Brickfields Asia College

Transcription

Issue 2
April - June 2012
BRICKFIELDS
LAW
REVIEW
Parliamentary Sovereignty
An Illusion or Reality?
Commission Agent Theory
Reconciling Wright J in
Montgomerie’s case
John Austin
Is Hart’s Criticism Against Austin’s
Command Theory Fair?
Section 114(1)(d)
Criminal Justice Act 2003
A Discussion on the Discretion of a
Judge in Respect of Admitting
Hearsay Evidence Pursuant to the
Safety Valve Exception
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Over a period of fifty-five years, Dr Bashir Mallal’s progressive
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and respected tradition. This Seventh Edition continues Dr Mallal’s
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practical guide to the criminal procedure and practice of both the
Superior and Subordinate Courts in Malaysia. This work serve to
simplify the arduous task of research into its vast area of law, and
make transparent the often complex process of the administration
of criminal justice and procedure in Malaysia.
Mallal’s Criminal Procedure contains detailed annotations to all the
sections of the Criminal Procedure Code. These annotations,
supported by relevant authorities, explain and analyse important
aspects of criminal procedure as well as provide useful information
such as the history of each section and similarities, if any, to the
Indian Criminal Procedure Code 1973 and the Singapore Criminal
Procedure Code 2010. They facilitate a better understanding of
criminal procedure and serve as signposts for further research.
The annotations to each section have been organised according to
the following:
(1) Scope (or synopsis) of section;
(2) Cross-references to statutes, encyclopedias and textbooks;
(3) Amendments; and
(4) Annotations
Other important contents of this edition include the Comparative
Table and the full updated text of the Evidence Act 1950 and the
Penal Code.
Key Features
• Extensive references to a selection of scholarly works of up to
2012.
• Includes comparative references to key legislations of other
jurisdictions. For example, the Singapore Criminal Procedure
Code 2010 and the Indian Criminal Procedure Code 1973.
• Addresses key provisions of the Indian Criminal Procedure Code
1973 that have been fairly recently substituted, inserted or
omitted by the Indian Criminal Procedure Code (Amendment)
Act 2005 and the Indian Code of Criminal Procedure
(Amendment) Act 2008.
Foreword by Tan Sri Edgar Joseph Jr,
Former Judge of the Federal Court of Malaysia
“Need I say that it is for me, a pleasure to warmly welcome this
Seventh Edition of Mallal’s Criminal Procedure. This book worthily
carries on the Dr Mallal tradition. To state the obvious, it provides the
reader with a model of succinct exposition, combining clarity,
thoroughness, and compression. It has been written with the
convenience to busy Judges, Legal Practitioners, and Prosecutors;
therefore will command a wide readership. The authors deserve to
be congratulated with all my heart.”
Key Cases
• PP v Dato’ Seri Anwar bin Ibrahim [2012] 3 MLJ 353
• Terengganu Forest Products Sdn Bhd v Cosco Container Lines
Co Ltd & Anor and other applications [2011] 1 MLJ 25 (FC)
• Borhan bin Hj Daud v Abd Malek bin Hussin [2010] 6 MLJ 329 (CA)
• Junaidi bin Bambang v PP [2011] 3 MLJ 141 (CA)
• Shahril bin Yahya v PP [2011] 8 MLJ 320
• PP v Dato’ Seri Anwar bin Ibrahim [2010] 2 MLJ 353 (CA)
• Dato’ Seri Anwar bin Ibrahim v PP [2010] 2 MLJ 312 (FC)
• Magendran a/l Mohan v PP [2010] 6 MLJ 619 (CA)
• PP v Vincent Jude a/l Xavier [2010] 9 MLJ 269
• Chian Swee Ong v PP [2010] 4 MLJ 737 (FC)
• Mohd Azri bin Abdul Samad v PP [2010] 9 MLJ 211
• Munawar Ahmad Anees v PP [2010] 3 MLJ 285 (FC)
• Jambri bin Abd Hamid v Pendakwa Raya [2009] 9 MLJ 683
• PP v Chin Chan Leong & Anor [2009] 8 MLJ 231
• Retnasara a/l Annarasa v PP [2008] 8 MLJ 608
• PP v Chan Wai Heng [2008] 5 MLJ 798 (CA)
• Seah Ah Chiew v PP [2007] 1 MLJ 377
• Md Yunus bin Ali v PP [2007] 8 MLJ 330
• Sathiyamurthi v Penguasa/Komandan, Pusat Pemulihan
Karangan, Kedah [2006] 6 MLJ 593 (FC)
• Balachandran v PP [2005] 2 MLJ 301 (FC)
• Bachik bin Abdul Rahman v PP [2004] 2 MLJ 534 (CA)
• Murugayah v PP [2004] 2 MLJ 545 (CA)
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Contents
49
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Criminal Division
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Common Law Reasoning & Institutions
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Public Law
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Commercial Law
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Law of Contract
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Land Law
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Family Law
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EU Law
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Law & Literature
36
Supreme Court – Case Digest: Assange v Swedish Prosecution
Authority
The Right to Reform Trial by Jury – Michael Zander
Parliamentary Sovereignty: An Illusion or Reality? – Kevin Arasu
Commission Agent Theory: Reconciling Wright J in Mongomerie’s
case – Shantini Sharon Sukumaran
ave the Courts Interpreted the Law or gone beyond the Intention
H
of the Parliament in relation to the Quantum of Damages for Sec
2(1) of Misrepresentation Act 1967? – Murali Kandasamy
ourt of Appeal – Case Digest: R (on the application of LE
C
(Jamaica)) v Secretary of State for the Home Department
Chancery Division – Case Digest: Brudenell-Bruce, Earl of
Cardigan v Moore and another
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Section 114(1)(d) Criminal Justice Act 2003- A Discussion on the
Discretion of a Judge in Respect of Admitting Hearsay Evidence
Pursuant to the Safety Valve Exception – Puvanal Sri
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John Austin: Is Hart’s Criticism Against Austin’s Command Theory
Fair? – Puviyal Sri
Queen’s Bench Division, Commercial Court – Case Digest:
Enercon GmbH and another company v Enercon (India) Ltd
Queen’s Bench Division, Commercial Court – Case Digest: West
Tankers INC v Allianz SpA (formerly known as Riunione Adriatica
Sicurta) and another
Outer House, Court of Session – Case Digest: Turner v Turner and
others
Family: The After-shock – Anna Heenan
Through the Back Door? – Trevor Tayleur
War Criminals in Kangaroo Courts – Sabah Carrim
2
Brickfields Law Review
April - June 2012
Criminal Division
Supreme Court
Assange v Swedish Prosecution Authority [2012] All ER (D) 232 (May); [2012] UKSC 22/
Before: Lord Phillips, P, Lord Walker, Lady Hale, Lord Brown, Lord Mance, Lord Kerr and Lord
Dyson SCJJ
30 May 2012
On 2 December 2010, the respondent Swedish Prosecution
Authority issued a European arrest warrant (the “warrant”)
requesting the arrest and surrender of the appellant. The appellant
was at that time in England, where he remained at the time of
the instant hearing. The offences of which he was accused and in
respect of which his surrender was sought, were alleged to have
been committed in Stockholm against two women in August
2010. They included sexual molestation and, in one case, rape.
At the extradition hearing before the senior district Judge, and
subsequently on appeal to the Divisional Court, he challenged
the validity of the warrant on a number of grounds. One of
the grounds was that the warrant had been issued by a public
prosecutor who was not a “judicial authority” as required by
art 6 of the Council of the European Union Framework Decision
on the European arrest warrant and surrender procedures
between Member States of the European Union 2002/584/
JHA (the “Framework Decision”) and by ss 2(2) and 66 of the
Extradition Act 2003. He argued that a “judicial authority” had
to be impartial and independent both of the executive and of the
parties, and as prosecutors, were parties in the criminal process,
so they could not be independent and impartial. If, contrary
to that argument, prosecutors could issue warrants under the
Framework Decision, then the appellant contended that they fell
outside the definition in the Act, as it was clear that Parliament
had intended to restrict the power to issue warrants to a Judge
or Court. Following his unsuccessful challenge, the appellant
appealed to the Supreme Court.
