Beswick (A.P.) v Beswick (A.P.)

JurisdictionEngland & Wales
CourtHouse of Lords
JudgeLord Reid,Lord Hodson,Lord Guest,Lord Pearce,Lord Upjohn
Judgment Date29 June 1967
Judgment citation (vLex)[1967] UKHL J0629-1
Date29 June 1967
Docket NumberParliamentary Archives, HL/PO/JU/4/3/114 9

[1967] UKHL J0629-1

HOUSE OF LORDS

Lord Reid

Lord Hodson

Lord Guest

Lord Pearce

Lord Upjohn

Parliamentary Archives, HL/PO/JU/4/3/114 9

Beswick (A.P.)
and
Beswick (A.P.)
Lord Reid

my lords,

1

Before 1962 the Respondent's deceased husband carried on business as a coal merchant. By agreement of 14th March, 1962, he assigned to his nephew the Appellant the assets of the business and the Appellant under-took first to pay to him £6 10s. per week for the remainder of his life and then to pay to the Respondent an annuity of £5 per week in the event of her husband's death. The husband died in November, 1963. Thereupon the Appellant made one payment of £5 to the Respondent but he has refused to make any further payment to her. The Respondent now sues for £175 arrears of the annuity and for an order for specific performance of the continuing obligation to pay the annuity. The Vice Chancellor of the County Palatine of Lancaster decided against the Respondent but the Court of Appeal reversed this decision and, besides ordering payment of the arrears, ordered the Appellant to pay to the Respondent for the remainder of her life an annuity of £5 per week in accordance with the agreement

2

It so happens that the Respondent is Administratrix of the estate of her deceased husband and she sues both in that capacity and in her personal capacity. So it is necessary to consider her rights in each capacity.

3

For clarity I think it best to begin by considering a simple case where, in consideration of a sale by A to B, B agrees to pay the price of £1,000 to a third party X. Then the first question appears to me to be whether the parties intended that X should receive the money simply as A's nominee so that he would hold the money for behoof of A and be accountable to him for it, or whether the parties intended that X should receive the money for his own behoof and be entitled to keep it. That appears to me to be a question of construction of the agreement read in light of all the circumstances which were known to the parties. There have been several decisions involving this question. I am not sure that any conflicts with the view which I have expressed: but if any does, e.g. Engelbach [1924] 2 Ch. 348, I would not agree with it. I think that re Schebsman [1944] Ch. 83 was rightly decided and that the reasoning of Uthwatt J. ( [1943] Ch. 366) and the Court of Appeal supports what I have just said. In the present case I think it clear that the parties to the agreement intended that the Respondent should receive the weekly sums of £5 in her own behoof and should not be accountable to her deceased husband's estate for them. Indeed the contrary was not argued.

4

Reverting to my simple example the next question appears to me to be, where the intention was that X should keep the £1,000 as his own, what is the nature of B's obligation and who is entitled to enforce it. It was not argued that the law of England regards B's obligation as a nullity, and I have not observed in any of the authorities any suggestion that it would be a nullity. There may have been a time when the existence of a right depended on whether there was any means of enforcing it, but today the law would be sadly deficient if one found that, although there is a right, the law provides no means for enforcing it. So this obligation of B must be enforceable either by X or by A. I shall leave aside for the moment the question whether section 56(1) of the Law of Property Act 1925 has any application to such a case, and consider the position at Common Law.

5

Lord Denning's view, expressed in this case not for the first time, is that X could enforce this obligation. But the view more commonly held in recent times has been that such a contract confers no right on X and that X could not sue for the £1,000. Leading counsel for the Respondent based his case on other grounds, and as I agree that the Respondent succeeds on other grounds, this would not be an appropriate case in which to solve this question. It is true that a strong Law Revision Committee recommended so long ago as 1937 (Cmd. 5449) that "where a contract by" its express terms purports to confer a benefit directly on a third party it "shall be enforceable by the third party in his own name … (page 31). And if one had to contemplate a farther long period of Parliamentary procrastination, this House might find it necessary to deal with this matter. But if legislation is probably at an early date I would not deal with it in a case where that is not essential. So for the purposes of this case I shall proceed on the footing that the commonly accepted view is right.

