Alteration and indemnity
The LRA 2002, Schedule 4 contains the current relevant principles on alteration and indemnity. A key feature of Schedule 4 is that ‘rectification’ of the register is now confined to a change ‘which prejudicially affects the title of a registered proprietor. i.e situations where a registered proprietor ‘loses’ something registered in his name. Rectification only now occurs when due to a mistake, someone has been wrongly registered as owner. All other changes to the register are now called ‘alterations’. Rectification will only be given against a registered proprietor who is in possession of the land if:
(a) he has by fraud or lack of proper care caused or substantially contributed to the mistake;
or
(b) it would for any other reason be unjust for the alteration [rectification] not to be made. (Schedule 4, paragraph 6(2)).
Schedule 8 of the 2002 Act covers indemnity. Generally a registered proprietor against whom rectification is ordered will be entitled to compensation, to the value of the interest he loses; the Chowood rule will still apply.
Further, under Schedule 8 paragraph 5(1), no indemnity is payable where the claimant’s loss is wholly or partly due to his own fraud, or wholly due to his own lack of proper care. A rule similar to contributory negligence in the law of tort also operates under paragraph 5(2). If a person is refused rectification, he or she may still receive an indemnity payment under Schedule 8 paragraph 1(b).
SETTLEMENTS
Settlements are beneficial interests in land created in favour of a series of persons. The rules for settlements were changed greatly in 1925; this was designed partly to prevent the creation of long-lasting settlements, and partly to overcome various problems with the old doctrine of ‘strict settlements’. Today all settlements take effect as trusts for land under the Trusts of Land and Appointment of Trustees Act 1996 (TLATA), although some problems still exist. You need to understand the problems under the old law so that you will be able to appreciate the major changes introduced by TLATA.
Background to settlements
The broad purpose of a settlement is to create a series of beneficial interests in favour of a succession of persons. So, if S wants to transfer his land to A for life, then to B in fee simple, this will be a settlement. Historically, settlements were used particularly by the wealthy and the aristocracy in order to keep land in the ownership of one family for a very long time, preventing its fragmentation. In 1925 there were several key reforms to deter the creation of long-lasting settlements, including: a limitation upon the length of time for which they could run (the rule against perpetuities, of which you do not need to know the details); punitive tax regulation; and the Settled Land Act 1925, which introduced complex and costly rules for the running of ‘strict settlements’, a particular form of settlement which created consecutive interests in the land e.g. to A for life, then to B absolutely.
Since 1925, all strict settlements must involve a trust. But, as is indicated below, it became clear that strict settlements were beset by problems for all involved and they were largely replaced by ‘trusts for sale’. The terminology is however difficult: strict settlements (which can no longer be created) were only one form of settlement, and the term ‘strict settlement’ is still sometimes used to describe a chain of successive interests in land. Until 1997 a trust for sale operated whenever concurrent interests were created in land (e.g. where it was held by a cohabiting couple, co-ownership), or where the term ‘trust for sale’ was applied expressly to a settlement creating consecutive interests. Again, it became clear that the trust for sale was not the most appropriate mechanism for family arrangements which created beneficial interests in land, since its logic was that the trustees of the land had a duty to sell it but only a power to postpone sale; a family rarely views land as only a financial asset, and far more frequently buys land for the primary purpose of retaining it as a home rather than selling it.
The greatest change in this area came in 1997 when a key 1996 statute came into force. While formerly a settlement of land was created either by way of strict settlement, where the purchaser took his title from the tenant for life under the SLA 1925, or by way of trust for sale, where he took it from the trustees for sale, today all settlements take effect as trusts for land under the Trusts of Land and Appointment of Trustees Act 1996 (TLATA 1996 ss.2, 4, 5). The Act came into force on 1 January 1997. Existing SLA settlements are unaffected and will continue to be governed by the complex rules summarised below, but as no new SLA settlements can be created, this area of the law will become increasingly less important, though there are a number of significant pre-1997 cases to appreciate which you will still need an understanding of the scheme of the SLA. All trusts for sale (existing and future, express and implied) now take effect as trusts of land and are governed to a large extent by the TLATA. Thus the focus of your reading should be firmly upon trusts of land under TLATA; it is important to remember that strict settlements are obsolete except for the very few historical ones which still exist; and that there are no longer any trusts for sale.
Cases on trusts for sale will however be useful in interpreting some of the rules of the trusts of land which now replace them. It is important to understand the fundamental difference between a settlement of land (where two or more persons have successive interests in the same land, now almost always under a trust of land) and co-ownership (where two or more persons have concurrent interests in the same land, again now under a trust of land). While the same mechanism now governs both, they are conceptually and historically different.
Strict settlement
SLA 1925 s.1(1) defined a settlement as an instrument under which land stands limited in trust for any persons by way of succession or for an infant in possession for an estate in fee simple or for a term of years absolute. This means that whenever successive interests in land were created, a strict settlement arose, as in the simple example used above: ‘to A for life, then to B absolutely’, or even ‘to A for life, remainder to B for life, remainder to C absolutely’. After 1925 a settlement under the SLA had to be created by two deeds:
1 a vesting deed, which vests the legal fee simple in the tenant for life, describes the property and names the trustees, and
2 the trust instrument, which declares the trusts arising under the settlement.
Where the settlement was made by will, the will constituted the trust instrument and the executors made a vesting assent in favour of the tenant for life. In this way the legal estate was separated from the beneficial interests, as has long been the case with trusts for sale. If no vesting deed was executed the tenant for life or statutory owner could require the trustees of the settlement to execute one (SLA 1925 s.9(2)), and until this was done, no disposition of the land inter vivos could operate to pass a legal estate, unless it was made in favour of a purchaser without notice of the fact that the tenant for life or statutory owner had become entitled to have a vesting deed executed in his favour (SLA 1925 s.13, the ‘paralysing
section’, so-called because it is designed to prevent evasion of the Act by making it generally impossible to dispose of the legal estate).
To illustrate the SLA machinery, suppose that in 1950 land is settled by will on A for life, remainder to B for life, remainder to C in fee simple. The will is the trust instrument and the executors must execute a vesting assent in favour of A. A now holds the legal estate on trust for himself for life and for B and C. Since 1925 life interests and future interests are necessarily equitable. On A’s death the settlement continues. The legal estate vests in A’s special personal representatives (the trustees of the settlement) and B may call on them to vest the legal estate in him, which he will then hold on trust for himself and C. On B’s death the settlement is at an end. The legal estate devolves on B’s general personal representatives
who are bound to convey it by ordinary assent to C, the absolute owner. (The remaining discussion of a strict settlement assumes that the settlement was created validly before 1997.)
Roles and rights
Tenant for life
The tenant for life is defined as any person who is of full age and beneficially entitled to possession (SLA 1925 ss.19, 20) and in the rare cases where there is no tenant for life or the tenant for life is a minor, the legal estate is to be vested in the statutory owner (usually the trustees of the settlement). Since 1925 the legal estate and the statutory powers are vested in the same person (usually the tenant for life) to hold on trust for those entitled under the settlement. The tenant for life has considerable powers, the most important of which (the powers to sell, lease and mortgage) are exercisable upon giving notice to the trustees of the settlement. There are certain statutory restrictions on the exercise of these powers (SLA 1925 ss.41, 71) and dispositions which do not comply with the requirements of the Act are void (s.18), but as long as the tenant for life acts bona fide, it appears that neither the trustees nor the court may interfere with the exercise of his or her powers.
The powers of the tenant for life are not assignable and although the settlement may confer upon him or her additional powers, any provision designed to cut down his or her powers is void (SLA 1925 s.106). Consider a proviso that the tenant for life is to forfeit her interest on ceasing to reside on the settled land. If the tenant for life ceases to reside in the exercise of his statutory powers (e.g. as a result of selling the land), the proviso is void, but if she ceases to reside for some other reason, the proviso is operative and his interest determines: see Re Ames and Re Acklom.A residence condition (a requirement that a tenant for life must reside on the settled land) can be more effectively enforced if the land is settled on a trust of land.
Trustees of the settlement
SLA 1925 s.30 defines who shall be the trustees of the settlement. Although the legal estate in the settled land is not vested in them as trustees, they have important functions in relation to the settlement. They give consent to certain transactions and they receive notice from the tenant for life of his intention to effect certain transactions. Moreover, they receive and hold capital money (e.g. money arising from the sale, lease or mortgage of the land) and they must apply it in one of the ways set out in the SLA s.73, as the tenant for life may direct.
Purchaser of settled land
A purchaser is not entitled to see the trust instrument and he or she is entitled and bound to assume that the particulars in the vesting deed are correct (SLA 1925 s.110(2)). A purchaser dealing in good faith with the tenant for life is taken – as against all parties entitled under the settlement – to have given the best price that could reasonably be obtained, and to have complied with all the requisitions of the Act (SLA 1925 s.110(1)). Provided that he pays the purchase money to the trustees of the settlement, to a trust corporation or into court (as the tenant for life may direct), he gets a good title; the beneficial interests under the settlement are overreached and take effect in the purchase money. The general scheme is clear: the beneficiaries are protected by the requirement that the purchaser pay the purchase money to the trustees of the settlement and the purchaser is protected as long as he or she complies with the provisions of the Act.
Problems with strict settlements
Strict settlements were a strange anomalous form of trust, with trustees who had few real powers and with the most important powers given to the life tenant, a beneficiary. There were also very old-fashioned restrictions upon the life tenant’s ability to dispose of the land other than by sale, e.g. he could not lease it for more than fifty years, and the ability to mortgage the land for such an important reason as to raise money with which to improve the land was severely limited. The documentation required was complex and the wording of the SLA was antiquated. Further, although most lawyers avoided them whenever possible, strict settlements could be created accidentally, particularly when a person wrote his own will and thus created successive interests (e.g. ‘my house is to go to my husband for his life, and then to our son’). The husband in that example would have a power to sell the house as life tenant, with nobody able to prevent him from doing so.
Trusts for sale: Between 1925 and the beginning of 1997, the express creation of ‘an immediate binding trust for sale’ was the method of avoidance of strict settlements. A trust for sale essentially gave the trustees of the land a duty to sell it, and a power to postpone the sale. This was a very artificial way of looking at most land ownership since the equitable interests behind the trust attached to the proceeds of sale rather than to the land itself, with the help of overreaching. The consent of named persons could be required for a sale, and this was sometimes used to make the exercise of the duty of sale difficult. Since the duty to sell was paramount, if one trustee wanted a sale then he could impose his decision on the other(s). Section 30 of the Law of Property Act 1925 gave a discretion to the courts in deciding whether a sale should be imposed in spite of contrary wishes, and a great deal of case law was generated on the issue of how a court should balance competing desires of beneficiaries to sell the land or reside on it. There was also until 1955 a denial that beneficiaries had any right to occupy the land held on trust for sale! See Lord Denning’s speech in Bull v Bull
SG08 Land law.indb 51 18/08/2008 12:10:16[1955] 1 All ER 253 where he held that a beneficiary did have the right to occupy the land; this has been almost universally accepted since. The main problem with the trust for sale’s application to land law was that its premise was simply incompatible with the nature of family trusts of land: a duty to sell, the doctrine of conversion and the initial denial of a beneficiary’s right to occupy the land are not a good fit with the reality of the situation where land provides a home and people care about more than its value as a financial asset.
Trust of land: According to s.1 of TLATA 1996, ‘trust of land’ means ‘…any trust of property which consists of or includes land…’, whether express, implied, resulting or constructive, and whether created before or after the Act itself came into force, except for existing strict settlements. Where a settlement takes effect by way of a trust of land (as all post-1996 settlements will), the legal estate is vested in the trustees of land. All trusts for sale of land are thus converted into ‘trusts of land’. Trustees of land have broader powers than those previously enjoyed by trustees for sale under the LPA ss.28 and 29 (TLATA 1996, ss.6–9), including the power to delegate any of their powers to beneficiaries of full age beneficially entitled to possession. Unlike pre-1997 trustees for sale, they are under no duty to sell the land (TLATA 1996, ss.4, 5). The doctrine of conversion (whereby the interest of a beneficiary under a trust for sale was regarded as an interest in personal property) is abolished (TLATA 1996, s.3), but the overreaching machinery (whereby on payment of the purchase money to two trustees or a trust corporation the interests of the beneficiaries are overreached) is retained. Beneficiaries will generally have the right to occupy the trust land (TLATA 1996, ss.12, 13).
The rules relating to consents and consultation are similar to those which applied to trusts for sale and which were formerly contained in the LPA s.26, but TLATA ss.14 and 15 go much further than LPA s.30 in their provisions, allowing a trustee or beneficiary to apply to the court for an order relating to the exercise of the trustees’ functions, and in the provisions setting out the matters to be considered by the court in determining such an application. It is important that you fully understand the effect of the TLATA on both settlements of land and the co-ownership of land. Co-ownership is considered in Chapter 5, where we shall return to TLATA in more detail.
Strict settlements were a historical method of keeping land in the family for generations. Trusts for sale saw land as just an investment. TLATA has replaced both with a ‘new’ trust of land (although some strict settlements do still exist), where trustees have power to either sell or to retain the land. Both strict settlements and trusts for sale had disadvantages for the beneficiaries and strict settlements in particular were unnecessarily complex. The new trust of land has many advantages over its predecessors, and the courts have a clear role in resolving disputes between trustees and/or beneficiaries. Trustees of land now have the same powers as if they were absolute owners of the land (subject to contrary provisions in the trust instrument), and so are much freer to deal with the land in accordance with the true purposes of the trust. But they also have corresponding duties to consult the beneficiaries and to exercise reasonably their discretion about matters such as which beneficiary may occupy the land. We shall return
Thursday, November 5, 2009
Wednesday, October 21, 2009
COMMERCIAL LAW
Distributorship and franchise The distributor or franchisee is a principal who sells a particular brand of product (e.g. Volkswagen cars) or runs a business developed by the franchiser. The consumer, who buys goods from either type of business, enters into a contract with the immediate seller and not with the original supplier or franchiser. Whether someone is an agent or a principal will depend on the particular circumstances: for example, was it the intention of the parties that goods supplied would be resold by the recipient acting as principal, or that the goods would be sold on behalf of the principal. See WT Lamb & Sons v Goring Brick Co [1932] 1 KB
The key characteristics of an agency are:
a) The agent acts on behalf of another (the principal) so
that the principal is bound and can sue or be sued by
the third party on the contract made by the agent
b) the agent is not liable on the contract between the
principal and the third party
TYPES OF AGENTS
General agent and special agent
A general agent acts for a principal in the ordinary course of that agent’s business; a special agent has authority only for a particular purpose that is not part of the ordinary course of
business for such an agent. A solicitor would be a general agent if authorised to undertake a range of legal work for a client, but a special agent if only authorised by the client to sell a house.
Factor and mercantile agent
A factor is an agent who is entrusted with the possession of goods or documents of title to goods and who is allowed to sell them in the factor’s own name as a principal (Baring v Corrie [1818] 2 B & Ald 137) or in the principal’s name (Stevens v Biller [1883] 25 Ch D 31). The factor has generally been superseded by the mercantile agent.
A mercantile agent is an agent who, in the customary course of business, has authority to sell or to consign goods for sale, or to buy goods, or to raise money on the security of goods (Factors Act 1889, s.1(1)). The general rule is that handing over goods or documents of title to another does not give that person authority to sell, so that anyone buying the goods will not acquire good title: handing over a car to a mechanic for repair does not constitute an authority to sell the car. A disposition by a mercantile agent is an important exception to this general rule.
Factors Act 1889, s.1 (1), 2(1), (2); Weiner v Harris [1910] 1 KB 285;Official Assignee of Madras v Mercantile Bank of India Ltd [1935] AC 53; Jerome v Bentley & Co [1952] 2 All ER 114). Of course, while the Factors Act provides the third party with rights in the goods so disposed, it does not exempt the mercantile agent from liability to the owner of goods for any breach of authority.
A mercantile agent must conduct a business of dealing in goods: a shop assistant sells goods in the course of the business of another (the shop owner) and, therefore, is not a mercantile agent (Lowther v Harris [1927] 1 KB 393; Sealy and Hooley, pp.343–5). The Factors Act does not expressly exclude the possibility of someone acting as a mercantile agent in a one-off sale, although it does refer to a mercantile agent as someone ‘having in the customary course of his business as such agent’ authority to dispose of goods, which might suggest past – or the prospect of future – such business.
Other agents
Broker: A broker negotiates contracts between a buyer and a seller without having possession of the goods or the documents of title (Baring v Corrie (1818) 2 B & Ald 137).
Produce brokers are key players in the commodity markets and exchanges. Some act for both buyers and sellers by virtue of the custom of particular markets.