The issue was whether a warrant issued by a public prosecutor was
a valid warrant issued by a judicial authority within the meaning
of ss 2(2) and 66 of the 2003 Act. The respondent submitted,
inter alia, that the phrase “judicial authority” in the context of
the Framework Decision and other European instruments bore
a broad and autonomous meaning. It described any person or
body authorised to play a part in the judicial process. The term
embraced a variety of bodies, some of which had the qualities
of impartiality and independence and some of which did not.
In some parts of the Framework Decision, the term “judicial
authority” described one type, in other parts, another. A prosecutor
properly fell within the description “judicial authority” and was
capable of being the judicial authority competent to issue a
warrant under art 6 of the Framework Decision if the law of the
state so provided. “Judicial authority” had to be given the same
meaning in the 2003 Act as it bore in the Framework Decision.
Consideration was given to the Vienna Convention on the Law
of Treaties 1969.
The appeal would be dismissed (Lady Hale and Lord Mance
dissenting).
“Judicial Authority” in Pt 1 of the Act should be accorded
the same meaning as it bore in the Framework Decision and
that term was properly to be understood as including public
prosecutors. The purpose of the Framework decision was to
introduce a system of surrender between judicial authorities
for those accused or convicted of serious criminal offences,
which required each of the member states to give a uniform
interpretation of the phrase “judicial authority”. Article 31.3(b)
of the 1969 Vienna Convention on the Law of Treaties permitted
recourse as an aid to interpretation to “any subsequent practice
in the application of the treaty which established the agreement
of the parties regarding its interpretation”. When one considered
the daft September Framework Decision, it was beyond doubt
that “judicial authority” was a term that embraced both a Court
and a public prosecutor. Although the precise definition of
“judicial authority” was removed from the final draft, the overall
scheme of the warrant did not change from that proposed in the
September draft. In particular, there remained a requirement for
an antecedent process before the issue of the warrant. Article
2, under the heading Scope of the European Arrest Warrant set
out the offences in respect of which a warrant could be issued.
Article 8 specified the content of the warrant, which included
“(c) evidence of an enforceable judgment, an arrest warrant or
any other enforceable judicial decision having the same effect,
coming within the scope of articles 1 and 2”. There could be two
possible reasons for removing the precise definition of “judicial
authority” that had been included in the September draft. The
first was to restrict the meaning by excluding from its ambit the
public prosecutor. The second was to broaden the meaning so
that it was not restricted to a Judge or a public prosecutor. The
second explanation was the more probable. Further, there was a
strong presumption in favour of interpreting an English statute
in a way which did not place the UK in breach of its international
obligations
In the instant case, the respondent judicial authority who had
issued the warrant had been a “judicial authority” within the
meaning of that phrase in s 2 of the 2003 Act and, therefore, the
appellant’s challenge to the validity of the warrant failed.
© LexisNexis
4
April - June 2012
Common Law Reasoning & Institutions
The Right to Reform Trial by Jury
by Michael Zander
Michael Zander considers the prospects for the government’s plans
The heading “Right to Jury Trial Faces Axe in Post-riot Reforms”
was a front page story in The Times on January 16. Frances
Gibb, the paper’s legal editor, reported that a White Paper to be
published this month would include a proposal to abolish the
right to trial by jury in minor either-way offences.
Louise Casey, who advises the government on dealing with the
aftermath of the riots, had said that if even half the 70,000 cases
heard by the Crown Court were heard instead in Magistrates
Court, the savings would amount to £30m. Transferring minor
cases to Magistrates Courts would also permit major cases to be
heard more quickly. (Ms Casey was quoted: “We should not view
the right to a jury trial as being so sacrosanct that its exercise
should be at the cost of victims of serious crime. It is known that
waiting for a criminal trial often means that victims put their
lives on hold: bereaved families of murder victims cannot grieve
until the trial.”)
Concern for victims is no doubt important, but it is perhaps
not unduly cynical to suppose that the government’s thinking is
likely to be even more influenced by the potential saving of many
millions of pounds.
My own chief reaction on reading Frances Gibb’s story was, “here
we go again.” Government after government has tried to reduce
costs by shifting cases from the Crown Court to the Magistrates
Court and over and over again it has been thwarted.
The defendant’s right to choose jury trial goes back not - as
some maintain - to the Magna Carta, but only to the mid 19th
century. The Administration of Criminal Justice Act 1855 gave
Magistrates jurisdiction to try simple larceny cases involving
sums of under five shillings, but only if the defendant consented.
The Summary Jurisdiction Act 1879 gave defendants the right to
claim trial by jury for all offences carrying a maximum sentence
of more than three months. Today, that right applies to all eitherway offences. There are two ways of shifting cases down to the
Magistrates Courts: re-classify them as summary-only or take
away the defendant’s right to elect jury trial, leaving the decision
as to mode of trial in either-way cases to the Magistrates. The
former has sometimes been done successfully; the latter has been
tried, but so far, unsuccessfully.
In 1975, the James Committee recommended that drink-driving
offences, theft cases involving amounts under £20 and criminal
damage cases where the damage did not exceed £100 should
all become summary-only offences. The government adopted
that proposal in the Bill to implement the report. But while the
recommendation regarding motoring offences became part of the
Criminal Law Act 1977, the proposal to make small theft and
small criminal damage cases summary-only was dropped from
the Bill after meeting massive opposition.
Despite this, in 1980, criminal damage cases involving amounts
under £200 became triable only summarily. The Criminal Justice
Act 1988 raised the figure to £2,000. The Criminal Justice and
Public Order Act 1994 raised it again, to £5,000.
In 1986, a Home Office consultation paper canvassed various
options for having small theft cases tried in the Magistrates
Court. The government included in the Criminal Law Bill a
proposal that theft cases involving less than £75 should become
summary-only, but again, the proposal was dropped before the
Bill became the Criminal Law Act 1988.
In 1993, the Runciman Royal Commission on Criminal Justice
recommended a radically different approach. The defendant
should no longer have a right to demand trial in the Crown
Court. It should instead be only a right to ask for trial at the
higher level. If the prosecution agreed, that would be sufficient. If
the prosecution did not agree, the matter would be decided by the
Magistrates Court after hearing representations from both sides.
The Court’s decision would be guided by statutory indications
as to what factors should be taken into account. These should
include the gravity of the offence, the defendant’s prior record, if
any, the complexity of the case, the likely sentence, and the likely
effect of a conviction on that defendant.
1. The Royal Commission, of which the writer was a member,
was unanimous in making this recommendation. The most
important of its reasons were: defendants often chose trial
by jury believing that it gave them a better chance of an
acquittal but it was as wrong to allow this as to give the
defendant the choice of a more lenient Judge.
