defence of necessity would apply. The three
common law defence in the Cresswell case and so the constituents of that defence were present, i.e. (a) the
common-law defence may be available instead of s 9 act was required to avoid inevitable and irreparable
where the police have not been notified. evil; (b) no more would be done than was reasonably
necessary for the purpose to be achieved, and (c) the
evil to be inflicted was not disproportionate to the evil
317 Cope v Sharpe (No 2) [1912] 1 KB 486 avoided.
The claimant was a landowner and he let the shoot-
ing rights over part of his land to a tenant. A heath General defences: mistake
fire broke out on part of the claimant’s land and the
defendant, who was the head gamekeeper of the tenant, 318 Beckwith v Philby (1827) 6 B & C 635
set fire to patches of heather between the main fire
and a covert in which his master’s pheasants were In this case it was held that the mistaken arrest of an
sitting. His object was to prevent the fire spreading. In innocent man on suspicion of an arrestable offence
fact, the fire was extinguished independently of what by an ordinary citizen is not actionable as false
the defendant had done, and the claimant now sued imprisonment, if the offence has been committed,
the defendant for damages for trespass. and if there are reasonable grounds for believing that
Held – the defendant was not liable because when he the person arrested is guilty of it.
carried out the act it seemed reasonably necessary,
and it did not matter that in the event it turned out General defences: Act of State
to be unnecessary.
Comment (i) In Rigby v Chief Constable of Northampton
319 Buron v Denman (1848) 2 Exch 167
[1985] 2 All ER 985, R’s shop was burnt out when the
police fired a canister of CS gas into the building to force The captain of a British warship was held not liable
out a dangerous psychopath. R’s claim in trespass failed for trespass when he set fire to the barracoon of a
on the ground of the defence of necessity. His claim in Spaniard slave trader on the West Coast of Africa and
negligence succeeded because there was, to the know- released the slaves. The captain had general instruc-
ledge of the police, no fire-fighting equipment available. tions to suppress the slave trade, and in any case his
(ii) In Monsanto plc v Tilly [1999] EGCS 143 the Court of conduct in this matter was afterwards approved by
Appeal ruled that the defence of necessity did not apply the Admiralty and the Foreign and Colonial Sec-
to the uprooting of genetically modified crops growing retaries. It seems, therefore, that neither the official
under government licence. There was no immediate responsible nor the Crown can be sued for injury
danger as in Creswell and Cope and emergency trespass inflicted upon others outside the territorial jurisdiction
was not justified where a public authority was respons- of the Crown, if this is authorised or subsequently
ible for public protection. ratified by the Crown.
.. ..
EL_Z02.qxd 3/26/07 10:58 AM Page 842
Penny v Wimbledon Urban District Council

320 Nissan v Attorney-General [1967] 2 All ER 1238 323
[1899] 2 QB 72
The claimant, a British subject, was the tenant of a The defendant Council, acting under conditional
hotel in Cyprus. In December 1963, the government powers conferred upon it by s 150 of the Public
of Cyprus accepted an offer that British Forces sta- Health Act 1875, employed a contractor to make up
tioned in Cyprus should give assistance in restoring a road in its district. The contractor removed the
peace to the island. The British troops occupied the surface soil and placed it in heaps on the road. The
claimant’s hotel for some months and the claimant claimant, while passing along the road in the dark,
now sued the Crown for compensation. It was held fell over one of the heaps, which had been left
– inter alia that the Crown was obliged to pay com- unlighted and unguarded, and was injured. She now
pensation and that a plea by the Crown of an ‘Act of sued for damages.
State’ was no defence as against a Britsh subject. Held – she succeeded. Although the Council was
operating under statutory powers it must, if it does
acts likely to cause danger to the public, see that the
321 Johnstone v Pedlar [1921] 2 AC 262
work is properly carried out, and take reasonable
Johnstone was the Chief Commissioner of the Dublin measures to guard against danger. The Council did
Metropolitan Police. He was the defendant in an not discharge this duty by delegating it to a contractor,
action in which Pedlar sued for the detention of and the local authority was liable for negligence.
£124 in cash and a cheque for £4 15s 6d. Pedlar was
convicted of being engaged in the illegal drilling of Marriage v East Norfolk Rivers Catchment
324
troops in Ireland, and the above property was found Board [1950] 1 KB 284
on him at the time of his arrest. Pedlar, who was a In pursuance of their powers under s 34 of the Land
naturalised citizen of the United States of America, Drainage Act 1930, the Catchment Board deposited
sued for the return of his property, and the defence dredgings taken from the river on the south bank of
was ‘Act of State’. A certificate given by the Chief that river, so raising its height by one to two feet.
Secretary for Ireland was put in at the trial, certifying When the river next flooded, the flood waters instead
that the detention of the property was formally of escaping over the south bank, as they had always
ratified as an Act of State. done, ran over the north bank and swept away a
bridge leading to a mill owned by the claimant. Sec-
Held – Pedlar was entitled to claim his property,
tion 34(3) of the Land Drainage Act 1930 provided
because the defence of ‘Act of State’ cannot be
that, in the event of injury to any person by reason of
raised against an alien who is a subject of a friendly
the exercise by a drainage board of any of its powers,
nation.
the board concerned should make full compensation,
disputes being settled by a system of arbitration. The
General defences: statutory authority
claimant had issued a writ (now claim form) for
nuisance against the board.
322 Vaughan v Taff Vale Railway (1860) 5 H & N 679
Held – no action in nuisance lay; the claimant’s only
The defendants were held not liable for fires caused remedy was to claim compensation under s 34(3).
by sparks from engines which they were bound
by statute to run and which were constructed with Remoteness of damage: the foresight test
proper care. Overseas Tankship (UK) Ltd v Morts Dock and
325
Engineering Co Ltd (The Wagon Mound)
Comment (i) By s 1 of the Railway Fires Acts 1905 as
[1961] AC 388
amended by s 38 of the Transport Act 1981, railway com-
panies are under a liability of up to £3,000 for damage to The appellant was the charterer of a ship called the
crops caused by fire by engines run under statutory Wagon Mound. While the ship was taking on furnace
authority, though the advent of diesel and electric trains oil in Sydney harbour, the appellant’s servants negli-
makes the statute somewhat out of date. gently allowed oil to spill into the water. The action
(ii) Even if the authority to act is absolute, the damage of the wind and tide carried this oil some 200 yards
will not be excused unless it is necessarily incidental. and over to the respondent’s wharf where the business
Thus, it is not necessary to the processing of sewage that of shipbuilding and repairing was carried on. The
rivers be polluted. (Pride of Derby and Derbyshire servants of the respondent were at this time engaged
Angling Association v British Celanese Ltd [1952] 1 All ER in repairing a vessel, the Corrimal, which was moored
1326.) alongside the wharf, and for this purpose they were
..
EL_Z02.qxd 3/26/07 10:58 AM Page 843
CASE 326 LAW OF TORTS: GENERAL PRINCIPLES 843
using welding equipment. The manager of the Held – by the House of Lords – the defendants were
respondent, seeing the oil on the water, suspended liable. ‘The cause of this accident was a known source
welding operations and consulted the wharf man- of danger, the lamp, but it behaved in an unpre-
ager who told him it was safe to continue work – a dictable way. . . . This accident was caused by a
decision which was justified, because previous know- known source of danger but caused in a way which
ledge showed that sparks were not likely to set fire to could not have been foreseen and in my judgment
oil floating on water. Work, therefore, proceeded with that affords no defence.’ (Per Lord Reid) ‘The accident
safety precautions being taken. However, a piece of was but a variant of the foreseeable. It was, to quote
molten metal fell from the wharf and set on fire a the words of Denning, LJ in Roe v Minister of Health
piece of cotton waste which was floating on the [see Chapter 21], “within the risk created by the negli-
oil. This set the oil alight and the respondent’s wharf gence”. . . . The children’s entry into the tent with the
was badly damaged. The case eventually came before ladder, the descent into the hole, the mishandling
the Judicial Committee of the Privy Council on of the lamp, were all foreseeable. The greater part of
appeal. the path to injury had thus been trodden, and the
Held – the appellant was successful in its appeal, the mishandled lamp was quite likely at this stage to spill
Judicial Committee holding that foreseeability of the and cause a conflagration. Instead, by some curious
actual harm resulting was the proper tort test. On this chance of combustion, it exploded and no conflagra-
principle, the Privy Council held that the damage tion occurred, it would seem, until after the explo-
caused by the fire was too remote, though it would sion. There was thus an unexpected manifestation of
have awarded damages for the fouling of the respond- the apprehended physical dangers. But it would be,
ent’s slipways by oil, if such a claim had been made, I think, too narrow a view to hold that those who
since this was foreseeable. created the risk of fire are excused from the liability
for the damage by fire because it came by way of
Comment In Overseas Tankship (UK) Ltd v Miller explosive combustion. The resulting damage, though
Steamship Property Ltd (The Wagon Mound (No 2) ) severe, was not greater than or different in kind from
[1966] 2 All ER 709, the same blaze had caused damage that which might have been produced had the lamp
to the respondent’s ship (it was the owner of the spilled and caused a more normal conflagration in the
Corrimal). However, the members of the Privy Council
hole.’ (Per Lord Pearce)
had by this time the decision of the House of Lords in
Hughes v Lord Advocate (1963) (see below) before
Comment (i) A good illustration of the rule in Hughes
them. It said that the precise nature of the particular
that the precise mechanics of the way in which harm
injury suffered need not be foreseeable so long as it
occurs need not be foreseen if it is within the risk caused
was one of a kind that was foreseeable, i.e. within the
by the negligence appears in Draper v Hodder [1972] 2
band of reasonable foreseeability. Therefore, the re-
All ER 210. The defendant owned 30 Jack Russell terriers
spondent recovered damages in negligence and also
which he kept on his ungated premises. The dogs could
nuisance. The Privy Council held that in the case of nui-
run into a nearby house which was owned by the
sance, as of negligence, it is not enough that the damage
claimant’s parents. That house was also ungated. On one
was a direct result of the nuisance if the injury was not
occasion the dogs ran into the yard of the nearby house
foreseeable.
and one or more of them attacked the claimant, a three-
year-old boy and bit him. His action for damages
326 Hughes v Lord Advocate [1963] 1 All ER 705 succeeded. It was foreseeable immediately that the dogs
would bowl over and scratch the child. Nevertheless, the
Workmen opened a manhole in the street and later fact that one or more of them bit him was within the risk
left it unattended having placed a tent above it and created by the negligence.
warning paraffin lamps around it. The claimant and
(ii) In spite of the more liberal attitude taken to foresight
another boy, who were aged eight and 10 respec-
in Hughes, some things are still too remote as con-
tively, took one of the lamps and went down the sequences. For example, in Meah v McCreamer (No 2)
manhole. As they came out, the lamp was knocked [1986] 1 All ER 943 the claimant had been injured in a car
into the hole and an explosion took place injuring accident by reason of the defendant’s negligence. The
the claimant. The explosion was caused in a unique claimant alleged that he had suffered a personality
fashion because the paraffin had vaporised (which change leading to him attacking women. He raped one
was unusual) and been ignited by the naked flame of and indecently assaulted another. The women recovered
the wick. The defendants argued that although some damages against him and he tried to recover them from
injury by burning was foreseeable, burning by explo- the defendant. It was held that the alleged damage was
sion was not. too remote.
.. ..
EL_Z02.qxd 3/26/07 10:58 AM Page 844
(iii) As regards damages for rape, it was held in About nine weeks after the accident, the defendant’s
Meah that these should be similar to those awarded in insurer approved the estimate. A few days later the
general personal injury cases. However, in Griffiths v claimant’s insurer did so and the repairs were started
Williams, The Times, 24 November 1995 the Court of one week afterwards. The District Registrar awarded
Appeal decided that since attitudes to rape had the claimant damages including £220 for loss of use
changed, it was now in a different category to ordinary of his vehicle for 10 weeks at the rate of £22 per week
personal injury and higher awards could be made. The for hire of a substitute vehicle to cover the period dur-
claimant’s appeal against an award of £50,000 to his ing which he had delayed repairs pending approval of
victim failed.
the estimate by the insurers. The defendant had
(iv) The decision of the House of Lords in Jolley v Sutton argued that the repairs were not commenced as early
LBC [2000] 1 WLR 1082 should be noted. The case as they could have been since the claimant was not
was brought under the Occupiers’ Liability Act 1957 himself able to pay for the repairs but had to wait to
(see Chapter 21). The Council allowed a derelict see what the position was as regards payment from
abandoned boat to remain on its land outside a block of an insurance company. On appeal by the defendant
flats which it owned. J and another boy jacked the boat
it was held – by the Court of Appeal, dismissing the
up and went underneath it to effect repairs. The boat fell
appeal – that the claimant was not in breach of his
on J and rendered him paraplegic. The Council con-
duty to mitigate his loss and had acted reasonably in
tended that it was only foreseeable that children would
the circumstances.
play in the boat and not attempt to repair it. The House
of Lords held that what the boys had done was, after
a consideration of The Wagon Mound and Hughes, 329 Morgan v T Wallis [1974] 1 Lloyd’s Rep 165
within the band of foreseeability so that the Council was
liable to J. Mr Morgan, a lighterman on the River Thames, sus-
tained back injuries in trying to avoid a wire rope
Remoteness of damage: the unusual thrown by a stevedore on to a barge where Mr Morgan
claimant rule was working. Liability for his injuries was admitted by
the defendants, his employers, because they should
327 Smith v Leech Braine & Co Ltd [1962] 2 WLR 148 have had a better system of working, but the amount
of damages was disputed because Mr Morgan unreas-
The claimant was the widow of a person employed by onably refused to undergo tests and an operation
the defendant. Mr Smith’s work consisted of lowering because he genuinely feared both of these things. The
articles into a galvanising tank containing molten highest estimate by a surgeon of the chances of suc-
zinc. On one occasion he was struck on the lip by a cess of such an operation was 90 per cent. It was held
piece of molten metal which caused a burn. This – by Browne, J – that the defendants had proved that
resulted in a cancer from which he died three years Mr Morgan’s refusal was unreasonable as to the invest-
later. Mr Smith’s work had given him a predisposition igations and that the operation would have been
to cancer and the question arose whether, since The successful on a balance of probabilities. Where there
Wagon Mound, the so-called ‘thin skull rule’ had dis- was no prior disability, physical, mental or psycholo-
appeared, so that the claimant had to show that the gical, a defendant did not have to take a claimant as
cancer was foreseeable. The Lord Chief Justice, Lord he found him.
Parker, finding for the claimant, said in the course of
his judgment: ‘I am satisfied that the Judicial Com- Remoteness of damage: intended damage never
mittee of the Privy Council did not have what are too remote: novus actus interveniens: act of a
called “thin skull” cases in mind. It has always been third party expected
the common law that a tortfeasor must take his victim
as he finds him.’
330 Scott v Shepherd (1773) 2 Wm Bl 892
328 Martindale v Duncan [1973] 1 WLR 674 On the evening of a fair-day at Milborne Port,
Shepherd threw a lighted squib on to the market
The claimant’s car was damaged in a collision with stall of one Yates, who sold gingerbread. Then one
the defendant’s car because of the negligence of the Willis, in order to protect the wares of Yates, threw it
defendant. The claimant delayed repairs to his car away and it landed on the stall of one Ryal. He
pending the approval of the defendant’s insurer and threw it to another part of the market house where it
also of his own. The defendant’s insurer wished to struck the claimant in the face, exploded and put out
seek the advice of independent engineers and did so. his eye.
..
EL_Z02.qxd 3/26/07 10:58 AM Page 845
Held – Shepherd was liable for the injuries to Scott that negligence as a novus actus interveniens. It was,
because he intended the initial act and there was no therefore, liable for all the claimant’s disabilities, and
break in the chain of causation. Shepherd should the contention that these were too remote was to be
have anticipated that Willis and Ryal would act as rejected.
they did.
Remoteness of damage: duty to guard against
Comment The decision in this case is initially difficult
novus actus
to understand because Shepherd did not injure the
claimant. It would seem that since battery is also a Davies v Liverpool Corporation [1949]
crime the maxim of the criminal law that a person 333
2 All ER 175
intends the natural consequences of his acts was applied
to produce the ‘transferred intent’ of the type seen in The claimant was trying to board a tramcar belonging
criminal cases. to the defendant Corporation at a request stopping
place. An unauthorised person (a passenger) rang
Remoteness of damage: novus actus not the bell, whereupon the car started, throwing the
materially causing or contributing to injury claimant off the platform and causing her injury.
The conductor was on the upper deck collecting
Barnett v Chelsea and Kensington Hospital fares. Evidence showed that the car had been stand-
331
Management Committee [1968] 1 All ER 1068 ing at the request stop for an appreciable time, and
that the conductor had been upstairs for the whole
Mr Barnett drank tea which had, unknown to him,
of that time, though it was not a particularly busy
been contaminated with arsenic. He attended at the
period. In this action for negligence brought by the
casualty department of a hospital saying that he had
claimant, it was held that the defendant was liable for
been vomiting for some three hours after drinking
the negligent act of the conductor. He should have
the tea. The casualty doctor failed to examine him but
foreseen that if he was absent from the platform of
sent a message that he should report to his own
the car for an appreciable time, some passenger might
doctor. Some five hours later Mr Barnett died and on
ring the bell. The act of the passenger did not, there-
his widow’s action for damages, it was held that the
fore, break the chain of causation because it was just
hospital authority owed a duty of care and that the
that sort of act which the conductor was employed
doctor was negligent in failing to examine and admit
to prevent.
Mr Barnett and accordingly there had been a breach
of that duty. However, on the facts the deceased’s
condition was such that he must have died despite Remoteness of damage: novus actus not
any medical attention which the hospital could have anticipated by defendant
given so that causation was not established and the
widow’s claim failed. 334 Cobb v Great Western Railway [1894] AC 419
Robinson v The Post Office, The Times, The railway company allowed a railway carriage to
332 become overcrowded, and because of this the claimant
26 October 1973
was hustled and robbed of £89. He now sued the com-
The claimant suffered a minor injury for which the pany in respect of his loss.
defendant, his employer, admitted liability. As a
result, the claimant received an anti-tetanus injection Held – this was too remote a consequence of the
which produced a rare complication of encephalitis, defendant’s negligence. The robbery was a novus actus
with grave consequences. Ashworth, J held that the interveniens breaking the chain of causation.
doctor had acted negligently in administering the
Comment In Stansbie v Troman [1948] 2 KB 48 the owner
injection in that he had failed to administer a test
of a house was obliged to leave a painter working alone
dose. However, it appeared that even if such a test on the premises. The owner told the painter to shut the
had been made the claimant would have shown no front door when he left the house, but in fact the painter
reaction to it. Thus, the doctor’s negligence had had left the house empty for about two hours in order to
no causative effect, since even with the proper precau- obtain some wallpaper and left the door unlocked. It was
tions the encephalitis would not have been pre- held that the painter was liable for the loss of jewellery
vented. The defendant appealed and it was held – by stolen by a third party who entered the house in his
the Court of Appeal – that the judge’s conclusions on absence because this was foreseeable as being just the
the question of the medical negligence were correct kind of thing which might happen in the situation. It is
and that accordingly the defendant could not rely on difficult to reconcile Stansbie with Cobb and this leads to
.. ..
EL_Z02.qxd 3/26/07 10:58 AM Page 846
the suggestion that Cobb may no longer be good law, Remoteness of damage: novus actus – the
though it has never been overruled. intervener must intend the act
Philco Radio Corporation v Spurling [1949]
Remoteness of damage: novus actus may be that 337
2 All ER 882
of the claimant
Certain packing cases containing inflammable film
scrap were delivered in error by the defendants to the
335 Sayers v Harlow UDC [1958] 2 All ER 342
claimant’s premises. No warning as to their contents
was given on the cases. The cases were opened by the
The defendant Council owned and operated a public claimant’s servants, and a foreman recognised the
lavatory. The claimant having paid for admission contents as inflammable, and gave instructions that
entered a cubicle. Finding that there was no handle the scrap was to be replaced, and that there was to
on the inside of the door, and no means of opening be no smoking in the vicinity. He telephoned the
the cubicle, the claimant had tried for some 10 to 15 defendants and arranged to have the cases delivered
minutes to attract attention. Having failed to do so, to their proper destination, 150 yards away. Before
and wishing to catch a bus to London in the next the cases had been moved, a typist employed by the
few minutes, she tried to see if there was a way of claimant negligently set light to the scrap with a
climbing out. She placed one foot on the seat of the cigarette, and it exploded causing damage. The defend-
lavatory and rested her other foot on the toilet roll ants pleaded that the proximate cause of the damage
and fixture, holding the pipe from the cistern with was the typist’s act and that the chain of causation
one hand and resting the other hand on the top of was broken.
the door. She then realised it would be impossible to
Held – the defendants were negligent in not ensuring
climb out, and she proceeded to come down, but as
that such dangerous material was properly delivered.
she was doing so, the toilet roll rotated owing to
The act of the typist did not break the chain of causa-
her weight on it and she slipped and injured
tion; she did not intend to injure her employer, and
herself. She sued the defendant for negligence. In the
when she approached the scrap with a cigarette she
county court the defendant was found negligent, but,
did so as a joke. Her act was not such a conscious act
as the claimant was in no danger on that account,
of violation as to relieve the defendants from liability,
and as she chose to embark on a dangerous act, she
and in any case the act formed part of the very risk
must bear the consequences. It was held – by the
that was envisaged.
Court of Appeal – that her act was not a novus actus
interveniens, and the damage was not too remote a
consequence of the defendant’s negligence. She was Remoteness of damage: nervous shock
36 years of age, and in her predicament her act was
not unreasonable, though if she had been an old lady 338 Dulieu v White [1901] 2 KB 669
it might have been. However, the damages recover-
able by the claimant would be reduced by one-quarter The defendant who was driving a van negligently, ran
in respect of her share of the responsibility for the into a public house. The claimant, who was pregnant,
damage. was in the public house and because of the shock
became ill and gave birth to a premature and men-
tally deficient child. It was held that she could recover
McKew v Holland and Hannen and Cubitts
336 damages.
(Scotland) Ltd [1969] 2 All ER 1621
McKew sustained an injury during the course of his Chadwick v British Railways Board [1967]
employment for which his employer was liable. The 339
1 WLR 912
injury caused him occasionally and unexpectedly to
lose the use of his left leg. On one occasion he left A serious railway accident was caused by negligence
a flat and started to descend some stairs which had no for which the Board was liable. A volunteer rescue
handrail. His leg gave way and he sustained further worker suffered nervous shock and became psycho-
injury. neurotic as a result. The claimant, as administratrix of
his estate, claimed damages for nervous shock. It was
Held – by the House of Lords – his conduct in trying held that:
to descend the stairs was unreasonable and thus
broke the chain of causation. The subsequent injury (a) damages were recoverable for nervous shock even
was, therefore, too remote and the employer was not though the shock was not caused by fear for one’s
liable. own safety or that of one’s children;
..
EL_Z02.qxd 3/26/07 10:58 AM Page 847
(b) in the circumstances injury by shock was for which damages are recoverable. The way to do this
foreseeable; is to estimate how much the claimant would have
(c) the defendant ought to have foreseen that volunt- suffered if, for instance, her husband had been killed
eers might attempt rescue and accordingly owed a in an accident when she was 50 miles away, and
duty of care to those who did. compare it with what she is now, having suffered all
the shock due to being present at the accident. The
Comment (i) If the deceased had merely read of this
evidence shows that she suffered much more by being
accident to strangers in his newspaper, there would have
present. (Per Lord Denning, MR)
been no claim for nervous shock if this had resulted.
(ii) It should be noted that in Chadwick and the other
cases of nervous shock there was an illness following 341 Hambrook v Stokes [1925] 1 KB 141
upon the shock. A contrast is provided by the decision of
The defendant left his lorry unattended on a sloping
the Court of Appeal in Nicholls v Rushton, The Times, 19
June 1992, where the claimant had been in a road traffic street and, because of his negligence in failing to
accident but suffered no physical injury. He experienced brake the vehicle properly, it began to run away. The
a nervous reaction which fell short of a psychological claimant’s wife had just left her children further
illness. He was not entitled to damages. The Court down the street though they were in fact round a
of Appeal said there were no damages for ‘shock and bend and not within her view. However, she saw the
shaking up’ without more. lorry moving and suffered shock, which resulted in
(iii) Chadwick v British Railways Board (1967) was held to her death, because she feared for the safety of her
be correctly decided but distinguished in White v Chief children. Her husband brought this action for loss of
Constable of South Yorkshire [1999] 1 All ER 1. The case her services and was held entitled to recover damages
involved claims by police officers for nervous shock fol- provided that the shock was brought about by his
lowing their involvement as rescuers in the Hillsborough wife’s own experience and not by the accounts of
football stadium disaster. There was, said the House of bystanders.
Lords, no liability to the officers. A rescuer, it said, is not
placed in any special position as regards liability for
342 McLoughlin v O’Brian [1982] 2 All ER 278
nervous shock merely by reason of the fact that he was a
rescuer unless, as in Chadwick, he had exposed himself The claimant’s husband and three children were
to danger or reasonably believed that he was doing so. In
involved in a road accident caused by the negligence
Chadwick the claimant was exposed to danger by trying
of the defendant. One child was killed and the
to rescue passengers in a train which might have caught
husband and the other two children were badly
fire or toppled over on him and so on. The police officers
injured. At the time of the accident the claimant was
at Hillsborough were not in danger as such. The danger
at home two miles away and was told of the accident
was past. It follows that a person who suffers nervous
shock or psychiatric injury caused by witnessing or parti- by a neighbour and taken to hospital where she saw
cipating in the aftermath of an accident that has caused the injured members of her family and the extent of
death or injury to others cannot recover damages unless their injuries and shock, and heard that her daughter
he was himself in danger or fear of it. had been killed. As a result of hearing and seeing the
results of the accident, the claimant suffered severe
and persisting nervous shock and brought this action
340 Hinz v Berry [1970] 1 All ER 1074 against the defendant for negligence. It was held by
the Court of Appeal that the claim failed. Even
Mrs Hinz witnessed a car accident in which her hus- though the claimant’s nervous shock was a reason-
band was killed and her children injured. The accident ably foreseeable consequence of the defendant’s negli-
was caused by the negligent driving of the defendant. gence, in accordance with precedent and social policy
As a result of seeing the accident Mrs Hinz, who had the duty of care owed by a driver of a motor vehicle
been a vigorous and lively woman, became morbid was limited to persons and owners of property on the
and depressed for years afterwards. road or near it who might be directly affected by the
Held – by the Court of Appeal – she was entitled to driver’s negligent driving and accordingly the defend-
damages of £4,000 for nervous shock. She was a ant did not owe a duty of care to the claimant because
woman of robust character who would probably have she had not been in the physical proximity of the
stood up to the strain if she had not seen the accident. accident when it occurred.
Somehow or other the court has to draw a line The House of Lords reversed the Court of Appeal
between sorrow and grief for which damages are not and upheld the claimant’s claim, even though she
recoverable, and nervous shock and psychiatric illness was two miles from the accident. The argument that
.. ..
EL_Z02.qxd 3/26/07 10:58 AM Page 848
848 LAW OF TORTS: GENERAL PRINCIPLES CASE 343
this would open the floodgates to many claims by driving while under the influence of alcohol. The father
people who had not actually seen the accident, which suffered severe post-traumatic stress disorder, though his
was a former restriction on claims of this sort, did son was later released from the car and recovered. The
not deter their Lordships. They all agreed that the High Court ruled that the claimant failed. There was no
claimant’s nervous shock was a foreseeable event duty of care owed by the victim of a self-inflicted injury
producing an identifiable mental illness. However, to a secondary party in these circumstances. In effect, the
that part of the decision in Hinz v Berry (above) which son’s insurer was not liable because the son was not.
says that nervous shock does not cover sorrow or grief (v) In Robertson v Forth Road Bridge Joint Board, 1996
was upheld. SLT 263 it was held that two friends of a worker whom
they saw blown off the Forth Bridge to his death could
Comment (i) If the floodgates ever did open, they were not recover for nervous shock. They were not within the
closed by the Court of Appeal in Alcock v Chief Constable Alcock categories of secondary victims.
of South Yorkshire, The Times, 6 May 1991. The case was
brought following the disaster at Hillsborough football (vi) More importantly, perhaps, the House of Lords has
ground at Sheffield where it was alleged that the police decided that where the claimant is not a witness but the
let too many people get into the ground causing those primary victim, if the accident is foreseeable, so is that
in front of them to be crushed against railings and barri- element of damage from it which can be put down to
cades. It was held that only the parents and spouses of nervous shock; see Page v Smith [1995] 2 WLR 644 where
the victims could recover damages for nervous shock and the claimant was involved in an accident with a car
then only if they had actually seen the accident by being driven negligently by the defendant. Page suffered no
at the ground or identified bodies afterwards. Parents physical injury but the accident worsened his previous
and spouses who had only seen the disaster by viewing it nervous state. As the House of Lords said, if it was
on a simultaneous TV broadcast could not get damages. reasonably foreseeable that the claimant might suffer
The decision was affirmed by the House of Lords. (See personal injury as a result of the defendant’s negligence,
Alcock v Chief Constable of South Yorkshire, The Times, it was not necessary to ask a separate question as to
29 November 1991.) The decisions in Frost v Chief whether the defendant should have foreseen injury by
Constable of South Yorkshire Police (1996) and White v shock. The House of Lords ruling in no way changes the
Chief Constable of South Yorkshire (1999) have already rules relating to witnesses who are secondary victims.
been noted as not putting police rescuers who were not (vii) The control mechanisms set out in Alcock continue to
related to the Hillsborough victims in a special category be applied in these cases. Thus in Keen v Tayside
as rescuers and, therefore, unable to recover damages for Contracts 2003 SLT 500 Mr Keen was a roadworker. He
nervous shock. was instructed by his employers to set up a road diversion
(ii) However, it was held in Attia v British Gas plc [1987] at the scene of a road accident. While doing this he
3 All ER 456 that damages for nervous shock could be became aware that there were four crushed and burned
recovered where it was caused by damage to property. It bodies in a car. He developed post-traumatic stress dis-
need not result from the death or injury of a person. The order and claimed damages against the employer for
claimant’s shock in this case arose when, on returning exposing him to the accident scenario and failing to pro-
home, she saw the whole of her house on fire as a result vide debriefing to enable him to come to terms with
of the defendant’s negligence. what he had seen. His case failed largely because he had
no close ties of love and affection with the victims, which
(iii) There have been further developments as follows. It
is one of the Alcock control mechanisms.
was held in Vernon v Bosley, The Times, 4 April 1996 by
the Court of Appeal that a father (V) who witnessed the
aftermath of an accident caused by B’s negligent driving Remoteness of damage: nervous shock – there
in which V’s two children died could recover for nervous must be a duty of care
shock and obtain further damages for grief and bereave-
ment of a normal kind. V was clearly suffering from 343 Hay (or Bourhill) v Young [1943] AC 92
mental illness as a result of what he had seen and it was
not necessary, if indeed it was possible, to say that one The claimant, a pregnant Edinburgh fishwife, alighted
part of his mental state was due to what he had seen from a tramcar. While she was removing her fish-
and some other part was due to normal grief and basket from the tram, Young, a motor cyclist, driving
bereavement. carelessly but unseen by her, passed the tram and
(iv) The above ruling was not applied in Greatorex v collided with a motor car some 15 yards away. Young
Greatorex, The Times, 6 June 2000. In that case the was killed. The claimant heard the collision, and after
claimant was a fire officer who went to the scene of a car Young’s body had been removed, she approached the
accident in which the defendant, his son, was trapped scene of the accident and saw a pool of blood on the
following an accident caused by the son’s negligent road. She suffered a nervous shock and later gave
..
EL_Z02.qxd 3/26/07 10:58 AM Page 849
birth to a stillborn child. The House of Lords held that of the claimant’s left leg and the defendant was liable
her action against Young’s personal representative only for loss suffered by the claimant up to 29 Novem-
failed, because Young owed no duty of care to persons ber 1967. Damages are compensation for loss arising
whom he could not reasonably anticipate would suffer from a tortious act and cease when by reason of recov-
injury as a result of his conduct on the highway. ery, supervening disease, or further injury there is no
continuing loss attributable to that act.
The House of Lords, [1969] 3 All ER 1528, reversed
344 Owens v Liverpool Corporation [1939] 2 KB 394
the Court of Appeal decision holding that damages
are not merely compensation for physical injury but
A funeral procession was making its way to the cem-
for the loss which the injured person suffers. This loss
etery when a negligently driven tram owned by the
was not diminished by the supervening event and the
defendant collided with the hearse and overturned
second injury was irrelevant. ‘The supervening event
the coffin. Several mourners who were following in a
has not made the appellant less lame nor less disabled
carriage suffered shock and it was held by the Court of
nor less deprived of amenities. It has not shortened
Appeal that they were entitled to damages.
the period over which he will be suffering. It has
made him more lame, more disabled, more deprived of
Remoteness of damage: successive accidents and
amenities. He should not have less damages through
supervening events
being worse off than he might have expected . . .’ (Per
Lord Pearson, LJ)
345 Jobling v Associated Dairies [1980] 3 All ER 769
Comment Holtby v Brigham & Cowan (Hull) Ltd (2000)
The claimant, an employee in a butcher’s shop, (see p 525) may perhaps be distinguished. In that case the
suffered a partially disabling accident at work in 1973. existing injury was merely aggravated by the continuing
In 1976 before the trial in regard to that accident employment – it was not a different injury.
came on, the claimant was found to be suffering from
a totally disabling but unconnected condition. At the Performance Cars Ltd v Abraham [1961]
347
3 All ER 413
trial in 1979 the judge took no account of the sup-
ervening disability. On appeal on amount of damages The claimant owned a motor car which was damaged
it was held – allowing the appeal – that where a in a collision with a car driven by the defendant. The
claimant was subsequently injured by a non-tortious damage to the claimant’s car was such that it would
act, the tortfeaser’s damages were to be reduced by necessitate respraying the whole of the lower body.
the extent of the claimant’s further injuries and conse- Two weeks before the accident the claimant’s car had
quent loss. Baker v Willoughby (1969) (below) should been involved in another collision which had also
not be extended further. made respraying of the lower body of the car neces-
sary. The claimant obtained judgment against the
driver responsible for the first collision, but that
346 Baker v Willoughby [1969] 3 All ER 1528 judgment was not satisfied and the car had not
been resprayed at the time when the second collision
In September 1964, the claimant was involved in took place. The court was asked to decide whether the
an accident on the highway caused by the negligent claimant was entitled to recover as damages from the
driving of the defendant, but attributable as to one- defendant the cost of respraying the lower body of
quarter to the claimant’s contributory negligence. The its car.
claimant received serious injuries to his left leg, but
Held – by the Court of Appeal – the claimant was not
after long hospital treatment he took up employment
entitled to recover the cost of respraying from the
with a scrap metal merchant. On 29 November 1967,
defendant because that damage was not the result of
while in the course of his employment, the claimant
his wrongful act.
was the innocent victim of an armed robbery receiv-
ing gunshot wounds necessitating the immediate
Limitation of actions: fraudulent or negligent
amputation of his left leg, which was already defec-
concealment of claim
tive because of the previous accident. The question of
the amount of damages for the claimant’s injuries in
348 Beaman v ARTS [1949] 1 All ER 465
the road accident of September 1964 came before the
court for assessment in February 1968. In November 1935, Mrs Beaman, before leaving for
Held – by the Court of Appeal – no consequence of the Istanbul, deposited with the defendant company
accident of September 1964 survived the amputation several packages to be sent to her as soon as she gave
.. ..
EL_Z02.qxd 3/26/07 10:58 AM Page 850
850 SPECIFIC TORTS CASES 349 –351
notice requesting it. In May 1936, the defendant at

SPECIFIC TORTS
her request dispatched one of the packages, but after-
wards regulations made by the Turkish authorities
Trespass to the person: words may prevent
prevented dispatch of the other packages and Mrs
an assault
Beaman asked the defendant to keep them in store
pending further instructions. Three years later the
349 Turbervell v Savage (1669) 2 Keb 545
defendant, not having received instructions, wrote
and asked the claimant to insure the contents of the In this old case a man laid his hand menacingly on
packages. She did not do so but replied saying that his sword, but at the same time said, ‘If it were not
she was hoping to return to England. However, the out- assize time I would not take such language from you.’
break of war while she was still in Turkey prevented
Held – this was not an assault because it was assize
this.
time, and there was no reason to fear violence.
On the entry of Italy into the war in 1940 the
defendant, being a company controlled by Italian
Trespass to the person: battery may arise from a
nationals, had its business taken over by the Custo-
failure to act
dian of Enemy Property. Wishing to wind up the
business as soon as possible, the manager of ARTS Ltd Fagan v Metropolitan Police Commissioner
350
examined the packages, reported that they were of no [1968] 3 All ER 442
value, and gave them to the Salvation Army. No steps Fagan was driving his car when he was told by a con-
were taken to obtain the claimant’s consent. The stable to draw into the kerb. He stopped his car with
claimant returned to England in 1946 and com- one wheel on the constable’s foot and was slow in
menced proceedings more than six years after the restarting the engine and moving the vehicle off. He
packages were disposed of, claiming damages for con- was convicted of assault on the constable and Quarter
version. The defendant set up the defence that the Sessions dismissed his appeal. He then appealed to
action was barred by the Limitation Act. The claimant the Queen’s Bench Divisional Court where it was held
relied on what is now s 32 of the Limitation Act 1980, – dismissing his appeal – that whether or not the
which provides that where ‘(a) the action is based on mounting of the wheel on the constable’s foot had
fraud of the defendant . . . or (b) the right of action is been intentional, the defendant had deliberately
concealed by the fraud of any such person . . . the allowed it to remain there when asked to move it, and
period of limitation shall not begin to run until the that constituted an assault. The decision seems to
[claimant] has discovered the fraud . . .’. extend the law because there was no act but merely
Held: an omission. Furthermore, there was no intentional
(a) The action for conversion was not ‘based on application of force but only a failure to withdraw it.
fraud’, so that what is now s 32(1)(a) had no A more appropriate charge might have been false
application. imprisonment because the constable could not
(b) The conduct of the defendant constituted a reckless presumably have moved while the wheel remained
‘concealment by fraud’ of the right of action on his foot.
within what is now s 32(1)(b). Therefore, the Comment This was a criminal prosecution for assault, an
claimant’s action was not barred. expression which is commonly used to mean battery also.
Comment (i) It appears that it is not necessary to prove In strict civil law terms, the trespass to the policeman was
a degree of moral turpitude to establish fraud for the a battery.
purposes of s 32. Thus, in Kitchen v Royal Air Force
Association [1958] 1 WLR 563, solicitors negligently Trespass to the person: is not actionable in itself:
concealed a payment of money on behalf of the claimant the claimant must prove intention or negligence
and this conduct was held to amount to ‘fraud’ for the
purposes of what is now s 32, even though the court 351 Fowler v Lanning [1959] 1 All ER 290
accepted that the solicitors were not dishonest.
(ii) Reference should also be made at this point By a writ (now claim form) the claimant claimed
to Sheldon v HM Outhwaite [1995] 2 All ER 558 where damages for trespass to the person. In his statement
the House of Lords decided that the normal period of of claim (now statement of case) he alleged that on
six years governing the start of legal claims can be 19 November 1957, at Vineyard Farm, Corfe Castle, in
extended where information relevant to the possible the County of Dorset, the defendant shot the
claim is deliberately concealed after the period of six claimant. By reason of the premises, the claimant sus-
years has started to run. tained personal injury and suffered loss and damage;
..
EL_Z02.qxd 3/26/07 10:58 AM Page 851
CASES 352–356 SPECIFIC TORTS 851
particulars of the claimant’s injuries were then set which was left stationary for some 20 minutes. At
out. The defendant denied the allegations of fact and 1.30 pm permission was given for the men to leave and
objected that the statement of claim disclosed no the claimant was brought to the top. He now sued for
cause of action, because the claimant had not alleged false imprisonment.
that the shooting was either intentional or negligent. Held – there was no false imprisonment. There was a
Held – in an action for trespass to the person, onus of collective agreement regarding the use of the cage,
proof of the defendant’s intention or negligence lay and the claimant’s right to be taken to the surface
on the claimant and the claimant must allege that the did not arise under the agreement until 4 pm. The
shooting was intentional or that the defendant was defendant was perfectly willing to let the claimant
negligent, stating the facts alleged to constitute the ascend, but was not required, in the absence of any
negligence. The claimant’s statement of claim, there- emergency, to provide him with the means of doing
fore, disclosed no cause of action. so except in accordance with the agreement.
Comment If the interference is unintentional it was held

Meering v Grahame White Aviation Co Ltd
in Letang v Cooper [1964] 2 All ER 929 that an action 354
(1919) 122 LT 44
must be brought in negligence.
The claimant, being suspected of stealing a keg of
varnish from the defendant, his employer, was asked
Trespass to the person: false imprisonment
by two works policemen to accompany them to the
works office to answer questions. The claimant, not
352 Bird v Jones (1845) 7 QB 742
realising that he was suspected, assented to the sug-
A bridge company enclosed part of the public footway gestion and even suggested a short cut. He remained
on Hammersmith Bridge, put seats on it for the use of in the office for some time during which the works
spectators at a regatta on the river, and charged policemen stayed outside the room without his
admission. The claimant insisted on passing along knowledge. The claimant later sued for false imprison-
this part of the footpath, and climbed over the fence ment and the question arose as to whether the
without paying the charge. The defendant, who was claimant must know that the defendant is restraining
the clerk of the Bridge Company, stationed two his freedom.
policemen to prevent, and they did prevent, the Held – the claimant was imprisoned and his know-
claimant from proceeding forwards along the footway ledge was irrelevant, though knowledge of imprison-
in the direction he wished to go. The claimant was at ment might increase the damages.
the same time told that he might go back into the car-
riage way and proceed to the other side of the bridge Trespass to the person: unlawful arrest
if he wished. He declined to do so and remained in
the enclosure for about half an hour. 355 Christie v Leachinsky [1947] AC 573
Held – there was no false imprisonment, for the
claimant was free to go off another way. The appellants, without the necessary warrant, arrested
the respondent for unlawful possession of a number
of bales of cloth. They had reasonable grounds for
Herd v Weardale Steel, Coal and Coke Co Ltd
353 thinking that the bales were stolen but did not dis-
[1915] AC 67
close this until later.
The claimant was an employee of the defendant com-
Held – by the House of Lords – the arrest was unlawful.
pany and at 9.30 am on 30 May 1911, he descended
the defendant’s mine. In the ordinary way he would
have been entitled to be raised at the end of his shift 356 Wheatley v Lodge [1971] 1 All ER 173
at 4 pm. The claimant and two other men were given
certain work to do which they believed to be unsafe, The defendant’s car collided with a parked vehicle.
and they refused to do it. At about 11 am they, and A constable saw him about an hour later and smelling
29 men acting in sympathy with them, asked the alcohol on his breath, cautioned him and said that he
foreman to allow them to ascend the shaft. The fore- was arrested for driving under the influence of drink
man, acting on instructions from the management, contrary to what is now the Road Traffic Act 1988.
refused this request. At about 1 pm the cage came The defendant was deaf and could not lip read,
down carrying men, and emptied at the bottom of though the constable did not know this. Nevertheless,
the shaft. The 29 men were refused permission to the defendant got into a police car, which the con-
enter, but some got in and refused to leave the cage, stable pointed to, and was taken to the police station
.. ..
EL_Z02.qxd 3/26/07 10:58 AM Page 852
852 SPECIFIC TORTS CASES 357–359
where he indicated his deafness. From then on the Comment This case illustrates the difficulties of trying to
charge and all relevant matters were made clear to recover at common law for oil pollution damage in negli-
him by written and printed matter. On the question of gence or trespass. The action for nuisance has similar
the lawfulness of his arrest, it was held by the Queen’s difficulties. Rylands v Fletcher does not apply because,
Bench Divisional Court that the original arrest was among other things, the oil does not escape from the
valid. A police officer arresting a deaf person had to land but from the sea and the sea is the equivalent of a
do what a reasonable person would do in the circum- public highway. Oil pollution is now dealt with by the
stances and the magistrates were clearly of the opinion Merchant Shipping (Oil Pollution) Act 1971, which pro-
vides a more straightforward method of making claims.
that the constable had done so.
Comment (i) Presumably, on the basis of this decision, if

a person is arresting someone who cannot speak English, 358 Kelson v Imperial Tobacco Co [1957] 2 All ER 343
he is not obliged to find an interpreter.
The claimant was the lessee of a one-storey tobaccon-
(ii) The Police and Criminal Evidence Act 1984 confirms
ist’s shop and brought this action against the defend-
the common-law rule that where an arrest is made by
ant, seeking an injunction requiring it to remove
seizure of a person, words indicating that the person
from the wall above the shop a large advertising sign
is under arrest should accompany the seizure (s 28(1) ).
for cigarettes showing the words ‘Players Please’. The
However, the common-law rule is modified by requiring
that where an arrest is made by a policeman, the sign projected into the airspace above the claimant’s
person arrested must be informed that he is under shop by a distance of some eight inches. The claimant
arrest, even though that fact is obvious. The common alleged that the defendant, by fixing the sign in that
law also requires that the person arrested be told position, had trespassed on his airspace.
the reason(s) for the arrest, and s 28(3) confirms this Held – the invasion of an airspace by a sign of this
rule but modifies it where there is an arrest by a con- nature constituted a trespass and, although the claim-
stable, requiring that in such a case information regard- ant’s injury was small, it was an appropriate case in
ing the ground for the arrest be furnished, regardless which to grant an injunction for the removal of the
of whether it is obvious (s 28(4) ). The section confirms sign.
the common-law rule that there is no requirement to tell
a person that he is under arrest or of the ground for Comment The claimant seemed prepared for the sign to
arrest if it is not reasonably practicable to do so, as where remain until he became involved in a dispute with the
he has escaped from arrest before the information can defendant regarding the quota of cigarettes supplied to
be given (s 28(5) ). The grounds for the arrest may be him. It was after the dispute that he brought this action,
given subsequently, e.g. at the police station as in Lewis v but the court found that the claimant’s case was not
Chief Constable of the South Wales Constabulary [1991] 1 affected by his acts.
All ER 206.
Woollerton and Wilson v Richard Costain
359
Trespass to land (Midlands) Ltd (1969) 119 NLJ 1093
Southport Corporation v Esso Petroleum Co In this case the court granted to the owners of a
357 factory and warehouse in Leicester an injunction
[1954] 2 QB 182
The Esso company’s tanker became stranded in the restraining the defendants from trespassing on
estuary of the River Ribble. The master of the tanker and invading airspace over their premises by means of
discharged oil in order to refloat the ship. The action a swinging crane. The injunction was suspended for
of the wind and tide took the oil on to the Corpora- 12 months to enable the defendants to finish their
tion’s foreshore and caused damage. The Corporation work, the defendants having offered to pay for the
sued in trespass and negligence. Devlin, J, at first right to continue to trespass and to provide insurance
instance, thought that trespass would lie, but on cover for neighbouring properties. It was also held
appeal to the Court of Appeal, Denning, LJ contended that it was no answer to a claim for an injunction
that there could be no trespass because the injury was for trespass that the trespass did no harm to the
not direct, but was caused by the tides and prevailing claimants.
winds; in trespass, the injury must be direct and not Comment There has not been full support from the judi-
consequential. In the House of Lords, [1956] AC 218, ciary on the issue of postponing the injunction. In John
Lord Tucker agreed with Denning, LJ, though in the Trenbart Ltd v National Westminster Bank Ltd (1979) 123
House of Lords trespass was not pursued. The appeal SJ 38, Walton, J would not postpone the operation of an
was based on negligence and the defendant was held injunction in similar circumstances and refused to follow
not liable. Woollerton saying it was wrongly decided.
..
EL_Z02.qxd 3/26/07 10:58 AM Page 853
CASES 360 –364 SPECIFIC TORTS 853
Bernstein v Skyviews & General [1977] Hounslow London Borough Council v