Commission agent: A commission agent (or commission merchant) buys or sells goods on
behalf of the owner, but does not establish a contractual relationship between the owner and the third party. The commission agent acts as principal in the contract with the third party. Nevertheless, this agent owes to the owner all the duties of an agent to a principal.
In a sale the agent is liable to the third party (the buyer) for breach of the implied terms as to quality. In a purchase of goods, the agent is liable to the third party (the seller) for the price, but is not liable to the principal for the quality of the goods. Such agents are familiar in civil law jurisdictions. But there has only been a limited acceptance of the idea in English law (Ireland v Livingston (1872) LR 5 HL 395; Robinson v Mollett (1875) LR 7 HL 802) and, in spite of the attractions of this type of agency, it cannot be regarded as part of English law (but
see Aluminium Industrie Vaassen bv v Romalpa Aluminium Ltd [1976] 1 WLR 676, section
The concept of someone who is simultaneously principal and agent does not fit
easily into English agency law because it does not conform to the idea of an agent as one who is able to alter the legal relations between the principal and a third party. English law has, instead, opted for the much less satisfactory idea of the undisclosed principal (see section 3.2).
Confirming houses Confirming houses act for overseas buyers wishing to obtain goods
in English markets. The confirming house can operate in a number of different ways, according to the wishes of the buyer. A confirming house may simply buy and sell without any suggestion of agency, or it may act as an agent for the buyer, or it may act as agent for the buyer and separately undertake to the seller that the buyer will perform (known as confirmation) (see Sobell Industries Ltd v Cory Brothers & Co [1955] 2 Lloyd’s Rep 82).
Forwarding agent A forwarding agent undertakes the transmission of goods for the
principal and is personally liable for the freight charges, which are recoverable from the principal. Such an agent must also exercise reasonable care in relation to the goods.
Del credere agent A del credere agent indemnifies the principal against loss incurred by the third party’s breach of contract in respect of payment, although not in respect of any other breach (Gabriel & Sons v Churchill & Sim [1914] 3 KB 1272). An exporter, who is uncertain about the financial status of a foreign buyer, might find such a guarantee attractive, although the modern tendency is to obtain a confirmation from a confirming house or to rely either on a documentary credit, under which a bank pays the seller on the presentation of certain documents (see Chapter 8), or on credit guarantees, which provide that in the event of the
buyer failing to pay the guarantor will be liable.
CREATION OF AGENCY:
An agency may be created by express agreement between the principal and the agent, where there is a representation by the principal to a third party that the agent has authority (agency by estoppel), where the principal ratifies an act without prior authorisation, where there is an agency of necessity and where agency arises under statute (Sale of Goods Act 1979, s.48(3), RV Ward Ltd v Bignall (1967)
Consent
An Agency is created by the consent of both parties. Where an agency is created by agreement no formalities are normally required. Acting out of friendship or without payment does not preclude agency (Chaudhry v Prabhakar [1989] 1 WLR 29). The appointment may be made orally or inferred from the conduct of the principal. The agent may accept expressly of inferred. For agency to exist,the agent must have some autonomy and not merely perform ministerial function. However, lack of total control does not preclude agency (stockbrokers,etc). If the parties put their agreement into a contractual document, then the court will interprete this as their true intention AMB Imballaggi Plastici SRL v Pacflex Ltd [1999] 2 All ER (Comm) 249; Mercantile International Group plc v Chuan Soon Huat Industrial Group plc [2002] EWCA Civ 288).
Power of attorney
It is commonplace to appoint an agent by executing a power of attorney under the Power of Attorney Act 1971 to overcome the practical difficulties the agent might have in establishing their authority to the satisfaction of third parties. The Enduring Powers of Attorney Act 1985 permits a power of attorney that will continue in spite of the subsequent mental incapacity of the donor, although in that situation the attorney (that is, the agent) must not act (subject to certain xceptions) until the power of attorney has been registered by the court. Under the Act the attorney and third parties are entitled to protections in certain situations where the power of attorney proves to be invalid or is revoked (s.9, Enduring Powers of Attorney Act 1985).
Normally, an agency will be established by consent of both parties. The parties can create the agency by a written agreement (for example, power of attorney), but it is also possible to imply the existence of the agency from the spoken words or the conduct of the parties.
The key characteristics of an agency are:
a) The agent acts on behalf of another (the principal) so
that the principal is bound and can sue or be sued by
the third party on the contract made by the agent
b) the agent is not liable on the contract between the
principal and the third party
TYPES OF AGENTS
General agent and special agent
A general agent acts for a principal in the ordinary course of that agent’s business; a special agent has authority only for a particular purpose that is not part of the ordinary course of
business for such an agent. A solicitor would be a general agent if authorised to undertake a range of legal work for a client, but a special agent if only authorised by the client to sell a house.
Factor and mercantile agent
A factor is an agent who is entrusted with the possession of goods or documents of title to goods and who is allowed to sell them in the factor’s own name as a principal (Baring v Corrie [1818] 2 B & Ald 137) or in the principal’s name (Stevens v Biller [1883] 25 Ch D 31). The factor has generally been superseded by the mercantile agent.
A mercantile agent is an agent who, in the customary course of business, has authority to sell or to consign goods for sale, or to buy goods, or to raise money on the security of goods (Factors Act 1889, s.1(1)). The general rule is that handing over goods or documents of title to another does not give that person authority to sell, so that anyone buying the goods will not acquire good title: handing over a car to a mechanic for repair does not constitute an authority to sell the car. A disposition by a mercantile agent is an important exception to this general rule.
Factors Act 1889, s.1 (1), 2(1), (2); Weiner v Harris [1910] 1 KB 285;Official Assignee of Madras v Mercantile Bank of India Ltd [1935] AC 53; Jerome v Bentley & Co [1952] 2 All ER 114). Of course, while the Factors Act provides the third party with rights in the goods so disposed, it does not exempt the mercantile agent from liability to the owner of goods for any breach of authority.
A mercantile agent must conduct a business of dealing in goods: a shop assistant sells goods in the course of the business of another (the shop owner) and, therefore, is not a mercantile agent (Lowther v Harris [1927] 1 KB 393; Sealy and Hooley, pp.343–5). The Factors Act does not expressly exclude the possibility of someone acting as a mercantile agent in a one-off sale, although it does refer to a mercantile agent as someone ‘having in the customary course of his business as such agent’ authority to dispose of goods, which might suggest past – or the prospect of future – such business.
Other agents
Broker: A broker negotiates contracts between a buyer and a seller without having possession of the goods or the documents of title (Baring v Corrie (1818) 2 B & Ald 137).
Produce brokers are key players in the commodity markets and exchanges. Some act for both buyers and sellers by virtue of the custom of particular markets.
Commission agent: A commission agent (or commission merchant) buys or sells goods on
behalf of the owner, but does not establish a contractual relationship between the owner and the third party. The commission agent acts as principal in the contract with the third party. Nevertheless, this agent owes to the owner all the duties of an agent to a principal.
In a sale the agent is liable to the third party (the buyer) for breach of the implied terms as to quality. In a purchase of goods, the agent is liable to the third party (the seller) for the price, but is not liable to the principal for the quality of the goods. Such agents are familiar in civil law jurisdictions. But there has only been a limited acceptance of the idea in English law (Ireland v Livingston (1872) LR 5 HL 395; Robinson v Mollett (1875) LR 7 HL 802) and, in spite of the attractions of this type of agency, it cannot be regarded as part of English law (but
see Aluminium Industrie Vaassen bv v Romalpa Aluminium Ltd [1976] 1 WLR 676, section
The concept of someone who is simultaneously principal and agent does not fit
easily into English agency law because it does not conform to the idea of an agent as one who is able to alter the legal relations between the principal and a third party. English law has, instead, opted for the much less satisfactory idea of the undisclosed principal (see section 3.2).
Confirming houses Confirming houses act for overseas buyers wishing to obtain goods
in English markets. The confirming house can operate in a number of different ways, according to the wishes of the buyer. A confirming house may simply buy and sell without any suggestion of agency, or it may act as an agent for the buyer, or it may act as agent for the buyer and separately undertake to the seller that the buyer will perform (known as confirmation) (see Sobell Industries Ltd v Cory Brothers & Co [1955] 2 Lloyd’s Rep 82).
Forwarding agent A forwarding agent undertakes the transmission of goods for the
principal and is personally liable for the freight charges, which are recoverable from the principal. Such an agent must also exercise reasonable care in relation to the goods.
Del credere agent A del credere agent indemnifies the principal against loss incurred by the third party’s breach of contract in respect of payment, although not in respect of any other breach (Gabriel & Sons v Churchill & Sim [1914] 3 KB 1272). An exporter, who is uncertain about the financial status of a foreign buyer, might find such a guarantee attractive, although the modern tendency is to obtain a confirmation from a confirming house or to rely either on a documentary credit, under which a bank pays the seller on the presentation of certain documents (see Chapter 8), or on credit guarantees, which provide that in the event of the
buyer failing to pay the guarantor will be liable.
CREATION OF AGENCY:
An agency may be created by express agreement between the principal and the agent, where there is a representation by the principal to a third party that the agent has authority (agency by estoppel), where the principal ratifies an act without prior authorisation, where there is an agency of necessity and where agency arises under statute (Sale of Goods Act 1979, s.48(3), RV Ward Ltd v Bignall (1967)
Consent
An Agency is created by the consent of both parties. Where an agency is created by agreement no formalities are normally required. Acting out of friendship or without payment does not preclude agency (Chaudhry v Prabhakar [1989] 1 WLR 29). The appointment may be made orally or inferred from the conduct of the principal. The agent may accept expressly of inferred. For agency to exist,the agent must have some autonomy and not merely perform ministerial function. However, lack of total control does not preclude agency (stockbrokers,etc). If the parties put their agreement into a contractual document, then the court will interprete this as their true intention AMB Imballaggi Plastici SRL v Pacflex Ltd [1999] 2 All ER (Comm) 249; Mercantile International Group plc v Chuan Soon Huat Industrial Group plc [2002] EWCA Civ 288).
Power of attorney
It is commonplace to appoint an agent by executing a power of attorney under the Power of Attorney Act 1971 to overcome the practical difficulties the agent might have in establishing their authority to the satisfaction of third parties. The Enduring Powers of Attorney Act 1985 permits a power of attorney that will continue in spite of the subsequent mental incapacity of the donor, although in that situation the attorney (that is, the agent) must not act (subject to certain xceptions) until the power of attorney has been registered by the court. Under the Act the attorney and third parties are entitled to protections in certain situations where the power of attorney proves to be invalid or is revoked (s.9, Enduring Powers of Attorney Act 1985).
Normally, an agency will be established by consent of both parties. The parties can create the agency by a written agreement (for example, power of attorney), but it is also possible to imply the existence of the agency from the spoken words or the conduct of the parties.
Thursday, May 7, 2009
Extract from the GCHQ case, Council of Civil Service Unions v Minister
Extract from the GCHQ case, Council of Civil Service Unions v Minister
for Civil Service [1985].
LORD DIPLOCK.
My Lords, the English law relating to judicial control of
administrative action has been developed upon a case to case
basis which has virtually transformed it over the last three
decades…
Judicial review, now regulated by R.S.C., Ord. 53, provides the
means by which judicial control of administrative action is
exercised. The subject matter of every judicial review is a
decision made by some person (or body of persons) whom I will
call the "decision-maker" or else a refusal by him to make a
decision.
….
For a decision to be susceptible to judicial review the decisionmaker
must be empowered by public law (and not merely, as in
arbitration, by agreement between private parties) to make
decisions that, if validly made, will lead to administrative action
or abstention from action by an authority endowed by law with
executive powers…. The ultimate source of the decision-making
power is nearly always nowadays a statute or subordinate
legislation made under the statute; but in the absence of any
statute regulating the subject matter of the decision the source
of the decision-making power may still be the common law itself,
i.e., that part of the common law that is given by lawyers the
label of "the prerogative." Where this is the source of decisionmaking
power, the power is confined to executive officers of
central as distinct from local government and in constitutional
practice is generally exercised by those holding ministerial rank.
It was the prerogative that was relied on as the source of the
power of the Minister for the Civil Service in reaching her decision
of 22 December 1983 that membership of national trade unions
should in future be barred to all members of the home civil
service employed at GCHQ.
…… there have unquestionably survived into the present day a
residue of miscellaneous fields of law in which the executive
government retains decision-making powers that are not
dependent upon any statutory authority but nevertheless have
consequences on the private rights or legitimate expectations of
other persons which would render the decision subject to judicial
review if the power of the decision-maker to make them were
statutory in origin. From matters so relatively minor as the grant
of pardons to condemned criminals, of honours to the good and
great, of corporate personality to deserving bodies of persons,
and of bounty from moneys made available to the executive
government by Parliament, they extend to matters so vital to the
survival and welfare of the nation as the conduct of relations with
foreign states and - what lies at the heart of the present case -
the defence of the realm against potential enemies. Adopting the
phraseology used in the European Convention on Human Rights
1953 (Convention for the Protection of Human Rights and
Fundamental Freedoms (1953) (Cmd. 8969)) to which the United
Kingdom is a party it has now become usual in statutes to refer
to the latter as "national security."
My Lords, I see no reason why simply because a decisionmaking
power is derived from a common law and not a statutory
source, it should for that reason only be immune from judicial
review. Judicial review has I think developed to a stage today
when without reiterating any analysis of the steps by which the
development has come about, one can conveniently classify
under three heads the grounds upon which administrative action
is subject to control by judicial review. The first ground I would
call "illegality," the second "irrationality” and the third
"procedural impropriety." That is not to say that further
development on a case by case basis may not in course of time
add further grounds. I have in mind particularly the possible
adoption in the future of the principle of "proportionality" which is
recognised in the administrative law of several of our fellow
members of the European Economic Community; but to dispose
of the instant case the three already well-established heads that
I have mentioned will suffice.
By "illegality" as a ground for judicial review I mean that the
decision-maker must understand correctly the law that regulates
his decision-making power and must give effect to it. Whether he
has or not is par excellence a justiciable question to be decided,
in the event of dispute, by those persons, the judges, by whom
the judicial power of the state is exercisable.
By "irrationality" I mean what can by now be succinctly referred
to as "Wednesbury unreasonableness" (Associated Provincial
Picture Houses Ltd. v. Wednesbury Corporation [1948] 1 K.B.
223). It applies to a decision which is so outrageous in its
defiance of logic or of accepted moral standards that no sensible
person who had applied his mind to the question to be decided
could have arrived at it. Whether a decision falls within this
category is a question that judges by their training and
experience should be well equipped to answer, or else there
would be something badly wrong with our judicial system. To
justify the court's exercise of this role, resort I think is today no
longer needed to Viscount Radcliffe's ingenious explanation in
Edwards v. Bairstow [1956] A.C. 14 of irrationality as a ground
for a court's reversal of a decision by ascribing it to an inferred
though unidentifiable mistake of law by the decision-maker.
"Irrationality" by now can stand upon its own feet as an accepted
ground on which a decision may be attacked by judicial review.
I have described the third head as "procedural impropriety"
rather than failure to observe basic rules of natural justice or
failure to act with procedural fairness towards the person who
will be affected by the decision. This is because susceptibility to
judicial review under this head covers also failure by an
administrative tribunal to observe procedural rules that are
expressly laid down in the legislative instrument by which its
jurisdiction is conferred, even where such failure does not involve
any denial of natural justice. But the instant case is not
concerned with the proceedings of an administrative tribunal at
all.
My Lords, that a decision of which the ultimate source of power
to make it is not a statute but the common law (whether or not
the common law is for this purpose given the label of "the
prerogative") may be the subject of judicial review on the ground
of illegality is, I think, established by the cases cited by my noble
and learned friend, Lord Roskill, and this extends to cases where
the field of law to which the decision relates is national security,
as the decision of this House itself in Burmah Oil Co. Ltd. v. Lord
Advocate, 1964 S.C. (H.L.) 117 shows. While I see no a priori
reason to rule out "irrationality" as a ground for judicial review of
a ministerial decision taken in the exercise of "prerogative"
powers, I find it difficult to envisage in any of the various fields in
which the prerogative remains the only source of the relevant
decision-making power a decision of a kind that would be open to
attack through the judicial process upon this ground. Such
decisions will generally involve the application of government
policy. The reasons for the decision-maker taking one course
rather than another do not normally involve questions to which, if
disputed, the judicial process is adapted to provide the right
answer, by which I mean that the kind of evidence that is
admissible under judicial procedures and the way in which it has
to be adduced tend to exclude from the attention of the court
competing policy considerations which, if the executive discretion
is to be wisely exercised, need to be weighed against one
another - a balancing exercise which judges by their upbringing
and experience are ill-qualified to perform. So I leave this as an
open question to be dealt with on a case to case basis if, indeed,
the case should ever arise.