2. Around 70 per cent of those who opted for trial in the
Crown Court ended by pleading guilty so that all the time
and cost of lawyers, experts and lay witnesses preparing and
actually coming for trial was wasted.
3. The number of last minute guilty pleas (“cracked trials”) also
caused significant difficulties in running the Courts.
The Royal Commission made 352 recommendations. This
proved to be by far the most controversial. Critics included the
Bar, the Law Society and, crucially, the Lord Chief Justice, Lord
Taylor. It has not been implemented.
In July 1995, a Home Office consultation paper canvassed three
options: (i) adopt the Runciman Royal Commission’s proposal;
April - June 2012
(ii) reclassify more either-way offences as summary-only; and (iii)
require defendants to enter their plea at the Magistrates Court
which would enable many more cases to be disposed of at the
lower level. The Criminal Procedure and Investigations Act 1996
adopted a modified version of the third option – inviting rather
than requiring a plea before venue.
In 1997, Martin Narey, then a senior Home Office official,
in his report, Review of Delay in the Criminal Justice System,
recommended, like the Royal Commission, that the defendant’s
right to demand trial by jury should be abolished. He was
even more robust than the Royal Commission. In his view, the
question should always be decided by the Court and not be open
to agreement between prosecution and defence.
In November 1999, the Blair Government introduced the
Criminal Justice (Mode of Trial) Bill providing, as recommended
by Martin Narey, that mode of trial should be determined only
by the Court, after it had heard representations from the parties.
The Bill ran into great opposition – especially the provision that
the effect of a conviction on the defendant’s reputation and
his livelihood would be amongst the factors to be taken into
account. Such a provision, it was argued, could create a “two-tier”
justice system with magistrates discriminating against the poor in
favour of defendants with a higher economic or social status. The
Bill, which started in the Lords, suffered a succession of defeats.
Removal of the defendant’s right to elect jury trial was defeated
on January 20, 2000 by 222 to 126. That was the end of that Bill
Undaunted, in February 2000, the Labour Government tried
again with its Criminal Justice (Mode of Trial) (No.2) Bill. This
time the Bill was introduced in the Commons. But when it
reached the Lords it was again defeated and was withdrawn after
the second reading debate on September 28.
The main difference between the No.1 and the No.2 Bill was the
removal of all but one of the factors the Court was permitted to
take into account. These were reduced to “the nature of the case”
and “the circumstances of the offence (but not of the accused)”.
In particular, reference to previous convictions or the effect of a
conviction on the accused was no longer to be permitted. (The
writer’s comment at the time was entitled “Why Jack Straw’s Jury
Reform has Lost the Plot” (NLJ, March 10, 2000, p 366).)
In October 2001, Lord Justice Auld in his Review of the Criminal
Courts System (pp 197-200) agreed with Runciman and Narey
that the decision as to mode of trial in either-way cases should
be made not by the defendant but by the Court – after hearing
representations from both sides and with a right of appeal to the
Crown Court. Some cases by their nature justified the facilities
and more searching pre-trial and trial procedures than could be
provided by Magistrates Courts. Equally, some cases did not
merit the more so elaborate, costly and time-taking procedures
of the Crown Court. It was a policy decision, according to the
nature and seriousness of the offence, and in the light of the
public interest.
I hold the same view as I did when I was a member of the Runciman
Royal Commission. I believe that the case for removing the
defendant’s right to elect jury trial is overwhelming. As a matter
of principle, it should be determined on the basis of objective
considerations, not on the basis of the accused’s perception of his
self-interest, and all the more so since the defendant usually ends
by pleading guilty. But that does not translate into optimism
that the Coalition Government will be any more successful than
previous governments in achieving this reform.
Lord Justice Auld said in his report that those opposed at that
time included the majority of legal practitioners undertaking
criminal work, major civil liberties organisations and ethnic
minority groups. Sure enough, Frances Gibb in her article of
January 16 quoted Max Hill QC, chairman of the Criminal Bar
Association, reacting to the news of the government’s intentions:
“So-called minor cases may not lead to prison, but can have a
major impact upon the individual and prospects of employment,
credit and general livelihood. Yet again, the Government seeks to
cut corners on justice, this time by reducing the citizen’s right to
trial by jury.” No doubt the Law Society, Liberty and organisations
representing ethnic minorities will take up the same cry.
The government will pray in aid the riots as justification for
trying yet again to shift a significant number of small theft cases
to the quicker and cheaper form of trial in Magistrates Court. It
would be surprising if that, or indeed any other argument, will
persuade their Lordships House. If I were a betting man I would
wager that any such proposal will suffer the same fate as before.
© LexisNexis
5
6
April - June 2012
Public Law
Parliamentary Sovereignty: An Illusion or Reality?
by Kevin Arasu
In this article, the writer tackles the oft debated issue of the
sovereignty of Parliament in the UK, in light of UK’s membership in
the European Union and the European Union Act 2011. Through
this analysis, the writer hopes to present the reader a succinct picture
of the current state of Westminster’s sovereignty.
Is the UK Parliament still sovereign? A question that has gripped
the minds of many, time and time again. A major stimulus for
a debate of this kind lies in the UK’s accession and continued
membership, initially in the European Communities (“EC”) and
then the European Union (“EU”) for close to 40 years now. In
order to fully grasp the impact of the UK’s membership in the EU
on Parliamentary sovereignty, it is imperative, first and foremost,
that the concept of Parliamentary sovereignty be appreciated to
its fullest.
The Doctrine and its Theoretical Exposition
Parliamentary sovereignty is a distinctive feature of the UK’s
unique unwritten constitution and reflects the might and will of
the general masses throughout the ages. Through this doctrine,
Parliament in Westminster is a mirror of the electorate of the UK
and their wishes are given effect through legislation passed therein.
Simply put, it embodies the view that Parliament is the most
authoritative law-making body, in that it has the absolute right
to make and unmake any law in any subject matter whatsoever
and that an Act of Parliament is the most supreme of laws in
the realm. Bearing in mind such a status, another important
exposition of the doctrine is that no person or body, including
the Courts, has the right to override or nullify legislation passed
by Parliament. Judicial interference towards legislation is deemed
unacceptable and taboo under this doctrine. Another pivotal
aspect of the doctrine is that Parliament is illimitable, meaning
that none of the laws passed by Parliament can be entrenched or
in other words, made to last forever. This aspect of the doctrine is
made possible through the doctrine of implied repeal, wherein it
is the Courts’ duty to give effect to the latest will of Parliament.
The preceding theoretical exposition of the doctrine represents an
orthodoxical understanding of Parliamentary sovereignty which
has been a cornerstone of the British constitution ever since the
inception of the Bill of Rights in 1689. Professor Albert Venn
Dicey in the introductory notes in ‘An Introduction to the Study
of the Law of the Constitution’, expounds that “Purely as a legal
doctrine it is too late to question the supremacy of Parliament”.
He then goes on to state in chapter 1 of his book, “My aim
in this chapter is, in the first place, to explain the nature of
Parliamentary sovereignty and to show that its existence is a legal
fact, fully recognised by the law of England; in the next place to
prove that none of the alleged legal limitations on the sovereignty
of Parliament have any existence; and, lastly to state and meet
certain speculative difficulties which hinder the ready admission
of the doctrine that Parliament is, under the British constitution,
an absolutely sovereign legislature”.
