Contract and Trading Company (Southern) Ltd v Barbey
| Jurisdiction | England & Wales |
| Judge | Viscount Simonds,Lord Goddard,Lord Radcliffe,Lord Cohen,Lord Keith of Avonholm |
| Judgment Date | 30 November 1959 |
| Judgment citation (vLex) | [1959] UKHL J1130-1 |
| Date | 30 November 1959 |
| Court | House of Lords |
[1959] UKHL J1130-1
Viscount Simonds
Lord Goddard
Lord Radcliffe
Lord Cohen
Lord Keith of Avonholm
House of Lords
Upon Report from the Appellate Committee to whom was referred the Cause Contract and Trading Co. (Southern) Limited against Barbey and others, carrying on business as Lombard Odier & Cie., that the Committee had heard Counsel on Wednesday the 28th day of October last upon the Petition and Appeal of The Contract and Trading Co. (Southern) Limited, of 24-25 Old Steine, Brighton, in the County of Sussex, praying, That the matter of the Order set forth in the Schedule thereto, namely, an Order of Her Majesty's Court of Appeal of the 12th of March 1959, might be reviewed before Her Majesty the Queen, in Her Court of Parliament, and that the said Order might be reversed, varied or altered, and that the Petitioners might have the relief prayed for in the Appeal, or such other relief in the premises as to Her Majesty the Queen, in Her Court of Parliament, might seem meet; as also upon the Case of Edmond Barbey, Georges Lombard, Richard Pictet, Jean Ernest Bonna. Raymond Barbey, Marcel Odier and Thierry Barbey carrying on business as Lombard Odier & Cie., lodged in answer to the said Appeal; and due consideration had this day of what was offered on either side in this Cause:
It is Ordered and Adjudged, by the Lords Spiritual and Temporal in the Court of Parliament of Her Majesty the Queen assembled. That the said Order of Her Majesty's Court of Appeal, of the 12th day of March 1959, complained of in the said Appeal, be, and the same is hereby, Affirmed, and that the said Petition and Appeal be, and the same is hereby, dismissed this House: And it is further Ordered, That the Appellants do pay, or cause to be paid, to the said Respondents the Costs incurred by them in respect of the said Appeal, the amount thereof to be certified by the Clerk of the Parliaments.
My Lords,
This appeal raises a short but by no means easy question upon the meaning and effect of certain provisions of the Exchange Control Act, 1947.
The facts are not in dispute. The Respondents carry on business and are resident at Geneva in Switzerland, a country not within the scheduled territories as defined by the Act that I have mentioned. As holders in due course of three Bills of Exchange for a total sum of £8,700, of which the Appellants were acceptors and which were dishonoured on presentation, they brought the action out of which this appeal arises against the Appellants in the Queen's Bench Division, claiming payment of the sum of £8,700. Upon their application under Order XIV, Rule 1, of the Rules of the Supreme Court to sign final judgment, the Appellants sought leave to defend the action upon the ground (the only ground, as I understand, that was open to them) that the Act afforded them a good defence to the action. It is this question which, having been determined adversely to the Appellants by the Master and the learned Judge in Chambers and by the Court of Appeal, has now reached your Lordships' House. It has conveniently throughout been treated as a question of law finally to be disposed of upon an interlocutory application, and I see no objection to this course.
The Act, of which the long title is "An Act to confer powers, and impose duties and restrictions, in relation to gold, currency, payments, securities, debts, and the import, export, transfer and settlement of property, and for purposes connected with the matters aforesaid", was a far-reaching measure designed for the protection of the national economy. It is with one only of its many aspects that this case is concerned, namely, the making of a payment in the United Kingdom to or for the credit of a person resident outside the scheduled territories, which, as I have already said, do not include Switzerland. For this matter special provision is made by section 5, which falls within Part II of the Act, but there are general provisions covering this and other prohibited transactions to which it will be necessary to refer. The relevant part of section 5 is as follows (I note that per incuriam section 6, not section 5, has been treated in the Courts below as the material section, but nothing turns on this):
"Except with the permission of the Treasury, no person shall do any of the following things in the United Kingdom, that is to say2—
( a) make any payment to or for the credit of a person resident outside the scheduled territories; or
( b) make any payment to or for the credit of a person resident in the scheduled territories by order or on behalf of a person resident outside the scheduled territories; or
( c) place any sum to the credit of any person resident outside the scheduled territories".