360 362
2 All ER 902 Twickenham Garden Developments
The claimant sued for damages for trespass against [1970] 3 WLR 538
Skyviews, which had taken an aerial photograph of A building owner granted a licence under a build-
his home from about 630 feet, crossing his land in ing contract to a builder to enter on his land and
order to do so. It was held – by Griffiths, J – that an do work there. The procedure for terminating the
owner of land at common law had rights above his building contract involved an architect giving notice
land to such height as was necessary for the ordinary that the work was not being carried out properly.
use and enjoyment of the land and the structures Such a notice was given but the building contractor
upon it. The plane was, therefore, too high to be refused to leave the land and carried on his work.
trespassing. In any case, s 40(1) of the Civil Aviation The owner claimed an injunction and damages for
Act 1949 (see now Civil Aviation Act 1982, s 76) pro- trespass.
vides a defence to such a claim where the height was Held – by Megarry, J – in view of the fact that it was
reasonable. However, the judge did say that constant not certain whether the architect’s notice had been
surveillance from the air with photographing might given as a result of following proper procedures, the
well be actionable nuisance. contract had not necessarily been terminated and the
builder was not, unless and until that was done, a
Trespass to land: effect of revocation of licences trespasser. The owner’s action failed.
Winter Garden Theatre (London) Ltd v
361 Trespass to land: self-help
Millennium Productions Ltd [1948] AC 173
The respondents were permitted by a contractual Hemmings v Stoke Poges Golf Club [1920]
363
licence to use the Winter Garden Theatre, Drury Lane, 1 KB 720
which belonged to the appellants, for the purpose The claimant was employed by the defendants and
of producing plays, concerts or ballets in return for occupied a cottage belonging to them. Later he left
a weekly payment of £300. There was no express term the defendants’ service and was called upon to give up
in the licence providing that the appellants could possession. On refusal, he and his property were ejected
revoke it. However, the appellants did revoke it, giving with no more force than was necessary.
the respondents one month in which to quit the Held – the defendants were not liable for assault or
premises, but stating that they were prepared to give trespass.
fresh notice for a later date if the respondents
required further time in which to make other arrange- Comment (i) Since this case concerns the eviction of an
ments. The respondents contended that the licence employee/occupier, it would seem to be overruled on its
could not be revoked so long as the weekly payments facts by s 8(2) of the Protection from Eviction Act 1977.
were continued. The appellants claimed that it was Hemmings could now claim damages for breach of that
Act. However, the principle behind the decision on the
revocable on giving reasonable notice.
Hemmings facts is still relevant in that the occupier of
Held – on a proper construction of the contract, property could eject a person not covered by the 1977
the licence was not intended to be perpetual, but Act, e.g. a squatter, from his property by the use of
nevertheless could only be determined by reasonable reasonable force.
notice. What was reasonable notice depended on the
(ii) It will, of course, not be regarded as reasonable to fire
commitments of the licensees and the circumstances a shotgun at a trespasser to effect his removal and such
of the parties. In this case the notice given by the a trespasser may be awarded damages (see Revill v
appellants was reasonable and valid to determine Newberry, The Times, 3 November 1995).
the licence.
Comment This case also has a bearing on the ejection Wrongful interference with goods: what is
of hooligans from soccer and other sports grounds. possession?
They may have paid and have a contractual right to
enter, but as Viscount Simon said in this case: ‘The ticket 364 The Tubantia [1924] P 78
entitles the purchaser to enter and, if he behaves himself,
to remain on the premises until the end of the event The claimant, who was a marine salvor, was trying
which he has paid to witness.’ This clearly implies that to salvage the cargo of the SS Tubantia which had
those who do not behave in a reasonable way cease been sunk in the North Sea. He had discovered the
to be licensees and become trespassers and can be wreck and marked it with a marker buoy, and his
evicted. divers were already working in the hold, when the
.. ..
EL_Z02.qxd 3/26/07 10:58 AM Page 854
defendant, a rival salvor, appeared on the scene and Comment It is also worth noting Elwes v Brigg Gas Co
started to send divers down to salvage the cargo from (1886) 33 Ch D 562 where it was held that a prehistoric
the wreck. boat found some six feet below the surface of the land
belonged to the landowner and not to the finders.
Held – whoever was the owner of the property sal-
Similarly, in Corporation of London v Appleyard [1963] 2
vaged, the claimant was sufficiently in possession of
All ER 834, the owner of a building site was held entitled
the wreck to found an action in trespass.
against workers of a demolition contractor to banknotes
found in a wall safe in an old cellar.
Conversion: may be based on a possessory title:
finders of property
Conversion: the relationship between the
Parker v British Airways Board [1982] claimant and the goods
365
1 All ER 834
The claimant was in BA’s first class lounge at Heathrow 367 Jarvis v Williams [1955] 1 All ER 108
waiting for a flight. He found a gold bracelet on the
floor and gave it to an employee of BA together with Jarvis agreed to sell some bathroom fittings to Peterson
his name and address asking that it be returned to and at Peterson’s request delivered them to Williams.
him if not claimed. It was not claimed but BA sold Peterson refused to pay the price and Jarvis agreed to
it. The claimant sued in conversion and the Court take them back if Peterson would pay for collection.
of Appeal held that the claimant was entitled to the Peterson accepted this offer and Jarvis sent his lorry-
proceeds of sale. man, with a letter of authority, to collect the fittings
but he was told that he could not take them, so he
Comment This principle was applied in two earlier cases, returned empty-handed. Jarvis claimed against
i.e. Bridges v Hawkesworth (1851) 21 LJ QB 75 where Williams in conversion for the return of the goods.
the finder of some banknotes which were lying on the
Held – on the delivery to Williams the property in the
floor in the public part of a shop was held entitled to
them as against the shopkeeper; and Hannah v Peel goods passed to Peterson, and the arrangement for
[1945] KB 509, where a soldier billeted in a house found re-collection did not re-vest the property in Jarvis. It
a brooch lying loose in an upstairs room, and he was held follows that at the time of collection, Jarvis had no
entitled to it as against the freeholder of the property right of property in the goods to sustain an action in
who had no knowledge of the brooch until the claimant conversion.
found it.
Conversion: the defendant’s conduct
Conversion: possessory title: goods on or attached
to land or buildings 368 Fouldes v Willoughby (1841) 8 M & W 540
South Staffordshire Water Co v Sharman The claimant had put his horses on the defendant’s
366
[1896] 2 QB 44
ferry boat and, a dispute having arisen, the defendant
The claimant company sued the defendant in detinue asked the claimant to take them off. The claimant
(now wrongful interference by conversion), claiming refused so the defendant did so, and since the
possession of two gold rings found by the defendant claimant refused to leave the boat, the defendant
in the Minster Pool at Lichfield. The claimant was the ferried him across the river. The claimant sued in
owner of the pool and the defendant was a labourer conversion. Maule, J directed the jury that the putting
it employed to clean the pool. It was in the course of of the horses ashore was a conversion, but on appeal,
cleaning the pool that the defendant came across the the Court of Exchequer reversed the decision and
rings. He refused to hand them to his employer, but found there was no conversion. Lord Abinger, CB
gave them to the police for enquiries to be made to said:
find the true owners. No owner was found and the pol- In order to constitute a conversion it is necessary
ice returned the rings to the defendant who retained either that the party taking the goods should intend
them. some use to be made of them by himself or by
Held – the rings must be given over to the claimant. those for whom he acts, or that owing to his act,
The claimant was the freeholder of the pool, and had the goods are destroyed or consumed to the preju-
the right to forbid anyone coming on the land; it had dice of the lawful owner. The removal of the horses
a right to clean the pool out in any way it chose. The involved not the least denial of the right of the
claimant possessed and exercised a practical control [claimant] to enjoyment or possession of them and
over the pool and had a right to its contents. was thus no conversion.
..
EL_Z02.qxd 3/26/07 10:58 AM Page 855
(t/a Christies) [2002] EWHC 2148. In that case an innocent

369 Oakley v Lyster [1931] 1 KB 148
buyer of a stolen painting sent it for sale by auction to
Oakley, a demolition contractor, agreed to pull down the defendants. It did not meet the reserve price and the
defendants returned it to the innocent purchaser who
an aerodrome on Salisbury Plain and reinstate the
eventually sold it. The defendants acted in good faith
land, a process which involved disposing of 8,000
and without notice that the innocent purchaser did not
tons of hard core and tar macadam. He thereupon
own the painting. The defendants checked the painting
rented three and a half acres of a farm on the opposite
on the stolen art register but received a negative reply.
side of the road on which to dump it. He sold 4,000
The true owner later sued the defendants in conversion
tons, but in January 1929, there was still 4,000 tons but failed. The mere receipt by an auctioneer of stolen
undisposed of when Lyster bought the freehold of the goods does not make him liable in conversion. There was
farm. Shortly afterwards Oakley found that some of no delivery by the auctioneer to a purchaser. If there had
the hard core was being removed on Lyster’s instruc- been the High Court said that the defendants would
tions, and Oakley saw him and was told that Lyster have been liable. The innocent purchaser who delivered
had bought the land and all that was on it, and on the goods to the auctioneer would have been liable
9 July 1929, his solicitors wrote to Oakley to this because he denied the owner’s title by delivering for
effect and forbade Oakley to remove the hard core sale. He was also clearly liable when he later sold the
otherwise he would become a trespasser on Lyster’s painting.
land. Correspondence followed but at the trial it
was admitted that Oakley was a lawful tenant and Public nuisance: obstruction of the highway;
owner of the hard core. While the correspondence dangerous activities near the highway
was continuing, Oakley agreed to sell that 4,000 tons
to Mr Edney, but in view of Lyster’s claim, Edney Attorney-General v Gastonia Coaches,
371
withdrew and the stuff was undisposed of. The The Times, 12 November 1976
conversion alleged was the removal by Lyster of G, a coach operator, owned 22 coaches of which 16
some of the hard core and the denial of title in the were parked in residential roads adjoining the
correspondence. Gastonia offices. No matter how carefully these
Held – the defendant was liable in damages for con- coaches were parked, they inevitably interfered with
version. In the correspondence Lyster was asserting the free passage of other traffic. It was held – on a
and exercising dominion over the goods inconsistent public relator action by the Attorney-General –
with the rights of the true owner, Oakley. Nor was it that Gastonia was guilty of a public nuisance and
sufficient to allow Oakley to resume dominion over the would be restrained from parking the vehicles on the
hard core and remove it. He was entitled to damages highway. Damages would also be awarded to private
of £300 for the loss of the sale to Edney. litigants who had suffered from the emissions
of exhaust gases, excessive noise and obstruction of
Conversion: principle of liability; where the drives.
defendant has acted honestly
Comment (i) Reference should also be made to Campbell
Elvin and Powell Ltd v Plummer Roddis Ltd v Paddington BC (1911) (see Chapter 20) which is an
370
(1933) 50 TLR 158 example of an action by a private person for a public
A fraudulent person ordered a consignment of goods nuisance.
from the claimants in the name of the defendants. He (ii) Public nuisance in terms of interference with a
then telephoned the defendants in the claimants’ public path arose in Wandsworth LBC v Railtrack plc
name, saying that the goods had been dispatched [2001] 1 WLR 368. The claimant sought to recover from
to them in error and that they would be collected. the defendant its costs in regard to rectifying problems
The fraudulent person then himself collected caused by pigeons congregating under the defendant’s
the goods from the defendants and absconded with railway bridge. The pigeon droppings were causing
them. The claimants now sued the defendants for substantial discomfort and inconvenience to members
conversion. of the public using a footpath. The High Court ruled
that the defendant was liable in public nuisance.
Held – as involuntary bailees of goods, the defendants
The defendant had control of the bridge and the
had acted reasonably in returning them, as they be-
means to prevent pigeons from roosting under the
lieved, to the claimants, by a trustworthy messenger.
bridge. The claimant was entitled to recover its reason-
They had not committed conversion.
able costs in putting things right but in the absence
Comment An honest defendant was also held not liable of damage to its property it had no right to a claim in
in conversion in Marcq v Christie Manson & Woods Ltd private nuisance.
.. ..
EL_Z02.qxd 3/26/07 10:58 AM Page 856
Castle v St Augustine’s Links Ltd and Another – that the claim in negligence failed as there was no
372
(1922) 38 TLR 615 evidence to show that the driver had not acted
On 18 August 1919, the claimant was driving a taxicab reasonably in the circumstances. The claim in nuis-
from Deal to Ramsgate when a ball played by the ance also failed, for although a nuisance had been
second defendant, a Mr Chapman, from the thirteenth created, the injury suffered resulted solely from the
tee on the golf course, which was parallel with the negligence of the motorcyclist himself. Of more
Sandwich Road, struck the windscreen of the taxicab. importance than the actual decision are the com-
In consequence, a piece of glass from the screen ments made in the Court of Appeal regarding the
injured the claimant’s eye and a few days later he had relationship between negligence and nuisance in
to have it removed. He then brought this action. terms of fault. See in particular Edmund Davies, LJ,
who said: ‘But if an obstruction be created, here too,
Held – the claimant succeeded. Judgment for £450
in my judgment, fault is essential to liability in the
damages was given by Sankey, J. The proximity of
sense that it must appear that a reasonable man
the hole to the road constituted a public nuisance.
would be bound to realize the likelihood of risk to
Compare Bolton v Stone [1951] AC 650, where cricket
highway users resulting from the presence of the
balls had been hit out of the ground and into the
obstructing vehicle on the road.’
highway six to 10 times in 35 years but had injured
nobody.
Nuisance: utility or benefit of activity no defence:
Held – no nuisance. See also Miller v Jackson [1977] 3 nor is coming to the nuisance
WLR 20, where the Court of Appeal held that the
public interest, which requires young people to have
375 Bliss v Hall (1838) LJ CP 122
the benefit of outdoor games, may be held to
outweigh the private interest of neighbouring house- The defendant carried on the trade of a candle-maker
holders who are the victims of sixes landing in their in certain premises near to the dwelling house of the
gardens so that it would be impossible to use the claimant and his family. Certain ‘noxious and foul
garden when cricket was being played. Thus, no injunc- smells’ issued from the defendant’s premises and the
tion was granted, even though the sportsmen were claimant sued him for nuisance. The defence was
held to be guilty of both nuisance and negligence. that, for three years before the claimant occupied
Comment In Kennaway v Thompson (1980) the Court of the dwelling house in question, the defendant had
Appeal refused to follow this approach on the matter of exercised the trade complained of in this present
an injunction and said in effect that a court ought not to establishment.
refuse an injunction if the tort is established merely Held – this was no answer to the complaint and judg-
because there is benefit to a section of the public. ment was given for the claimant.
Comment In Miller v Jackson [1977] 3 WLR 20 the Court
373 Tarry v Ashton (1876) 1 QBD 314 of Appeal decided that it was no defence to the claim in
nuisance that the cricket ground only became a nuisance
A lamp projected from the defendant’s premises over
when the claimant built a house close by it.
the highway. It fell and injured the claimant, who
then sued the defendant in respect of his injuries.
The defendant had previously employed an inde- 376 Adams v Ursell [1913] 1 Ch 269
pendent contractor, who was not alleged to be incom-
petent, to repair the lamp and it was because of the The claimant was a veterinary surgeon and he pur-
negligence of that contractor that the lamp fell. Even chased a house in 1907 for £2,370. In November 1912,
so, the defendant was held liable and the decision sug- the defendant opened a fried fish shop at premises
gests that there is strict liability in respect of injuries adjoining the claimant’s house. Very soon after the
caused by artificial projections over the highway. commencement of the business, the claimant’s house
was permeated with the odour of fried fish, and the
vapour from the stoves filled the rooms ‘like fog or
374 Dymond v Pearce [1972] 1 All ER 1142
steam’.
A lorry was left parked on a road subject to a 30 mph Held – an injunction would be granted because the
speed limit with its lights on beneath a street lamp. defendant’s activities materially interfered with the
The claimant collided with the vehicle and suffered ordinary comfort of the claimant and his family; and
injury. He sued the defendants alleging negligence it did not matter that the shop was in a large working-
and nuisance. It was held – by the Court of Appeal class district and, therefore, supplied a public need.
..
EL_Z02.qxd 3/26/07 10:58 AM Page 857
Dunton v Dover District Council, The Times, for nuisance and negligence for cracks in his house
377
31 March 1977 resulting from trees planted by the Council in soil
which to the Council’s knowledge was of medium
The Council provided a play area for children of a hous-
shrinkability.
ing estate on grazing land at the rear of the claimant’s
hotel. The playground was not fenced and there was (iii) Nuisance emanating from low flying aircraft was the
no restriction on the age of the children using it. The source of a case entitled Dennis v Ministry of Defence,
claimant suffered noise and inconvenience and was The Times, 6 May 2003. Harrier squadrons trained at RAF
Wittering. The claimant’s property was adjacent to the
awarded £200 damages and a continuing injunction
base. Aircraft flew at low altitudes and frequently over
against the Council that the playground should only
the claimant’s property when landing. The claimant
be open between 10 am and 6.30 pm to children
alleged that this constituted a nuisance at common law
under 12 years of age.
and an infringement of his human rights under Art 8 of
the Convention (right to respect for private and family
Nuisance: modes of annoyance life). The High Court found for the claimant on both
grounds but would not grant an injunction to stop the
378 Christie v Davey [1893] 1 Ch 316 flying because this was in the public interest.
Furthermore, the Harrier training was scheduled to end
The claimant was the occupier of a semi-detached some nine years after the date of the proceedings.
house, and she and her daughter gave pianoforte, However, an award of damages would be made and this
violin and singing lessons in the house, four days a would satisfy the infringements in terms of nuisance at
week for 17 hours in all. There was also practice of common law and breach of human rights. The award was
music and singing at other times, and occasional for capital loss, loss of amenity and loss of commercial
musical evenings. The defendant, a woodcarver and a opportunities. Damages of £950,000 were awarded. The
court stated that the defendant had not acquired the
versatile amateur musician, occupied the adjoining
right to commit any nuisance by prescription because
portion of the house, and he found the activities of
the claimant had neither consented to nor acquiesced in
the claimant and her family annoying. In addition
the nuisance.
to writing abusive letters, he retaliated by playing
concertinas, horns, flutes, pianos and other musical
instruments, blowing whistles, knocking on trays or 379 Hubbard v Pitt [1975] 3 All ER 1
boards, hammering, shrieking or shouting, so as
to annoy the claimant and injure her household’s The defendants picketed in the road outside the
activities. offices of the claimant estate agents to protest against
a particular property development. An interlocutory
Held – what the claimant and her family were doing
injunction was granted to restrain them from doing
was not an unreasonable use of the house, and could
so. The Court of Appeal held – dismissing their appeal
not be restrained by the adjoining tenant. However,
– (a) that the original ground for granting the injunc-
the adjoining tenant was himself restrained from
tion, namely, that street picketing other than in
making noises to annoy the claimant, the court being
furtherance of a trade dispute was unlawful, was
satisfied that such noises had been made wilfully for
correct; (b) that the balance of convenience required
the purpose of annoyance.
an injunction to be issued there being a serious issue
Comment (i) It was held in Khorasandjian v Bush [1993] to be tried.
3 WLR 476 by the Court of Appeal that harassment
Comment As regards what is lawful picketing in a trade
by unwanted telephone calls was actionable as a private
dispute, s 15(1) of the Trade Union and Labour Relations
nuisance. The claimant alleged that the defendant’s
Act 1974 (see now s 220 of the Trade Union and Labour
unwanted telephone calls were causing her great
Relations (Consolidation) Act 1992) provides: ‘It shall
distress. A court order restraining the defendant
be lawful for a person in contemplation or furtherance
from ‘using violence or harassing, pestering or commun-
of a trade dispute to attend – (a) at or near his own place
icating with’ the claimant was affirmed by the Court of
of work, or (b) if he is an official of a trade union, at or
Appeal.
near the place of work of a member of that union whom
The decision is founded in private nuisance and does
he is accompanying and whom he represents, for the
not involve the creation of a new tort, i.e. harassment.
purpose only of peacefully obtaining or communicating
For a situation where there was public nuisance, see R v
information, or peacefully persuading any person to
Johnson (Anthony Thomas) (1996).
work or abstain from working.’ This provision would not
(ii) In Paterson v Humberside County Council, The Times, appear to provide a defence if pickets approached and
19 April 1995 the claimant successfully claimed damages stopped vehicles.
.. ..
EL_Z02.qxd 3/26/07 10:58 AM Page 858
Nuisance: duration of offending acts (ii) In Christie v Davey (1893) (see Case 378) also, North, J
took into account the malice of the defendant by saying
British Celanese Ltd v A H Hunt (Capacitors) Ltd
380 that the noise was ‘made deliberately and maliciously for
[1969] 2 All ER 1252
the purpose of annoying the [claimant]’.
The defendants allowed metal foil to escape from
their land and foul the bus bars of overhead electric Nuisance: act need not cause ill-health or diminish
cables. The claimants lost power and their machines the value of property
were clogged up and time and material wasted.
Held, by Lawton, J: 382 Bone v Seale [1975] 1 All ER 787
(a) the defendants were not liable under Rylands v
Over a period of 12 1/ 2 years smells coming from
Fletcher, because there was no non-natural use of
a neighbouring pig farm owned by the defendant
land;
had caused a nuisance to properties owned by the
(b) the defendants owed a duty of care to the
claimant who sought an injunction restraining the
claimants and could be liable in negligence –
nuisance and damages. The judge found that no
the claimants had a proprietary interest in the
diminution in the value of the properties had resulted
machines which were damaged and could recover
but granted an injunction and awarded over £6,000
loss flowing from that – pure economic loss was
damages. The defendants appealed, saying, amongst
not involved;
other things, that the award was too high. It was held
(c) the defendants were liable in nuisance – an
– by the Court of Appeal allowing the appeal against
isolated happening such as this could create an
the award – that by drawing a parallel with loss of
actionable nuisance and the claimants were
sense of smell as a result of personal injury the award
directly and foreseeably affected.
was erroneous and £1,000 for the claimant would be
substituted.
Nuisance: effect of malice or evil motive
Hollywood Silver Fox Farm Ltd v Emmett [1936] Nuisance: who can sue? who can be sued?
381
2 KB 468
The claimants were breeders of silver foxes and erected 383 Malone v Laskey [1907] 2 KB 141
a notice board on their land inscribed: ‘Hollywood
Silver Fox Farm’. The defendant owned a neighbour- The defendants owned a house which they leased to
ing field, which he was about to develop as a building Witherby & Co, which sublet it to the Script
estate, and he regarded the notice board as detrimental Shorthand Company. The claimant’s husband was
to such development. He asked the claimants to employed by the latter company, and was allowed to
remove it, and when this request was refused, he sent occupy the house as an emolument of his employ-
his son to discharge a 12-bore gun close to the claim- ment. A flush cistern in the lavatory of the house was
ants’ land, with the object of frightening the vixens unsafe, the wall brackets having been loosened by the
during breeding. The result of this activity was that vibration of the defendants’ electric generator next
certain of the vixens did not mate at all, and others, door. The claimant told Witherby & Co of the
having whelped, devoured their young. The claimant situation, and it communicated with the defendants
brought this action alleging nuisance, and the defence who sent two of their plumbers to repair the cistern
was that Emmett had a right to shoot as he pleased on gratuitously. The work was carried out in an improper
his own land. and negligent manner, and four months later the
Held – an injunction would be granted to restrain claimant was injured when the cistern came loose.
Emmett. His evil motive made an otherwise innocent The claimant sued the defendants (a) in nuisance, and
use of land a nuisance. (b) in negligence.
Comment (i) It seems at first sight difficult to reconcile

Held – there was no claim in nuisance against the
the above case with Bradford Corporation v Pickles defendants. The claimant was not their tenant, and in
(1895), see Chapter 20. The difference probably is in the nuisance the tenant is the person to sue, not other
fact that Hollywood Silver Fox Farm v Emmett was an persons present on the premises, though such persons
action for nuisance by noise, so that the defendant’s may have a claim where the nuisance is a public
motive was relevant in establishing the tort. In Bradford nuisance. Further, there was no claim in negligence,
Corporation v Pickles, the action was really one for inter- because the defendants owed no duty of care: first,
ference with a servitude or right over land, and motive because there was no contractual relationship; sec-
was not relevant in establishing the rights of the parties. ond, because the defendants did not undertake any
..
EL_Z02.qxd 3/26/07 10:58 AM Page 859
duty towards the claimant. They were under no obli-

387 Smith v Scott [1972] 3 All ER 645
gation to carry out repairs but sent their plumbers
merely as a matter of grace. This was a voluntary act
The local authority had placed in an adjoining house
and was not in any sense the discharge of a duty. The
to the claimant’s a family which it knew was likely to
defendants were not in occupation of the premises
cause a nuisance, but on conditions of tenancy which
and had not invited the claimant to occupy them.
expressly prohibited the commission of such. These
Comment (i) The case still represents the law regarding tenants had a large and unruly family and their con-
nuisance. Regarding the claim for negligence it was duct was, in the words of Pennycuick, V-C, ‘altogether
overruled in Billings v Riden [1958] AC 240, where it was intolerable both in respect of physical damage and
held that there may be liability in negligence, where noise’. The claimant and his wife, an elderly couple,
premises are left in a dangerous condition by workmen found it impossible to live next door and moved
so that injury results, even though the injured person is away. Notwithstanding protests on the part of the
not the occupier but is a visitor to the premises. claimant, the local authority took no effective steps to
(ii) The Khorasandjian case (see p 491) should be noted control the unruly family or to evict them. It was held
here. The claimant, aged 18, received the calls at her by Pennycuick, V-C, that, whatever the precise tests
mother’s home in which the claimant had no proprietary might be, it was impossible to apply the exception
interest. Nevertheless, the Court of Appeal said she rendering a landlord liable for his tenants’ acts in the
could sue for private nuisance. Dillon, LJ said it would be present case. The exception was not based on cause
ridiculous to regard the law of private nuisance by and probable result apart from express or implied
harassing telephone calls to be actionable only where the authority. The property had been let on conditions
recipient has a freehold or leasehold interest in the of tenancy which expressly forbade the commission
premises at which they were received. of a nuisance, and it would not be legitimate to say
that the local authority had authorised the nuisance.
384 Wilchick v Marks and Silverstone [1934] 2 KB 56 It should also be noted that the court held that the
rule in Rylands v Fletcher could not be applied and
Landlords who had let premises with a defective that the rights and liabilities of landowners had
shutter, and had expressly reserved the right to enter already been determined by the law and it was not
the premises to do repairs, were held liable along with open to the court to reshape those rights and liabilities
their tenant, to a passer-by injured by the shutter. by reference to the concept of duty of care. Thus the
defendant was not liable in negligence. On the matter
of Rylands v Fletcher liability, Pennycuick, V-C said:
385 Mint v Good [1951] 1 KB 517
The rule in Rylands v Fletcher was applied in
Landlords were held liable to the minor claimant who Attorney-General v Corke against a defendant who
was injured when a wall on the premises, which they brought caravan dwellers on to his land as licensees
had let, collapsed on to the highway. They had not but so far as counsel has been able to ascertain the
reserved the right to enter to do repairs, but the Court rule has never been sought to be applied against
of Appeal stated that such a right must be implied, a landlord who lets his property to undesirable
because the premises were let on weekly tenancies tenants and I do not think it can be properly
and it was usual to imply a right to enter to do repairs applied in such a case. The person liable under the
in such tenancies. rule in Rylands v Fletcher is the owner or controller
of the dangerous ‘thing’, and this is normally the
occupier and not the owner of the land. . . . A land-
386 Harris v James (1876) 45 LJQB 545
lord parts with possession of the demised property
A landlord was held liable for the nuisance created by in favour of his tenant and could not in any sense
his tenant’s blasting operations at a quarry because he known to the law be regarded as controlling the
had let the property for that purpose. The tenant, tenant on property still occupied by himself. I should
therefore, inevitably created a nuisance. respectfully have thought that Attorney-General v
Corke could equally well have been decided on the
Comment In Tetley v Chitty [1986] 1 All ER 663, a local basis that the landowner there was in possession of
authority granted a seven-year lease to a go-kart club. T the property and was himself liable in nuisance for
and others, who were ratepayers living near the track, the acts of his licensees.
obtained an injunction against the Council to prevent the
continuance of the nuisance by noise. Damages were an Comment It should be noted that in O’Leary v Islington
inadequate remedy. London Borough Council, The Times, 5 May 1983 it was
.. ..
EL_Z02.qxd 3/26/07 10:58 AM Page 860
decided by the Court of Appeal that there was no pipe became blocked and the appellant’s garden was
implied term in a tenancy agreement obliging landlords flooded. He claimed damages from the college on the
to enforce a tenant’s agreement not to cause nuisance ground that the pipe was a nuisance.
to neighbours who were also their tenants, and the
Held – by the House of Lords – that the college was
appropriate remedy for aggrieved tenants was to bring
liable because it appeared that the college should
an action in tort against the tenant causing the nuisance.
have known about the pipe and realised the risk.
Furthermore, it had adopted the nuisance by using
388 Brew Brothers v Snax (Ross) [1969] 3 WLR 657 the pipe to drain its land.
In June 1965, the freehold owners of premises leased Comment (i) This case was applied in Page Motors v
Epsom and Ewell Borough Council (1981) 80 LGR 337
them for a term of 14 years. The lease contained
where a site on an industrial estate was leased to a
covenants by the tenants regarding repairs, payment
firm for the sale and repair of motor vehicles but was
of maintenance expenses and viewing by the land-
occupied by gypsies who caused a nuisance. The firm
lords. In November 1966, one of the walls of the
claimed damages against the Council for the nuisance in
premises tilted towards the neighbouring premises the years 1973 until 1978, by which time the authorised
which belonged to the claimant. It was shored up but gypsy caravans had all left the site. It was held by the
caused an obstruction for 18 months. It appeared that Court of Appeal that the Council was liable because it
the reason why the wall had tilted was the seeping of had adopted the nuisance by failing to take steps to
water from certain drains and the removal of a tree by move the gypsies on. Furthermore, the claimant could
the tenants. The claimant sued the landlords and the recover damages for loss of business. This was a foresee-
tenants, and the landlords contended that the respons- able result of having a gypsy site nearby.
ibility fell entirely on the tenants under the lease. (ii) In this case Lord Wright said, ‘. . . it has been rightly
Held – by the Court of Appeal: established in the Court of Appeal that an occupier is not
prima facie responsible for a nuisance created without
(a) the tenants were responsible for repairing defects
his knowledge and consent. If he is to be liable a further
pointed out by the landlords but that the work condition is necessary, namely, that he had knowledge or
required on the wall was not within the terms of means of knowledge, that he knew or should have
the lease; known of the nuisance in time to correct it and obviate
(b) the landlords must be presumed to know the state its mischievous effects.’ The words in italics indicate that
of the premises and were liable for nuisance in knowledge in private nuisance may be constructive, as
that they allowed the state of affairs to continue; it can also be in public nuisance (see R v Shorrock (Peter)
(c) the tenants were jointly liable in nuisance in that [1993] 3 All ER 917).
they failed to put the matter right – this liability
was quite independent of their duties under the Nuisance: the remedy of injunction
lease.
390 Kennaway v Thompson [1980] 3 All ER 329
Nuisance: abatement
The defendants represented a club at which motor-
Sedleigh-Denfield v O’Callaghan and Others boat racing and water-skiing were carried on. In 1972
389
[1940] AC 880 the claimant moved into a house which she had had
One of the respondents (a college for training foreign built near to the lake on which the above activities
missioners) was the owner of property adjoining the were carried out, as they had been since the early
appellant’s premises in Mill Hill. On the boundary of 1960s. After the claimant moved in the nature of the
the property owned by the college there was a ditch club’s activities increased in frequency and noise
and it was admitted that the ditch also belonged to because large powerboats took part in international
the college. About 1934, when a block of flats was meetings which were preceded by periods of noisy
erected on the western side of the appellant’s pre- practice. The claimant sought damages for nuisance
mises, the county council had laid a pipe and grating and an injunction but Mais, J awarded her damages
in the ditch but no permission was obtained and no only – £1,000 for the past nuisance and £15,000 in
steps were taken to inform the college authorities of respect of future nuisance, since he regarded it as
the laying of the pipe. However, the presence of the oppressive to issue an injunction to prevent the club
pipe became known to a member of the college who from continuing its activities on the ground that this
was responsible for cleaning out the ditch twice a was contrary to public interest. The Court of Appeal
year. The Council had not put a guard at the entrance allowed the claimant’s appeal and awarded an injunc-
to the pipe to prevent its being blocked by debris. The tion stating that the public interest should not prevail
..
EL_Z02.qxd 3/26/07 10:58 AM Page 861
over the private interest of a person affected by a the High Trees case (see Chapter 10), since there was
continuing nuisance, and accordingly the claimant no representation by the landlords intended to affect
was entitled to an injunction under which the club the legal relations of the parties. There was a special
was ordered to curtail its activities, restricting noisy relationship between the parties which might have
meetings to a limited number of occasions. created a duty of care under the principle of Hedley
Byrne (see Case 142) but that duty was not to give
Nuisance: defences: prescription negligent information. The failure to give information
which amounted to an omission was not within the
391 Sturges v Bridgman (1879) 11 Ch D 852 principle of Hedley Byrne.
Comment A further example, this time of liability by

For more than 20 years the defendant, a confectioner, omission, occurred in John D Wood & Co v Knatchbull
had used large pestles and mortars in his premises in [2003] 08 EG 131. The claimants sued for their commis-
Wigmore Street. Then the claimant, a physician in sion on a sale of the defendant’s property. He counter-
Wimpole Street, built a consulting room in his garden claimed for damages for the fact that the claimants had
abutting on the confectioner’s premises. The noise not, before sale, advised him of an increase in the selling
and vibration made by the confectioner’s activities prices of properties near to his in Notting Hill, London.
interfered materially with the claimant’s practice. He The claimants advised an asking price of £1.5 million and
sued for an injunction to prevent the offensive the property was bought for that price ‘subject to con-
activities and the defence was that the defendant had tract’. Before contracts were signed another property
acquired a prescriptive right to commit the nuisance. close to the defendant’s was put on the market at £1.95
million. Sign boards were not allowed in the area so that
Held – though it was possible to acquire a right, the
the defendant was not aware of this attempt to sell. The
defendant had not done so, because the nuisance
claimants did, however, become aware of it but allowed
only arose when the consulting room was built.
the defendant to enter into a binding contract at £1.5
million. Damages for loss of a chance to sell at a higher
Negligence: liability for omissions price were awarded to the the defendant, i.e. £120,000
on the basis of a 66 per cent chance of finding a buyer at
Argy Trading Development Co Ltd v Lapid
392 £1.7 million. Allowances were made and deducted for
Developments Ltd [1977] 1 WLR 444
interim use by the defendant and the increased commis-
In an under-lease for six years from 19 October 1971 sion he would have had to pay. The judge said that it was
the tenant agreed to insure against fire for the full an implied term of the of agency contract with a concurrent
value of the premises, including two years’ rent, and duty of care in tort that an estate agent should exercise
in the event of loss or damage by fire to reinstate the the skill and care of a reasonably competent member of
premises. In fact, the landlords insured the premises his or her profession. There was a continuing duty so
under a block policy covering other property as well long as the agency lasted to make relevant disclosures.
and the tenant paid the landlords the appropriate
proportion of the premium. In 1973 there was a Negligence: economic loss recoverable by way of
change in the control of the landlords and the land- parasitical damages
lords did not renew the block policy but failed to
Weller & Co v Foot and Mouth Disease Research
notify the tenant of its cancellation. In 1973, some 393
Institute [1965] 3 All ER 560
months after the policy had lapsed, the premises were
gutted by fire. Neither party wanted the premises, The defendants carried out experiments on their land
which were scheduled for redevelopment, to be concerning foot and mouth disease. They imported
reinstated. The landlords undertook not to enforce an African virus which escaped and infected cattle in
the covenant to reinstate but the tenant wished to the vicinity. As a consequence, two cattle markets in
recover damages from the landlords on the ground the area had to be closed and the claimants, who were
that it had been deprived of the insurance moneys, auctioneers, sued for damages for loss of business.
which it would otherwise have received, by the Held – by Widgery, J – so far as negligence was con-
landlords’ failure to continue the insurance or to cerned, the defendants owed no duty of care to the
notify the tenant of its cancellation so that it had no claimants who were not cattle owners, and had no
opportunity to take out the policy. It was held – by proprietary interest in anything which could be
Croom-Johnson, J – that there was no implied term damaged by the virus. Furthermore, the defendants
that the landlords would maintain their block policy owed no absolute duty to the claimants under Rylands
or not cancel it without notifying the tenant. Nor was v Fletcher (1868) because the claimants had no interest
there any equitable estoppel such as was applied in in any land to which the virus could have escaped.
.. ..
EL_Z02.qxd 3/26/07 10:58 AM Page 862
Comment Had a duty of care been found, the liability consequential on foreseeable physical injury or
in this case would have been endless. The closing of the damage to property.
market no doubt affected also the takings of cafés, car
parks, shops, and public houses, amongst others. It would Comment The power shut-off lasted for some time and
not seem likely that the courts are yet ready to extend during that time the claimants would normally have
liability in this way. processed four more ‘melts’; because they had been
unable to do so, they had lost the profits they would
have made on them. However, this was regarded as eco-
SCM (United Kingdom) Ltd v W J Whittall & nomic loss not consequent upon the physical damage
394
Son Ltd [1970] 3 All ER 245 and, therefore, what was recoverable was only the loss of
A workman employed by the defendants carrying profit on the melt which was actually interrupted by the
out construction work near the claimants’ factory, cut failure of electrical supplies.
into an underground electric cable so that the power
to the claimants’ factory failed. The claimants made Spartan Steel and Alloys Ltd v Martin & Co Ltd
395
typewriters and the lack of power caused molten [1972] 3 All ER 557
materials to solidify in their machines which were While digging up a road, the defendants’ employees
physically damaged. The machines had to be stripped damaged a cable which the defendants knew supplied
down and reassembled and production was brought the claimants’ factory. The cable belonged to the local
to a halt for seven-and-a-half hours. In the Court of electricity board and the resulting electrical power
Appeal the claimants limited their claim to damages failure meant that the claimants’ factory was deprived
in respect of the physical damage to the machines of electricity. The temperature of their furnace dropped
and the financial loss directly resulting from that and so metal that was in melt had to be poured away.
damage. This enabled the court to decide that the Furthermore, while the cable was being repaired the
claimants’ property had foreseeably been damaged by factory received no electricity so it was unable to
the defendants’ act so that the claimants could function for some 14 hours. The Court of Appeal,
recover for damage to the machines and the con- however, allowed only the claimants’ damages for
sequential financial loss flowing from it. Nevertheless, the spoilt metal and the loss of profit on one ‘melt’.
the court went on to consider economic loss in the They refused to allow the claimants to recover their
context of negligence and dealt in effect with the loss of profit which resulted from the factory being
position as it might have been if the power cut had unable to function during the period when there was
stopped production without damaging the machines. no electricity. Lord Denning, MR chose to base his
The following aspects of the judgments are important: decision on remoteness of damage rather than the
Per Lord Denning, MR: absence of any duty of care to avoid causing eco-
In actions of negligence, when the [claimant] has nomic loss. However, he did make it clear that public
suffered no damage to his person or property, but policy was involved. In the course of his judgment
has only sustained economic loss, the law does not he said:
usually permit him to recover that loss. Although At bottom I think the question of recovering
the defendants owed the [claimants] a duty of care, economic loss is one of policy. Whenever the courts
that did not mean that additional economic loss draw a line to mark out the bounds of duty, they do
which was not consequent on the material damage so as a matter of policy so as to limit the respons-
suffered by the plaintiffs [claimants] would also be ibility of the defendant. Whenever the courts set
recoverable; in cases such as Weller & Co v Foot and bounds to the damages recoverable – saying that
Mouth Disease Research Institute (1965) [see above], they are, or are not, too remote – they do it as a
and Electrochrome Ltd v Welsh Plastics Ltd (1968) [see matter of policy so as to limit the liability of the
above] the [claimants] did not recover for economic defendant.
loss because it was too remote to be a head of
damage, not because there was no duty owed to the Negligence: economic loss: injury to person or
[claimants] or because the loss suffered in each case property not always essential
was not caused by the negligence of the defendants.
Junior Books Ltd v Veitchi Co Ltd [1982]
Per Winn, LJ: 396
3 All ER 201
Apart from the special case of imposition of liability Junior Books ( J) owned a building. Veitchi ( V ) were
for negligently uttered false statements, there is flooring contractors working under a contract for the
no liability for unintentional negligent infliction main contractor who was doing work on the building.
of any form of economic loss which is not itself There was no privity of contract between J and V. It
..
EL_Z02.qxd 3/26/07 10:58 AM Page 863
was alleged by J that faulty work by V left J with an Third Parties) Act 1999. There is no problem about
unserviceable building and high maintenance costs so recovering economic loss in contract claims. A great
that J’s business became unprofitable. The House of many of them are precisely for that (see further
Lords decided in favour of J on the basis that there Chapter 10).
was a duty of care. V were in breach of a duty owed to
J to take reasonable care to avoid acts or omissions, Negligence: breach of duty; behaviour as a
including laying an allegedly defective floor, which reasonable man
they ought to have known would be likely to cause Daniels v R White and Sons Ltd [1938]
the owners economic loss of profits caused by the 397
4 All ER 258
high cost of maintaining the allegedly defective floor
The claimants, who were husband and wife, sued the
and, so far as J were required to mitigate the loss by
first defendants, who were manufacturers of mineral
replacing the floor itself, the cost of replacement was
waters, in negligence. The claimants had been injured
the appropriate measure of liability so far as this
because a bottle of the first defendants’ lemonade,
loss was concerned. The standard of care required is
which they had purchased from a public house in
apparently the contractual duty, and so long as the
Battersea, contained carbolic acid, presumably from
work is up to contract standard, the defendant in a
the bottle-washing plant. Evidence showed that the
case such as this cannot be in breach of his duty. Lord
manufacturers took all possible care to see that no
Fraser of Tullybelton said:
injurious matter got into the lemonade. It was held
Where a building is erected under a contract with a that the manufacturers were not liable in negligence
purchaser, then provided the building, or part of it, because the duty was not one to ensure that the
is not dangerous to persons or to other property goods were in perfect condition but only to take
and subject to the law against misrepresentation, reasonable care to see that no injury was caused to the
I can see no reason why the builder should not be eventual consumer. This duty had been fulfilled.
free to make with the purchaser whatever contractual
arrangements about the quality of the product the
purchaser wishes. However jerry-built the product, 398 Hill v J Crowe (Cases), The Times, 19 May 1977
the purchaser would not be entitled to damages
from the builder if it came up to the contractual The claimant was injured when he stood on a pack-
standards. ing case whose boards collapsed causing him to fall.
It was held – by MacKenna, J – that the case had been
Comment (i) The effect of the decision in Junior Books badly made and the manufacturers owed a duty of
was whittled away in Simaan General Contracting Co care to the claimant. They could not escape liability
v Pilkington Glass Ltd [1988] 1 All ER 345. The claimant by showing that they had a good system of work and
(S Ltd) was the main contractor to construct a building in
proper supervision. Daniels v White and Sons (1938),
Abu Dhabi for a sheikh. The erection of glass walling
above, was not followed.
together with supplying the glass was subcontracted to
an Italian company (Feal). Feal bought the glass from the
defendant (P Ltd). The glass units should have been a Greaves & Co (Contractors) v Baynham Meikle &
399
Partners [1974] 3 All ER 666
uniform shade of green but some were various shades of
green and some were red. The sheikh did not pay S Ltd. It The claimant, a builder, was instructed to build a
chose to sue P Ltd in tort rather than Feal in contract for warehouse and sub-contracted its structural design to
its loss, i.e. the money the sheikh was withholding. the defendant firm of consultant structural engineers.
Held – by the Court of Appeal – since there was no physical B knew or, by reason of the relevant British Standard
damage, this was purely a claim for economic loss and P Code of Practice, ought to have known, that as the
Ltd had no duty of care. S Ltd’s claim failed. Feal would warehouse was to carry loaded trucks there was a
have been liable under the Supply of Goods and Services danger of vibration. The design was competent but
Act 1982 (see Chapter 14) but for some reason was not inadequate for the purpose of carrying the trucks
sued. Economic loss can be recovered in contract. and it was held – by Kilner Brown, J, allowing the
Dillon, L J said of Junior Books that it had ‘been the claimant’s claim for breach of duty of care and breach
subject of so much analysis and discussion that it cannot of an implied term of the contract – that the duty of
now be regarded as a useful pointer to any development the defendant firm was not simply to exercise the care
of the law. It is difficult to see that future citation from and skill of a competent engineer which it had done,
Junior Books can ever serve any useful purpose.’ but to design a building fit for its purpose in the
(ii) It is now possible to use the law of contract to deal light of the knowledge which the firm had as to its
with third-party claims under the Contracts (Rights of proposed use.
.. ..
EL_Z02.qxd 3/26/07 10:58 AM Page 864
care of themselves. The Board had not fulfilled this

400 Paris v Stepney Borough Council [1951] AC 367
duty and was liable in damages for negligence which
The claimant was employed by the defendant on were assessed at £3,000 general damages, and £2,250
vehicle maintenance. He had the use of only one eye special damages, Haley’s retirement being accelerated
and the defendant was aware of this. The claimant by four years.
was endeavouring to remove a bolt from the chassis
of a vehicle, and was using a hammer for the purpose, Watt v Hertfordshire County Council [1954]
402
2 All ER 368
when a chip of metal flew into his good eye so that he
became totally blind. The claimant sued for damages A fireman was injured by a heavy jack which slipped
from his employer for negligence in that he had not while being carried in a lorry which was going to the
been supplied with goggles. The defendant showed scene of an accident. The lorry was not equipped to
in evidence that it was not the usual practice in trades carry such a heavy jack but it was required to free a
of this nature to supply goggles, at least where the woman who had been trapped in the wreckage. No
employees were men with two good eyes. The trial proper vehicle was available and it was held that the
judge found for the claimant, but the Court of Appeal fire authority was not liable.
reversed the decision on the ground that the claimant’s
disability could be relevant only if it increased the 403 Latimer v AEC Ltd [1953] 2 All ER 449
risk, i.e. if a one-eyed man was more likely to get a
splinter in his eye than a two-eyed man. Having A heavy rainstorm flooded a factory and made the
found that the risk was not increased, it allowed the floor slippery. The occupiers of the factory did all they
appeal. The House of Lords reversed the judgment of could to get rid of the water and make the factory
the Court of Appeal, holding that the gravity of the safe, but the claimant fell and was injured. He alleged
harm likely to be caused would influence a reasonable negligence in that the occupiers did not close down
employer, so that the duty of care to a one-eyed the factory.
employee required the supply of goggles, and Paris, Held – the occupiers of the factory were not liable.
therefore, succeeded. The risk of injury did not justify the closing down of
the factory.
Haley v London Electricity Board [1964]
401
3 All ER 185 Negligence: res ipsa loquitur
The appellant, Haley, a blind man who was on his
way to his work as a telephonist, tripped over an 404 Easson v LNE Railway Co [1944] 1 All ER 246
obstacle placed by servants of the London Electricity
The claimant, a boy aged four years, fell through the
Board near the end of a trench excavated in the pave-
open door of a corridor train seven miles from its last
ment of a street in Woolwich. He fell and suffered an
stopping place. It was held that the defendants did
injury which rendered him deaf, and brought about
not have sufficient control over the doors for res ipsa
his premature retirement from his employment. The
loquitur to apply. In the course of his judgment,
guard was sufficient warning for sighted people but
Goddard, LJ said:
was by its nature inadequate to protect or warn the
blind. It consisted of a hammer hooked in the railings It is impossible to say that the doors of an express
and resting on the pavement at an angle of 30 corridor train travelling from Edinburgh to London
degrees, and Haley’s white stick, which he was properly are continuously under the sole control of the
using as a guide, did not encounter the obstacle railway company . . . passengers are walking up and
with the result that instead of being warned by it he down the corridors during the journey and get in and
fell over it. Evidence was given that about one in 500 out at stopping places. The fact that the door came
people were blind and there were 258 registered blind open could as well have been due to interference by
people in Woolwich, many of whom were capable of a passenger as to the negligence of the defendants’
walking in the streets alone, taking the normal pre- servants.
cautions that such blind persons were accustomed to
take. The House of Lords held, reversing the decision 405 Roe v Minister of Health [1954] 2 QB 66
of the Court of Appeal, that the London Electricity
Board was liable in negligence. Those engaged in Two patients in a hospital had operations on the
operations on the pavement or a highway must act same day. Both operations were of a minor character
reasonably to prevent danger to passers-by including and in each case nupercaine, a spinal anaesthetic,
blind people who must, however, also take reasonable was injected by means of a lumbar puncture. The
..
EL_Z02.qxd 3/26/07 10:58 AM Page 865
injections were given by a specialist anaesthetist, maxim res ipsa loquitur applied. In the course of his
assisted by the theatre staff of the hospital. The judgment, Erle, CJ said: ‘Where the thing is shown to
nupercaine had been contained in sealed glass be under the management of the defendant, or his
ampoules, stored in a solution of phenol. After the servants, and the accident is such as, in the ordinary
operations both patients developed symptoms of course of things, does not happen if those who have
spastic paraplegia caused by the phenol, which had the management use proper care, it affords reasonable
contaminated the nupercaine by penetrating almost evidence, in the absence of explanation by the
invisible cracks in the ampoules. In the event, both defendant, that the accident arose from want of care.’
patients became permanently paralysed from the waist
Comment This case was followed in Ward v Tesco Stores
down, and they now sued the defendants for negligence.
[1976] 1 All ER 219, where the Court of Appeal held that
Held – the defendants were vicariously liable for an accident which had occurred due to a spillage of
the negligence (if any) of those concerned with the yoghurt on a shop floor put an evidential burden upon
operations, but on the standard of medical knowledge the defendant shopowner to show that the accident did
in 1947, when the operations took place, those not occur through any want of care on its part. The
concerned were not negligent. The cracks in the defendant was not able to satisfy that burden and the
ampoules were not visible on ordinary examination, claimant succeeded.
and could not be reproduced even by deliberate
experiment. It was true that in 1954, when the case Pearson v North Western Gas Board [1968]
408
was brought, phenol used for disinfectant purposes 2 All ER 669
was tinted so that it might be seen on examination, The claimant’s husband was killed by an explosion of
but the case must be decided on medical knowledge gas which also destroyed her house. It appeared from
at the time when the operations were carried out. It the evidence that a gas main had fractured due to a
was also suggested that once the accident has been movement of earth caused by a severe frost. When
explained, there is no question of res ipsa loquitur the weather was very cold the defendants had men
applying. Nor does the maxim apply when many standing by ready to deal with reports of gas leaks,
persons might have been negligent. Denning, LJ but unless they received reports there was no way of
suggested that every surgical operation is attended predicting or preventing a leak which might lead to
by risks. Doctors, like the rest of us, have to learn by an explosion.
experience. Further, one must not condemn as negli-
Held – by Rees, J – assuming the principle of res ipsa
gence that which is only misadventure.
loquitur applied, the defendants had rebutted the pre-
Comment Although it is not certain what effect it would sumption of negligence and the claimant’s case failed.
have had on the above case, it is worth noting the more
modern standard of care put forward in Newell v Contributory negligence
Goldenberg (1995) and Bolitho (1997) (see p 558).
409 Jones v Lawrence [1969] 3 All ER 267