It has to be noted that times have changed considerably since
1885, the year in which Prof Dicey wrote his book. The
orthodoxical understanding of the doctrine has been put to test
through various developments of constitutional importance
in the UK, the most significant being, for the purposes of this
article, the UK’s entry into and continued membership in the
EU, which imposes an obligation on the UK to give effect to
EU laws, sometimes even at the expense of Acts of Parliament,
whenever there is a conflict between the two. Another important
jurisprudence of joining the EU is the overarching position of
the European Court of Justice (“ECJ”), wherein the decisions
of the ECJ are binding on all the member states of the EU. This
supremacy of EU laws reflects one of the means through which
European integration and supranationalism can be achieved.
The Rise of Nationalism in Europe, World War II and
European Integration
It has been observed that the rise of high nationalist sentiments
and the idea of discrete national identities in Europe in the
early parts of the 20th century and a growing economic disparity
amongst European countries were major catalysts of World War
II. Therefore, to avoid a recurrence and the atrocities of a war
of such magnitude, European integration and supranational
prosperity and security were seen as obvious solutions. With these
solutions in mind, six countries, commonly known as the Inner
Six, namely, Belgium, The Netherlands, Luxembourg, France,
West Germany and Italy formed the EC which was comprised of
the European Economic Communities, European Coal and Steel
Community and the European Atomic Energy Community,
which were later absorbed into the EU, which now has 27
members. A new New Legal Order was sought to be achieved in
Europe with common interest and prosperity in mind, in tandem
with European integration. These aims are reflected in the treaties
that created the EC and then later the EU.
A “New Legal Order”: ECJ’s Jurisprudence
The ECJ has been instrumental in establishing a New Legal
Order in Europe through the upholding of the supremacy of
April - June 2012
EU laws over its member states by consistently affirming and
reminding member states that the jurisprudence of signing the
treaties that formed the EC and later the EU is the surrendering
of part of their sovereignty. This “shackling” of sovereignty is seen
to be necessary for the attainment of economic uniformity and
European integration which are the very essence of the New Legal
Order. Every attempt to challenge the supremacy of EU laws was
strongly “shot down” by the ECJ which could remarkably be
seen in the cases of Van Gend en Loos [1963] CMLR 105, Costa
v ENEL [1964] CMLR 425, Internationale Handelsgesellschaft
[1972] CMLR 255 and Simmenthal [1978] ECR 629. The core
reasoning adopted in all the preceding decisions is that “the entry
of member states into the EC by the signing of the treaties carries
with it a permanent limitation of their sovereign rights”. It was
also stressed through these decisions that EC laws reign supreme
over conflicting domestic legislation, both subsequent and prior
to the entry of a member state into EU and even over conflicting
provisions found in a written constitution of a member state.
cases generally represent the view that the UK’s compliance with
EU laws, sometimes at the expense of domestic laws, is as a result
of the ECA 1972 and not the treaties that were signed. This could
naturally mean that if Parliament were to repeal the ECA 1972,
which is possible, as no Act of Parliament could be perpetual, the
UK Courts would stop applying EU laws. In other words, the
UK Courts purely give effect to EU laws because they have been
“told” to do so by Westminster. This then brings us to the next
question; will the ECA 1972 ever be repealed? It can be said that
even though such a possibility remains, its repercussions may be
dire, which may put off Parliament from doing so. Therefore, this
begs the question as to whether the UK Courts are in denial that
EU laws already form an integral part of UK laws and have been
deeply entrenched within the legal systems in the UK and that
they have no choice but to follow them.
The question which then arises is how could the notion of
Parliamentary sovereignty, which stresses the supremacy of UK
laws, be reconciled with the New Legal Order, which compels the
supremacy of EU laws.
The European Union Act 2011 (“the Act”) reflects the current
administration’s standpoint on the sovereignty of the UK in
relation to the EU. One of the provisions therein which purports
to reiterate the sovereignty of Westminster is s 18 which is
classified as “Status of EU law dependent on continuing statutory
basis” and states as follows:
British Defiance or Denial?
The accession of the UK into the EC in 1973 was marked by the
passing of the European Communities Act 1972 (“ECA 1972”),
which saw the reception of EC laws into the UK. Two main
provisions of the ECA 1972 are ss 2(1) and (4) which require
the Courts to give effect to EU laws even at the expense of
domestic Acts of Parliament and for the Courts to interpret Acts
of Parliament in a way which avoids conflict with EU laws. This
naturally poses the question as to whether the UK Parliament has
lost part of its sovereignty. In order to appreciate this question,
the views of the UK Courts as reflected in cases both before and
after the passing of the ECA 1972 must be observed. Decisions
before the passing of the ECA 1972 such as R v Secretary of State
for the Home Department ex parte McWhirter [1969] TLR and
Blackburn v AG [1971] 2 All ER 1380 reflect the standpoint
adopted by the UK Courts that the signing of the treaty carries no
legal effect until it is implemented through an Act of Parliament
and also that the powers of the Crown rest in the Bill of Rights
and remains so even after the treaty is signed. The underlying
principle of the two decisions above is that Westminster’s
sovereignty can never be removed by any means whatsoever, in
this scenario, the EC treaties. The standpoint of the UK Courts
after the passing of the ECA 1972, which remains similar to the
earlier decisions, could be said to represent a remarkable act of
defiance towards ECJ’s standpoint. The jurisprudence of the cases
after the passing of the ECA 1972, most importantly, Macarthys
v Smith C-129/79; [1981] QB 180 and the series of Factortame
The European Union Act 2011: A Renewal of
Sovereignty?
Directly applicable or directly effective EU law (that is, the
rights, powers, liabilities, obligations, restrictions, remedies
and procedures referred to in section 2(1) of the European
Communities Act 1972) falls to be recognised and
available in law in the United Kingdom only by virtue
of that Act or where it is required to be recognised and
available in law by virtue of any other Act.
(Emphasis added).
The preceding provision represents a reiteration and codification
of the various judgments of the UK Courts as seen earlier in this
analysis and has been famously known as the “sovereignty clause”.
Two other major provisions that must be highlighted are ss 2 and
5 of the Act, wherein before any treaty is signed with regard to
the EU, a referendum shall be held and a statement relating to
that treaty is presented in Parliament before the treaty is ratified.
It is observed that the general spirit of the Act is to clarify the
position that the UK Parliament is still sovereign in relation to
the EU and that the current administration aims to whittle down
any question of Westminster’s sovereignty.
Perhaps, the very fact that the UK administration is able to come
up with such an Act demonstrates the essence of Parliamentary
sovereignty: the ability to pass laws on its own accord.
7
8
April - June 2012
Commercial Law
Commission Agent Theory: Reconciling Wright J in
Montgomerie’s case
by Shantini Sharon Sukumaran
The jurisprudential struggle to define law continues to be
evidenced in the difficulties envisaged by various academicians
in defining the concept of agency. Thus far, the broadly accepted
definition of the law of agency is that of G.H Treitel who stated
“Agency is a relationship which arises when one person, called
the principal, authorises another, called the agent, to act on his
behalf, and that other agrees to do so. Generally, the relationship
arises out of an agreement between the principal and agent. Its
most important effect, for the purposes of this book, is that it
enables the agent to make a contract between his principal and a
third party”. Lord Scarman in Yeung Kai Yung V Hong Kong and
Shanghai Banking Corporation enunciated the general rule of law
for a contractual relationship where a person is liable for his own
contracts, even when made on behalf of another. However, the
law of agency poses an exception to this rule.