It is common ground that Treasury permission for payment of the sum of £8,700 by the Appellants to or for the credit of the Respondents had not been given either at the date of presentation of the Bills of Exchange or at the date of the issue of the writ in the action. Therefore, said the Appellants, the Bills were not due and payable and no action lay upon them. And this plea they reinforced by reference to section 33 of the Act to which I refer.
That section, which is in Part VI of the Act entitled "Supplemental", provides as follows:
"(1) It shall be an implied condition in any contract that, where, by virtue of this Act, the permission or consent of the Treasury is at the time of the contract required for the performance of any term thereof, that term shall not be performed except in so far as the permission or consent is given or is not required:
Provided that this subsection shall not apply in so far as it is shown to be inconsistent with the intention of the parties that it should apply, whether by reason of their having contemplated the performance of that term in despite of the provisions of this Act or for any other reason.
(2) Notwithstanding anything in the Bills of Exchange Act, 1882, neither the provisions of this Act, nor any condition, whether express or to be implied having regard to those provisions, that any payment shall not be made without the permission of the Treasury under this Act, shall be deemed to prevent any instrument being a bill of exchange or promissory note.
(3) The provisions of the Fourth Schedule to this Act shall have effect with respect to legal proceedings, arbitrations, bankruptcy proceedings, the administration of the estates of deceased persons, the winding up of companies, and proceedings under deeds of arrangement or trust deeds for behoof of creditors."
I pause to note that this section shows upon its face that the contractual obligation of payment created by a Bill of Exchange is a term for the performance of which Treasury permission is required. And I would also observe how attractively simple at this stage is the argument presented by the Appellants. Write out, they say, the condition implied by the statute and you get a promise to pay on the due date or on the date when Treasury permission is given whichever is the later date. It is on that date and not before it that the Bill becomes due and actionable. My Lords, I might, while wondering that the Legislature had thought fit to deprive of their apparent rights creditors, whose only fault lay in residence outside the scheduled territories, without making any countervailing provision for their protection, I might, I say, have been compelled to an unwilling acquiescence in this argument if the Act had ended with subsection (2) of section 33. But subsection (3) of the same section and the Fourth Schedule to which it refers justify and demand a different interpretation to be put upon section 5 read in conjunction with section 33 (1) and (2).
The Fourth Schedule provides by paragraph 1 that the provisions of Part II of the Act shall apply to sums required to be paid by any judgment or order of any court or by any award as they apply in relation to other sums, with the implication that such sums are not to be paid except with the permission of the Treasury, by paragraph 2 that nothing in the Act shall be construed as preventing the payment by any person of any sum into any court in the United Kingdom, but that the provisions of Part II should apply to the payment of any sum out of court, whether under an order of the court or otherwise, to or for the credit of any person resident outside the scheduled territories, by paragraph 3 for the making of rules of court in regard to payment into court and other matters. Paragraph 4 is of vital importance. It is as follows:
"(1) In any proceedings in a prescribed court and in any arbitration proceedings, a claim for the recovery of any debt shall not be defeated by reason only of the debt not being payable without the permission of the Treasury and of that permission not having been given or having been revoked.
(2) No court shall be prescribed for the purpose of this paragraph unless the Treasury are satisfied that adequate provision has been made therefor by rules of court for the purposes specified under the last preceding paragraph." (i.e. inter alia for payment into court.)
The High Court of Justice is such a prescribed court. Paragraphs 5 and 6 may also be mentioned, for their provisions, though not directly in point, undoubtedly fit better into the scheme of the Act for which the Respondents contend. The former paragraph provides that in any bankruptcy, winding up of any company or administration of the estate of any deceased person as therein mentioned, a claim for a sum not payable without the permission of the Treasury shall, notwithstanding that the permission has not been given or has been revoked, be admitted as if it had been given and had not been revoked, and paragraph 6 provides that a debt for the payment of...
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...Private and Public international Law, Clarendon Press: Oxford 198-2, at 364-5, 37. Contract and Trading Co. (Southern) Ltd v Barbey, [1960] AC 244 at 252 per Viscount Simonds. 38. Unreported. Supreme Court of the Bahamas, No 1383 of 1987, dated December 21st, 1990. subject to any contrary l......