Reading v Attorney General

The Lord Chancellor, who is unable to be present today, asks me to say that he concurs in the opinion I am about to deliver.

This is an Appeal from an Order of the Court of Appeal dated the 19th May, 1949, affirming the judgment of the Honourable Mr. Justice Denning (as he then was), and ordering that the Suppliant's Appeal from the said judgment be dismissed with costs to be paid by the Suppliant to the Crown or its Solicitor, such costs to be taxed by a Taxing Master.

In 1944 and 1945 certain sums, all in Egyptian currency, amounting in all to £E18,842.105, equivalent to £19,325 4s. 8d. in sterling, and held by or on behalf of the Suppliant, were seized and taken into possession on behalf of His Majesty.

By Petition of Right presented on the 1st November, 1946, the Suppliant sought to recover these sums or their sterling equivalent (allowance being made for sums released to him), as money had and received by His Majesty to his use.

The Respondent admitted that these sums had been seized and taken into possession on behalf of His Majesty but alleged that they represented part of the proceeds of bribery and that the Suppliant was accountable therefor to His Majesty and received and held them in trust for His Majesty. Alternatively he claimed that the Respondent was entitled to set them off against the Suppliant's Claim.

The facts proved or agreed in the Action are not in dispute and may succinctly be stated substantially in the form adopted by the Appellant in his case and are as follows:—

(A) In 1943 and 1944 the Appellant was a Sergeant in the Royal Army Medical Corps and receiving pay at the rate appropriate to his Rank. He was employed as a Sergeant in charge of medical stores at No. 63 General Hospital, Cairo.

The Appellant's Case also alleges that at all material times it was obligatory for all service personnel in Cairo to wear uniform, except when engaged in sport or other specially excepted activity. I can find no evidence to this effect but regard the allegation as immaterial to the decision which your Lordships are asked to reach.

In these circumstances Denning, J., held that the Crown was entitled to the money in question. It was, in his view, immaterial to consider whether the method of seizure was justified or not. Even if it was not, the Crown had a valid counterclaim and, avoiding a circuity of action, could thus defeat the Appellant's claim. "It is", he says, "a claim for restitution of moneys which, in justice, ought to be paid over." It was suggested in argument that the learned judge founded his decision solely upon the doctrine of unjust enrichment and that that doctrine was not recognised by the law of England. My Lords, the exact status of the law of unjust enrichment is not yet assured. It holds a predominant place in the law of Scotland and, I think, of the United States, but I am content for the purposes of this case to accept the view that it forms no part of the law of England and that a right to restitution so described would be too widely stated. But, indeed, this doctrine is not of the essence of Denning, J.'s, judgment. His reasoning is to be found in the passage which succeeds that quoted. He says:

"In my judgment, it is a principle of law that if a servant takes advantage of his service by violating his duty of honesty and good faith, to make a profit for himself, in this sense, that the assets of which he has control, or the facilities which he enjoys, or the position which he occupies, are the real cause of his obtaining the money, as distinct from being the mere opportunity for getting it, that is to say, if they play the predominant part in his obtaining the money, then he is accountable for it to the master. It matters not that the master has not lost any profit, nor suffered any damage. Nor does it matter that the master could not have done the act himself. It is a case where the servant has unjustly enriched himself by virtue of his service without his master's sanction. It is money which the servant ought not to be allowed to keep, and the law says it shall be taken from him and given to his master, because he got it solely by reason of the position which he occupied as a servant of his master."

And again, "The uniform of the Crown, and the position of the man as a servant of the Crown were the sole reasons why he was able to get this money, and that is sufficient to make him liable to hand it over to the Crown." The...