R v Schildkamp
|Lord Reid,Lord Hodson,Lord Guest,Viscount Dilhorne,Lord Upjohn
|27 November 1969
|Judgment citation (vLex)
| UKHL J1127-1
|27 November 1969
|House of Lords
 UKHL J1127-1
House of Lords
Upon Report from the Appellate Committee, to whom was referred the Cause Director of Public Prosecutions against Schildkamp (on Appeal from the Court of Appeal (Criminal Division)), that the Committee had heard Counsel, as well on Monday the 6th, as on Tuesday the 7th and Wednesday the 8th, days of October last, upon the Petition and Appeal of the Director of Public Prosecutions, praying, That the matter of the Order set forth in the First Schedule thereto, namely, an Order of Her Majesty's Court of Appeal (Criminal Division) of the 23d of May 1969, might be reviewed before Her Majesty the Queen, in Her Court of Parliament, and that the said Order might be reversed, varied or altered, or that the Petitioner might have such other relief in the premises as to Her Majesty the Queen, in Her Court of Parliament, might seem meet; and Counsel having been heard on behalf of Jan Schildkamp, the Respondent 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 (Criminal Division), of the 23d day of May 1969 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 there be paid to the Respondent out of local funds such sums as may be reasonably sufficient to compensate him for his expenses, the amount thereof to be ascertained and certified by the Clerk of the Parliaments.
I have read the speech of my noble and learned friend, Lord Upjohn. For the reasons which he gives I would dismiss this appeal. I shall only add some general observations.
No one disputed that in construing a provision in an Act of Parliament one begins by considering its words in their context of the whole Act. And I think it is now clear that there is a very strong presumption that a provision in a consolidation act does not alter the pre-existing law. The question which has arisen in this case is whether and to what extent it is permissible to give weight to punctuation, cross headings and side notes to sections in the Act. Taking a strict view one can say that these should be disregarded because they are not the product of anything done in Parliament. I have never heard of an attempt to move that any of them should be altered or amended, and between the introduction of a Bill and the Royal Assent they can be and often are altered by officials of Parliament acting in conjunction with the draftsman.
But it may be more realistic to accept the Act as printed as being the product of the whole legislative process, and to give due weight to everything found in the printed Act. I say more realistic because in very many cases the provision before the court was never even mentioned in debate in either House, and it may be that its wording was never closely scrutinised by any member of either House. In such a case it is not very meaningful to say that the words of the Act represent the intention of Parliament but that punctuation, cross headings and side notes do not.
So if the authorities are equivocal and one is free to deal with the whole matter I would not object to taking all these matters into account provided that we realise that they cannot have equal weight with the words of the Act. Punctuation can be of some assistance in construction. A cross heading ought to indicate the scope of the sections which follow it but there is always a possibility that the scope of one of these sections may have been widened by amendment. But a side note is a poor guide to the scope of a section for it can do no more than indicate the main subject with which the section deals
If we take these matters into consideration then we are in effect searching for the intention of the draftsman rather than the intention of Parliament. And then it becomes very relevant to ask—could any competent draftsman have adopted this form of drafting if he had intended the result for which the Appellant contends? If the answer is no, then there is such real doubt that it must be resolved in favour of the accused.
The Respondent was charged with a number of offences in connection with a company of which he was a member, namely, Fiesta Tours, Ltd. One of the offences to which he pleaded guilty was described in the first count thus:
" Statement of Offence—Carrying on the business of a company with intent to defraud creditors contrary to Section 332 (3) of the Companies Act, 1948.
Particulars of Offence—JAN SCHILDKAMP between the 1st day of October 1963 and the 10th day of July 1964 within the jurisdiction of the Central Criminal Court was knowingly a party to the carrying on of the business of a company known as Fiesta Tours Limited with intent to defraud the creditors of the said company."
The Respondent appealed successfully to the Criminal Division of the Court of Appeal on the ground that he could not lawfully be convicted of this offence because section 332, sub-section (3) applied only to acts done before or in the course of a winding up, and Fiesta Tours, Ltd. has never been wound up.
The sole question to be determined is whether the Appeal Court has rightly construed the section by limiting its scope to acts done before or in the course of a winding up. Sub-section (3) reads:
"Where any business of a company is carried on with such intent or for such purpose as is mentioned in subsection (1) of this section, every person who was knowingly a party to the carrying on of the business in manner aforesaid, shall be liable on conviction on indictment to imprisonment for a term not exceeding two years or to a fine not exceeding five hundred pounds or to both."
The relevant part of subsection (1) reads:
"If in the course of the winding-up of a company it appears that any business of the company has been carried on with intent to defraud creditors of the company …. or for any fraudulent purpose, the court on the application of the Official Receiver …. may, if it thinks proper so to do, declare that any persons who were knowingly parties to the carrying on of the business in manner aforesaid shall be personally responsible, without any limitation of liability, for all or any of the debts or other liabilities of the company as the court may direct."
Winding up is not expressly mentioned in subsection (3) whereas it is referred to specifically in subsection (1) to which subsection (3) is linked by reference. The whole fasciculus of sections in which section 332 appears is dealing with liquidation.
The Act of 1948 is a consolidation act and did not alter the pre-existing law which is to be found in the Companies Act, 1928 sections 72 to 77 inclusive, in which the same fasciculus of sections appears, all of which deal with liquidation. Section 75 of the 1928 Act is in the same terms as section 332 of the 1948 Act and section 75(1), just as its successor, is concerned only with liquidation. Fraudulent trading is a new conception not imported from the Bankruptcy Act.
The Crown naturally relies on the principle that when the words of an Act of Parliament are plain they must prevail. There is no mention of liquidation in subsection (3), therefore the offence is unlimited in its scope and is not confined to cases where there has been a winding up. The maxim cxpressio unius est exclusio alterius is relied upon. True that the words "winding up" are not mentioned in subsection (3) but there is a specific reference to subsection (1) where winding up is specifically mentioned. As I have said, these sections are linked together by their language. They provide a coherent whole dealing with civil and criminal remedies for fraudulent trading in winding up cases. It would not be expected that a brand new criminal offence would be introduced by Parliament in this way. In my opinion, even if there is room for doubt that doubt should be resolved in favour of the accused. It is, to my mind, impossible to say that the words of subsection (3) in their context are so plain that the context can be ignored and that this new offence has been introduced.
I am not impressed by the argument that some re-writing of subsection (3) is necessary to make it correspond in terms with subsection (1) mutatis mutandis. If the accused is charged, as here, with an offence in breach of subsection (3) he is able to rely on the fact that there has been no winding up of the company concerned to quash the charge. This he has successfully done in this case. True that there is a change in tense from one subsection to the other but I cannot agree that this affects the argument.
Section 75 of the 1928 Act as a whole treats the civil and criminal remedies for fraudulent trading on the same footing and it would indeed be anomalous if the criminal remedy were wider in its scope than the civil remedy. A brand new offence would more naturally be found in a separate section, as is illustrated by section 93(6) which imposes penalties for the issue, circulation or distribution of any prospectus or for the issue of a form of application for shares or debentures in contravention of subsection (1) of the same section.
This is not the first time that this House has been asked to consider a situation of this kind, that is to say one where words which if plainly and literally interpreted have a wide meaning have been held to be restricted by their context to a narrower meaning. Such a case is section 3 of the Factors Act, 1889, extended to... where
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