406 Byrne v Boadle (1863) 2 H & C 722
A boy aged seven years and three months ran out
The claimant brought an action in negligence alleging from behind a parked van across a road apparently
that, as he was walking past the defendant’s shop, a without looking in order to get to a fun-fair. He was
barrel of flour fell from a window above the shop and knocked down by Lawrence who was travelling on his
injured him. The defendant was a dealer in flour, but motor cycle at 50 miles per hour in a built-up area. The
there was no evidence that the defendant or any of his boy’s injuries adversely affected his school work and
servants were engaged in lowering the barrel of flour at he subsequently failed his eleven-plus examination.
the time. The defendant submitted that there was no In an action on his behalf for damages it was held – by
evidence of negligence to go to the jury, but it was held Cumming-Bruce, J – that:
that the occurrence was of itself evidence of negligence
sufficient to entitle the jury to find for the claimant in (a) his conduct was only that to be expected of a
the absence of an explanation by the defendant. seven-year-old child and could not amount to
contributory negligence;
Scott v London and St Katherine Docks Co (b) the failure to obtain a grammar-school place and
407
(1865) 3 H & C 596 the permanent impairing of his powers of con-
The claimant, a Customs officer, proved that when he centration affected his job attainment potential
was passing in front of the defendant’s warehouse six and were factors to be taken into account in
bags of sugar fell upon him. It was held that the assessing damages.
.. ..
EL_Z02.qxd 3/26/07 10:58 AM Page 866
866 SPECIFIC TORTS CASES 410 – 412B
Comment The matter is, however, one of fact in each the statutory order was to prevent the spread of dis-
case. Thus, in Minter v D & H Contractors (Cambridge) ease, not to prevent animals from being drowned.
Ltd, The Times, 30 June 1983, the defendants had been
Comment A similar point is raised in Lane v London
negligent in leaving a pile of hard core in the road, into
Electricity Board (1955) (see Chapter 6).
which the claimant, aged nine, rode his cycle. He was
found to be guilty of contributory negligence to the
extent of 20 per cent. The judge said that this claimant,
Product liability: illustrative case law
who on the evidence was a ‘good rider’, could not be Abouzaid v Mothercare (UK) Ltd [2000]
412a
said to come into the category of minors who were All ER (D) 2436
incapable of any contributory negligence. This case is of interest because it deals with product
liability for older products. The claim related to a
410 Oliver v Birmingham Bus Co [1932] 1 KB 35 fleecy-lined sleeping bag for a child’s pushchair sold
by the defendant company in 1990. While helping to
A grandfather was walking with his grandchild aged fix the bag on to his brother’s pushchair, one of the
four, when a bus approached quickly and without elasticated straps flew out of the claimant’s hand and
warning. The grandfather, being startled, let go of the caught the claimant in the eye so that he ended up
child’s hand and the bus struck the child. It was held with no central vision. The claimant was 12 years old
that the damages awarded to the child should not be at the time. When the matter eventually reached the
reduced to take account of the grandfather’s negligence. Court of Appeal it was decided that the defendant was
not negligent at common law. There was no know-
Negligence: actions based on breach of ledge of the defect at the time of sale. Nevertheless,
statutory duty the product was defective under s 3 of the Consumer
Atkinson v Newcastle and Gateshead Protection Act 1987 in that it did not provide the
411 level of safety that persons are generally entitled to
Waterworks Co (1877) LR 2 Ex D 441
expect in all the circumstances. This liability is strict
The claimant’s timber yard caught fire and was
and does not depend on negligence. There is, how-
destroyed, there being insufficient water in the mains
ever, the possibility of raising the development risk
to put it out. The defendant was required by the
defence. This was done by the defendant in this case.
Waterworks Clauses Act 1874, to maintain a certain
It stated in particular that there had been no accidents
pressure of water in its water pipes, and the Act pro-
reported to the relevant government agencies on the
vided a penalty of £10 for failure to keep the required
use of the straps. This certainly went to showing it was
pressure and 40s for each day during which the
not negligent. However, the s 3 defence being strict
neglect continued, the sums being payable to
was not affected by this. In addition, the Court of
aggrieved ratepayers. The claimant sued the defendant
Appeal did not accept the development risk defence.
for loss caused by the fire on the ground that it was in
There had been no developments between 1990 and
breach of a statutory duty regarding the pressure in
the present day in regard to tests and the defendant
the pipes.
could have tested the product in 1990 in exactly the
Held – that the defendant was not liable. The statute same way as currently. In the view of the court, the
did not disclose a cause of action by individuals for defendant had not used the available methods in
damage of this kind. It was most improbable that the 1990 to test the product and so was not able to plead
legislature intended the company to be a gratuitous the defence successfully. The claimant succeeded.
insurer against fire of all the buildings in Newcastle.
Bogle and Others v McDonald’s Restaurants Ltd
412b
412 Gorris v Scott (1874) LR 9 Exch 125 [2002] unreported
A group of claimants sued for personal injury caused
A statutory order placed a duty on the defendant to by the spillage of hot drinks served to them by the
supply pens of a specified size in those parts of a defendant. The claim was by way of a group litigation
ship’s deck occupied by animals. The defendant did order. The majority of claimants were children. The
not supply the pens, and sheep belonging to the issues before the High Court were whether the de-
claimant were swept overboard. The claimant sued for fendant was negligent in dispensing and serving hot
damages from the defendant for breach of statutory drinks at the temperature it did and whether the
duty. defendant was in breach of the Consumer Protection
Held – the claimant could not recover for his loss Act 1987. The most significant part of the claimants’
under breach of statutory duty, because the object of case was that the thermal cups in which the drinks
..
EL_Z02.qxd 3/26/07 10:58 AM Page 867
CASE 413 SPECIFIC TORTS 867
were served masked the actual temperature of the a duty of care to Candler because they had prepared
drink so that it was not allowed to cool and the drink allegedly negligent financial statements on the basis
container had to be opened to add sugar and creamer of which they knew Mr Candler might invest in the
before it could be consumed. There was also the con- company concerned; and the judgment of the House
tention that the drinks being served at between 75°C of Lords in Hedley Byrne & Co Ltd v Heller & Partners Ltd
and 95°C were served too hot and that a temperature [1963] 2 All ER 575, where a bank supplied an allegedly
of 70°C would have been more appropriate. The High negligent reference as to the creditworthiness of a
Court did not find the defendant negligent. There was company called Easipower which it knew would be
no evidence to show that serving the drinks at a lower used by Hedley Byrne as a basis for extending credit
temperature of 70°C would have caused less injury. to the company, which then went into liquidation.
The range of temperatures used by the defendant was A salient feature of both those cases, said Lord Bridge,
normal in the catering industry. Customers would be was that the defendant giving advice on information
assumed by the defendant to know that drinks would was fully aware of the nature of the transaction the
be served hot and the cups and lids were adequately claimant was contemplating, knew that the advice or
designed and made. information would be communicated to him, and
On the matter of liability under the 1987 Act, the knew that it was likely that the claimant would rely
judge ruled that the safety of the hot drinks involved on that advice or information in deciding whether or
met the public’s legitimate expectations as to safety not to engage in the transaction in contemplation.
generally. The public would expect the drinks to be The situation was quite different where the state-
served hot. The public would expect scalding to result ment was put into more or less general circulation
if there was a spillage. Therefore, serving the drinks in and might foreseeably be relied on by strangers for
the way the defendant had did not constitute a any one of a variety of different purposes which the
breach of the 1987 Act. maker of the statement had no specific reason to
anticipate.
Negligence: professional liability Lord Bridge felt that it was one thing to owe a
possibly wider duty of care to avoid causing injury to
Caparo Industries plc v Dickman and Others the person or property of others, but quite another to
413
[1990] 2 WLR 358 owe a similar duty to avoid causing others to suffer
The facts were, briefly, that Caparo, which already purely economic loss.
held shares in Fidelity plc, eventually acquired the His Lordship concluded that auditors of a public
controlling interest in the company. The group later company’s accounts owed no duty of care to mem-
alleged that certain purchases of Fidelity shares and bers of the public at large who relied on the accounts
the final bid were made after relying on Fidelity’s in deciding to buy shares in the company. And as a
accounts, which had been prepared by Touche Ross & purchaser of additional shares in reliance on the
Co, the third defendants. auditors’ report, the shareholder stood in no different
The accounts, Caparo alleged, were inaccurate and position from any other investing member of the
misleading in that an apparent pre-tax profit of some public to whom the auditor owed no duty.
£1.3 million should in fact have been shown as a loss Lord Oliver was concerned with establishing the
of £400,000. It was also alleged that, if the supposed purpose of an audit under the Companies Act 1985.
true facts had been known, Caparo would not have He went on to say that in enacting the statutory
made a bid at the price it did and might not have provisions Parliament did not have in mind the provi-
made a bid at all. sion of information for the assistance of purchasers of
The Court of Appeal decided that while Touche shares in the market, whether they were already the
Ross did not have a duty of care towards members of holders of shares or other securities or people with no
the public in regard to the Fidelity accounts, it did previous proprietary interest in the company.
owe a duty of care to Caparo because Caparo was The purpose for which the auditors’ certificate was
already a shareholder in Fidelity when it made the made and published was that of providing those
final purchase of shares and the bid. entitled to receive the report with information to
The two main judgments in the House of Lords pro- enable them to exercise the powers which their
vide an interesting contrast: Lord Bridge concentrates respective proprietary rights in the company con-
more on the case law and in particular on the dissent- ferred on them and not for the purposes of individual
ing judgment of Lord Denning in Candler v Crane, speculation with a view to profit.
Christmas [1951] 1 All ER 426, where Lord Denning The duty of care was one owed to the shareholders
thought that the defendant accountants should have as a body and not to individual shareholders.
.. ..
EL_Z02.qxd 3/26/07 10:58 AM Page 868
868 SPECIFIC TORTS CASE 414
Comment (i) The decision represents a further retreat capital of First Castle Electronics plc (FC). When the
from the judgment of Lord Wilberforce in Anns v Merton announcement was made, FC’s most recent published
London Borough Council [1977] 2 All ER 492. There was a financial statements were the reports and audited
view taken of that judgment that a person should owe a accounts for the years ended 31 January 1984 and
duty of care in negligence to anyone allegedly injured by 1985.
his conduct, including those suffering economic loss, On 17 December 1985, MC published a formal offer
unless there was any good reason or ground of public document which was addressed to FC shareholders.
policy to prevent the duty being imposed. More recently, Morgan Grenfell advised MC and Hill Samuel advised
and particularly in this case, the courts have shown that
FC. The directors of FC, acting on its behalf, sent their
there is a real need for proximity and so have gone a
shareholders a number of circulars. They were also
long way to reducing the fear of ever increasing poten-
issued as press releases by Hill Samuel and copies were
tial professional liability.
supplied to MC’s advisers.
It now seems that knowledge as to the user of the
Two days later, a circular was sent out by the
statement concerned and, seemingly, also as to the pur-
pose or probable purpose for which it will be used, is directors of FC, comparing MC’s profit record un-
required to establish the necessary proximity in these favourably with FC’s and recommending refusal of
cases where allegedly careless misstatements result in the bid. In subsequent circulars reference was made to
economic loss. It seems unlikely that there will now be the published financial statements, and one circular
any further movement towards foresight of the user and of 31 December 1985 stated that they could be
use which had begun to show itself in JEB Fasteners v inspected.
Marks Bloom & Co [1983] 1 All ER 583. An FC circular to its shareholders, issued on 24
(ii) Problems of causation continue to arise. In Galoo Ltd January 1986, forecast an increase in profits before tax
and Others v Bright Grahame Murray, The Times, in the year to 31 January 1986 of 38 per cent. A letter
14 January 1994, there were unproved allegations of from the auditors, Judkins, was included, saying that
negligence by the auditors in terms of the accounts of the profit forecast had been properly compiled.
two companies. These accounts, it was alleged, gave too Included also was a letter from Hill Samuel stating that
optimistic a view of the companies’ financial position, in its opinion the profit forecast had been prepared
thus allowing them to trade on to insolvency, causing after due and careful inquiry.
loss to various parties. The Court of Appeal held that On 29 January, MC increased its bid; on 31 January,
even if it were to be assumed that the unproven allega- FC’s board sent another letter to shareholders recom-
tions were true the claim against the auditors would fail. mending acceptance of that increased bid; on 14 Feb-
The accounts may have allowed the companies to exist ruary, the bid was declared unconditional; and on
and trade but a company’s existence is not the cause of 27 February, a further recommendation to accept the
its trading losses nor, for that matter, its profits. These bid was sent by FC to its shareholders.
depend upon many things including market forces for
Later, MC alleged that the financial statements
which the auditors are obviously not responsible.
(audited and unaudited) issued prior to the bid, the
(iii) The Caparo judgment has angered some in the profit forecast of 24 January, and the financial mate-
business world because investors have, in a sense, lost rial contained in the circulars and recommendation
their right to make investment judgments on the basis of
documents were prepared negligently and were mis-
the annual audited accounts. This is not really surprising
leading. MC asserted that if the true facts had been
because the annual accounts are in essence stewardship
known the bid would not have been made or com-
statements, i.e. how the directors have conducted the
pleted. MC issued a writ (now claim form) on 6 May
company’s business during the year covered by the
1987 joining as defendants Hill Samuel, Judkins, and
accounts. They are, by their nature, backward-looking
and not a suitable vehicle to help speculators to predict a FC’s chairman and board. It alleged that the board
future which is uncertain, nor are they intended to be. and the auditors were responsible for circulating the
‘Decision-usefulness’ is not the primary purpose of financial statements; that they and Hill Samuel were
annual accounts. The accounting statements in Morgan responsible for the profit forecast; that all of them
(see below) went much further. owed a duty of care to MC as a person who could
foreseeably rely on them; that the statements and
Morgan Crucible Co plc v Hill Samuel Bank Ltd forecasts were negligently prepared; and that MC
414
and Others, Financial Times Law Reports, relied on them in making and increasing its offer and
30 October 1990 thereby suffered heavy loss.
The crucial events in the case were as follows. On In dealing with the allegations and the House
6 December 1985, Morgan Crucible (MC) announced a of Lords judgment in Caparo, Lord Justice Slade said,
proposed unsolicited offer to acquire the entire share first, that in Caparo all of the representations relied on
..
EL_Z02.qxd 3/26/07 10:58 AM Page 869
CASE 415 SPECIFIC TORTS 869
had been made before an identified bidder had come White v Jones [1993] 3 All ER 481 by the Court of Appeal
forward, whereas in this case some of the representa- that a solicitor who was instructed to prepare a will but
tions had been made after a bidder had emerged and failed to do so was liable to a disappointed beneficiary
indeed because a bid had been made. They were because the testator died before a will in the new form
clearly made with an identified bidder in mind, i.e. was signed. There was sufficient proximity between the
MC. MC had, therefore, applied for leave to amend solicitor and the beneficiary, and financial loss was
its statement of claim (now statement of case) to reasonably foreseeable.
representations made after the bid and as part of the (iii) The White case was distinguished in Carr-Glynn v
takeover battle. This could then distinguish MC’s case Freasons (a firm) [1997] 2 All ER 614 where Lloyd, J held
from the situation in Caparo. that where a solicitor’s breach of his duty of care to a
The issue before the court was whether MC’s allega- testator in preparing his will resulted in loss to the estate
tions disclosed a reasonable cause of action. On the – in this case failure to sever a joint tenancy in land – so
assumption that the allegations were true, was there a that on death the whole interest passed to the other
duty of care to MC? The judge went on to say, on the joint owner (see Chapter 22), the solicitor owed no duty
assumed facts, that the defendants could have fore- of care to an intended beneficiary under the will whose
gift of the testatrix’s part was lost since it was unaccept-
seen that MC would or might suffer financial loss if
able that the solicitor should be at risk of two separate
the representations were incorrect; but that foresee-
claims for identical loss, one by the personal represent-
ability in itself was not enough for liability to arise
atives on behalf of loss to the estate and one by the
– there had to be a sufficient relationship of proximity
disappointed beneficiary. Since there was only one claim
between the claimant and defendant. In addition, it
in White, i.e. that of the beneficiary, it probably survived.
must be just and reasonable to impose liability on the It seems that in any case there was no breach of any
defendant. duty. The solicitors warned that there might be a joint
The fatal weakness in the Caparo case, the judge tenancy but the testatrix did not pursue the matter by
said, was that the auditors’ statement, i.e. the annual providing the solicitors with the relevant deeds. This
accounts, had not been prepared for the purpose for decision was reversed by the Court of Appeal (see [1998]
which the claimant relied on it. It was, therefore, 4 All ER 225). The court stated that it was consistent
arguable that this case could be distinguished from with the reasoning in White that the assumption of
Caparo. responsibility by a solicitor towards a client be extended
On the assumed facts, the directors of FC, when in favour of a beneficiary who as a result of the
making the relevant representations, were aware that negligence of the testatrix’s solictors in carrying out the
MC would rely on them for the purpose of deciding testamentary instructions suffered a loss of expectation.
to make an increased bid and, indeed, intended that
they should. MC did rely on them for that purpose. Occupiers’ liability: two or more occupiers
It was, therefore, arguable that there was a sufficient
proximity between the directors of FC and MC to give 415 Wheat v E Lacon & Co Ltd [1966] 1 All ER 582
rise to a duty of care.
For the same reasons, it could be argued that Hill The manager of a public house was permitted by the
Samuel and Judkins owed MC a duty of care in terms owners, Lacon & Co, to take paying visitors who were
of their representations involving the profit forecast accommodated in a part of the premises labelled
and the audited accounts. ‘Private’. The claimant’s husband, while a paying
Leave was given to amend the statement of claim visitor, was killed by a fall from a staircase in the
(now statement of case). MC’s amended case should private part of the premises. Lacon & Co denied liabil-
be permitted to go forward to trial. ity on the ground that they were not occupiers of the
private part of the premises.
Comment (i) So, some reliance can be placed on financial
statements and other representations in a takeover after Held – by the House of Lords – that:
all. If, during the conduct of a contested takeover and (a) the defendants retained occupation and control
after an identified bidder has emerged, the directors and
together with the manager;
financial advisers of the target company make express
(b) the deceased was a visitor to whom the defend-
representations with a view to influencing the conduct
ants owed a common duty of care;
of the bidder, then they owe him a duty of care not to
(c) on the facts the staircase, though not lit, was not
mislead him negligently as was alleged.
dangerous if used with proper care.
(ii) Liability in negligence can extend to a wide variety
of professionals, e.g. those who value property and, of Wheat’s claim, therefore, failed because there was no
course, solicitors. In regard to the latter it was held in breach of the duty of care.
.. ..
EL_Z02.qxd 3/26/07 10:58 AM Page 870
870 SPECIFIC TORTS CASES 416 – 419
Comment A not dissimilar case is Manning v Hope (t/a crossing its rollers when in operation. He was injured
Priory), The Times, 18 February 2000. M fell down some while attempting to cross the rollers in the course of
steps and injured her ankle whilst on property belonging his work and sued for damages.
to H. She recovered damages on the basis that a hand rail
Held – by O’Connor, J – the defendants having re-
should have been fitted. The Court of Appeal reversed
tained control of the tunnel and the machine were
this decision. There was no finding that the steps were
the occupiers. They were not absolved from liability
unsafe without a hand rail and H had no duty to fit one.
under the Act of 1957 merely because of the claim-
Occupiers’ liability: defective work of an ant’s knowledge of the danger. Knowledge was not
independent contractor assent. However, the claimant’s damages were reduced
by 50 per cent on the ground of his contributory
negligence.
416 Cook v Broderip (1968) 112 SJ 193
Comment It was held in Salmon v Seafarer Restaurants
The owner of a flat employed an apparently com- Ltd [1983] 3 All ER 729 that an occupier owes a duty to
petent contractor to put in a new socket. Mrs Cook, firemen attending his premises to put out a fire. A fire
who was a cleaner, received an electric shock caused occurred in the defendants’ fish and chip shop because of
because the socket was faulty. It appeared that the the negligence of an employee. The employee failed to
contractor had negligently failed to test the socket for turn off a gas heater prior to closing the shop. The
reversed polarity. claimant fireman was injured when attending the fire.
Held – by O’Connor, J – Major Broderip, the owner of The court said that the defendants were vicariously
liable. It was foreseeable that a fireman might be injured
the flat, was not vicariously liable for the contractor’s
following the employee’s negligence.
negligence and was not in breach of duty under the
Occupiers’ Liability Act 1957. Damages of £3,081 were
Occupiers’ liability and negligence liability:
awarded against the contractor who was the second
the special case of children
defendant.
Comment (i) On the issue of inspection of the work 418 Yachuk v Oliver Blais & Co Ltd [1949] AC 386
done, the House of Lords stated in Ferguson v Welsh, The
Times, 30 October 1987 that it would not ordinarily be In this appeal from the Supreme Court of Canada to
reasonable to expect an occupier, having engaged a con- the Judicial Committee of the Privy Council the facts
tractor, whom he believed on reasonable grounds to be were as follows: a servant of Oliver Blais & Co Ltd had
competent, to supervise the contractor’s activities. If he supplied five cents’ worth of gasoline in an open lard
knew, however, that an unsafe system was being used it pail to certain boys, aged nine and seven, who told
might be reasonable for the occupier to take steps to see him that they needed it for their mother’s car, which
that things were made safe. If not, he might be liable.
had run out of petrol down the road. In fact, they
(ii) The occupier may be liable where although work on wanted it for a game of Red Indians. The boys dipped
the premises is done by an independent contractor the a bullrush into the pail and lit it. This set fire to the
occupier does not check to see whether the contractor petrol in the pail and the boy Yachuk was seriously
has adequate insurance to meet a claim for injury caused injured. The Judicial Committee held that the company
by his negligent work. This will be particularly likely was liable for the negligence of its servant in allowing
where the work consists of something involving some
the boys to take away the gasoline. The question of
risk, e.g. the setting up of a ride at a fête (see Gwilliam
contributory negligence did not arise, because there
v West Hertfordshire Hospital NHS Trust, The Times,
was no evidence that the minors appreciated the
7 August 2000).
dangerous quality of gasoline. The company was fully
responsible even though the boys had resorted to
Occupiers’ liability: effect of claimant’s knowledge
deceit to overcome the supplier’s scruples.
of danger
417 Bunker v Charles Brand & Sons [1969] 2 All ER 59 419 Gough v National Coal Board [1954] 1 QB 191
The claimant’s employers were engaged as subcontrac- The defendant Board was the owner of a colliery
tors by the defendants who were the main contractors which included a small railway which was constantly
for tunnelling in connection with the Victoria Line. in use. The railway lines were not fenced or guarded,
The claimant was required to carry out modifications although there were houses on both sides. The public
to a digging machine. He had seen the machine in situ had for a long time been permitted to cross the lines,
and was taken to have appreciated the danger in and children often played on the wagons, although
..
EL_Z02.qxd 3/26/07 10:58 AM Page 871
CASES 420 – 422 SPECIFIC TORTS 871
the defendant’s servants had been told to keep frequently chased children away in the past and in
children off. The claimant, a boy aged six-and-a-half, particular the claimant on a number of occasions. The
was seriously injured when he jumped off a wagon contractors contended that the claimant was a tres-
on which he had been riding. At the trial the boy passer, that he had been warned off and that they
admitted that he knew he was not supposed to ride were under no duty.
on the wagons, and that his father had threatened to Held – the contractors were in breach of the duty of
punish him if he did. Nevertheless, it was held that care owed to the child; their workmen had failed to
the defendant was liable. The fact that children had keep a proper look-out.
for many years played near the railway made them
licensees, and although the boy was, strictly speaking, Comment Penny v Northampton Borough Council (1974)
72 LGR 733 provides a contrast. In that case a child
a trespasser as regards the wagon, he was allured by the
trespasser was not successful in recovering damages
slow-moving wagons which the defendants knew
following injury from an aerosol can which exploded
were an attraction to children.
when it was thrown into a fire by another child. The
Comment Although the reference in these cases is to accident took place in a discarded rubbish tip some 50
‘children’, the rules extend also to young persons. Thus, acres in an area which resembled a rough field. The
in Adams v Southern Electricity Board, The Times, 21 children had often been warned off the land by the
October 1993, the Court of Appeal decided that the Council’s workmen. The court considered the authority
electricity board owed a duty of care to a boy of 15 who had behaved with common sense and humanity and
was electrocuted and injured by being able to climb on could not have known of the danger on the land so that
to apparatus consisting of a pole-mounted transformer it had discharged its duty of care. However, in Harris v
because of a defective anti-climbing device. The boy had Birkenhead Corporation [1975] 1 All ER 1001, a local
climbed the pole before and had become insensitive to authority was not successful in showing that it had dis-
the danger. His damages were reduced by two-thirds for charged its duty of care to a child trespasser who had
contributory negligence. Nevertheless, the Court of entered a derelict house which the Corporation had
Appeal held that the Board was in breach of its common purchased under a compulsory purchase order. The child
law duty to take reasonable care for the safety of fell from an upstairs window and the authority was held
the boy. to be the occupier since the previous owner had got out
of the premises in view of the order. The authority was
fixed with knowledge of the relevant facts and Kilner
420 Mourton v Poulter [1930] 2 KB 183
Brown, J found for the claimant.
The owner of certain land wished to carry out building
Highways Act, 1980: no defence unless authority
operations on it, but before he could so do, it was neces-
has done what was reasonably required
sary to fell a large elm tree. The land was unfenced,
and children of the locality were in the habit of using Griffiths v Liverpool Corporation [1966]
422
it as a playground. During the process of felling, a 2 All ER 1015
large number of children gathered near the tree and The claimant tripped and fell on a flagstone which
Poulter, who had been employed to fell the tree, rocked on its centre. In this action against the high-
warned the children of the danger likely to arise when way authority for breach of s 1(1) of the Highways
the tree came down. He failed to repeat the warning (Miscellaneous Provisions) Act 1961 (see now
when the tree was about to fall, and the claimant, a Highways Act 1980), it appeared that a regular system
boy of 10, was crushed by the falling tree. of inspection was desirable but was not carried out
Held – the defendant was liable. Even though the chil- because the authority could not get tradesmen to put
dren were trespassers, he owed them a duty to give right faults discovered. The present fault could, how-
adequate warning. ever, have been put right by a labourer and no shortage
of labourers was alleged.
Held – by the Court of Appeal – the authority had not
421 Pannett v McGuinness & Co [1972] 3 All ER 137
brought itself within the statutory defence in s 1(2)
The defendants were demolishing a warehouse in a and damages should be awarded.
heavily populated area near a park where children Comment (i) In Pridham v Hemel Hempstead Corporation
played. Three workmen were specially appointed to (1970) 69 LGR 525, the authority proved that it had
make a bonfire of rubbish and to keep a look-out for inspected the footpath of a minor residential road every
children and to see that they came to no harm. The three months and had kept a complaints book. The Court
claimant, a boy of five, got in while the three men of Appeal held that this excluded the authority from
were away and was severely burned. The men had liability for injury caused by a defect in the footpath.
.. ..
EL_Z02.qxd 3/26/07 10:58 AM Page 872
872 SPECIFIC TORTS CASES 423– 425
(ii) Highway authorities which cause accidents by their because the accident itself was unforeseeable. This
failure to remove ice and snow from the carriageway are defence was rejected by the Court of Appeal and the
not liable for accidents caused. The House of Lords so claimant succeeded in his pursuit of damages. Where
ruled in Goodes v East Sussex County Council, The Times, a defendant has failed to fence dangerous machinery,
16 June 2000. Such removal is not within their duty to as here, in breach of s 14 of the Factories Act 1961, he
repair. The claimant who suffered injuries which left him cannot escape liability for injury on the ground that
almost entirely paralysed when his car skidded on black such injury occurred in a way that was not reason-
ice and crashed into the parapet of a bridge recovered ably foreseeable. Thus, a claimant might succeed
no damages. There was no suggestion that there was a
when suing on a statutory duty and fail if suing on a
duty at common law, although the case was based upon
common-law one.
the Highways Act 1980.
It is to be hoped that our injuries, if we must have Comment Of course, an employer will not breach his
them, are caused by potholes! statutory duties where an employee makes equipment
(iii) In Goodes v East Sussex CC [2000] 1 WLR 1356 unsafe by deliberately misusing it. Thus in Horton v
the House of Lords ruled that highway legislation did Taplin Contracts Ltd, The Times, 25 November 2003 the
not require a local authority to spread salt and thus claimant was injured when working on a scaffolding
neutralise icy road conditions. The claimant had tower that was deliberately toppled by another
sustained serious injuries when he skidded on ice on an employee. The claimant alleged that the employer had
untreated road. Lord Hoffmann in his judgment said that failed to stabilise the tower as required by health and
the statutory duty of a highway authority was to repair safety regulations. The case reached the Court of Appeal
and although in modern road conditions it might be which ruled that it was only necessary to stabilise
reasonable to expect that a local authority should equipment where the behaviour to be guarded against
compensate a person who suffered serious injuries after was reasonably foreseeable. This did not include the
skidding on ice which could have been removed by the ‘extraneous, deliberate, unpredictable and violent act of
local authority it was clear from the legislation that such a third party’. The claimant’s action failed.
a remedy was not yet available under that legislation.
However, in Sandhar v Department of the Environ- Torts against business interests: inducing a breach
ment, Transport and the Regions [2001] All ER (D) 245 of contract
a claim at common law for negligence was allowed to
proceed. 424 Lumley v Gye (1853) 2 E & Bl 216
(iv) In Calderdale MBC v Gorringe [2002] RTR 27 the Court
of Appeal ruled that there was no statutory duty to paint The claimant, who was the manager of an opera
warning signs such as ‘slow’ on the surface of the road house, made a contract with a prima donna Johanna
arising under highways legislation. The claimant claimed Wagner for her exclusive services for a period of time.
damages for an accident that occurred on the crest of Gye induced Johanna Wagner to break her operatic
a hill of a road. The statutory duty did not cover the engagement with the claimant and sing for him. It
erection of warning signs either. However, there could was held that whatever might have been the origin of
be liability at common law for not painting road signs the right to sue in such cases as this, it was not now
and erecting signs at an accident blackspot. That was not confined to actions by masters for the enticement of
the case here, however, and the claimant’s case failed. their servants but extended to wrongful interference
with any contract of personal service.
Employers’ negligence: effect of statutory duties
of care Daily Mirror Newspapers v Gardner [1968]
425
2 All ER 163
423 Millard v Serck Tubes Ltd [1969] 1 All ER 598 The executive committee of the retailers’ federation re-
commended their members to boycott the Daily Mirror
The claimant operated a power drill during the course
for one week after that newspaper had announced
of his employment. The drill was fenced, but the
that the retailers’ discount rate was to be reduced
guard was not complete in that there was a gap in it
when the price of the newspaper was increased. The
through which the operator’s hand could be drawn.
newspaper asked for interlocutory injunctions requir-
While the claimant’s hand was resting on the guard
ing the committee to communicate with their members
a piece of swarf thrown out from the drill wound
and withdraw the recommendation on the grounds
itself around the claimant’s hand and drew it into the
that:
drill causing injury to the claimant. The defendant
employers conceded that the drill had not been pro- (a) it was an unlawful interference with the news-
perly fenced but contended that they were not liable paper’s contracts with the wholesalers because the
..
EL_Z02.qxd 3/26/07 10:58 AM Page 873
wholesalers would not want to take copies of the union to increase wages but they said that they could
Daily Mirror if the retailers would not take it; and not accede to union requests because of the damaging
(b) it was equivalent to an agreement contrary to the competition of the Crofter Company. Consequently,
public interest within s 21(1) of the Restrictive Veitch and others acting in combination placed an
Trade Practices Act 1956 (see now the Competi- embargo on the Crofter Company’s imported yarn and
tion Act 1998). exported tweed by instructing dockers at Stornoway
to refuse to handle these goods. The dockers obeyed
Held – by the Court of Appeal – a sufficient prima facie
these instructions but were not on strike or in breach
case had been made out on both grounds and the
of contract. The Crofter Company sought an interdict
injunctions would be granted.
(or injunction) against the embargo. The House of
Comment The essential difference between the Lumley Lords held that the union officials were not liable in
and Gardner cases is that the interference in Lumley was conspiracy because their purpose was to benefit the
aimed at the other party to the contract, i.e. direct inter- members of the union and the means employed were
ference, whereas in Gardner the interference was indir- not unlawful.
ect, i.e. the retailers were not trying directly to persuade
the wholesalers not to take the Daily Mirror but the Defamation: what is?
inevitable result would be that they would not. If in
indirect interference it is unclear from the evidence
427 Byrne v Deane [1937] 1 KB 818
what effect the interference will have, the court may
refuse to grant a remedy. The claimant was a member of a golf club in which
Thus, in Middlebrook Mushrooms Ltd v TGWU [1993]
there had been some gaming machines. The defend-
IRLR 232, women who were sacked from a mushroom
ants, Mr and Mrs Deane, were proprietors of the club.
farm, after refusing new contracts that they said had
As a result of a complaint being made to the police,
made cuts in their pay, proposed to carry out a leaflet
the machines were removed. Shortly afterwards, the
campaign to persuade customers at supermarkets not to
following typewritten lampoon was placed on
buy the farm’s produce. The Court of Appeal refused
to grant an injunction to prevent this because it was the wall of the clubhouse near to the place where the
indirect interference and it was not clear from the machines had stood:
evidence what effect it would have. Customers might For many years upon this spot
ignore it; they were not like the wholesalers in the You heard the sound of the merry bell
Gardner case who clearly could not ignore the retailers’ Those who were rash and those who were not,
ban. Also, to grant an injunction would be contrary to Lost and made a spot of cash
Art 10 of the European Convention on Human Rights But he who gave the game away,
and Fundamental Freedoms because it would affect the May he Byrne in hell and rue the day.
right of free speech (see now also the UK Human Rights Diddleramus
Act 1998).
The claimant brought this action for libel alleging
Civil conspiracy: the principles illustrated that the defendants were responsible for exhibiting
the lampoon, and that the lampoon was defamatory
Crofter Hand Woven Harris Tweed Co Ltd in that it suggested that he was disloyal to his fellow
426
v Veitch [1942] AC 435 club members.
Veitch and the other defendants were officials of the Held – the words were not defamatory because
Transport and General Workers Union. The dockers the standard was the view which would be taken by
at Stornoway on the island of Lewis were all members right-thinking members of society, and, in the view of
of the union and so were most of the employees in the court, right-thinking persons would not think less
the spinning mills on the island. The yarn when spun of a person who put the law into motion against
in the mills was woven into tweed cloth by crofters wrongdoers.
working at home, the woven cloth being finished in
the mills. The tweed thus produced was sold by the Defamation: libel or slander: form of publication
owners of the mill as Harris Tweed. The Crofter
Company also produced tweed cloth but its yarn was Youssoupoff v Metro-Goldwyn-Mayer Pictures
428
not spun on the island but instead was obtained more Ltd (1934) 50 TLR 571
cheaply on the mainland. This cloth was sold as The claimant was a member of the Russian royal
Harris Tweed but did not bear the trade mark in the house. The defendants produced in England a film
form of a special stamp. The mill owners making dealing with the life of Rasputin who had been the
the genuine Harris Tweed were being pressed by the adviser of the Tsarina of Russia. The film also dealt
.. ..
EL_Z02.qxd 3/26/07 10:58 AM Page 874
with the murder of Rasputin. In the course of the