As Wright J had stated in Montgomerie v United Kingdom Mutual
Steamship Association, “where a person contracts as agent for a
principal, the contract is that of the principal, and not that of
the agent; and prima facie, at common law the only person who
may sue is the principal, and the only person who can be sued is
the principal”. Therefore, although on face value the contract is
that of an agent, he conveniently “drops out” of the picture and
bears no liability. As Professor Reynolds noted, the agent here is
a mere intermediary or conduit pipe, thus would defy logic to
hold him liable. To this extent, Wright J’s concept of liability in a
disclosed principal situation is accurate. However, the possibility
envisaged by the law of agency to hold an agent accountable
in a disclosed principal situation and the very concept of an
undisclosed principal whereby the existence of the principal is
unknown on face value, appears to defeat Wright J’s statement
above. The accuracy of His Lordship’s statement is in question
although it was a design in perfection of the essence of the law of
agency. The question remains as to how one would maintain the
balance between the concept of privity of contract and the law of
agency without making the latter redundant.
In a disclosed principal situation, the existence of an agency
relationship and the principal is usually identified. As such,
a privity of contract exists between the principal and the third
party provided the agent acts intra vires and lawful in which case
the principal can sue or be sued as noted in Resolute Maritime
v Nippon Kaisi Kyokai. As such, the agent becomes a stranger
to the contract. To this extent, Wright J’s statement is accurate.
However, there are circumstances in disclosed principal situations
where the agent is caught liable for the transaction he engineered.
Such is the consequence of an agent’s fraudulent action where he
subsequently finds himself personally liable in deceit as envisaged
in Noel v Poland or even jointly in addition to the principal as
that which occurred in Standard Chartered v Pakistan National
Shipping. Although the contract is not his, it is right for the agent
to remain liable for his fraudulent actions, which have unduly
prejudiced the principal’s position. As such, this exception is a
fair compromise to Wright J’s illustration in Montgomerie’s case.
An agent could also be liable if such was the intention of the
parties as that found in Short v Spackman either manifested by
the terms of the contract as in Higgins v Senior or by the fact
that the agent executed a deed personally as in Pickering’s Case.
Where the intentions are not clear the Courts have to examine
the surrounding circumstances and context to determine the
objective intentions of the parties. In The Swan the Court held
that the objective intention between the parties with regards to
the agent’s liability (Mr Rodger) was gathered based on the fact
that Mr Rodger obtained the benefit of the repairs and although
the repairers sent the bill to the company, it was still reasonable
to expect Mr Rodger, as the owner of the boat, to be liable unless
he made it clear that this was not to be the case, which he failed
on the facts. As such, the principal (company) and the agent (Mr
Rodger) were held jointly liable. However, in The Santa Carina,
the Courts held there was no objective intention between the
parties to hold the agent liable simply because the claimants knew
the defendant brokers were only agents and not intended to be
liable. The third party’s knowledge of the principal’s existence
made the contract purely that of the principal in support of
Wright J’s statement in question.
An agent may also be liable based on the manner of presentation
ie, the relevant formalities or processes in the contract, which in
construction makes the agent liable. For example, where the agent
signs in his name, he may be personally liable as noted in Gadd v
Houghton. Where the terms of the contract include phrases such
as “on behalf of ” as found in Newborne v Sensolid or “as agents” in
Universal Steam Navigation v James Mc Kelrie, the agent will not
be personally liable. However in contrast, Brandon J in The Swan
opined such terms do not relieve agents of their personal liability,
which in essence ensures the agent is accountable for his actions
to the principal. In fact, a term may be implied by custom which
subsequently holds the agent personally liable as that evidenced
in Fleet v Murton.
Where the agent acts ultra vires, he could be liable for breach
of contractual and fiduciary duty to the principal and breach of
warranty of authority towards the third party as noted in Yonge v
Toynbee whilst the principal incurs no liability to the third party
as evidenced in Comerford v Britanic Assurance Co Ltd. An agent
could also be liable under the law of tort where he voluntarily
assumes responsibility for the contract entered into as seen in
Hedley Byrne v Heller and Partners.
An agent also incurs personal liability where he acts on behalf of
unincorporated or fictitious company. Kelner v Baxter is authority
that in such cases they are not in fact an agent, rather they are
promoters of a company which did not have legal entity yet and
as such, these actions are also not rectifiable pursuant to s 36C(1)
April - June 2012
Companies Act 1985. Hence, these agents remain personally
liable. Even if exclusion clauses were to be used, Phonogram Ltd
v Lane requires it to be explicit. Previously, the agents of foreign
principals were presumed personally liable but following Teheran
–Europe Ltd v St Belton (Tractors), such a presumption has been
rebutted. As such, despite all the exceptions to the general rule,
the circumstances recognised by the law of agency as far as a
disclosed principal situation is concerned, does not in any way
unduly compromise the concept of privity of contract nor cast
any doubt on Wright J’s statement in Montgomerie’s case.
However, the undisclosed principal concept makes Wright
J’s statement redundant. Here, the existence of a principal is
unknown to the third party, thus the contract cannot be one of
the principal. Instead, it would be a contract of the agent. Yet
this does not relieve the undisclosed principal from liability as
the principal can nevertheless sue or be sued where his identity
is revealed, and provided the agent acts intra vires as evidenced
in Sin Yin Kuan v Eastern Insurance. Further, as Lord Lindley
in Keighley Maxtead & Co v Durant had stated, “it is a matter
of indifference to either party whether there is an undisclosed
principal or not”. Though the existence of a principal is clear in
a disclosed principal situation, the principal in an undisclosed
principal situation may also be subject to liability where his
existence is revealed.
However in Watteau v Fenwick – a rather exceptional case –
the third party was allowed to enforce the contract against the
undisclosed principal upon discovery of existence even though
the agent acted ultra vires. Here, rather surprisingly, the Courts
treated the contract as one between a principal and agent when
in reality it was not. Lloyd LJ justified the decision on the basis
that it catered for commercial convenience ie, the need to alert
rivals, control price and the fact that identity should not matter.
It being an exceptional case was rarely applied as precedent in
future cases as this is a decision unique to its own facts and
remains good law despite the disapproval in the Canadian case
of Sign-O-Lite Plastics Ltd v Metropolitan Life Insurance. Perhaps,
if we were to treat this case as an estoppel by conduct, we will
reconcile the case with orthodoxy. In a nutshell, as Sir Federick
Pollock opined, this situation indicates that the very concept of
undisclosed principal makes the concept of privity of contract
redundant as those indirectly affected by the contract are given
the chance to sue and be sued.
Thus far, it appears that the concept of disclosed principal and
its exceptions can still reconcile with the concept of privity of
contract and Wright J’s statement in Montgomerie’s case but
the same cannot be said for an undisclosed principal situation.
Perhaps, if the concept of undisclosed principal were to be
replaced with commission agent theory ie, where A is an agent to
the principal and also the principal to a third party, this would
reconcile the law of agency and the concept of privity of contract
as Wright J stated in Montgomerie’s case as the contract in such
an instant remains that of the principal.
References
G.H.L Fridman, Law of Agency (6th Edition, Butterworths, 1990).
Boustead & Reynolds on Agency (16th Edition, 1996).
G.H Treitel, Law of Contract (9th Edition, Sweet & Maxwell, 1995).
L Sealey & R Hooley, Text and Materials in Commercial Law, Chapter 5:
“Relations with Third Parties”, pp 147-57.
Notes
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
Montgomerie v United Kingdom Mutual Steamship Association [1891] 1 QB
370.
