Maclaine Watson & Company Ltd v International Tin Council
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE NOURSE,LORD JUSTICE RALPH GIBSON,LORD JUSTICE KERR |
| Judgment Date | 27 April 1988 |
| Judgment citation (vLex) | [1988] EWCA Civ J0427-11 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | 88/0440,88/0441 |
| Date | 27 April 1988 |
[1988] EWCA Civ J0427-10
Lord Justice Kerr
Lord Justice Nourse
and
Lord Justice Ralph Gibson
88/0440
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
COMPANIES COURT
Royal Courts of Justice,
MR. ROBERT ALEXANDER Q.C, MR. RICHARD SYKES Q.C, MR. NICHOLAS CHAMBERS Q.C., MRS. ROSALYN HIGGINS Q.C., MR. PETER IRVIN and MR. LESLIE KOSMIN (instructed by Messrs. Cameron Markby) appeared on behalf of the International Tin Council.
MR. ANDREW MORRITT Q.C., MR. ELITHU LAUTERPACHT Q.C., MR. PATRICK HOWELL and MR. RICHARD PLENDER (instructed by Messrs. Allen & Overy) appeared on behalf of Amalgamated Metal Trading.
MR. MARK BARNES (instructed by Messrs. Slaughter & May) appeared on behalf of Kleinwort Benson.
MR. ANTHONY GRABINER Q.C., MR. NICOLAS BRATZA and MR. DAVID RICHARDS (instructed by the Treasury Solicitor) appeared on behalf of the Attorney-General.
MR. ADRIAN HUGHES (instructed by Messrs. Elborne Mitchell) appeared on behalf of Maclaine Watson.
MR. ALAN BOYLE (instructed by Messrs. Clifford Chance) held a Watching Brief for the Members.
(" ")
Introduction
This is the judgment of the court in the proceedings seeking the compulsory winding up of the ITC. On 22nd January 1987, on a motion by the ITC, Millett J struck out the petition presented by Amalgamated Metal Trading Limited, a creditor with an arbitration award for £5.3m which is also the first plaintiff in the Multi-Broker action. The other parties to the motion, who were joined by leave of the judge, are Kleinwort Benson PLC, which is one of the plaintiffs in the Six Banks actions and wishes to support the petition as a loan creditor for more than £7m, and the Attorney-General, who wishes to see the petition struck out. Both the petitioner and Kleinwort Benson have now, with the leave of the judge, appealed to this court.
The judgment of Millett J and the arguments of counsel before him are now fully reported in [1987] Ch. 419. The winding up proceedings were the earliest to be heard at first instance and the judgment of Millett J, at pp 438 to 442, contains an admirable summary of the ITC and the events surrounding its failure, and also of the main provisions of ITA6, the Headquarters Agreement, the 1968 Act and the 1972 Order. All these matters have been dealt with in the appeals in the direct actions and need not be repeated here. Furthermore, the arguments in this court, having been heard after those in the appeals in the direct actions, did not have to traverse the basic common ground and were correspondingly abbreviated.
Millett J held, first, that although the ITC fell within the literal meaning of "association" in section 665 of the Companies Act 1985, Parliament could not have intended to subject it to the winding up jurisdiction of the English court; and, secondly, that the immunity from "suit and legal process" conferred on the ITC by paragraph 6(1) of the 1972 Order included immunity from the winding up process, which in any event was not an "enforcement" of the petitioner's arbitration award within the exception from immunity contained in paragraph 6(1)(c). Being in no doubt that the learned judge's decision of both points was correct and in broad agreement with his reasoning, we do not propose to do more than to indicate the essential grounds on which we have come to that view.
Jurisdiction
Part XXI of the 1985 Act, consisting of sections 665 to 674, provides for the winding up of unregistered companies. The meaning of "unregistered company" is defined by section 665:
"For the purposes of this Part, the expression 'unregistered company' includes any trustee savings bank certified under the enactments relating to such banks and any partnership (whether limited or not), any association and any company, with the following exceptions—
(a) a railway company incorporated by Act of Parliament,
(b) a company registered in any part of the United Kingdom under the Joint Stock Companies Acts or under the legislation (past or present) relating to companies in Great Britain,
(c) a partnership, association or company which consists of less than 8 members and is not a foreign partnership, association or company,
(d) a limited partnership in England and Wales or Northern Ireland."
