Miliangos v George Frank (Textiles) Ltd
| Jurisdiction | UK Non-devolved |
| Judge | Lord Wilberforce,Lord Simon of Glaisdale,Lord Cross of Chelsea,Lord Edmund-Davies,Lord Fraser of Tullybelton |
| Judgment Date | 05 November 1975 |
| Judgment citation (vLex) | [1975] UKHL J1105-2 |
| Court | House of Lords |
| Date | 05 November 1975 |
[1975] UKHL J1105-2
Lord Wilberforce
Lord Simon of Glaisdale
Lord Cross of Chelsea
Lord Edmund-Davies
Lord Fraser of Tullybelton
House of Lords
Upon Report from the Appellate Committee, to whom was referred the Cause Miliangos against Georse Frank (Textiles) Limited, That the Committee had heard Counsel, as well on Monday the 19th as on Tuesday the 20th, Wednesday the 21st and Thursday the 22d, days of May last, upon the Petition and Appeal of George Frank (Textiles) Limited of 400 Caledonian Road, London N.l, 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 10th of February 1975, except so far as regards the words: " execution be stayed for 21 days upon the balance between the Judgment as expressed in Swiss Francs and Sterling and if the Defendants do within such time pay such balance into Court into a Swiss Francs Account or into a Joint Account in the names of the Solicitors to the parties subject to Treasury consent under the Exchange Control Act 1947 the said stay be continued until the determination of an appeal herefrom or until further order" might be reviewed before Her Majety the Queen, in Her Court of Parliament, and that the said Order might be reversed, varied or altered, or that the Petitioners might have 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 Michael Miliangos, 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 10th day of February 1975, in part 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 Respondent the Costs incurred by him in respect of the said Appeal, the amount thereof to be certified by the Clerk of the Parliaments.
My Lords,
The facts in this case are as simple as in the Havana Railways case they were complex. It is concerned with a contract made in May 1971 for the sale of 90,718 kilogrammes of polyester yarn at a price of 12.56 Swiss francs per kilogramme, price to be paid within 30 days of invoice. The proper law of this contract was Swiss law and the money of account and of payment was Swiss francs. The respondent, the seller, is a national of Switzerland and the yarn was produced by his firm in Switzerland. It was delivered in the autumn of 1971 under five invoices, each of which stated the price in Swiss francs, payment to be made within 30 days to a Swiss bank. The appellant company did not pay any part of the price. It accepted, by way of part payment, two bills of exchange drawn in Switzerland for a total sum of 300,000 Swiss francs payable on 31st January 1972 but these were dishonoured on presentation.
The action was begun by writ on 20th April 1972. In his statement of claim the respondent claimed the amount of the price or, alternatively, the amount due on the bills expressed, in each case, in the sterling equivalent of the sum due in Swiss francs as at the dates when payment should have been made. The appellant delivered a defence and a counterclaim alleging that the yarn was defective and there followed a number of interlocutory steps arising out of this allegation. But on 22nd November 1974 just before the action was due to come on for trial the appellant wrote to say that it abandoned the defence and counterclaim and would submit to judgment.
Thereafter the proceedings took a remarkable course. On 26th November 1974 the Court of Appeal (Lord Denning M.R., Lawton L.J. and Foster J.) announced their decision in a case involving a claim in German currency� Schorsch Meier G.m.b.H. v. Hennin [1974] 3 W.L.R. 823. Although they were faced with a unanimous decision of this House in In re United Railways of Havana and Regla Warehouses Ltd. [1961] A.C. 1007 that, on a foreign currency claim, judgment can only be given in sterling, to which the foreign currency must be converted as at the date when the debt became due, the court held by a majority that an English court could give a money judgment in a foreign currency, when that currency was the currency of the contract. Lawton L.J., dissenting considered that he was bound by the Havana Railways case. Unanimously, as a second ground of decision, the court held that where the creditor resided in an E.E.C. country, an English court was obliged (sic) by Article 106 of the Treaty of Rome to give a judgment in the currency of the creditor, if that was the currency of the contract.