430 Morgan v Odhams Press [1971] 2 All ER 1156
film, a lady (Princess Natasha), who was affectionate
towards the murderer of Rasputin, was also represented In 1965 the Sun reported that a kennel girl had
as having been raped by Rasputin, a man of the worst been kidnapped by a dog-doping gang. In or about
possible character. The claimant was married to a man the relevant period various witnesses had seen her in
who was undoubtedly one of the persons concerned the company of Mr Morgan whose friend she was. The
in the killing of Rasputin. The claimant alleged that newspaper article made no mention of Mr Morgan’s
because of her marriage reasonable people would name. Nevertheless, he began an action against the
think that she was the person who was so raped. The newspaper pleading that he had been libelled by
action was for libel. innuendo in that persons would think he was in-
Held – the action was properly framed in libel and the volved either in the kidnapping or the dog-doping,
claimant succeeded. or both.
Comment This case is generally accepted as authority Held – by the House of Lords – the article was poten-
for the view that a defamatory talking film is always tially libellous:
libel. However, the rape of Princess Natasha was in the (a) the newspaper article was not, by itself, capable of
pictorial part of the film and not on the sound track. It is
being so understood, but;
also uncertain whether a claimant can sue for a slander-
(b) an article to be defamatory of a person need not
ous imputation of rape without proving special damage.
contain a ‘key or pointer’ showing it refers to him.
The Slander of Women Act 1891 provides that the ‘words
Evidence is admissible to import a defamatory
spoken and published . . . which impute unchastity or
adultery to any woman or girl shall not require special meaning to otherwise innocent words.
damage to render them actionable’. However, lack of
consent, which is essential in rape, may mean that there 431 Tolley v J S Fry & Sons Ltd [1931] AC 333
is no imputation of unchastity.
The claimant was a well-known golfer. The defendants
Defamation: innuendo: illustrations from case law published an advertisement without the claimant’s
consent containing his picture and underneath the
Cassidy v Daily Mirror Newspapers Ltd [1929]
429 following words:
2 KB 331
A man named Cassidy or Corrigan who was well The caddy to Tolley said, ‘Oh Sir,
known for his indiscriminate relations with women, Good shot, Sir! That ball, see it go, Sir.
allowed a racing photographer to take a photograph My word, how it flies,
of himself and a lady, and said that she was his Like a cartet of Fry’s,
fiancée and that the photographer might announce They’re handy, they’re good, and priced low, Sir.’
his engagement. The photograph was published in The claimant brought an action for libel, alleging
the Daily Mirror with the following caption: ‘Mr M an innuendo. It was said that a person reading the
Corrigan, the race-horse owner, and Miss X whose advertisement would assume that the claimant had
engagement has been announced.’ The claimant, been paid for allowing the use of his name in it, and
Cassidy’s lawful wife, who was also known as Mrs that in consequence he had prostituted his amateur
Corrigan, sued the newspaper for libel alleging as an status as a golfer.
innuendo that if Mr Corrigan was unmarried and able Held – the evidence showed that the advertisement
to become engaged, she must have been cohabiting was capable of this construction and the claimant was
with him in circumstances of immorality. awarded damages.
Held – since there was evidence that certain of
her friends thought this to be so, she was entitled to
432 Sim v Stretch (1936) 52 TLR 669
damages.
Comment The case is authority for the view that a The defendant had encouraged the claimant’s house-
person may be liable for a statement which he does maid to leave the claimant’s employ and re-enter the
not actually know to be defamatory. It does not decide, defendant’s. The defendant later sent the following
nor does any other relevant case, that a person who has telegram to the claimant: ‘Edith has resumed her
taken all possible steps to ensure the accuracy of his services with us to-day. Please send her possessions
statement and could not, by reasonable enquiries, have and the money you borrowed, also her wages.’ The
discovered that his statement was defamatory is or is not telegram was said to impute that the claimant was
liable in defamation. in financial difficulties and had in consequence
..
EL_Z02.qxd 3/26/07 10:58 AM Page 875
borrowed from his housemaid, and that he had been innuendo that people finding out that the claimants
unable to pay her wages, and was a person of no were appearing at other concerts on the same dates as
credit. The claimant succeeded at first instance and in those cancelled would think that the claimants had
the Court of Appeal, but the House of Lords reversed given a false story. It was held by the Court of Appeal
the judgment, holding that the telegram was incapable that where a claimant relies on an innuendo, he must
of bearing a defamatory meaning. In the words of prove that the words were published to a specific person
Lord Atkin: ‘It seems to me unreasonable that, when who knew at the time of the publication of specific
there are a number of good interpretations, the only facts enabling him to understand the words in the
bad one should be seized upon to give a defamatory innuendo meaning. Facts which came into existence
sense to the statement.’ It was also in this case that afterwards did not make the statement defamatory. As
Lord Atkin suggested the following test of a ‘defam- Lord Denning said, the statement was not defamatory
atory’ statement: ‘Would the words tend to lower as it stood, since it is not defamatory of a person to
the [claimant] in the estimation of right-thinking say that he is seriously ill. At the time the statement
members of society generally?’ was made those becoming aware of it would not have
access to facts to suggest that it was wrong.
Fulham v Newcastle Chronicle and Journal Obviously, later on, when concerts were advertised in
433
[1977] 1 WLR 651 the Sunday Times on the same dates as those which
In 1962 the claimant left the Catholic priesthood. had been cancelled it might have been possible to
He married in 1964, a child being born 14 months construe that Mr Grappelli and Mr Disley were not
later. In 1973 he was appointed as deputy headmaster really ill and that the whole story was a put-up job.
of a school in Teesside having previously lived in However, this information had to be available at the
South Yorkshire. A Newcastle newspaper published by time of publication of the defamatory words since,
the defendants commented upon his appointment according to Lord Denning, the cause of action arises
stating that he ‘went off very suddenly’ from Salford in defamation when the words are published and they
where he had been a priest ‘about seven years ago’ must be seen to be defamatory then, and not later.
and had subsequently married. The claimant alleged
that such statements contained a libellous imputation Defamation: the words must refer to the claimant
that he had married while still a priest and had
fathered an illegitimate child. The particulars supplied 435 E Hulton & Co v Jones [1910] AC 20
by the claimant simply stated his date of marriage A newspaper published an article descriptive of life in
and the date of birth of his eldest child. The defend- Dieppe in which one Artemus Jones, described as a
ants sought to strike out his claim. It was held – by churchwarden at Peckham, was accused of living with
the Court of Appeal – that only those knowing of a mistress in France. All persons concerned contended
the dates of the claimant’s marriage and/or the birth that they were ignorant of the existence of any person
of his child could draw the imputation alleged and of that name, and the writer of the article said that he
that since the defendants’ newspaper did not circulate had invented it. Unfortunately, the name so chosen
in the area where the claimant had been a priest or was that of a Welsh barrister and journalist, and the
subsequently lived it was necessary for him to plead evidence showed that those who knew him thought
particulars of persons receiving the publication that the article referred to him.
having the requisite knowledge and that unless he
Held – the newspaper was responsible for the libel and
was able to do so his allegation of innuendo would be
the claimant was awarded damages.
struck out.
Comment (i) In cases of this kind the defence of offer of
Grappelli v Derek Block (Holdings) Ltd [1981] amends may be available under ss 2–4 of the Defamation
434 Act 1996. However, it is by no means certain that it
2 All ER 272
would have been available on the actual facts of this
The claimants, Mr Grappelli and Mr Disley, were jazz case, because ss 2–4 apply only where the defendant did
musicians with an international reputation. The not know or have reasonable grounds to believe that the
defendants were their managers and agents. The statement complained of referred to the claimant or was
defendants had, so the claimants alleged, purported likely to be understood as referring to him, and was both
to book contracts for them without authority. Then false and defamatory of the claimant. On the facts of
it was said that one of these concerts had been Hulton v Jones it seems that the publication was
cancelled because Mr Grappelli was seriously ill which attended by some carelessness. It should be noted that
was an entirely untrue story. It was said that that the 1996 Act offer of amends is, unlike previous provi-
was defamatory, not as it stood, but because of an sions, only available to a defendant who is willing to pay
.. ..
EL_Z02.qxd 3/26/07 10:58 AM Page 876
such compensation as is agreed or assessed by a judge the writ (claim form) and statement of claim struck
and to publish a correction and an apology. out. (Knupffer applied.)
(ii) In Hayward v Thompson [1981] 3 All ER 450 the Comment It was decided in Farringdon v Leigh, The
defendants were the editor, a journalist on, and the pro- Times, 10 December 1987, that it was at least arguable
prietors and publishers of, a Sunday paper. In one article that where defamatory words in a publication referred
it was alleged that a wealthy benefactor of the Liberal to an unidentified member or members of a group of
Party was connected with an alleged murder plot but persons, each of those persons had a cause of action in
no name was given. In a later article the paper named libel. In these circumstances an action by members of a
the claimant reporting that the police wished to inter- team of seven police officers was allowed to proceed to
view him in connection with the alleged murder plot trial where they alleged that certain articles in the
which was not, of course, a defamatory allegation that Observer were defamatory of them in alleging that at
he was involved in it as the first article had been. It least two of them, who were unnamed, had passed
was held – by the Court of Appeal – that the two articles confidential information to journalists.
could be connected. Thus, the libel in the first article
was of the claimant by reason of connection with the
Defamation: defences: justification
second one.
Alexander v The North Eastern Railway Co
438
Knupffer v London Express Newspaper Ltd (1865) 6 B & S 340
436
[1944] AC 116 The defendant published the following notice:
The claimant was head in the United Kingdom of a North Eastern Railway. Caution. J Alexander, manu-
Russian refugee organisation, active in France and the facturer and general merchant, Trafalgar Street,
United States of America, but having only 24 members Leeds, was charged before the magistrates of
in England. An article in the newspaper ascribed Darlington on 28th September, for riding on a train
Fascism to this ‘minute body established in France and from Leeds, for which his ticket was not available,
the United States of America’, but without mentioning and refusing to pay the proper fare. He was convicted
the English branch. in the penalty of £9 1s, including costs, or three
Held – the article was not defamatory of the claimant weeks’ imprisonment.
since he was not marked out by it, even assuming In this action for libel, the claimant contended that
that it was defamatory to call someone a Fascist. the defence of justification could not lie because,
although he had been convicted as stated, the alterna-
Schloimovitz v Clarendon Press, The Times, tive prison sentence was 14 days not three weeks.
437
6 July 1973
Held – the substitution of three weeks for a fortnight
The claimant by statement of claim (now statement did not make the statement libellous. It could be
of case) alleged that the definitions of the word justified, since the rest of it was true.
‘Jew’ contained in three dictionaries published by
the defendant were derogatory, defamatory and
Defamation: defences: fair comment
deplorable and sought an injunction restraining the
defendant from publishing such definitions, at least
439 London Artists v Littler [1969] 2 All ER 193
without qualification, in any future editions of such
dictionaries. In 1965 four of the principal actors and actresses in a
Held – by Goff, J – what was before the court was play called The Right Honourable Gentleman simultane-
not whether the definitions were right or wrong ously wrote to the defendant, who was the producer
or whether they were justly applied to any Jews, but of the play, terminating their engagement by four
whether in law the claimant had a cause of action to weeks’ formal notice. This was, of course, highly
restrain the conduct of the defendant. No individual unusual and the defendant wrote to the actors and
could maintain an action in respect of defamatory actresses concerned wrongly accusing the claimants,
matter published about a body of persons unless in its who were their agents, of conspiracy to close down
terms, or by reason of the circumstances, it should the play. The defendant also communicated the letter
and must be construed as a reference to him as an to the press. The defendant was now sued for libel.
individual. There were two questions: (a) were the It was held – by the Court of Appeal – that he had
words defamatory? (b) did they in fact apply to the libelled the claimants because although the subject
claimant or were they capable in law of being so matter of the allegations was of public interest, i.e.
regarded? The claimant failed to satisfy the latter test the fate of the play, the defence of fair comment did
and accordingly the defendant was entitled to have not apply to the allegation of a plot which was an
..
EL_Z02.qxd 3/26/07 10:58 AM Page 877
allegation of fact. The allegation of a plot was defamat- be summarily dismissed. The High Court allowed
ory and had not been justified. In fact, it seemed that the application taking the view that in this sort of case
all the actors and actresses involved had their own the defence of qualified privilege should apply in the
good and different reasons for leaving the play. There absence of malice.
was no evidence of combination.
441 Osborn v Thomas Boulter & Son [1930] 2 KB 226
Defamation: defences: qualified privilege
London Association for the Protection of Trade The claimant, a publican, wrote a letter to the defend-
440 ants, his brewers, complaining of the quality of the
v Greenlands [1916] 2 AC 15
The respondent was a limited company carrying on beer. The defendants sent one of their employees to
business as drapers and general furnishers in investigate and report. After receiving the report,
Hereford. The appellants were members of an unin- Mr Boulter dictated a letter to his typist in which he
corporated association consisting of about 6,300 suggested that the claimant had been adding water
traders and had, as one of their objects, the making of to the beer, and pointing out the penalties attaching
private inquiries as to the means, respectability and to this if the claimant was caught. The claimant sued,
trustworthiness of individuals and firms. A member of alleging publication to the typist and certain clerks.
the association was about to sell goods to the respond- Held – the occasion was privileged, and since the
ent and he asked the association to report on the claimant could not prove malice in the defendants,
company, and particularly to say whether the respond- his action failed.
ent was a good risk for credit of between £20 and
£30. In the report submitted, the association declared
442 Beach v Freeson [1971] 2 WLR 805
that the respondent was a fair trade risk for the sum
mentioned, but said that it had heavy mortgages A Member of Parliament wrote to the Law Society
charged on its assets, and that the assets barely complaining of the conduct of a firm of solicitors
covered the loans. In fact, the mortgages were secured reported to him by his constituents. He also sent a
by a charge upon the real and leasehold property copy of the letter to the Lord Chancellor.
only, and all other assets were entirely free from any
Held – by Geoffrey Lane, J – both publications were
mortgage whatever, and constituted a large and valu-
protected by qualified privilege. The privilege arose
able fund. The respondent company was originally
out of a Member of Parliament’s duty to his con-
the claimant in an action for libel contained in the
stituents and the responsibilities of the Law Society
statement about the mortgages, and the statement
and the Lord Chancellor.
that it was only good for credit of between £20 and
£30.
Held – the occasion was privileged and thus the re- 443 Cook v Alexander [1973] 3 WLR 617
spondent had no claim in the absence of malice
which it had not proved. Judgment was, therefore, The claimant sued the defendant for libel in respect
given for the appellants. of an account of a House of Lords debate which he
had written for the Daily Telegraph. The debate had
Comment A further example of qualified privilege aris- been about an approved school where the claimant
ing out of common interest is Kearns v General Council had been a teacher and which had been closed partly
of the Bar [2002] 4 All ER 1075. In that case the head of because of the claimant’s revelations as to the system
the Bar Council’s Professional Standards and Legal
of punishment there. The newspaper had published
Services Department sent a letter to all heads of cham-
a précis of each speech on one of the inside pages, but
bers, senior clerks and practice managers stating that the
the claimant objected to a report written by the
claimants (who were an agency) were not solicitors and
defendant which appeared on the back page. In this
that it would, in consequence, be improper to accept
work from them unless certain specified conditions were report, known as ‘Parliamentary Sketch’, the writer
satisfied, e.g. that the instructions came from a solicitor. gave his impression of the debate and emphasised the
This statement was not in fact true. Within two days salient aspects of it, but there was a reference to the
a letter correcting the error and apologising was sent more detailed account on another page. The claimant
to all the recipients of the original letter. Nevertheless, alleged that the sketch was defamatory of him because
the claimants brought defamation proceedings. The it gave great prominence to a speech that was very
Bar Council put forward the defence of qualified priv- critical of him and his conduct, while it dismissed in
ilege based on common interest. The claimants did not uncomplimentary terms a speech which defended his
plead malice and the defendants applied for the case to action. It was held – by the Court of Appeal – that
.. ..
EL_Z02.qxd 3/26/07 10:58 AM Page 878
878 SPECIFIC TORTS CASES 444 – 445A
such a Parliamentary sketch was protected by qualified the committee were actuated by malice but three were
privilege. A reporter was entitled to select from a not. The other two had meanwhile died. The judge gave
debate those parts which seemed to him to be of pub- judgment against all the defendants including the
lic interest and provided that the account as a whole assistant secretary.
was fair and honest, such a Parliamentary sketch was Held – on appeal – the defence of qualified privilege
protected by qualified privilege. is a defence for the individual who is sued, and not
a defence for the publication. It is quite erroneous to
444 Horrocks v Low [1972] 1 WLR 1625 say that it is attached to the publication. The three
committee members innocent of malice were entitled
At a local authority council meeting Low made a to protection and were not liable. The assistant
speech defamatory of Horrocks who in answer to secretary also had an independent and individual
Low’s defence of justification, fair comment and privilege, and was not responsible or liable for the tort
qualified privilege, alleged that Low had been actuated of those members of the committee who had acted
by express malice. with malice. Even in a joint tort, the tort is the
separate act of each individual; each is severally
Held – by the Court of Appeal – malice could not be answerable for it; and each is severally entitled to his
inferred. Low held an honest and positive belief in own defence.
the truth of his statement and had not abused the
privileged occasion. ‘[The defendant] is not to be held Defamation: media developments in qualified
malicious merely because he was angry or prejudiced privilege
even unreasonably prejudiced, against the [claimant],
so long as he honestly believed what he said to be Loutchansky v Times Newspapers Ltd (No 2)
445a
true. Such is the law as I have always understood it to [2002] 1 All ER 652
be.’ (Per Lord Denning, MR) The Times newspaper published articles alleging that
‘What has to be proved is that the defendant was Dr Grigori Loutchansky was in charge of a major
activated by malice in the popular meaning of the Russian criminal organisation involved in money
word: that is to say, in speaking as he did, he must laundering and the smuggling of nuclear weapons.
have been actuated by spite or ill-will against the per- The defence was qualified privilege based on public
son defamed or by some indirect or improper motive.’ interest. The Times was found liable by reason of
(Per Edmund Davis, LJ) having failed to apply the House of Lords guidelines
‘When there is . . . [gross and unreasoning] pre- in Reynolds v Times Newspapers Ltd [1999] 3 WLR
judice there will often, perhaps usually, be reckless 1010. The Times appealed to the Court of Appeal.
indifference whether what is said is true or false. But The Court of Appeal dealing with Reynolds said that
if there is honest belief that it is true, there cannot in the House of Lords had established in that case that
any judgment be recklessness whether it be true or when deciding whether to publish defamatory mater-
false.’ (Per Stephenson, LJ) ial to the public the relevant interest was that of the
public in a modern democracy, to free expression and
the promotion of a free and vigorous press to keep the
445 Egger v Viscount Chelmsford [1964] 3 All ER 406
public informed. However, there was a corresponding
duty on the journalist and his or her editor to behave
Mrs Egger, a judge of Alsatian dogs, was on the list
responsibly and if they did not do so privilege could
of judges of the Kennel Club, and Miss Ross, the
not arise. In regard to responsible behaviour, the
secretary of a dog club in Northern Ireland, wrote to
House of Lords in Reynolds laid down a number of
the Kennel Club asking it to approve of Mrs Egger as
matters to be considered. In the Loutchansky case
a judge of Alsatians at a show. The assistant secretary
the court considered that The Times failed a number
of the Kennel Club, C A Burney, wrote to Miss Ross to
of these tests as follows:
say that the committee could not approve the
appointment. Mrs Egger brought an action for libel n reliability and motivation of its sources of
against the 10 members of the committee and the information;
assistant secretary on the ground that the letter n urgency (the judge had found that there was
reflected on her competence and integrity. There were none);
two long trials at both of which the judge ruled that n did the articles contain the gist of the claimant’s
the occasion was privileged. The jury disagreed the side of the story? (it did not said the judge);
first time, but at the second trial the jury found that n was comment sought from the claimant? (appar-
the letter was defamatory and that five members of ently not).
..
EL_Z02.qxd 3/26/07 10:58 AM Page 879
Up to that point the Court of Appeal would have withdrawal of that licence should appear in the Racing
dismissed the appeal but the High Court judge had Calendar, which was also to be the recognised vehicle
introduced an additional test, i.e. would The Times of communication for all matters concerning infringe-
have been subject to legitimate criticism if it had ment of rules.
failed to publish the information? This the Court of Held – the claimant being bound by the terms of his
Appeal felt was too strict from the newspaper’s point licence, the doctrine of volenti non fit injuria applied as
of view. The case was remitted to the High Court and regards publication in the Racing Calendar, so that the
the judge for him to examine his findings on the claimant had no cause of action.
Reynolds principles but without the more stringent
test identified in his judgment. Defamation: damages: compensatory not punitive
Comment (i) Courts dealing with this type of case will
now have to use the more liberal approach to media 447 Davis v Rubin [1967] 112 Sol J 51
publication set out in Jameel v Wall Street Journal
Europe [2006] 3 WLR 642 (see p 599). The claimants were chartered accountants of good
reputation and they wished to buy the lease of business
(ii) A further item of interest arose in this case from the
premises. The defendants, who were the landlords,
posting of the article on The Times website. Section 5 of
the Defamation Act 1996 reduces the limitation period wrote to the holder of the lease saying that they would
for bringing claims for defamation from three years to not accept the claimants if the lease was assigned and
one year. But how is this period to be applied where a referred in a defamatory fashion to the claimants’
libel is published on an Internet website and remains business and references. The claimants sued for dam-
there for some time? The claimant in Loutchansky ages in respect of the libel published in the letter, and
brought his action more than one year after the libel was were awarded £4,000 each. The Court of Appeal,
first published on The Times website that contained news allowing the defendants’ appeal, said that the damages
items and remained on the website for some time receiv- were ‘excessive, extravagant and exorbitant’. There
ing a number of visits every month. The Times contended had been publication to one person only and there
that the time should run from first publication which is was no evidence that the claimants’ reputation had
the rule applied in the USA. The claimant contended that been diminished in the minds of other persons. A rea-
taking the number of visits each month since first publi- sonable sum would not have exceeded £1,000 each
cation his claim was within the one year period. On this and a new trial was ordered on the issue of damages.
point the Court of Appeal ruled that there had been a
continuing publication so that the claimant’s case was Comment Over the past few years damages awarded by
not barred by the one year limitation rule. The first or juries in defamation cases have generally been regarded
single publication rule could not be adapted to an as excessive, often exceeding those granted for serious
English law context. Time does not begin to run until the physical injuries. Section 8 of the Courts and Legal
material is removed from the website. Services Act 1990 allows the Court of Appeal to sub-
stitute its own award of damages for those of the jury at
first instance instead of ordering a new trial. As regards
Defamation: consent of the claimant to
defamation, this power was used in Rantzen v Mirror
publication
Group Newspapers [1993] 3 WLR 953.
Chapman v Lord Ellesmere and Others [1932] The defendants had alleged that Esther Rantzen had
446
2 KB 431 kept secret the fact that a particular person was a child
abuser and that this had put children at risk. They were
The claimant was a trainer and one of his horses, after
found guilty of libel and the jury in the High Court
winning a race, was found to be doped. An inquiry
awarded Ms Rantzen £250,000.
was held by the Stewards of the Jockey Club, as a
On appeal the Court of Appeal reduced the award to
result of which they decided to disqualify the horse
£110,000, using the s 8 power and also because of the
for future racing, and to warn the claimant off
European Convention for the Protection of Human Rights
Newmarket Heath. The decision was published in the and Fundamental Freedoms. The Convention is designed,
Racing Calendar. The claimant contended that among other things, to prevent the restriction of free
the words were defamatory because they implied that speech, which excessive libel damages obviously do (see
he had doped the horse. The defendants, who were also John v Mirror Group Newspapers (1995)).
the proprietors of the Racing Calendar, contended that The matter of an excessive award of damages arose in
the words were not defamatory, and meant simply Grobbelaar v News Group Newspapers Ltd [2002] 4 All ER
that the claimant had been warned off for not pro- 732. The Court of Appeal had regarded a verdict of libel
tecting the horse against doping. Evidence showed and an award of damages of £85,000 by a jury to G as
that it was a condition of a trainer’s licence that the perverse in terms of the evidence. It was alleged that G
.. ..
EL_Z02.qxd 3/26/07 10:58 AM Page 880
had conspired to fix and had actually fixed football Comment The ratio of the Court of Appeal in Hale v
matches. The Court of Appeal said that the decision and Jennings Bros [1938] 1 All ER 579 suggests that there may
the award were perverse because they could only have be liability for personal injury. In that case a stallholder
been based on the fact that G was innocent in terms of at a fair suffered personal injury because of the escape of
the allegations whereas he had admitted taking money the defendants’ chair-o-plane. It was held that she had a
to fix matches. It therefore quashed the decision. The good claim under Rylands v Fletcher.
House of Lords restored the verdict in terms of the libel
but reduced G’s damages to £1. Rylands v Fletcher: does not depend on ownership
of land: covers escapes of a variety of offensive
Rylands v Fletcher: strict liability: escape of fire and dangerous substances
Emanuel v Greater London Council (1970) Charing Cross Electricity Supply Co v Hydraulic
448 450
114 Sol J 653 Power Co [1914] 3 KB 772
A contractor employed by the Ministry of Public The defendant’s water mains under a public street
Building and Works removed prefabricated bungalows burst and damaged the claimant’s cables which were
from the Council’s land. The contractor lit a fire and also laid under the street.
negligently allowed sparks to spread to the claimant’s
Held – the defendant was liable under the rule in
land where buildings and goods were damaged. The
Rylands v Fletcher, because the rule was not confined to
claimant sued the GLC and it was held – by James,
wrongs between owners of adjacent land and did not
J – that:
depend on ownership of land. Here it could be applied
(a) on the facts the Council remained in occupation to owners of adjacent chattels.
of the site;
(b) the contractor was not a ‘stranger’ to the Council
451 Attorney-General v Corke [1933] Ch 89
since it retained a power of control over his act-
ivities; and The defendant was the owner of disused brickfields,
(c) although the Council had not been negligent and he permitted a number of gypsies to occupy them
and was not vicariously liable for the contractor’s and live in caravans and tents. The gypsies threw slop
negligence since it did not employ him, it was water about in the neighbourhood of the fields and
strictly liable under Rylands v Fletcher for the accumulated all sorts of filth thereabouts. The court
escape of fire. held that Rylands v Fletcher applied, and an injunction
was granted against the defendant. While it was not
Rylands v Fletcher: there must be an escape: unlawful to license caravan dwellers, it was abnormal
whether the rule applies to personal injuries use of land, since such persons often have habits of
life which are offensive to those persons with fixed
449 Read v J Lyons & Co Ltd [1947] AC 156
homes.
The appellant was employed by the Ministry of Comment Reference should also be made to Smith v
Supply as an Inspector of Munitions in the respond- Scott (1972).
ents’ munitions factory. In the course of her employ-
ment there she was injured by the explosion of a shell Rylands v Fletcher: not applicable to escape of
which was in course of manufacture. She did not things naturally on land: other claims
allege negligence on the part of the defendants, but
based her claim on Rylands v Fletcher. The trial judge 452 Giles v Walker (1890) 24 QBD 656
found that there was liability under the rule, but the
Court of Appeal and the House of Lords reversed this The defendant wished to redeem certain forest land
decision, holding that the rule did not apply since and ploughed it up. Thistles grew up on the land and
there had been no escape of the thing that inflicted thistle-seed was blown in large quantities by the wind
the injury. In the words of Viscount Simon, LC, from the defendant’s land to that of the claimant.
‘Escape for the purpose of applying the proposition in Held – there was no duty as between adjoining
Rylands v Fletcher means escape from a place which occupiers to cut things such as thistles which are the
the defendant has occupation of, or control over, to natural growth of the soil, therefore, the defendant
a place which is outside his occupation or control.’ was not liable. Presumably if a person deliberately set
It was also suggested obiter in this case that the rule in thistles on his land, he would be liable under the rule
Rylands v Fletcher does not extend to personal injury, in Rylands v Fletcher, for it is not usual to cultivate
but only to injury to property. weeds on one’s land.
..
EL_Z02.qxd 3/26/07 10:58 AM Page 881
CASES 453 –458 THE LAW OF PROPERTY 881
Comment An action for nuisance would probably have turned full on. The defendant’s caretaker had found
succeeded here, because a person is liable for a nuisance the cloakroom in proper order at 10.20 pm the previous
on his land (even if he has not caused it) if he lets it con- evening.
tinue (but note Weeds Act 1959).
Held – the defendant was not liable under the rule in
Rylands v Fletcher because the damage had been
453 Davey v Harrow Corporation [1957] 2 All ER 305 caused by the act of a stranger.
The roots of the defendant’s elm trees spread to the Rylands v Fletcher: defence: common benefit
claimant’s land and caused damage to the claimant’s Peters v Prince of Wales Theatre (Birmingham)
property. 456
Ltd [1943] KB 73
Held – the defendant was liable in nuisance, whether The defendants leased to the claimant a shop in a
the trees were self-sown or not. It was no defence to building which contained a theatre. In the latter there
an action for nuisance that the thing causing the nuis- was, to the claimant’s knowledge, a sprinkler system
ance was naturally on the defendant’s land, though it installed as a precaution against fire and the system
might be a defence to liability under the rule in Rylands extended to the claimant’s shop. In a thaw, following
v Fletcher. a severe frost, water poured from the sprinklers in the
defendants’ rehearsal room into the claimant’s shop and
Rylands v Fletcher: defence of act of God damaged his stock. The claimant sued for damages for
Greenock Corporation v Caledonian Railway Co negligence, and under Rylands v Fletcher.
454
[1917] AC 556 Held – there was no negligence on the part of the
The Corporation, in laying out a park, constructed a defendants and there was no liability under Rylands v
concrete paddling pool for children in the bed of a Fletcher, because the sprinkler had been installed for
stream, thereby altering its course and natural flow. the common benefit of the claimant and defendants.
Owing to rainfall of extraordinary violence, the
stream overflowed and poured down the street, flood- THE LAW OF PROPERTY
ing the railway company’s premises. The House of
Lords held that this was not an act of God and the Ownership and possession: rights of
Corporation was liable. The House of Lords indicated owner paramount
the restricted range of the defence of act of God and
of the decision in Nichols v Marsland (1876), distin- 457 Moffat v Kazana [1968] 3 All ER 271
guishing that case on the ground that whereas in
Nichols v Marsland the point at issue was the liability The claimant hid banknotes in a biscuit tin in the
for storing water in artificial lakes, the point here was roof of his house. He sold the house to the defendant,
interference with the natural course of a stream, and one of whose workmen discovered the money. In this
anyone so interfering must provide even against action by the claimant to recover the money it was
exceptional rainfall. held – by Wrangham, J – that the claimant succeeded.
He had never shown any intention to pass the title in
Rylands v Fletcher: defence: wrongful act the money to anyone. Therefore, his title was good,
of stranger not only against the finder, but also against the new
owner of the house.
455 Rickards v Lothian [1913] AC 263
Adverse possession or squatters’ rights
The defendant was the occupier of business premises
and leased part of the second floor to the claimant. 458 Hayward v Challoner [1967] 3 All ER 122
On the fourth floor was a men’s cloakroom with a
wash basin. The cloakroom was provided for the use The predecessors in title of the claimant landowner
of tenants and persons in their employ. The claim- let land to the rector of a parish at a rent of 10s (50p)
ant’s stock in trade was found one morning seriously a year. The rent was not collected after 1942 and the
damaged by water which had seeped through the claimant now sued for possession.
ceiling from the wash basin on the fourth floor. Held – by the Court of Appeal – a right of action in
Examination showed that the waste pipe had been respect of rent or possession must be held to have
plugged with various articles such as nails, pen- accrued when the rent due was first unpaid, and
holders, string and soap, and the water tap had been therefore was barred by what is now the Limitation
.. ..
EL_Z02.qxd 3/26/07 10:58 AM Page 882
882 THE LAW OF PROPERTY CASES 459 – 462
Act 1980. The rector as a corporation sole had acquired Comment It should be noted that a bailee cannot sue for
a good squatter’s title. loss or damage to the bailed goods if the bailor has
already brought a successful claim for that loss or damage.
Thus, in O’Sullivan v Williams [1992] 3 All ER 385, A allowed
459 Littledale v Liverpool College [1900] 1 Ch 19 B to use his car while he was on holiday. While it was
parked outside B’s home it was written off when an
The claimants had a right of way for agricultural
excavator fell off a tractor on to it. A sued for damages and
purposes over a strip of grass land belonging to the
that action was settled by the payment of an appropriate
defendants. The claimants put up gates which they
sum. B sued for damages for nervous shock and incon-
kept locked at each end of the strip, and used the
venience due to the loss of the car. It was held by the Court
grass for grazing, keeping the hedges of the strip of Appeal that B’s claim for nervous shock succeeded but
clipped. They now claimed ownership of the land by that she could not recover damages for inconvenience
virtue of adverse possession. since this arose from damage to the bailed chattel.
Held – the claimants’ acts could be construed as protect-
ing the right of way, rather than excluding the owner, Bailment and licence distinguished
and were insufficient to establish the claimants’ title
to the land. 462 Ashby v Tolhurst [1937] 2 All ER 837
Smirk v Lyndale Developments Ltd [1974] The claimant drove his car on to a piece of land at
460
2 All ER 8 Southend owned by the defendants. He paid one
The claimant had a service tenancy of a house shilling to an attendant who was the defendants’ ser-
owned by the British Railways Board. In 1960 he took vant and was given a ticket. He left the car with the
effective possession of an adjacent plot of land owned doors locked. When he returned his car had gone, the
by the Board, though the Board was unaware of his attendant having allowed a thief, who said he was a
action. The claimant did not communicate to the friend of the claimant, to drive it away. The ticket was
Board at any time that he disclaimed the Board’s called a ‘car-park ticket’ and contained the words:
title. The Board sold the house and the plot to the ‘The proprietors do not take any responsibility for the
defendants who granted a new tenancy of the house safe custody of any cars or articles therein, nor for any
to Smirk on different terms not including the adja- damage to the cars or articles however caused nor for
cent plot. The claimant asserted a possessory title to any injuries to any persons, all cars being left in all
that plot. It was held – by Pennycuick, V-C – that respects entirely at their owner’s risk. Owners are
the claimant did not have a good possessory title to requested to show a ticket when required.’
the plot. Held that:
Bailment: damage to goods; action by bailee (a) the relationship between the parties was that of
licensor and licensee, not that of bailor and bailee
461 The Winkfield [1902] P 42 because there was in no sense a transfer of posses-
sion. There was, therefore, no obligation upon
This was an Admiralty action arising because a ship the defendants towards the claimant in respect of
called the Mexican was negligently struck and sunk by the car;
a ship called the Winkfield. The Mexican was carrying (b) if there was a contract of bailment, the servant
mail from South Africa to England during the Boer delivered possession of the car quite honestly
War. The Postmaster-General made, among other under a mistake and the conditions on the tickets
things, a claim for damages in respect of the estim- were wide enough to protect the defendants;
ated value of parcels and letters for which no claim (c) there could not be implied into the contract a
had been made or instructions received from the term that the car should not be handed over
senders. The Postmaster-General undertook to dis- without production of the ticket.
tribute the amount recovered when the senders were
Comment (i) Where the claimant hands over the key, the
found. An objection was made that the Postmaster-
court may find a transfer of possession and a bailment,
General represented the Crown and was not liable to
but the delivery of the key is not conclusive.
the senders (see now Crown Proceedings Act 1947).
Thus, in Sadler v Brittania Country House Hotel (1993)
Held – as a bailee in possession the Postmaster- CLW 40, S left his car by agreement with the hotel in one
General could recover damages for the loss of the of the hotel’s two car parks for two weeks while he went
goods irrespective of whether or not he was liable to abroad. He paid £75 for this service. He took the keys
the bailors. with him but nevertheless the car was stolen in his
..
EL_Z02.qxd 3/26/07 10:58 AM Page 883
CASES 463 – 468 THE LAW OF PROPERTY 883
absence. The system of guarding the cars was negligent. case. She left the shop having forgotten the brooch;
Only one guard checked both car parks on only five days an assistant found it and handed it to the shopwalker
per week, with no cover for breaks. S recovered damages who put it in his desk. By the firm’s rules the brooch
for the loss of the car and inconvenience for loss of use. ought to have been taken to its lost property office.
This was not, the judge said, a car park of ‘general invita- The brooch could not be found on the following
tion’ such as a public car park. It was not a temporary Monday.
parking arrangement and the defendants owed him a
Held – there was evidence to support the trial judge’s
duty of care as bailees. They were not mere licensees
with no duty of care. finding that the firm had become a bailee and had
not exercised proper care.
(ii) It was held in Chappell (Fred) v National Car Parks,
The Times, 22 May 1987, that where a vehicle was parked
Neuwirth v Over Darwen Industrial Co-operative
on NCP land for a fee but there was no barrier, the land 466
Society (1894) 70 TLR 374
was open and no keys to the vehicle were handed over,
as the owner locked the vehicle and retained the keys, no A concert hall was hired for an evening performance.
bailment of the vehicle took place and NCP were not No mention was made of rehearsal but the orchestra
liable for its theft. rehearsed in the hall during the afternoon without
(iii) It should not be assumed that because in the opposition from the proprietors or the keeper of the
Chappell case there was no bailment that this result will hall. After the rehearsal Neuwirth left his double-bass
be arrived at in all such public car parks. A modern multi- fiddle in an ante-room in such a position that when
storey car park with its careful checks on incoming and the hall keeper came to turn on the gas in the ante-
outgoing cars and a fee in return for a parking space and room he could not do so without first moving the
tickets to be presented before allowing departure will instrument. The fiddle fell and was badly damaged.
almost invariably constitute a bailment. Held – there was no contract of bailment between the
The position may be different where the car park is on parties. The care of musical instruments was outside
open land albeit fenced since in such a case it is difficult
the scope of the hall keeper’s authority and there was
to show the essential ingredient of bailment, i.e. that the
no evidence that he had been guilty of negligence in
owner gives the bailee the ability to exclude all others
the course of his employment.
except the owner.
Comment Reference should also be made to Elvin and
Powell Ltd v Plummer Roddis Ltd (1933).
463 Ultzen v Nicols [1894] 1 QB 92
A waiter took a customer’s overcoat, without being Bailment: obligations of bailor

asked to do so, and hung it on a peg behind the
customer. The coat was stolen and it was held that the 467 Hyman v Nye (1881) 6 QBD 685
restaurant keeper was a bailee of the coat and that
The claimant hired a landau with a pair of horses and
there was negligence in supervision on the part of the
a driver for a drive from Brighton to Shoreham and
bailee.
back. The claimant was involved in an accident owing
Comment In this case the servant seems to have been to a broken bolt which caused the carriage to upset so
regarded as taking possession, but it is unlikely that a that the claimant was thrown out of it.
bailment will arise if a customer merely hangs his coat on
Held – the trial judge’s direction to the jury that the
a stand or other device provided by the establishment.
claimant must prove negligence was wrong. There
was an implied warranty that the carriage was as fit
464 Deyong v Shenburn [1946] 1 All ER 226 for the purpose for which it was hired as skill and care
could make it.
An allegation that an actor who left his clothes in a
dressing room had constituted the theatre owners
bailees of the clothes was not sustained. 468 Reed v Dean [1949] 1 KB 188
Bailment: finders and involuntary recipients The claimants hired a motor launch called the Golden
Age from the defendant for a family holiday on the
Newman v Bourne & Hollingsworth (1915) Thames. The claimants set sail at about 7 pm on 22
465
31 TLR 209 June 1946, and at about 9 pm, when they were near
The claimant went into the defendant’s shop on a Sonning, they discovered that a liquid in the bilge by
Saturday in order to buy a coat. While trying on coats the engine was on fire. They attempted to extinguish
she took off a diamond brooch and put it on a show the fire but were unable to do so, the fire-fighting
.. ..
EL_Z02.qxd 3/26/07 10:58 AM Page 884
equipment with which the launch was supplied being Global Dress Co v W H Boase & Co [1966]
470
out of order. The claimants had to abandon the launch 2 Lloyd’s Rep 72
and suffered personal injury and loss of belongings. B & Co were master porters and had custody of 30
The claimants admitted to a fireman after the accid- cases of goods belonging to G & Co at a Liverpool
ent that they might have spilt some petrol when the dock shed. One case was stolen and G & Co brought
tank was refilled. an action for damages against B & Co. B & Co offered
Held – the claimants succeeded because there was an evidence of their system of safeguarding the goods
implied undertaking by the defendant that the launch and the county court judge at first instance found
was fit for the purpose for which it was hired as the system to be as good as any other in the Liverpool
reasonable care and skill could make it. Further, as the Docks, but notwithstanding this he found B & Co
launch had caught fire due to an unexplained cause, liable. On appeal to the Court of Appeal it was held
there was a presumption that it was not fit for this that if B & Co could not affirmatively prove that
purpose. The defendant’s failure to provide proper their watchman was not negligent it was of no avail
fire-fighting equipment was a breach of the implied to show that they had an impeccable system, and
warranty of fitness. the appeal should be dismissed. Thus, the onus of
proving that their servant was not negligent lay upon
Bailment: obligations of bailee B & Co.
Houghland v R Low (Luxury Coaches) Ltd [1962]

469
2 All ER 159 471 Doorman v Jenkins (1843) 2 Ad & El 256
The defendant company supplied a coach for the pur-
poses of an old people’s outing to Southampton. On The claimant left the sum of £32 10s with the defend-
returning the passengers put their luggage into the ant, who was a coffee-house keeper, for safe custody
boot of the coach. During a stop for tea the coach was and without any reward. The defendant put the
found to be defective and another one was sent for money in with his own in a cash box which he kept
and the luggage was transferred from the first coach in the taproom. The taproom was open to the public
to the relief coach. The removal of the luggage from the on a Sunday but the rest of the house was not and the
first coach was not supervised, but the restacking of cash was, in fact, stolen on a Sunday. Lord Denman
the luggage into the new coach was supervised by one held that the loss of the defendant’s own money was
of the defendant’s employees. When the passengers not enough to prove reasonable care and the court
arrived home a suitcase belonging to the claimant was found for the claimant.
missing and he brought an action against the defend-
ant for its loss. It was held, by the Court of Appeal,
472 Brabant v King [1895] AC 632
that whether the action was for negligence or in det-
inue, the defendant was liable unless it could show This action was brought against the government of
that it had not been negligent. On the facts it had Queensland for damage to certain explosives belong-
failed to prove this and was, therefore, liable. It was in ing to the claimant which the government, as bailee
this case that Ormerod, LJ made some observations for reward, had stored in sheds situated near the
on bailments in general. The county court judge had water’s edge on Brisbane River. The water rose to an
found that the bailment was gratuitous and that the exceptional height and the store was flooded. The
defendant was liable only for gross negligence. question of inevitable accident was raised and also the
Dealing with this question, Ormerod, LJ said: degree of negligence required. The Privy Council held
For my part I have always found some difficulty in that, because of the nature of the site, the bailee was
understanding just what was gross negligence, required to place the goods at such a level as would in
because it appears to me that the standard of care all probability ensure their absolute immunity from
required in a case of bailment or any other type of flood water, and the defendant was held liable. The
case is the standard demanded by the circumstances Privy Council went on to say, in case of deposit for
of the particular case. It seems to me to try and reward, that bailees were ‘under a level of obligation
put bailment, for instance, into a watertight com- to exercise the same degree of care, towards the
partment, such as gratuitous bailment on the one preservation of the goods entrusted to them from
hand and bailment for reward on the other, is to over- injury, which might reasonably be expected from a
look the fact that there might well be an infinite skilled storekeeper, acquainted with the risks to be
variety of cases which might come into one or apprehended from the character either of the store-
other category. house or of its locality; and the obligations included,
..
EL_Z02.qxd 3/26/07 10:58 AM Page 885
CASES 473– 478 THE LAW OF PROPERTY 885
not only the duty of taking all reasonable precautions Bailment: delegation by bailee
to obviate these risks but the duty of taking all proper
measures for the protection of the goods when such 476 Davies v Collins [1945] 1 All ER 247
risks were imminent or had actually occurred’. Counsel
for the government suggested that a bailee was not An American Army officer sent his uniform to the
liable for damage caused by the defects in his ware- defendants to be cleaned. It was accepted on the fol-
house where these defects were known to the bailor, lowing conditions: ‘Whilst every care is exercised in
in this case the proximity of the warehouse to the cleaning and dyeing garments, all orders are accepted
Brisbane River. The Privy Council dismissed this argu- at owner’s risk entirely and we are unable to hold
ment on the ground that it was a dangerous one, not ourselves responsible for damage.’ The defendants did
supported by any authority. It said that the bailor not clean the uniform but sub-contracted the work to
could rely on the skill of the bailee in this matter. It another firm of cleaners. In the event, the uniform was
will be seen from this decision that a bailee for reward lost and the defendants were held liable in damages.
is liable even in the case of uncommon or unexpected The Court of Appeal took the view that the limitation
danger, unless he uses efforts which are in proportion clause operated to exclude the right to sub-contract
to the emergency to ward off that danger. because it used the words ‘every care is exercised’,
which postulated personal service.
473 Wilson v Brett (1843) 11 M & W 113

477 Edwards v Newland [1950] 2 All ER 1072
Wilson was in process of selling his horse and Brett
volunteered to ride the horse in order to show it off to The defendant agreed to store the claimant’s furniture
a likely purchaser. Brett rode the horse on to wet and for reward. Later, without the claimant’s knowledge,
slippery turf and the horse fell and was injured. Brett the defendant made arrangements with another com-
pleaded that he was not negligent but the court held pany to store the claimant’s furniture. The third party’s
that he had not used the skill he professed to possess warehouse was damaged by a bomb and they asked
when he volunteered to ride the horse and that he the defendant to remove the furniture but this was
was liable. not done immediately because there was a dispute
about charges. Eventually the claimant removed his
Saunders (Mayfair) Furs v Davies (1965) furniture but some pieces were missing.
474
109 SJ 922
Held – the claimant could recover from the defendant
The claimants delivered a valuable fur coat to a shop because he had departed from the terms of the con-
belonging to the defendants, on sale-or-return terms. tract of bailment by sub-contracting. However, the
The defendants displayed it in their shop window defendant was not entitled to damages against the
and at 2.30 am one morning the coat was stolen in a third party because the latter, though a bailee, had
smash-and-grab raid. not, in the circumstances, been negligent.
Held – in all the circumstances and because of the
valuable nature of the property, the defendants had Learoyd Bros & Co v Pope & Sons [1966]
478
taken an unreasonable risk and were negligent in 2 Lloyd’s Rep 142
leaving the coat on display in the window all night. The claimants entered into an agreement with a car-
rier for the transport of their goods. The carrier sub-
contracted the work to the defendants, who were also
475 Coldman v Hill [1919] 1 KB 443
a firm of carriers, though the claimants had no notice
The defendant was a bailee of cows belonging to the of this arrangement. The lorry was stolen while the
claimant. Two of these cows were stolen through no defendants’ driver was in the wharf office upon arrival
fault of the defendant, though he failed to notify the at London Docks, and the carrier with whom the
claimant and did not inform the police or take any claimants had contracted paid some of the claimants’
steps to find the cows. The claimant now sued him loss and the claimants now sued the defendants for
for negligence and it was held – by the Court of the balance.
Appeal – that it was up to the defendant to prove Held – the defendants were bailees to the claimants,
that, even if notice had been given, the cows would notwithstanding the absence of any contract between
not have been recovered. In the circumstances of this them, and that the defendants’ driver was negligent
case that burden had not been discharged and the in leaving the lorry unattended and, therefore, the
defendant was liable. defendants were liable for the claimants’ loss.
.. ..
EL_Z02.qxd 3/26/07 10:58 AM Page 886
Bailment: actions against bailees for non-delivery: Leasehold: leases and licences distinguished
defence of superior title
Shell-Mex and BP Ltd v Manchester Garages Ltd
481
Rogers, Sons & Co v Lambert & Co [1891] [1971] 1 All ER 841
479
1 QB 318 The claimants by an agreement contained in a
The claimants had purchased copper from the defend- document called a licence let the defendants into
ants but did not take delivery of it and left it with the occupation of a petrol filling station for one year. The
defendants as warehousemen. The claimants then parties had some disagreements during this time and
resold the copper to a third person. Some time later at the end of the year the claimants asked the defend-
the claimants asked for delivery of the copper from ants to leave. The defendants refused claiming that
the defendants, but the defendants refused to deliver the agreement gave them a business tenancy pro-
on the ground that the claimants no longer had a title tected by the Landlord and Tenant Act 1954, Part II,
to it. which deals with the method of terminating business
Held – this was no defence to an action of detinue. tenancies. This method had not been followed by the
The defendants must show that they were defending claimants.
the action on behalf and with the authority of the Held – by the Court of Appeal – it was open to parties
true owner. to an agreement to decide whether that agreement
should constitute a lease or a licence, but the fact that
Co-ownership: severance of joint tenancy it was called a licence was not conclusive. However,
in this case it was a licence because the claimants
480 Re Draper’s Conveyance [1967] 3 All ER 853 retained, under the agreement, the right to visit the
premises whenever they liked and to exercise general
In 1951 a house was conveyed to a husband and wife control over the layout, decoration and equipment of
in fee simple as joint tenants at law and of the pro- the filling station. These rights were inconsistent with
ceeds of the trust for sale. In November 1965, the wife the grant of a tenancy.
was granted a decree nisi of divorce and this was made
Comment In Westminster City Council v Clarke [1992] 2
absolute in March 1966. In February 1966, she applied
WLR 229 the House of Lords decided that Mr Clarke, who
by summons under s 17 of the Married Women’s
was an occupant of a council hostel for single homeless
Property Act 1882, for an order that the house be sold
persons, was a licensee and not a tenant under a lease.
and in her affidavit asked that the proceeds of sale be He had no exclusive rights of occupation and his licence
distributed equally between her husband and herself. could be terminated on seven days’ notice or forthwith if
The court made such an order in May 1966, and in in breach of the rules. The claimants gave him notice
August 1966 a further order was made under the Act because of complaints about him and were entitled to
of 1882 that the former husband give up possession possession of his room.
of the house. In spite of the order, the former hus-
band remained in possession until January 1967, Leasehold: exclusive possession of land not
when a writ of possession was executed. Four days necessarily a tenancy in spite of agreement
later he died without having made a will. The former
wife now applied to the court to determine whether
482 Binions v Evans [1972] 2 All ER 70
she held the proceeds of any sale absolutely (which
would have been the case if she and her former Mr Evans was employed as a chauffeur by the
husband had been joint tenants at his death) or for Tredegar Estate which owned a number of houses. His
herself and the deceased’s estate as tenants in com- father and grandfather had also worked for the
mon in equal shares (which would have been the case estate. Mr Evans died in 1965 and the trustees of
if there had been severance). the estate allowed Mrs Evans to continue to reside
Held – severance of a joint tenancy in a matrimonial in a cottage which belonged to the estate, free of rent
home may be effected by the wife’s issue of a sum- and rates. In 1968 the trustees made a formal agree-
mons under s 17 of the Married Women’s Property ment with Mrs Evans, the defendant in this case,
Act 1882, and her affidavit in support. The affidavit who was then aged 76. The agreement purported to
had stated the former wife’s wish for severance and create a tenancy at will in order to provide her with
had operated accordingly. Therefore, she held any a temporary home for the rest of her life free of rent
proceeds of sale as trustee for herself and the estate without any rights to assign, sub-let or part with
of her former husband as tenants in common in equal possession. Two years later the trustees sold the
shares. cottage and other properties to Mr and Mrs Binions,
..
EL_Z02.qxd 3/26/07 10:58 AM Page 887
CASES 483– 486 THE LAW OF PROPERTY 887
the claimants, expressly subject to the tenancy of Leaseholds: implied covenants: inapplicable to
Mrs Evans and because of that tenancy the trustees latent defects
accepted a lower price. A copy of the trustees’ agree-
ment with Mrs Evans was given to the purchasers. 484 O’Brien v Robinson [1973] 1 All ER 583
Shortly afterwards the purchasers tried to evict Mrs
Evans on the ground that her tenancy, being at will, The claimant was the tenant of a flat to which s 32 of
was liable to determination at any time. She refused the Housing Act 1961 (giving an implied covenant to
to vacate and the court was asked to decide whether repair) applied (see now Landlord and Tenant Act 1985).
her occupation was in the nature of a tenancy at will In 1965 the claimant had complained about stamping
or a mere licence. on the ceiling above, but it was found that the landlord
was not given notice that the ceiling was defective. In
Held – by the Court of Appeal – the interest of the 1968 the ceiling fell and the claimant was injured.
defendant was not a tenancy at will, although it had
Held – by the House of Lords – the defendant landlord
been so described in the agreement. When the
was not liable for breach of covenant.
trustees created a right in her favour to live in the cot-
tage for the rest of her life, it could not be a tenancy Comment (i) In Sheldon v West Bromwich Corporation
at will liable to be terminated at any time. It was, (1973) 25 P & CR 360, the Court of Appeal held the
therefore, a mere licence, though equity would not defendant landlord liable where a water tank in a
permit the claimants to revoke it as long as the defend- council house had remained discoloured for some
ant was not in breach of the licence. The claimants held considerable time to the knowledge of the Council. The
on a constructive trust to give effect to the agreement tank burst and the Council was in breach of its implied
with Mrs Evans. covenant, under what was then s 32 of the Housing Act
1961, to keep the installation for the supply of water in
Comment In Prudential Assurance Co v London Residuary repair. The discolouration of the tank, which the Council
Body [1992] 3 WLR 279 the House of Lords held that an knew about, meant that this was not a latent defect.
agreement which stated that certain land was leased (ii) The relevant provisions of the 1961 Act are now to be
until it was required for road widening was void as a found in ss 11–16 of the Landlord and Tenant 1985.
lease for uncertainty as all leases of land must be for a
term of certain duration. Easements: cannot exist ‘in gross’ but only with
reference to the holding of land
Leaseholds: effect in equity of agreement for a
lease other than by deed; part performance; 485 Hill v Tupper (1863) H & C 121
liability of landlord for latent defects
Hill was the lessee of land on the bank of a canal. The
483 Walsh v Lonsdale (1882) 21 Ch D 9 land and the canal were owned by the lessor, and Hill
was granted the sole and exclusive right of putting
The defendant agreed in writing to grant a seven pleasure boats on the canal. Later Tupper, without
years’ lease of a mill to the claimant at a rent payable authority, put rival pleasure boats on the canal. Hill now
one year in advance. The claimant entered into pos- sued Tupper for the breach of a so-called easement
session without any formal lease having been granted, granted by the owner of the canal.
and he paid his rent quarterly and not in advance. Held – the right to put pleasure boats on the canal was
Subsequently the defendant demanded a year’s rent not an interest in property which the law could recog-
in advance, and as the claimant refused to pay, the nise as attaching to the land. It was in the nature of a
defendant distrained on his property. At common law contractual licence which could not be enforced
the claimant was a tenant from year to year because against the whole world. Tupper could have been
no formal lease had been granted, and as such his sued by the owner of the canal, or by Hill, as lessee, if
rent was not payable in advance. The claimant argued he had also been granted a lease of the canal.
that the legal remedy of distress was not available to
the defendant. Easements: right must be definite enough to form
subject of grant
Held – as the agreement was one of which the
court could grant specific performance, and as 486 Bass v Gregory (1890) 25 QBD 481
equity regarded as done that which ought to be
done, the claimant held on the same terms as if a The claimants were the owners of a public house in
lease had been granted. Therefore, the distress was Nottingham, and the defendant was the owner of
valid. some cottages and a yard adjoining the claimants’
.. ..
EL_Z02.qxd 3/26/07 10:58 AM Page 888
888 THE LAW OF PROPERTY CASES 487–489
premises. The claimants claimed to be entitled, by the maintenance, and the owners of the park agreed
user as of right, to have the cellar of their public not to erect dwelling houses or buildings, other than
house ventilated by means of a hole or shaft cut from ornamental buildings, on the park. The park was later
the cellar to an old well situated in the yard occupied sold, and the question of the rights of the owners or
by the defendant. The claimants sought an injunction occupiers of the houses fronting on to the park to
to prevent the defendant from continuing to block enforce their rights over the park arose. It was con-
the passage of air from the well. tended that the rights created by the conveyances
Held – the right having been established, an injunc- were not enforceable, because they did not conform
tion would be granted because the access of air to the to the essential qualities of an easement, and that
premises came through a strictly defined channel, and they gave a right of perambulation which was not a
it was possible to establish it as an easement. right legally capable of creation.
Held – the rights granted to the owners of the houses
Comment In Bryant v Lefever (1879) 4 CPD 172, the
were enforceable as a legal easement.
claimant and defendant occupied adjoining premises,
and the claimant’s complaint was that the defendant, in Comment As regards the categories of easements, there
rebuilding his house, carried up the building beyond its have been a number of cases concerning car parking as
former height and so checked the access of the draught an easement. From these case rulings it can be said that
of air to the claimant’s chimneys. The Court of Appeal although parking can exist as an easement, parking that
held that the right claimed could not exist at law, monopolises the use of the land will be regarded as too
because it was an attempt to claim special rights over the great an interference with the land to exist as an ease-
general current of air which is common to all mankind. ment as in Batchelor v Marlow (2001) 82 P & CR 459. In
that case the claimant claimed a right to an easement
Easements: not necessarily negative to park six cars in a space only large enough for six cars.
The same problem arose in Central Midland Estates Ltd
487 Crow v Wood [1970] 3 All ER 425 v Leicester Dyers Ltd [2003] 4 CL 404 where the court
conceded that the right to park could exist in law.
This case arose out of damage done on a farm in However, since the claim was to park an unlimited num-
Yorkshire by sheep which strayed on to it from an ber of vehicles anywhere on the piece of land concerned
adjoining moor. The owner of the sheep, who was the being restricted only by the space available, there could
owner of another farm adjoining the moor, raised, as be no easement on the facts because this would make
a defence against an action for trespass, an obligation the actual owner’s right to the land illusory as in the
on the claimant to fence her own property to keep Batchelor case. The only way to achieve such wide rights
is to ask for a lease of the relevant land. In this connec-
the sheep out. It was held – by the Court of Appeal –
tion, it is worth noting that in Stonebridge v Bygrave
that a duty to fence existed as an easement and that
[2001] All ER (D) 376 (Oct) the High Court ruled that
it had passed under s 62 of the Law of Property Act
where a tenant has an exclusive right in a lease to park in
1925, when the defendant purchased his farm, even
a specified parking place the problems described above
though his conveyance and previous ones had made
did not arise because the owner of the land must be
no reference to the obligation of other farmers to taken to have retained sufficient use of his own land.
keep up their fences. However, the right was appurten-
ant to the land sold and, therefore, became an ease-
ment in favour of the defendant and his successors 489 Phipps v Pears [1964] 2 All ER 35
in title.
A Mr Field owned two houses, Nos 14 and 16 Market
Easements: categories capable of limited Street, Warwick, and in 1930 he demolished No 16
expansion and built a new house with a wall adjacent to the
existing wall of No 14. In 1962, No 14 was demo-
488 Re Ellenborough Park [1956] Ch 131 lished under an order of Warwick Corporation, leav-
ing exposed the wall of No 16. This wall had never
Ellenborough Park was a piece of open land near the been pointed; indeed it could not have been because
seafront at Weston-super-Mare. The park and the sur- it was built hard up against the wall of No 14. It was
rounding land was jointly owned by two persons. The not, therefore, weatherproof and the rain got in and
surrounding land was sold for building purposes, and froze during the winter causing cracks in the wall. The
the conveyances granted an easement over the park claimant sued for the damage done, claiming an ease-
in favour of the owners of the houses. The owners of ment of protection. It was held by the Court of Appeal
the houses undertook to be responsible for some of that there is no such easement. There is a right of
..
EL_Z02.qxd 3/26/07 10:58 AM Page 889
CASES 490 –491 THE LAW OF PROPERTY 889
support in appropriate cases. No 16 did not depend right of use claimed was so extensive as probably to be
on No 14 for support; the walls, though adjoining, were incapable of constituting an easement at law; (c) that
independent. Lord Denning, MR said in the course of in any event on the facts use of the cellar for the pur-
his judgment: poses of the shop had ceased when the properties
A right to protection from the weather (if it exists) were divided, it had never been contemplated that
is entirely negative. It is a right to stop your neigh- such would be the case in the future and the defend-
bour pulling down his house. Seeing that it is a neg- ants’ claim to an easement failed. This decision was
ative easement, it must be looked at with caution confirmed by the Court of Appeal [1973] 3 All ER 455.
because the law has been very chary of creating any
new negative easements. . . . If we were to stop a Easements: acquisition; effect of Law of Property
man pulling down his house, we would put a brake Act 1925, s 62
on desirable improvement. If it exposes your house
to the weather, that is your misfortune. It is not 491 Ward v Kirkland [1966] 1 All ER 609
wrong on his part. . . . The only way for an owner The wall of a cottage could be repaired only from the
to protect himself is by getting a covenant from his yard of the adjoining farm. Before 1928 both propert-
neighbour that he will not pull down his house. . . . ies belonged to a rector and the tenant of the cottage
Such a covenant would be binding in contract; and repaired the wall without seeking the permission of
it would be enforceable on any successor who took the tenant of the farm. In that year the cottage was
with notice of it, but it would not be binding on conveyed to a predecessor in the title of Ward and in
one who took without notice. 1942 Mrs Kirkland became the tenant of the farm.
Comment These walls would not appear to be party From 1942 to 1954 work to the wall was done with
walls as where two properties are semi-detached. Thus, her permission as tenant and in 1958 she bought
the newer Party Wall, etc. Act 1996 may not have the farm. In October 1958, Ward did not make entry
applied. on to the farmyard to maintain the wall because
Mrs Kirkland would not let him enter as of right. In
this action, which was brought to determine, amongst
490 Grigsby v Melville [1972] 1 WLR 1355 other things, whether Ward was entitled to enter the
farmyard to maintain the wall and for an injunction
A Mr Holroyd owned two adjoining properties, con-
to prevent interference with drains running from the
sisting of a cottage and a shop which had recently
cottage through the farmyard, it was held – by Ungoed
been occupied in single occupation by a butcher.
Thomas, J – that:
Beneath the drawing room of the cottage there was a
cellar, the only practical means of access to which was (a) assuming such a right could exist as an easement
by way of steps from the shop which the butcher had it would not be defeated on the ground that it
used for storing brine in connection with the business would amount to possession or joint possession
of the shop. In 1962, Holroyd conveyed the cottage of the defendant’s property;
to Natinvil Builders Ltd, the predecessor in title of (b) although such a right was not created by implica-
the claimant in this case. The conveyance accepted tion because it was not ‘continuous and apparent’,
‘such rights and easements or quasi-rights and quasi- yet the advantage having in fact been enjoyed, it
easements as may be enjoyed in connection with the was transformed into an easement by s 62 of the
. . . adjoining property’. A month later Holroyd con- Law of Property Act 1925;
veyed the shop to a Mrs Melville. Mrs Melville, who (c) no easement had arisen by prescription because
was a veterinary surgeon, began to use the cellar for permission had been given between 1942 and
storage. The claimant acquired the cottage in 1969 1958;
but did not realise the situation until 1971 when she (d) permission having been granted by the rector to
heard hammering beneath her drawing room floor. Ward to lay drains from the cottage through the
She sought an injunction to prevent Mrs Melville farmyard and Ward having incurred expense in
from trespassing there. The defendants claimed that so doing it was assumed that the permission was
the cellar was excluded from the property conveyed, of indefinite duration and an injunction would
or alternatively that they enjoyed an easement of be granted to prevent interference with the drains
storage there equivalent to an estate in fee simple. by Mrs Kirkland.
Held – by Brightman, J – (a) that the cellar, though not Comment (i) Even in the absence of an easement, advant-
the steps leading to it, formed part of the property con- age may now be taken of the provisions of the Access to
veyed to Natinvil Builders Ltd; (b) that the exclusive Neighbouring Land Act 1992 (see Chapter 21).
.. ..
EL_Z02.qxd 3/26/07 10:58 AM Page 890
890 THE LAW OF PROPERTY CASES 492–493
(ii) A further illustration is provided by Bratts Ltd v (d) only the demonstration of a fixed intention never
Habboush, High Court, 1 July 1999 (unreported). The at any time to assert the right or to attempt to trans-
claimant was a tenant of a nightclub in part of a build- mit it to anyone else could amount to an abandon-
ing. The landlord removed emergency lighting and exit ment of an easement or profit, thus the acquiescence
signs from the common parts of the building. The by the farmers in the arrangement under which the
claimant submitted that the right to use and maintain association controlled the grazing for a period of time
the lighting and exit signs was an easement under s 62 of did not amount to abandonment.
the 1925 Act. The High Court so held and decided also
that the claimant was entitled to damages to replace the Comment It was held by the Court of Appeal in Benn v
signs and lights. Hardinge, The Times, 13 October 1992, that non-user for
175 years of a grant of a right of way made in 1818 did
Easements: acquisition: by prescription not of itself indicate an intention of the owner (or his
predecessors) of the right to abandon it, so that it still
492 Tehidy Minerals v Norman [1971] 2 WLR 711 existed in the absence of any evidence of intention to
abandon it. Comment in a leading text that 20 years’
The owners of a number of farms adjoining a down non-user was enough was not approved.
claimed to be entitled to grazing rights over it. The
facts of the case were as follows:
493 Diment v N H Foot [1974] 2 All ER 785
(a) the farms and the downs had been owned by one
person until 19 January 1920; A vehicular way across the claimant’s field was
(b) the down had been requisitioned by the govern- claimed and had been used by the defendant from
ment on 6 October 1941; time to time without dispute between 1936 and 1967.
(c) during the period of requisition the owners of The claimant, although the registered owner of the
surrounding farms had grazed cattle on the down by field throughout that period, had never farmed the
arrangement with the Ministry concerned; land herself but had had tenants and during much of
the time had lived far away or abroad. Until 1967 the
(d ) on 31 December 1960, the down was derequisi-
claimant knew nothing of the way claimed.
tioned and the association of farmers which had
made the arrangements with the Ministry entered Held – by Pennycuick, V-C – (a) the law of prescrip-
into a further arrangement with the owner of the tion rested upon acquiescence for which knowledge
down for the maintenance of certain fences erected was essential; (b) the claimant had no actual know-
by the Ministry and grazing continued but under the ledge and knowledge was not to be imputed to her
control of the association of farmers. either (i) because there was a gateway from the field
On appeal from a decision of the county court judge to a parcel of the defendant’s land to which there was
that the farmers were entitled to grazing rights over no vehicular access; there were a number of possible
the down it was held by the Court of Appeal that: explanations for it; or (ii) because the claimant had
not shown that her agents did not have knowledge
(a) as there had been no enjoyment of the grazing
of the use of the way or the means of knowledge.
rights between October 1941 and 31 December 1960,
The presumption that long use was known to the
except by permission of the Ministry, the farmers
owner was rebuttable and in the present case had
could not claim 30 years’ prescription which the Act
been rebutted. It did not extend to the knowledge
of 1832 required for a profit to be established by user
of agents. The burden of proving such knowledge
as of right;
or means of knowledge lay on the defendant
(b) despite the extreme unreality of such a presump- and there was no evidence of either in the present
tion, it must be presumed that a modern grant, since case.
lost, had been made of grazing rights at some time
between 19 January 1920 and 6 October 1921, i.e. 20 Comment Even if the owner of the servient tenement (A)
knows of the use the right will not arise if A permits the
years before the requisition; this presumption could
use. Thus, in Goldsmith v Burrow Construction Co Ltd,
not be rebutted by evidence that no such grant had
The Times, 31 July 1987, the claimants had used a path
been made but only by evidence – of which there was
over the defendants’ land for over 20 years. However,
none – that it could not have been made;
the defendants had a gate across the path and locked it
(c) the period of 20 years applied to profits as well from time to time. The Court of Appeal held that no
as to easements for the purposes of the law of lost easement had come into being. The claimants’ use
modern grant although the Act of 1832 provided for depended on the permission of the defendants. They had
different periods in the two cases; shown this by locking the gate from time to time.
..
EL_Z02.qxd 3/26/07 10:58 AM Page 891
CASES 494 – 498 THE LAW OF PROPERTY 891
Held – the company was not entitled to redeem the

