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DAMAGES.

66

High Court-Queen's Bench Division.

PAYNTER v. WATSON. Div. Court. 9th May.

LONDON BUILDING ACT-NEW AND SOMEWHAT DIFFERENT DOMESTIC BUILD-
ING ERECTED IN PLACE OF OLD PREMISES" DEVIATE IN ANY RESPECT "____
GROUND TO BE COVERED DOES NOT EXCEED AREA OCCUPIED BY OLD PREM-
ISES-PLANS MUST BE SENT IN-LONDON BUILPING ACT, 1894 (57 & 58
VICT. CCCXIII) ss. 41, 43, 145, 150.

Special case stated by a metropolitan police magistrate upon a notice of an objection to an objection under the London Building Act, 1894, s. 43. The facts were as follow: The appellant had served a building notice under section 145 on the district surveyor of the district of St. George's, Hanoversquare North, and had annexed thereto the plans and sections of new domestic buildings which he proposed to erect on ground previously occupied by houses. The plans shewed that the new buildings would not cover any ground that was uncovered before, but the arrangement of the upper floors was such that a certain amount of the former existing air space would be occupied by the new buildings, which were to be higher and to contain more cubic feet than the old. The survey or served notice of his objection to pass the plans under section 159 of the Act, and the matter came before the magi-trate, who found that the plans of the proposed new buildings deviated in certain respects from the plans of the old buildings, and he held that the word "deviate" in section 43 (2) applied not only to the area of ground covered by the old buildings, but also to any structural alteration in the buildings in respect to their height and width and depth on the several floors, and he affirmed the objection to them given by the surveyor of the district, the present respondent, under section 150. The question for the decision of the court was whether the owner of premises had a right to rebuild them in a different manner to the old buildings so long as the new buildings did not, in fact, cover more of the ground than the old buildings did, without first obtaining the leave of the London County Council. For the owner of the premises it was contended that section 43 (2) had reference to the ground-plan only, and that so long as the new buildings occupied no more land than did the old he was free to rebuild a domestic building in such a way as he thought fit provided that he did not contravene any of the provisions as to height and the like in section 47. For the respondent it was pointed out that Part V. of the Act, in which part this group of sections was to be found, was headed, "Open Spaces about Buildings, and Height of Buildings." By section 41 all new buildings were to leave air space from the ground upwards, and in many instances to rebuild on the old plan would be to evade this importaut provision of the Act.

This was an action against the defendant syndicate and its directors for the rescission of a contract made in June, 1894, for the purchase by the company from the syndicate at a price of £850,000 of certain nitrate grounds and works at Laguna, Chile, and for damages. The question shortly was whether the description of the property in the contract and the statements in the prospectus contained such misrepresentations as would support a case for rescission and damages, and after having voluminous evidence, the court found that of the numerous matters complained of two only were legitimate grounds for complaint-namely, the state of the water supply at the date of the contract and for some time after, and the non-completion in some respects of one-half of the factory maquina" " until some short time after the contract. The facts, so far as material, are sufficiently referred to in the judgment. ROMER, J., after referring to the fact that fraud was not alleged against any of the defendants, nor was ever intended to be alleged, and considering at length the material circumstances, continued: I think it would not be fair or equitable to now decree rescission of the contract. I quite agree that if the company had satisfied me, on looking at all the circumstances, that it was entitled to ask for rescission, I should not have allowed any option to the syndicate of paying damages or making good its representations instead of rescission: see Rawlins v. Wickham (7 W. R. 145, 3 De G. & J. 304) and the authorities there cited, in all of which it is to be noted that nothing but rescission would have afforded complete or proper relief to the parties complaining. In the case now before me I think that justice will be done, and the company will obtain all the relief it is entitled to against the syndicate, by directing, upon the alternative claim of the company for damages for breach of contract, an inquiry as to what loss or damage the company has sustained by reason of the maquina not being in complete working order on the 30th of June, 1894. With regard to the case put forward against the original directors of the company, it follows from what I have already said as to these directors not having been guilty of bad faith that the case against them must be substantially based on negligence. Nothing that they have done was beyond their powers as directors. The company said they were liable (1) for entering into such a contract without proper investigation, and (2) for carrying it out and for paying the purchase-moneys with notice of the defects in the property. Now, directors are not liable when acting intra vires and in good faith for loss accruing to their property by their acts unless arising from what has been called " gross negligence" on their part. Exception has often been taken, and with good cause, to that phrase. But it has been frequently used, and in other cases besides those concerning directors, and has its use, inasmuch as there is a practical difference between the degrees of negligence for which different classes of persons are responsible (Giblin v. McMullen, L. R. 2 P. C. 317, per Lord Chelmsford, pp. 336 and 337). A director is no doubt liable for acts done by him which he knows to be ultra vires the company and result in loss to the company, nor can he with impunity pay away without inquiry the company's moneys if it should subsequently turn out that they have been paid for a purpose to which they could not lawfully be applied, but MERSEY DOCKS AND HARBOUR BOARD v. TWIGGE AND BUTTERS. imprudence or want of judgment would not by itself make a director liable: Marzetti's case (28 W. R. 541, per the present Lord Esher, p. 543). With reference to the position of the directors in the present case as being also interested as directors of the syndicate, the observations of Lord Selborne in Hirsche v. Sims (L. R. 1894 A. C. 654, p. 660; 43 W. R. Dig. 36) may be referred to, where he says: "If the defendants truly and reasonably believed at the time that what they did was to the interest of the company they are not chargeable with dolus or breach of trust merely because in promoting the interests of the company they were also promoting their own." Now, in the present case, ought the directors to be held liable for breach of duty under the circumstances above stated because they entered into the contract and gave the syndicate time to remedy the defects, and because, notwithstanding the delay in the remedy and pending the remedy, they proceeded with the contract and obtained the conveyance and paid the purchase-money? I think not. Although they did not call the attention of the shareholders to the defects and delay, I see no sufficient evidence to justify me in coming to the conclusion that they did not truly and reasonably believe that what they were doing was for the interest of the company, though they may have been imprudent in some respects. Bearing in mind the knowledge of the property they had, I do not see why they were bound to make further investigations before sealing the contract on behalf of the company; and on this part of the case I may refer to Overend, Gurney, & Co. v. Gibb (L. R. 5 H. L. 480), and in considering the conduct of the directors the position of affairs at that time has to be regarded. His lordship dealt with this, and concluded that there had been no negligence of a kind for which directors could be held liable by action to their company.-COUNSEL, Swinfen Eady, Q.C., A. T. Lawrence, Q.C., Kirby, and Peterson; Cozens-Hardy, Q.C., Carson, Q.C., Macnaghten Q.C., and Russell Clarke; Crackanthorpe, Q.C., Farwell, Q C., and O. Leigh Clare. SOLICITORS, Slaughter & May; Budd, Johnsons, & Jecks; Blunt & Co. [Reported by J. F. WALEY, Barrister-at-Law.]