This decision was naturally welcomed by the respondent. So when this action came on for hearing on 2nd December 1974 he applied to amend his statement of claim so as to claim the amount due to him in Swiss francs. This amendment was allowed by Bristow J. so that the claim became one for 415,522�45 Swiss francs for the price plus 621�75 the cost of protesting the two bills, making together 416,144�20 Swiss francs. Since, between the date in 1971 when payment was due and the date of the hearing, sterling had fallen in value as against the Swiss franc from Sw.Frs.9�90 to 6�00 (approximately) to the £, this meant that if the respondent could obtain judgment in Swiss francs he could recover in sterling terms some £60,000, whereas if he had to accept the sterling equivalent at the 1971 rate he could recover only some £42,000.
This amendment having been made, the action (together with a second action into which it is unnecessary to enter) came for trial. The learned judge found himself in a difficult position. On the one hand there was the decision of this House in the Havana Railways case which clearly precluded him from giving judgment in Swiss francs or from awarding the sterling equivalent of the sum due converted at any other date than the date when the sum claimed was due. On the other hand there was the decision of the Court of Appeal in Schorsch Meier, which had declined to apply the Havana Railways decision. In these circumstances he decided that he ought to follow the decision of this House and that the decision in Schorsch Meier was given per incuriam.
An appeal was brought to the Court of Appeal and was heard in February 1975 by Lord Denning M. R., Stephenson and Geoffrey Lane L.JJ. It was submitted that the court, on indistinguishable facts, was bound by and should follow the Havana Railways case, but the court declined to do so. It held that the majority decision in Schorsch Meier was not given per incuriam (the unanimous alternative was not directly relevant since Switzerland is not an E.E.C. member) and that it was binding upon the court. It therefore varied the judgment of Bristow J. so as to give judgment for the respondent for the sum claimed in Swiss francs. From this judgment appeal has come to this House. There has been no appeal in the Schorsch Meier case but since it was applied by the Court of Appeal in these proceedings I shall have to comment upon it.
My Lords, it is clear from this account that some distortion of the judicial process has been brought about. As Bristow J. said:
"I am faced with a judgment of a majority of the Court of Appeal, which in its application to the issue raised before me says that a rule of English law taken for granted by the Court of Appeal and the House of Lords for some 350 years is no longer a rule of English law.
The speeches of the House of Lords in Broome v. Cassell & Co. Ltd. constrain me in the circumstances to hold that the rule of law that my judgment can only be expressed in sterling is still of full force and effect, since Parliament has not altered it, nor has the House of Lords itself under its 1966 Declaration (see [1966] 1 W.L.R. 1234)".
It has to be reaffirmed that the only judicial means by which decisions of this House can be reviewed is by this House itself, under the Declaration of 1966. Whether it can or should do so is a difficult enough question, which I shall now examine.
My Lords, although the "breach date rule" has a long history, possibly, but I think not clearly, extending back to the Year Books, consideration of it at the present time as regards foreign money debts must start from the Havana Railways case. For that was a case of a money debt as to which it was sought to persuade this House that a different rule should be applied from that which was admitted to be relevant to claims for damages for tort or for breach of contract. The claim there was for a debt (or debts) in U.S. dollars, due under a contract the proper law of which was held to be the law of Pennsylvania. The debtor (the United Havana Railways Co.) was English: the creditor was American. The proceedings were by way of proof in the liquidation of the debtor, not by action by writ but it was not suggested that this made any difference, and I say at once that I do not think that any distinction can be drawn on this ground. On the arguments presented which were at least strenuous, and after examination of the cases extending over a long period, the House unanimously decided that the provable sum in U.S. dollars had to be converted into sterling at the rates of exchange prevailing when the relevant sums fell due and were not paid. They rejected the counter-suggestion that conversion should be made at the date of judgment. They did not take up or accept suggestions which had been made in some earlier cases that a separate rule applied to foreign money claims.
My Lords, even if I were...
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