Attorney General v De Keyser's Royal Hotel

APPEAL from a decision of the Court of Appeal^F1 reversing a decision of Peterson J.

The following statement of facts is taken from the opinion of Lord Dunedin: “In April, 1916, the Army Council, finding it necessary to have accommodation in London for the headquarters personnel of the Royal Flying Corps and for the Design Section of the same, communicated with the Board of Works with a view to their finding a suitable building. That department, which had previously had some tentative offers from the Receiver and Manager in possession of the premises belonging to the De Keyser Hotel Co., Ld., came to the conclusion that the building known as De Keyser's Hotel would suit. They communicated with the War Office to that effect on April 18, 1916, and on the same date applied to the Receiver to see on what terms he would let. After a short period of ineffectual negotiation the Board of Works, on April 29, informed the Receiver that ‘after full consideration of the matter the Board are of the opinion that it will be to the advantage of all concerned to refer the question of the amount to be paid by the Government for the use of such of the hotel premises as will be required to the Defence of the Realm Losses Commission. In these circumstances the Board have no option but to communicate with the War Office with a view to the hotel premises, excluding the shops, being requisitioned under the Defence of the Realm Acts in the usual manner.’ Following on this communication the War Office, on May 1, wrote as follows to the Receiver:—

“DE KEYSER'S ROYAL HOTEL, E.C.

“‘I am instructed by the Army Council to take possession of the above property under the Defence of the Realm Regulations, excluding the shops, the other portions sub-let, and the wine-cellars. …. I enclose forms of claim for submission to the Defence of the Realm Losses Commission. Compensation, as you are probably aware, is made, ex gratia, and is strictly limited to the actual monetary loss sustained.’

“On receipt of this letter the Receiver expressed his willingness to facilitate the taking possession, but at the same time he safeguarded his position by the following letter on May 3:—

“‘I write to inform you that I have instructed Messrs. John Barker & Son, Ld., to represent me at the making of the inventory of the contents of this Hotel, and also to meet your representative there to-morrow, and to render every facility in order that the necessary work may be done with the utmost expedition. I desire, however, to inform you that the steps which I am taking are without prejudice to the question as to whether the Army Council are within their rights of acquiring possession of the above property under their notice dated 1st May, 1916, as to which I am being advised.’

“This was followed up by a letter of May 5 to the following effect:—

“‘Referring to the letter of the 1st instant from Captain Cole of the Lands Branch, War Office, it does not seem to me that the acquisition of this building as offices is necessary for the purpose of securing the public safety or the Defence of the Realm, or that such an acquisition is within the powers conferred by the Defence of the Realm Consolidation Regulations, 1914. I must, therefore, enter a protest against the notice contained in the letter if acted upon, and you must understand that anything which I am doing in the matter is without prejudice to the rights of all parties interested in the Hotel. I think that a fair rent might be fixed by personal negotiation between a representative of the Authority acquiring the building and myself, but failing this I would ask you to agree to submit the question to arbitration.’

“To this the Office of Works replied on May 9:—

“‘With regard to your letter of the 5th instant, the premises having been commandeered by the Military Authorities under the Defence of the Realm Acts, the amount of payment to the applicants out of public funds in respect of direct and substantial loss incurred and damage sustained by them by reason of interference with the applicants’ property or business through the exercise by the Crown of its rights and duties in defence of the Realm will be determined by the Defence of the Realm Losses Commission. Having regard, therefore, to para. 4 of your letter it would seem advisable for the claim to be made on a form prepared for the purpose, a supply of which I believe you have, as soon as possible.'

“As no settlement was arrived at, and the Receiver declined to go before the Losses Commission, there was presented a Petition of Right by the De Keyser Company. The relief asked was:—

“‘(1.) A declaration that your suppliants are entitled to payment of an annual rent so long as Your Majesty's Principal Secretary of State for the War Department or Your Majesty's Army Council or any other person or persons acting on Your Majesty's behalf continues in use and occupation of the said premises.

“‘(2.) The sum of 13,520l. 11s. 1d. for use and occupation of your suppliants’ premises from the 8th day of May, 1916, to the 14th day of February, 1917.'

“‘(4.) A declaration that your suppliants are entitled to a fair rent for use and occupation by way of compensation under the Defence Act, 1842.’

“To this, reply was made by the Attorney-General on behalf of His Majesty to the following effect:—

“‘(7.) No rent or compensation is by law payable to the Suppliants in respect of the matters aforesaid or any of them either under the Defence Act, 1842, or at all. The Suppliants have been offered on behalf of His Majesty payment of such sum as in the opinion of the Defence of the Realm Losses Commission ought in reason and fairness to be made to them out of public funds in respect of direct and substantial loss incurred and damage sustained by them by reason of interference with their property or business in the United Kingdom through the exercise by the Crown as aforesaid of its rights and duties in the Defence of the Realm.’

“The case depended before Peterson J., who dismissed the petition, holding himself bound by the decision of the Court of Appeal in In re A Petition of Right.^F2 Appeal being taken to the Court of Appeal, that Court, by a majority, Sir Charles Swinfen Eady M.R. and Warrington L.J., Duke L.J. dissenting, reversed the decision of Peterson J., and made the following declaration:—

“‘And this Court doth declare that the Suppliants are entitled to a fair rent for use and occupation of De Keyser's Royal Hotel on the Thames Embankment in the City of London by way of compensation under the Defence Act, 1842.’

“Against this order the present appeal has been brought.”