Registrar of Restrictive Trading Agreements v W. H. Smith & Son Ltd
| Jurisdiction | England & Wales |
| Judge | THE MASTER OF THE ROLLS,LORD JUSTICE FENTON ATKINSON,LORD JUSTICE MEGAW |
| Judgment Date | 26 June 1969 |
| Judgment citation (vLex) | [1969] EWCA Civ J0626-2 |
| Date | 26 June 1969 |
| Court | Court of Appeal (Civil Division) |
[1969] EWCA Civ J0626-2
In The Supreme Court of Judicature
Court of Appeal
Appeal of the plaintiff, The Registrar of Restrictive Trading Agreements, from Order of Mr. Justice Cross on 31 July 1968.
The Master of The Rolls (Lord Denning)
Lord Justice Fenton Atkinson and
Lord Justice Megaw.
In the Matter of an Agreement relating to the supply of Newspapers in the area of Newport in the County of Monmouth
and
In the Matter of the Restrictive Trade Practices Act 1956
Mr. DAVID HIRST, Q. C. and Mr. F. M. FERRIS (instructed by the Treasury Solicitor) appeared on behalf of the plaintiff, The Registrar of Restrictive Trading Agreements, Appellant.
Mr. A. J. BATESON (instructed by Messrs, Bircham & Co.) appeared on behalf of the first and second defendant, W. H. Smith & Son Ltd. and Mr. Howard Sams Walker.
Mr. G. B. H. DILION, Q. C., and Mr. M. A. F. LYNDON-STANFORD (instructed by Messrs. Peachey & Co.) appeared on behalf of the third and fourth defendants, John Menzies (Southern) Ltd., and Mr. Harold Vaughan.
The fifth defendant, Mr. Joseph Charles Carr, was not an appellant, did not appear and was not represented.
The Registrar of Restrictive Trading Agreements applies to the Court to interrogate some men of business. It concerns the selling of newspapers in Newport, Monmouthshire. A lady, Mrs. Seer, has a small business called Dewsland Dairy at Nos. 119 to 121 Stow Hill, Newport. Immediately opposite her dairy shop there was a newspaper shop where the retailer sold newspapers. He got his supply from the big wholesalers, W. H. Smith & Son Ltd., who had a branch house in Newport. He was energetic and efficient, but nevertheless, Mrs. Seer thought that she would like to go into the newspaper trade also and sell newspapers from the dairy. There were only three wholesale suppliers in Newport. One was W. H. Smith & Son Ltd., who had a branch in Newport. Their branch manager was a Mr. Walker. The other was Wyman Marshall Ltd., afterwards Menzies Ltd. They also had a branch in Newport. Their branch manager was a Mr. Vaughan. In addition to those big concerns, there was a small wholesale supplier, Mr. Carr of 127 Commercial Road, Newport. He did most of the work himself. He used to get up at 5 o'clock every morning and fetch his supplies from the Newport railway station. He worked till 7 o'clock at night and never had a holiday. Mrs. Ser says that she approached all three of these wholesalers to try and get them to let her have newspapers, but they refused to supply her. On the 10th August, 1966, she wrote to W. H. Smiths.
They refused to supply her because they were supplying the shop just the opposite side of the road. She then approached Wyman Marshall Ltd. They sent down from London a Mr. Pres. He thought that there was no real advantage to be gained in setting up a new selling point at Mrs. Sees because there was a newsagent on the other side of the road. Mrs. Seer then approached Mr. Carr. He was unwilling to supply because he only had a small business and did not want to extent it further. As the Newport wholesalers would not supply her,Mrs. Seer got into touch with a wholesaler at Cardiff called Mr. O'Shea. He did supply her with newspapers for a while. Afterwards he got into touch with Mr Carr. According to Mr Carr, Mr O'Shea asked about the creditworthiness of Mrs. Seer. Mr Carr said as far as he knew she was all right. After that conversation Mr OShea also refused to supply Mrs. Seer. She was very annoyed. She rang up Mr. Carr and according to him she was very abusive. She went to see the agent of the Local Labour Party. She telephoned all round. Eventually she reported the matter to the Registrar of Restrictive Trading Agreements. That is how he comes into the picture.
On the 5th October, 1966, the Registrar sent down one of his staff, a Mrs. Branston, to Newport. She saw Mr Carr, He answered all her questions. But not apparently to her satisfaction. For on the 24th October, 1966, the registrar served notices under Section 14 of the Act on all the three wholesalers in Newport, that is on Mr Carr, W. H. Smith & Son Ltd. and Wyman Marshall Ltd. He said he had a reasonable cause to believe that they had been parties to a restrictive agreement and required each of them to give particulars of it. Each of them dealt with this notice differently.