THE COURT (WILLS and KENNEDY, JJ.) dismissed the appeal, and supported the decision of the magistrate. The cardinal object of the Act was the limitation of private rights over property for the general good. If the building owner desired to erect his new buildings on a different plan to that upon which the old building was put up, he must submit his complete set of plans for the approval of the county council. Perhaps if his new building was identical with the old, then he might get the protection of section 41 (1), if not, he must submit plans for the discretionary sanction of the county council.-COUNSEL, Macmorran, Q.C., and Poyser; Horace Avory and Daldy. SOLICITORS, Sandlands & Co.; Blaxland. [Reported by ERSKINE REID, Barrister-at-Law.]

Div. Court. 29th April.

MERSEY DOCK ACTS-DOCK RATES ON GOODS-GOODS IMPORTED COASTWISE

-TRANSHIPPED AT A PORT IN ENGLAND-MERSEY DOCK ACTS CONSOLIDA-
TION ACT, 1858 (21 & 22 Vicr. c. XCII.).

In this case the question was whether under the Mersey Dock Acts
Consolidation Act, 1858 (21 & 22 Vict. c. xcii.), s. 234, certain goods
imported into Liverpool from Singapore, but transhipped at London,
were liable to foreign dock rates and town dues, or whether they were
liable to town dues only in accordance with the resolutions of the board
now in force in respect of goods imported coastwise. Section 234 provides,
so far as relates to this case, as follows: "All goods imported from parts
beyond the seas or coastwise into the port of Liverpool, and brought into
the docks, or land at, or deposited upon, or carried over any quay, &c.,
belonging to the board
shall be liable to the rates specified
in Schedule U hereunto annexed.
By Schedule C the rates on
tapioca inported from parts beyond the seas is declared to be 3d. per
cwt. and coastwise 1d. Since the Act was passed the Mersey Docks
and Harbour Board, by resolution, remitted the dock rates on goods
imported coast wise. A consignment of 306 bags of tapioca was shipped by
the consignors at Singapore on board the steamship Agamemnon, belonging
to a Dutch company registered at Amsterdam, for carriage to Liverpool
under the terms of a bill of lading which contained a power to tranship at
London. The Dutch company and the Ocean Steamship Co., an English
company, worked in conjunction, and the profits of the Dutch company
went to the shareholders of the English company. The Agamemnon, after
touching at Amsterdam, proceeded to London, where she discharged all
her inward cargo, including the tapioca. Entry was made of all her cargo
carried to London, and the usual London dues paid on it. For the pur-
poses of the Customs Act the ship and cargo were treated as arriving from
beyond the seas. The tapioca was then shipped on board The Sarpedon,
belonging to the Ocean Steamship Co. The Sarpedon's voyage was to
Liverpool and thence to China. The Liverpool cargo, including the