As respects "procedural propriety" I see no reason why it should
not be a ground for judicial review of a decision made under
powers of which the ultimate source is the prerogative. Such
indeed was one of the grounds that formed the subject matter of
judicial review in Reg. v. Criminal Injuries Compensation Board,
Ex parte Lain [1967] 2 Q.B. 864. Indeed, where the decision is
one which does not alter rights or obligations enforceable in
private law but only deprives a person of legitimate expectations,
"procedural impropriety” will normally provide the only ground on
which the decision is open to judicial review. But in any event
what procedure will satisfy the public law requirement of
procedural propriety depends upon the subject matter of the
decision, the executive functions of the decision-maker (if the
decision is not that of an administrative tribunal) and the
particular circumstances in which the decision came to be made.
*412 My Lords, in the instant case the immediate subject matter
of the decision was a change in one of the terms of employment
of civil servants employed at GCHQ. That the executive functions
of the Minister for the Civil Service, in her capacity as such,
included making a decision to change any of those terms, except
in so far as they related to remuneration, expenses and
allowances, is not disputed. It does not seem to me to be of any
practical significance whether or not as a matter of strict legal
analysis this power is based upon the rule of constitutional law to
which I have already alluded that the employment of any civil
servant may be terminated at any time without notice and that
upon such termination the same civil servant may be re-engaged
on different terms. The rule of terminability of employment in the
civil service without notice, of which the existence is beyond
doubt, must in any event have the consequence that the
continued enjoyment by a civil servant in the future of a right
under a particular term of his employment cannot be the subject
of any right enforceable by him in private law; at most it can only
be a legitimate expectation.
Prima facie, therefore, civil servants employed at GCHQ who
were members of national trade unions had, at best, in
December 1983, a legitimate expectation that they would
continue to enjoy the benefits of such membership and of
representation by those trade unions in any consultations and
negotiations with representatives of the management of that
government department as to changes in any term of their
employment. So, but again prima facie only, they were entitled,
as a matter of public law under the head of "procedural
propriety, " before administrative action was taken on a decision
to withdraw that benefit, to have communicated to the national
trade unions by which they had theretofore been represented the
reason for such withdrawal, and for such unions to be given an
opportunity to comment on it.
The reason why the Minister for the Civil Service decided on 22
December 1983 to withdraw this benefit was in the interests of
national security. National security is the responsibility of the
executive government; what action is needed to protect its
interests is, as the cases cited by my learned friend, Lord Roskill,
establish and common sense itself dictates, a matter upon which
those upon whom the responsibility rests, and not the courts of
justice, must have the last word. It is par excellence a nonjusticiable
question. The judicial process is totally inept to deal
with the sort of problems which it involves.
The executive government likewise decided, and this would
appear to be a collective decision of cabinet ministers involved,
that the interests of national security required that no notice
should be given of the decision before administrative action had
been taken to give effect to it. The reason for this was the risk
that advance notice to the national unions of the executive
government's intention would attract the very disruptive action
prejudicial to the national security the recurrence of which the
decision barring membership of national trade unions to civil
servants employed at GCHQ was designed to prevent.
There was ample evidence to which reference is made by others
of your Lordships that this was indeed a real risk; so the crucial
point of law in this case is whether procedural propriety must
give way to *413 national security when there is conflict between
(1) on the one hand, the prima facie rule of "procedural
propriety" in public law, applicable to a case of legitimate
expectations that a benefit ought not to be withdrawn until the
reason for its proposed withdrawal has been communicated to
the person who has theretofore enjoyed that benefit and that
person has been given an opportunity to comment on the reason,
and (2) on the other hand, action that is needed to be taken in
the interests of national security, for which the executive
government bears the responsibility and alone has access to
sources of information that qualify it to judge what the necessary
action is. To that there can, in my opinion, be only one sensible
answer. That answer is "Yes."
I agree with your Lordships that this appeal must be dismissed.
for Civil Service [1985].
LORD DIPLOCK.
My Lords, the English law relating to judicial control of
administrative action has been developed upon a case to case
basis which has virtually transformed it over the last three
decades…
Judicial review, now regulated by R.S.C., Ord. 53, provides the
means by which judicial control of administrative action is
exercised. The subject matter of every judicial review is a
decision made by some person (or body of persons) whom I will
call the "decision-maker" or else a refusal by him to make a
decision.
….
For a decision to be susceptible to judicial review the decisionmaker
must be empowered by public law (and not merely, as in
arbitration, by agreement between private parties) to make
decisions that, if validly made, will lead to administrative action
or abstention from action by an authority endowed by law with
executive powers…. The ultimate source of the decision-making
power is nearly always nowadays a statute or subordinate
legislation made under the statute; but in the absence of any
statute regulating the subject matter of the decision the source
of the decision-making power may still be the common law itself,
i.e., that part of the common law that is given by lawyers the
label of "the prerogative." Where this is the source of decisionmaking
power, the power is confined to executive officers of
central as distinct from local government and in constitutional
practice is generally exercised by those holding ministerial rank.
It was the prerogative that was relied on as the source of the
power of the Minister for the Civil Service in reaching her decision
of 22 December 1983 that membership of national trade unions
should in future be barred to all members of the home civil
service employed at GCHQ.
…… there have unquestionably survived into the present day a
residue of miscellaneous fields of law in which the executive
government retains decision-making powers that are not
dependent upon any statutory authority but nevertheless have
consequences on the private rights or legitimate expectations of
other persons which would render the decision subject to judicial
review if the power of the decision-maker to make them were
statutory in origin. From matters so relatively minor as the grant
of pardons to condemned criminals, of honours to the good and
great, of corporate personality to deserving bodies of persons,
and of bounty from moneys made available to the executive
government by Parliament, they extend to matters so vital to the
survival and welfare of the nation as the conduct of relations with
foreign states and - what lies at the heart of the present case -
the defence of the realm against potential enemies. Adopting the
phraseology used in the European Convention on Human Rights
1953 (Convention for the Protection of Human Rights and
Fundamental Freedoms (1953) (Cmd. 8969)) to which the United
Kingdom is a party it has now become usual in statutes to refer
to the latter as "national security."
My Lords, I see no reason why simply because a decisionmaking
power is derived from a common law and not a statutory
source, it should for that reason only be immune from judicial
review. Judicial review has I think developed to a stage today
when without reiterating any analysis of the steps by which the
development has come about, one can conveniently classify
under three heads the grounds upon which administrative action
is subject to control by judicial review. The first ground I would
call "illegality," the second "irrationality” and the third
"procedural impropriety." That is not to say that further
development on a case by case basis may not in course of time
add further grounds. I have in mind particularly the possible
adoption in the future of the principle of "proportionality" which is
recognised in the administrative law of several of our fellow
members of the European Economic Community; but to dispose
of the instant case the three already well-established heads that
I have mentioned will suffice.
By "illegality" as a ground for judicial review I mean that the
decision-maker must understand correctly the law that regulates
his decision-making power and must give effect to it. Whether he
has or not is par excellence a justiciable question to be decided,
in the event of dispute, by those persons, the judges, by whom
the judicial power of the state is exercisable.
By "irrationality" I mean what can by now be succinctly referred
to as "Wednesbury unreasonableness" (Associated Provincial
Picture Houses Ltd. v. Wednesbury Corporation [1948] 1 K.B.
223). It applies to a decision which is so outrageous in its
defiance of logic or of accepted moral standards that no sensible
person who had applied his mind to the question to be decided
could have arrived at it. Whether a decision falls within this
category is a question that judges by their training and
experience should be well equipped to answer, or else there
would be something badly wrong with our judicial system. To
justify the court's exercise of this role, resort I think is today no
longer needed to Viscount Radcliffe's ingenious explanation in
Edwards v. Bairstow [1956] A.C. 14 of irrationality as a ground
for a court's reversal of a decision by ascribing it to an inferred
though unidentifiable mistake of law by the decision-maker.
"Irrationality" by now can stand upon its own feet as an accepted
ground on which a decision may be attacked by judicial review.
I have described the third head as "procedural impropriety"
rather than failure to observe basic rules of natural justice or
failure to act with procedural fairness towards the person who
will be affected by the decision. This is because susceptibility to
judicial review under this head covers also failure by an
administrative tribunal to observe procedural rules that are
expressly laid down in the legislative instrument by which its
jurisdiction is conferred, even where such failure does not involve
any denial of natural justice. But the instant case is not
concerned with the proceedings of an administrative tribunal at
all.
My Lords, that a decision of which the ultimate source of power
to make it is not a statute but the common law (whether or not
the common law is for this purpose given the label of "the
prerogative") may be the subject of judicial review on the ground
of illegality is, I think, established by the cases cited by my noble
and learned friend, Lord Roskill, and this extends to cases where
the field of law to which the decision relates is national security,
as the decision of this House itself in Burmah Oil Co. Ltd. v. Lord
Advocate, 1964 S.C. (H.L.) 117 shows. While I see no a priori
reason to rule out "irrationality" as a ground for judicial review of
a ministerial decision taken in the exercise of "prerogative"
powers, I find it difficult to envisage in any of the various fields in
which the prerogative remains the only source of the relevant
decision-making power a decision of a kind that would be open to
attack through the judicial process upon this ground. Such
decisions will generally involve the application of government
policy. The reasons for the decision-maker taking one course
rather than another do not normally involve questions to which, if
disputed, the judicial process is adapted to provide the right
answer, by which I mean that the kind of evidence that is
admissible under judicial procedures and the way in which it has
to be adduced tend to exclude from the attention of the court
competing policy considerations which, if the executive discretion
is to be wisely exercised, need to be weighed against one
another - a balancing exercise which judges by their upbringing
and experience are ill-qualified to perform. So I leave this as an
open question to be dealt with on a case to case basis if, indeed,
the case should ever arise.
As respects "procedural propriety" I see no reason why it should
not be a ground for judicial review of a decision made under
powers of which the ultimate source is the prerogative. Such
indeed was one of the grounds that formed the subject matter of
judicial review in Reg. v. Criminal Injuries Compensation Board,
Ex parte Lain [1967] 2 Q.B. 864. Indeed, where the decision is
one which does not alter rights or obligations enforceable in
private law but only deprives a person of legitimate expectations,
"procedural impropriety” will normally provide the only ground on
which the decision is open to judicial review. But in any event
what procedure will satisfy the public law requirement of
procedural propriety depends upon the subject matter of the
decision, the executive functions of the decision-maker (if the
decision is not that of an administrative tribunal) and the
particular circumstances in which the decision came to be made.
*412 My Lords, in the instant case the immediate subject matter
of the decision was a change in one of the terms of employment
of civil servants employed at GCHQ. That the executive functions
of the Minister for the Civil Service, in her capacity as such,
included making a decision to change any of those terms, except
in so far as they related to remuneration, expenses and
allowances, is not disputed. It does not seem to me to be of any
practical significance whether or not as a matter of strict legal
analysis this power is based upon the rule of constitutional law to
which I have already alluded that the employment of any civil
servant may be terminated at any time without notice and that
upon such termination the same civil servant may be re-engaged
on different terms. The rule of terminability of employment in the
civil service without notice, of which the existence is beyond
doubt, must in any event have the consequence that the
continued enjoyment by a civil servant in the future of a right
under a particular term of his employment cannot be the subject
of any right enforceable by him in private law; at most it can only
be a legitimate expectation.
Prima facie, therefore, civil servants employed at GCHQ who
were members of national trade unions had, at best, in
December 1983, a legitimate expectation that they would
continue to enjoy the benefits of such membership and of
representation by those trade unions in any consultations and
negotiations with representatives of the management of that
government department as to changes in any term of their
employment. So, but again prima facie only, they were entitled,
as a matter of public law under the head of "procedural
propriety, " before administrative action was taken on a decision
to withdraw that benefit, to have communicated to the national
trade unions by which they had theretofore been represented the
reason for such withdrawal, and for such unions to be given an
opportunity to comment on it.
The reason why the Minister for the Civil Service decided on 22
December 1983 to withdraw this benefit was in the interests of
national security. National security is the responsibility of the
executive government; what action is needed to protect its
interests is, as the cases cited by my learned friend, Lord Roskill,
establish and common sense itself dictates, a matter upon which
those upon whom the responsibility rests, and not the courts of
justice, must have the last word. It is par excellence a nonjusticiable
question. The judicial process is totally inept to deal
with the sort of problems which it involves.
The executive government likewise decided, and this would
appear to be a collective decision of cabinet ministers involved,
that the interests of national security required that no notice
should be given of the decision before administrative action had
been taken to give effect to it. The reason for this was the risk
that advance notice to the national unions of the executive
government's intention would attract the very disruptive action
prejudicial to the national security the recurrence of which the
decision barring membership of national trade unions to civil
servants employed at GCHQ was designed to prevent.
There was ample evidence to which reference is made by others
of your Lordships that this was indeed a real risk; so the crucial
point of law in this case is whether procedural propriety must
give way to *413 national security when there is conflict between
(1) on the one hand, the prima facie rule of "procedural
propriety" in public law, applicable to a case of legitimate
expectations that a benefit ought not to be withdrawn until the
reason for its proposed withdrawal has been communicated to
the person who has theretofore enjoyed that benefit and that
person has been given an opportunity to comment on the reason,
and (2) on the other hand, action that is needed to be taken in
the interests of national security, for which the executive
government bears the responsibility and alone has access to
sources of information that qualify it to judge what the necessary
action is. To that there can, in my opinion, be only one sensible
answer. That answer is "Yes."
I agree with your Lordships that this appeal must be dismissed.
Extract from the speech of Lord Hope in the case of Campbell v MGN
Extract from the speech of Lord Hope in the case of Campbell v MGN
[2004] 2 AC 457 241
104 In my opinion the Court of Appeal's approach is open to the criticism that… they failed to carry out the
required balancing exercise.
105 The context for this exercise is provided by articles 8 and 10 of the Convention. The rights guaranteed by
these articles are qualified rights. Article 8(1) protects the right to respect for private life, but recognition is given
in article 8(2) to the protection of the rights and freedoms of others. Article 10(1) protects the right to freedom
of expression, but article 10(2) recognises the need to protect the rights and freedoms of others. The effect of
these provisions is that the right to privacy which lies at the heart of an action for breach of confidence has to be
balanced against the right of the media to impart information to the public. And the right of the media to impart
information to the public has to be balanced in its turn against the respect that must be given to private life…..
As Sedley LJ pointed out in Douglas v Hello! Ltd [2001] QB 967, 1004, para 135:
"The European Court of Human Rights has always recognised the high importance of free media of
communication in a democracy, but its jurisprudence does not – and could not consistently with the Convention
itself – give article 10(1) the presumptive priority which is given, for example, to the First Amendment in the
jurisprudence of the United States' courts. Everything will ultimately depend on the proper balance between
privacy and publicity in the situation facing the court."
107 I accept, of course, that the importance which the Court of Appeal attached to the journalistic package finds
support in the authorities. In Jersild v Denmark (1994) 19 EHRR 1, para 31 the European court, repeating what
was said in Observer and Guardian v United Kingdom (1991) 14 EHRR 153, para 59, declared that freedom of
expression constitutes one of the essential foundations of a democratic society and that the safeguards to be
afforded to the press are of particular importance. It then added these comments in para 31:
"Whilst the press must not overstep the bounds set, inter alia, in the interest of 'the protection of the reputation
and rights of others', it is nevertheless incumbent on it to impart information and ideas of public interest. Not
only does the press have the task of imparting such information and ideas: the public also has a right to receive
them. Were it otherwise, the press would be unable to play its vital role of 'public watchdog'."
108 *487 The freedom of the press to exercise its own judgment in the presentation of journalistic material was
emphasised in a further passage in Jersild's case where the court said, at p 26, para 31:
"At the same time, the methods of objective and balanced reporting may vary considerably, depending among
other things on the media in question. It is not for this court, nor for the national courts for that matter, to
substitute their own views for those of the press as to what technique of reporting should be adopted by
journalists. In this context the court recalls that article 10 protects not only the substance of the ideas and
information expressed, but also the form in which they are conveyed."
In Fressoz and Roire v France (1999) 31 EHRR 28, 60, para 54 the court said that in essence article 10 leaves it
for journalists to decide whether or not it is necessary to reproduce material to ensure credibility, adding:
"It protects journalists' rights to divulge information on issues of general interest provided that they are acting in
good faith and on an accurate factual basis and provide 'reliable and precise' information in accordance with the
ethics of journalism."