494 Davis v Whitby [1974] 1 All ER 806
mortgage before the end of the 40 years because, in
The claimant and his predecessors in title had enjoyed the circumstances, the postponement of the right
a right of way over the defendant’s land by a certain was not unreasonable, since the parties were men of
route for 15 years and then by another route, substi- business and equal in bargaining power. A postpone-
tuted by agreement, for a further 18 years. On appeal ment of the right of redemption is not by itself a clog
by the defendant to the Court of Appeal against the on the equity of redemption; much depends upon the
decision that a right of way over the substituted route circumstances. Further, the postponement did not
had been established by prescription, it was held – by offend the rule against perpetuities, which did not
the court – that the appeal should be dismissed. apply to mortgages.
‘When you have a way used for some time and then
afterwards a substituted way is used for the same pur- 497 Noakes v Rice [1902] AC 24
pose, both uses being as of right, with the apparent
consent or acquiescence of those concerned, then the The appellant was a brewery company and the
original way and the substituted way should be con- respondent wished to become the purchaser of a pub-
sidered as one.’ (Per Lord Denning, MR) lic house owned by the company. The respondent
borrowed money from the company in order to effect
Restrictive covenants: there must be land which the purchase, and agreed that the company should
can benefit have the exclusive right to supply the premises with
malt liquors during the period of the mortgage and
495 Kelly v Barrett [1924] 2 Ch 379 afterwards, whether any money was or was not owed.
The respondent subsequently gave notice to the com-
The owner of an estate in Hampstead developed it for pany that he was prepared to pay off the money
building purposes. He made a new road through it, and secured by the mortgage, if the company would release
sold plots of land along the road to a building firm who him from the above-mentioned contract. This was
erected dwelling houses on the land. The purchasers refused and the respondent asked the court for relief.
undertook that the houses built should be used as pri-
Held – the covenant was invalid as a clog on the equity
vate dwelling houses only. The owner of the estate
of redemption in so far as it purported to tie the public
did not retain any land except the road, which was
house after payment of the principal money and
afterwards taken over and vested in the local author-
interest due on the security.
ity. A subsequent purchaser of two adjoining houses
carried on a nursing and maternity home in them.
Kreglinger v New Patagonia Meat and Cold
The tenant for life under the former estate owner’s 498
Storage Co [1914] AC 25
will and one of the original purchasers claimed an
injunction to restrain the defendant’s activities. The appellants were a firm of merchants and wool
brokers. The respondents carried on the business of
Held – no injunction could be granted because the
preserving and canning meat, and of boiling down
agreement was not a valid building scheme, and the
carcasses of sheep and other animals. The appellants
vendor’s successor did not retain any interest capable
advanced money to the respondents, the loan being
of being affected by the restrictions.
secured by a charge over all the respondents’ prop-
erty. The appellants agreed not to demand repayment
Mortgages: equity of redemption; restraint on
for five years, but the respondents could repay the
redemption enforced if parties at arm’s length;
debt at an earlier period on giving notice. The agree-
collective transactions
ment also contained a provision that the respondents
Knightsbridge Estates Trust Ltd v Byrne [1939] should not sell sheepskins to anyone but the appel-
496
Ch 441 lants for five years from the date of the agreement, so
The claimant company was the owner of a large free- long as the appellants were willing to purchase the
hold estate close to Knightsbridge. This estate was same at an agreed price. The loan was paid off before
mortgaged to a friendly society for a sum of money, the expiration of the five years.
which, together with interest, was to be repaid over a Held – the option of purchasing the sheepskins was
period of 40 years in 80 half-yearly instalments. The not terminated on repayment, but continued for the
company wished to redeem the mortgage before the period of five years. The option was a collateral contract
expiration of the term, because it was possible for it to which was not a mortgage and in no way affected the
borrow elsewhere at a lower rate of interest. right to redeem the property.
.. ..
EL_Z02.qxd 3/26/07 10:58 AM Page 892
892 THE LAW OF PROPERTY CASES 499 –501
Cityland and Property (Holdings) Ltd v Dabrah Charges and encumbrances over land: spouse’s
499
[1967] 2 All ER 639 right of occupation
A first mortgage of £2,900 was granted by the seller Williams & Glyn’s Bank Ltd v Boland [1980]
of property to a purchaser and was expressed to 501
3 WLR 138
be repayable in the sum of £4,553 for which the
property was charged. The £4,553 was to be repaid A husband and wife lived together in the matrimonial
over six years by equal monthly instalments and there home which was owned by the husband and subject
was no mention in the mortgage of any interest. The to a mortgage with the bank. The husband was regis-
whole of the balance of the £4,553 became payable tered as the owner for the purposes of the Land
if the borrower defaulted and for this reason Goff, Registration Act 1925. It appeared that his wife had
J held that the premium amounting to £1,653 was made a substantial contribution of money towards
an unreasonable collateral advantage and, therefore, buying the house and that she had, accordingly, equit-
void under the principle in Kreglinger’s case (1914) able rights in it. The husband failed to keep up the
(above). The judge having disallowed the premium mortgage repayments and the bank asked the court
was prepared to allow interest at 7 per cent on a day- for a possession order over the house with a view to
to-day basis which he thought to be somewhat more selling it. The wife raised objection to the possession
than market rates, but in fact it was below market order, claiming that her rights and occupation gave
rates. The premium was an interest computation her an ‘overriding interest’ in the home which over-
of 91/2 per cent, non-reducing over six years, and if rode the bank’s claim to possession under s 70(1) of
it had been expressed as such in the mortgage the Land Registration Act 1925. Section 70 includes as
it would appear that the court could not have set it an overriding interest: ‘The rights of every person in
aside since the court can only set aside unreasonable actual occupation . . .’. The bank argued that the wife
collateral advantages. However, in regard to interest was not in actual occupation and also relied on s 3 of
rates, it appears that ‘equity does not reform mortgage the 1925 Act which provides that equitable rights,
transactions because they are unreasonable’ (Greene, such as the wife had, were not an overriding interest
MR in Knightsbridge Estates Trust Ltd v Byrne (1939) but a ‘minor interest’ and it was admitted that these
(see above) ). But this case was not cited to Goff, J. would not have defeated the bank’s claim. However,
It would seem that for the future interest in mort- the House of Lords held that the wife’s objection must
gages should be expressed as such and not disguised be sustained and refused the bank an order for posses-
as a premium. sion. The wife was in actual possession just as much
as her husband and the fact that he was in occupation
did not prejudice her right to be regarded as in occupa-
Remedies of legal mortgagee: taking possession;
tion also. If she had not been in occupation, apparently
duty of mortgagee
her equitable rights would have been a minor interest,
White v City of London Brewery Co (1889) but since she was also in occupation this fact converted
500
42 Ch D 237 them into an overriding interest.
The claimant had a lease of a public house in Can- Comment (i) This decision has caused considerable con-
ning Town, and he mortgaged it to the defendants to cern to banks and building societies since the occupation
secure a loan of £900 with interest. One year later, of most houses is shared either with a spouse or a cohabitee
no interest having been paid since the date of the or relatives who have made some financial contribution
mortgage, the defendants entered into possession towards the purchase.
of the public house. They later let the premises
(ii) The response of lending institutions has been to ask a
on a tenancy determinable at three months’ notice
spouse (or other relatives who may have rights of occupa-
under which the tenant was to take all his beer
tion) to sign a Deed of Postponement as s 6(3) of the
from the defendants. Eventually the lease was sold by Matrimonial Homes Act 1983 allows. This postpones the
the defendants, and the claimant asked the defend- interest of an occupier to that of the lender.
ants to account and pay him what should be found
(iii) Following the decision of the House of Lords in
due.
Abbey National v Cann [1990] 2 WLR 832 the person
Held – the defendants must account to the claimant claiming an overriding interest must occupy the property
for the increased rent they might have received if from the time of purchase. Persons who take up occupa-
they had let the public house without the restrictive tion later are excluded. For example John buys a house
condition regarding the sale of the defendants’ beer, with some help from his mother in terms of finance.
since a ‘free house’ would produce more rent than a Some time after the purchase John’s mother comes to
‘tied house’. live with John. John’s mother cannot claim an overriding
..
EL_Z02.qxd 3/26/07 10:58 AM Page 893
CASES 502–503 THE LAW OF PROPERTY 893
interest against a person who, e.g., lent John money on reaccommodate herself (see Bank of Baroda v Dhillon
mortgage to complete the purchase. [1998] 1 FCR 489).
(iv) A contrast is provided by the decision of the House
of Lords in City of London Building Society v Flegg [1987] Mortgages of chattels: bills of sale
All ER 435. In this case the property was owned by a
husband and wife, Mr and Mrs Maxwell-Brown, as joint 502 Koppel v Koppel [1966] 2 All ER 187
tenants. They were, therefore, trustees of land of the
property and could give a good receipt for purchase Mr Koppel, who was estranged from his wife, invited
money so as to override all beneficial interests of them- a Mrs Wide to come to his house and look after his
selves and others. The building society had advanced cap- children on a permanent basis. Mrs Wide agreed to do
ital money to them by way of mortgage and their receipt so provided that Mr Koppel transferred the contents
for that money had overriden all equitable interests of his house to her to compensate for giving up her
including their own and that of Mr & Mrs Flegg, parents own home and disposing of her furniture. The trans-
of the wife, who lived there. The building society could fer was recorded in writing. Later Mrs Koppel sought
sell the property without regard to those interests if the to levy execution on the contents of the house for her
loans were not repaid. unpaid maintenance which amounted to £114. In
(v) See also Hodgson v Marks (1970) in Chapter 13. proceedings resulting from Mrs Wide’s claim to the
property, a county court registrar held that the writ-
(vi) In Hypo-Mortgage Services Ltd v Robinson [1997] 2
ten transfer of the property to Mrs Wide was void as an
FCR 422, the Court of Appeal held that children who
unregistered bill of sale.
lived with a parent who was the legal owner of a prop-
erty could not have an overriding interest protected Held – by the Court of Appeal – the contents of the
under the LRA 1925, s 70(1)(g) by reason of actual occupa- house were not in Mr Koppel’s ‘possession or apparent
tion because they had no rights of their own to occupy possession’ within s 8 of the Bills of Sale Act 1878,
and were present only because their parents were the because:
occupiers.
(a) Mr Koppel had transferred possession to Mrs
(vii) The decision of the Court of Appeal in Ferrishurst Ltd Wide under the document which was an absolute
v Wallcite Ltd, The Times, 8 December 1998 makes it clear bill of sale;
that in order to rely on s 70 a person does not have to be (b) the grantor of the bill, Mr Koppel, had, therefore,
in occupation of the whole of the land. In that case, neither possession nor apparent possession. He did
Ferrishurst had a lease of office premises and a third not have apparent possession because Mrs Wide
party had a lease of a garage contained within the same was living in the house with him and both had
premises. Ferrishurst had an option to acquire a lease of
apparent possession of the property, not merely
the whole premises when its lease of the office premises
Mr Koppel;
expired. Wallcite bought the freehold of the whole of
(c) Mrs Wide was, therefore, entitled to the property.
the premises, there being no entry on the title register
regarding the right of Ferrishurst to ask for a lease of the
Lien: innkeepers
whole of the premises. Nevertheless, the Court of Appeal
said that Ferrishurst had the right and that Wallcite must
grant it the lease. So instead of becoming an unfettered 503 Robins & Co v Gray [1895] 2 QB 501
freeholder, Wallcite became a landlord.
The claimants dealt in sewing machines and
The case demonstrates how important it is to ascertain
employed a traveller to sell the machines on commis-
the fact of a person’s occupation of land (or now part of
sion. The claimants’ traveller put up at the defend-
it) when acquiring a property or dealing with the land in
ant’s inn in April 1894, and stayed there until the
terms, e.g. of a security. Full and stringent enquiries
should be made, and it is also desirable (if not essential) end of July 1894. During this time the claimants sent
to inspect the property to ascertain all the facts. the traveller machines to sell in the neighbourhood.
At the end of July, the traveller owed the defendant
(viii) Overriding interests may themselves be overridden.
£4 for board and lodgings, and he failed to pay. The
The court has a discretion under s 14 of the Trusts of
defendant detained certain of the goods sent by the
Land and Appointment of Trustees Act 1996. This discre-
claimants to their traveller, asserting that he had a
tion was used by the Court of Appeal where the property
lien on them for the amount of the debt due to him,
was jointly owned by a husband and wife and the hus-
although the defendant knew that the goods were the
band became bankrupt and the wife was in occupation.
The court ordered a sale of the property where otherwise property of the claimants.
there was no prospect of the claimant being paid and Held – the defendant was entitled to a lien on the
the wife having a resource which would enable her to claimants’ property for the traveller’s debt.
.. ..
EL_Z02.qxd 3/26/07 10:58 AM Page 894
894 CRIMINAL LAW: GENERAL PRINCIPLES CASES 504–507
Lien: solicitors sale was appropriate here, particularly since the filly
was eating a great quantity of food. Fawcett had not
504 Caldwell v Sumpters [1971] 3 All ER 892 made any attempt to get his property back but had
clothed Davis with all the indicia of ownership. An
The defendants, a firm of solicitors, were holding the order for sale would therefore be made unless Fawcett
title deeds to property recently sold by a former paid into court the amount of Larner’s charges by a
client, Mrs Caldwell, who had not paid their charges. given date.
They voluntarily released the deeds to another firm
which had been instructed to take their place to
complete the sale, stating that they did so on the CRIMINAL LAW: GENERAL PRINCIPLES
understanding that the deeds would be held to their
order until Mrs Caldwell had paid. The second firm of Crime and civil wrongs distinguished: the burden
solicitors kept the deeds and refused to accept that of proof in crime
understanding. Woolmington v Director of Public Prosecutions
506
Held – by Megarry, J – Sumpters’ lien was lost when [1935] AC 462
they voluntarily parted with possession of the deeds W had been charged with the murder of his wife. He
and could not be retained by a one-sided reservation had, on his own admission, shot her but said in his
of the kind made. If the agreement of the second defence that the gun had gone off accidentally. The
firm of solicitors had been obtained, the lien would judge told the jury that so long as the prosecution
have been preserved, as it would also if Sumpters had had shown that the accused had caused the death
lost possession by trickery or other wrongdoing. The malice was presumed and that the accused must
second firm was under no obligation to accept the prove that the killing was an accident. The jury con-
reservation or to return the deeds. victed W who appealed to what was then the Court of
Criminal Appeal where his conviction was upheld.
Comment The decision of Megarry, J was reversed by the
However, on appeal to the House of Lords his convic-
Court of Appeal (Caldwell v Sumpters [1972] 1 All ER
tion was quashed.
567), the court holding that Sumpters’ lien was not lost
when they parted with the deeds since: Throughout the web of English Criminal Law one
golden thread is always to be seen that it is the duty
(a) possession was given up on the clear and express
of the prosecution to prove the prisoner’s guilt sub-
understanding that the deeds were to be held to
ject to what I have already said as to the defence of
Sumpters’ order; and
insanity and subject also to any statutory excep-
(b) solicitors as officers of the court could not be
tions. If, at the end of and on the whole of the case,
allowed to take advantage of this sort of situation
there is a reasonable doubt created by the evidence
even out of regard for any duty owed to a client.
given by either the prosecution or the prisoner, as
to whether the prisoner killed the deceased with a
Lien: power of court to order sale
malicious intention, the prosecution has not made
out the case and the prisoner is entitled to an
505 Larner v Fawcett [1950] 2 All ER 727 acquittal. (Per Viscount Sankey, LC)
The defendant owned a racehorse and made an agree-

Nulla poena sine lege: the common law offence of
ment with a Mr Davis under which it was agreed that
conspiracy
Davis would train and race the filly and receive half
of any prize money she might win. Davis, unknown Shaw v Director of Public Prosecutions [1961]
507
to the defendant, agreed to let Larner have the animal 2 All ER 446
to train. Larner did so, and when his charges had S published a booklet called The Ladies Directory
reached £125, he discoverd that Fawcett was the true which contained names and addresses of prostitutes.
owner. Larner, being unable to recover the cost of The entries gave telephone numbers and indicated
training and feeding the filly from Davis, who had no that they were offering their services for sexual inter-
funds, now applied to the court for an order for sale. course and some of them for the practice of sexual
Fawcett was brought in as defendant. perversions. S was convicted of conspiracy to corrupt
Held – by the Court of Appeal – Larner had a common- public morals and his appeal eventually reached the
law lien for his charges, and although such a lien does House of Lords. His appeal was dismissed and his
not carry with it a power of sale, the power given in conviction affirmed. However, Lord Reid, in a strong
the Rules of the Supreme Court to make an order for dissenting judgment, said that in his view there was
..
EL_Z02.qxd 3/26/07 10:58 AM Page 895
CASES 508–511 CRIMINAL LAW: GENERAL PRINCIPLES 895
no such general offence known to the law as conspiracy death. She was in good health apart from thymus
to corrupt public morals and the court in convicting gland trouble, on which the medical evidence was
S of it was creating a new crime on the basis of public that a person with such a condition might die from
mischief which is the criminal law equivalent of pub- the combined effects of fright, strong emotion and
lic policy. He thought that if the courts had stopped physical exertion. H was charged with manslaughter
creating new heads of public policy in, for example, at Maidstone Assizes and found guilty. Ridley, J said
the civil law of contract, then they certainly should that the abnormal state of the deceased’s health did
refrain from doing so in criminal law. not affect the question whether the prisoner knew or
did not know of it, if it were proved to the satisfac-
The requirement of causation tion of the jury that the death was accelerated by the
prisoner’s illegal act.
508 R v Towers (1874) 12 Cox 530
510 R v Curley (1909) 2 Cr App R 109
T had attacked a woman by hitting her and pulling
her hair. She was holding a baby of four-and-a-half C had been indicted for murder but convicted of
months. The woman screamed loudly and the baby manslaughter. He had been heard quarrelling with
went black in the face. From then on it had convul- the woman he lived with. She had been heard shout-
sions and died some six months later. Prior to the ing in her bedroom. She had said: ‘Let me out’, ‘mur-
attack the child had been healthy. T was charged with der’ and ‘police’. C was heard to go into her room and
the murder of the child. He was found not guilty. the window was opened. The woman later jumped
There was doubt whether a child of such an age could from it. C told a police officer: ‘I ran at her to hit her.
be frightened in the way suggested. The jury took the I didn’t quite touch her. Out she jumped.’ The court
view that the act of the accused in assaulting the held the accused to be guilty. The jumping out of the
woman was unconnected with the child’s death. window was contributed to by C’s unlawful act.
Comment A not dissimilar situation occurred in Haystead
v DPP (2000) 164 JP 396 where a woman was holding a 511 R v Smith [1959] 2 All ER 193
child and the defendant punched her, causing her to
drop the child so that it hit its head. He was charged with The facts were that the victim of a barrack-room brawl
assault (effectively battery here) and was held by the who was stabbed twice with a bayonet was dropped
High Court to have been guilty of assault. Although the twice by those trying to get him to hospital and given
assault would normally require the use of direct force artificial respiration when he got there although he
against the person of the child, the defendant was guilty
was wounded in the lungs so that this was not advis-
of an assault upon its mother and no distinction could be
able. Nevertheless, these events were held not to break
drawn between using the mother or a weapon to assault
the chain of causation. However, it must be said that
the child. The child’s fall had resulted directly from the
the events in this case, including the death of Private
assault on the mother and the defendant was guilty of
Creed who was the victim, all occurred within a
assault by beating. In any case, battery did not necessarily
require the direct application of force at least in criminal period of some two hours.
matters. Force can be applied indirectly. A man is stabbed in the back, his lung is pierced
Cases that support the concept of indirect battery are and haemorrhage results; two hours later he dies of
few and thought by some to be wrongly decided. The haemorrhage from that wound; in the interval
concept of indirect battery is, however, supported by the there is no time for a careful examination, and the
decision in DPP v K (1990, Case No 540 below). treatment given turns in the light of subsequent
knowledge to have been inappropriate and, indeed,
harmful. In those circumstances no reasonable jury
509 R v Hayward (1908) 21 Cox 692
or court could, properly directed, in our view possibly
H came home one night in a violent state of excite- come to any other conclusion than that the death
ment. He had said previously that he was going to resulted from the original wound. Accordingly the
‘give his wife something’ when she returned home. court dismisses this appeal. (Per Lord Parker, CJ)
When she arrived there were sounds of quarrelling Comment (i) This case seems to illustrate the usual
and soon afterwards the wife ran out of the house fol- approach of the court to these causation problems. The
lowed by H. The wife fell on to the road and H kicked case of R v Jordan (1956) 40 Cr App R 152 seems to be
her on her left arm. She died and the medical examina- the odd man out. In that case J had stabbed the victim
tion showed that the kick was not the cause of her but it was established that the wound was healing
.. ..
EL_Z02.qxd 3/26/07 10:58 AM Page 896
satisfactorily. The victim died after being given an anti- deceased owing to the non-performance of that
biotic to which he was allergic and over-large quantities legal duty. It is unnecessary to say more than that
of liquid intravenously. J’s conviction for murder was upon the evidence this conviction was most prop-
quashed on appeal. erly arrived at. (Per Lord Coleridge, CJ)
(ii) In R v Malcherek [1981] 2 All ER 422 two victims of
Comment (i) An example of liability arising from an
assault were placed on life-support machines and in both
omission in a special relationship situation of parent and
cases doctors having diagnosed brain death discontinued
child is provided by R v Gibbins and Procter (1918) 13 Cr
treatment and disconnected the life-support system. It
App R 134. In that case G was the father of a child and he
was held by the Court of Appeal that the original injuries
was living, together with the child, with P the female
were the continuing operating cause of death. The dis-
second defendant. They failed to feed the child and she
continuance of the treatment did not break the chain of
died. The convictions of G and P for murder were upheld
causation between the initial injury and the death.
by the appeal court. Of course, in the case of P it was
(iii) More recently in R v Cheshire [1991] 3 All ER 670, necessary to show that she had assumed a duty towards
following an argument in a fish and chip shop C shot his G’s child. It was held that she had by living with him and
victim in the leg and stomach, seriously wounding him. receiving money from him for food.
The victim died two months later following complications
(ii) An additional illustration is provided by R v Hood
after surgery to assist his breathing. C was convicted of
[2004] 1 Cr App R (S) 431, where the accused was found
murder even though there was evidence that the leg and
guilty of the manslaughter of his wife. He was her sole
stomach wounds were no longer life threatening at the
carer. She suffered from diabetes and osteoporosis caus-
time of his death. The Court of Appeal in dismissing an
ing brittle bones. She broke several bones in a fall and
appeal said that the acts of the accused need not be the
the accused failed to summon medical assistance for
sole or even the main cause of the death, it being suffi-
some weeks. The wife died shortly after being admitted
cient that his acts contributed significantly to the death.
to hospital in a debilitated state. The accused’s sentence
(iv) Again, in R v Mellor (Gavin Thomas), The Times, 29 was reduced from four years to 30 months on the basis of
February 1996 M appealed against conviction of the the wife’s reluctance to go to hospital.
murder of a 71-year-old man who had died two days after
(iii) Problems can arise where persons suffering injury
he had been admitted to hospital with facial and chest
have, because of irreversible brain damage, gone into a
injuries caused by M. The appeal was dismissed by the
persistent vegetative state. To avoid liability for failing to
Court of Appeal, the court holding that in the superven-
sustain life or bringing about death by turning off life-
ing event cases the prosecution had only to establish that
support apparatus, the family and health trust concerned
the injuries inflicted by the defendant were a significant,
should ask the court for a declaratory judgment of no
if not the only, cause of death. It was not necessary, e.g.,
liability at criminal or civil law. They are then protected
for the prosecution to establish that there had been no
against criminal and/or civil proceedings. This approach
medical negligence in the treatment of the victim.
was used in Airedale National Health Service Trust v
Bland where it was upheld by the House of Lords (see
Actus reus: liability for failing to act [1993] AC 789).
Euthanasia is still illegal in the UK and can result in a
512 R v Instan [1893] 1 QB 450 conviction for murder, even though there may be the
most compelling compassionate grounds.
Instan lived with her 73-year-old aunt. The aunt
seemed to be in reasonable health until shortly before Actus reus: contractual duties
her death. During the 12 days prior to her death she
had gangrene in her leg and could not look after her-
513 R v Pittwood (1902) 19 TLR 37
self or summon help. That she was in this condition
was a matter known only to Instan. It appeared that Pittwood was a gatekeeper employed by a railway com-
she had not given her aunt any food nor had she tried pany. It was his duty to keep the gate shut whenever
to obtain medical or nursing aid. Following the death a train was passing between 7 am and 7 pm. The gate
of her aunt she was accused of manslaughter and con- was left open on one afternoon and a hay cart which
victed. The Court for Crown Cases Reserved (as it was crossing the line was struck by a train. A man was
then was) affirmed the conviction. killed and another seriously injured. The defendant
The prisoner was under a moral obligation to the was charged with manslaughter and was found guilty.
deceased from which arose a legal duty towards her; Wright, J said there was gross and criminal negligence
that legal duty the prisoner has wilfully and deliber- as the man was paid to keep the gate shut and protect
ately left unperformed, with the consequence that the public. He added that a man might incur criminal
there has been an acceleration of the death of the liability from a duty arising out of contract.
..
EL_Z02.qxd 3/26/07 10:58 AM Page 897
Actus reus: previous conduct did just that and killed the stepfather. It appeared that
he did not aim the gun but just pulled the trigger. He
514 R v Miller [1983] 1 All ER 978 was later charged with murder but that was reduced
to manslaughter by the House of Lords. The House
The defendant, who was a vagrant squatter, fell asleep of Lords felt that the circumstances did not show that
after lighting a cigarette. He woke to find his mattress the defendant had the intent to kill or cause really
smouldering. He left it as it was and went to sleep in serious injury and nothing else would do for the
another room. There was a fire and the defendant crime of murder. Lord Bridge said:
was charged with arson. He was found guilty and his I do not believe it is necessary for the judge to do
appeal was dismissed by the House of Lords. His con- more than invite the jury to consider two ques-
viction was justified either on the basis that there was tions. First, was death or really serious injury . . . a
a continuous act or on the basis that the defendant natural consequence of the defendant’s volun-
owed a responsibility to try to undo the harm which tary act? Second, did the defendant foresee that
he had unwittingly done. The House of Lords felt that consequence as being a natural consequence of his
this latter basis which is really an omission would be act? The jury should then be told that if they
easier to explain to juries. answer Yes to both questions it is a proper infer-
ence for them to draw that he intended that
Mens rea: motive: irrelevant to guilt or innocence consequence.
Chandler v Director of Public Prosecutions Comment (i) The matter came before the House of Lords
515
[1962] 3 All ER 142 again in R v Hancock [1986] 1 All ER 641. The defendant,
In this case the defendants impeded the operation of Hancock, and another defendant, Shankland, had
an airfield at Wethersfield, Essex. Their object was to thrown items including lumps of concrete from a road-
bridge in order to block the road so that a taxi carrying a
demonstrate against nuclear armament.
working miner would not be able to get through and so
In the result, I am of opinion that if a person’s to some extent break the miners’ strike. A lump of con-
direct purpose in approaching or entering is to crete hit the windscreen of the taxi and the driver was
cause obstruction or interference, and such obstruc- killed. The defendants were charged with murder and
tion or interference is found to be a prejudice to the eventually appealed to the House of Lords from their
defence dispositions of the State, an offence is conviction for that offence. Lord Scarman and the other
thereby committed, and his indirect purposes or his Law Lords were critical of Lord Bridge’s approach. His
motives in bringing about the obstruction or inter- Maloney guidelines required a reference to probability.
ference do not alter the nature or content of his Lord Scarman said: ‘They also require an explanation that
offence. . . . Is a man guilty of an offence, it was the greater the probability of a consequence the more
asked, if he rushed on to an airfield intending to likely it is that the consequence was foreseen and that if
stop an airplane taking off because he knows that a that consequence was foreseen the greater the probabil-
time-bomb has been concealed on board? I should ity is that the consequence was also intended.’ But he
went on to stress that the jury should not be told more
say that he is not, for the reason that his direct
except that any inference of intent was for them to make
purpose is not to bring about an obstruction but to
on all the evidence and circumstances of the case and not
prevent a disaster, the obstruction that he causes
merely on the judge’s directions.
being merely a means of securing that end. (Per
Lord Radcliffe) (ii) The matter came before the Court of Appeal again in
R v Nedrick [1986] 3 All ER 1 where the defendant
poured paraffin through the letter box of the house of a
Mens rea: states of mind
woman against whom he had a grudge. He set light to it
and the woman’s child died in the resulting fire. He was
516 R v Maloney [1985] 1 All ER 1025 convicted of murder, the judge bringing in the Hancock
approach, i.e. that if the defendant knew that it was
The defendant and his stepfather had been drinking highly probable that his act would result in serious bodily
heavily at a family party. They were part of a united injury to someone inside the house he was guilty of mur-
and happy family. In the early hours of the morning der. The defendant had admitted starting the fire but
they began larking about with shotguns. There was a said he wanted just to frighten the woman and not to
challenge as to who could load fastest. The defendant kill anyone. The Court of Appeal substituted a verdict of
was able to load faster and pointed his gun at the manslaughter and the Lord Chief Justice had to lay down
stepfather, saying: ‘You’ve lost’. The stepfather said: guidelines as to the direction of juries in this sort of case.
‘You wouldn’t dare pull the trigger’. The defendant He said that the jury should be told that they are not
.. ..
EL_Z02.qxd 3/26/07 10:58 AM Page 898
898 CRIMINAL LAW: GENERAL PRINCIPLES CASE 517
entitled to infer the necessary intent for murder unless the necessary intention unless they felt sure that death or
they feel sure that death or serious bodily harm was a serious bodily harm was a virtual certainty as a result of
virtually certain result of the defendant’s action (barring the defendants’ actions and that the defendants appre-
some unforeseen intervention) and that the defendant ciated that this was the case’. Nevertheless, the Court of
appreciated that fact. This is where the matter currently dismissed the appeal. The judge had repeatedly made
lies. To equate foresight with intention is now ruled out the point about the need for intent and, although the
unless intent can be construed from evidence surround- main direction was a misdirection, that misdirection
ing the act (see below). was immaterial.
(iii) In R v Woollin (Stephen Leslie), The Times, 12 August
1996 W appealed to the Court of Appeal against his con- Recklessness: a subjective test
viction for the murder of his three-month-old son whom
he had thrown towards a pram which was against the 517 R v Cunningham [1957] 2 All ER 412
wall. The child seemed to have hit the wall and died from
injuries sustained. When summing up the judge directed C was convicted of unlawfully and maliciously causing
the jury that they could find the necessary intent for to be taken by Sarah Wade a certain noxious thing,
murder if they felt that W appreciated that there was ‘a namely, coal gas, so as to endanger her life contrary to
substantial risk’ that serious bodily harm would result s 23 of the Offences Against the Person Act 1861. The
to the child. W claimed that the judge should have used crime is unlawfully and maliciously administering
the expression ‘virtual certainty’ of serious bodily harm. to or causing to be administered to or taken by any
The former expression related to recklessness for person any poison or other destructive or noxious
manslaughter and the latter to an intent for murder. thing so as to endanger the life of such person or so as
Whilst the Court of Appeal agreed that, taking only the thereby to inflict upon such person any grievous bod-
act of throwing the child at the pram, the direction ily harm. C had gone into an empty house and torn
might have been faulty, if there were surrounding circum- away the gas meter in the cellar in order to take the
stances and evidence of intent other than the act, a money it contained with the intention of stealing
conviction for murder could be sustained. Here the
that money. However, coal gas poured out of the pipe
defendant had admitted that he ‘lost his cool’ when the
he had fractured and percolated into the house next
child started to choke upon his food and that he had
door where it almost asphyxiated the occupant, Sarah
shaken him in a fit of rage or frustration before throwing
Wade. C appealed and his appeal was allowed.
him at the pram.
(iv) The Woollin case came before the House of Lords (see We think it is incorrect to say that the word ‘malic-
R v Woollin (Stephen Leslie) [1998] 3 WLR 382). Their ious’ in a statutory offence merely means wicked.
Lordships accepted that the trial judge, in using the We think the judge was, in effect, telling the jury
expression ‘a substantial risk’, had blurred the distinction that if they were satisfied that the appellant acted
between intention and recklessness, and thus murder wickedly – and he had clearly acted wickedly in
and manslaughter. Accordingly, Woollin’s conviction for stealing the gas meter and its contents – they ought
murder could not stand. A conviction for manslaughter to find that he had acted maliciously in causing
was substituted. the gas to be taken by Mrs Wade so as thereby to
(v) The problem the trial judge has in getting the right endanger her life.
direction to the jury in these cases on the border of In our view it should have been left to the jury to
intention or criminal negligence was again illustrated in decide whether, even if the appellant did not intend
R v Matthews (Darren John); R v Alleyne (Brian Dean), to injure Mrs Wade, he foresaw that the removal of
The Times, 18 February 2003. The defendants had the gas meter might cause injury to someone but
assaulted and robbed the victim. In the assault the victim nevertheless removed it. We are unable to say that a
lost his glasses and having left the scene of the assault, a reasonable jury, properly directed as to the meaning
nightclub, he was going home and was flagging down of the word ‘maliciously’ in the context of s 23,
cars when the defendants’ car came up. They stopped would without doubt have convicted.
and forced him into the car and took him to a river In these circumstances this court has no alternative
bridge. They threw him over the bridge into the river, but to allow the appeal and quash the conviction.
although he had told them he could not swim. The victim (Per Byrne, J)
drowned. The charge was murder and the trial judge
directed the jury to find the necessary intent provided Comment The fact that the judge is applying a subjective
that they were satisfied that the defendants had an standard is indicated by the fact that he says, ‘he (i.e. the
appreciation of the ‘virtual certainty of death’. The Court defendant) foresaw’. This is what the jury must find if the
of Appeal found this to be the wrong direction which test is to be subjective. Of course, no jury can really know
should have been that the jury were ‘not entitled to find what a particular defendant may or may not have foreseen.
..
EL_Z02.qxd 3/26/07 10:58 AM Page 899
CASES 518 –520 CRIMINAL LAW: GENERAL PRINCIPLES 899
They can only do their best in the light of answers which not appreciate them. In other words, it would appear
the defendant or other witnesses may have given to that the test at criminal law has become an objective
questions posed by counsel in examination-in-chief and test of recklessness, at least where criminal damage is
cross-examination. It is by no means an exact science! concerned.
(iii) The objective standard approach to recklessness was
Recklessness: an objective test followed in R v Sangha, The Times, 2 February 1988 where
the Court of Appeal said that the test was ‘would an
518 R v Caldwell [1981] 1 All ER 961 ordinary prudent bystander have perceived an obvious risk
that property of value and life would be endangered?’
Caldwell had done some work for the owner of a Sangha was convicted of arson under s 1(2) of the
hotel and had a quarrel with the owner about this. He Criminal Damage Act 1971 because life was endangered.
got drunk and set fire to the hotel in revenge. The fire
was discovered and put out before any serious damage Transferred malice
was done and none of the guests was injured. He was
charged with criminal damage under the Criminal 519 R v Latimer (1886) 17 QBD 359
Damage Act 1971. It was held incidentally that his
self-induced intoxication was no defence but on the Latimer was quarrelling with A in a pub. He struck
issue of recklessness which was part of the charge, i.e. out at A with his belt. The blow glanced off A and
intentionally or recklessly destroying or damaging severely injured another person, B. Latimer was found
property, the House of Lords eventually dismissed his guilty of unlawful and malicious wounding. Lord
appeal. A person is reckless they said if (a) he does an Coleridge, CJ said:
act which in fact creates an obvious risk that property We are of opinion that this conviction must be sus-
will be destroyed or damaged; and (b) when he does tained. It is common knowledge that a man who
the act he either has not given any thought to the has an unlawful and malicious intent against
possibility of there being any such risk or has recog- another, and, in attempting to carry it out, injures a
nised that there was some risk involved and has third person, is guilty of what the law deems malice
nonetheless gone on to do it. The test is objective against the person injured, because the offender is
because a person is guilty if he has given no thought doing an unlawful act, and has what the judges call
at all to the risk when in effect a reasonable person general malice, and that is enough. . . .
would have done so.
Comment (i) Although the above words were spoken in 520 R v Pembliton (1874) LR 2 CCR 119
regard to recklessness for the statutory offence of criminal
damage, it seems from the general tenor of the judgments Pembliton was fighting outside a pub. He picked up a
in Caldwell and another decision of the House of Lords, R stone and threw it at the persons he had been fight-
v Lawrence [1981] 1 All ER 974 (a case of reckless driving), ing. It missed them but broke a window in the pub.
that they might apply to the construction of criminal It was held that the evidence did not support a con-
statutes generally and to recklessness at common law. viction for unlawful and malicious damage under the
(ii) The principles laid down in Caldwell and Lawrence Malicious Damage Act 1861. There was no intention
were applied in another case of criminal damage, i.e. to break the window.
Elliott v C [1983] 2 All ER 1005. C was a 14-year-old
schoolgirl who was charged with criminal damage under Comment (i) He might now have been successfully
s 1(1) of the Criminal Damage Act 1971 (destroying or charged with criminal damage if he was in fact reckless
damaging property without danger to life). She spent within the Caldwell test, or of an attempt to cause actual
one entire night awake and wandering around. She had or grievous bodily harm. Nevertheless, in the terms in
entered a toolshed and there poured white spirit on to a which he was charged the case makes its point that mens
carpet and set light to it, destroying the shed. The magis- rea is not transferable from crime to crime.
trates found that she did not appreciate just how (ii) The rule is somewhat arbitrary and appears generous
inflammable the spirit was, and having regard to her to the defendant. This was admitted by the House of
extreme state of tiredness, that she did not in fact give Lords in Attorney-General’s Reference (No 3 of 1994)
any real thought to the risk of fire. In consequence, the [1998] AC 245 but their Lordships nevertheless applied
magistrate acquitted her. It was held by a Divisional it ruling that the defendant’s malice towards his
Court of Queen’s Bench, allowing the prosecutor’s girlfriend in stabbing her did not extend to the crime
appeal, that the correct test was whether a reasonably of murder of a child which, to his knowledge, she
prudent man would realise the dangers of fire in the cir- was carrying. The House of Lords acknowledged that the
cumstances, even though the particular accused might rule is an exception to the general principles of law.
.. ..
EL_Z02.qxd 3/26/07 10:58 AM Page 900
Mens rea: must coincide with actus reus resin, contrary to s 5(b) of the Dangerous Drugs
Act 1965. The evidence showed that she had no
521 Thabo Meli v R [1954] 1 All ER 373 knowledge whatever that the house was being used
for the purpose of smoking cannabis or cannabis
In this case the accused persons planned to kill the resin. She visited the premises only occasionally to
victim in a hut and thereafter to roll his body over a collect letters and rent and though sometimes she
cliff so that it would appear that he had died an accid- stayed overnight, generally she did not. Section 5 of
ental death. The victim was made unconscious in the 1965 Act provides ‘if a person (a) being the oc-
the hut by the attack and thinking him to be dead, cupier of any premises, permits those premises to be
the accused persons rolled him over a cliff. There was used for the purpose of smoking cannabis or cannabis
evidence that the victim was not in fact killed in the resin or of dealing in cannabis or cannabis resin
hut but that he died on account of exposure at the (whether by sale or otherwise); or (b) is concerned in
bottom of the cliff. the management of any premises used for any pur-
The point of law which was raised in this case can poses aforesaid; he shall be guilty of an offence under
be simply stated. It is said that two acts were neces- the Act’. The House of Lords, after holding that in
sary and were separable; first, the attack in the hut; spite of the wording of the Act in terms of the ‘man-
and, secondly, the placing of the body outside after- agement’ offence mens rea must be implied, found
wards. It is said that, while the first act was accom- that there was no mens rea in the accused in this case
panied by mens rea, it was not the cause of death; and that, therefore, her appeal should be allowed and
but that the second act, while it was the cause of her conviction quashed.
death, was not accompanied by mens rea; and on
Comment (i) The offence of ‘permitting’ would normally
that ground it is said that the accused are not guilty
require mens rea but the ‘management’ offence was
of any crime, except perhaps culpable homicide.
regarded in this case by the magistrates as not requiring
It appears to their Lordships impossible to divide
mens rea and they convicted Ms Sweet. However, the
up what was really one transaction in this way.
House of Lords decided mens rea must be implied. The
There is no doubt that the accused set out to do all mens rea may, however, be little more than ‘wilful blind-
these acts in order to achieve their plan and as part ness’ to what is going on in the premises. There was no
of their plan; and it is much too refined a ground of finding that Ms Sweet had this.
judgment to say that, because they were under a
(ii) The presumption of a requirement of mens rea in
misapprehension at one stage and thought that
statutory offences has become stronger in more recent
their guilty purpose had been achieved before in
cases. An example is B v DPP [2000] 2 Cr App R 65. The
fact it was achieved, therefore they are to escape the defendant a 15-year-old boy sat next to a 13-year-old girl
penalties of the law. . . . (Per Lord Reid) on a bus and requested her to give him a ‘shiner’. As the
The appeal of the accused persons was, therefore, judge remarked, ‘This in the language of today’s gilded
dismissed. youth apparently means not a black eye but an act of
Comment It is not necessary for the acts to be part of a pre- oral sex’. The girl refused. He was charged with having
conceived plan which went wrong. In R v Le Brun [1991] 3 incited a girl under the age of 14 to commit an act of
WLR 653 a husband had an argument with his wife in the gross indecency with him contrary to s 1(1) of the
street and hit her without intending serious harm. She fell Indecency with Children Act 1960. This is a strict offence
unconscious on the highway and he then tried to move and both the trial judge and the Court of Appeal ruled
her on to the pavement. Her head hit the pavement and that it was no defence that the boy believed that the
she fractured her skull and died. He was acquitted of girl was over 14. However, the House of Lords followed
murder and convicted of manslaughter and his appeal the approach in Sweet v Parsley (above) and applied a
against that conviction was dismissed. The unlawful presumption in favour of a requirement for mens rea.
application of force and the eventual act causing death The prosecution had to prove, said their Lordships, an
were part of the same sequence of events. They did not absence of genuine belief by the defendant that the
have to be part of a preconceived plan as in Thabo Meli. victim was aged 14 or over. This belief which does not
have to be on reasonable grounds will if genuinely held
Mens rea: statutory offences result in an acquittal.
(iii) The ruling in B v DPP (above) was applied in R v K
522 Sweet v Parsley [1969] 1 All ER 347 [2001] Crim LR 993 again by the House of Lords. The
defendant in this case was charged with indecent assault
The magistrates had convicted Sweet of being con- on a girl under 16 contrary to s 14 of the Sexual Offences
cerned in the management of premises which were Act 1956. The girl had consented. However, by reason of
used for the purpose of smoking cannabis or cannabis s 14(2) a girl under 16 cannot give a legally valid consent
..
EL_Z02.qxd 3/26/07 10:58 AM Page 901
although in this case she had also told the defendant act of a trespass or act of God would have been a
that she was over 16. The House of Lords allowed the defence, but there was no such trespass or act of God
defendant’s appeal and held that the defendant’s in this case.
mistaken belief that the girl was over 16 was a valid
defence. Such a belief need not be based on ‘reasonable Comment (i) ‘Causing’ is a word which does not require
grounds’ but the more unreasonable it is the less likely it mens rea. The statute did not say ‘knowingly causing’.
is that it will be taken as genuine. Obviously, the reasons That would have required mens rea.
the defendant gives for the belief will be a crucial piece (ii) It was held in R v CPC (UK), The Times, 4 August 1994
of evidence for the police to establish when dealing with that ‘causing’ polluting matter to enter a river contrary
this type of offence. to s 85(1) of the Water Resources Act 1991 and s 4(1) of
(iv) The Sexual Offences Act 2003 has relevant provisions the Freshwater Fisheries Act 1975 was a question of fact
which should be noted (see p 698). and did not require fault or knowledge on the part of
the defendant. It does however, require some active par-
ticipation: Attorney-General’s Reference (No 1 of 1994)
523 R v Tolson (1889) 23 QBD 168 [1995] 2 CLY 5135.
(iii) There is a tendency in more recent statutes to use
Martha Ann Tolson, who married in September 1880,
expressions that do not require mens rea but contain a
was deserted by her husband in December 1881. She
‘due diligence’ defence, which allows the defendant to
made enquiries and learned from his elder brother
escape conviction by showing that all reasonable precau-
that he had been lost at sea in a ship bound for
tions were taken.
America which sank with all hands. Believing herself
to be a widow, she went quite openly through a cere-
mony of marriage on 10 January 1887, with Y who 525 Cundy v Le Cocq (1884) 13 QBD 207
was fully aware of the circumstances. It was held that
she could not be convicted of bigamy under s 57 of C, who was a licensed victualler, sold liquor to a per-
the Offences Against the Person Act 1861, even son who was drunk though C did not know this. He
though the opening part of that section says: was, however, convicted of unlawfully selling liquor
‘Whosoever, being married, shall marry any other per- to a drunken person contrary to s 13 of the Licensing
son during the life of the former husband or wife . . . Act 1872, which provided that: ‘If any licensed person
shall be guilty of a felony . . .’. She had no mens rea. . . . sells any intoxicating liquor to a drunken person
The object of Parliament was not to treat the marriage he shall be liable to a penalty . . .’. It was held – by
of widows as an act to be if possible prevented as Stephen, J – that knowledge of the condition of the
presumably immoral. Mrs Tolson’s conduct was not person to whom the liquor was sold was not neces-
immoral but perfectly natural and legitimate. A sary to constitute the offence.
statute may relate to such subject matter and may Against this view we have had quoted the maxim
be so framed as to make an act criminal whether that in every criminal offence there must be a guilty
there has been any intention to break the law or not. mind; but I do not think that maxim has so wide
In other cases a more reasonable construction requires an application as it is sometimes considered to
the implication into the statute that a guilty mind is have. In old time, and as applicable to the common
required. law or to earlier statutes, the maxim may have been
of general application; but a difference has arisen
524 Alphacell v Woodward [1972] 2 All ER 475 owing to the greater precision of modern statutes.
It is impossible now, . . . to apply the maxim gener-
A Ltd was the owner of paper-making mills. In the ally to all statutes, and the substance of all the
course of manufacture effluent passed into two tanks reported cases is that it is necessary to look at the
on the banks of a river. Pumps were used to remove object of each Act that is under consideration to see
the effluent from the tanks but it was inevitable that whether and how far knowledge is of the essence of
if the pumps failed, the effluent would enter the river the offence created. Here, as I have already pointed
and pollute it. As a result of foliage blocking the out, the object of this part of the Act is to prevent
pump inlets, such an overflow occurred and A Ltd the sale of intoxicating liquor to drunken persons,
was charged with ‘causing’ polluting matter to enter and it is perfectly natural to carry that out by
the river under s 2(1) of the Rivers (Prevention throwing on the publican the responsibility of
of Pollution) Act 1951. It was held – by the House of determining whether the person supplied comes
Lords – that A Ltd was guilty of that offence even within that category. I think, therefore, the convic-
though it had not been negligent. The intervening tion was right and must be affirmed.
.. ..
EL_Z02.qxd 3/26/07 10:58 AM Page 902
Comment Is it perhaps simply that a landlord is supposed the results referred to in s 1(1) of the Act of 1933.
to know when a customer is drunk? Contrast Sherras v De We are quite satisfied that the conviction on count
Rutzen [1895] 1 QB 918 where a publican was convicted 2 was justified both on the law and the facts . . .’.
of serving a constable while on duty. He thought he (Per Phillimore, LJ)
was off-duty and anyway had no way of knowing
whether he was or not. His conviction was quashed by a Comment There was another count on the indictment
Divisional Court. for manslaughter but this was allowed on appeal.
Gaumont British Distributors Ltd v Henry [1939]