tapioca, was carried under a "transire" from the Customs, a document which is only issued in respect of cargo carried (so far as Customs are concerned) coastwise. At Liverpool the tapioca, with the other cargo from London, consigned to Liverpool was discharged and was treated for Customs purposes as carried coastwise, and no examination and no entries were passed in respect of it. The defendants were the purchasers of 150 bags of the tapioca, and these were delivered to them from the plaintiffs' docks. The plaintiffs' claim was for £1 5s., being the amount of the foreign dock dues at 2d. per cwt., less credit for coastwise town dues. It was contended on behalf of the defendants that the tapioca was imported coastwise, and that for the purpose of ascertaining the meaning of the expression "coastwise" in section 234 it was necessary to refer to the Customs Laws Consolidation Act, 1876 (39 & 40 Vict. c. 36), under which the goods in question ought to be treated as imported coastwise; Mersey Docks and Harbour Board v. Henderson (13 App. Cas. 600) was cited in support of this proposition. The following sections of the Customs Laws Consolidation Act, 1876, were referred to: Sections 40, 41, 64, 101, 140, and 145. MATHEW, J., in delivering judgment, said that section 234 of the Mersey Dock Acts Consolidation Act, 1858, provided that all goods imported into the port of Liverpool from ports beyond the seas should be liable to the dock rates mentioned in Schedule C. The section further provided that goods imported coastwise should pay certain other dock rates. When the plain language of section 234 was looked at, nothing would seem to be clearer than that, under the circumstances of this case, the goods were imported into Liverpool from a port beyond the seas. It was eaid, however, on behalf of the defendants, that the section had a subtle and concealed meaning, and that it must be construed by reference to the Customs Consolidation Act, 1876, and the regulations made under that statute. It was said that the effect of that statute was to deprive the plaintiffs of the dues payable in respect of goods imported from beyond the seas, which they would otherwise have been entitled to under the Act of 1858. That would be a most extraordinary result, because the Customs Act had nothing to do with these dock dues, which were payable for harbour and dock services rendered by the plaintiffs. The defendants' case was put in this way. The Customs Act, it was said, must be taken to contain a provision that goods transhipped at London were to be deemed to be imported into London, and then carried coast wise to Liverpool There was no express provision in the Customs Act to that effect, or in the regulations made under it, but it was said such a provision ought to be implied from the course of business. The evidence showed that the course of business of the Customs authorities was that when a vessel arrived in London it was ascertained what dutiable and what non-dutiable goods were on board, and when that had been done the Customs had no further interest in nou-dutiable goods. The tapioca in question, which was non-dutiable after transhipment, was not placed on a coasting vessel, but on The Sarpedon, which, after discharging a part of her cargo at Liverpool, proceeded on a foreign voyage, so that the action of the Customs authorities in sending the tapioca under a "transire," which was only issued in respect of goods carried coastwise, was irregular. When the goods were dutiable they were treated after transhipment in a different manner. They were forwarded under a bond. In other words, the Customs authorities kept their hands on them till they reached their destination, where the Customs were paid and the record made. Therefore in the case of the transhipment of dutiable goods, no such implication as was contended for by the defendants could arise. But if the contention of the defendants prevailed, it would result that there would be one set of dock dues payable to the plaintiffs in respect of dutiable goods and another set of dues in respect of non-dutiable goods. Under these circumstances, there did not appear to be any reason for implying any such regulation in construing the Mersey Docks Act of 1858. The extremely slender foundation on which the defendants' argument was based was that, in the case of Henderson v. Mersey Docks and Harbour Board (13 App. Cas. 600), the late Master of the Rolls and the House of Lords had had recourse to the language of the Customs Act in order to ascertain the meaning of the words "trading inwards" in a section of the Mersey Docks Act; but in that case the Customs Act was merely referred to as a dictionary might be referred to for the purpose of ascertaining the meaning of an ambiguous word. Because that had been done, it was now argued in this case that, whenever a question arose as to the meaning or construction of the Mersey Docks Act, that question must be decided by referring to the Customs Act. The argument of the defendants was, in his lordship's opinion, quite untenable. There would, therefore, be judgment for the plaintiff's for the amount claimed, with costs on the High Court scale.-COUNSEL, Joseph Walton, Q.C., Carver, Q.C., and T. G. Horridge; Boyd, Q.C., and Scrutton. SOLICITORS, Rowcliffe, Rawle, & Co., for A. T. Squarey, Liverpool; Stokes & Stokes, for Thornely & Cameron, Liverpool.

[Reported by C. G. WILBRAHAM, Barrister-at-Law.]

Winding-up Cases.

Re AURIFEROUS PROPERTIES (LIM.). Wright, J. 4th May. COMPANY-WINDING-UP-CREDITOR AND CONTRIBUTORY-UNPAID Calls of COMPANY-DEBT OF COMPANY-RIGHT TO SET-off.

The African Gold Properties (Limited) were holders of shares in the Auriferous Properties (Limited). In January and June, 1896, two calls were made on these shares amounting to nearly £1,500, but these calls were not paid. In January, 1896, the Auriferous Co. became indebted to the African Gold Co. to the extent of over £2,000. A compulsory winding-up order was made against the Auriferous Co. The African Gold Co. went

into voluntary liquidation in January, 1898. This was a summons by the liquidator of the African Gold Co. in the winding-up of the Auriferous Co. to raise the question whether he was entitled to set-off the amount due from the Auriferous Co. to the African Gold Co. against the calls due from the latter to the former company.

case;

585).