…110 The need for a balancing exercise to be carried out is also inherent in the provisions of article 10 itself …
…111 Section 12(4) of the Human Rights Act 1998 provides:
"The court must have particular regard to the importance of the Convention right to freedom of expression and,
where the proceedings relate to material which the respondent claims, or which appears to the court, to be
journalistic, literary or artistic material (or to conduct connected with such material), to--(a) the extent to which-
-(i) the material has, or is about to, become available to the public; or (ii) it is, or would be, in the pubic interest
for the material to be published; (b) any relevant privacy code."
But, as Sedley LJ said in Douglas v Hello! Ltd [2001] QB 967, 1003, para 133, you cannot have particular regard
to article 10 without having equally particular regard at the very least to article 8: see also In re S (A Child)
(Identification: Restrictions on Publication) [2004] Fam 43, 72, para 52 where Hale LJ said that section 12(4)
does not give either article pre-eminence over the other. These observations seem to me to be entirely consistent
with the jurisprudence of the European court, as is the following passage in Sedley LJ's opinion in Douglas, at p
1005, para 137:
"The case being one which affects the Convention right of freedom of expression, section 12 of the Human
Rights Act 1998 requires the court to have regard to article 10 (as, in its absence, would section 6). This,
however, cannot, consistently with section 3 and article 17, give the article 10(1) right of free expression a
presumptive priority over other rights. What it does is require the court to consider article 10(2) along with
article 10(1), and by doing so to bring into the frame the conflicting right to respect for privacy. This right,
contained in article 8 and reflected in English law, is in turn qualified in both contexts by the right of others to
*489 free expression. The outcome, which self-evidently has to be the same under both articles, is determined
principally by considerations of proportionality."
It is to be noted too that clause 3(i) of the Code of Practice of the Press Complaints Committee acknowledges
this limitation. It states that a person may have a reasonable expectation of privacy in a public place.
Striking the balance
112 There is no doubt that the presentation of the material that it was legitimate to convey to the public in this
case without breaching the duty of confidence was a matter for the journalists. The choice of language used to
convey information and ideas, and decisions as to whether or not to accompany the printed word by the use of
photographs, are pre-eminently editorial matters with which the court will not interfere. The respondents are
also entitled to claim that they should be accorded a reasonable margin of appreciation in taking decisions as to
what details needed to be included in the article to give it credibility. This is an essential part of the journalistic
exercise.
113 But decisions about the publication of material that is private to the individual raise issues that are not simply
about presentation and editing. Any interference with the public interest in disclosure has to be balanced against
the interference with the right of the individual to respect for their private life. The decisions that are then taken
are open to review by the court. The tests which the court must apply are the familiar ones. They are whether
publication of the material pursues a legitimate aim and whether the benefits that will be achieved by its
publication are proportionate to the harm that may be done by the interference with the right to privacy. The
jurisprudence of the European Court of Human Rights explains how these principles are to be understood and
applied in the context of the facts of each case. Any restriction of the right to freedom of expression must be
subjected to very close scrutiny. But so too must any restriction of the right to respect for private life. Neither
article 8 nor article 10 has any pre-eminence over the other in the conduct of this exercise. As Resolution 1165 of
the Parliamentary Assembly of the Council of Europe (1998), para 11, pointed out, they are neither absolute not
in any hierarchical order, since they are of equal value in a democratic society.
… 123 The same process of reasoning that led to the findings in Peck that the article 8 right had been violated
and by the majority in Aubry that there had been an infringement of the claimant's right to respect for her private
life can be applied here. Miss Campbell could not have complained if the photographs had been taken to show the
scene in the street by a passer-by and later published simply as street scenes. But these were not just pictures of a
street scene where she happened to be when the photographs were taken. They were taken deliberately, in secret
and with a view to their publication in conjunction with the article. The zoom lens was directed at the doorway
of the place where the meeting had been taking place. The faces of others in the doorway were pixelated so as not
to reveal their identity. Hers was not, the photographs were published and her privacy was invaded. The
argument that the publication of the photograph added credibility to the story has little weight. The photograph
was not self-explanatory. Neither the place nor the person were instantly recognisable. The reader only had the
editor's word as to the truth of these details.
124 Any person in Miss Campbell's position, assuming her to be of ordinary sensibilities but assuming also that
she had been photographed surreptitiously outside the place where she been receiving therapy for drug addiction,
would have known what they were and would have been distressed on seeing the photographs. She would have
seen their publication, in conjunction with the article which revealed what she had been doing when she was
photographed and other details about her engagement in the therapy, as a gross interference with her right to
respect for her private life. In my opinion this additional element in the publication is more than enough to
outweigh the right to freedom of expression which the defendants are asserting in this case.’
[2004] 2 AC 457 241
104 In my opinion the Court of Appeal's approach is open to the criticism that… they failed to carry out the
required balancing exercise.
105 The context for this exercise is provided by articles 8 and 10 of the Convention. The rights guaranteed by
these articles are qualified rights. Article 8(1) protects the right to respect for private life, but recognition is given
in article 8(2) to the protection of the rights and freedoms of others. Article 10(1) protects the right to freedom
of expression, but article 10(2) recognises the need to protect the rights and freedoms of others. The effect of
these provisions is that the right to privacy which lies at the heart of an action for breach of confidence has to be
balanced against the right of the media to impart information to the public. And the right of the media to impart
information to the public has to be balanced in its turn against the respect that must be given to private life…..
As Sedley LJ pointed out in Douglas v Hello! Ltd [2001] QB 967, 1004, para 135:
"The European Court of Human Rights has always recognised the high importance of free media of
communication in a democracy, but its jurisprudence does not – and could not consistently with the Convention
itself – give article 10(1) the presumptive priority which is given, for example, to the First Amendment in the
jurisprudence of the United States' courts. Everything will ultimately depend on the proper balance between
privacy and publicity in the situation facing the court."
107 I accept, of course, that the importance which the Court of Appeal attached to the journalistic package finds
support in the authorities. In Jersild v Denmark (1994) 19 EHRR 1, para 31 the European court, repeating what
was said in Observer and Guardian v United Kingdom (1991) 14 EHRR 153, para 59, declared that freedom of
expression constitutes one of the essential foundations of a democratic society and that the safeguards to be
afforded to the press are of particular importance. It then added these comments in para 31:
"Whilst the press must not overstep the bounds set, inter alia, in the interest of 'the protection of the reputation
and rights of others', it is nevertheless incumbent on it to impart information and ideas of public interest. Not
only does the press have the task of imparting such information and ideas: the public also has a right to receive
them. Were it otherwise, the press would be unable to play its vital role of 'public watchdog'."
108 *487 The freedom of the press to exercise its own judgment in the presentation of journalistic material was
emphasised in a further passage in Jersild's case where the court said, at p 26, para 31:
"At the same time, the methods of objective and balanced reporting may vary considerably, depending among
other things on the media in question. It is not for this court, nor for the national courts for that matter, to
substitute their own views for those of the press as to what technique of reporting should be adopted by
journalists. In this context the court recalls that article 10 protects not only the substance of the ideas and
information expressed, but also the form in which they are conveyed."
In Fressoz and Roire v France (1999) 31 EHRR 28, 60, para 54 the court said that in essence article 10 leaves it
for journalists to decide whether or not it is necessary to reproduce material to ensure credibility, adding:
"It protects journalists' rights to divulge information on issues of general interest provided that they are acting in
good faith and on an accurate factual basis and provide 'reliable and precise' information in accordance with the
ethics of journalism."
…110 The need for a balancing exercise to be carried out is also inherent in the provisions of article 10 itself …
…111 Section 12(4) of the Human Rights Act 1998 provides:
"The court must have particular regard to the importance of the Convention right to freedom of expression and,
where the proceedings relate to material which the respondent claims, or which appears to the court, to be
journalistic, literary or artistic material (or to conduct connected with such material), to--(a) the extent to which-
-(i) the material has, or is about to, become available to the public; or (ii) it is, or would be, in the pubic interest
for the material to be published; (b) any relevant privacy code."
But, as Sedley LJ said in Douglas v Hello! Ltd [2001] QB 967, 1003, para 133, you cannot have particular regard
to article 10 without having equally particular regard at the very least to article 8: see also In re S (A Child)
(Identification: Restrictions on Publication) [2004] Fam 43, 72, para 52 where Hale LJ said that section 12(4)
does not give either article pre-eminence over the other. These observations seem to me to be entirely consistent
with the jurisprudence of the European court, as is the following passage in Sedley LJ's opinion in Douglas, at p
1005, para 137:
"The case being one which affects the Convention right of freedom of expression, section 12 of the Human
Rights Act 1998 requires the court to have regard to article 10 (as, in its absence, would section 6). This,
however, cannot, consistently with section 3 and article 17, give the article 10(1) right of free expression a
presumptive priority over other rights. What it does is require the court to consider article 10(2) along with
article 10(1), and by doing so to bring into the frame the conflicting right to respect for privacy. This right,
contained in article 8 and reflected in English law, is in turn qualified in both contexts by the right of others to
*489 free expression. The outcome, which self-evidently has to be the same under both articles, is determined
principally by considerations of proportionality."
It is to be noted too that clause 3(i) of the Code of Practice of the Press Complaints Committee acknowledges
this limitation. It states that a person may have a reasonable expectation of privacy in a public place.
Striking the balance
112 There is no doubt that the presentation of the material that it was legitimate to convey to the public in this
case without breaching the duty of confidence was a matter for the journalists. The choice of language used to
convey information and ideas, and decisions as to whether or not to accompany the printed word by the use of
photographs, are pre-eminently editorial matters with which the court will not interfere. The respondents are
also entitled to claim that they should be accorded a reasonable margin of appreciation in taking decisions as to
what details needed to be included in the article to give it credibility. This is an essential part of the journalistic
exercise.
113 But decisions about the publication of material that is private to the individual raise issues that are not simply
about presentation and editing. Any interference with the public interest in disclosure has to be balanced against
the interference with the right of the individual to respect for their private life. The decisions that are then taken
are open to review by the court. The tests which the court must apply are the familiar ones. They are whether
publication of the material pursues a legitimate aim and whether the benefits that will be achieved by its
publication are proportionate to the harm that may be done by the interference with the right to privacy. The
jurisprudence of the European Court of Human Rights explains how these principles are to be understood and
applied in the context of the facts of each case. Any restriction of the right to freedom of expression must be
subjected to very close scrutiny. But so too must any restriction of the right to respect for private life. Neither
article 8 nor article 10 has any pre-eminence over the other in the conduct of this exercise. As Resolution 1165 of
the Parliamentary Assembly of the Council of Europe (1998), para 11, pointed out, they are neither absolute not
in any hierarchical order, since they are of equal value in a democratic society.
… 123 The same process of reasoning that led to the findings in Peck that the article 8 right had been violated
and by the majority in Aubry that there had been an infringement of the claimant's right to respect for her private
life can be applied here. Miss Campbell could not have complained if the photographs had been taken to show the
scene in the street by a passer-by and later published simply as street scenes. But these were not just pictures of a
street scene where she happened to be when the photographs were taken. They were taken deliberately, in secret
and with a view to their publication in conjunction with the article. The zoom lens was directed at the doorway
of the place where the meeting had been taking place. The faces of others in the doorway were pixelated so as not
to reveal their identity. Hers was not, the photographs were published and her privacy was invaded. The
argument that the publication of the photograph added credibility to the story has little weight. The photograph
was not self-explanatory. Neither the place nor the person were instantly recognisable. The reader only had the
editor's word as to the truth of these details.
124 Any person in Miss Campbell's position, assuming her to be of ordinary sensibilities but assuming also that
she had been photographed surreptitiously outside the place where she been receiving therapy for drug addiction,
would have known what they were and would have been distressed on seeing the photographs. She would have
seen their publication, in conjunction with the article which revealed what she had been doing when she was
photographed and other details about her engagement in the therapy, as a gross interference with her right to
respect for her private life. In my opinion this additional element in the publication is more than enough to
outweigh the right to freedom of expression which the defendants are asserting in this case.’
Extract from Hashman and Harrup v United Kingdom [2000] 30 EHRR 241
Extract from Hashman and Harrup v United Kingdom [2000] 30 EHRR 241
‘A. As to the existence of an interference with the applicants' freedom of Expression
27. The applicants, "hunt saboteurs", disrupted the Portman Hunt on 3 March 1993. Proceedings were brought
as a result of which they were bound over in the sum of £100 not to breach the peace and to be of good behaviour
for 12 months. [note: ‘binding over
28. The Court recalls that proceedings were brought against the applicants in respect of their behaviour while
protesting against fox hunting by disrupting the hunt. It is true that the protest took the form of impeding the
activities of which they disapproved, but the Court considers nonetheless that it constituted an expression of
opinion within the meaning of Article 10. [FN30]
The measures taken against the applicants were, therefore, an interference with their right to freedom of
expression.
FN30 See, e.g. Steel v. United Kingdom, loc. cit., para. 92.
B. Whether the interference was "prescribed by law"
… 31. The Court recalls that one of the requirements flowing from the expression "prescribed by law" is
foreseeability. A norm cannot be regarded as a "law" unless it is formulated with sufficient precision to enable the
citizen to regulate his conduct. At the same time, whilst certainty in the law is highly desirable, it may bring in its
train excessive rigidity and the law must be able to keep pace with changing circumstances. The level of precision
required of domestic legislation--which cannot in any case provide for every eventuality--depends to a
considerable degree on the content of the instrument in question, the field it is designed to cover and the number
and status of those to whom it is addressed. [FN34]
FN34 See generally in this connection, Rekvenyi v. Hungary: 20 May 1999, para.
34.
32. The Court further recalls that prior restraint on freedom of expression must call for the most careful scrutiny
on its part. [FN35]
FN35 See, in the context of the necessity for a prior restraint, The Sunday Times v. United Kingdom (No. 2),
loc. cit., para. 51.
33. The Court has already considered the issue of "lawfulness" for the purposes of Article 5 of the Convention of
orders to be bound over to keep the peace and be of good behaviour. [FN36] In that case, the Court found that
the elements of breach of the peace were adequately defined by English law. [FN37]
FN36 In Steel v. United Kingdom, loc. cit., paras. 71-77.
FN37 ibid., para. 75.
34. The Court also considered whether the binding-over orders in that case were specific enough properly to be
described as "lawful order[s] of a court" within the meaning of Article 5(1)(b) of the Convention. It noted at
paragraph 76 of the judgment that:
... the orders were expressed in rather vague and general terms; the expression "to be of good behaviour" was
particularly imprecise and offered little guidance to the person bound over as to the type of conduct which would
amount to a breach of the order. However, in each *257 applicant's case the binding-over order was imposed
after a finding that she had committed a breach of the peace.
Having considered all the circumstances, the Court is satisfied that, given the context, it was sufficiently clear
that the applicants were being requested to agree to refrain from causing further, similar, breaches of the peace
during the ensuing 12 months.
The Court also noted that the requirement under Article 10(2) that an interference with the exercise of freedom
of expression be "prescribed by law" is similar to that under Article 5(1) that any deprivation of liberty be
"lawful". [FN38]
FN38 ibid., para. 94.
35. It is a feature of the present case that it concerns an interference with freedom of expression which was not
expressed to be a "sanction", or punishment, for behaviour of a certain type, but rather an order, imposed on the
applicants, not to breach the peace or behave contra bonos mores in the future. The binding-over order in the
present case thus had purely prospective effect. It did not require a finding that here had been a breach of the
peace. The case is thus different from the case of Steel, in which the proceedings brought against the first and
second applicants were in respect of breaches of the peace which were later found to have been committed.
36. The Court must consider the question of whether behaviour contra bonos mores is adequately defined for the
purposes of Article 10(2) of the Convention.
37. The Court first recalls that in its Steel judgment, it noted that the expression "to be of good behaviour" was
particularly imprecise and offered little guidance to the person bound over as to the type of conduct which would
amount to a breach of the order". [FN39] Those considerations apply equally in the present case, where the
applicants were not charged with any criminal offence, and were found not to have breached the peace.
FN39 ibid., para. 76.
38. The Court next notes that conduct contra bonos mores is defined as behaviour which is "wrong rather than
right in the judgment of the majority of contemporary fellow citizens". [FN40] ……..
FN40 See para. 13 above.
40. With specific reference to the facts of the present case, the Court does not accept that it must have been
evident to the applicants what they were being ordered not to do for the period of their binding over. Whilst in
the case of Steel the applicants had been found to have breached the peace, and the Court found that it was
apparent that the bind over related to similar behaviour, [FN43] the present applicants did not breach of the
peace, and given the lack of precision referred to above, it cannot be said that what they were being bound over
not to do must have been apparent to them.