Yeung Kai Yung v Hong Kong and Shanghai Banking Corpn [1981] AC 787
at 795.
ResoluteMaritime Inc v Nippon Kaiji Kyokai (The ‘Skopas’) [1983] 1 WLR
857.
Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465.
Vlassopulos (N & T) Ltd v Ney Shipping Ltd: The Santa Carina [1977] 1
Lloyd’s Rep 478.
Universal Steam Navigation Co Ltd v James McKelvie & Co [1923] AC 492.
Bridges & Salmon Ltd v The ‘Swan’ (Owner) [1968] 1 Lloyd’s Rep 5.
Fleet v Murton [1871] LR 7 QB 126.
Kelner v Baxter [1866] LR 2 CP 174.
Phonogram Ltd v Lane [1982] QB 938.
Yonge v Toynbee [1910]1 KB 215.
Keighley, Maxsted & Co v Durant [1901] AC 240.
Siu Yin Kwan v Eastern Insurance Co Ltd [1994] 2 AC 199.
Teheran-Europe Co Ltd v ST Belton(Tractors) Ltd [1968] 2 QB 545.
Yonge v Toynbee [1910]1 KB 215.
Teheran-Europe Co Ltd v ST Belton(Tractors) Ltd [1968] 2 QB 545.
Noel v Poland and another - [2001] All ER (D) 145.
Standard Chartered Bank v Pakistan National Shipping Corp (No 2) [2003]
1 All. ER 173.
Short v. Spackman, 2 B. & Ad. 962.
Higgins v. Senior, 8 Mees. & W. 834.
Re: E. Pickering International Contract Co. UK.
Gadd v. Houghton (1876) 1 Ex. D. 357 (C.A.).
Newborne v Sensolid (GB) Ltd [1954] 1 QB 45.
Comerford v Britannic Assurance Co Ltd (1908) 24 TLR 593.
Watteau V Fenwick 1893 Queen’s Bench 346 (QBD 1892).
Sign-O-Lite Ltd v Metropolitan Life Insurance Co’ (1991) 70 Canadian Bar
Review 329.
s.36C(1), Companies Act 1985 (inserted by s 130, Companies Act 1989).
9
10
April - June 2012
Law of Contract
Have the Courts Interpreted the Law or gone beyond the
Intention of the Parliament in relation to the Quantum of
Damages for Section 2(1) of Misrepresentation Act 1967?
Royscott v Rogerson [1991] 2 QB 297 Court of Appeal1
by Murali Kandasamy
Maidenhead Honda Centre Ltd (“the Dealer”) is a motor-car
dealer. In May 1987, the first defendant Mr Andrew Jeffrey
Rogerson (“the Customer”) agreed with the Dealer to buy on hirepurchase a second-hand Honda Prelude for the price of £7,600,
of which a deposit of £1200 was to be paid, leaving a balance of
£6,400. The plaintiff and the respondent to this appeal, Royscot
Trust Ltd (“the Finance Company”) is a company which finances
hire-purchase sales. The Finance Company has a policy that it
will not accept a hire-purchase transaction unless the deposit
paid represents at least 20 per cent of the total cash price.
The Dealer represented to the Finance Company that the total
cash price payable was £8,000 and that a deposit of £1600 had
been paid by the Customer. It will be observed that the balance
under these figures – £6,400 – is the same as that which was
truly payable by the Customer. It is common ground that
this was a misrepresentation and that in reliance, the Finance
Company entered into a hire-purchase agreement with the
Customer. The Finance Company did not claim the Dealer was
acting fraudulently. Accordingly the Finance Company relies
on misrepresentation under s 2(1) of the Misrepresentation Act
1967.
The Finance Company issued proceedings against both the
Customer and the Dealer, and on 23rd November 1989 entered
judgment in default against both defendants for damages to be
assessed. It was that assessment of damages which came before
Judge Barr on 22nd February 1990.
The Finance Company submitted that its loss was the difference
between the sum of £6,400 which it paid to the Dealer and the
sum of £2,774.76 paid by the Customer, viz. £3,625.24. Counsel
for the Dealer submitted that the Finance Company had suffered
no loss since they had acquired title to a motor-car worth at least
£6,400. The Judge accepted neither submission.
The issue on this appeal which the Dealer submits raises a pure
point of law:
•
Where a motor dealer innocently misrepresents to a finance
company the amount of the sale price of, and the deposit
paid by the intended purchaser of, the car
•
The finance company is thereby induced to enter into a hirepurchase agreement with the purchaser which it would not
have done if it had known the true facts
•
The purchaser thereafter dishonestly disposes of the car and
defaults on the hire-purchase agreement; can the finance
company recover all or part of its losses on the hire-purchase
agreement from the motor dealer?
The third bullet point will be the highlight of this article.
What is the basis of awarding damages under s 2(1) of the
Misrepresentation Act 1967.
It is worth noting the contents of the provision before we could
proceed further. Section 2(1)2 states:
Where a person has entered into a contract after a
misrepresentation has been made to him by another party
thereto and as a result thereof he has suffered loss, then, if
the person making the misrepresentation would be liable
to damages in respect thereof had the misrepresentation
been made fraudulently, that person shall be so liable
notwithstanding that the misrepresentation was not
made fraudulently...
(Emphasis added).
Judge Barr held that if the figures on the hire-purchase agreement
had shown a deposit of £1200 and a cash price of £6,000, then
the Finance Company would have paid £4,800 to the Dealer and
would have had no recourse against it since the deposit would
have been correctly shown as £1200.
The statute seems to suggest that the representor will be liable for
damages as though the misrepresentation was made fraudulently
even if the misrepresentation was not made fraudulently.
Since the Finance Company was induced to pay an extra £1600,
it was argued that that is the relevant loss suffered by the Finance
Company.
The Courts in previous cases had some views ranging from a
measure in contract to that of negligence. Let’s see some of the
views put forward by these cases.
What should be the interpretation that should be adopted here?
April - June 2012
In two cases in the Court of Appeal, Gosling v Anderson3 and
Jarvis v Swans Tours4 and the decision at first instance in Watts v
Spence,5 there was some doubt whether the measure of damages
for an innocent misrepresentation giving rise to a cause of action
under the 1967 Act was the tortious measure, [so as to put the
representee in the position in which he would have been if he had
never entered into the contract], or the contractual measure, [so
as to put the representee in the position in which he would have
been if the misrepresentation had been true], and thus in some
cases give rise to a claim for damages for loss of bargain.
Watts v Spence was disapproved in Sharneyford Supplies Ltd v
Edge.6 It is now clear that the tortious measure of damages should
be adopted. These decisions are at first instance and will be
found in Chitty on Contract,7 and in McGregor on Damages8and
Chesneau v Interhome Ltd.9
Is the measure where the tort is that of fraudulent
misrepresentation, or is it the measure where the tort is
negligence at common law?
The wording of the subsection is clear: “the person making the
innocent misrepresentation shall be ‘so liable’ ie, liable to damages
as if the representation had been made fraudulently”.
This was the conclusion to which Walton J. came in F & B
Entertainments Ltd v Leisure Enterprises Ltd 10and McNally v
Welltrade International Ltd.11
In each of these cases the Judge held that the basis for the
assessment of damages under s 2(1) of the 1967 Act is that
established in Doyle v Olby. This is also the effect of the judgment
of Eveleigh L.J. in Chesneau v Interhome Ltd: “By ‘so liable’ means
liable as he would be if the misrepresentation had been made
fraudulently”.