WRIGHT, J., held, that the amount of the debt could not be set off against could not have set off its claim for money lent against its liability for the the sum due for calls. If the African Gold Co. had not been in liquidation it amount of the calls. This was decided before the Judicature Act, 1875, 1 Ch. 528), Black & Co.'s case (21 W. R. 68, L. R. 8 Ch. 254, 261), and in Re Overend, Gurney, & Co. (Limited), Grissell's case (14 W. R. 1015, L. R. since the Judicature Act it had been decided that the same rule held good and whether the liquidation was compulsory or voluntary: Re Whitehouse whether the call was made before or after the liquidation had commenced, & Co. (27 W. R. 181, 9 Ch. D. 595); the ground of the rule being that all contributions from shareholders are by the Companies Acts made applicable for the payment of the company's creditors pari passu, and that a person who is a creditor and a contributory cannot be allowed to do what amounts to own paying his claim in full fund which ought to be distributed rateably: out of Black & Co.'s Re Pyle Works (38 W. R. 282, 44 Ch. D. 534, 537, Whether the same rule would apply if the liquidator sought to enforce the call by action seemed never to have been decided, but the call though made before the liquidation and therefore at one time a debt to the company was also enforceable by the liquidator by balance order as a contribution to be made in the winding-up for pari passu distribution, and in this fence was not a subject of set-off in the case of a limited company. In the present case the African Gold Co. was also in liquidation, and the question arose as to the effect of that. If the African Co. must have enforced his claim in bankruptcy and according to the bankGold Co. had been a bankrupt individual the liquidator of the Auriferous ruptcy law, which even before the Judicature Act would have allowed the set-off: Re Duckworth, Ex parte Cooper (15 W. R. 367, L. R. 2 Ch. 578); Re Universal Banking Corporation, Ex parte Strang (18 W. R. 475, L. R. 5 Ch. 492). Here the creditor was not a bankrupt individual but a company in liquidaapplicable. The liquidator of the Auriferous Co. had not to proceed in tion and the particular ground on which Re Duckworth was decided was not the Bankruptcy Court but in the Chancery Division, and was entitled to the benefit of the Companies Act as there administered. The question therefore was, Had section 10 of the Judicature Act, 1875, introduced into off? This question was decided in the negative by Gill's case (27 W. R. the law of the winding-up of companies the bankruptcy rules as to set934, 12 Ch. D. 775), which was cited with approval in the Court of Appeal in Re Washington Diamond Co. (41 W. R. 681; 1893, 3 Ch. 95), and the liquidAfrican Gold Co. for the whole amount still due on the shares, ator of the Auriferous Co. was entitled to prove in the winding-up of the leaving the liquidator of the African Gold Co. to his right of proof in the winding-up of the Auriferous Co. that in Gill's case the creditor contributory was not a in liquidation, but that circumstance did not prevent it from being in point Judicature Act into the law of companies so as to allow a set-off against as a decision that the bankruptcy law of set-off was not imported by the calls, though for other purposes there may be the same right as in bankruptcy to a set-off of cross-claims as existing at the time of bankruptcy. Re Duckworth had therefore no application. This view seemed to be consistent with all the decisions on section 101 of the Companies Act, 1862, since the Judicature Act, though there was some difficulty in reconciling Re Duckworth, with what Lord Selborne said in Black & Co.'s case think that the House of Lords would now overrule what was said in Re with reference to a "statutory trustee," yet the learned judge did not Duckworth.-COUNSEL, George R. Northcote; Howard Wright. SOLICITORS, Watts & Habershon; Freshfields & Williams.

[Reported by C. W. MEAD, Barrister-at-Law.]

NEW ORDERS, &c.

TRANSFER OF ACTIONS.

ORDER OF COURT.

It was

true

company

Thursday, the 5th day of May, 1898. North, Mr. Justice Stirling, Mr. Justice Romer, and Mr. Justice Byrne Whereas, from the present state of the business before Mr. Justice respectively, it is expedient that a portion of the Causes assigned to Mr. Justice North, Mr. Justice Stirling, and Mr. Justice Romer, should for the purpose only of Hearing or of Trial be transferred to Mr. Justice Byrne; Now I, the Right Honourable Hardinge Stanley, Earl of Halsbury, Lord High Chancellor of Great Britain, do hereby Order that the several Causes and Matters set forth in the Schedules hereto, be accordingly transferred from the said Mr. Justice North, Mr. Justice Stirling, and Mr. Justice Romer to Mr. Justice Byrne for the purpose only of Hearing or of Trial, and be marked in the Cause Books accordingly. And this Order is to be drawn up by the Registrar and set up in the several Offices of the Chancery Division of the High Court of Justice.

FIRST SCHEDULE. From Mr. Justice NORTII. 1897.

Pneumatic Rubber Stamp Co, ld v Lindner 1896 P 2,354 July 9 Foster v Wagstaffe 1897 F 744 July 10

In re Ehrhardt's Patent, No 3,116 of 1891 petn entered in Witness List Sulley v Sulley 1897 S 1,357 Aug 12
July 10

Lord Iveagh v Davies 1897 I 487 July 13
Massingberd v Massingberd 1897 M 777 July 17
Spurgeon v Keddie 1897 S 1,038 July 21
Holt v May 1897 H 1,949 July 21

Gregory v Freame 1897 G 857 July 22

Lee Conservancy Board v London Agency ld 1897 L 262 July 24
Cook v Suart 1897 C 500 July 24

Cook ▾ Suart 1897 C 501 July 24

FC Calvert & Co v D Calvert & Co 1897 C 1,566 July 26
Kilner v Taylor 1897 K 141 Aug 4

Trustees, Executors, & Securities Insurance Corpn, ld v Deutsche Bank
1895 T 796 Aug 5