6

What then is A's position? I assume that A has not made himself a trustee for X, because it was not argued in this appeal that any trust had been created. So if X has no right A can at any time grant a discharge to B or make some new contract with B. If there were a trust the position would be different. X would have an equitable right and A would be entitled and indeed bound to recover the money and account for it to X. And A would have no right to grant a discharge to B. If there is no trust and A wishes to enforce the obligation how does he set about it? He cannot sue B for the £1,000 because under the contract the money is not payable to him, and, if the contract were performed according to its terms, he would never have any right to get the money. So he must seek to make B pay X.

7

The argument for the Appellant is that A's only remedy is to sue B for damages for B's breach of contract in failing to pay the £1,000 to X. Then the Appellant says that A can only recover nominal damages of 40s. because the fact that X has not received the money will generally cause no loss to A: he admits that there may be cases where A would suffer damage if X did not receive the money but says that the present is not such a case.

8

Applying what I have said to the circumstances of the present case, the Respondent in her personal capacity has no right to sue, but she has a right as administratrix of her husband's estate to require the Appellant to perform his obligation under the agreement. He has refused to do so and he maintains that the Respondent's only right is to sue him for damages for breach of his contract. If that were so, I shall assume that he is right in maintaining that the administratrix could then only recover nominal damages because his breach of contract has caused no loss to the estate of her deceased husband.

9

If that were the only remedy available the result would be grossly unjust. It would mean that the Appellant keeps the business which he bought and for which he has only paid a small part of the price which he agreed to pay. He would avoid paying the rest of the price, the annuity to the Respondent, by paying a mere 40s. damages.

10

The Respondent's first answer is that the common law has been radically altered by section 56(1) of the Law of Property Act 1925, and that that section entitles her to sue in her personal capacity and recover the benefit provided for her in the agreement although she was not a party to it. Extensive alterations of the law were made at that time but it is necessary to examine with some care the way in which this was done. That Act was a Consolidation Act and it is the invariable practice of Parliament to require from those who have prepared a consolidation Bill an assurance that it will make no substantial change in the law and to have that checked by a committee. On this assurance the Bill is then passed into law, no amendment being permissible. So, in order to pave the way for the 1925 Consolidation Act, earlier Acts were passed in 1922 and 1924 in which were enacted all the substantial amendments which now appear in the 1925 Act and these amendments were then incorporated in the Bill which became the 1925 Act. Those earlier Acts contain nothing corresponding to section 56 and it is therefore quite certain that those responsible for the preparation of this legislation must have believed and intended that section 56 would make no substantial change in the earlier law. and equally certain that Parliament passed section 56 in reliance on an assurance that it did make no substantial change.

11

In construing any Act of Parliament we are seeking the intention of Parliament and it is quite true that we must deduce that intention from the words of the Act. If the words of the Act are only capable of one meaning we must give them that meaning no matter how they got there. But if they are capable of having more than one meaning we are, in my view, well entitled to see how they got there. For purely practical reasons we do not permit debates in either House to be cited: it would add greatly to the time and expense involved in preparing cases involving the construction of a statute if Counsel were expected to read all the debates in Hansard, and it would often be impracticable for counsel to get access to at least the older reports of debates in Select Committees of the House of Commons; moreover, in a very large proportion of cases such a search, even if practicable, would throw no light on the question before the Court. But I can see no objection to investigating in the present case the antecedents of section 56.

12

Section 56 was obviously intended to replace section 5 of the Real Property Act 1845 (8 and 9 Vict. C. 106). That section provided:

"That under an Indenture executed after the first day of October 1845 an immediate estate or interest in any tenements or hereditaments and the benefit of a condition or covenant respecting any tenements or hereditaments may be taken although the taker thereof be not named a party to the said indenture …"

13

Section 56(1) now provides:

"a person may take an immediate or other interest in land or other property, or the benefit of any condition, right of entry, covenant or agreement over or respecting...

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