526 528 Somerset v Wade [1894] 1 QB 574
2 KB 717
Gaumont British was charged under s 1(a) of the Wade was charged with permitting drunkenness
Dramatic and Musical Performers’ Protection Act under s 13 of the Licensing Act 1872 which provides
1925, with knowingly making a record of a musical that if any licensed person permits drunkenness, or
work without the written consent of the performers. any violence, quarrelsome or riotous conduct to take
No consent had actually been given but GB said, and place on his premises or sells any intoxicating liquor
it was accepted, that it had never thought about the to any drunken person, he commits an offence. A
question of consent. Nevertheless GB was convicted drunken woman was actually found on Wade’s
and appealed. The appeal was allowed. premises but it was accepted that Wade did not know
I desire to add emphatically that no colour can be that she was drunk. The charge having been dis-
obtained from this case, or from the argument, or missed the prosecutor appealed. The appeal of the
from any opinion which is present to my mind, prosecutor failed and Wade was not convicted.
that the wholesome and fundamental principle But the word ‘suffers’ is not distinguishable from
ignorantia juris neminem excusat (ignorance of the ‘permits’, which is the word used in s 13, the sec-
law is no excuse) is in any degree to be modified or tion now before us. In a case where the defendant
departed from. . . . I should be very sorry, directly does not know that the person who was on his
or indirectly, even to appear to add any colour to premises was in fact drunk, he cannot be said to
the suggestion, if it were made – as I do not think it permit drunkenness. In the present case the justices
is – that in circumstances of this kind ignorance of have found that the respondent did not know that
the law might excuse. The way in which the topic the person was drunk and there was evidence to
of the appellants’ knowledge came in was solely support that finding. (Per Mathew, J)
with reference to the words ‘knowingly makes any
Comment (i) As regards the word ‘malicious’, it will be
record without the consent in writing of the per-
recalled that in R v Cunningham (1957), mens rea was
formers’, and the contention was a contention of
required for an offence which had to be committed
fact. According to a true view of the evidence of fact
‘maliciously’.
in this case it was incorrect to say that the appel-
lants did knowingly without the consent in writing (ii) In the Somerset case Mathew, J was prepared to say
that the word ‘suffers’ was the same as ‘permits’, i.e. a
of the performers that which was done. (Per Lord
word requiring mens rea in the accused.
Hewart, CJ)
(iii) The distinction between this case and Cundy appears
to be that Wade did not serve or sell liquor to the
527 R v Lowe [1973] 1 All ER 805 woman while she was in a drunken state and did not
know she was on the premises.
Lowe was charged under s 1 of the Children and
Young Persons Act 1933 as being a person who had
Vicarious liability in crime
the charge of a child and wilfully neglected it in a
manner likely to cause it unnecessary suffering or
529 Griffiths v Studebakers Ltd [1924] 1 KB 102
injury to health. L’s case was that the child’s critical
condition arose after he had told the woman he was Studebakers were holders of a limited trade licence
living with, who was the child’s mother, to take the and were charged with having used on a public road a
child to a doctor and that she later falsely told him motor car carrying more than two persons in addition
that she had done so. He was convicted and appealed. to the driver, which was an offence under the Road
It did not matter what he ought to have realised as Vehicles (Trade Licences) Regulations 1922. At the
the possible consequences of his failure to call a time of the alleged offence, the car was being driven
doctor; the sole question was whether his failure by a servant of the respondents. He was in the course
to do so was deliberate and thereby occasioned of his employment because he was giving a trial run to
..
EL_Z02.qxd 3/26/07 10:58 AM Page 903
prospective purchasers of the car but, by carrying more

531 Vane v Yiannopoullos [1965] AC 486
than two passengers, he was infringing the express
orders of his employers. The employers were convicted Section 22(1) of the Licensing Act 1961, which was
and appealed to the Divisional Court. relevant in this case provided, ‘If – (a) the holder of a
It would be fantastic to suppose that a manufac- Justices’ on-licence knowingly sells or supplies intoxic-
turer, whether a limited company, a firm, or an ating liquor to persons to whom he is not permitted
individual, would, even if he could, always show by the conditions of the licence to sell or supply it . . .
cars to prospective purchasers himself; and it would he shall be guilty of an offence’. Y was the licensee
defeat the scheme of this legislation if it were open of a restaurant and had been granted a Justices’
to an employer, whether a company, or a firm, or on-licence subject to a condition that intoxicating
an individual, to say that although the car was liquor was to be sold only to those who ordered
being used under the limited licence in contraven- meals. He employed a waitress and he instructed her
tion of the conditions upon which it was granted: to serve drinks only to customers who ordered meals
‘My hand was not the hand that drove the car.’ On but on one occasion whilst Y was in another part of
these facts there ought to have been a conviction of the restaurant the waitress did serve drinks to two
the respondents and also the driver as aider and youths who had not in fact ordered a meal. Y did not
abettor. (Per Lord Hewart, CJ) know of that sale. He was charged with knowingly
selling intoxicating liquor on the premises to persons
Thus, the conviction of Studebakers was affirmed by
to whom he was not permitted to sell contrary to
the Divisional Court.
s 22(1)(a) of the Act. The magistrates dismissed the
Comment Note that liability was not affected by the fact information and the prosecutor appealed eventually
that the employee was told not to do the act. to the House of Lords. The appeal of the prosecutor was
dismissed and there was therefore no conviction of Y.
So far, however, as the present case is concerned,
530 James and Son Ltd v Smee [1955] 1 QB 78
I feel no doubt that the decision of the Divisional
Court was right. There was clearly no [‘knowledge’]
Under the Motor Vehicles (Construction and Use)
in the strict sense proved against the licensee:
Regulations in force at the time the alleged offence
I agree also with the Lord Chief Justice that there
occurred, the braking system of a vehicle or trailer
was no sufficient evidence of such [‘delegation’] on
used on the road had to be in efficient working order,
his part of his powers, duties and responsibilities to
and further anyone who used or caused or permitted
render him liable on that ground. I would therefore
to be used on the road a motor vehicle or trailer
without hesitation dismiss the appeal. (Per Lord
where the braking system was not in efficient working
Evershed)
order was liable to a fine. James and Son Ltd sent out
in the charge of their employee a lorry and trailer the Comment Note that Y was on the premises when the
braking system of which was in efficient working order. drinks were served. Delegation was not, therefore, com-
However, during the course of his rounds the employee plete, as it must be.
had to disconnect the braking system of the trailer
and forgot to connect it up again. James and Son were
532 Ferguson v Weaving [1951] 1 All ER 412
convicted of ‘permitting to be used’ the trailer in con-
travention of the regulation then in force. However,
Section 4 of the Licensing Act 1921, which was relev-
their appeal was allowed by the Divisional Court.
ant in this case, made it an offence for any person,
In other words, it is said that in committing the except during permitted hours, to consume intoxicat-
offence of the user in contravention of the regula- ing liquor on any licensed premises. In a large public
tions he at the same time made his master guilty of house of which W was the manager customers were
the offence of permitting such user. In our opinion found consuming liquor outside the permitted hours
this contention is highly artificial and divorced and were convicted of an offence under the section.
from reality. We prefer the view that before the The evidence did not show that W knew that the
company can be held guilty of permitting a user in liquor was being consumed. It had in fact been sup-
contravention of the regulations it must be proved plied to customers by waiters employed by her who
that some person for whose criminal acts the com- had neglected to collect the glasses in time. A charge
pany is responsible permitted as opposed to com- against W of aiding and abetting the customers’
mitted the offence. There was no such evidence in offence was dismissed and the prosecutor appealed.
the present case. (Per Parker, J) The appeal was dismissed. ‘There can be no doubt
.. ..
EL_Z02.qxd 3/26/07 10:58 AM Page 904
904 SPECIFIC OFFENCES CASES 533–534
that this court has more than once laid it down in Comment (i) In R v Morhall [1993] 4 All ER 888 the Court
clear terms that before a person can be convicted of of Appeal refused to take into account that the defend-
aiding and abetting the commission of an offence ant had been glue-sniffing prior to a killing by stabbing
he must at least know the essential matters which and the victim had taunted him about this. This was not
constitute the offence. . . .’ (Per Lord Goddard, CJ) found a relevant ‘characteristic’, in terms of provocation.
A conviction of murder must stand. Camplin is a different
Comment Before a person can be convicted of aiding situation. Youth is not self-induced and is a ‘character-
and abetting an offence, i.e. being a secondary party, he istic’ of each one of us at a certain stage in life (but see
must know of all the essential matters which constitute (iii) below).
the offence (see Lord Goddard CJ, in Johnson v Youden
[1950] 1 KB 544). This is true even of a strict offence. Here (ii) The decision of the Privy Council in Luc v The Queen
there was no knowledge. [1996] 3 WLR 45 is also relevant. It was decided that the
mental condition of the defendant which impaired his
powers of self-control could not be taken into account in
SPECIFIC OFFENCES provocation. Such a condition could not be attributed to
the reasonable man. It should be pleaded as diminished
Murder responsibility and succeed or fail on that basis. Since the
medical evidence did not establish diminished responsib-
533 R v Dyson [1908] 2 KB 454 ility, the defendant’s conviction for murder stood.
(iii) There was an appeal to the House of Lords in Morhall
Dyson was charged with manslaughter it being alleged
which reversed the Court of Appeal. In cases where a
that injuries which he inflicted on his child in Novem-
defendant’s addiction is the subject of taunts said to con-
ber 1906 had caused its death in March 1908. His
stitute provocation, a jury should be directed to take into
conviction was quashed. Lord Alverstone, CJ said: ‘it
account the defendant’s addiction as a matter going to
is still undoubtedly the law of the land that no person the gravity of the alleged provocation.
can be convicted of manslaughter where the death The mere fact that the defendant has a discreditable
does not occur within a year and a day after the characteristic does not exclude it from consideration. In
injury was inflicted . . .’. the case of glue-sniffing, drug addiction or alcoholism, a
Comment (i) It should be noted that the ‘year and a day distinction must be drawn between, on the one hand,
rule’ applied to all homicides but this case is obviously an situations where the defendant is taunted with his
authority also for murder. It was an ancient rule coming addiction, in which case it may be relevant to take
from the days when medical science could not be precise the addiction into account as going to the gravity of the
about causation. provocation, and on the other the mere fact that the
defendant was intoxicated by alcohol, glue or drugs at
(ii) It should be noted that the case still has relevance as
the time since the latter is excluded as a matter of policy
an example of a case requiring the consent of the
(see R v Morhall [1995] 3 WLR 330).
Attorney-General to a prosecution under the Law Reform
(Year and a Day Rule) Act 1996, s 2. (iv) In R v Roberts [1990] Crim LR 122 Roberts, who was
23 years old, killed a person because he taunted him about
Voluntary manslaughter: provocation his deafness. It was held that the judge had properly
directed the jury to take into account the disability as part
534 R v Camplin [1978] 2 All ER 168 of the characteristics of the hypothetical reasonable man.
(v) Again, in R v Smith (Morgan James) [2000] 4 All ER
Paul Camplin was 15 years of age. He went to the 289 the fact that the defendant suffered from depres-
house of a Mr K who was in his fifties. While he was sion, which reduced his power of self-control, could said
there K buggered him in spite of his resistance and the House of Lords be taken into account as a charac-
after he had finished K laughed at him. Camplin then teristic of a reasonable person for the purposes of the
killed K by splitting his skull with a chapatti pan. He objective test on a charge of murder.
pleaded provocation to reduce a charge of murder to (vi) R v Smith (Morgan James) [2000] 1 AC 146 was not
manslaughter. In reaching a decision that he was pro- followed by the Privy Council in Attorney-General for
voked, the House of Lords said his age must be taken Jersey v Holley [2005] 2 AC 580. Holley and his girlfriend
into account. Lord Diplock said that if the jury thinks lived together in Jersey and were alcoholics. Holley killed
that the same power of self-control is not to be his girlfriend by striking her a number of times with an
expected in an ordinary average or normal boy of 15 axe. The judge did not refer in his summing up to the
as in an older person, the boy’s age is relevant to his fact that Holley’s alcoholism should be brought into
response. A conviction for manslaughter must stand. account. What he said to the jury was: ‘In your opinion,
Camplin’s age was relevant. having regard to the actual provocation and your views
..
EL_Z02.qxd 3/26/07 10:58 AM Page 905
CASES 535–536 SPECIFIC OFFENCES 905
of its gravity for the defendant, decide whether a man

536 R v Thornton (1991) 141 NLJ 1223
of the defendant’s age, having ordinary power of self-
control might have done what the defendant did. If Mrs Thornton was married in 1988. She realised from
the answer to that question is “Yes” then the verdict is the start that her husband was a heavy drinker and
not guilty of murder but guilty of manslaughter. If the jealous and possessive. He was violent in the home
answer to that question is “No” then the verdict would be assaulting Mrs Thornton. In May 1989 he committed
guilty of murder.’ The jury convicted Holley of murder.
a serious assault which led to charges being brought.
If we test the facts against the summing up, we shall
In June of that year Mrs Thornton told a workmate
see that the girlfriend had entered the flat they shared
that she was going to kill her husband. Later that
and announced that she had just had sex with another
month after a series of rows with her husband in
man and then said: ‘You haven’t got the guts.’ Holley,
which he called her a whore Mrs Thornton went to
who was going outside to chop wood, then lifted the axe
and hit her seven or eight times. The evidence showed the kitchen to calm down. While in the kitchen she
that the defendant had drunk a great deal of beer or picked up a carving knife and sharpened it. She then
lager during the day. However, no mention of this is went back to her husband who was lying on a sofa.
made in the summing up. The standard is the reasonable She asked him to come to bed but he would not and
person not a drunken or alcoholic reasonable person. The said he would kill her when she was asleep. She said
Court of Appeal said that the Jersey court should have she would kill him first. He then suggested sarcastic-
followed R v Smith (Morgan James) (2000) and taken into ally that she should go ahead. She made a downward
account the particular characteristics of Holley. However, movement with the knife expecting he would ward
in R v James [2006] 1 All ER 759 the House of Lords pre- it off but it entered his stomach and killed him. She
ferred Holley to its own ruling in R v Smith (Morgan was charged with and convicted of murder. Her
James) (2000) and followed Holley. James stabbed his appeal to the Court of Appeal was dismissed. It was
wife to death. She had left home, having formed a rela- held that since provocation can only be put forward as
tionship with another man. There was psychiatric evid- a defence to a charge of murder if it caused a sudden
ence regarding James but the House of Lords ruled that and temporary loss of self-control on the part of the
this should not be taken into account when trying to defendant, prolonged domestic violence does not of
establish the partial defence of provocation. itself amount to provocation unless there is a sudden
The House of Lords followed a persuasive precedent of
and temporary loss of self-control by the wife.
the Privy Council rather than its own previous judgment
in R v Smith (Morgan James) (2000). The point of preced- Comment (i) Although the decision is in some ways an
ent is considered in Chapter 7. unfortunate one which does not assist the position of the
We may conclude, therefore, that special characteristics battered wife, there does in all honesty seem to have
will not be taken into account except in cases such as R v been a ‘cooling-off’ period while the wife was in the
Roberts (1990) (above), where the provocation is directed kitchen and actually sharpening the knife. Some lawyers
at the defendant’s disability. took the view that in cases such as this the cumulative
effect of wife-beating should be taken into account. In
other words, there may be a slow wearing down of the
535 R v Johnson (Christopher) [1989] 1 WLR 740 wife’s self-control.
Johnson killed his victim in a night club. His own (ii) There was an appeal to the Court of Appeal (see R v
behaviour had been unpleasant, resulting in a girl- Thornton [1996] 2 All ER 1023). The court reiterated the
friend of the victim taunting Johnson calling him a requirement of a sudden and temporary loss of control
being clearly anxious not to allow premeditated killings
‘white nigger’ since he affected a West Indian accent
to come under the shelter of provocation. It did, how-
at times. Johnson drew a knife and stabbed the victim
ever, somewhat enlarge the defence by accepting the
because matters were getting more violent and
possibility of ‘cumulative provocation’. A jury should con-
Johnson said he feared that the victim was about to
sider the whole history of a prior abusive relationship
cut him with a glass. A verdict of manslaughter was
between the accused and the victim on which the sudden
substituted for one of murder by the Court of Appeal. loss of control was based rather than simply looking at
Watkins, LJ said that whether or not there were ele- the last provocative act before the killing. This act might
ments in Johnson’s conduct which justified the con- be minor in itself but could be ‘the last straw which broke
clusion that he started the trouble and induced others the camel’s back’. The Court of Appeal ordered a new trial
including the victim to act as they did, the defence which took place at Oxford Crown Court. The jury substi-
of provocation should nevertheless have been put to tuted a verdict of guilty of manslaughter and sentenced
the members of the jury and left to them. Since this Mrs Thornton to five years’ imprisonment. In view of the
had not been done, the verdict of murder must be fact that she had already served five-and-a-half years on
set aside. the murder conviction, she walked free immediately.
.. ..
EL_Z02.qxd 3/26/07 10:58 AM Page 906
(iii) The principle of a slow wearing down of the accused Comment Presumably in the absence of a medically
was raised again in R v Humphries (Emma), The certified mental state of depression, the defendant
Independent, 11 July 1995. H appealed to the Court of would not have had the defence of diminished respons-
Appeal against a conviction of murder on the basis of her ibility merely because he was under the influence of
defence of provocation. She was 17 at the time of the drink and drugs at the time.
offence and was described as having explosive, immature
and attention-seeking traits. She had worked as a pro- Involuntary manslaughter by unlawful act
stitute for her boyfriend who used to beat her and she
had cut her wrists on a number of occasions. On the day 539 R v Church [1966] 1 QB 59
of the murder she had again cut her wrists and he
taunted her saying she had not done a good job of it. Church had an argument with a woman and had a
She lost control and stabbed and killed him. Her appeal fight with her. She was knocked unconscious and,
was allowed, and her sentence adjusted to provide having failed to revive her, he threw her in a river.
for her immediate release. The judge’s summing up She was, in fact, alive at the time and died of drown-
should have dealt with the victim’s behaviour during ing. He was convicted of manslaughter and appealed.
the whole of her relationship with the victim because
The problem basically was that he had not killed her
the latter’s conduct over that period of time was capable
in the fight and he did not foresee the risk of death
of building up and culminating in the final provoking
when he threw her in the river because he thought
event.
wrongly that she was already dead. Nevertheless, his
conviction for involuntary manslaughter was upheld.
Diminished responsibility: use of alcohol The court said that his act was unlawful in the sense
that throwing a woman into a river deliberately is
537 R v Tandy, The Times, 23 December 1987 unlawful even if the defendant did not intend or fore-
see that death or serious bodily harm would result.
Linda Mary Tandy was an alcoholic who drank nine-
Such an act at least created a risk of physical harm
tenths of a bottle of vodka over part of a day and then
and that was enough.
strangled her daughter aged 11. They had had a good
relationship over the years. She was convicted of Comment The unlawful act must in general involve the
murder. The defence of diminished responsibility was infliction of physical as distinct from emotional harm.
not available. Her drinking was not involuntary. She Thus, where in the course of robbing a petrol station the
had bought the vodka on Monday but had not started robbers so frighten the attendant that he dies from a
to drink it until the Wednesday of the killing. Her heart attack of which neither he nor they knew he was at
first drink was not involuntary even if later drinking imminent risk, there can be no conviction of manslaugh-
was. This amounted to voluntary drinking and could ter (see R v Dawson (1985) 81 Cr App R 150).
not amount to a disease of the mind as diminished
responsibility required. Statutory offences against the person
Director of Public Prosecutions v K [1990]

540
538 R v Gittins [1984] 3 All ER 252 1 All ER 331
K, a 15-year-old schoolboy, left a chemistry class to
Gittins killed his wife and raped and killed his step-
wash his hands following a spillage of acid. He took a
daughter while suffering from depression and the
test tube of the acid with him and while in the toilet
effects of drinking and drugs. He was charged with
he heard footsteps approaching and panicked. He
murder and convicted. He then appealed to the Court
poured the acid into a hot air drier. He then returned
of Appeal. His conviction for murder was reduced to
to his class intending to clean out the drier later.
manslaughter on the ground of diminished respons-
Before he could do so the next user of the drier was
ibility. The court was careful to point out that norm-
squirted in the face by the acid and scarred. K was
ally the taking of drink or drugs would not amount to
charged under s 47 of the Offences Against the Person
diminished responsibility, but where other elements
Act 1861. He was reckless in that he had given no
were present, such as the mental state of depression
thought to the risk of a subsequent use of the machine
in this case which might have been brought on by an
before he could clean it. Caldwell and Lawrence were
extended period of drink and drugs, nevertheless it
applied. K was convicted (but see now R v Parmenter
remained an abnormality of the mind whatever its
(1991), Case 542 below).
source and, provided it existed, could be a ground for
reducing murder to manslaughter on the grounds of Comment (i) In R v Spratt [1991] 1 WLR 1073 the Court of
diminished responsibility. Appeal doubted the above decision. Spratt fired an air
..
EL_Z02.qxd 3/26/07 10:58 AM Page 907
CASES 541–542 SPECIFIC OFFENCES 907
pistol from the bedroom window of his flat. Two pellets injured, but in the sense of doing an unlawful act
struck a seven-year-old girl who was playing in the fore- calculated to injure, and by which others were in fact
court. He was charged under s 47 of the 1861 Act. He injured. The prisoner was most properly convicted.’
pleaded guilty on legal advice because although he was (Per Lord Coleridge, CJ)
unaware of the girl’s presence he had given no thought
to the risk of his action and was, therefore, Caldwell Comment (i) This would appear to be an early formula-
reckless. Nevertheless, he appealed against conviction tion of Cunningham recklessness.
and the Court of Appeal said Caldwell recklessness was (ii) Did Martin ‘inflict’ the harm as s 20 of the 1861 Act
not enough for the s 47 offence. The mens rea of every requires? The Court thought so and yet, oddly enough,
type of offence against the person under the 1861 Act would the case not have been better brought under s 18
involved intention or recklessness, i.e. taking the risk of the 1861 Act, which only requires the ‘causing’ of
of harm ensuing with foresight that it might happen. grievous bodily harm? An unresolved problem. Changes
Caldwell recklessness was not enough, and this even in the Act may be required. Perhaps the major offence
though s 47 did not use the word ‘malice’. The court in in s 18 should require an assault and the lesser one in s 20
DPP v K had not been referred to R v Cunningham (1957) should not do so.
and the definition of recklessness there. The conviction was
quashed. (But see now R v Parmenter (1991), Case 542.)
542 R v Parmenter [1991] 2 WLR 408
(ii) In DPP v Smith (Michael Ross) [2006] 2 All ER 16 the
defendant cut off the complainant’s ponytail without her Parmenter admitted injuring his baby son and was
consent with a pair of kitchen scissors. She was his former
charged amongst other things with inflicting grievous
girlfriend. The issue was whether this had caused ‘actual
bodily harm contrary to s 20 of the Offences Against
bodily harm’ for the purposes of the s 47 offence. The
the Person Act 1861. The Court of Appeal had eventu-
Dudley justices had ruled that the defendant had no case
ally to decide upon the mens rea for the s 20 offence
to answer because there was no evidence of bruising,
and the s 47 offence. It held as follows:
bleeding or cutting of the skin and in the absence of evid-
ence of any psychiatric or psychological harm the facts (a) a direction to the jury on the intent necessary to
alleged could not amount to actual bodily harm. found a conviction of unlawfully and maliciously
The Queen’s Bench Divisional Court, to which the DPP inflicting grievous bodily harm contrary to s 20
appealed, did not agree. Even if, scientifically speaking, should indicate to the jury that it was necessary that
hair above the surface of the skin was dead tissue, it the defendant actually foresaw that some physical
remained part of the body and was intrinsic to each indi- harm to some other person would result from his act.
vidual. Therefore, the lopping of hair as part of an A direction that it was sufficient that the defendant
assault on the victim was capable of amounting to an ought to or should have foreseen the physical harm
assault occasioning actual bodily harm. was a misdirection;
The case was sent back to the justices with a direction
to continue hearing it. It will be appreciated that the fact (b) on the suggestion that Parmenter might be con-
situation here could be the basis of an action for dam- victed on the lesser offence in s 47, the Court of
ages for assault and battery and could be used to illus- Appeal said no. The necessary mens rea for s 47 was
trate the civil scenario if care is taken to point out that it intention or subjective (or Cunningham) recklessness.
was a criminal prosecution. Since the trial judge’s direction had been objective in
form Parmenter’s conviction on s 20 was quashed and
a s 47 offence could not be substituted.
541 R v Martin (1881) 8 QBD 54
R v Spratt (1990) was applied.
Just before a theatrical performance came to an end Comment (i) On appeal to the House of Lords, [1991] 4
M, intending to terrify people leaving the theatre, All ER 698, their Lordships decided that:
put out lights on the staircase which he knew a (a) in order to establish the offence under s 20, the
large number of people would use when leaving the Crown must prove that the defendant intended or actu-
theatre. He then placed an iron bar across an exit door. ally foresaw that his act would cause harm. This physical
As a result of his actions several people were hurt as harm need only be of a minor character and it is unneces-
they tried to leave the theatre. M was convicted on a sary for the Crown to show that the defendant intended
charge of unlawfully and maliciously inflicting or foresaw that his unlawful act might cause physical harm
grievous bodily harm under s 20 of the Offences of the gravity described in s 20, i.e. either wounding or
Against the Person Act 1861. ‘The prisoner . . . acted grievous bodily harm;
“unlawfully and maliciously”, not that he had any (b) in order to establish the offence of assault under s 47,
personal malice against the particular individuals it is sufficient for the Crown to show that the defendant
.. ..
EL_Z02.qxd 3/26/07 10:58 AM Page 908
committed an assault; the Crown is not obliged to prove presumed. He was convicted, the trial judge following
that the defendant intended to cause some actual bodily an existing rule that rape could take place if the
harm or was reckless as to whether such harm would be wife had ceased, as in this case, to live with her hus-
caused (R v Spratt (1990) was disapproved); band. Nevertheless, the husband appealed saying
(c) a verdict of guilty under s 47 is a permissible alterna- there could be no rape of a wife in the absence of a
tive to a charge under s 20. court order of divorce or separation or a separation
(ii) The House of Lords did not agree entirely with the agreement.
Court of Appeal as to the mens rea required for s 20, and The House of Lords eventually heard the appeal.
not at all on s 47. The position is, therefore, as stated by It decided that a husband could rape his wife if he
the House of Lords. had intercourse with her without her consent even if
(iii) The House of Lords’ ruling was applied in R v they were not divorced or separated but were cohabit-
Rushworth (Gary Alan) (1992) 95 Cr App R 252, where ing. It was unacceptable that by marriage a wife sub-
the Court of Appeal decided that the defendant was mits to sexual intercourse in all circumstances.
guilty under s 20 when he attempted, during sexual
activities, to insert a vibrator into the complainant’s
545 R v Williams [1923] 1 KB 340
vagina, causing laceration to her vulva and bowel. The
jury decided on the evidence that he actually foresaw
Williams taught singing. He told a 16-year-old female
some physical harm.
pupil that if she had intercourse with him it would
improve her voice. The girl allowed him to have inter-
543 R v Belfon [1976] 3 All ER 46 course with her and made no resistance. She believed
what he said and in any case was not mature enough
Belfon attacked a man called Paul Horne with a razor to know that he was having sexual intercourse with
causing him serious injury. He was charged under s 18 her. She did not know that that was what they were
of the Offences Against the Person Act 1861. At his doing. He was convicted of rape. His appeal was dis-
trial the judge directed the jury that intention or missed. Lord Hewart, CJ said: ‘She was persuaded to
Cunningham recklessness as to the infliction of consent to what he did . . . because she thought it was
grievous bodily harm constituted the mens rea for an a surgical operation.’ Therefore, there was in effect no
offence under s 18. He was convicted and appealed to consent.
the Court of Appeal. His conviction was quashed and
Comment A further example of deception nullifying
a conviction for unlawful wounding under s 20 was
consent is to be found in R v Tabassum (Navid), The
substituted. The Court of Appeal laid it down that in
Times, 26 May 2000 where the Court of Appeal found the
directing a jury in relation to an offence under s 18 defendant guilty of indecent assault where he had, by
the judge should direct the jury that what has to be pretending to be medically qualified, fondled the breasts
proved is (a) the wounding; (b) that the wounding of three women on the basis that he was demonstrating
was deliberate and without justification; (c) that it was breast self-examination.
committed with intent to cause really serious bodily
harm; and (d) that the test of intent is subjective.
Director of Public Prosecutions v Morgan [1975]
546
2 All ER 347
Sexual offences: rape
Morgan and his three companions were members of
544 R v R [1991] 4 All ER 482 the RAF. Following a drinking session Morgan took
the three men home to have sexual intercourse with
A husband and wife were having matrimonial prob- his wife. He told them she might resist because she
lems. The wife left her husband and went to live with was a bit ‘kinky’ and this was the only way she could
her parents. She left a note at the matrimonial home get ‘turned on’. When they got to Morgan’s home
saying she was going to petition for a divorce. Some Mrs Morgan was in bed asleep. She did not habitually
three weeks later the husband forced his way into the sleep with her husband. She was frog-marched to
house of his wife’s parents who were out at the time another bedroom and laid on a double bed; each of
and attempted to have sexual intercourse with his her arms was held and her legs were held apart. All
wife against her will. In the course of doing so he three men then had intercourse with her. When they
squeezed her neck and, therefore, assaulted her. He had finished and left the room Morgan had inter-
was tried, amongst other things, for attempted rape. course with her himself. Mrs Morgan immediately
His defence was that he could not in law commit rape left the house and went to a nearby hospital. She said
or attempted rape upon his wife. Her consent was she had done all she could to resist. The three men
..
EL_Z02.qxd 3/26/07 10:58 AM Page 909
CASES 547–549 AGE AND RESPONSIBILITY – GENERAL DEFENCES 909
(not Morgan, who could not commit rape upon his could apply to a person suffering from epilepsy.
wife in those days) were charged with rape and all Mr Sullivan admitted inflicting grievous bodily harm on a
four with aiding and abetting the rapes. friend of his at a time when he was recovering from a
The case eventually got to the House of Lords where minor epileptic seizure. His defence was automatism
it was decided that: which could have resulted in an acquittal but the judge
ruled that the defence amounted to one of insanity
(a) The crime of rape was committed by having sexual which would, if successful, have led to Mr Sullivan’s
intercourse with a woman with intent to do so with- immediate detention in a special institution. Mr Sullivan
out her consent or with reckless indifference as to changed his plea to guilty of occasioning actual bodily
whether she consented or not. The test of recklessness harm and was convicted and sentenced to probation
is subjective and not objective because if the defend- with medical supervision.
ant believes the woman is consenting that belief need Previously it had been thought that for M’Naghten to
not be based on reasonable grounds. apply the mind had to be working but not as it should. It
(b) There could have been no subjective belief in the seems from this decision that M’Naghten applies even if,
as in this case, the mind is not working at all.
circumstances of this case that Mrs Morgan was con-
senting and so the convictions for rape and aiding
and abetting rape must stand. 548 R v Hennessy [1989] 1 WLR 287
Comment The Sexual Offences Act 2003 contains statu-
The defendant was charged with taking a motor
tory provisions regarding consent. The decision in
Morgan is replaced by the statutory definition. Under the vehicle without consent. He suffered from diabetes
new provisions, the prosecution must prove that B did and had to take insulin every day. He had been having
not consent and that A did not reasonably believe that B marital and employment problems causing stress
was consenting. An honest but unreasonable belief as to and depression and he had not taken his insulin for
the consent of the victim will no longer entitle the defend- two or three days before the incident. He claimed that
ant to an acquittal. In deciding whether the defendant’s as a result he did not know what he was doing and
belief in consent is reasonable, the court must have did not, therefore, have the necessary mens rea. The
regard to all the circumstances at the time in question, judge took the view that this was a disease of the
including any steps that the defendant may have taken mind and he was insane within the M’Naghten rules.
to establish that the victim did consent to the sexual The defendent changed his plea to guilty and then
activity. In addition, the 2003 Act introduces rebuttable appealed against the insanity ruling. The Court of
and irrebuttable presumptions about consent. Appeal held that the hyperglycaemia caused by the
The Morgan case is included only to show the previous lack of insulin was a disease of the mind within
position and to provide a contrast with current law. M’Naghten. The defence of automatism was not avail-
able. The defendant was insane. The trial judge’s ruling
was correct.
AGE AND RESPONSIBILITY –
GENERAL DEFENCES Comment (i) In R v Burgess, The Times, 28 March 1991
a man claimed to have been sleepwalking when he
M’Naghten rules: disease of the mind wounded a woman. He said he was suffering from non-
insane automatism and lacked the necessary mens rea
547 R v Kemp [1956] 3 All ER 249 for the offence. The Court of Appeal held that he was
insane and that an appeal by him against a verdict of not
The accused struck his wife with a hammer without, guilty by reason of insanity failed. He was suffering from
so he said, being conscious of doing so and was insane automatism in spite of the transitory nature of the
charged with causing grievous bodily harm. He was disorder.
an elderly man of good character who suffered from (ii) The fact that an epileptic (as in Sullivan) and a dia-
arteriosclerosis. Medical opinions differed as to the betic (as in Hennessy) can be regarded as insane is an
precise effects of this disease on his mind. It was held illustration of the fact that the test is legal not medical
that, whichever medical opinion was accepted, arterio- and is based on responsibility for the act in the circum-
sclerosis was a disease capable of affecting the mind, and stances of the case.
was thus a disease of the mind within the M’Naghten
Rules, whether or not it was recognised medically as a
mental disease. 549 R v Clarke [1972] 1 All ER 219
Comment In R v Sullivan [1983] 2 All ER 673 the House of May Clarke was convicted of theft from the
Lords held that the definition of insanity in M’Naghten International Stores in Leicester. She had put certain
.. ..
EL_Z02.qxd 3/26/07 10:58 AM Page 910
910 AGE AND RESPONSIBILITY – GENERAL DEFENCES CASES 550–552
items into her shopping bag and not into the wire appealed. The appeal was allowed and the defendant
basket provided by the store which she presented therefore convicted.
at the check-out. She suffered from diabetes but did
I agree that there may be cases where the circum-
not claim not to have taken her insulin. She had not
stances are such that the accused could not really
entirely recovered from ’flu and on the Friday pre-
be said to be driving at all. Suppose he had a stroke
vious to the theft her husband had suffered a
or an epileptic fit, both instances of what may prop-
broken collar bone and she had become, she said,
erly be called acts of God; he might well be in the
very depressed and forgetful. In her own words,
driver’s seat even with his hands on the wheel, but
‘Everything seemed to get on top of me.’ She pleaded
in such a state of unconsciousness that he could
guilty rather than face a decision that she was not
not be said to be driving. A blow from a stone or an
guilty by reason of insanity. She appealed against her
attack by a swarm of bees I think introduces some
conviction on the guilty plea. The Court of Appeal
conception akin to novus actus interveniens. In this
held that her conviction must be quashed. She had
case, however, I am content to say that the evid-
been wrongly advised by the Assistant Recorder that if
ence falls far short of what would justify a court
she did not do so the insanity verdict would be appro-
holding that this man was in some automatous
priate. It would not have been. The M’Naghten rules
state. (Per Lord Goddard, CJ)
relating to insanity do not apply to those who retain
the powers of reasoning but who in moments of con- Comment In Attorney-General’s Reference (No 2 of
fusion or absent-mindedness fail to use those powers 1992), The Times, 31 May 1993 the defendant, who was
to the full. described as driving without awareness induced by the
repetitive stimuli of motorway-driving over a long period,
was charged with motor manslaughter and convicted.
550 R v Windle [1952] 2 QB 826
The Court of Appeal affirmed that conviction and did not
accept the defence of automatism. There was no destruc-
The defendant gave his wife a large and fatal dose
tion of nor total absence of voluntary control on the part
of aspirin. He was admittedly suffering from mental
of the defendant in his driving though it was impaired or
illness but he did admit he had administered the
reduced.
aspirin and said he supposed he would hang for it as
he later was! His only defence was insanity. He was
convicted, the trial judge having ruled that there was 552 R v Quick [1973] 3 All ER 347
no evidence to support such a defence. The defence
did not go to the jury. Windle appealed and his Quick was a nurse employed at a mental hospital. He
appeal failed. Lord Goddard, CJ said: assaulted a patient and claimed that he could not
remember doing so. He was a diabetic and had taken
In the opinion of the court there is no doubt that insulin as recommended by his doctor. He then had a
in the M’Naghten rules ‘wrong’ means contrary to small breakfast and no lunch. He had also been drink-
law and not ‘wrong’ according to the opinion of ing before the assault took place. Medical evidence
one man or a number of people on the question of showed that at the time of the assault he was suffer-
whether a particular act might or might not be ing from a deficiency of blood sugar following the
justified. In the present case it could not be chal- insulin injection. The trial judge ruled that this state
lenged that the appellant knew that what he was could only be relied on to support the defence of
doing was contrary to law, and that he realised insanity. Quick changed his plea to guilty and then
what punishment the law provided for murder. appealed against his conviction. The Court of Appeal
held that the improper functioning of his mind had
Actus reus: automatism been caused by an external factor not a disease of the
mind. The use of the insulin was that external factor.
551 Hill v Baxter [1958] 1 All ER 42 He was, therefore, entitled to have the defence of
automatism put to the jury and since this had not
The defendant had been charged with dangerous driv- been done his conviction must be quashed.
ing and failing to conform with a traffic sign under Comment (i) All that the Court of Appeal was deciding in
ss 11 and 49(b) of the Road Traffic Act 1930, respec- this case was that the defence of automatism could and
tively. He said in his defence that he had been should have been put to the jury after proper argument
unconscious at the time because a sudden illness had by counsel. The Court of Appeal does indicate that the
overtaken him. The magistrates accepted his defence defence may not have succeeded because the deficiency
and dismissed the charges and the prosecutor of blood sugar might very well have been regarded as
..
EL_Z02.qxd 3/26/07 10:58 AM Page 911
self-induced. Those who take insulin should eat regularly a specific intent (see Chapter 23) the defendant’s sub-
afterwards. Quick did not. He had also been advised to missions as to drink and drugs were no defence and
take a lump of sugar if he felt an attack coming on. his conviction must be upheld.
He had not done so. However, the conviction had to
be quashed because the jury might have accepted the Comment (i) It seems difficult to find the ingredients of
defence. It is important to know that it is available crime in Lipman and Majewski in terms of the actus reus
in these circumstances even though it is by no means and mens rea requirements. Perhaps the law punishes
certain that it will succeed. the act of becoming intoxicated on drink or drugs, the
punishment being then based on the act which the
(ii) In Moses v Winder [1980] Crim LR 232 the defendant defendant did while in that state.
had been a diabetic for 20 years. He felt a diabetic attack
developing and took a dose of sugar which usually post- (ii) Involuntary intoxication by way of drink or drugs is
poned the attacks for about an hour. However, whilst capable of negativing mens rea. In R v Kingston [1993]
driving home he drove his car on the wrong side of the 3 WLR 676 the defendant, a paedophile, was drugged
road, colliding with an oncoming car. He stopped a few by another man so that the defendant could be
minutes later in a daze, examined his car and then drove photographed in a compromising sexual situation with
a further half mile. It was held by a Divisional Court that a boy aged 15 and so that the other man might black-
the defendant was nevertheless guilty of driving without mail him. The defence was that because of the drugs
due care and attention. His defence of automatism did the defendant had no recollection of acting as he did.
not succeed and would rarely succeed without medical The defence of involuntary intoxication succeeded in the
evidence. The defendant had not taken sufficient precau- Court of Appeal. See also Ross v HM Advocate (1991)
tions to deal with the threat of a diabetic coma. below.
(iii) The House of Lords reversed the decision of the Court
of Appeal in Kingston (see The Times, 22 July 1994). They
553 R v Lipman [1969] 3 All ER 410 did not accept that the drugs had sufficiently affected his
intent. He was still excited by the boy and he acted with
L was charged with murder of a girl but convicted of the intent of a paedophile, i.e. to commit acts of inde-
manslaughter. Both he and the girl had taken LSD cency with a young boy. The decision shows how difficult
together in her room and L said that while under the it is, and always has been, to plead involuntary intoxica-
influence of the drug he had an illusion of being tion in crime.
attacked by snakes and that he must have killed
the girl during this time. The girl had received two
555 R v Hardie [1984] 3 All ER 848
severe blows on the head but the immediate cause
of her death was asphyxia as a result of having part
Hardie lived with a woman at her flat. The relation-
of a sheet pushed down her mouth. The Court of
ship broke down and she insisted that he leave. He
Appeal affirmed the conviction, saying that when the
was upset and took several tablets of valium, a sedat-
killing results from the unlawful act of the accused,
ive drug, belonging to the woman. Some hours later
no specific intent was to be proved to convict of
he started a fire in the bedroom of the flat while the
manslaughter and mental states which are self-
woman and her daugher were in the sitting room. He
induced by drink or drugs are no defence to a charge
was charged with damaging property with intent to
of manslaughter.
endanger life or being reckless as to whether life
would be endangered (Criminal Damage Act 1971,
Drunkenness and drugs s 1(2)). The trial judge said in answer to the defence
of no mens rea that because the valium was voluntar-
Director of Public Prosecutions v Majewski
554 ily self-administered it could not negative mens rea
[1976] 2 All ER 142
and was no defence. Hardie was convicted and
There was a disturbance at the Bull public house in appealed. The Court of Appeal decided that although
Basildon, Essex. Majewski attacked the landlord and self-induced intoxication from alcohol or a dangerous
two other persons. He also assaulted three police drug was no defence to crimes involving recklessness
officers. He was charged with assault occasioning because the taking of the alcohol or drugs was itself
actual bodily harm. At his trial he said he did not reckless a drug which was merely soporific was differ-
know what he was doing by reason of drink and ent. The jury should have been asked to consider
drugs. The case eventually reached the House of Lords what effect the valium might have had upon the
which ruled that unless the offence charged required defendant’s ability to appreciate the risk. Since they
a specific intent a drink/drugs defence was not applic- had not been asked to do so the conviction must
able. Since the assaults charged did not require solely be quashed.
.. ..
EL_Z02.qxd 3/26/07 10:58 AM Page 912
ness, which renders him incapable of forming that