Woodward v Darby & Cumberland 1897 W 1,828 Aug 5

Moran v Raby 1897 M 2,437 Aug 5

Boileau v Heath 1897 B 2,027 Aug 6

Octopus ld v Harding & Co 1897 O 259 Aug 7

Bilton v Woodbridge 1897 B 522 Aug 10

Bovril ld v Bouillon Fleet ld 1897 B 2,255 Aug 11
Bovril ld v MacSymon's Stores ld

1897 B 2,258 Aug 11
Same v McBirnie 1897 B 2,262 Aug 11
Same v Evans 1897 B 2,266 Aug 11

Same v Shaw 1897 B
Same v JP Evans & Co

2,267 Aug 11

1897 B 2,269 Aug 11

Pierce v Weston 1896 P 2,082 Aug 11

In re Buckett Aldridge v Buckett

1897 A 559 Aug 11

Simmance v W Sugg & Co ld 1897 S 760 Aug 12
Darby v London Agency ld 1896 D 1,827 Aug 13
Delannoy v The Hostabuch Copper Syndicate ld 1897
Aug 13

D 579

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SECOND SCHEDULE.
From Mr. Justice Stirling.

Coates v Danes 1897 C 793 July 19

Halford v Lewinsohn 1897 H 855 July 21

Fanning v Fennessy 1897 F 491 July 23

Warren v Invicta Patent Brick Manufacturing Co ld 1896 W 2,806
July 24

Lennox v Peters 1897 L 1,344 July 27

McLeod v Power 1896 M 1,837 July 28

Harward v Australian South African Gold Exploration Co ld 1897 H 74 July 29

Renouf v Spalding & Bros 1896 R 1,921 July 31

Williams v Wheeler 1897 W 1,371 Aug 4

Attorney-General v Radstock Urban District Council 1897
Aug 5

Barton v Beal 1897 B 409 Aug 9

Bates v Chignell 1897 B 1,981 Sept 7
Priestley v Öxley 1897 P 752 Oct 4
Hobbs v Mills 1897 H 1,963 Oct 4

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RULES PUBLICATION ACT, 1893.
THE PRIZE COURTS ACT, 1894.

HALSBURY, C.

Notice is hereby given that, after the expiration of forty days from the date hereof [May 10] it is proposed to submit to her Majesty in Council, in pursuance of the above-mentioned Act, the draft of an order in Council making Rules of Court touching the practice in prize proceedings to be observed in Vice-Admiralty Courts and Colonial Courts authorized to act as Prize Courts. And notice is hereby further given that, in accordance with the provisions of the Rules Publication Act, 1893, copies of the proposed draft Order in Council can be obtained by any public body, within forty days of the date of this notice, at the Privy Council Office, Whitehall.

LAW SOCIETIES.

INCORPORATED LAW SOCIETY.
SELECT COMMITTEE ON MONEY LENDING, 1898.

Report of special committee of the Council of the Incorporated Law
Society, as adopted by the Council 22nd of April, 1898 :

The committee have considered the communication (referred to them by the Council on the 25th of March), from the Select Committee of the House A 627 of Commons on Money Lending, inquiring if the Council had any suggestions to offer as to remedies, or alterations to recommend in the present state of the law with regard to money lending. The committee

Vilanova y Domenech v The Olot & Gerona Ry Co ld 1896 D 2,144 find that in the evidence taken by the Select Committee the following, Aug 9

Armstrong v Croft 1897 A 104 Aug 9

In re Willcox Armitage v Pauling 1897 W 1,792 Aug 9
Mascias v Anglo-American Construction Co, ld 1893 M 2,441 Aug 11
West v Harper 1897 W 872 Aug 12
Helios Electricitas Actien Gesellschaft v Braulik 1897 H 1,345 Aug 12
Lord Hastings v North-Eastern Ry Co 1897 H 1,564 Aug 14
Clerical, Medical, and General Life Asɛce Soc v Rogers 1897 C 1,053
Aug 14

Harper & Battcock v Lewis 1897 H 2,035 Aug 24
Horton v Redfern 1897 H 2,631 Aug 28
Paynter v Galindez Bros 1897 P 397 Oct 20

Howson v Dunlop Pneumatic Tyre Co, ld 1897 H 3,758 Oct 23
Hoskin v J Shoolbred & Co 1897 H 1,276 Oct 25

Shurey ▾ Kinnis & Co 1897 S 1,063 Oct 26

Allen v Pyatt & Co 1897 A 522 Oct 30

Huntly-Gordon v Hall 1896 H 2,964 Nov 1

Bergheim v Bryan 1897 B 2,080 Nov 1
Jones v Koral 1897 J 514 Nov 8

Gompertz (trading, &c) v The Credit Reform Assoc
Nov 8

THIRD SCHEDULE.

