Byrne v Kinematograph Renters Society Ltd
| Jurisdiction | England & Wales |
| Date | 1958 |
| Court | Chancery Division |
Natural Justice - Tribunal - Trade association - Disqualification recommended - Remedy of injunction and damages - Contractual relationship - Necessity. - Trade Dispute - Act in furtherance of - Conspiracy - Predominant object - Use of unlawful means. - Restraint of Trade - Trade association - Tribunal - Quasi-judicial proceedings - Natural justice. - Trespass - Privacy, invasion of - Access to premises - False reasons given.
The plaintiff at the material time was in control of two cinemas; the first defendant, K.R.S., was a limited company for the protection of film distributors; the third and fourth defendants, H. and B., were respectively the secretary and head of the investigation department of K.R.S.; the second defendant, C.E.A., was a trade union to protect exhibitors of films and their employees.
Following complaints from one of the members of K.R.S., B. decided to have investigations carried out at the plaintiff's cinemas. Visits by K.R.S. inspectors were made for that purpose on 23 occasions between September 16, 1955, and April 30, 1956; on two occasions, namely, December 3, 1955, and February 13, 1956, discrepancies were found between the number of tickets sold and the returns to the distributors, which would have the result of a financial loss to the distributors. On April 30 the inspectors (of whose existence the plaintiff had hitherto been unaware) disclosed their identity to him and asked to check his box-office returns. They deliberately refrained from telling the plaintiff their real objective and said that it was a routine inspection. Failing to see certain return sheets the inspectors came back on May 3, when they questioned the plaintiff and his wife (who was in charge of the box-office) from 10 a.m. until 6.30 p.m. about the discrepancies of December 3 and February 13. No satisfactory explanation was furnished but the plaintiff and his wife alleged that the discrepancies were due to lack of adequate staff.
The inspectors' report was sent to B., who made his own report to J.I.C. (the joint investigation committee of K.R.S. and C.E.A.). The plaintiff was told that he could attend a meeting of J.I.C. on June 26, when he could, if he wished, make representations on the matter. At the meeting the plaintiff was called in and confronted with “this” (the report of B.), but he was not allowed to see it. He read certain letters he had written to B. and was questioned by H. His wife was not permitted to give evidence.
K.R.S., following that meeting of J.I.C., recommended its members not to supply films to the plaintiff, who was told that this course had been adopted pending a full investigation at his expense by accountants nominated by K.R.S. The plaintiff was unwilling to agree to an investigation by accountants nominated by K.R.S., and the recommendation came into operation, with the result that the plaintiff was unable to continue his business of exhibiting films.
By this action the plaintiff asked for a declaration that the recommendation of J.I.C. was null and void on the grounds that it was the result of proceedings conducted contrary to the tenets of natural justice, and for an injunction to restrain K.R.S. from carrying out the recommendation. He also claimed damages for conspiracy and trespass against K.R.S., H. and B. and for breach of contract against K.R.S. for failing to treat him according to natural justice.
The plaintiff contended that the defendants could not plead against the claim in conspiracy that what they did was in the interests of the trade, because the means used were unlawful, namely, trespass or unlawful invasion of privacy by visits to the cinema, not for the purpose of seeing films but of checking the plaintiff's returns, and access to his office obtained by a direct falsehood. The plaintiff also contended that K.R.S. owed him a duty whether or not his claim was based on contract:—
Held, (1) that the claim for damages for conspiracy failed, as the predominant object of the defendants had been to protect their own interests and not to injure the plaintiff, and they had not committed trespass or employed other unlawful means to attain that object.
(2) That the remedies of a declaration and an injunction based on the claim that the defendants did not act according to natural justice must have a contractual basis no less than the remedy of damages.
(3) That the contract here, if there were one, came into existence when the plaintiff was invited to attend the inquiry by J.I.C. and he agreed to do so, and it would be implied in such a contract that it would be fairly conducted.
(4) That a domestic tribunal like J.I.C. was not required by the principles of natural justice to conduct itself like a court of law, and although there were no rules of universal application to every kind of inquiry and to every kind of domestic tribunal, natural justice required: (a) that the person accused should know the nature of the accusation made against him; (b) he should be given an opportunity to state his case; and (c) the tribunal must act in good faith.
(5) That although the methods of the defendants might be deplored, they had not in the circumstances failed to comply sufficiently with the rules of natural justice and the plaintiff's claim failed.