FN43 ibid.
41. The Court thus finds that the order by which the applicants were bound over to keep the peace and not to
behave contra bonos mores did not comply with the requirement of Article 10(2) of the Convention that it be
"prescribed by law".
… 43. It follows that there has been a violation of Article 10 of the Convention.’
‘A. As to the existence of an interference with the applicants' freedom of Expression
27. The applicants, "hunt saboteurs", disrupted the Portman Hunt on 3 March 1993. Proceedings were brought
as a result of which they were bound over in the sum of £100 not to breach the peace and to be of good behaviour
for 12 months. [note: ‘binding over
28. The Court recalls that proceedings were brought against the applicants in respect of their behaviour while
protesting against fox hunting by disrupting the hunt. It is true that the protest took the form of impeding the
activities of which they disapproved, but the Court considers nonetheless that it constituted an expression of
opinion within the meaning of Article 10. [FN30]
The measures taken against the applicants were, therefore, an interference with their right to freedom of
expression.
FN30 See, e.g. Steel v. United Kingdom, loc. cit., para. 92.
B. Whether the interference was "prescribed by law"
… 31. The Court recalls that one of the requirements flowing from the expression "prescribed by law" is
foreseeability. A norm cannot be regarded as a "law" unless it is formulated with sufficient precision to enable the
citizen to regulate his conduct. At the same time, whilst certainty in the law is highly desirable, it may bring in its
train excessive rigidity and the law must be able to keep pace with changing circumstances. The level of precision
required of domestic legislation--which cannot in any case provide for every eventuality--depends to a
considerable degree on the content of the instrument in question, the field it is designed to cover and the number
and status of those to whom it is addressed. [FN34]
FN34 See generally in this connection, Rekvenyi v. Hungary: 20 May 1999, para.
34.
32. The Court further recalls that prior restraint on freedom of expression must call for the most careful scrutiny
on its part. [FN35]
FN35 See, in the context of the necessity for a prior restraint, The Sunday Times v. United Kingdom (No. 2),
loc. cit., para. 51.
33. The Court has already considered the issue of "lawfulness" for the purposes of Article 5 of the Convention of
orders to be bound over to keep the peace and be of good behaviour. [FN36] In that case, the Court found that
the elements of breach of the peace were adequately defined by English law. [FN37]
FN36 In Steel v. United Kingdom, loc. cit., paras. 71-77.
FN37 ibid., para. 75.
34. The Court also considered whether the binding-over orders in that case were specific enough properly to be
described as "lawful order[s] of a court" within the meaning of Article 5(1)(b) of the Convention. It noted at
paragraph 76 of the judgment that:
... the orders were expressed in rather vague and general terms; the expression "to be of good behaviour" was
particularly imprecise and offered little guidance to the person bound over as to the type of conduct which would
amount to a breach of the order. However, in each *257 applicant's case the binding-over order was imposed
after a finding that she had committed a breach of the peace.
Having considered all the circumstances, the Court is satisfied that, given the context, it was sufficiently clear
that the applicants were being requested to agree to refrain from causing further, similar, breaches of the peace
during the ensuing 12 months.
The Court also noted that the requirement under Article 10(2) that an interference with the exercise of freedom
of expression be "prescribed by law" is similar to that under Article 5(1) that any deprivation of liberty be
"lawful". [FN38]
FN38 ibid., para. 94.
35. It is a feature of the present case that it concerns an interference with freedom of expression which was not
expressed to be a "sanction", or punishment, for behaviour of a certain type, but rather an order, imposed on the
applicants, not to breach the peace or behave contra bonos mores in the future. The binding-over order in the
present case thus had purely prospective effect. It did not require a finding that here had been a breach of the
peace. The case is thus different from the case of Steel, in which the proceedings brought against the first and
second applicants were in respect of breaches of the peace which were later found to have been committed.
36. The Court must consider the question of whether behaviour contra bonos mores is adequately defined for the
purposes of Article 10(2) of the Convention.
37. The Court first recalls that in its Steel judgment, it noted that the expression "to be of good behaviour" was
particularly imprecise and offered little guidance to the person bound over as to the type of conduct which would
amount to a breach of the order". [FN39] Those considerations apply equally in the present case, where the
applicants were not charged with any criminal offence, and were found not to have breached the peace.
FN39 ibid., para. 76.
38. The Court next notes that conduct contra bonos mores is defined as behaviour which is "wrong rather than
right in the judgment of the majority of contemporary fellow citizens". [FN40] ……..
FN40 See para. 13 above.
40. With specific reference to the facts of the present case, the Court does not accept that it must have been
evident to the applicants what they were being ordered not to do for the period of their binding over. Whilst in
the case of Steel the applicants had been found to have breached the peace, and the Court found that it was
apparent that the bind over related to similar behaviour, [FN43] the present applicants did not breach of the
peace, and given the lack of precision referred to above, it cannot be said that what they were being bound over
not to do must have been apparent to them.
FN43 ibid.
41. The Court thus finds that the order by which the applicants were bound over to keep the peace and not to
behave contra bonos mores did not comply with the requirement of Article 10(2) of the Convention that it be
"prescribed by law".
… 43. It follows that there has been a violation of Article 10 of the Convention.’
Extract from the decision of European Court of Human Rights in CR and SW vs UK (1995) 21 EHRR 245
Extract
“The applicant maintained that the general common law principle that a husband could not be
found guilty of rape upon his wife, albeit subject to certain limitations, was still effective on 18
September 1990, when he committed the acts which gave rise to the rape charge. A succession
of court decisions before and also after that date for instance on 20 November 1990 in R. v. J
had affirmed the general principle of immunity. It was clearly beyond doubt that as at 18
September 1990 no change in the law had been effected, although one was being mooted....
On 17 September 1990 the Law Commission provisionally recommended that the immunity
rule be abolished. However, the debate was pre-empted by the Court of Appeal's and the
House of Lords' rulings in the case of R. v. R. In the applicant's submission, these rulings
altered the law retrospectively, which would not have been the case had the Law Commission's
proposal been implemented by Parliament.
The Government and the Commission were of the view that by September 1990 there was
significant doubt as to the validity of the alleged marital immunity for rape. This was an area
where the law had been subject to progressive development and there were strong indications
that still wider interpretation by the courts of the inroads on the immunity was probable. In
particular, given the recognition of women's equality of status with men in marriage and
outside it and of their autonomy over their own bodies, the adaptation of the ingredients of the
offence of rape was reasonably foreseeable, with appropriate legal advice, to the applicant. He
was not convicted of conduct which did not constitute a criminal offence at the time when it
was committed.
In addition, the Government pointed out, on the basis of the agreed facts Owen J. had found
that there was an implied agreement between the applicant [CR] and his wife to separation and
to withdrawal of the consent to intercourse. The circumstances in his case were thus covered by
the exceptions to the immunity already stated by the English courts.
The Court notes that the applicant's conviction for rape was based on the statutory offence of
rape in section 1 of the 1956 Act, as further defined in section 1(1) of the 1976 Act. The
applicant does not dispute that the conduct for which he was convicted would have constituted
rape within the meaning of the statutory definition of rape as applicable at the time, had the
victim not been his wife. His complaint under Article 7 of the Convention relates solely to the
fact that in deciding on 18 April 1991 that the applicant had a case to answer on the rape
charge, Rose J. followed the Court of Appeal's ruling of 14 March 1991 in the case of R. v. R
which declared that the immunity no longer existed.
It is to be observed that a crucial issue in the judgment of the Court of Appeal in R. v. R
related to the definition of rape in section 1(1)(a) of the 1976 Act: 'unlawful sexual intercourse
with a woman who at the time of the intercourse does not consent to it'. The question was
whether 'removal' of the marital immunity would conflict with the statutory definition of rape,
in particular whether it would be prevented by the word 'unlawful'. The Court of Appeal
carefully examined various strands of interpretation of the provision in the case law, including
the argument that the term 'unlawful' excluded intercourse within marriage from the definition
of rape. In this connection, the Court recalls that it is in the first place for the national
authorities, notably the courts, to interpret and apply national law. It sees no reason to disagree
with the Court of Appeal's conclusion, which was subsequently upheld by the House of Lords,
that the word "unlawful" in the definition of rape was merely surplusage and did not inhibit
them from 'removing a common law fiction which had become anachronistic and offensive' and
from declaring that 'a rapist remains a rapist subject to the criminal law, irrespective of his
relationship with his victim'.
The decisions of the Court of Appeal and then the House of Lords did no more than continue a
perceptible line of case law development dismantling the immunity of a husband from
prosecution for rape upon his wife. There was no doubt under the law as it stood on 18
September 1990 that a husband who forcibly had sexual intercourse with his wife could, in
various circumstances, be found guilty of rape. Moreover, there was an evident evolution,
which was consistent with the very essence of the offence, of the criminal law through judicial
interpretation towards treating such conduct generally as within the scope of the offence of
rape. This evolution had reached a stage where judicial recognition of the absence of immunity
had become a reasonably foreseeable development of the law.
The essentially debasing character of rape is so manifest that the result of the decisions of the
Court of Appeal and the House of Lords – that the applicant could be convicted of attempted
rape, irrespective of his relationship with the victim – cannot be said to be at variance with the
object and purpose of Article 7 of the Convention, namely to ensure that no-one should be
subjected to arbitrary prosecution, conviction or punishment. What is more, the abandonment
of the unacceptable idea of a husband being immune against prosecution for rape of his wife was
in conformity not only with a civilised concept of marriage but also, and above all, with the
fundamental objectives of the Convention, the very essence of which is respect for human
dignity and human freedom.
Having reached this conclusion, the Court does not find it necessary to enquire into whether
the facts in the applicant's case were covered by the exceptions to the immunity rule already
made by the English courts before 18 September 1990. In short, the Court, like the
Government and the Commission, finds that the Crown Court's decision that the applicant
could not invoke immunity to escape conviction and sentence for rape upon his wife did not
give rise to a violation of his rights under Article 7(1) of the Convention.”
“The applicant maintained that the general common law principle that a husband could not be
found guilty of rape upon his wife, albeit subject to certain limitations, was still effective on 18
September 1990, when he committed the acts which gave rise to the rape charge. A succession
of court decisions before and also after that date for instance on 20 November 1990 in R. v. J
had affirmed the general principle of immunity. It was clearly beyond doubt that as at 18
September 1990 no change in the law had been effected, although one was being mooted....
On 17 September 1990 the Law Commission provisionally recommended that the immunity
rule be abolished. However, the debate was pre-empted by the Court of Appeal's and the
House of Lords' rulings in the case of R. v. R. In the applicant's submission, these rulings
altered the law retrospectively, which would not have been the case had the Law Commission's
proposal been implemented by Parliament.
The Government and the Commission were of the view that by September 1990 there was
significant doubt as to the validity of the alleged marital immunity for rape. This was an area
where the law had been subject to progressive development and there were strong indications
that still wider interpretation by the courts of the inroads on the immunity was probable. In
particular, given the recognition of women's equality of status with men in marriage and
outside it and of their autonomy over their own bodies, the adaptation of the ingredients of the
offence of rape was reasonably foreseeable, with appropriate legal advice, to the applicant. He
was not convicted of conduct which did not constitute a criminal offence at the time when it
was committed.
In addition, the Government pointed out, on the basis of the agreed facts Owen J. had found
that there was an implied agreement between the applicant [CR] and his wife to separation and
to withdrawal of the consent to intercourse. The circumstances in his case were thus covered by
the exceptions to the immunity already stated by the English courts.
The Court notes that the applicant's conviction for rape was based on the statutory offence of
rape in section 1 of the 1956 Act, as further defined in section 1(1) of the 1976 Act. The
applicant does not dispute that the conduct for which he was convicted would have constituted
rape within the meaning of the statutory definition of rape as applicable at the time, had the
victim not been his wife. His complaint under Article 7 of the Convention relates solely to the
fact that in deciding on 18 April 1991 that the applicant had a case to answer on the rape
charge, Rose J. followed the Court of Appeal's ruling of 14 March 1991 in the case of R. v. R
which declared that the immunity no longer existed.
It is to be observed that a crucial issue in the judgment of the Court of Appeal in R. v. R
related to the definition of rape in section 1(1)(a) of the 1976 Act: 'unlawful sexual intercourse
with a woman who at the time of the intercourse does not consent to it'. The question was
whether 'removal' of the marital immunity would conflict with the statutory definition of rape,
in particular whether it would be prevented by the word 'unlawful'. The Court of Appeal
carefully examined various strands of interpretation of the provision in the case law, including
the argument that the term 'unlawful' excluded intercourse within marriage from the definition
of rape. In this connection, the Court recalls that it is in the first place for the national
authorities, notably the courts, to interpret and apply national law. It sees no reason to disagree
with the Court of Appeal's conclusion, which was subsequently upheld by the House of Lords,
that the word "unlawful" in the definition of rape was merely surplusage and did not inhibit
them from 'removing a common law fiction which had become anachronistic and offensive' and
from declaring that 'a rapist remains a rapist subject to the criminal law, irrespective of his
relationship with his victim'.
The decisions of the Court of Appeal and then the House of Lords did no more than continue a
perceptible line of case law development dismantling the immunity of a husband from
prosecution for rape upon his wife. There was no doubt under the law as it stood on 18
September 1990 that a husband who forcibly had sexual intercourse with his wife could, in
various circumstances, be found guilty of rape. Moreover, there was an evident evolution,
which was consistent with the very essence of the offence, of the criminal law through judicial
interpretation towards treating such conduct generally as within the scope of the offence of
rape. This evolution had reached a stage where judicial recognition of the absence of immunity
had become a reasonably foreseeable development of the law.
The essentially debasing character of rape is so manifest that the result of the decisions of the
Court of Appeal and the House of Lords – that the applicant could be convicted of attempted
rape, irrespective of his relationship with the victim – cannot be said to be at variance with the
object and purpose of Article 7 of the Convention, namely to ensure that no-one should be
subjected to arbitrary prosecution, conviction or punishment. What is more, the abandonment
of the unacceptable idea of a husband being immune against prosecution for rape of his wife was
in conformity not only with a civilised concept of marriage but also, and above all, with the
fundamental objectives of the Convention, the very essence of which is respect for human
dignity and human freedom.
Having reached this conclusion, the Court does not find it necessary to enquire into whether
the facts in the applicant's case were covered by the exceptions to the immunity rule already
made by the English courts before 18 September 1990. In short, the Court, like the
Government and the Commission, finds that the Crown Court's decision that the applicant
could not invoke immunity to escape conviction and sentence for rape upon his wife did not
give rise to a violation of his rights under Article 7(1) of the Convention.”
Wednesday, May 6, 2009
Liversidge v. Anderson [1942] A.C. 206
Liversidge v. Anderson [1942] A.C. 206 is an important and landmark case in English law which concerned the relationship between the courts and the state, and in particular the assistance that the judiciary should give to the executive in times of national emergency. It concerns civil liberties and the separation of powers. Both the majority and dissenting judgements in the case have been cited as persuasive precedent by various countries of the Commonwealth of Nations. However, in England itself, the courts have gradually retreated from the decision in Liversidge.