From Mr. Justice ROMER.

among other suggestions, have been made: (1) That professional money lenders should be registered. (2) That professional money lenders should be compelled to take out a licence to be granted to a person only in his own name. (3) That the minimum limit of bills of sale should be raised from £30 to £50; in other words, that bills of sale for less than £50 should be illegal. (4) That the provision in the Bills of Sale Act, 1878 (repealed by the Amendment Act, 1882, as regards bills of sale by way of security), that bills of sale should be attested by a solicitor, and state that the document had been previously explained by him, should be re-enacted; or, in substitution, that attestation should be before a registrar of a county court. (5) That it should be made a criminal offence for professional money lenders to issue false and misleading advertisements. (6) That power should be given to the court to fix a fair rate of interest in all cases where there is anything unfair or oppressive in the bargain. (7) That the practice of interference with contracts by professional money lenders should be assimilated to that which is adopted by courts of equity in setting aside "unconscionable bargains made with expectant heirs and reversioners." (8) That further discretionary powers should be given to county court judges. The committee con1896 W 3,885 sider that their remarks and suggestions may conveniently follow the order of these suggestions. While recognizing the advantages which would accrue from the check which proper registration and licensing would put upon professional money lenders, the committee consider that such a measure is not practicable. They see difficulty in giving a legal definition of a "professional money lender" so as to confine it to the class concerned with the mischief to be dealt with, and to avoid bringing in bankers, financial and trust companies and firms, discount houses, stockbrokers, solicitors, insurance companies, and others, who lend money with or without security. which has been expressed that professional money lenders, if registered They also agree in the opinion and licensed, would make use of that fact in pushing their trade, and thus obtain additional power over the unwary. The committee also think that if registration were practicable, the registers would not in practice be

Barnes v de Montmort 1896 B 2,846 July 29
In re Chard, Chard v Chard 1897 C 565 Aug 4
In re the Marie Rose Gold Mining Co, ld, & Co's Acts (ex parte
motion entered in witness list Aug 4

In re the Sharkington Combined Pick and Shovel Syndicate, ld

In re the Same (ex parte Brand) motion entered in witness list

entered in witness list Aug 6

Anderson v Anderson 1896 A 1,564 Aug 10
Jackson v Horner 1897 J 863 Aug 10

Rawson)

Aug 4

motion

resorted to by the classes for whose protection they would be intended. | Moreover, to be of any use, the entries on the register must be renewed at frequent intervals, and a system of supervision would be needed to ensure compliance with the law and to prevent its becoming a dead letter. The proposal that professional money lenders should be compelled to trade only in their own names, also involves the practical difficulty of defining professional money lenders in such a way as to include only the so-called professional money lender and to exclude bankers and others who lend money. There are many firms and companies who trade under names which do not indicate the individuals who actually carry on the business, and it would seriously interfere with business if this long-established custom were prohibited. The committee approve of the proposal that the minimum limit of bills of sale should be raised from £30 to £50, and that bills of eale for less than £50 should not be allowed. In some cases it may no doubt happen that a bill of sale is the only security which borrowers in great need can offer, and the restriction may shut out all chance of help. But those cases must be comparatively few, while the cases of oppression by the means of small bills of sale are numerous. The committee are of opinion that the rate of interest on bills of sale might be limited to 15 per cent. per annum on bills of sale to secure £100 and under, and 10 per cent. per annum on bills of sale to secure over £100, following the principle of the Pawnbrokers Acts. The committee are also in favour of the re-enactment of the provision in the Bills of Sale Act, 1878, that bills of sale should be attested by a solicitor, and that the attestation should state that the effect had been explained to the grantor by the attesting solicitor. It is considered that this safeguard constitutes a valuable check upon usurious bills of sale, and tends to ensure that illiterate borrowers do not sign documents without proper knowledge of their contents. With deference to the weighty opinions expressed before the select committee, the committee consider that the suggestion to make it criminal for professional money lenders to issue false and misleading advertisements and circulars is not capable of being carried out in practice, much as they would wish to see some remedy of this character put in force to check the evils of such advertisements and circulars. Suggestions of this kind would meet with universal approval provided they could be made operative and be restricted to the classes of cases intended; but it seems to the committee that any proposals dealing with money lending advertisements as such must of necessity go beyond the limits intended, and might produce disastrous results. The committee consider that the chief remedy for the evils under consideration must be sought in the direction indicated in the proposals that unjust and oppressive transactions should be revised by the courts of law, including county courts, and, in proper cases, a fair rate of interest fixed. It is no doubt a serious thing to meddle with freedom of contract, but the Legislature has seen fit to do so on more than one occasion, and to prohibit certain classes from contracting themselves out of protective statutes. It would be still more serious to interfere with banking and mercantile business or to place any obstacle in the way of ordinary commercial transactions. But the remedy of granting relief by the court against unconscionable bargains does not necessarily involve interference with freedom of contract. It is more analogous to cases where contracts are avoided as being against public policy, and it is assumed that the suggested legislation need not forbid contracting out, because the remedy will, of necessity, override any contract. In all ages and in all countries endeavours have been made by legislation to deal with the evils of money lending at high rates of interest, but with small success, as will be seen on reference to the useful book on "The Law of Unconscionable Bargains," by Bellot & Willis, recently published. An interesting history of the efforts to repress usury and hard dealing, and of the shifts of money lenders is there given, together with the reasons which led to the total abolition of the Usury Acts in 1854. The extreme difficulty of dealing with the evil by repressive legislation is there abundantly illustrated. But, even while the usury law existed, extensive classes of transactions were always free from restriction. Among these may be mentioned contracts in a foreign country or loans to be repaid abroad, and cases where the right to recover the money lent is put in jeopardy. As instances of the latter class may be mentioned sums lent on bottomry or at respondentia, and also annuities for lives or other contingencies. Moreover, in ordinary banking and mercantile transactions, commission in addition to interest is frequently charged, and when money is dear the commission may be at a high rate. Legislation would be disastrous which interfered with such transactions, especially in times of panic or financial embarrassment. Cases, too, not unfrequently occur in which money is lent at great risk, and consequently at large interest, where no unfair advantage is taken by the lender. For these reasons the committee are of opinion that restrictive legislation attempting to re-introduce to any extent the laws against usury, or fixing a maximum rate of interest in the case of professional money lenders, is undesirable, except in the cases of bills of sale. In their opinion legislation in the direction of rectifying unconscionable bargaius is more likely to be attended with success in remedying the undoubted evils attendant upon the present system of money lending by professional money lenders. The committee suggest that the legislation might take the form of a declaration that the law against unfair dealings might be enforced by order of any judge or master of the High Court, or of any judge or registrar of the county courts, declaring the bargain unfair, or the rate of interest excessive, and substituting a lower rate of interest or other modification of the contract, as occasion may require. It has been suggested that the practice of the High Court exercising its equitable jurisdiction in setting aside unconscionable bargains with expectant heirs and reversioners should be adopted. It may be remarked that this doctrine of the court is not confined to the Chancery Division nor to bargains with expectant heirs or reversioner. In more than one case eminent Common Law judges have applied the same doctrine. Lord Mansfield, C.J., did not