556 R v O’Grady [1987] 3 WLR 321
intention is an answer. . . . 2. If a man by drinking
O’Grady and his acquaintances were given to heavy brings on a distinct disease of the mind such as
drinking. On the day in question he had drunk at delirium tremens, so that he is temporarily insane
least eight flagons of cider. His companions, Brennan within the M’Naghten Rules, that is to say, he does
and McCloskey, who had been drinking with him not at the time know what he is doing or that it is
went back to O’Grady’s flat. During the night wrong, then he has a defence on the ground of
McCloskey attacked O’Grady and in the ensuing fight insanity. . . .
O’Grady punched McCloskey to death. He put for- However, G’s original conviction for murder was
ward self-defence. It seemed from the circumstances upheld because he did not fit the above categories. As
that McCloskey’s attack was severe but not so severe Lord Denning said:
as to warrant killing him in self-defence. O’Grady My Lords, I think the law on this point should take
asked the court to acquit him because being drunk he a clear stand. If a man, whilst sane and sober, forms
had not appreciated the nature of McCloskey’s attack. an intention to kill and makes preparation for it,
The Court of Appeal heard an appeal by O’Grady knowing it is a wrong thing to do, and then gets
against his conviction at his trial of manslaughter. himself drunk so as to give himself Dutch courage
The appeal failed, the Court of Appeal ruling that so to do the killing, and whilst drunk carries out his
far as self-defence is concerned reliance cannot be intention, he cannot rely on this self-induced
placed on a mistake as to the nature of the attack drunkenness as a defence to a charge of murder, nor
induced by voluntary intoxication. even as reducing it to manslaughter.
Comment Much depends upon the wording of statutory
offences. For example, s 5 of the Criminal Damage Act 558 Ross v HM Advocate, 1991 SLT 564
1971 requires that a person causing damage to property
has a defence if he believed that the owner of the prop- This was a trial for attempted murder. The evidence
erty would have consented to it. The Act says it is imma- was that on the day of the attempted murder the
terial whether the belief is justified if it is honestly defendant had been drinking lager from a can. He did
held. This means that the test as to belief is subjective. In not know that five or six tablets of temazepam and a
addition the section does not go on to say ‘if it is honestly quantity of LSD had been squeezed into the can. The
held other than because of self-induced intoxication’. defendant drank the lager. Shortly afterwards the
In Jaggard v Dickson [1980] 3 All ER 716 a girl who was defendant started lunging about with a knife and
drunk broke into a house thinking it was a friend’s house screaming. He injured various people who were
which he had said she could use as her own. It was an
strangers to him. On a charge of attempted murder
identical house in the same street but not her friend’s.
the defendant said that he had no self-control and
The girl was acquitted of criminal damage because the
therefore no mens rea. He was nevertheless convicted.
Divisional Court said if she honestly believed it was her
He appealed and his appeal was allowed. He should
friend’s house then the defence in the Act was estab-
be acquitted because his absence of self-control was not
lished even though the honest belief arose from drink. It
is doubtful whether there will be much scope to extend self-inflicted. But see also R v Kingston (1994), above,
this decision into other areas. where the House of Lords did not apply the decision in
Ross but were able to apply certain of the reasoning in
Attorney-General for Northern Ireland v the Ross case to the effect that the particular decision
557 should not be of universal application.
Gallagher [1963] AC 349
G was convicted of murdering his wife. In his defence
Duress
he pleaded insanity under the M’Naghten rules or, as
an alternative, that he was too drunk at the time to
559 R v Gotts [1991] 2 All ER 1
form the necessary intent for murder so that he was
only guilty of manslaughter. G had shown intention to Ben Gotts was charged with the attempted murder
kill his wife before taking the drink. The case eventu- of his mother. The mother had left the family home
ally reached the House of Lords where Lord Denning after arguments with the father and gone to a women’s
gave a useful summary of the effect of drunkenness aid refuge with two of the younger children. One
when he said: morning as the mother left the refuge to take one of
1. If a man is charged with an offence in which a the children to school Ben then aged 16 armed with a
specific intention is essential (as in murder, though knife supplied by his father ran up behind her and
not in manslaughter), then evidence of drunken- stabbed her. He was charged with attempted murder
..
EL_Z02.qxd 3/26/07 10:58 AM Page 913
and wounding with intent. He pleaded duress: that gang threatened him and his family with violence if
his father had ordered him to kill his mother. The he did not continue. The trial judge ruled that the
Court of Appeal held that duress was not a defence to defence of duress was not available because he had
attempted murder and his appeal was dismissed. voluntarily participated in a criminal act. He appealed
There was no verdict on the count relating to wound- and the Court of Appeal held that his conviction must
ing with intent. be quashed. The defence of duress was available if at
The decision of the Court of Appeal was affirmed by the time he joined the gang he did not contemplate
the House of Lords (see R v Gotts [1992] 1 All ER 832). that violence would be used against him if he did not
continue to participate.
560 R v Hudson [1971] 2 All ER 244 Duress of circumstances

Two girls aged 17 and 19 were the main witnesses for
563 R v Martin [1989] 1 All ER 652
the prosecution on a charge in Manchester of wound-
ing. At the trial they both failed to identify the defend- Mr Martin was found guilty of driving whilst dis-
ant Wright. He was acquitted as a result of this. The qualified. He appealed on the basis that his wife had
girls were tried for perjury and put in the defence of suicidal tendencies, and that on the day in question
duress. They had been approached by a group of men his stepson had overslept and was bound to be late
who threatened to ‘cut them up’ if they ‘told on’ for work and, it was said, at risk of losing his job
Wright in court. They were nevertheless convicted unless Mr Martin drove him to work. Mr Martin was
and appealed. The appeal turned on the trial judge’s disqualified from driving but his wife started scream-
direction to the jury that duress can only arise where ing and beating her head against the wall and threat-
there is a threat of death or serious personal injury at ening suicide unless he drove the stepson to work
the moment when the crime is committed. The threat which he then did. He was stopped and later pro-
here was to do something in the future. The Court of secuted for driving whilst disqualified. His defence
Appeal said that their convictions must be quashed. was necessity and the Court of Appeal accepted it in
Lord Parker, CJ said that the threats in this case were this case though referring to the situation as ‘duress
none the less compelling because they could not be of circumstances’.
executed in the court room if they could be carried
out on the streets of Salford the same night. Comment It was held by the Court of Appeal in R v
Pommell, The Times, 22 May 1995 that the duress of
circumstances defence, though developed in relation to
561 R v Sharp (David) [1987] 3 WLR 1 road traffic offences, also applied to other crimes, but not
murder, attempted murder and some forms of treason.
David Sharp was involved in the armed robbery of A person was permitted to break the law to prevent a
a post office. He participated in the robbery. He was greater evil from happening to himself or others. P had
charged with aiding and abetting murder but he was appealed against conviction for possessing a firearm. The
in fact convicted of manslaughter. He claimed that he police, having a search warrant, had found him in bed
had not wished to go on with the robbery but had been holding a loaded gun which he said he had taken from
forced to because a member of the gang to which he a visitor to his house the previous night to prevent the
belonged which had masterminded the robbery had visitor from carrying out his threat to kill persons whom
he said had killed his friend. He claimed that he intended
held a gun to his head to make him proceed. He
to take the gun to the police station in the morning.
appealed because the trial judge rejected the defence
His conviction was set aside and a new trial ordered.
of duress. The Court of Appeal dismissed the appeal.
The defence of duress was not available where, as
Necessity
here, a person had voluntarily and with knowledge of
its nature joined a gang which he knew might put
564 R v Dudley and Stephens (1884) 14 QBD 273
pressure on him to commit an offence.
A yacht was shipwrecked, and three men and a boy
562 R v Shepherd (1988) 86 Cr App R 47 escaped in an open boat. They were adrift for eight
days without food when the men killed the boy, who
Shepherd and other persons entered retail premises was by then very weak, in order to eat his body and
and stole goods. He was charged with burglary. He keep themselves alive. They were rescued four days
said that he had participated willingly at first but later later by a passing ship. They were tried for, and con-
lost his nerve but stayed on because a member of the victed of, murder. It was held that there is no principle
.. ..
EL_Z02.qxd 3/26/07 10:58 AM Page 914
of law which entitles a man to take the life of an diagnosed as schizophrenic. During the indecent
innocent person to save his own. In any case, the act, which involved the touching of her private parts,
death of the men would not have been inevitable, but she was mumbling all the time giving perhaps to a
only probable. Where the offence committed is not a reasonable person evidence that she was a sick woman.
capital offence, the defence of necessity might result Since the attack took place on the cricket ground near
in a mitigation of sentence. the hospital gardens, it might have led a reasonable
person to believe that the sickness was mental and
Comment (i) It was held in DPP v Harris, The Times, 16
throw doubt upon her consent. The Court of Appeal
March 1994, that a police driver could not successfully
decided that it was enough if the mistake which
plead the defence of necessity on a charge of driving
Kimber made was to honestly believe that she con-
without due care and attention when he failed to stop
sented. However, his conviction must stand because no
a car, being used for police purposes, at a red light.
This would seem to stress the need for an element of reasonable jury properly instructed that an honest
threat or danger where the defence is put up (see also belief was sufficient as a defence could have believed
A (children), The Times, 10 October 2000: necessary to that Kimber could or did honestly believe she con-
separate conjoined twins: court consents to inevitable sented in the circumstances of the case.
death of one).
(ii) The reluctance of our courts to entertain the defence 566 R v Bailey (1800) 168 ER 651
of necessity is also illustrated by R v Altham, The Times,
1 February 2006. Bailey, who was the captain of a ship, fired at another
The defendant suffered pain from a road accident ship on the high seas without any justification and
some 15 years before this prosecution was brought. He wounded one of the sailors on that other ship. He was
used cannabis to relieve the pain. He was later prose- charged under an Act of Parliament which made such
cuted for the offence of possession of a controlled drug, a shooting on the high seas triable and punishable in
i.e. cannabis, contrary to s 5(2) of the Misuse of Drugs Act
this country. The following extract from the judg-
1971. He was convicted of this offence in Preston Crown
ment of the court is relevant:
Court and appealed to the Court of Appeal. His appeal
was dismissed. It was then insisted that the prisoner could not be
His contention that notwithstanding that the cause of found guilty of the offence with which he was
his condition was a road accident some 15 years before, charged, because the Act of 39 Geo. 3, c. 37 upon
the state had an Art 3 human rights obligation to allow which . . . the prisoner was indicted at this
him to take any steps necessary to alleviate his condition Admiralty Sessions, . . . only received the Royal
even though those steps involved breaches of the law Assent on 10 May, 1799, and the fact charged in
was not accepted by the court. The state had done noth- the indictment happened on 27 June in the same
ing to subject the defendant to either inhuman or year when the prisoner could not know that any
degrading treatment and therefore Art 3 was not such Act existed (his ship the Langley being at the
engaged. Article 3 did not require the state to take any time upon the coast of Africa). Lord Eldon told the
steps to alleviate his condition. jury that he was of opinion that he was, in strict
The defence of necessity did not apply because, if it law, guilty within the statutes . . . though if the
were applied, it would enable individuals to treat them-
facts laid were proved, though he could not then
selves by unlawful acts without medical intervention or
know that the Act of 39 Geo. 3, c. 37 had passed,
supervision.
and that his ignorance of that fact, could in no
Accordingly, the trial judge was right to hold that the
other wise affect the case, than that it might be the
defence of necessity should not be left to the jury.
means of recommending him to a merciful consid-
Note: since the prosecution the defendant has been
prescribed another drug which alleviated his pain to such eration elsewhere should he be found guilty. . . .
an extent that he no longer uses cannabis. Comment At the next Admiralty Sessions Bailey was
pardoned.
Mistake
Self-defence
565 R v Kimber [1983] 3 All ER 316
567 R v McInnes [1971] 3 All ER 295
Kimber sexually assaulted a woman who was a patient
in a mental hospital. He was charged with indecent McInnes belonged to a group of youths called
assault. His defence was that he honestly believed ‘greasers’. There was a fight between a group of
that the woman consented. The woman had been ‘greasers’ and another group of youths called ‘skin-
..
EL_Z02.qxd 3/26/07 10:58 AM Page 915
CASES 568 –569 AGE AND RESPONSIBILITY – GENERAL DEFENCES 915
heads’. It took place at Platt Fields, Manchester. A or not is objective. So if the prosecution shows that
skinhead jumped on the defendant’s back and his excessive force was used, the defence fails. The use of
response was to stab the skinhead, which caused his excessive force is not to be decided in terms of the defend-
death. The defendant was convicted of murder. He ant’s perception of events, which would be a subjective
appealed to the Court of Appeal on two main points: test.
The Law Commission has proposed a test in which the
(a) that the trial judge had said that in self-defence key question would be, was the violence used ‘reason-
cases it was necessary for the defendant to have able’ in the circumstances as the defendant believed
retreated as far as he could before using the force them to be? This test is, of course, more objective. Using
in self-defence; and this test in the Clegg case the court would have to decide
(b) that even if the force used was unreasonable, as it whether Clegg believed the soldiers still to be at risk. The
clearly was in this case, a jury could be directed to House of Lords merely decided they were not and that
return a verdict of manslaughter. was it. The defence failed. The House of Lords thought
that any changes in the law, particularly in connection
On these points it was decided that it was not essential with the acts of soldiers and policemen, was a matter for
that the defendant should have retreated. Whether he Parliament and not the courts. The House of Lords also
did or not was merely one factor in deciding whether confirmed that it was no defence for Clegg to say that he
the defence of self-defence succeeded or not. Further- was under orders. There is no defence of superior orders
more, if the defence failed, as it did here, because of in English law.
lack of reciprocity then it failed altogether. It was not There was a campaign by the tabloid newspapers in
possible for the jury to return a verdict of manslaughter. England which resulted in Clegg’s release after serving
The defendant’s conviction for murder must stand. only four years’ imprisonment.
Comment (i) The fact that no retreat is merely a factor to (iii) There is a need to look afresh at the law of self-
be looked at in terms of a plea of self-defence was defence. Crime against private property has increased and
affirmed again in R v Bird (Debbie) [1985] 2 All ER 513, the police, perhaps because of inadequate funding, are
where following a house party the defendant hit the increasingly perceived as ineffective against such crime,
victim in the face with a glass after he slapped her while leading perhaps to individuals or groups being prepared
he was pinning her to the wall. She had not shown an to use force to defend their homes against crime.
unwillingness to fight but the Court of Appeal said this
was not absolutely necessary. Incidentally, the force used Attorney-General’s Reference (No 2 of 1983)
568
here was totally lacking in reciprocity, but the defendant [1984] 1 All ER 988
managed to satisfy the court that she did not know she had The defendant in this case had a shop in an area
the glass in her hand and only intended to use her fist. which had suffered riots and his store had been
(ii) The issue of self-defence was raised before the House looted. He was in constant fear of further rioting.
of Lords in R v Clegg [1995] 1 All ER 334. In that case the He boarded his shop up, bought fire extinguishers
appellant was a British soldier stationed in Northern and made 10 petrol bombs which he kept upstairs
Ireland. He was at the relevant time on patrol at a check- to be used to repel rioters. This was an offence under
point when a car drove through it without stopping and the Explosive Substances Act 1883. He pleaded self-
in spite of calls for it to stop by soldiers at the check- defence, the problem about that defence being that
point. The car was stolen. The appellant, believing that when he prepared the petrol bombs no attack was
the lives of his fellow soldiers were at risk from attack by taking place. The Court of Appeal held on this point
what appeared to be terrorists in the car, opened fire on that the defence of self-defence was available to go to
it killing the driver and a woman passenger. The evid- a jury at least. A person can make preparations for
ence showed that the woman had been shot in the back self-defence where there is an apprehension of immin-
at a time when the car was 50 feet down the road from ent attack. The issue of reciprocity was not raised, since
the checkpoint and when the soldiers could no longer this was not a trial as such, although the defendant did
have been in any danger. The appellant was convicted
say he did not intend to throw the bombs at people
of murder and his defence of self-defence failed. The
but to throw them on the pavement in front of his
House of Lords said that a soldier or police officer who,
shop to keep the rioters away from it.
in the course of his duty, killed a person by firing a shot
which constituted the use of excessive and unreasonable
force in self-defence was guilty of murder and not 569 R v Rose (1884) 15 Cox CC 540
manslaughter.
The decision states, in effect, that if the force used is John Rose, who was a very powerful man, was killed
unreasonable the defence fails and more importantly by his son, a weakly young man aged 22 years. John
that the test of whether the force used was reasonable Rose had frequently threatened to kill his wife, the
.. ..
EL_Z02.qxd 3/26/07 10:58 AM Page 916
916 AGE AND RESPONSIBILITY – GENERAL DEFENCES CASE 569
young man’s mother. On this occasion he violently Comment (i) This case was decided on common-law prin-
assaulted her, threatened to cut her throat and said ciples. Today it provides an example of the possible use
he was going to a bedroom to get a knife which the of s 3 of the Criminal Law Act 1967.
family knew he kept there. He came back with the (ii) Where the defence is raised, as here, in relation to the
knife and grabbed his wife and held her in a position taking of a person’s life, the provisions of Art 2 of the
which could have been preparatory to cutting her Convention on Human Rights will now be applied. Article
throat. The son got a gun and shot him dead. He was 2 is more stringent than s 3. Under Art 2 the force used
indicted for manslaughter. He was found not guilty. must be absolutely necessary, and lethal force is likely to
The judge said that homicide was excusable if the be permissible only when acting to defend another from
fatal blow (or shot in this case) was necessary for the unlawful violence not in the general prevention of crime.
preservation of the life of another. Article 2 could well have been satisfied in the Rose case.
..
EL_Z03.qxd 3/26/07 10:59 AM Page 917
GLOSSARY OF COMMONLY USED

LEGAL WORDS AND PHRASES
accord and satisfaction A phrase used to indic- chose in action An intangible asset such as a
ate that a contract which has not been wholly claim to money as where A owes money to B. In
performed is to be treated as discharged by such a case, the debt is a chose in action. Other
agreement of the parties (the accord ), this agree- forms of property are also included such as
ment being supported by consideration (the copyright in a book and a potential claim on an
satisfaction). insurance policy. In essence, a chose in action is
agent A person who is employed by another a piece of property which the owner has the
(called the principal) to put that other into a con- right to recover by court action if it is withheld.
tractual relationship with a third party. chose in possession A tangible physical object
such as a pen or a book.
bailment The transfer by one person to another of
possession but not ownership of a tangible asset. conveyance A method by which property, in the
main land, is transferred or the document by
bill of exchange A form of credit under which a
which this is done.
seller S who has sold goods to a buyer B will
draw up a bill of exchange on B, the bill being covenant A promise set out in a deed.
payable, say, three months hence. If, as is usual, demise The grant of a lease of land. According to
B accepts the bill, he will return it to S who may the context, it can also mean death.
wait three months before presenting it to B for
devise A gift of real property by will.
payment, or alternatively get a bank to pay
him so that the bank will present the bill for estoppel A rule of evidence by which a party may
payment at the end of three months. The price be prevented from proving what is true because
paid for the goods or by the bank for the bill will he has previously suggested that it was false and
be adjusted to take into account interest during another party has relied on that. Thus A and B
the waiting period of three months. who are not partners are present together when
A asks X for a loan. X knows B but not A. So A
case stated An appeal from a magistrates’ court to
says ‘Lend me the money, it will be repaid: B is
the Divisional Court of Queen’s Bench on a
my partner’. B remains silent and X lends A the
point of criminal law. The magistrates state the
money which A cannot repay. B is obliged to
facts and the Queen’s Bench rules on the cor-
repay it since partners are jointly and severally
rectness or otherwise of the law applied by the
liable for the debts of the firm, and B’s silence
magistrates.
estops him from denying that he is not A’s
caveat emptor ‘Let the buyer take care’ – this partner.
implies that the buyer should watch out for any ex parte An application in judicial proceedings
defects in the goods he is buying since, in the which as an exception is heard in the absence of
absence of misrepresentation by the seller, he an opponent. This is now called a without notice
will bear the consequences of anything which application under the Civil Procedure Rules
he fails to notice. 1998.
chattel Personal property consisting of a tangible execution The carrying into effect of a court
asset, e.g. a watch. order, e.g. for debt by the bailiffs taking the
cheque Essentially, a bill of exchange but always property of the defendant to sell by public auc-
drawn on a bank and payable on demand instead tion in order to pay the claimant what the court
of at a fixed or determinable future time. has decided he is entitled to.
..
EL_Z03.qxd 3/26/07 10:59 AM Page 918
918 GLOSSARY OF COMMONLY USED LEGAL WORDS AND PHRASES
indictable offence A crime triable by jury either pledge The giving-up of possession, but not owner-
because the law requires it, as in the case of ship, of goods as security for the future payment
murder, or at the option of the defendant where of a debt or other obligation.
the offence is triable either summarily or on probate The official recognition by the court that
indictment. executors have authority to deal with the estate
insurable interest The interest which an insured under the will of a dead person.
party must have in the subject matter of the quantum meruit This phrase is used to indicate
policy. an action at law for reasonable payment for work
intestate A person is said to die intestate when the done.
death occurs without leaving a will. realty Freehold or commonhold interest in land
laches Unjustifiable delay in bringing a claim to and buildings.
enforce an equitable right. remainder An equitable interest which becomes
legacy A gift of personal property by will. effective in possession only when the estate of a
liquidation A process under which a corporate previous owner expires. In a gift of property ‘to
body such as a registered company is dissolved by A for life remainder to B’, B’s interest is in
an administrative procedure laid down by law. remainder and will become effective in posses-
sion on the death of A.
negotiable instrument Personal property in the
form of a document the rights in which can be reversion If A owns the freehold of Greenacre and
transferred merely by delivering it to another grants B a lease of, say, 25 years in Greenacre,
person or by delivery following endorsement. the freehold will return to A or his estate if he
The most common example is a bill of exchange. is dead when the lease expires. Until then, A’s
interest in Greenacre is in reversion.
parol contract An agreement made by word of
mouth. simple contract A contract made orally or in
writing but not by deed.
per In the summary of a case the expression ‘per
Bloggs J’ may appear. The word ‘per ’ in this specialty contract A contract made by deed.
context means ‘in the opinion of’. surety A person who has given a guarantee or
personal representatives Executors and adminis- indemnity of a debt.
trators being persons who deal with the estate of winding-up The liquidation or dissolution of a
a deceased person. company.
..
EL_Z04.qxd 3/26/07 10:59 AM Page 919
INDEX
abatement 551, 552, 860 age and responsibility 701–12, apprehended imminent attack 711
acceptance 271, 276, 735, 739–41 909–16 arbitration 63, 174
implied 273 automatism 704, 910–11 clauses 374
not essential 744–5 consent 709–10 Armageddon legal claims 255
not identifiable 281 crime prevention 711 arraignment 141
oral 277 disease of the mind 909–10 arrest 118, 120, 122, 536–7
partial 273 drunkenness and drugs 705–6, unlawful 851–2
postal 277–8, 741–2 911–12 artificial light 642–3
accommodation 57 duress 706–8, 912–13 artificial projections 547
accord and satisfaction 294–5, 528, insanity 702–4 assault 532, 693–4
752–4, 917 liability of minors 701 assent, conditional 274–5
accountants 574 mistake 709, 914 assessment 406
Act of God 516, 840, 881 necessity 708, 913–14 Assets Recovery Agency 164
Act of Parliament 13, 14, 249, religious belief, genuine 712 assignment 293, 301
715 self-defence 710–11, 914–16 assured shorthold tenancies (private
Act of state 517, 841–2 agency 245–6, 292 sector) 629
acte clair 66–7 agent 500, 917 attachment of earnings 187, 188
action for damages 537 agreement 271 attendance centre order 162
action plan orders 162 vague or incomplete 737–9 Attorney-General 40, 50, 51, 53, 113,
actions in personam (personal) aiding and abetting 681 116, 723
actions in rem (real) 609 airline recruitment and training attornment clause 657
actus reus 704, 910–11 company 368 attribution rule 682
criminal law 675–6, 677, 679 alcohol 462, 470, 906 auctions 272, 733
specific offences 686, 693, 694, see also drunkenness audit 259
698, 896–7 alibi 138–9 Australia 588
adjournment in event of judicial aliens 497 authorised guarantee agreement 633
inquiry 97 allocation of business to judges 39 automatism 704, 705, 910–11
administration charges 637 allocation of cases 180–3 award:
Administrative Court 43, 81 allocation procedures 27 additional 478
administrative hearing 124–5 alternative dispute resolution 38, 44, basic 477
administrative inquiries 76 75–6, 174–5, 176, 177, compensatory 477–9
administrative procedures 87 716–17 protective 484
administrative tribunals 70–1 ambassadorial staff 497
administrators 498–500 annoyance, modes of 857 bad character evidence 135–6, 147
admission filing 179 annual leave, paid 431, 434, 443 bail 124, 127–31
adoption, effect of 228–9 annual report 57 after charge 121
adoption leave 443, 452–3 ante-natal care 450 hostels 131
advertising 236, 239, 242–3, 298, anti-social behaviour orders 160 bailees 612, 616–17, 884–5
318 anticipatory breach 402, 809–11 bailment 246, 286, 542, 614–18, 746,
advice, denying access to 122 appeals 29–30, 38, 186 882 – 6, 917
Advisory, Conciliation and administrative tribunals 70 bailors 616, 617, 883–4
Arbitration Service 63–4, 73, against refusal of bail 129–30 bankruptcy 34, 44, 187–8, 229–30,
75, 175, 476, 485 in criminal cases 151 531, 669
employment rights 417, 458 Crown Court 40–1 see also insolvency
advocates 21, 99, 558, 722–3 health and safety 75 Bar Council 99, 103, 109
Advocates-General 64, 65 rights of 145 BARDIRECT 99
affidavits 100 service 70 barristers 104–8, 174
affirmation 323 appointment: briefing and negligence 106–7
age discrimination 422–5 power of 503 circuits 105–6
age requirements 423, 466 terms of 56 conduct 107
..
EL_Z04.qxd 3/26/07 10:59 AM Page 920
920 INDEX
barristers (continued) citation of unreported cases 208–9 circuit 105–6

education and training 105 Court of Appeal 212 administrators 114
employed 105 Crown Court 213 judges 6–7, 31, 36, 38–40, 46–7,
Legal Services Consultative decided cases, reference to 209 52, 60, 74
Panel 105 declaratory and original precedents circumstances, duress of 707–8
Queen’s Counsel 106 217 citation as partner 253
special advocates 107–8 Divisional Courts 213 citation of unreported cases 208–9
barter 348 Employment Appeal Tribunal citizen’s right 252, 465
battery 532–4, 693–4, 850 213–14 City of London 376
Beeching Commission 114 European Court 219 civil claims 461
beneficial contracts 760–1 High Court 213 civil conspiracy 873
bias 82, 719–20 House of Lords 211 civil debt 29
bills, enactment of 194 Judicial Committee of the Privy civil jurisdiction 20, 29
bills of exchange 292, 917 Council 214 civil jury 185–6
bills of sale 893 magistrates’ courts and county Civil Justice Council 103, 225
bills, types of 192 courts 213 civil law 3
binding force 211 media-neutral citations 209–10 civil partnerships 35
binding over of parent or guardian persuasive precedents 216–17 civil procedure 167–88
160 reports 208 alternative dispute resolution
binding over to keep the peace 159 reversing, overruling and 174–5, 176
binding precedent, general res judicata 217–18 appeals 186
exceptions to 214–16 case management 180–3 arbitration 174
breach 402, 403 case stated 29–30, 917 case management and allocation
of contract 486, 584, 872–3 casual delegation 509 of cases 180–3
contractual 74–5 causation 557–9, 895–6 conditional fee agreements
of duty 556–7, 863–4 cause of action 128 170 – 4
effect on contract 402–3 caveat emptor 311, 343, 581, 917 defendant’s response to claim
fundamental 360, 791–2 Central Arbitration Committee 178–9
of statutory duty 837–8, 866 464–5 funding claim 168–70
of warranty of authority 322 Central Criminal Court 41 initial considerations 167–8
briefing 106–7 Chancellor 8, 10, 11 judgment enforcement 186–8
building and construction contracts see also Lord Chancellor offers to settle and Part 36
346 Chancery District Registries 34 payments 176
building and construction plant and Chancery Division 34, 37, 42, 43, proceedings commencement
equipment 349 44 177–8
building schemes 645 change of control clauses 393–4 reform: judgment enforcement 188
burden of proof 116, 363, 894 charge 124–5, 134 reply to the defence 180
business application 651 certificates 662–3 requests for further information
business claims 178 written 119 180
business connection 375 charges and encumbrances over structured settlement procedure
business contracts 351, 396 land 892–3 175
business interests 584–6 charges made for service 352 timetables, court enforcement of
business structures 100–1 charges register 660 183
business tenants 628–9 charging order 186, 188 trial 183–6
charities 236, 310 written offers 176–7
cab-rank rule 107 chastisement 694 civil proceedings 4–5, 264, 673–4
call centres 282–3 chattels 609–10, 650, 663–4, 917 civil remedies of third parties to
cancellation clauses 261 check-off deductions 465 recover loss 388–9
canon law 16 cheque 292, 917 civil servants 262
capability, lack of 469 Chief Coroner 98 civil trial centres 180
capacity of company 309 chief executive 57 civil wrongs 4, 371, 673
capacity to contract 254 children 92, 870–1 claim form 177–8
career breaks 443 on premises 579 claimant, reference to 592–3
careless driving 692–3 protection of 227–8 claimant, rights of 103
case law/judicial precedent law see also minors claims jurisdiction 420, 422
207–19 choses in action 610, 650, 917 co-ownership 624–6, 886
advantages and drawbacks 218–19 assignments 667–9 code of practice 241
binding force 211 mortgages 664 collateral contract 565–6, 744–5
binding precedent, general choses in possession 610, 650, collateral wrongs 511
exceptions to 214–16 917 collective agreements 433, 485
..
EL_Z04.qxd 3/26/07 10:59 AM Page 921
INDEX 921
collective enfranchisement by prohibition 385 counter-offer 735–7

tenants of flats 635–6 reform 386 death of offeree before acceptance
collective transactions 891–2 see also illegality, public policy 744
commercial contracts 396 and competition law death of offeror before acceptance
Commercial Court 43–4, 45, 63 complaints 61, 237, 389 744
commercial credits 292–3 compromise contract/agreement discharge of contract by
commercial purpose defeated 400, 417 performance 297
808 concealment 815–16 electronic trading 281–2
Commission of Assize for Civil conciliation 38, 63–4, 476 equitable estoppel 297
Actions 7 conditional bill 663 equity – promissory estoppel rule
Commission for Equality and conditional fees 101–2, 103, 170–4 295–7
Human Rights 72, 91, 415, 417 conditional offers 280, 743–4 essentials of valid contract 269
Commission of oyer and terminer 7 conditions 333–4, 395, 780 formalities 301–4, 759–60
Commission for Racial Equality 72, conduct 107, 470 formation 271, 282–3
237, 415 previous 677, 897 intention to create legal relations
Commissioner for Protection against confidential information 378–80 297–300
Unlawful Industrial Action confidential relationship 317 invitation to treat 733–4
465 conformity to contract 353 lapse of offer after reasonable time
committal proceedings 25–6 consent 533–4, 709–10 743
Committee on Administrative implied 512–13 lock-out agreements 735
Tribunals and Inquiries 76 see also informed consent; reality mental disorder and drunkenness
common benefit 881 of consent 307–8
common law 6–8, 294–5 consideration 271, 284–94, 745–9 minors 304–7, 760–1
defects 8–11 executed 284–5, 287 offer and acceptance by post 741–2
and equity in conflict 715 past 749 offer and acceptance not essential
Common Law Corporation 248 privity and claims against 744–5
common serjeant 61 insolvent businesses 294 offer and invitation to treat 272–4,
common socage 618 privity of contract 287–8 733, 734
commonhold 619–22 privity rule exceptions 288–93 offer termination 278–81
communication 277, 356–9 total failure 412–13 offer and unilateral agreements
community justice centres: consolidation 657 732
community conspiracy 584, 894–5 past consideration 749
judge 110–11 construction rules 791 privity of contract 749–52
Community Legal Service 104, 126, constructive communication rule promissory estoppel 754–6
168– 9 357 registered companies 762
community orders 156–7 constructive notice doctrine 357 revocation of offer 742–3
companies 92, 178, 247–9 consumer: of sale 272
Companies’ Court 44 complaints 101 standing offer 737
company prospectuses/ guarantees 354, 361 unsound mind and drunkenness
advertisements 273, 323 hiring 349 762
company winding-up 34 law 336, 345 vague or incomplete agreements
compensation 321–2, 477–9 transactions 351 737–9
orders 160 Consumers Association 389 see also consideration; contract of
compensatory rest 434 contact orders 228 employment; contractual;
Competition Appeals Tribunal 45, contingency fees 171–2 discharge of contract
383, 389 contra proferentem rule 359 contract of employment 261–4,
Competition Commission 387, 388, contract 3–4, 269–83, 284–300, 426–35
389 301–10, 732 – 62 disciplinary procedure 427
competition law 384–90, 646 acceptance 274–8, 735, 739–41 discrimination once in
abuse of dominant position: accord and satisfaction 752–4 employment 445–9
prohibitions 386–7 agreement 272 equal treatment 440–2
civil remedies of third parties to arbitration 63 exemptions from written
recover loss 388–9 capacity to 304 particulars requirements
complaints 389 classification 270–1 428 – 9
EU law, relationship with 389 common law – accord and fixed-term contracts 444–5
exclusions 385, 387 satisfaction 294–5 grievance procedure 427
exemptions 386, 387 conditional offer 743–4 guarantee payments 449
institutional structure 388 contractual intention 756–9 part-time workers 443–4
media mergers 388 contrary to public policy 381–2 pay 435–40
monopolies and mergers 387 corporations 308–10 shop workers 486–8
.. ..
EL_Z04.qxd 3/26/07 10:59 AM Page 922
922 INDEX
contract of employment (continued) contributory fault 473–4 civil jurisdiction 29

suspension from work on medical control test 501–2 Commercial Court 43–4
grounds 449–50 conventions, international 15–16 Companies’ Court 44
working time 429–34 conversion 854–5 conciliation 63–4
see also family-friendly provisions conveyance 100, 917 Court of Protection 44–5
contracting out 439 conviction 49, 703 Crown Court 39–41
contractual assent 836 previous 135–6, 147 disclosure in criminal cases to
contractual claims 261–4 cooling off period 392 assist trial management 28
contractual clauses 775–6 Coroners’ Charter 98 duty solicitor 28
contractual consent 513 Coroner’s courts 95–8 European Court of Human Rights
contractual debt 324 Coronial Advisory Council 98 67–8
contractual duties 286, 676, 896 corporal punishment 534 European Court of Justice 64–5
contractual exceptions clauses 508 corporations 308–10, 497, 681–4, European Court, role of 65–7
contractual grievance 472–3 731, 828 High Court 41–3
contractual intention 756–9 corruption 9, 372 House of Lords 53–7
contractual licences 627 cost effectiveness of claim 168 inspectorate 30
contractual sick pay 436 costs 173–4 International Criminal Court 67
contractual statements 331 funded by non-parties 102 judges, removal and retirement of
contractual terms 330–55, 779–88 order 73 62
conditions and warranties 333–4, recovery of 409 judicial appointments 59–61
780 counter-offer 275, 735–7 Judicial Committee of the Privy
conformity to contract 353 counterclaim 179 Council 57–8
consumer guarantees 354 countryside, access to 578–9 magistrates – sentencing powers
defects 787 County court 19, 31–9, 47, 48, 61, 28
exchange and barter 348 213 offences triable either way,
exclusion clauses – supply of goods alternative dispute resolution 38 allocation and transfer of
and services 351, 352 appeal 38 26–7
fitness 343–4, 784–5, 786–7 judgments enforcement 37–8 present day courts 19
goods, supply of other than by sale jurisdiction 32–7 restrictive practices 45
345 online court service: money claim sending for trial procedure 28
hire of goods, contracts for 349 online 38–9 Supreme Court: assistance for
implied by custom 781–2 permission 38 transaction of judicial
implied conditions as to fitness rules 200 business 52
339–40 course of dealing 276 Supreme Court of Judicature
implied terms 334–6, 346–8, Court of Admiralty 15, 18, 34 18–19
349–51, 786–7 Court of Appeal 19, 34, 41, 46–52, Technology and Construction
inducements and terms 330–3 53, 55, 58, 65, 212 Court 45
innominate terms 334, 781 administrative tribunals 70, 71 tribunals 64
intermediate terms 781 Civil Division 45, 46–9, 52, 53, 56 youth courts 31
judicial implied terms 782 Criminal Division 40, 49–52, 53, see also county court; Court of
packaging 784 56, 128 Appeal; magistrates’ courts
purchase price reduction or employment tribunals 74, 75 ‘courts of pie powder’ (pieds poudrés)
rescission 354 Court of Chancery 10, 11, 17, 18 14–15
remedies 348 court, choice of 32–3 covenants 630–1, 917
repair/replacement 353–4 Court of Common Pleas 18 implied 887
representations and terms Court of Exchequer 18 release from 633–4
distinguished 779–80 Court of First Instance 65 restrictive 644–6, 891
resale price and satisfactory quality court order 188 crime 4–5, 371, 470, 471
786 Court of Probate 18 and civil wrongs distinguished 894
risk, passing of 354 Court of Protection 44–5 prevention 711
sale by description 338–9, 783 Courts Boards 23 criminal acts 508–9
sale by sample 344–5, 787–8 courts of law 18–68 criminal appeal 128
satisfactory quality 341–4, 785, appeals 29–30 Criminal Cases Review Commission
786–7 arbitration 63 50, 51–2
services, supply of 351–2 Bankruptcy Court 44 criminal conduct of employee 832–3
statutory implied terms 782–3 cases suitable for allocation for criminal convictions 601
title 336–7 summary trial 27 Criminal Defence Service 122, 126–7,
transfer of property in goods, cases suitable for trial on 137
contracts for 345–6 indictment 27 Criminal Defence Solicitors 137
work and materials contracts 346 Central Criminal Court 41 criminal jurisdiction 21
..
EL_Z04.qxd 3/26/07 10:59 AM Page 923
INDEX 923
criminal law 3, 673–84, 894–904 release of offenders from custody damages 85, 405, 518–24, 602,
actus reus 675–6, 896–7 158 811–14
causation 895–6 reporting 138 aggravated 520–2
constituent elements of criminal sentencing 151 assessment 171–2
offence 674–5 summary trial before magistrates compensatory 518, 519, 521
crime and civil wrongs 132 – 6 contemptuous 522
distinguished 673, 894 suspended sentences 157 deductions 519–20
mens rea 677–81, 897–8, 900–2 travel restriction orders 160 exemplary 406, 520–2
mental element – corporations trial 123–4 for injury to feelings not available
681–4 trial on indictment in Crown 479
nulla poena sine lege (no Court 137 interest on 408
punishment unless by law) trial, place and time of 139–40 liquidated 405, 522
674, 894–5 youth community orders 161–3 nominal 406, 522
omissions or failure to act 676–7 youth court proceedings 136–7 novus actus interveniens 523 – 4
recklessness 898–9 youth crime and disorder – ordinary 520
terminology and outcome of sentencing 161 parasitical 556, 861–2
criminal and civil proceedings see also jury trial personal injury 407–8, 519
673– 4 criminal proceedings, terminology provisional 407–8, 498
transferred malice 899 and outcome of 4–5 punitive 406, 520–1
vicarious liability in crime 902–4 criminal records 425–6 remoteness 522
criminal offences, classification of 23 Criminal Records Bureau 425–6 special 520, 591
criminal procedure 115–66, 723–4 criminal trials 131–2 structured settlements 522
absolute discharge 159 cross-examination 184 unliquidated 406, 522
alibi 138–9 cross-offers, identical 278 Wagon Mound status 523
anti-social behaviour orders 160 Crown 97 damnum sine injuria 492–3, 825–6
appeal in criminal cases 151 Crown Court 19, 27–30, 31, 39–41, danger, alternative 563
arraignment 141 49, 51–2, 213 dangerous activities 547
at police station 119–23 criminal procedure 126, 129, 138, dangerous driving 692–3
bail 127–31 139 de facto employee doctrine 509
binding over of parent or guardian and magistrates’ courts 23, 24, 25, death 531, 669
160 26 appeals in cases of 51
binding over to keep the peace power to appeal to 130 by dangerous or careless driving
159 for sentence, committal to 150–1 692–3
community orders 156–7 trial on indictment in 137 general effect of 498–9
compensation orders 160 Crown and persons 226–65, 496, of offeree before acceptance 744
conditional discharge 159 729–32 of offeror before acceptance 744
Contempt of Court Act 1981 151 civil proceedings privilege 264 of a party, effect of 280–1
criminal trials and Human Rights contractual claims 261–4 debt 324
Act 1998 131–2 juristic persons 246–9 interest on 408
Crown Court for sentence, legal profession privilege 265 recovery 34, 408–10
committal to 150–1 see also limited liability deceit 562
custodial sentences 151–5 partnerships; natural persons; decency, requirement of 816–17
custodial sentences: mandatory life unincorporated associations decided cases, reference to 209
sentence 155–6 Crown Prosecution Service 99, 117, decisions 86–9, 135, 223
deferred sentences 157–8 124, 125, 133 declaratory judgment 84
fines 158–9 curfew order 161–2 declaratory precedents 217
funding defence – legal aid 126–7 Curia Regis (King’s Council) 5, 18 deductions 519–20
indictment 138 custodial sentences 151–6 defamation 586–7, 590, 873–80
injury compensation 164 custody 157 default interest clauses 408
instituting proceedings 118–19 of youth offenders 161 default judgment 179
legal aid 137 custom 14–16 defect of reason 703
non-disclosure of sentence 165–6 defective contracts 761
offence and indictment 140 damage 492–3, 825–6 defective work 870
prison sentences of less than 12 actual to property 548 defects 785, 787, 887
months 157 after successive accidents 525–7 defences 9, 134–5, 511–18, 534–5,
property restitution in criminal discounting 526–7 835–42
cases 163–4 intended 523 Act of God 516
prosecution commencement provisional 526 Act of state 517
124– 6 to claimant 559 contractual consent 513
prosecutor 116–18 to goods 882 defendant’s knowledge of risk 514
.. ..
EL_Z04.qxd 3/26/07 10:59 AM Page 924
924 INDEX
defences (continued) anticipatory breach and disease of the mind 703, 909–10
disclosure by 25 supervening events 402 see also insanity
duty to rescuers 515 by agreement 393–4 dismissal 445, 455
filing 179 by breach 402–3, 809–11 actual 468
illegality 518 by frustration 398, 806–9 automatically unfair 466
implied consent 512–13 by performance 394, 804–6 conduct justifying 821–2
inevitable accident 516 commercial purpose defeated 400 constructive 468
inherent danger 514 construction of contract as entire definition 468
justification or self-defence 518 394–5 discriminatory 479
mistake 517 euro, impact of 403–4 fair 424
necessity 516 express provision in contract 400 grounds for 468–73
notice 513 full performance prevented by power of 503
reply 180 promisee 396 on transfer of business 822
rescue cases 514–15 government interference 399 unacceptable reasons for 474–5
statutory authority 517–18 non-occurrence of an event 399 union related 470–1
statutory duties 514 partial performance, acceptance of see also unfair dismissal
volenti non fit injuria 511–12 395 – 6 distraint 638
defendant: payments appropriation 397–8 distress damage feasant 539
application 145 performance, time of 396 district judges (magistrates’ courts)
claimant, rights of 103 personal service contracts 398–9 21–2, 31–2, 36, 46, 47, 61
Crown Court 40 sale of land, leases and contracts of District Registry 661
evidence 147–8 400 divisional courts 43, 213
finances 168 self-induced events 400 Divorce Court 18
knowledge of risk 514 subject matter of contract, domestic agreements 756–7
response to claim 178–9 destruction of 399 domestic burglary 153
delay 85 substantial performance 395 domestic tribunals 78–9
delegated legislation 14, 724–5 tender 396–7 domicile 230–1, 232, 729
delegation 504 disciplinary procedures 427, 472–5 dominance 392
demise 650, 917 discipline 61–2 dominant position, abuse of 386–7
Department for Constitutional disciplining legal profession 110 double jeopardy 50
Affairs 97–8 disclosure 259, 317, 657, 776 drug trafficking offences 152–3
Department of Trade and Industry by prosecution and defence 25 drugs 154, 462, 470, 705–6, 911–12
425, 429, 432, 485 in criminal cases to assist trial drunkenness 307–8, 705–6, 762,
dependants’ leave 819–20 management 28 911–12
deposit requirement 467 of documents 731–2 due diligence 679
description 342, 347 enhanced 426 duress 325–6, 706–8, 776, 912–13
detention 125 standard 426 economic 328–9
during Her Majesty’s Pleasure 161 discretionary power 720–2 duty of care 351–2, 553–5, 576,
of goods 545 discrimination 233, 238–40 839–40
review 121 after end of work relationship 449 see also duty of care – economic
for specified period 161 age 422–5 loss
and training orders 161 direct 233, 238, 416, 420, 421, 422, duty of care – economic loss 556–64
without charge 120–1 423, 446, 816, 819 alternative danger or dilemma
detriment 445 disability 240–3, 418–19, 446 principle 563
development risk defence 567 in education 235, 243 breach of duty 556–7
devise 917 indirect 233, 238, 416, 420, 421, causation 557–9
dilemma principle 563 422, 423, 446, 819 contributory negligence 560–3
diminished responsibility 688–9, once in employment 445–9 res ipsa loquitur (the thing speaks
705–6, 906 positive 420, 421 for itself ) 559–60
diplomatic immunity 828 in provision of goods, facilities or resulting damage to claimant 559
directives 223 services 235, 241–2 statutory duties 563
Director of Public Prosecutions 50, racial 233–8, 416–17, 447, 730, duty of skill 351–2
117 816, 819 duty solicitor 28, 122
directors and associates 309–10 religion and belief 417, 421–2, 447 duty to act under statute 677
disability discrimination 240–3, sex 238, 416–17, 446, 447, 730, duty to fill vacancies 59
418–19, 446 816–17, 819 duty to a rescuer 515, 839
Disability Rights Commission 72, sexual orientation 420–1, 446,
243, 415 447 e-mail 278, 282
discharge of contract 159, 393–404, transsexual 419–20 see also electronic trading;
804–11 see also victimisation Internet
..
EL_Z04.qxd 3/26/07 10:59 AM Page 925
INDEX 925
easements 610, 639–40, 641, 642, see also contract of employment; contract of employment 442
643, 887–91 recruitment and selection; direct effect of union law in UK
economic duress 328–9 redundancy; termination of 223
economic loss 565, 861–3 employment contract European Commission 222
see also duty of care employment tribunals 71–5 European Council 221–2
education 238–9 environmental health officer 552 European Parliament 220–1
discrimination in 235, 243 Equal Opportunities Commission 72, law reform 224–5
either-way case 139 84, 239, 240, 415 membership 220
ejusdem generis rule 203, 726 equal treatment 440–2 monetary union – impact of the
electronic trading 281–2, 304, 315, equitable assignments 668 euro 224
369 equitable estoppel 297 primary legislation: Treaty of Rome
emergencies 507 equitable execution 187 222–3
employees 505 equitable interests 622–4 remedies and limitation of actions
breach of contract 486 equitable mortgage 651 410
contributory fault 473–4 equitable mortgagees 656 secondary legislation 223
of Crown Prosecution Service 99 equitable remedies 410–12, 414 Union/Community 220
definition 501–5 equity 8, 11–12, 33, 295–7, 754–5, see also case law/judicial precedent
mixing employer’s business with 767–8 evidence 50, 146, 454
his own 507 looks upon that as done which new 50
restraints arising from agreements ought to be done 630 evidenced in writing 759–60
between manufacturers and property law 630 ex gratia payments 478–9
traders 380 of redemption 652 ex parte 917
using own property on employer’s escape of fire 880 ex turpi causa 518
business 508 escape of offensive and dangerous exceptional circumstances 145
see also recruitment and selection substances 880 exceptions clauses 508
employers: escape of things naturally on land excessive force 710–11
defences 442 880–1 exchange 348
explanatory statement 487 essential workers 252 exclusion clauses 361, 788–94, 836
liability 830–1 estate 618 ambiguous 790–1
negligence 872 contract 630 applicable if reasonable 362–3
Employment Appeal Tribunal 73–5, legal 619–22 evasion of liability, provisions
76, 78, 213–14 estoppel 271, 301–2, 618, 917 against 365–6
employment disputes 175 equitable 297 reasonableness 363–5
employment period 466 issue 128 unfair contract terms 366–9
employment rights 415–88, 816–23 see also promissory estoppel communication of 789
alternative employment offer euro, impact of 403–4 construction rules 791
822–3 European Commission 65, 222, 383, fundamental breach 791–2
betting offices 488 388, 389, 391, 392 inducement liability:
dependants’ leave 819–20 European Community and restrictive reasonableness 792–4
discriminatory dismissal 479 practices 390–9 ineffective 789–90
dismissal 821–2 European Convention on Human misrepresentation 788–9
employee’s breach of contract Rights 12, 22, 32, 67–8, 71, 89, privity rule 790
486 92, 204 supply of goods 351
employment contract and shop criminal procedure 155 supply of services 352
workers 486–8 employment rights 420 see also exclusion clauses and other
flexible working 456–7 specific torts 537 unfair terms
health and safety 459–63, tort law 492 exclusion clauses and other unfair
820–1 European Council 13, 65, 221–2 terms 356–69
insolvency of employer 459 European Court 30, 65–7, 219 applicable if reasonable 362–3
‘like work’ 817–18 European Court of Human Rights communication 356–9
part-time employment 818–19 67–8, 85, 92 construction 359
racial discrimination 816, 819 European Court of Justice 13, 64–5, fundamental breach 360
sex discrimination 816–17, 819 90, 216, 431 Parliament, approach of 360–1
sick pay 817 European Parliament 220–1 exclusions 385, 387
time off 457–9 European Union 13, 92, 188, 207–25, exclusive service 504
trade union membership and 727–9 executed contracts 270, 304–5
activities 463–5 application of EC law in UK cases execution 186, 917
unfair dismissal 821 224 executive necessity 261
written statement of reasons for competition law 389 executors 498–500
dismissal 486 Constitution 224 executory contracts 270
.. ..
EL_Z04.qxd 3/26/07 10:59 AM Page 926
926 INDEX
exemptions 386, 387, 428–9 fixed-term contracts 444–5, 468 grievous bodily harm 696
existing law, no retrospective effect flexible working 456–7 group purchasing companies 291
or alteration of 205 force majeure clause 401–2, 403 guarantees 307, 449, 566, 759–60
expected week of confinement 452, forcible feeding 534–5 manufacturers 361, 566
454, 456 foreclosure 654–5 guilty pleas 124, 154
expert determination by contract 175 foreign relations, contracts
explanatory notes 206 prejudicial to 372 habeas corpus 11, 537
express agreement 487 foreign sovereigns 497 habitual residence 231
express provision in contract 400 foreseeability 590 harassment 234, 422, 447–8, 697–8
express statutory prohibition 383 foresight 569, 604–5, 842–4 Heads of Divisions 59
express terms 409–10, 471 to knowledge 571 health assessments 434
expressio unius est exclusio alterius rule forfeiture 637, 638 health and safety 75, 434, 459–63,
203, 726 form ET1 72 475, 584, 820–1
extended sentence 152 form ET3 72 Health and Safety Commission 460,
‘extortionate credit bargains’ 37 formal investigation 243 462
extra-judicial remedies 539 formalities 173, 759–60 Health and Safety Executive 463
four corners rule 359, 791 hearing appeals 48
facilities 239 franchising 127, 170, 660 hearsay evidence 146–7, 184
fact or past event, specific existing Franks Committee 76, 77 Henry VIII (ouster) clauses 200–1
and verifiable 317–18 fraud 317, 372, 772–3, 815–16 Her Majesty’s Courts Service 19, 23
failure to act 676–7 fraudulent acts 508–9 High Court 6, 18–19, 41–3, 52, 65–6,
fair balance 85 fraudulent concealment of claim 70, 213, 376, 718
fair comment 594–5, 876–7 849–50 Administrative Division 77
fair trial, right to in civil proceedings freedom of expression 91, 92, 94–5 appeals 29–30
92 freedom of thought, conscience and arbitration 63
fairness test 367 religion 91, 94 and Commercial Court 43
fallback scheme 453–4 freedom to legislate 261 and county court 32–8
false imprisonment 535, 537, 851 freeholds 650, 660–1 and Court of Appeal 46–9
family agreements 298, 757–8 frustration 398, 399, 400, 401, 403, and Court of Protection 45
family cases 170 475 – 6 criminal procedure 129
Family Division 42, 43 full-time work 440 and Crown Court 39, 40
Family Hearing Centre 35 funding claim 168–70 employment tribunals 74, 75
family life 92 funding defence – legal aid 126–7 Family Division 16
family proceedings 29, 47 future conduct 296 judicial control 81
family-friendly provisions 450–6 removal and retirement of judges
adoption leave 452–3 gang, membership of 707 62
ante-natal care 450 gaol delivery 7 highway authorities 580
compulsory maternity leave 451 garden leave contract 376–7 highway, obstruction of 547, 855–6
maternity allowance 455–6 garnishee order 187 hire of goods, contracts for 349
maternity leave and pay 450–1 general principle of liability theory holiday-pay 430
notice provisions 453 491 holidays 443, 505
paternity leave 451–2 genuine occupational qualifications home information packs 649
statutory maternity pay 416–17, 418, 419–20, 446, homicide 685
administration 451 816–17 horizontal agreements 385
suspension on maternity grounds genuine occupational requirements hours of work 505
450 420, 421, 422 House of Commons 43, 190
time off for dependants 455 golden rule of interpretation 203, House of Lords 18–19, 30, 41, 48, 56,
unpaid parental leave 453–4 726 65–6, 727
fast-track claims 46 goods 239 Appeal Committee 53
fatal accidents 499–500 description 342 barristers 104
fiduciary relationships 317, 325, 776 examination 341 employment tribunals 74
final judgment, reopening of 48 non-manufactured 340 Judicial Committee 54
financial circumstances 154 non-necessary 306–7 law-making process 190–2, 211
financial eligibility 169–70 partially defective 342 specific torts 583, 605
finders 615–16, 883 and services, supply of 345 housing 239
fines 158–9 supply of 351 association tenancies 628
‘fire damaged’ goods 347 supply of other than by sale 345 human rights 253
fitness 343–4, 347, 349–50, 785, government Bills 192 absolute privilege 596
786–7 government interference 399, 807 administrative tribunals 71
for purpose 339–40, 347, 784–5 grievance 427, 472–3 concerns 155
..
EL_Z04.qxd 3/26/07 10:59 AM Page 927
INDEX 927
human rights (continued) indictment 138, 140 joint borrowers 651