Mr. Morritt, for the petitioner, took us through the statutory predecessors of this definition, starting with section 3 of the Joint Stock Companies Winding-up Act 1848, which defined the word "company" to mean "any partnership, association, or company, corporate or unincorporate, to which this Act applies." Between 1849 and 1929 successive acts progressively introduced the exceptions which are now to be found in section 655, but the basic words "any partnership….. any association….. any company" were always there.
It never having been suggested that it is a partnership or a company, the sole question is whether the ITC, an international organisation, is an "association" within section 665. Mr. Morritt submitted that here we have an ordinary word in the English language, with a plain and unambiguous meaning, which is apt to describe the ITC and to which effect must be given accordingly. Referring to observations made in the House of Lords in IRC v. Colico Dealings Limited [1962] A.C.1, Millett J convincingly disposed of that submission in these words [1987] Ch. at page 450 A-B:
"…..it is one thing to give effect to plain and unambiguous language in a statute. It is quite another to insist that general words must invariably be given their fullest meaning and applied to every object which falls within their literal scope, regardless of the probable intentions of Parliament."
We entirely agree. Like most canons of statutory construction, it is only a matter of common sense.
The learned judge's approach is fully supported by a decision on this very legislation, which was relied on for another purpose in the direct actions but was not cited below in the winding up proceedings. In Re St. James's Club [1852] 2 De.G.M. & G. 383 Lord St. Leonards LC, sitting as the Court of Appeal in Chancery, held that a members' social club was not an association for the purposes of the 1848 Act as amended by the 1849 Act, section 1 of which provided that "notwithstanding anything in the said Act contained importing a more limited application thereof, the same shall apply to all partnerships, associations and companies, whereof the partners or associates are not less than seven in number, whether incorporated or unincorporated." The Lord Chancellor, having considered the rules of the club and having observed that the difficulty would be very great in bringing clubs within the operation of the winding-up acts, considered the legislation and, at page 389, after reading the words of the 1849 Act above quoted, continued:
"The words are very wide, no doubt; but still, I must give a reasonable construction to the Act, which is in pari materia, and incorporated with the Act of the preceding year. I cannot hold it to apply to every association or company. If I were to do so, I might be called upon to carry the application much lower than to such a club as that now in question. A cricket club, an archery society, or a charitable society, would come under the operation of the Act, and indeed every club would be included. Though 'associations' are mentioned, I cannot think that word is to be treated without regard to the particulars with which it is associated……I will not say what associations are within the Acts; but, bearing in mind that the individuals who form a club do not constitute a partnership, nor incur any liability as such, I think associations of that nature are not within the Winding-Up Acts. I find in all these Acts to which I have referred, that every provision is inconsistent with including such an association as this club is. If such had been the intention of the legislature, why should not the word 'club' have been expressly mentioned? If, however, the legislature has used ambiguous expressions, I will not extend their signification beyond their natural import. At first sight, the word 'association' would seem to include the case of clubs, but in looking at the context, I am clearly of opinion that it does not."
Recognising the force of that decision, Mr. Barnes, for Kleinwort Benson, submitted that it went no further than to exclude from the application of section 665 associations which do not carry on business. He said that since the ITC had carried on business, moreover on a massive scale, it was not excluded. In our opinion, the Lord Chancellor's decision is of wider effect. He said that he would not say what associations were within the leglislation. He only held that a members' social club was not; on à ground which, if he would not state exhaustively what associations were included, cannot have been intended to be the only ground on which they could be excluded. In our opinion the decision establishes that the word "association" in what is now section 665 does not include an association which Parliament could not reasonably have intended should be subject to the winding up process.
When we look at ITA6, it is obvious that it would have been against all reason for Parliament to have had such an intention in the case of the ITC. Mr. Morritt submitted that to approach the matter in this way is to rely on a treaty in order to construe a statute. We wholly disagree. We have to decide whether general words in a statute include the ITC. We are told by authority that those words do not include an association which Parliament could not...
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