hesitate in several actions in the King's Bench to grant relief in cases of hard and unconscionable bargains, and Lord Chancellor Hardwicke, in Chesterfield v. Jansen, stated that there were instances where the common law had given relief, giving as an example a case before Hyde, J., in 1663. In another case, Thornbury v. Whitacre, a court of law stated that in the event of the case going to trial the jury would consider the folly of the defendant and give only reasonable damages. There are, in fact, numerous cases in the reports from the leading case of Chesterfield v. Jansen, decided in 1750, down to the present time, to prove that relief may be given in all cases where, from the circumstances or conditions of the parties contracting, or from weakness on one side or usury on the other, or extortion or advantage taken of that weakness, the presumption of fraud arises, and that fraud in this sense does not mean deceit or circumvention, but it means an unconscientious use of the power arising out of these considerations and conditions. The late Denman, J., in Neville v. Snelling (15 Ch. D. 679), said that the doctrine might be applied to all cases of undue advantage taken by money lenders. At the same time a mere high rate of interest will not be conclusive, because, as was pointed out by Byles, J., a merchant or a manufacturer under pressing necessities may require an immediate advance, and the security he can offer may be such that some additional interest in the nature of a premium of insurance against the risk may be required, or the demand for temporary financial accommodation may be so great that the supply may not be commensurate with the demand. In such cases it may be absolutely essential in the manufacturer's or merchant's interest, and for the benefit of the whole community, that lenders should be at liberty to advance money at high rates of interest. The county courts having only a limited equitable jurisdiction have not power to give effect to the equitable doctrine of relief against unconscionable bargains. Under the County Courts Act, 1888, s. 67, the jurisdiction in equity is limited to eight classes of actions or matters, and no action not coming within those classes can be safely commenced in a county court. Actions for relief against fraud or mistake are included, but they do not, it is conceived, embrace cases in which the presumption of fraud arises from the circumstances of the parties. It might be convenient that any new Act of Parliament should contain a preamble shewing that it is directed against the evils attendant upon the system of money lending by professional money lenders at high rates of interest, or under oppressive conditions as to repayment, and especially in cases where misleading advertisements or circulars have been resorted to, or where young or aged or ignorant persons or married women have been concerned, or persons under fear of publicity to themselves or their friends, or where the business is carried on under false or misleading names. The object of such a preamble (and there are many precedents in forcible language in the old statutes against usury) would be to indicate the class of cases in which the court is expected to interfere, and not to specify or limit the circumstances which would justify interference. The committee think that it would not be expedient to attempt in any such Act of Parliament to define the cases which should constitute unfair dealing, or that legislation should be limited to lending money at high rates of interest. Such transactions may be carried on under many specious disguises, such as sale and re-purchase of goods, or hire and purchase of goods, or the loan of property, or they may take the form of mortgage transactions, or annuities on lives or other contingencies. What seems desirable is that it should be recognized that in all cases the court, of its own initiative, and without any request on the part of a defendant, should have power at any time to set aside or rectify any dealing or bargain where the parties have not been on equal terms, and where any advantage has been taken by one party against the other, either from necessity, or pressure, or ignor ance, and to open up any accounts or transactions purporting to have been closed under such conditions, and to go behind and set aside any judgment of the court, and to order repayment of any amounts already paid in excess of the amount held by the court to be reasonable. The committee think that any proposed legislation might also enable the county court to restrain a grantee under a bill of sale from removing or selling chattels or otherwise as provided by the Bills of Sale Act, 1882, s8. 7. And that in money lending transactions the lender should be bound to furnish at the time to the borrower and his surities, if any, copies of every document signed by him or them, and that any breach of this duty should be taken into consideration by the court upon any question of unfair dealing. It is also thought that it should be a matter for consideration in the drafting of any Bill dealing with the money lending question whether transactions of the nature of renewals of loans should be valid between judgment debtor and judgment creditor so long as the judgment remains unsatisfied. And further, that the powers of the county court to order payment by instalments should be extended to judgments for sums exceeding £20, and that the power given by section 153 of the County Courts Act, 1888, in cases such as sickness should be extended to all cases of money lending, if for any reason the defendant is unable to discharge the debt or damages. There is another point to which the committee attach especial importance, and that is that the process of obtaining such relief should be easy, inexpensive, and not accompanied with unnecessary publicity. It is a matter of common experience that the business of professional money lenders depends to a large extent on the fact that needy borrowers cannot, or will not, face publicity. The committee therefore recommend that the proposed Act of Parliament should enable either party to invoke the aid of the court privately, and not necessarily on a trial in open court. It is suggested that this end might be attained by giving a right in any existing action or proceeding to either party to have any question of unfair dealing referred without pleadings or any interlocutory proceeding in the Queen's Bench Division to an official referee, and in the Chancery Division to a master or judge in chambers; and in the county courts to the registrar, or judge, sit