Background
Emergency powers in Regulation 18B of the Defence (General) Regulations 1939 permitted the Home Secretary to intern people if he had "reasonable cause" to believe that they had "hostile associations". Sir John Anderson exercised this power in respect of a man called Jack Perlzweig, who used the name Robert Liversidge, committing him to prison but giving no reason.[1] On appeal, the case, joined with that of Ben Greene, reached the House of Lords Judicial Committee (HoLJC), the highest court of appeal.[2] They had to decide whether the court could investigate the objective basis for the reasonable cause; in other words, could they evaluate the Home Secretary's actions on an objective standard, comparing them to that which might be taken by a reasonable man, or were they to measure them against the personal standard of the Secretary?[3]
[edit] Majority judgments
The majority of the Law Lords held that the legislation should be interpreted so as to make effective in the way parliament intended, even if that meant adding to the words to give that effect. Although parliament had made the power subject to a reasonable belief they accepted the Home Secretary's statement that he held such a belief; in otherwise that he believed he had reasonable cause. Viscount Maugham said that the court should "prefer a construction which will carry into effect the plain intention of those responsible " and Lord Macmillan that "it is right so to interpret emergency legislation as to promote rather than to defeat its efficacy". According to him, if the Secretary had acted in good faith, he need not disclose the basis for his decision, nor were his actions justiciable in a court of law.[3]
The majority of the Lords appear to have been greatly concerned with the fact that they were dealing with a matter of national security. In their view, it was not appropriate for a court to deal with matters of national security, especially as they were not privy to classified information that only the executive had.[4]
[edit] Dissenting judgment
The case is most famous for the dissenting speech of Lord Atkin, which has been recognised as a defining statement of the need for courts to remain independent of the executive whatever the prevailing circumstances. In his view the majority had abdicated their responsibility to investigate and control the executive, and were "more executive-minded than the executive". Lord Atkin protested that theirs was "a strained construction put on words with the effect of giving an uncontrolled power of imprisonment to the minister". He went on to say:
“ In England, amidst the clash of arms, the laws are not silent. They may be changed, but they speak the same language in war as in peace. It has always been one of the pillars of freedom, one of the principles of liberty for which on recent authority we are now fighting, that the judges are no respecters of persons and stand between the subject and any attempted encroachments on his liberty by the executive, alert to see that any coercive action is justified in law. ”
Lord Atkin continued:
“ I know of only one authority, which might justify the suggested method of construction. 'When I use a word,' Humpty Dumpty said, in rather a scornful tone, 'it means just what I choose it to mean, neither more nor less'. 'The question is,' said Alice, 'whether you can make words mean so many different things.' 'The question is,' said Humpty Dumpty, 'which is to be the master, that's all.' After all this long discussion, the question is whether the words 'If a man has' can mean 'If a man thinks he has'. I have an opinion that they cannot and the case should be decided accordingly. ”
Lord Atkin's view was that the phrase "reasonable cause" in the statute at hand indicated that the actions of the Secretary were meant to be evaluated by an objective standard (which means, of course, a subjective standard applied by judges). As a result, it would be within the court's purview to determine the reasonableness of the Secretary's actions.[4]
[edit] Aftermath
The potential power of this dissenting judgement was clearly recognised even before it was published. The Lord Chancellor, John Simon, 1st Viscount Simon, wrote to Lord Atkin asking him to amend the proposed terms of the speech. He did not.[5]
Atkin's interpretation has generally been preferred subsequently. In Nakkuda Ali v Jayaratne[6] a strong Privy Council held that Liversidge v. Anderson must not be taken to lay down any general rule on the construction of the expression "has reasonable cause to believe". Subsequently Liversidge v Anderson was described by Lord Reid in Ridge v Baldwin[7] as a "very peculiar decision". Lord Diplock in I.R.C. v Rossminster Ltd[8] thought that "the time has come to acknowledge openly that the majority of this House in Liversidge v Anderson were expediently and, at that time, perhaps, excusably, wrong and the dissenting speech of Lord Atkin was right".
However, in the 1977 deportation case of R v. Secretary of State ex parte Hosenball[9], Lord Denning MR, in the Court of Appeal, supported judicial non-interference with ministerial discretion in matters of national security.[10]
[edit] Commonwealth countries
In the Commonwealth, many jurisdictions, particularly in the Caribbean, have opted to follow Lord Atkin's judgement as well. In A-G of St. Christopher, Nevis and Anguilla v. Reynolds, the Privy Council even went further than Lord Atkin's judgement had intended. Lord Atkin had suggested that a subjective standard would only be applicable if the statute had used phrasings such as "if it appears to the Secretary of State that..." or "where the Secretary of the State is satisfied that..."[4] In this case, however, the Privy Council held that despite the statute's statement that the Governor could detain a person if he was "satisfied" that the person was involved in acts "prejudicial to public safety and order", the statute did not grant unlimited discretion to the Governor; his actions could be evaluated on an objective standard.[11]
In other parts of the Commonwealth such as Singapore and Malaysia, the courts have generally followed the majority decision in Liversidge. In Singapore, the case of Re Ong Yew Teck saw the arrest of a man under the Singaporean Criminal (Temporary Provisions) Ordinance 1955, which granted police officers the power to arrest and detain anyone "whom he has reason to believe that there is ground to justify his arrest and detention under s. 47" of the ordinance. The detainee appealed, arguing that the phrase "has reason to believe" meant that an objective test of reasonableness was to be used, citing Nakkuda Ali. Justice Chua rejected this argument, and accepted the majority decision in Liversidge as persuasive precedent.[12] In Malaysia, the case which established the subjective test of reasonableness for executive actions was Karam Singh v. Menteri Hal Ehwal Dalam Negeri. The case, heard by the Federal Court in 1969, remains as binding precedent in Malaysia. In the case, the appellant had been detained under the Internal Security Act (ISA), but the statement of the Home Minister giving the grounds for his detention provided only one reason, even though his detention order had initially stated there were more. It was argued that the Home Minister had taken a "casual and cavalier" approach to the detention, and that because the allegations against the appellant had been unduly vague, the Home Minister had acted in bad faith, thereby voiding the detention. The court held that the detention was good, because it could not assess the actions of the executive, applying the subjective test of reasonableness as Liversidge had.[13]
In India, the Liversidge decision was cited in Gopalan v. State of Madras, where the court held that the subjective test was to be applied. However, subsequent decisions such as Fazal Ghosi v. State of Uttar Pradesh have allowed some measure of judicial intervention by holding that the executive's decisions must be based on "pertinent material"; if it is found that there is no such material justifying the decision, the courts may act.[14] In some other Commonwealth countries such as Malaysia, it has been attempted to overrule the precedent of Liversidge by citing Indian cases as persuasive precedent; in the case of Karam Singh, the Indian case of Jagannath Misra v. State of Orissa, where the facts were similar, was cited. Legal commentators have noted, however, that the Malaysian judiciary has been reluctant to accept Indian authorities, seeking to distinguish them whenever possible. One Malaysian judge has suggested that "English courts take a more realistic view of things while Indian judges ... impress me as indefatigable, idealists seeking valiantly to reconcile the irreconcilable".[13]
Background
Emergency powers in Regulation 18B of the Defence (General) Regulations 1939 permitted the Home Secretary to intern people if he had "reasonable cause" to believe that they had "hostile associations". Sir John Anderson exercised this power in respect of a man called Jack Perlzweig, who used the name Robert Liversidge, committing him to prison but giving no reason.[1] On appeal, the case, joined with that of Ben Greene, reached the House of Lords Judicial Committee (HoLJC), the highest court of appeal.[2] They had to decide whether the court could investigate the objective basis for the reasonable cause; in other words, could they evaluate the Home Secretary's actions on an objective standard, comparing them to that which might be taken by a reasonable man, or were they to measure them against the personal standard of the Secretary?[3]
[edit] Majority judgments
The majority of the Law Lords held that the legislation should be interpreted so as to make effective in the way parliament intended, even if that meant adding to the words to give that effect. Although parliament had made the power subject to a reasonable belief they accepted the Home Secretary's statement that he held such a belief; in otherwise that he believed he had reasonable cause. Viscount Maugham said that the court should "prefer a construction which will carry into effect the plain intention of those responsible " and Lord Macmillan that "it is right so to interpret emergency legislation as to promote rather than to defeat its efficacy". According to him, if the Secretary had acted in good faith, he need not disclose the basis for his decision, nor were his actions justiciable in a court of law.[3]
The majority of the Lords appear to have been greatly concerned with the fact that they were dealing with a matter of national security. In their view, it was not appropriate for a court to deal with matters of national security, especially as they were not privy to classified information that only the executive had.[4]
[edit] Dissenting judgment
The case is most famous for the dissenting speech of Lord Atkin, which has been recognised as a defining statement of the need for courts to remain independent of the executive whatever the prevailing circumstances. In his view the majority had abdicated their responsibility to investigate and control the executive, and were "more executive-minded than the executive". Lord Atkin protested that theirs was "a strained construction put on words with the effect of giving an uncontrolled power of imprisonment to the minister". He went on to say:
“ In England, amidst the clash of arms, the laws are not silent. They may be changed, but they speak the same language in war as in peace. It has always been one of the pillars of freedom, one of the principles of liberty for which on recent authority we are now fighting, that the judges are no respecters of persons and stand between the subject and any attempted encroachments on his liberty by the executive, alert to see that any coercive action is justified in law. ”
Lord Atkin continued:
“ I know of only one authority, which might justify the suggested method of construction. 'When I use a word,' Humpty Dumpty said, in rather a scornful tone, 'it means just what I choose it to mean, neither more nor less'. 'The question is,' said Alice, 'whether you can make words mean so many different things.' 'The question is,' said Humpty Dumpty, 'which is to be the master, that's all.' After all this long discussion, the question is whether the words 'If a man has' can mean 'If a man thinks he has'. I have an opinion that they cannot and the case should be decided accordingly. ”
Lord Atkin's view was that the phrase "reasonable cause" in the statute at hand indicated that the actions of the Secretary were meant to be evaluated by an objective standard (which means, of course, a subjective standard applied by judges). As a result, it would be within the court's purview to determine the reasonableness of the Secretary's actions.[4]
[edit] Aftermath
The potential power of this dissenting judgement was clearly recognised even before it was published. The Lord Chancellor, John Simon, 1st Viscount Simon, wrote to Lord Atkin asking him to amend the proposed terms of the speech. He did not.[5]
Atkin's interpretation has generally been preferred subsequently. In Nakkuda Ali v Jayaratne[6] a strong Privy Council held that Liversidge v. Anderson must not be taken to lay down any general rule on the construction of the expression "has reasonable cause to believe". Subsequently Liversidge v Anderson was described by Lord Reid in Ridge v Baldwin[7] as a "very peculiar decision". Lord Diplock in I.R.C. v Rossminster Ltd[8] thought that "the time has come to acknowledge openly that the majority of this House in Liversidge v Anderson were expediently and, at that time, perhaps, excusably, wrong and the dissenting speech of Lord Atkin was right".
However, in the 1977 deportation case of R v. Secretary of State ex parte Hosenball[9], Lord Denning MR, in the Court of Appeal, supported judicial non-interference with ministerial discretion in matters of national security.[10]
[edit] Commonwealth countries
In the Commonwealth, many jurisdictions, particularly in the Caribbean, have opted to follow Lord Atkin's judgement as well. In A-G of St. Christopher, Nevis and Anguilla v. Reynolds, the Privy Council even went further than Lord Atkin's judgement had intended. Lord Atkin had suggested that a subjective standard would only be applicable if the statute had used phrasings such as "if it appears to the Secretary of State that..." or "where the Secretary of the State is satisfied that..."[4] In this case, however, the Privy Council held that despite the statute's statement that the Governor could detain a person if he was "satisfied" that the person was involved in acts "prejudicial to public safety and order", the statute did not grant unlimited discretion to the Governor; his actions could be evaluated on an objective standard.[11]
In other parts of the Commonwealth such as Singapore and Malaysia, the courts have generally followed the majority decision in Liversidge. In Singapore, the case of Re Ong Yew Teck saw the arrest of a man under the Singaporean Criminal (Temporary Provisions) Ordinance 1955, which granted police officers the power to arrest and detain anyone "whom he has reason to believe that there is ground to justify his arrest and detention under s. 47" of the ordinance. The detainee appealed, arguing that the phrase "has reason to believe" meant that an objective test of reasonableness was to be used, citing Nakkuda Ali. Justice Chua rejected this argument, and accepted the majority decision in Liversidge as persuasive precedent.[12] In Malaysia, the case which established the subjective test of reasonableness for executive actions was Karam Singh v. Menteri Hal Ehwal Dalam Negeri. The case, heard by the Federal Court in 1969, remains as binding precedent in Malaysia. In the case, the appellant had been detained under the Internal Security Act (ISA), but the statement of the Home Minister giving the grounds for his detention provided only one reason, even though his detention order had initially stated there were more. It was argued that the Home Minister had taken a "casual and cavalier" approach to the detention, and that because the allegations against the appellant had been unduly vague, the Home Minister had acted in bad faith, thereby voiding the detention. The court held that the detention was good, because it could not assess the actions of the executive, applying the subjective test of reasonableness as Liversidge had.[13]
In India, the Liversidge decision was cited in Gopalan v. State of Madras, where the court held that the subjective test was to be applied. However, subsequent decisions such as Fazal Ghosi v. State of Uttar Pradesh have allowed some measure of judicial intervention by holding that the executive's decisions must be based on "pertinent material"; if it is found that there is no such material justifying the decision, the courts may act.[14] In some other Commonwealth countries such as Malaysia, it has been attempted to overrule the precedent of Liversidge by citing Indian cases as persuasive precedent; in the case of Karam Singh, the Indian case of Jagannath Misra v. State of Orissa, where the facts were similar, was cited. Legal commentators have noted, however, that the Malaysian judiciary has been reluctant to accept Indian authorities, seeking to distinguish them whenever possible. One Malaysian judge has suggested that "English courts take a more realistic view of things while Indian judges ... impress me as indefatigable, idealists seeking valiantly to reconcile the irreconcilable".[13]
Entick v Carrington (1665)
Entick v Carrington (1765) 19 Howell's State Trials 1030 is a leading case in English law establishing the civil liberties of individuals and limiting the scope of executive power. The case has also been influential in other common law jurisdictions and was an important motivation for the Fourth Amendment to the United States Constitution.
On 11 November 1762, the King's Chief Messenger Nathan Carrington, and three other King's messengers, James Watson, Thomas Ardran, and Robert Blackmore broke into the home of the Grub-street writer, John Entick (1703?-1773), in the parish of St Dunstan, Stepney, "with force and arms" and seized Entick's private papers. Entick, an associate of John Wilkes, was arrested. Also arrested that day was a lawyer, Arthur Beardmore. The King's messengers were acting on the orders of Lord Halifax, newly appointed Secretary of State for the Northern Department, "to make strict and diligent search for . . . the author, or one concerned in the writing of several weekly very seditious papers intitled, 'The Monitor or British Freeholder, No 357, 358, 360, 373, 376, 378, and 380'".
Entick sought judgment against Carrington and his colleagues who argued that they acted upon Halifax's warrant. A jury returned a special verdict finding that the defendants had broken into Entick's home "with force and arms" and searched for and taken away some of his private papers.
The trial took place in Westminster Hall presided over by Lord Camden, the Chief Justice of the Common Pleas. Camden held that Halifax had no right under statute or under precedent to issue such a warrant. In the most famous passage he stated:
The trial took place in Westminster Hall presided over by Lord Camden, the Chief Justice of the Common Pleas. Camden held that Halifax had no right under statute or under precedent to issue such a warrant. In the most famous passage he stated:
The great end, for which men entered into society, was to secure their property. That right is preserved sacred and incommunicable in all instances, where it has not been taken away or abridged by some public law for the good of the whole. The cases where this right of property is set aside by private law, are various. Distresses, executions, forfeitures, taxes etc are all of this description; wherein every man by common consent gives up that right, for the sake of justice and the general good. By the laws of England, every invasion of private property, be it ever so minute, is a trespass. No man can set his foot upon my ground without my license, but he is liable to an action, though the damage be nothing; which is proved by every declaration in trespass, where the defendant is called upon to answer for bruising the grass and even treading upon the soil. If he admits the fact, he is bound to show by way of justification, that some positive law has empowered or excused him. The justification is submitted to the judges, who are to look into the books; and if such a justification can be maintained by the text of the statute law, or by the principles of common law. If no excuse can be found or produced, the silence of the books is an authority against the defendant, and the plaintiff must have judgment.[1]
”
So the individual may do anything but that which is forbidden by law, and the state may do nothing but that which is expressly authorised by law.
The judgment established the limits of executive power in English law, that an officer of the state could only act lawfully in a manner prescribed by statute or common law.
It was also part of the background to the Fourth Amendment to the United States Constitution and was described by the Supreme Court of the United States as a "great judgment, one of the landmarks of English liberty, one of the permanent monuments of the British Constitution,’’ and a guide to an understanding of the Fourth Amendment.[2][3]
On 11 November 1762, the King's Chief Messenger Nathan Carrington, and three other King's messengers, James Watson, Thomas Ardran, and Robert Blackmore broke into the home of the Grub-street writer, John Entick (1703?-1773), in the parish of St Dunstan, Stepney, "with force and arms" and seized Entick's private papers. Entick, an associate of John Wilkes, was arrested. Also arrested that day was a lawyer, Arthur Beardmore. The King's messengers were acting on the orders of Lord Halifax, newly appointed Secretary of State for the Northern Department, "to make strict and diligent search for . . . the author, or one concerned in the writing of several weekly very seditious papers intitled, 'The Monitor or British Freeholder, No 357, 358, 360, 373, 376, 378, and 380'".
Entick sought judgment against Carrington and his colleagues who argued that they acted upon Halifax's warrant. A jury returned a special verdict finding that the defendants had broken into Entick's home "with force and arms" and searched for and taken away some of his private papers.