Atiyah in an article on the 1967 Act 12 says:
The measure of damages in the statutory action will
apparently be that in an action of deceit ... But more
probably the damages recoverable in the new action are the
same as those recoverable in an action of deceit.
Treitel13 says:
Where the action is brought under section 2(1) of the
Misrepresentation Act, one possible view is that the deceit
rule will be applied by virtue of the fiction of fraud. But
the preferable view is that the severity of the deceit rule can
only be justified in cases of actual fraud and that remoteness
under section 2(1) should depend, as in actions based on
negligence, on the test of foreseeability.
It seems that to suggest that if a different measure of damage is
applied to an action under the section than that which applies to
an action for fraudulent misrepresentation (deceit) at common
law, then we will totally ignore the plain words of the subsection
and this is inconsistent with the cases to which was referred.14
The only authority cited in support of the “preferable” view15 is
Shepheard v Broome,16 a case under s 38 of the Companies Act
1867, which provided that in certain circumstances a company
director, although not in fact fraudulent, should be “deemed
fraudulent”.
As Lord Lindley said:17
To be compelled by Act of Parliament to treat an honest man
as if he were fraudulent is at all times painful”, but he went
on to say: “but the repugnance which is naturally felt against
being compelled to do so will not justify your Lordships in
refusing to hold the appellant responsible for acts for which
an Act of Parliament clearly declares he is to be held liable.
It is, therefore, clear that the quantum of damages to be awarded
under s 2(1) of the Misrepresentation Act should be based on
tort of deceit.
Hence what is the legal outcome of this case?
When a claimant sues the defendant for misrepresentation, the
quantum of damages recoverable seems to surpass that of breach
of contract. After this decision, a representer can be made liable
for the following losses: loss profits, expenses incurred, the
difference in price between the contract and the actual market
value and non-financial losses. This direction has been approved
and applied in the case of East of Maurer[1990] EWCA Civ 6,
which was decided after Royscott v Rogerson.
As a result, the question arises whether the Courts have gone
beyond what the Parliament has intended. In this article, we have
explored what the Courts have done. It is clear that they have
opted to interpret the law and avoided the making of the laws.
It can be stated to be correct but producing harsh consequences.
Should the Courts, therefore, avoid these consequences? We will
explore in the next article what are the criticisms levied against
this finding.
Notes
1 www.bailii.org extracted on 7 May 2012.
2
Extract from Misrepresentation Act 1967.
3
[1972] E.G.D. 709.
4
[1973] Q.B. 233, 237.
5
[1976] Ch. 165.
6
[1987] Ch. 305, 323.
7
(26th ed.) para. 439.
8
(15th ed.) para. 1745.
9
(1983) 134 N.L.J. 341.
10 (1976) 240 E.G. 455, 461.
11 [1978] I.R.L.R. 497.
12 30 M.L.R.
13 Law of Contract (7th ed.) at p 278.
14 Ibid page 2.
15 Ibid page 3.
16 [1904] A.C. 342.
17 Shepheard v Broome at p 346.
11
12
April - June 2012
Law of Tort
Court of Appeal
R (on the application of LE (Jamaica)) v Secretary of State for the Home Department
[2012] EWCA Civ 597, [2012] All ER (D) 92 (May)
Before: Maurice Kay, Richards and Kitchin LJJ
9 May 2012
The claimant was born in Jamaica and had been granted indefinite
leave to remain in the UK as the husband of a British citizen.
The marriage broke down and the claimant was subsequently
charged with drug offences. He had breached the conditions of
his bail and attempted to flee the country on a false passport. He
was diagnosed as a paranoid schizophrenic and a hospital order
was made against him. After being discharged from hospital
he was convicted of conspiracy to kidnap and conspiracy to
blackmail, and was sentenced to imprisonment. The defendant
Secretary of State made a deportation order against him. Upon
being released from prison, the claimant was detained under
sch 3 to the Immigration Act 1971 (the 1971 Act) and removal
directions were set. In the meantime, the claimant had lodged
an application to the European Court of Human Rights. There
had been some difficulties in securing the claimant’s travel
documentation, and the Jamaican High Commission had refused
to validate the documentation on the grounds that the claimant
had had an outstanding human rights application. The claimant
was thereafter granted bail and he issued proceedings challenging
his detention. The claimant’s case had been that detention was
contrary to the Secretary of State’s policy concerning the use
of immigration detention (the “policy”) because the reason for
detention was simply that removal was thought to be imminent,
which had not been an adequate reason under the policy.
Further, he claimed that he had fallen within para 38.10 of the
policy by reason of his mental illness and there had not been
“very exceptional circumstances”, as provided under the policy,
to justify his detention. The Judge found that the decision to
detain the claimant had been rational, both in terms of the risk of
absconding, in addition to the imminent deportation, and on the
ground that the claimant’s mental illness had not engaged para
38.10 of the policy. The claimant appealed.
The claimant submitted: (i) that the Judge had been wrong to
have analysed the matter in terms of the rationality of the decision
to detain; that the Court had not been limited to applying
the reasonableness test set out in Associated Provincial Picture
Houses Ltd v Wednesbury Corporation ([1947] 2 All ER 680)
(“Wednesbury”), but had been required to act as primary decisionmaker in deciding on the evidence before it, whether detention
had been in accordance with the policy; and (ii) no consideration
had been given to whether very exceptional circumstances had
existed so as to render the claimant as suitable for detention under
the policy; the mere existence of a diagnosable mental illness was
sufficient to bring a person within the scope of the policy and to
require the existence of very exceptional circumstances to have
justified detention. Consideration was given to R v Governor of
Durham Prison, ex p Singh ([1984] 1 All ER 983).
The appeal would be dismissed.
1. If the claimant’s initial detention or continued detention
had been in material breach of the policy, it had not been only
unlawful in public law terms, but had also constituted the
tort of false imprisonment; but he would be entitled only to
nominal damages if he could and would have been detained in
any event on the lawful application of the policy. The exercise
of the power of detention was also subject to the principles set
out in R v Governor of Durham Prison, ex p Singh ([1984] 1 All
ER 983) (the “Hardial Singh principles”). Subject to the limits
imposed by the Hardial Singh principles, the power to detain was
discretionary, and the decision whether to detain a person in the
particular circumstances of the case had involved a true exercise
of discretion. That discretion was vested by the 1971 Act in the
Secretary of State, not in the Court. The role of the Court was
supervisory, not that of a primary decision-maker. The Court was
required to review the decision in accordance with the ordinary
principles of public law, including Wednesbury principles, in order
to determine whether the decision-maker had acted within the
limits of the discretionary power conferred on him by the statute.
In submitting that it was for the Court to determine as primary
decision-maker whether detention had been in accordance with
the policy, the claimant had elided the question whether the
decision-maker had directed himself correctly as to the meaning
of the policy, and the question whether, if so, the decision-maker
had acted within the limits of his discretion when applying the
policy to the facts of the case. The first question was a matter of
which the Court was the ultimate decision-maker, and the latter
was a matter in relation to which a Wednesbury test had applied.
In the instant case, however, it had made no difference on the
particular facts whether the Court adopted a Wednesbury test
or made its own independent assessment of the justification for
detention. Had the Judge found it necessary to have decided for
himself whether the claimant’s detention was justified in light of
the policy, it had been clear that he would have found that it was.
The Judge had been right to find that the decision was rational,
and also that if it had been necessary to decide, that the detention
had been justified.
