Re British Concrete Pipe Association's Agreement
| Jurisdiction | England & Wales |
| Judge | THE MASTER OF THE ROLLS,LORD JUSTICE MAY,LORD JUSTICE ROBERT GOFF |
| Judgment Date | 17 November 1982 |
| Judgment citation (vLex) | [1982] EWCA Civ J1117-1 |
| Docket Number | 82/0450 |
| Court | Court of Appeal (Civil Division) |
In The Matter of The Restrictive Trade Practices Act 1956
and
[1982] EWCA Civ J1117-1
The Master of the Rolls
(Sir John Donaldson)
Lord Justice May
and
Lord Justice Robert Goff
82/0450
1964 No. 18 (E&W)
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE RESTRICTIVE PRACTICES COURT
(IN ENGLAND AND WALES)
Royal Courts of Justice.
MR. DAVID KEMP, Q.C. and MR. RICHARD SEYMOUR (instructed by Messrs. Bristows Cooke & Carpmael) appeared on behalf of British Steel (Appellants).
MR. F.M. FERRIS, Q.C. (instructed by the Treasury Solicitor) appeared on behalf of the Director-General of Fair Trading (Respondents).
This is an appeal by the British Steel Corporation against a judgment of the Restrictive Practices Court given on the 17th December, 1980. That court held the British Steel Corporation to be in contempt of court by breaching an undertaking which had been given to the court in January 1965, not by British Steel, but by Stanton & Staveley Limited.
At that time in 1965 Stanton & Staveley Limited were members of the British Concrete Pipe Association. As such they made an agreement which had the effect of restricting price competition. They duly registered that agreement. It was selected for examination by the registrar, brought before the court, and declared to be contrary to the public interest. The court, instead of making an injunctive order, accepted an undertaking from Stanton & Staveley Limited and from others that they would not enter into agreements to the like effect. (I am paraphrasing the undertaking because its exact terms are immaterial for present purposes).
British Steel came on the scene in 1969 when under section 8 of the Iron and Steel Act of that year the minister was given power to transfer property from private steel companies. Section 8 (1) of the Act is in these terms:
"The Minister may, with respect to a publicly-owned company which was in public ownership on 30th April 1969, by order (made by statutory instrument whereof a draft shall be laid before Parliament) vest all or any of its property, rights, liabilities and obligations in the Corporation; and an order under this section may contain provision for any matter for which it appears to the Minister requisite or expedient to make provision in connection with, or in consequence of, the vesting."
That was followed by the Steel Companies (Vesting Order 1970 ( S.I. No. 430 of 1970) which provided by paragraph 3:
"On the date on which this Order comes into operation [29th March,1970] all the property, rights, liabilities and obligations of each scheduled company shall vest in the Corporation by virtue of this Order and without further assurance."
Stanton & Staveley Limited were, of course, one of the companies in the schedule; and it was said by the registrar and upheld by the Restrictive Practices Court that the effect of paragraph 3 of the order, which follows the wording of section 8 (1) of the Act, was to transfer to the British Steel Corporation the burden of the undertaking which had been given to the court by Stanton & Staveley Limited five years before.
The particular word relied upon by the registrar is the word "obligation". The primary meaning given to that word by the Oxford English Dictionary is: "The action of binding oneself by oath, promise, or contract to do or forbear something". Indeed, binding oneself by oath or promise would appear to be a very accurate description of an undertaking given to the court. The word "obligation" was also considered in Watkinson v. Hollington (1944) 1 King's Bench 16 at page 21 where Lord Justice Scott adverted to this meaning and made it clear in his judgment that the word "obligation" was not limited to a contractual obligation or the payment or non-payment of money but had this broader meaning, although it is true to say that he was dealing with the matter in quite a different context.
Mr. Kemp for the British Steel Corporation submits that section 8 and paragraph 3 of the order should be construed restrictively in this particular context so as not to transfer the burden of an undertaking given to the court. Our task, as I see it, is to construe the Act, and in so doing the prima facie rule is that words have their ordinary meaning. But that is subject to the qualification that if, giving words their ordinary meaning, we are faced with extraordinary results which cannot have been intended by Parliament, we then have to move on to a second stage in which we re-examine the words and see whether they must in all the circumstances have been intended by Parliament to have a different meaning or a more restricted meaning.
Mr. Kemp, pursuing that approach, has advanced seven main reasons for urging that section 8 and paragraph 3 should be given a sufficiently restricted meaning to exclude the transfer of this undertaking. It is common ground between the parties that for practical purposes an undertaking to the court can be treated in the same way as an injunction.
The first point is this. Mr. Kemp says that the Restrictive Practices legislation requires traders and manufacturers to register agreements which prima facie infringe the prohibitions contained in that Act, but they are free to operate such agreements unless and until they are declared by the court to be contrary to public interest. In Mr. Kemp's submission, if the registrar is correct in this case, Parliament has deprived British Steel of a fundamental freedom enjoyed by every British subject engaged in trade or commerce, namely the right to operate a restrictive agreement until such time as that particular agreement has been declared contrary to law.
I think the answer to that submission is really this, that price fixing is not inherently bad—it can be justified in some circumstances—and accordingly the Restrictive Practices legislation provides that, so long as you do not do it secretly and you register your agreement, you may go...
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...of a statute. On the contrary it is frequently used: see Bennion on Statutory Interpretation, section 9.6, In re British Concrete Pipe Association's Agreement [1983] 1 All ER 203, per Sir John Donaldson MR at p 205 and, in the context of a taxing statute, Fry v Inland Revenue Comrs [1959] C......
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