The trial took place in Westminster Hall presided over by Lord Camden, the Chief Justice of the Common Pleas. Camden held that Halifax had no right under statute or under precedent to issue such a warrant. In the most famous passage he stated:
The trial took place in Westminster Hall presided over by Lord Camden, the Chief Justice of the Common Pleas. Camden held that Halifax had no right under statute or under precedent to issue such a warrant. In the most famous passage he stated:
The great end, for which men entered into society, was to secure their property. That right is preserved sacred and incommunicable in all instances, where it has not been taken away or abridged by some public law for the good of the whole. The cases where this right of property is set aside by private law, are various. Distresses, executions, forfeitures, taxes etc are all of this description; wherein every man by common consent gives up that right, for the sake of justice and the general good. By the laws of England, every invasion of private property, be it ever so minute, is a trespass. No man can set his foot upon my ground without my license, but he is liable to an action, though the damage be nothing; which is proved by every declaration in trespass, where the defendant is called upon to answer for bruising the grass and even treading upon the soil. If he admits the fact, he is bound to show by way of justification, that some positive law has empowered or excused him. The justification is submitted to the judges, who are to look into the books; and if such a justification can be maintained by the text of the statute law, or by the principles of common law. If no excuse can be found or produced, the silence of the books is an authority against the defendant, and the plaintiff must have judgment.[1]
”
So the individual may do anything but that which is forbidden by law, and the state may do nothing but that which is expressly authorised by law.
The judgment established the limits of executive power in English law, that an officer of the state could only act lawfully in a manner prescribed by statute or common law.
It was also part of the background to the Fourth Amendment to the United States Constitution and was described by the Supreme Court of the United States as a "great judgment, one of the landmarks of English liberty, one of the permanent monuments of the British Constitution,’’ and a guide to an understanding of the Fourth Amendment.[2][3]
Tuesday, May 5, 2009
Law of Trusts - Computer Marked Assessment III
No additional materials are provided for the following eight 'knowledge' questions. Please read each question carefully and select an answer from those available.
Question 1
Marks: 1 What is the rule in Milroy v Lord (1861)?
Choose one answer. A. That courts of equity will not enforce bare promises
B. That courts of equity will not generally enforce voluntary covenants
C. That courts of equity will not order the perfection of imperfect gifts
D. That courts of equity will not enforce trusts in favour of volunteer beneficiaires
E. Don't know
Feedback
That's correct.
Although statements (a) and (b) are perfectly correct, they are not rules contained in Milroy v Lord. And statement (d) is plainly wrong. As cases such as Paul v Paul (1882) 20 Ch D 742 demonstrate, the objection is not that the claimant is a volunteer per se, for most trusts have volunteer beneficiaries. The fact that the claimant is a volunteer is only relevant where the trust is not completely constituted, where, in other words, there is no trust, merely a failed attempt to create one.
Correct
Marks for this submission: 1/1.Question 2
Marks: 1 What is a covenant to settle?
Choose one answer. A. A promise by deed to convey rights to the promisee outright
B. A promise by deed to convey rights to the promisee to hold on trust
C. A conveyance of rights to a third party to hold on trust
D. A written promise to convey rights to the promisee to hold on trust
E. Don't know
Feedback
That's correct.
A covenant is a promise in a deed, and a covenant to settle is a promise to set up a trust contained in a deed. Answer (d) is wrong, for though a deed must be written, writing itself is not enough to constitute a deed. Answer (a) is wrong because this is not a promise to create a trust, and answer (c) is wrong because it mentions no promise at all.
Correct
Marks for this submission: 1/1.Question 3
Marks: 1 What is the general attitude of equity to voluntary coventants?
Choose one answer. A. Equity will award damages for breach of a voluntary covenant
B. Equity will decree specific performance of a voluntary covenant
C. Equity will deem a voluntary covenant to have been fully performed
D. Equity will not lend its assistance to the enforcement of a voluntary covenant
E. Don't know
Feedback
That's correct.
The general rule, subject to one exception, is that only promises made for consideration will be enforced in equity, and then only those in which an award of damages is an inadequate remedy.
Correct
Marks for this submission: 1/1.Question 4
Marks: 1 What is the fundamental problem the intended beneficiary normally faces in trying to enforce voluntary covenants to settle?
Choose one answer. A. He is not privy to the deed
B. The deed does not purport to confer a benefit on him
C. The covenant cannot be enforced against a deceased covenantor
D. The intended beneficiary gave no consideration for the promise
E. Don't know
Feedback
That's correct.
Although the promise, because under seal, will be enforceable at law, the intended beneficiary cannot normally (Cannon v Hartley (1949) is exceptional in this regard) enforce it because he will not be privy (party) to it. Answer (b) is wrong, because the deed clearly does purport to confer a benefit on him. Answer (c) is wrong because the death of the covenantor does not extinguish his liablity for non-performance of the covenant; it is perfectly possible to pursue a claim for damages against his estate. Answer (d) is wrong because consideration is not needed for enforcement at law where the promise is contained in a deed.
Correct
Marks for this submission: 1/1.Question 5
Marks: 1 What exception is made in the case of marriage settlements?
Choose one answer. A. That equity will decree specific performance in favour of all intended beneficiaries
B. That equity will make an award of damages in favour of all intended beneficiaries
C. That equity will decree specific performance in favour of those within the marriage consideration
D. That equity will decree specific performance in favour of the next of kin alone
E. Don't know
Feedback
That's correct.
Although equity will not generally lend its aid to enforce a voluntary covenant, it takes a radically different view in the case of marriage settlements where the person seeking to enforce is within the 'marriage consideration'. In such cases, not only will the court decree specific performance, but it will do so even where damages are not an inadequate remedy. Answer (a) is wrong because relief is restricted to those within the marriage consideration. Answer (b) is wrong both for this reason and the further one that the remedy is specific performance, not damages. Answer (d) is wrong because, as re Plumptre's Marriage Settlement (1910) demonstrates, the next of kin will not be granted specific performance of a marriage settlement.
Correct
Marks for this submission: 1/1.Question 6
Marks: 1 What is the 'trust of the covenant' argument?
Choose one answer. A. That the right to sue vested in the covenantees is held on trust for the covenantor
B. That the right to sue vested in the covenantees is held on trust for the intended beneficiary
C. That the damages the covenantees will receive from suing the covenantor for breach of covenant will be held on trust for the intended beneficiary
D. That the covenantor holds the benefit of the covenant on trust for the intended beneficiary
E. Don't know
Feedback
That's correct.
The reason this argument will be made is that if the right is so held, then the intended beneficiary, though still not a beneficiary of a trust of the rights promised to be transferred, is at least the beneficiary of a different trust, a trust of the right to sue for failure to transfer the rights as promised. And given that he is the beneficiary of a completely constituted trust, it matters not that he is a volunteer (Paul v Paul (1882)). Answer (a) is wrong, because this argument would not suit the intended beneficiary. Answer (c) is wrong because this does not give the intended beneficiary what he is seeking, viz a lever to compel the covenantees to sue. Answer (d) is wrong because it is the convenantees, not the covenantor, who have the benefit of the covenant.
Correct
Marks for this submission: 1/1.Question 7
Marks: 1 What do the intended trustees generally have which the intended beneficiaries do not?
Choose one answer. A. They are parties to the covenant and so have a right specific performance
B. They are parties to the covenant and so have a right to damages at law
C. They are within the marriage consideration and so can claim damages in equity
D. They are within the marriage consideration and so can claim specific performance
E. Don't know
Feedback
That's correct.
Answer (a) is wrong, because although the covenantees are party, they will be trying to enforce a voluntary covenant, and equity will not generally lend its aid to the enforcement of such a covenant. However, the absence of consideration is no defence at common law: the fact of the promise being under seal and being enforced by a party to the covenant is enough. That is why (b) is correct. Answers (c) and (d) are both wrong because, even in the case of a marriage settlement, the covenantees will not usually be within the marriage consideration.
Correct
Marks for this submission: 1/1.Question 8
Marks: 1 What is the resulting trust argument which sometimes surfaces in this area?
Choose one answer. A. That any damages recovered by the covenantees in a suit against the covenantor will be held by them on resulting trust for the intended beneficiaires
B. That the rights promised to be transferred are held by the covenantees on resulting trust for the covenantor
C. That the covenantor is a resulting trustee of the rights he has promised to transfer for the intended beneficiaries
D. That the right to sue on the covenant being held by the covenantees on resulting trust for the covenantor, so too will any damages recovered from him in a suit for breach of covenant
E. Don't know
Feedback
That's correct.
Answer (a) is wrong, because a resulting trust is one arising in favour of the transferor of the rights now held on trust, and the intended beneficiaries transferred nothing to the covenantees. Answer (b) is wrong because the rights promised to be transferred have not been transferred at all - that is the very problem the intended beneficiary is trying to overcome. And answer (c) is wrong for the reason that this trust would once again not be a trust arising in favour of the transferor of rights.
Correct
Marks for this submission: 1/1.Comprehension
Each question in the Comprehension section refers to an extract. Please make sure you read the relevant extract before answering the questions below.
Please read the following extract from the judgment of Eve J in re Pryce [1917] 1 Ch 234 and then answer the five questions (Q9 - Q13) that follow.
Context
Under what was a typical marriage settlement, the defendant wife covenanted to convey to covenantees any after-acquired property she might receive to be held by them on trust for her husband and herself for their joint lives, for the survivor for their life, remainder to the children of the marriage (if any), and, in default of issue, remainder to her next-of-kin. This was known as the 'wife's fund'. The husband later gave the defendant a remainder interest he had from his own parents' marriage settlement, which interest vested in possession on the death of his mother. At that point, the defendant had a right to call for a transfer of these rights from the trustees of her husband's parents' marriage settlement to the covenantees/trustees of the 'wife's fund'. In breach of covenant, the defendant left the rights where they were, with the result that they were held for her absolutely. Her husband having now died, and in light of the fact that there were no issue of the marriage and that the only persons who would benefit from a transfer of the rights to the covenantees/trustees were the defendant widow's next of kin, the covenantees/trustees sought directions, inter alia, as to whether they were bound to take steps to enforce the payment and transfer to themselves of the rights currently held in trust for the defendant outright.
Question 9
Marks: 1 How does Eve J paraphrase the question asked by the covenantees?
Choose one answer. A. Whether the covenantees/trustees could be compelled to take steps to recover or enforce payment of transfer to them of the rights concerned
B. Whether the wife's next of kin could sue for breach of covenant
C. Whether the covenantees/trustees ought to take any steps to recover or enforce payment or transfer to them of the rights concerned
D. Whether the wife's next of kin could obtain specific performance of the covenant
E. Don't know
Feedback
That's correct.
The point to notice is that the word 'ought' has here been substituted for 'bound'. For that reason, answer (a) is what Eve J should have asked himself, but unfortunately didn't. And answers (b) and (d) are wrong because the next of kin were not themselves trying to enforce the covenant, either through an award of damages or a grant of specific performance.
Correct
Marks for this submission: 1/1.Question 10
Marks: 1 In relation to the 'wife's fund', what was the relevance of the fact that there were no children of the marriage?
Choose one answer. A. The trust failed and the rights were held on resulting trust for the wife
B. The only person who would gain from performance of the covenant would be the next of kin
C. If there had been children of the marriage, they would have been within the 'marriage consideration' and would have been able to bring an action for specific performance of the covenant
D. Both (b) and (c)
E. Don't know
Feedback
That's correct.
The wife was absolutely entitled to the rights held for her on trust by the trustees of her husband's parents' marriage settlement. By conveying those rights to the trustees of her own marriage settlement, she would thereby reduce her entitlement to a life interest, the remainder going to the next of kin. Given that this was a marriage settlement, had any children been born of her marriage, they would have been within the marriage consideration and so able to enforce the covenant in equity: Pullan v Koe (1913). No such right, however, is given to the next of kin: re Plumptre's Marriage Settlement (1910). Answer (a) is wrong, because the trust provided beneficiaries in case of failure of issue, viz the next of kin.
Correct
Marks for this submission: 1/1.Question 11
Marks: 1 If there had been children of the marriage, what effect would that have had so far as any trusts were concerned?
Choose one answer. A. None - there would be no trust until the rights in question were transferred to the covenantees
B. A constructive trust would arise in favour of the next-of-kin
C. A constructive trust of the defendant's interest would arise in favour of the children
D. None of the above
E. Don't know
Feedback
That's correct.
Since the covenant would now be specifically enforceable, application of the maxim that 'equity looks upon that as done which ought to be done' would generate a construcitve trust in favour of the children. Answer (a) is therefore wrong, and answer (b) is untenable because the next of kin could only take where there were no issue.
Correct
Marks for this submission: 1/1.Question 12
Marks: 1 What, according to Eve J, was the effect of the Judicature Act?
Choose one answer. A. That the same defences to a claim in equity could now be opposed to a claim at law
B. There was now only one court, and in it the rules of equity prevailed
C. All trusts were now executed, with the rights of the trustees now being vested in their beneficiaries
D. That voluntary covenants were now enforceable in equity
E. Don't know
Feedback
That's correct.
Answer (b) is the view of Sir George Jessel MR in Walsh v Lonsdale, not that of Eve J in this case, answer (c) would mean that our entire subject no longer existed, and answer (d) is the exact opposite of what Eve J was saying.
Correct
Marks for this submission: 1/1.Question 13
Marks: 1 Why did Eve J order that the trustees ought not to take any action to enforce the covenant?
Choose one answer. A. Because any damages awarded at common law would be nominal
B. Because any damages would be held on resulting trust for the wife
C. Because it would give the next of kin by indirect means relief they could not obtain by any direct procedure
D. Because the next of kin were not party to the covenant
E. Don't know
Feedback
That's correct.
Answers (a) and (b) are wrong for the simple reason that these issues were not addressed in Eve J's judgment. Answer (d) is true, but irrelevant, the issue being the position of the covenantees, who were, of course, party to the covenant.
Correct
Marks for this submission: 1/1.Application
Please consider the following fact scenario, then answer the four examination questions (Q14 - Q17) that follow:
Fred covenanted with Ella that he would convey £50,000 from the £100,000 currently in his account with the London Bank plc and any earnings he might receive from a book he was about to publish to her to hold on trust for Peter. Although he later earned £1,000,000 in royalties from the sale of his book, Fred failed to keep either promise.
Question 14
Marks: 1 What is the relevance of the fact that the covenant concerns royalties in respect of a book not yet written?
Choose one answer. A. It is not possible to have a trust of after-acquired property
B. The royalties would be after-acquired property, and according to re Cook, no trust of the covenant is possible in such circumstances
C. Rights to after-acquired property are incapable of assignment and so cannot be transferred to Ella
D. There is no certainty of subject-matter with after-acquired property
E. Don't know
Feedback
That's correct.
It was for this reason that Buckley J refused to countenance the idea that the covenantees held the benefit of the covenant on trust for the intended beneficiary. You should note that his reasoning in this regard is extremely contentious. And though (a) is perfectly correct, no-one is saying that there is a present trust of the royalties. Answer (c) is not the right answer, for though true, no attempt was made by Fred to convey to Ella the right to receive the royalties. And answer (d) is wrong because the issue is not one of uncertainty of subject-matter but of no subject-matter at all.
Correct
Marks for this submission: 1/1.Question 15
Marks: 1 What would Peter need to establish before he could sue for breach of covenant?
Choose one answer. A. That he could sue on the covenant by virtue of the Contracts (Rights of Third Parties) Act 1999
B. That the right to sue on the covenant was held for him on trust
C. That this was a marriage settlement and he was within the marriage settlement
D. Either (a) or (c)
E. Don't know
Feedback
Answer (d) is correct.
There are two ways in which Peter could sue in his own right. The first, which is doubtful, is that the 1999 Act applies to voluntary covenants and that he is able to invoke the Act. If both those questions are answered affirmatively, then Peter would be able to sue for damages at law. Second, where the requirements of a marriage settlement are present, in which case Peter will be able to obtain specific performance in equity. Answer (c) is not strictly correct, for the right to sue in such case would be vested in Ella, not Peter. However, in such circumstances, Peter could compel Ella to bring a claim, and, if she refused, in certain circumstances bring the claim himself in her name.
Incorrect
Marks for this submission: 0/1.Question 16
Marks: 1 What barrier does re Pryce present to Ella, who is considering suing Fred for breach of covenant?
Choose one answer. A. That the court will direct her not to sue Fred
B. That the court, if asked for directions, will direct her not to sue Fred
C. That the court will only direct her to sue Fred if it finds that she holds the right to sue on trust for Peter
D. That even if she does sue, the damages she will obtain will be nominal
E. Don't know
Feedback
That's correct.