First, Mr. Carr. He did not answer in writing. He thought he had made his position clear to the Registrar's representative when she had come down. He had told her that there was no agreement of any kind between the wholesalers: that he only had a very small business; and he did not want to extend it to Mrs. Seer. But as Mr. Carr did not answer in writing, the Registrar seems to have asked the local Police to call on Mr Carr. I must say that was going rather far. It would disturb anyone to have a policeman calling on him. Mr. Carr explained everything to the policeman; he went to a solicitor. On the 23rd January, 1967, the solicitor wrote to the Registrar giving him full information and saying if he wanted anything more he was to get in touch with him. The Registrar appearedto be satisfied. Mr Carr did not hear any more of it for months.
Second, W. H. Smith. They answered on the 4th November 1966, in writing from the Head Office. Their director, Mr. Spicer, said there was no such agreement. He explained fully the position. He said that a request had been made by Mrs. Seer which they refused. Again the Registrar appeared to be satisfied. W. H. Smith did not hear anything again for months.
Third, Wyman Mashall Ltd. (afterwards Menzies Ltd.).
They took the notice seriously; they sent Mr Press from their Head Office to se the Registrar. He was interviewed at length by a Mr Rogers in the presence of Mrs Branston and a Miss Jacob. Mr Press denied that there was any such agreement as suggested. Mr Rogers was not satisfied. He said he would like to see Mr Vaughan, the local manger. So it was arranged. On the 1st December, 1966, the company sent Mr. Vaughan, and with him their deputy managing director, Mr. Baird, to see Mr Rogers. Mr Rogers started off by a warning. He said that Mr Vaughan would be making a statement and it would be a criminal offence to mislead the Registrar deliverately or recklessly. There followed an interview at which full notes were taken. Those notes showed that Mr Rogers conducted a very thorough cross-examination of Mr Vaughan and asked questions of Mr Baird too. Thereafter the Registrar appeared to be satisfied. Wyman Mashal heardnothing again for months.
Eight months later, on the 1st August, 1967, the Treasury Solicitor wrote to Wyman Marshall or Menzis indicating that he was going to take proceedings under section 15 of the Restrictive Practices Act, 1956. On the 7th November of 1967 summonses were taken out. The Registrar applied to the Court for an Order against Mr. Walker, the branch manager of Smiths, Mr Vaughan, the branch manager of Menzies Ltd, and Mr Carr personally. He asked for them to be examinedon oath. On the31st July of 1968, the summonses came before Mr. Justice Cross. He made no order against the branch managers; but he made an order for the examination of Mr. Carr. The Registrar appeals to this Court, asking for an Order against the Branch Mangers as well as Mr. Carr.
The first question in this case is whether, in point of law, there was any power for the Court to order the interrogation of Mr. Walker and Mr. Vaughan. They were only branch mangers at Newport. Mr. Justice Cross held that they were not within the interrogative powers given by the Statute. The Registrar appeals from that decision.
In construing the Restrictive Trade Practices Act, 1956, it is useful to remember the mischief which was aimed at. At one time traders used to come to restrictive agreements between themselves which were contrary to the public interest. They used to get together so as to seize all the trade for themselves, to keep up prices for their own selfish profit, to shut out any newcomers who might cut prices, and so forth. In order to get rid of such practices, Parliament required that all restrictive agreements should be registered and said they were to be void unless they were proved to be in the public interest. It put a duty on traders themselves to register the agreements. But it is obvious that some traders would not do their duty. People who combine together to keep up prices do not shout it from the housetopos. They keep it quiet. They make their own arrangements in the cellar where no on can see. They will not put anything into writing, nor even into words. A nod or a wink will do. Parliament was well aware of this. So it included not only an "agreement" properly so-called, but any "arrangement" however informal. Every restrictive arrangement had to be registered. In order to discover whether any such arrangement had been made, they gave the Registrar liberty to apply to the Court to interrogate any person. How far does this power to interrogate extend? In particular, when the trader is a limited company,who are the persons who can be interrogated on its behalf? That is the question to be decided today.
The relevant sections are these: section 14(1) provides that if the Regisstrar has reasonable cause to believe that any person, being a person carrying on business, is or ma be a party to an agreement subject to registration, he may give notice to that person requiring him to notify the Registrar whether he is a party to any agreement, and, if so, to furnish particulars. Section 15(1) says that "in any case in which the Registrar has given notice to any person under section fourteen of this Act, the High Court may...
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