infringement 85–6 individuals’ rights 240 Joint Committee on Statutory
jurisdiction 32 inducements 330–3 Instruments 201
and manslaughter 691–2 industrial action 251–2, 467 joint owners 622
transsexual discrimination 420 inevitable accident 516, 840 joint tortfeasors 498
see also European Convention on inferior courts see judicial control judge-only trials 41, 146
Human Rights over inferior courts and judges 146
husband and wife 298, 495–6 tribunals acting 56
‘hype’ 318 Information Commissioner 492 presiding 114
informed consent 511, 533, 695 removal and retirement 62
illegality, public policy and inherent danger 514 judgment 527–8
competition 370–92, 794–804 injunction 10, 84, 527, 602, 731, enforcement 37–8, 65, 186–8
consequences 373–4, 796–8 814–15, 860–1 judicial appointments 59–61
contract contrary to public policy: common 11 Judicial Appointments Commission
severance 381–2 freezing 33, 411 59, 71
employee restraints arising from interim (interlocutory) 527, 602 Judicial Appointments and
agreements between judicial control 81 Complaints Ombudsman 61,
manufacturers and traders 380 perpetual 602 62
European Community and specific torts 551 judicial appraisal 175
restrictive practices 390–9 injuria sine damno 492–3 judicial authority 534
involuntary restraints on members injurious falsehood 602 judicial bias 217
of trade associations and injury compensation 164 judicial business, assistance for
professions 803–4 injury to third party 344 transaction of business 52
involuntary restraints of trade innkeepers 893 Judicial Committee of the Privy
381 innominate terms 334, 781 Council 57–8, 214
judiciary 794–5 Inns of Court 104 judicial control 200, 724–5
non-contractual restraints on innuendo 592, 874–5 see also judicial control over
employees: confidential insanity 702–4 inferior courts and tribunals
information 378–80 insolvency 47, 187–8, 294, 459 judicial control over inferior courts
public policy: illegal contracts inspectorate 30 and tribunals 79–86
371–2 installation and improvement commercial context 86
public policy: Parliament 382–3 contracts 346 damages 85
restrictions accepted by Institute of Legal Executives 99 delay 85
distributors of merchandise insurable interest 384, 918 human rights infringement
381 insurance 172–3, 292, 384, 573, 575, 85 – 6
restrictions on shareholder- 775 – 6 injunction and declaratory
employees 380 before the event 172 judgment 84
severance 798 directors’ and officers’ 291 prerogative orders and judicial
void contracts 374–5 intelligence, low 707 review 80–1
wagering contracts: insurance and intent 677–9 quashing orders 81–4
dealing in differences 384 intention 297–300, 322, 850–1 statutory right of appeal 79–80
see also competition law; restraints to exclude 542 judicial immunity 496
implied condition 336, 339–40, 350 interest 409 judicial review 30, 41, 718
implied terms 334–6, 346–8, 349–51 interim order 541 Judicial Studies Board 22
in consumer law – sale of goods intermediate terms 781 judiciary 49, 54–5, 794–5
336 intermittent custody 157 jurisdiction:
in consumer law – supply of goods international conventions 15–16 Criminal Division 49–50
and services 345 International Criminal Court 67 Crown Court 41
customary 334 Internet 242, 586 House of Lords 53
judicial 335–6, 782 interpleader 618 Supreme Court 56
statutory 782–3 interviews 122–3 want or excess of 81
improvement notice 463 intestate 918 jurisdictional tests 387
in camera 144 intra vires 200, 201, 497 juristic persons 226, 246–9
in loco parentis 534 invitation to treat 272–4, 733–4 jury trial 95–6, 134, 141–50
incompatibility, declaration of 90 involuntary act 704 advantages and disadvantages 143
incomplete (inchoate) agreements involuntary manslaughter by alternative verdicts 150
275– 6 unlawful act 906 bad character evidence and
indemnities 130–1, 344, 362, 644, involuntary recipients 615–16, previous convictions, evidence
759–60 883 of 147
independent contractors 505 issue estoppel 128 challenge 143
.. ..
EL_Z04.qxd 3/26/07 10:59 AM Page 928
928 INDEX
jury trial (continued) taking possession without court ‘leapfrogging’ method 48, 53, 56
defendant’s evidence: defendant’s order 654 leasehold 636, 650, 660–1, 886–7
silence 147–8 recovery of 414 see also leasehold or term of years
judge 146 registered 660–1 leasehold or term of years 626–32
judge-only trials 146 settled 622–3 contractual licences 627
juror personation 145 titles 34 creation of leases 630
jurors, number of 150 transfer of 646–9 duration of leases 627–8
jury vetting 144 unregistered 649, 659–60 rights and liabilities of landlord
majority verdicts 149 Land Charges Register 659 and tenant 630–2
membership of jury 141–3 Land Registry 660, 661, 663 special protection for residential
nobbling 142 landlord 630–2 and business tenants 628–9
oath 144 release 633 Leasehold Valuation Tribunals
summing up 148 selling freehold 633–4 637–8
tampering 145 and tenant 579–80 leases 293, 301, 636–7
trial and evidence 146 Lands Tribunal 71, 78, 79 overriding 633
trials on indictment without jury last in, first out 474, 482 in possession 630
145–6 late payment of commercial debts reversionary 630
verdict 148 legislation 408–9 leave 443
victims’ advocate 150 law centres 111 in advance of entitlement 431
witnesses, leading of and hearsay Law Commission 225, 260, 343, 346, in the first year 431
evidence 146–7 369 postponement 454
jus accrescendi 624–5 property law 631, 647–8 legacy 918
jus tertii 543 remedies and limitation of actions legal advice privilege 265
justice, natural 82–3, 719–20 403, 414 legal advisors 22
Justice of the Peace 7 specific torts 566, 602 legal aid 78, 104, 126–7, 137
justices’ clerks 22 tort law 519, 531 Legal Aid Fund 28
justification 518, 593–4, 876 law of confidence 823–4 legal entity principle 246
Law of Contract 11 legal executives 110
King’s Council 10, 15 Law Lords (Lords of Appeal in legal help 169
knowing the act is wrong 704 Ordinary) 53, 54 legal interests and charges 622
knowledge 528 law merchant 14–15 legal mortgagee, remedies of 892
constructive 547 law reform 224–5 legal profession, discrimination in
lack of 547 Law Reform Committee 336 235 – 6
special, or lack of same 333 Law Society 99, 103, 110, 657 legal profession privilege 265
that statement is untrue 319 law of trusts 625–6 legal relations 269, 271
to foresight 570–1 law-making process: UK legislation legal representation 82, 169–70
of victim 569–70 189–206, 724–9 legal services 98–101
bills, enactment of 194 advocates and litigators, overriding
laches 918 bills, types of 192 duties of 99
land: delegated legislation 197–201 business structures 100–1
agreements 385, 638 future developments 192 consumer complaints 101
certificates 662–3 private bills 196 conveyancing services 100
charges and encumbrances over private members’ Bills 193 oaths, and affidavits 100
892–3 prorogation and its effect 193 payment for 101–4
charges registration 659–63 public and private bills 193 probate services 100
contracts 396, 808–9 Queen’s Speech 192–3 rights of audience and employees
law 293, 618–22 Royal Assent 196 of Crown Prosecution Service
mortgages 650–9 short title – numbering and 99
equitable mortgage 651 citation 196 Legal Services Commission 104, 122,
freeholds 650 statute law and case law 126, 137, 168–9, 170
joint borrowers: liability 651 distinguished 197 Legal Services Complaints
leaseholds 650 statutes, interpretation of by Commission 110
mortgagor or borrower, rights of judiciary 201–6 Legal Services Consultative Panel
651–3 various stages 194–5 105
possession order and money Welsh Assembly 189–90 Legal Services Ombudsman 88, 101
judgment 654–6 Westminster Hall debates 192 legal treatises 16–17
powers and remedies of legal Westminster Parliament 190–1 Leggett Report 77
mortgagee 653–4 lawyers’ practising certificates 109 legislation 12–14
priority 658 laying an information 118 less favourable treatment 444, 816,
solicitor disclosure 657 leading questions 184 818–19
..
EL_Z04.qxd 3/26/07 10:59 AM Page 929
INDEX 929
liability 492–3, 825–6 liquidation 918 manufacturers’ guarantees 361, 566

cessation 527–31 literal rule 203, 726 marital status 420, 23–48
cutting short 167–8 litigation 722–3 marriage, status of, contracts
as defendant 826 friend 227 prejudicial to 374
employers 830–1 privilege 265 married women 231
evasion, provisions against 365–6 litigators 99, 722–3 Master of the Rolls 52, 54
exclusion 361 loans 305 masters 113–14
inducement 362–3, 792–4 Local Administration Commissions materiality 770–2
of member in contract 250 88 – 9 maternity allowance 455–6
of members in tort 250 local authority by-laws 199, 201, 724 maternity leave and pay 443, 450–1
of minors 701 lock-out agreements 735 matrimonial and family proceedings
occupiers’ 869–71 locus standi 81, 82, 84 34–5
for omissions 861 London Insolvency District 34 matrimonial home 661–2
of original parties 632 long-stop period 528 media 598
of parents 826 Lord Chancellor 19, 21, 43, 71, 77, mergers 388
personal 255–6 97, 111–12 neutral citations 209–10
product 564–6, 866–7 county court 34, 35 mediation 38
professional 867–9 House of Lords 54, 55, 56 medical practitioners 557–8
see also negligence judicial appointments and members of tribunals 70
statutory product 566–8 discipline 59–60, 61, 62 Memorandum and Articles of
for stress-related injury 582–3 Lord Chief Justice 21, 39, 43, 49, 52, Association 248
strict 679, 880 54, 59–62, 71 mens rea 677–9, 682, 897–8, 900–2
in tort 827–8 Lords Justices of Appeal 60 age and responsibility 702, 703
for torts of independent loss, mitigation of 407 specific offences 686, 691, 693, 698
contractors 510–11, 834–5 loss recoverable, type of 406 statutory offences 679–81
vicarious 500–1, 503, 505–9, loss recovery 388–9 mental disorder 229, 495
680–1, 828–30, 831–4, 902–4 Low Pay Commission 439 mental distress 812–13
see also limited liability mental element – corporations 681–4
partnerships magistrates 30 mental health 92
libel 590–1, 873–4 and civil debt 29 mental states 711
licence and bailment 615 criminal procedure 128–9 mentally disordered offenders 153
lien 246, 618, 664–7, 893–4 involvement on appeals from mercantile law (lex mercatoria) 14
banker’s 667 magistrates’ courts 40 mere expectancies 668
equitable 666–7 lay 21 mergers 271, 385, 387, 392
maritime 666 sentencing powers 28 merits-based test 85
possessory/common-law 664–6 see also magistrates’ courts mesne profits 628
life and physical integrity, right to 92 magistrates’ courts 19–26, 40, 61, military personnel 261–2
life sentence 152 213 Ministers of the Crown and the
mandatory 155–6 administration 23 courts 86–7
‘like work’ 817–18 committal proceedings 25–6 minors 226–7, 230–1, 304–7, 494–5,
limitation of actions 271, 849–50 criminal offences, classification of 701, 760–1, 826
see also remedies and limitation of 23 miscellaneous rules 205
actions criminal procedure 126 mischief rule 202, 725
limitation period 92, 414, 601 district judges and deputy district mischievous discretion 701
limitation, special periods of 530–1 judges 21–2 misconduct 481
limited liability partnerships 255–60 justices’ clerks and legal advisors misfeasance, active 580
disclosure and audit 259 22 misrepresentation 316, 585, 769–75,
incorporation 256 lay magistrates 21 788 – 9
limited partnerships 259–60 offence triable either way 24 actionable and remedies 319–21
membership 256–7 proceedings, nature of 24 fraudulent 320–1
membership agreement 259 prosecution 535 innocent 319–20
names 258 summary trial 25 negligent 320, 772
new 575 trial, sending for 24 and sale by description 338
personal liability of partners 255–6 maintenance contracts 346 misstatements, careless 556
reform 260 malice 493, 825–6, 858 mistake 517, 709, 762–3, 815–16,
registered office 259 aforethought 686 841, 914
registration of membership transferred 899 agreement 311
changes 257 malicious wounding 678, 694–5 bilateral identical (common)
regulations 258 mandatory order 33, 79, 80–1, 720–1 313–15, 765–7
taxation 257–8 manslaughter 686–91, 904–6 fundamental 312
.. ..
EL_Z04.qxd 3/26/07 10:59 AM Page 930
930 INDEX
mistake (continued) necessaries principle 307–8, 760 notary public 110

non-identical bilateral (mutual) necessity 516, 534–5, 707, 708, notice 376–8, 426, 453, 454, 483–4,
315, 768–9 840–1, 913–14 513, 633
shared 313 negligence 106–7, 545, 722–3 novus actus interveniens 523–4, 565,
as to quality 313–14 at common law 322–3 844 – 6
unilateral 312–13, 763–5 contributory 403, 560–3, 565, 577, nuisance 856–61
mistakenly signed documents 312 865 – 6 private 548–53
mitigation 135 criminal law 679 nulla poena sine lege 674, 894–5
mobile phone company 368 employers 581–4, 872
monetary union – impact of the gross 678, 691–2 ‘oath helpers’ 9
euro 224 liability 870–1 oaths 100, 144
money bills 195 nursemaid school of 582 obiter dicta 210–11
money judgment 654–6 occupiers’ liability 576–80 objective standards 557
money-laundering legislation product liability 564–6 objective tests 678, 899
163–4 reality of consent 773–4 offences 23, 140
monopolies 387 specific torts 553, 850–1, 862–5, absolute 680
moral obligations arising from 866, 867–9 alleged 132
particular relationships 676 tort law 824–5 arrestable 119–20
mortgages 10–11, 650, 652, 891–2, see also negligence – professional biological 695
893 liability corporate 439
see also land mortgages negligence – professional liability indictable 123–4, 139, 918
mortgagor or borrower, rights of 568–76 seriousness of 152, 154
651–3 accountants: developments in sexual 152, 698, 908–9, 701
motive 493, 825–6, 897 exclusion of liability 574 summary 123
evil 858 background and development triable either way 24, 26–7
multi-track claims 46–7 568 – 9 violent 152
murder 685–6, 904 duty of care 576 see also specific offences; statutory
foresight to knowledge 571 offences
National Insurance Fund 459 insurance 575 offenders, release of from custody
national minimum wage 436–8 knowledge to foresight 570–1 158
national security 720 liability, avoiding and excluding offer 271, 272–4, 732, 733, 734
natural persons 226–46 572 – 4 of amends 599–600
adoption, effect of 228–9 liability, current trends in 571–2 implied 273
bankrupts, undischarged 229–30 reform 575 lapse of after reasonable time 743
children, protection of 227–8 special relationship, necessity for – not essential 744–5
disability discrimination 240–3 knowledge of victim 569–70 not identifiable 281
discrimination 233, 238–40, 244 negligent concealment of claim postal 277–8, 741–2
domicile 230–1, 232 849–50 qualified 599
legal relationships 245–6 negligent control 826 termination 278–81
mental disorder, persons suffering negotiable instrument 918 to settle 176
from 229 nervous shock 524–5, 846–9 written 176–7
minors 226–7 night work 432, 434 office equipment 349
racial discrimination 233–8 ‘no costs’ rule 36 Office of Fair Trading 45, 63, 368,
residence 232 no-win-no-fee 512, 563 383, 386, 388, 389
sex discrimination 238 non est factum 312, 356 official search certificate 658
naturalisation 729–30 non-delivery 886 Official Solicitor 114
nature and development of English non-derogation from the grant 632 ‘Old Bailey’ see Central Criminal
law 3–17, 715–17 non-disclosure of sentence 165–6 Court
canon law 16 non-discrimination agreements 243 Ombudsman 87–8
classification 3–5 non-discrimination notices 243 omissions 676–7
common law 6–8 non-employees 441, 505 online court service: money claim
common law defects 8–11 non-lawyers, information and advice online 38–9
custom 14–16 from 111 opted-out workers 487
delegated legislation 14 non-necessary goods contracts 305 opting-in notice 487
development and sources of 5–6 non-occurrence of an event 399, oral hearing 46, 47
equity 8 807–8 oral statements later put into writing
equity and law, relationship of non-transferability rule 292 333
11–12 Northern Ireland 55, 56, 57, 58, Orders in Council 54, 199
legal treatises 16–17 193 original precedents 217
legislation 12–14 noscitur a sociis rule 203, 726 Oulton Committee 37
..
EL_Z04.qxd 3/26/07 10:59 AM Page 931
INDEX 931
oust jurisdiction of the courts 374, made under a mistake 413 pre-action protocols 182
798 statements, itemised 435–6 pre-contractual statements 331
outside evidence 330 to lawyers 127 pre-incorporation contracts 291
overriding interests 660, 661–2 of wages or salary 503–4 pre-nuptial agreements 372
overruling 217–18 paying a rolled-up rate 432 pre-sentence drug testing 154
overtime 443 Payne Committee 655 pre-sentence report 153–4
owner-managed businesses 437 penalty 405 pre-trial interpretation of relevant
ownership 610–11 pensions 420, 421, 425, 442, 443 material 601–2
per 918 pre-trial review 36, 125, 182
package holiday business 368 per incuriam 215 precedent 218–19
packaging 784 percentage threshold scheme 436 preferred supplier scheme 170
panel report 60 performance 394 preliminary hearing 139
Par Pro Bono Unit 104 bonds 292–3 premises, disposal or management
parental authority 534 full, prevented by promisee 396 of, discrimination in 235
parental leave 443, 453–4 further, refusal of 412 preparation time order 73
parental responsibility 228 improper, of acts within scope of prerogative orders 80–1
parenting orders 163 employment 506–7 prescription 641–3, 861
pari delicto rule 796–7 partial 395–6, 805, 887 present day courts 19
Parliament 190–1, 192, 370–1 prevented 805 presumption of grant 643
see also Act of Parliament specific 10, 410–11 previous dealings 357–8
Parliamentary control 201 substantial 395, 804–5 price indications 273–4, 733–4
Parliamentary funds 261 time of 396 price paid or value declared 341–2,
Parliamentary and Health Service permanent employment vacancies 649
Commissioner 87–8 445 primary law (legislation) 223
parol contract 918 permission 38 primary victim 524
parol (oral) evidence rule 330 to appeal 48 principals 500
Part 36 payments 176 perpetual succession principle 246 prison sentences of less than
part-time employment 440, 441–2, personal chattels mortgages 663–4 12 months 157
443–4, 818–19 personal injury 407–8, 414, 519, private bills 193, 196
parties in tort law 493–500 880 private defence see self-defence
aliens 497 personal property 650 private law 3
corporations 497 personal representatives 918 private members’ Bills 193
Crown and its servants 496 personal service 178 private sales 343
executors and administrators contracts 398–9, 806 privilege 595–8
498–500 personality 609–10 qualified 877–9
foreign sovereigns and persuasive precedents 216–17 privity of contract 287–8, 358, 553,
ambassadorial staffs 497 Phoenix association 622 564, 632–4, 644, 749–52
husband and wife 495–6 photography 57 privity rule 293, 790
joint tortfeasors 498 physical injury 556, 564–5, 569 Privy Council 56
judicial immunity 496 piggyback claims 383, 389 probate 34, 100, 918
mental disorders, persons suffering place of work 504 procedure 9
from 495 plant and equipment 504 proceedings:
minors 494–5 plea 134 commencement 177–8
partners, principals and agents 500 bargaining 141 nature of 24
postal and telecommunications before venture 26 order of 184–5
authorities 496 directions hearing 139 professionals 557
unincorporated associations and pledge 664, 918 profits:
trade unions 498 clauses 374 à prendre 610, 640, 643, 660
partners 500 police powers 92 account of 527
partnerships 178, 234, 238, 253–5 police station 119–23 sharing 253
passing off 527, 584–6 political strikes 252 prohibiting orders 33, 79, 80–1, 83
patents court 37, 46–7 possession 611–15, 653–6, 853–4, prohibition 385, 386–7
paternity leave 451–2 892 notice 463, 568
‘pawn’ 664 adverse 612–14, 881–2 promise 296
pay/payment 435–40, 443 possessory title 854 fictitious 322
appropriation 397–8, 806 post rule and e-mail 278 promisee 289
by cheque 753 postal authorities 496 promisor 289
deduction of union subscriptions postal offer and acceptance 277–8 promissory estoppel 295–7, 753,
465 powers of attorney 308 754 – 6
in lieu of notice (PILON) 377–8 Practice Directions 22 property bailed 617
.. ..
EL_Z04.qxd 3/26/07 10:59 AM Page 932
932 INDEX
property law 609–69, 881–94 public nuisance 546–8, 855–6 reality of consent 311–15, 316–29,
adverse possession 881–2 public policy 515, 558, 705, 709–10, 762–79
bailment 614–18, 882–6 839–40 agent’s breach of warranty of
charges and encumbrances over see also illegality, public policy and authority 322
land 892–3 competition law agreement mistake in general 311
choses in action assignments public transport, discrimination in bilateral identical (common)
667–9 243 mistake 313–15, 765–7
choses in action mortgages 664 Public Trustee 114 compensation 321–2
co-ownership 624–6, 886 publication 587–603 duress 325–6, 776
easements 887–91 claimant, reference to 592–3 economic duress 328–9
equitable interests 622–4 criminal convictions 601 electronic trading 315
land charges registration 659–63 damages 602 equity 767
land law 618–22 defamation 590 fiduciary relationships 776
land, transfer of 646–9 defences 593 misrepresentation 316, 319–21,
leasehold 886–7 fair comment on matter of public 769–75
legal mortgagee, remedies of 892 interest 594–5 mistake 762–3
lien 664–7, 893–4 injunctions 602 mistakenly signed documents 312
mortgages 891–2 innuendo 592 negligence at common law 322–3
mortgages of chattels 893 justification 593–4 no general rule that all contracts
nature of property 609–10 libel and slander 590–1 must be fair 329
ownership and possession 610–11, limitation period 601 non-identical bilateral (mutual)
881 offer of amends 599–600 mistake 315, 768–9
personal chattels mortgages 663–4 pre-trial interpretation of relevant rectification 767–8
personal property 650 material 601–2 representation, meaning of 316–19
possession 611–14 privilege 595–8 rescission remedy 323–4
privity of contract 632–4 reform 602–3 uberrimae fidei contracts (utmost
restrictive covenants 644–6, 891 republication 589–90 good faith) 324–5, 775–6
servitudes 639–44 special damage 591 unconscionable bargains 329,
tenants’ rights to acquire freehold summary procedure 600–1 777–9
of houses and blocks of flats ‘puffing’ 318 undue influence and associated
634–8 puisne (High Court) judges 42, 49, equitable pleas 326–7, 776–7
see also land mortgages; leasehold 52, 60 unilateral mistake 312–13, 763–5
or term of years purchase of business 729–30 realty 609, 918
property letting company 368 purchase price reduction 354 reasonable responses test 469
property register 660 purse-sharing 106 reasonableness test 291, 363–5, 367,
property restitution in criminal cases 375, 573, 792–4
163–4 qualifications, lack of 469 recaption 546
property, threats to 326 qualifying bodies 234, 238, 240, 368 receipt, discharge by 397
property, torts affecting 537–42 qualifying offences 50 receiver, right to appoint 656
extra-judicial remedies 539 qualifying periods 444 recklessness 678, 686, 898–9
revocation of licenses 538–9 quality 347, 349–50 recorder 60–1
squatters 541 see also satisfactory quality records 433–4, 439, 454
trespass to land 537–8 quantum meruit 396, 401, 412, 815, recruitment and selection of
proportionality test 85, 86 918 employees 415–26
proprietorship register 660 quashing orders 33, 79, 80–4, age discrimination 422–5
prorogation and its effect 193 718–19 criminal records 425–6
prosecution 134 quasi-contract 322, 412–13, 815 disability discrimination 418–19
application 145–6 Queen’s Bench 7, 30, 42, 43, 53, 75, enforcement 417
commencement 124–6 77, 81 exceptions 417
Crown Court 40–1 Queen’s Counsel 106 religion and belief discrimination
disclosure by 25 Queen’s Speech 192–3 421–2
prosecutor 116–18 qui facit per alium facit per se 506 sex and race discrimination
protected shop workers 487 quia timet 527 416–17
provocation 687–8, 904–6 quiet enjoyment 631 sexual orientation discrimination
psychological injury 706 420–1
public authorities 90–1 racial aggravation 154 trade union members and non-
public Bills 193, 194, 196 racial discrimination 233–8, 416–17, members 417–18
public duty 286, 458 447, 730, 819 transsexual discrimination 419–20
public interest 264, 387, 731–2, rape 698–9, 908–9 rectification 314, 767–8
798 ratio decidendi 210 redemption 891–2
..
EL_Z04.qxd 3/26/07 10:59 AM Page 933
INDEX 933
redundancy 425, 443, 459, 470, republication 589–90 of sale 655–6

479–85 repudiatory breach (breach of suspension of 754–5
amount of redundancy payment condition) 331–2, 333 in term 539
481–2 repugnancy 359, 791 to exercise 635
consultation 482–5 request for selection for appointment to a fair trial of disputes 93–4
definition 480 59–60 to manage 534–5
eligibility 480–1 requests for further information 180 to occupy 651
procedure 482 res extincta 313, 314, 765–6 to representation, criteria for grant
unfair selection for 474 res ipsa loquitur 559–60, 564, 864–5 of 137
reference period 430 res judicata 217–18 risk, passing of 354
referral orders 163 res sua 313, 314, 765–6 road traffic offences 124
registered companies 246–8, 308–9, resale price 786 Royal Assent 196
730–1, 762 rescission 320, 323–4, 354, 411–12 Royal Chancery 8–9
regulations 223 rescue cases 514–15, 838–9 Royal Charter 12, 248
Regulatory Reform Order 254 reserve price 272 Royal Commissions 7
reliance 339–40, 755 residence 232 Royal Courts 9, 14
religion and belief discrimination residential tenants 628–9
421–2, 447 responsibility see age and sale:
religious aggravation 154 responsibility by description 338–9, 783
religious belief, genuine 712 rest periods 434 by sample 344–5, 787–8
remainder 918 restitutio in integrum 518 in the course of a business 339
remands, duration of 125–6 restitution 163–4 of land, alleged contracts for 734
remedial orders 91 specific 527 of land, leases and contracts of
remedies 10, 91–2, 333, 348 restraints: 400
see also remedies and limitation of on distributors of merchandise price and guarantors 656
actions 802–3 through an agent 341
remedies and limitation of actions on employees: exceptionally for under limited title 337
405–14, 811–16 life 800–1 sales talk 318
damages 405, 811–14 on employees: solicitation of sample 348, 350
equitable remedies 410–12, 414 customers and clients satisfactory quality 340, 341–4, 347,
European Union developments 799–800 350, 785, 786–7
410 on employees: taken in contract Schengen Convention 50
fraud, concealment and mistake between their employers 801 Scotland 55, 56, 57, 58, 193
815–16 on employees: trade secrets 798–9 Court of Criminal Appeal 56
injunction 814–15 on employees/shareholders 802 Court of Session 53, 56
interest on debt and damages 408 of trade 374–5, 653, 798 Law Commission 260
liquidated damages 405 on employees through period of search order 33, 411
loss, mitigation of 407 notice 376–8 ‘second appeal’ 46
provisional damages for personal involuntary 381, 803–4 Second Reading Committee 194
injury 407–8 and public interest 798 second-hand goods 340, 785
quantum meruit 815 voluntary contractual 375–6 secondary legislation 223
recovery of debt 408–10 on vendors of businesses 380, 801 secondary victim 524
restitution claims: quasi-contract restrictions accepted by distributors ‘seconds’ 347
412–13 of merchandise 381 Secretary of State 27, 70, 96–7, 387,
unliquidated damages 406 restrictions on shareholder- 388, 459, 484–5
remoteness 406, 522, 552, 813–14, employees 380 selection:
842–9 restrictive practices 45, 370, 390–9 commissions 55
remuneration 438 retirement age 423–4 powers 503
Rent Assessment Committees 69 retrial 50, 51 process 55, 60
repair 353–4 reversing 217–18 self-defence 518, 534, 694, 710–11,
failure to 580 reversion 918 914–16
reparation order 162 review and references, applications self-employment 429
repentance 796–7 for 62 self-help 412, 537, 539, 551, 853
replacement 353–4 revocation 278–80, 538–9, 742–3, self-induced events 400
replevin 546 853 sending for trial procedure 28
reporting 74, 138 rights: sense of the promise rule 315
reporting orders, restricted 419 of audience 99 sentences 49, 135, 151
reports 55, 62, 208 in connection with legal advice deferred 157–8
representation 316–19, 779–80 121–2 power to increase 51
representative order 251 of occupation 661 in youth court 136–7
.. ..
EL_Z04.qxd 3/26/07 10:59 AM Page 934
934 INDEX
Sentencing Guidelines Council homicide 685 importance 332

155–6 involuntary manslaughter 690–1, influencing representee’s decision
sentencing powers 28 906 319
separation agreements 374 manslaughter 686 of intention, opinion or belief as
Serious Fraud Office 117 murder 685–6, 904 actionable statements of fact
service acknowledgment 178 sexual offences – rape 908–9 769–70
service of claim form 178 statutory offences against the and intentions of the parties 331–2
service contract 501 person 906–8 of law 318
service-related pay and benefits voluntary manslaughter 686–90, must induce contract 318–19
424–5 904 – 6 nature of 332
services 239 see also statutory offences against necessity for 317
supply of 351–2 the person negligent 569
servitudes 610, 639–44 specific torts 532–605, 850–81 of opinion 318, 587
severance 381–2, 798, 886 act of God 881 timing of 332–3
sex discrimination 238, 416–17, 446, affecting the person 532–5 as to future conduct or intention
447, 730, 816–17, 819 against business interests 584–6, 318
sexual immorality 371–2 872–3 of truth 178
sexual offences 152, 698, 908–9 arrest and tort of trespass to the written 444, 486
sexual orientation discrimination person 536–7 states of mind 897–8
420–1, 446, 447 civil conspiracy 873 statutes 13–14, 189, 197, 201–6,
sexually transmitted diseases 695 common benefit 881 715–16
share purchase contracts 396 contributory negligence 865–6 statutory authority 517–18, 842
share of supply test 388 conversion 854–5 statutory companies 308–9
shop workers 486–8 defamation 586–7, 873–80 statutory duties 514, 563
short citation 209 duty of care 553–5 statutory employment rights 262
short title – numbering and citation employers’ negligence 872 statutory grievance procedures
196 false imprisonment, remedies 473 – 5
shuttle diplomacy 38 available against 537 statutory instruments 199
sick leave, long-term 430 highway authorities 580 statutory interpretation 89–90, 725,
sick pay 436, 443, 817 negligence 553, 862–5, 866, 867–9 726
signatures and electronic trading 304 negligence – employers 581–4 statutory intervention 552–3
significant harm 228 negligence – occupiers’ liability statutory maternity pay
silence, restriction of right to 123 576–80 administration 451
simple contract 271, 285, 918 negligence – product liability statutory offences against the person
skeleton arguments 183 564 – 6 679–81, 694–700, 906–8
skill, special or lack of same 333 nuisance 856–61 assault by penetration 699–700
slander 590–1, 873–4 occupiers’ liability 869–71 assault occasioning actual bodily
small claims 35–6 private nuisance 548–53 harm 694
smoking in the workplace 461–2 product liability 866–7 grievous bodily harm 696
so far as is reasonably practicable public nuisance 546–8, 855–6 harassment 697–8
460, 462 statutory product liability 566–8 malicious wounding 694–5
Social Security Commissioner 70 strict liability 880 rape 698–9
social security tribunals 70 trespass to the person 850–2 sexual offences 698
sole traders 178 trespass to land 852–3 sexually transmitted diseases 695
solicitation of customers and clients wrongful act of stranger 881 stalking 696–8
799–800 wrongful interference with goods statutory product liability 566–8
Solicitor-General 113 542–6, 853–4 statutory prohibition, implied 382–3
solicitors 104, 108–9, 657, 894 see also duty of care – economic statutory restriction 471
some other substantial reason 471–2 loss; negligence – professional statutory rights 79–80, 475, 651
special advocates 107–8 liability; property, torts statutory sick pay 436
special relationship, necessity for – affecting; publication stop and search powers 536–7
knowledge of victim 569–70 spouse’s right of occupation 892–3 street bail 119
specialist proceedings 46–7 squatters’ rights 541, 881–2 stress-related injury 582–3
specially qualified advisers 57 stalking 696–8 strike 467
specialty contract 270–1, 918 standing offer 737 striking out 181
specific offences 685–700, 904–9 ‘Staple Courts’ 15 structured settlements 175, 407–8,
assault 693–4 stare decisis 7–8, 11, 207 522
death by dangerous or careless statement: subject matter 399, 807
driving 692–3 of case 180 subject to contract 274
diminished responsibility 906 of facts 124 subjective test 898–9
..
EL_Z04.qxd 3/26/07 10:59 AM Page 935
INDEX 935
subordinate legislation 189 termination of employment contract learning representatives 458–9

subpoena 10 465–79 members and non-members
subrogation 531 automatically unfair dismissals 466 417–18
substantial lessening of competition dismissal, definition of 468 membership and activities 463–5
387, 392 dismissal, grounds for 468–73 recognition 457–8
success fee 171 exceptions, other 467 trading contracts 761
succession order 622 statutory grievance and training 429, 443
successive accidents and supervening disciplinary procedures 473–5 transfer of business 475
events 849 unfair dismissal 465–6 transfer of employees 828–30
sueing for money owing 656 unfair dismissal: damages for transfer of property in goods,
suicide pact 689–90 injury to feelings not available contracts for 345–6
summary procedure 600–1 479 transfer to permanent employment
summary trial 25, 27, 132–6 unfair dismissal and frustration of 445
summing up 148 contract 475–6 transsexual discrimination 419–20
summons 118, 125, 132–3 unfair dismissal, remedies for travel restriction orders 160
Sunday trading 486–8 476 – 9 treasure 96–7
sunset clauses 199 territorial limits 33 trespass 578
superior title 886 theft 470 to goods 542–4
supervening events 402 third parties 324, 327, 358–9, 388–9, to land 537–8, 852–3
supervision order 162 565–6, 743, 754 to land by relation 612
Supreme Court 18–19, 23, 30, 48, threats 706–7 to the person 532–5, 850–2
65, 66 time lapse 280, 323–4, 528–9 trial 137, 145, 146, 183–6
assistance for transaction of time limits 123–4, 126, 479, 481 bundles 183
judicial business 52 time off 455, 457–9 on indictment 27
composition 57 time for performance 352, 805–6 on indictment in Crown Court
jurisdiction 56 time-bars 167 137
Justices 54 timetables, court enforcement of on indictment without jury 145–6
Northern Ireland 53 183 new 51
reform 54–7 title 336–7, 346, 349, 660–1 place and time of 139–40
Rules 200 tort law 4, 491–531, 823–50 procedure, sending for 28
surety 130–1, 918 corporations 828 sending for 24
surrender to bail and sureties 130 damage after successive accidents see also jury trial
suspect protection 123 525–7 tribunals 64, 445, 717–19, 720
suspended sentences 157 damage and liability 492–3, administrative 70–1
suspension: 825 – 6 administrative inquiries 76
from work on medical grounds diplomatic immunity 828 advantages 76
449–50 employee, definition of 501–5 alternative dispute resolution
on maternity grounds 450 employer liability 830–1 75 – 6
notice 568 exclusion clauses 836 appeals from 48
sympathy strike 252 general defences 835–42 domestic 78–9
liability cessation 527–31 employment 71–5
taxation 257–8, 439, 729 liability for torts of independent Inquiries Act 2005 77
taxing officers 114 contractors 510–11, 834–5 legal aid 78
Technology and Construction Court limitation of actions 849–50 reform 77
45 mental patients 827–8 see also judicial control over
telecommunications authorities 496 minors 826 inferior courts and tribunals
telephone acceptance 740–1 nature of 491–2, 823–5 trust instrument 622
telex acceptance 740–1 nervous shock 524–5 trusts 5, 10–11
tenancies, public-sector 628 non-employees, rights of 505 of land 624
tenancy at will 627 remoteness of damage 842–9 turnover test 388
tenancy by sufferance 628 vicarious liability 500–1, 505–9, two-tier service 573
tenants 630–2 828–30, 831–4
for life 622–3 see also damages; defences; parties uberrimae fidei contracts 317, 324–5
release from liability 633 in tort law; specific torts ultra vires 81, 90, 717–18, 720, 724–5
rights to acquire freehold of houses tort remedy 322–3 corporations 308–9
and blocks of flats 634–8 tracking 657 persons and the Crown 248, 255
tenders 275, 396–7 trade practice 276 procedural 200
tenement 639 trade secrets 375, 379–80, 798–9 substantive 200
tenure 56, 618 trade unions 234, 238, 251–3, 498 tort law 497
term of years absolute 619 activities 458 tribunals 80
.. ..
EL_Z04.qxd 3/26/07 10:59 AM Page 936
936 INDEX
unconscionable bargains 329, 777–9 valuable benefit 401 Wednesbury reasonable test 85, 86
undue influence 653, 776–7 vegetative state cases 512 when and where test 502
and associated equitable pleas verdict 148 whistle-blowing 379, 389, 449
326–7 alternative 150 winding-up 918
unenforceable contracts 270 majority 149 without unit-holders 621
unfair contract terms 366–9 vertical agreements 385, 386 witnesses, attendance of 183
unfair dismissal 439, 465–6, 474, vesting deed 622 witnesses, leading of 146–7
475–9, 821 Vice-Chancellors 10 work and materials contracts 346
unfair relationships 652–3 vice-presidents 52 work, obligation to 504
unfitness to plead 141 victimisation 233, 239, 416, 422, workforce agreements 433
unilateral agreements 732 439, 447, 455 working hours 434
unilateral contracts 277, 279–80 victims’ advocate 150 working time 429–34
unincorporated associations 249–55, violence, threats of 325 workplace rights 92
498 void contracts 270, 326, 370, writ system 8–9
partnership 253–5 374–5 written contracts 330, 368
trade unions 251–3 volenti non fit injuria 494, 511–12, written requisition 119
Union for the Investment Finance 514, 515, 710, 835–40 wrongful act of stranger 881
Industry 465 specific torts 533, 534, 535, 577 wrongful interference 542–6,
unit-holders 621 voluntary act 704 611–12, 853 – 4
United States 589 volunteers 120, 121
unsound mind 762 year and a day rule 685
see also insanity wagering contracts 370, 384 young (adolescent) workers 434–5
unusual plaintiff (claimant) rule 523, waiver 277, 528, 805–6 young persons 458
844 Wales 55, 56, 57, 58, 72, 77, 87, youth community orders 161–3
up-front payments 173 189–90 youth courts 31, 126, 136–7
usage of trade 344 warning the victim 562–3 youth crime and disorder –
use of own name 586 warrant, issue of 118 sentencing 161
utmost good faith 775–6 warranties 333–4, 349, 395 Youth Justice Board 136–7
implied 337 youth offender contract 163
vagueness 757–8 waste 632 youth offender panel 163
valid contracts 304–5 wasted costs order 73 youth offending team 161, 163
..
EL_Z04.qxd 3/26/07 10:59 AM Page 937
.. ..
EL_Z05_Curzon.qxd 4/12/07 2:27 PM Page 938
..

Smith and Keenan's English Law PDF

Uploaded by

Copyright:

Available Formats

Smith and Keenan's English Law PDF

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Smith and Keenan's English Law PDF

Uploaded by

Copyright:

Available Formats

15th Edition

Text and Cases

The new edition has been brought fully up-to-date to include:

Denis Keenan is a Barrister, an experienced teacher and former Head of

Additional student support at

Cover image: © Getty Images

9781405846189_COVER.indd 1 21/3/07 4:55:30 pm

Smith & Keenan’s

Smith and Keenan’s

Smith and Keenan’s

Smith and Keenan’s

Visit the English Law, fifthteenth edition Companion Website at

Smith & Keenan’s

of the Middle Temple, Barrister

Pearson Education Limited

Visit us on the World Wide Web at:

© Kenneth Smith and Denis Keenan, 1963, 1966

The right of Denis Keenan to be identified as author of this work has

All rights reserved. No part of this publication may be reproduced, stored in

Crown Copyright material is reproduced with the permission of the

British Library Cataloguing-in-Publication Data

Typeset by 35 in 9/12pt Stone Serif.

The publisher’s policy is to use paper manufactured from sustainable forests

Preface xi The Criminal Division 49

Procedure at the police station 119 Conditional fee agreements 170

10 Making the contract II 284 14 Contractual terms 330

Who is an employee? 501 A leasehold or a term of years 626

Drunkenness and drugs 705 Making the contract II 745

Companion Website for students

Courses on which this book is known to be used

AAT CIMA Foundation

THE BOOK AT A GLANCE

Part 2 THE LAW OF CONTRACT

Part 3 Part 4 Part 5

Part 6 CASES AND MATERIALS

LAW REPORT ABBREVIATIONS

AC Law Reports, Appeal Cases 1891–(current).

A (Children), Re (2000) 708, 914 Allen v Greenwood (1979) 642

xvi TABLE OF CASES

TABLE OF CASES xvii

xviii TABLE OF CASES

TABLE OF CASES xix

TABLE OF CASES xxi

xxii TABLE OF CASES

TABLE OF CASES xxiii

xxiv TABLE OF CASES

TABLE OF CASES xxv

xxvi TABLE OF CASES

TABLE OF CASES xxvii

xxviii TABLE OF CASES

TABLE OF CASES xxix

National Provincial Bank Ltd v Ainsworth Oliver v Ashman (1962) 519

xxx TABLE OF CASES

TABLE OF CASES xxxi

xxxii TABLE OF CASES

TABLE OF CASES xxxiii

R v Northumberland Compensation Appeal R v Simpson (2003) 212

xxxiv TABLE OF CASES

TABLE OF CASES xxxv