Answer (a) is wrong because Eve J said nothing at all about the situation in which the covenantee simply goes ahead and sues without asking. Answer (c), though arguably what Eve J should have said in re Pryce, was not part of his reasoning at all. And answer (d), though one of the arguments put forward to defend the result, though not the reasoning, in re Pryce, again formed no part of the reasoning of Eve J.
Correct
Marks for this submission: 1/1.Question 17
Marks: 1 Which of the following arguments could NOT be made to show that re Pryce was wrongly decided?
Choose one answer. A. That Eve J mistook the effect of the Judicature Acts
B. That Eve J wrongly held that the right to sue was not held on trust for the next of kin
C. That Eve J answered a different question to that from which he was asked
D. That the fact that the next of kin could not sue in their own right had no bearing on the covenantees' right to do the same
E. Don't know
Feedback
That's correct.
Answer (b) was a point which was unfortunately not addressed in Eve J's judgment. All of (a), (c), and (d) are perfectly legitimate arguments to make against the correctness of Eve J's judgment.
Correct
Marks for this submission: 1/1.
Question 1
Marks: 1 What is the rule in Milroy v Lord (1861)?
Choose one answer. A. That courts of equity will not enforce bare promises
B. That courts of equity will not generally enforce voluntary covenants
C. That courts of equity will not order the perfection of imperfect gifts
D. That courts of equity will not enforce trusts in favour of volunteer beneficiaires
E. Don't know
Feedback
That's correct.
Although statements (a) and (b) are perfectly correct, they are not rules contained in Milroy v Lord. And statement (d) is plainly wrong. As cases such as Paul v Paul (1882) 20 Ch D 742 demonstrate, the objection is not that the claimant is a volunteer per se, for most trusts have volunteer beneficiaries. The fact that the claimant is a volunteer is only relevant where the trust is not completely constituted, where, in other words, there is no trust, merely a failed attempt to create one.
Correct
Marks for this submission: 1/1.Question 2
Marks: 1 What is a covenant to settle?
Choose one answer. A. A promise by deed to convey rights to the promisee outright
B. A promise by deed to convey rights to the promisee to hold on trust
C. A conveyance of rights to a third party to hold on trust
D. A written promise to convey rights to the promisee to hold on trust
E. Don't know
Feedback
That's correct.
A covenant is a promise in a deed, and a covenant to settle is a promise to set up a trust contained in a deed. Answer (d) is wrong, for though a deed must be written, writing itself is not enough to constitute a deed. Answer (a) is wrong because this is not a promise to create a trust, and answer (c) is wrong because it mentions no promise at all.
Correct
Marks for this submission: 1/1.Question 3
Marks: 1 What is the general attitude of equity to voluntary coventants?
Choose one answer. A. Equity will award damages for breach of a voluntary covenant
B. Equity will decree specific performance of a voluntary covenant
C. Equity will deem a voluntary covenant to have been fully performed
D. Equity will not lend its assistance to the enforcement of a voluntary covenant
E. Don't know
Feedback
That's correct.
The general rule, subject to one exception, is that only promises made for consideration will be enforced in equity, and then only those in which an award of damages is an inadequate remedy.
Correct
Marks for this submission: 1/1.Question 4
Marks: 1 What is the fundamental problem the intended beneficiary normally faces in trying to enforce voluntary covenants to settle?
Choose one answer. A. He is not privy to the deed
B. The deed does not purport to confer a benefit on him
C. The covenant cannot be enforced against a deceased covenantor
D. The intended beneficiary gave no consideration for the promise
E. Don't know
Feedback
That's correct.
Although the promise, because under seal, will be enforceable at law, the intended beneficiary cannot normally (Cannon v Hartley (1949) is exceptional in this regard) enforce it because he will not be privy (party) to it. Answer (b) is wrong, because the deed clearly does purport to confer a benefit on him. Answer (c) is wrong because the death of the covenantor does not extinguish his liablity for non-performance of the covenant; it is perfectly possible to pursue a claim for damages against his estate. Answer (d) is wrong because consideration is not needed for enforcement at law where the promise is contained in a deed.
Correct
Marks for this submission: 1/1.Question 5
Marks: 1 What exception is made in the case of marriage settlements?
Choose one answer. A. That equity will decree specific performance in favour of all intended beneficiaries
B. That equity will make an award of damages in favour of all intended beneficiaries
C. That equity will decree specific performance in favour of those within the marriage consideration
D. That equity will decree specific performance in favour of the next of kin alone
E. Don't know
Feedback
That's correct.
Although equity will not generally lend its aid to enforce a voluntary covenant, it takes a radically different view in the case of marriage settlements where the person seeking to enforce is within the 'marriage consideration'. In such cases, not only will the court decree specific performance, but it will do so even where damages are not an inadequate remedy. Answer (a) is wrong because relief is restricted to those within the marriage consideration. Answer (b) is wrong both for this reason and the further one that the remedy is specific performance, not damages. Answer (d) is wrong because, as re Plumptre's Marriage Settlement (1910) demonstrates, the next of kin will not be granted specific performance of a marriage settlement.
Correct
Marks for this submission: 1/1.Question 6
Marks: 1 What is the 'trust of the covenant' argument?
Choose one answer. A. That the right to sue vested in the covenantees is held on trust for the covenantor
B. That the right to sue vested in the covenantees is held on trust for the intended beneficiary
C. That the damages the covenantees will receive from suing the covenantor for breach of covenant will be held on trust for the intended beneficiary
D. That the covenantor holds the benefit of the covenant on trust for the intended beneficiary
E. Don't know
Feedback
That's correct.
The reason this argument will be made is that if the right is so held, then the intended beneficiary, though still not a beneficiary of a trust of the rights promised to be transferred, is at least the beneficiary of a different trust, a trust of the right to sue for failure to transfer the rights as promised. And given that he is the beneficiary of a completely constituted trust, it matters not that he is a volunteer (Paul v Paul (1882)). Answer (a) is wrong, because this argument would not suit the intended beneficiary. Answer (c) is wrong because this does not give the intended beneficiary what he is seeking, viz a lever to compel the covenantees to sue. Answer (d) is wrong because it is the convenantees, not the covenantor, who have the benefit of the covenant.
Correct
Marks for this submission: 1/1.Question 7
Marks: 1 What do the intended trustees generally have which the intended beneficiaries do not?
Choose one answer. A. They are parties to the covenant and so have a right specific performance
B. They are parties to the covenant and so have a right to damages at law
C. They are within the marriage consideration and so can claim damages in equity
D. They are within the marriage consideration and so can claim specific performance
E. Don't know
Feedback
That's correct.
Answer (a) is wrong, because although the covenantees are party, they will be trying to enforce a voluntary covenant, and equity will not generally lend its aid to the enforcement of such a covenant. However, the absence of consideration is no defence at common law: the fact of the promise being under seal and being enforced by a party to the covenant is enough. That is why (b) is correct. Answers (c) and (d) are both wrong because, even in the case of a marriage settlement, the covenantees will not usually be within the marriage consideration.
Correct
Marks for this submission: 1/1.Question 8
Marks: 1 What is the resulting trust argument which sometimes surfaces in this area?
Choose one answer. A. That any damages recovered by the covenantees in a suit against the covenantor will be held by them on resulting trust for the intended beneficiaires
B. That the rights promised to be transferred are held by the covenantees on resulting trust for the covenantor
C. That the covenantor is a resulting trustee of the rights he has promised to transfer for the intended beneficiaries
D. That the right to sue on the covenant being held by the covenantees on resulting trust for the covenantor, so too will any damages recovered from him in a suit for breach of covenant
E. Don't know
Feedback
That's correct.
Answer (a) is wrong, because a resulting trust is one arising in favour of the transferor of the rights now held on trust, and the intended beneficiaries transferred nothing to the covenantees. Answer (b) is wrong because the rights promised to be transferred have not been transferred at all - that is the very problem the intended beneficiary is trying to overcome. And answer (c) is wrong for the reason that this trust would once again not be a trust arising in favour of the transferor of rights.
Correct
Marks for this submission: 1/1.Comprehension
Each question in the Comprehension section refers to an extract. Please make sure you read the relevant extract before answering the questions below.
Please read the following extract from the judgment of Eve J in re Pryce [1917] 1 Ch 234 and then answer the five questions (Q9 - Q13) that follow.
Context
Under what was a typical marriage settlement, the defendant wife covenanted to convey to covenantees any after-acquired property she might receive to be held by them on trust for her husband and herself for their joint lives, for the survivor for their life, remainder to the children of the marriage (if any), and, in default of issue, remainder to her next-of-kin. This was known as the 'wife's fund'. The husband later gave the defendant a remainder interest he had from his own parents' marriage settlement, which interest vested in possession on the death of his mother. At that point, the defendant had a right to call for a transfer of these rights from the trustees of her husband's parents' marriage settlement to the covenantees/trustees of the 'wife's fund'. In breach of covenant, the defendant left the rights where they were, with the result that they were held for her absolutely. Her husband having now died, and in light of the fact that there were no issue of the marriage and that the only persons who would benefit from a transfer of the rights to the covenantees/trustees were the defendant widow's next of kin, the covenantees/trustees sought directions, inter alia, as to whether they were bound to take steps to enforce the payment and transfer to themselves of the rights currently held in trust for the defendant outright.
Question 9
Marks: 1 How does Eve J paraphrase the question asked by the covenantees?
Choose one answer. A. Whether the covenantees/trustees could be compelled to take steps to recover or enforce payment of transfer to them of the rights concerned
B. Whether the wife's next of kin could sue for breach of covenant
C. Whether the covenantees/trustees ought to take any steps to recover or enforce payment or transfer to them of the rights concerned
D. Whether the wife's next of kin could obtain specific performance of the covenant
E. Don't know
Feedback
That's correct.
The point to notice is that the word 'ought' has here been substituted for 'bound'. For that reason, answer (a) is what Eve J should have asked himself, but unfortunately didn't. And answers (b) and (d) are wrong because the next of kin were not themselves trying to enforce the covenant, either through an award of damages or a grant of specific performance.
Correct
Marks for this submission: 1/1.Question 10
Marks: 1 In relation to the 'wife's fund', what was the relevance of the fact that there were no children of the marriage?
Choose one answer. A. The trust failed and the rights were held on resulting trust for the wife
B. The only person who would gain from performance of the covenant would be the next of kin
C. If there had been children of the marriage, they would have been within the 'marriage consideration' and would have been able to bring an action for specific performance of the covenant
D. Both (b) and (c)
E. Don't know
Feedback
That's correct.
The wife was absolutely entitled to the rights held for her on trust by the trustees of her husband's parents' marriage settlement. By conveying those rights to the trustees of her own marriage settlement, she would thereby reduce her entitlement to a life interest, the remainder going to the next of kin. Given that this was a marriage settlement, had any children been born of her marriage, they would have been within the marriage consideration and so able to enforce the covenant in equity: Pullan v Koe (1913). No such right, however, is given to the next of kin: re Plumptre's Marriage Settlement (1910). Answer (a) is wrong, because the trust provided beneficiaries in case of failure of issue, viz the next of kin.
Correct
Marks for this submission: 1/1.Question 11
Marks: 1 If there had been children of the marriage, what effect would that have had so far as any trusts were concerned?
Choose one answer. A. None - there would be no trust until the rights in question were transferred to the covenantees
B. A constructive trust would arise in favour of the next-of-kin
C. A constructive trust of the defendant's interest would arise in favour of the children
D. None of the above
E. Don't know
Feedback
That's correct.
Since the covenant would now be specifically enforceable, application of the maxim that 'equity looks upon that as done which ought to be done' would generate a construcitve trust in favour of the children. Answer (a) is therefore wrong, and answer (b) is untenable because the next of kin could only take where there were no issue.
Correct
Marks for this submission: 1/1.Question 12
Marks: 1 What, according to Eve J, was the effect of the Judicature Act?
Choose one answer. A. That the same defences to a claim in equity could now be opposed to a claim at law
B. There was now only one court, and in it the rules of equity prevailed
C. All trusts were now executed, with the rights of the trustees now being vested in their beneficiaries
D. That voluntary covenants were now enforceable in equity
E. Don't know
Feedback
That's correct.
Answer (b) is the view of Sir George Jessel MR in Walsh v Lonsdale, not that of Eve J in this case, answer (c) would mean that our entire subject no longer existed, and answer (d) is the exact opposite of what Eve J was saying.
Correct
Marks for this submission: 1/1.Question 13
Marks: 1 Why did Eve J order that the trustees ought not to take any action to enforce the covenant?
Choose one answer. A. Because any damages awarded at common law would be nominal
B. Because any damages would be held on resulting trust for the wife
C. Because it would give the next of kin by indirect means relief they could not obtain by any direct procedure
D. Because the next of kin were not party to the covenant
E. Don't know
Feedback
That's correct.
Answers (a) and (b) are wrong for the simple reason that these issues were not addressed in Eve J's judgment. Answer (d) is true, but irrelevant, the issue being the position of the covenantees, who were, of course, party to the covenant.
Correct
Marks for this submission: 1/1.Application
Please consider the following fact scenario, then answer the four examination questions (Q14 - Q17) that follow:
Fred covenanted with Ella that he would convey £50,000 from the £100,000 currently in his account with the London Bank plc and any earnings he might receive from a book he was about to publish to her to hold on trust for Peter. Although he later earned £1,000,000 in royalties from the sale of his book, Fred failed to keep either promise.
Question 14
Marks: 1 What is the relevance of the fact that the covenant concerns royalties in respect of a book not yet written?
Choose one answer. A. It is not possible to have a trust of after-acquired property
B. The royalties would be after-acquired property, and according to re Cook, no trust of the covenant is possible in such circumstances
C. Rights to after-acquired property are incapable of assignment and so cannot be transferred to Ella
D. There is no certainty of subject-matter with after-acquired property
E. Don't know
Feedback
That's correct.
It was for this reason that Buckley J refused to countenance the idea that the covenantees held the benefit of the covenant on trust for the intended beneficiary. You should note that his reasoning in this regard is extremely contentious. And though (a) is perfectly correct, no-one is saying that there is a present trust of the royalties. Answer (c) is not the right answer, for though true, no attempt was made by Fred to convey to Ella the right to receive the royalties. And answer (d) is wrong because the issue is not one of uncertainty of subject-matter but of no subject-matter at all.
Correct
Marks for this submission: 1/1.Question 15
Marks: 1 What would Peter need to establish before he could sue for breach of covenant?
Choose one answer. A. That he could sue on the covenant by virtue of the Contracts (Rights of Third Parties) Act 1999
B. That the right to sue on the covenant was held for him on trust
C. That this was a marriage settlement and he was within the marriage settlement
D. Either (a) or (c)
E. Don't know
Feedback
Answer (d) is correct.
There are two ways in which Peter could sue in his own right. The first, which is doubtful, is that the 1999 Act applies to voluntary covenants and that he is able to invoke the Act. If both those questions are answered affirmatively, then Peter would be able to sue for damages at law. Second, where the requirements of a marriage settlement are present, in which case Peter will be able to obtain specific performance in equity. Answer (c) is not strictly correct, for the right to sue in such case would be vested in Ella, not Peter. However, in such circumstances, Peter could compel Ella to bring a claim, and, if she refused, in certain circumstances bring the claim himself in her name.
Incorrect
Marks for this submission: 0/1.Question 16
Marks: 1 What barrier does re Pryce present to Ella, who is considering suing Fred for breach of covenant?
Choose one answer. A. That the court will direct her not to sue Fred
B. That the court, if asked for directions, will direct her not to sue Fred
C. That the court will only direct her to sue Fred if it finds that she holds the right to sue on trust for Peter
D. That even if she does sue, the damages she will obtain will be nominal
E. Don't know
Feedback
That's correct.
Answer (a) is wrong because Eve J said nothing at all about the situation in which the covenantee simply goes ahead and sues without asking. Answer (c), though arguably what Eve J should have said in re Pryce, was not part of his reasoning at all. And answer (d), though one of the arguments put forward to defend the result, though not the reasoning, in re Pryce, again formed no part of the reasoning of Eve J.
Correct
Marks for this submission: 1/1.Question 17
Marks: 1 Which of the following arguments could NOT be made to show that re Pryce was wrongly decided?
Choose one answer. A. That Eve J mistook the effect of the Judicature Acts
B. That Eve J wrongly held that the right to sue was not held on trust for the next of kin
C. That Eve J answered a different question to that from which he was asked
D. That the fact that the next of kin could not sue in their own right had no bearing on the covenantees' right to do the same
E. Don't know
Feedback
That's correct.
Answer (b) was a point which was unfortunately not addressed in Eve J's judgment. All of (a), (c), and (d) are perfectly legitimate arguments to make against the correctness of Eve J's judgment.
Correct
Marks for this submission: 1/1.
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