ACTION.
The following statement of facts is taken from the judgment: In 1955 the plaintiff, Miles Austen Byrne, was interested in the entertainment industry in Hereford where he controlled two halls known as the Kemble Theatre and the County Cinema. The former was the property of the plaintiff company, Miles Byrne (Hereford) Ltd., in which the plaintiff was a shareholder and of which he was the managing director. He was, in addition, the lessee of the County Cinema. At the Kemble “live” theatrical shows were the main part of the entertainment, supplemented by film performances; the County Cinema was wholly given up to the latter. Contracts for films in both halls were negotiated and concluded by the plaintiff in the name of the plaintiff company in spite of the fact that it had no interest in the County.
The first defendant (hereafter called K.R.S.) was a company limited by guarantee whose object was to protect the interests of film renters (distributors of films to exhibitors) in this country. It had about 20 such members who between them apparently controlled more than nine-tenths of the films in commercial distribution. The third and fourth defendants, Hill and Belton, were or had been two K.R.S. employees.
The second defendant (hereafter referred to as C.E.A.) was a trade union registered as such and concerned to protect the interests of exhibitors of films and their employees. C.E.A. claimed to represent over nine-tenths of the cinema proprietors in this country, but neither of the plaintiffs was a member, and it was a part of their case that C.E.A. was indirectly controlled by the three largest distributing concerns, which owned chains of cinemas known as circuits. The circuits it was further alleged were through associated companies intimately connected with the large renters, with the effect that the circuits were favoured at the expense of the small or independent exhibitor outside the ring, and C.E.A. was the ally of the renters.
As a result of a recommendation given by K.R.S. to its members the plaintiff had in effect been put out of business and had been very seriously injured in his trade. In this action, as originally framed, he sought to have this recommendation pronounced null and void on the grounds that it was the result of proceedings conducted in defiance of the tenets of natural justice or, alternatively, as being in restraint of trade and contrary to public policy. He also sought to have the defendants enjoined from implementing the recommendation and from interfering with his liberty to trade with members of K.R.S. He also claimed damages against Hill and Belton — and by amendment against K.R.S. — for conspiracy to injure him in his trade. By further amendments the plaintiff claimed damages for trespass against K.R.S., Hill and Belton, and damages against K.R.S. for breach of contract to treat him in accordance with natural justice.
Before the advent of sound films most film bookings were at a flat rate; but with the coming of the talking film in about 1930, percentage bookings were adopted, that is, talking films were hired out on a sharing system. This complicated accounts between exhibitors and renters, and the latter set up a “Sound Inspection System.” This organization in about 1930 was handed over to K.R.S., which set up an investigation department. Since the beginning of 1931 the renters had not made inspections themselves, though rights of inspection appeared to be included in their ordinary contracts with exhibitors, but had left the whole matter to K.R.S., who did not in this matter appear to act as agents for the renters but as a principal carrying out its object of protecting its members' interests.
The K.R.S. investigation department was originally run by the defendant Hill, then secretary of the society, but he subsequently handed over control to the defendant Belton. The investigation department employed inspectors up and down the country to make routine visits to cinemas and to check the results of these visits with the returns made by exhibitors, to renters. The method employed was to buy tickets at the cinema early in the day's...
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R v Jones (John)
...of the Court since this statute was passed which governs particularly this point. He has reminded us of the decision in Byrne v. Kinematograph Renters Society Ltd. (1958) 2 All England Reports, 579, which he prays in and of his argument. In that case persons had entered a cinema by producin......
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Preliminary Sections
...Brydges v. Brydges & Wood [1909] p. 187. 46 Bull v. Bull [1965] 3 W.L.R. 1048. 177 Byrne v. Kinematograph Renters Society Ltd & anor (1958) 2 All E.R. 579. 60 C.O. Segun (01. Alokolaro with him;, for the 17th and 20th Respondents 234 Carlish v. East Ham Corporation anc Edwards [1948] 2 K.B.......
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Cases referred to in 1967
...Brydges v. Brydges & Wood [1909] p. 187. 46 Bull v. Bull [1965] 3 W.L.R. 1048. 177 Byrne v. Kinematograph Renters Society Ltd & anor (1958) 2 All E.R. 579. 60 C.O. Segun (01. Alokolaro with him;, for the 17th and 20th Respondents 234 Carlish v. East Ham Corporation anc Edwards [1948] 2 K.B.......