ting in chambers. And that, where there is no existing action or suit, proceedings might, without writ or pleadings, be commenced by originating summous for plaint, asking relief against unfair dealings, and be disposed of in chambers. The committee are of opinion that the evils of the existing system of money lending would be to a large extent remedied if the relief could be granted without publicity. In many cases needy borrowers are deprived of any independent advice or protection when they have recourse to professional money lenders, and they submit to any conditions for immediate and secret relief. In conclusion the committee recommend that the following suggestions be communicated to the Parliamentary Select Committee: (1) To raise the minimum limit of bills of sale from £30 to £50, and to limit the rate of interest to 15 per cent. per annum on bills of sale to secure £100 and under, and to 10 per cent. per annum on bills of sale to secure over £100. (2) To re-enact the provision in the Bills of Sale Act, 1878, that bills of sale should be attested by a solicitor, and that the attestation should state that before the execution of the bill of sale the effect had been explained to the grantor by the attesting solicitor. (3) To give a borrower under a bill of sale liberty to repay a loan, nominally payable at a fixed date or by instalment, by tendering, at any time, the principal sum with interest at the rate specified, together with fourteen days' interest in lieu of notice. (4) To declare and extend the powers of the High Court and county courts so as to enable them to interfere as referred to above where there has been oppression or unfair dealing, and especially that this relief should be rendered available without unnecessary publicity.

SOLICITORS' BENEVOLENT ASSOCIATION.

The usual monthly meeting of the board of directors of this association was held at the Law Institution, Chancery-lane, on Wednesday, the 11th inst., Mr. Henry Morten Cotton in the chair. The other directors present were: Messrs. Wm. Geare, J. R. B. Gregory, Augustus Helder, M.P. (Whitehaven), F. Rowley Parker, Richard Pennington, J.P., Sidney Smith, and J. T. Scott (secretary). A sum of £250 was distributed in grants of relief, twelve new members were admitted to the association, and other general business transacted.

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Carlyle, Thomas Fairfax

Carvalho, Samuel Nunes Castellan, Charles Ernest

Edmunds, William Rees Evans, Cecil Wilfrid

Farmer, Frank Morley

Farrar, James Gill Lister
Fraser, James Scholfield
Fream, Ralph

Galloway, Thomas Percival, B.A.
(Oxon.)

Geare, John Walter
Gosden, Oscar George
Gregory, Charles Lewis

B.A. Griffiths, Trevor Coleridge

Cayley, Norman, B. A. (Camb.)
Chadwick, Richard Stanley
Clarke, Charles Neville
Clarke, Leslie, B.A. (Oxon.)
Clarke, Stephen Hardcastle, B.A.
(Oxon.)

Coe, Charles Graburn, B.A. (Camb.)
Cook, George Rope
Cooper, John Campbell
Cottam, Charles Edmondson, B.A.
(Camb.)

Crow, Percy Falshaw Castlereagh
Thompson

Cuthbert, Robert Frederick
Dawby, Edward Sherman

Deans, John

Davies, Daniel John

Davis, Sydney Carlile

Davson, Arthur Mackenzie, (Camb.)

Derry, William

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Guerrier, Arthur Philip

Guillet, William Percy

Haines, George Emeris

Hannay, Erskine

Harral, Francis Monckton

Harrison, William Robinson
Harvey, George

Hobbs, Ernest William, M.A. (Edin.)
Hodgkinson, Robert Frank Byron
Hopkinson, Charles Alden
Horden, John

Horton, Charles Ernest
Howard, George Frederick Thomas
Howarth, Humphrey, B.A. (Camb.)
Howe, Harry

Humphrey, William Murray
Jenner, John Henry
Johnstone, William Yuile
Jones, William Llewelyn
Kelly, Charles Edward
Kendrick, Henry Haden
Lambert, Thomas
Larken, Edmund
Lawrence, John Gerald
B.A. Lemon, Allan Bruce
Longhurst, Alfred Melville
Longinotto, Leo

McBean, Alexander Hamilton
Maitland, Max Gray

Marshall, William Leslie

B.A. Marten, Charles Joseph

Martyn, Gerald Stephen

Dundas, Charles Percival During Meggy, Harry

Eaden, Harold

Meyer, Herb

Ellis

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The following candidates (whose names are in alphabetical order) were successful at the Final Examination held on the 18th and 19th April, 1898:

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