Return To Dunlop v. Selfridge?
| Published date | 01 July 1960 |
| Date | 01 July 1960 |
| DOI | http://doi.org/10.1111/j.1468-2230.1960.tb00612.x |
RETURN TO DUNLOP
TI.
SELFRIDGE?
INTRODUCTION
IT
is remarkable how apparently obvious and fundamental
questions can remain unsettled for centuries, either because they
are never litigated at all,
or
because the courts vacillate between
different possible solutions thereof. One of the most important
examples of this phenomenon in English law arises out of the
attempts of the courts to grapple with the question whether
a
contract made for the benefit of
a
third party can be enforced by
that third party even though he was not a party to the contract and
did not give consideration. The early history of this problem at
common law is disputed.' During the seventeenth, eighteenth and
early nineteenth centuries cases can be found which support the
proposition that a third party can enforce a contract made for his
benefit and cases can equally be found which are inconsistent with
that view,3 but controversy as to which was the rule and which the
exception is of
no
more than historical interest in view of the clear
pronouncements
on
the common law rule to be found in
Tweddle
v.
Atkinson
and
Dunlop
v.
Selfridge.6
While the common law was arriving at the rule that a third
party cannot sue to enforce a contract made for his benefit, equity
in a long series of cases from
Tomlinson
v.
Gill
onwards gave
a
remedy to the third party by the use of the trust concept. Since
trusts were discovered where nothing more emerged than an inten-
tion to benefit the third party, one might have been forgiven for
supposing that a method of mitigating,
if
not of altogether avoiding,
the common law rule had been designed. This view appeared to
have been confirmed when the House of Lords set the seal of its
approval
on
the wide inference of trusts
of
promises in
Les
Afidteurs RCunis
v.
Walford.'
Such was the view taken by
Professor Corbin in
1980
in his authoritative review of the cases.8
Cf.
E.J.P.,
70
L.Q.R.
467,
and Denning
L.J.
in
Smith and Snipes Hall
Farm, Ltd.
v.
River Douglas Catchment Board
[1949] 2
K.B.
500;
[1949] 2
All
E.R.
179,
and
Drive Yourself Hire
Co.
V.
Strutt
[1954]
1
Q.B.
250; [1953]
2
All
E.R.
1475.
Dutton
v.
Poole
(1678) 2
Lev.
210;
Martyn
v.
Hind
(1776) 2
Cowp.
437;
Marchington
v.
Vernon
(1787)
1
Bos.
&
P.
101;
Carnegie
V.
Waugh
(1823)
2
Dowl.
&
Ry.K.B.
277.
There are also
Q
large number
of
cases before
Dutton
V.
Poole
not cited by either Denning
L.J.
or
E.J.P.
See Corbin,
46
L.Q.R.
12
at
p.
17,
note
11.
Bourne
V.
Mason
(1669)
1
Vent.
6;
Crow
v.
Rogers
(1724)
1
Stra.
592;
Price
V.
Easton
(1833) 4
B.
&
Ad.
433.
(1861)
1
B.
&
S.
393.
5
[1915]
A.C.
847.
(1756)
Ambler
330;
and see,
e.g., Gregory
v.
Williams
(1817)
3
Mer.
582;
Re Flaaell
(1883) 25
Ch.D.
89;
Lloyd's
v.
Harper
(1880) 16
Ch.D.
290.
[1919]
A.C.
801.
46
L.Q.R.
la.
373
874
THE
MODERN
LAW
REVIEW
VOL.
!28
The courts have never explicitly repudiated this approach, but
in recent years the trust has fallen into desuetude as a means of
enforcing contracts
in
favour of third parties. Professor Cheshire
and
Mr.
Fifoot adopt the view of Dr. Glanville Williams
lo
that
‘‘
the way in which the court will decide a novel case is almost
completely unpredictable
”
but, with respect,
it
seems only too
clear that the chances of persuading a court to infer a trust from
evidence of intention to benefit the third party have in recent years
diminished almost
to
vanishing point.”
It
is not easy to under-
stand either
on
principle
or
authority why the courts
so
soon
retreated from the apparently attractive haven of
Walford’s
case.12
It
cannot simply be ascribed to the forces of reaction since Lord
Wright, one of the most forward-looking judges of
his
day, delivered
the opinion of the Privy Council in
Vandepitte’s
case,ls probably
the most important single pronouncement against a wide application
of the trust concept; yet only four years later signed as chairman the
Sixth Interim Report of the Law Revision Committee
l4
which
recommended “that where a contract by its express terms purports
to confer a benefit directly
on
a third party,
it
shall be enforceable
by the third party in his
own
name subject to any defences that
would have been valid between the contracting parties.”
If
we
may make an inference from Lord Wright’s extrajudicial descrip-
tion of the trust as
a
cccumbrous ficteion,”15
it
seems likely that
the original objection to the trust was not
so
much that
it
produced
unsatisfactory results as that
it
was inelegant.
No
doubt
it
is
desirable to employ techniques which are as simple as possible, but
in
view
of
the studied indifference of Parliament to the recom-
mendations of the Law Revision Committee, one is tempted to
regard the final result
of
this
volte-face
as a classic example of the
maxim that the better is the enemy
of
the good.
and its progeny did not mark an end to the
struggles of the courts.
In
recent years Denning
L.J.
and Devlin
J.
(as they then were) have cast considerable doubt
on
the existence
of an inflexible rule that a third party cannot sue to enforce a
Vandepitte’s
case
5th ed. at
p.
375.
10
7
M.L.R.
123.
l1
See,
e.g., Re Engelbach
[1924]
2
Ch.
348;
Vandepitte
v.
Preferred Accident and
Insurance Corporation
o
New
York
[1933]
A.C.
70;
Re Stapleton-B,retherton
[194l]
1
Ch.
482;
Re Sciebsman
[1944]
Ch.
83;
Re Clay’s Poliq
of
Assurance
[1937]
2
All
E.R.
548;
Re
Sinclair’s
Life Policy
[1938]
Ch.
799;
Re Foster
[1938] 3
All
E.R.
357;
Re Miller’s Agreement
[1947]
Ch.
615;
cf.
Re Webb
[1941] 1
Ch.
225.
12
[1919]
A.C.
801;
see
per
Fullagar
J.
in
Wilson
v.
Darling Island Stevedoring
and Lighterage
Co.
(1956) 95
C.L.R.
43
at
67
:
“
it
is
difficult
to
understand
the rq!uctance which courts have sometimes shown to infer trust
in
such
cases.
1s
[1933]
A.C.
70.
14
Cmd.
5449
at
p.
30.
15
55
L.Q.R.
189
at
p.
208
in. a review
of
Williston
on
Contracts.
16
[1933]
A.C.
70.
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