2. It was difficult to see why special provisions requiring detention
to be justified by very exceptional circumstances should have been
made for those with a mental illness that could be satisfactorily
April - June 2012
managed in detention so that the illness was not significantly
affected by detention and did not make detention significantly
more burdensome.
engaged on the particular facts of the case. The decision taken by
the Secretary of State that the policy had not been engaged had
been rational.
There had been nothing wrong with the Judge’s conclusion. He
had followed authority as regards the construction of the policy
and had reached a lawful conclusion that the policy had not been
The initial detention of the claimant was accordingly lawful.
© LexisNexis
Case History
Annotations
Case Name
Citations
Court
Date
--
R (on the application of LE
(Jamaica)) v Secretary of State for
the Home Department
[2012] EWCA Civ 597, [2012] All ER (D)
92 (May)
CA
09/05/2012
Affirming
R (on the application of LE
(Jamaica)) v Secretary of State for
the Home Department
[2007] EWHC 2980 (Admin), [2007] All
ER (D) 209 (Dec)
Admin
Ct
14/12/2007
Cases considered by this case
Annotations: All CasesCourt: ALL COURTS
Sort by: Judgment Date (Latest First)
Treatment
Case Name
Citations
Court
Date
Considered
R (on the application of OM
acting by her litigation friend, the
Official Solicitor) v Secretary of
State for the Home Department
[2011] EWCA Civ 909, [2011] All ER (D)
02 (Aug)
CA
28/07/2011
Considered
[2011] UKSC 23, [2011] 4 All ER 975,
R (on the application of
[2011] 1 WLR 1299, [2011] 23 LS Gaz R
Kambadzi) v Secretary of State for
18, (2011) Times, 10 June, [2011] All ER
the Home Department
(D) 244 (May)
SC
25/05/2011
Considered
R (on the application of Lumba)
v Secretary of State for the Home
Department; R (on the application
of Mighty) v same
[2011] UKSC 12, [2012] AC 245, [2011] 4
All ER 1, [2011] 2 WLR 671, [2011] 14 LS
SC
Gaz R 20, (2011) Times, 24 March, 155 Sol
Jo (no 12) 30, [2011] All ER (D) 262 (Mar)
23/03/2011
Considered
Anam v Secretary of State for the
Home Department
[2010] EWCA Civ 1140, [2010] NLJR
1492, [2010] All ER (D) 179 (Oct)
CA
19/10/2010
Approved
R (on the application of Anam) v
Secretary of State for the Home
Department
[2009] EWHC 2496 (Admin), [2009] All
ER (D) 127 (Oct)
Admin
Ct
13/10/2009
Considered
R (on the application of Hussain)
v Secretary of State for the Home
Department
[2007] EWHC 2134 (Admin), 151 Sol Jo
LB 1228, [2007] All ER (D) 36 (Sep)
Admin
Ct
07/09/2007
Considered
R v Governor of Durham Prison,
ex p Singh
[1984] 1 All ER 983, [1984] 1 WLR 704,
[1983] Imm AR 198, 128 Sol Jo 349,
[1981] LS Gaz R 1764
CO
13/12/1983
13
14
April - June 2012
Law of Trusts
Chancery Division
Brudenell-Bruce, Earl of Cardigan v Moore and another [2012] EWHC 1024 (Ch), [2012] AU ER
(D) 108 (Apr)
Before: Newey J
20 April 2012
The claimant was the Earl of Cardigan. He inherited an estate
(the “estate”), which had been owned by his family for about
a thousand years. The estate included a valuable collection of
paintings, which were mainly of the claimant’s ancestors. The
instant proceedings concerned the ownership of the paintings.
The defendants (the “trustees”) were the trustees of the claimant’s
family trusts. In 1951, a partnership agreement was entered
into by the claimant’s father and grandfather and the estate was
conveyed by deed (the “1951 Conveyance”) to them to be held on
trust for sale as part of their partnership property. An agreement
entered into in 1963 subsequently provided that the partnership
was in future to be carried on by the claimant’s father and trustees
for the claimant. In 1987, there was a further generational
shift. The partnership share held on trust for the claimant was
appointed to him absolutely and his father assigned his share in
the partnership to S and B on trusts for the claimant’s children
(the “1987 trust”). In 1994, B retired as a trustee of the 1987
trust and the claimant was appointed in his place. Accordingly,
the claimant and S became the only trustees of both the 1987
trust and the trusts affecting the estate. A new partnership
agreement was entered into reflecting the change of trustee. The
claimant and S consented to the grant of a lease dated 16 March
1999 (the “lease”), of Savernake Lodge, one of the houses on the
estate, to the claimant for a 20-year term at a peppercorn rent.
Under cl 1 of the lease, Savernake Lodge was demised to the
claimant together with, inter alia, “the use of all the Landlords’
furniture, fixtures and fittings in or on the premises”. The trustees
subsequently wished to sell some of the paintings which formed
part of the estate, having taken the view that financial pressures
on the estate made it necessary. They relied on a Tomlin Order
made in 2008 which had provided, inter alia, for the claimant
and one other, F, as the then trustees of the estate, to be replaced
by the trustees and following which two deeds, including a deed
of retirement and appointment of trustees (the “2008 deed”) had
been executed which provided that: it was “intended that the
property now in the Trusts” was to be transferred to or under
the control of the trustees. One of the recitals of the 2008 deed
stated that “the Assets of the Trusts are identified in the Second
Schedule”, which included “the pictures” and “paintings”. The
claimant brought the instant proceedings seeking a declaration
that the trustees had no power to sell the paintings. The trustees
counterclaimed, alleging that the lease was invalid under the
“self-dealing rule”.
Issues arose as to whether: (i) the family’s collection of paintings
still belonged to the partnership carried on under the terms of the
1951 partnership agreement (as amended) (the “partnership”);
(ii) the lease extended to such of the paintings as were in
Savernake Lodge; and (iii) the trustees were entitled to have
the lease set aside on the ground of the “self-dealing” rule. The
claimant contended that the trustees were not legally entitled to
sell the paintings without his consent. The paintings belonged
to a partnership of which he was a partner and in any case,
many of them had been leased to him in 1999. The claimant
further submitted that given the lapse of time, the trustees were
precluded by laches or acquiescence from invoking the selfdealing rule. The trustees sought to have the lease set aside on the
basis that the “self-dealing rule” applied. They contended that
the 2008 deed served to vest the paintings in the trustees. It was
common ground that when considering whether a chattel had
become a fixture, regard had to be had to: (i) the degree to which
the chattel had become annexed to the land; and (ii) the purpose
of such annexation.
The Court ruled:
1. It was settled law that a statement in a deed was capable of
giving rise to an estoppel. If a recital contained a statement, which
a party to the deed was to be taken to have agreed to admit as
true, the statement was binding on him. The interpretation of a
document involved looking at the meaning that it would convey
to a reasonable person having all the background knowledge
which would reasonably have been available to the parties.
In the instant case, one of the recitals of the 2008 deed stated that
“the Assets of the Trusts are identified in the Second Schedule”.
Further, the claimant was to be taken to have agreed to admit
the truth of the recital. It could be inferred that the recital was
intended to settle whether the items listed in the second schedule
were to be considered to be “Assets of the Trusts”. It followed
that the claimant was estopped from arguing otherwise and from
contending that the paintings were partnership property. In any
case, as a matter of construction, the 2008 deed served to transfer
the paintings to the trustees.
The paintings were held by the trustees and were no longer
partnership property.
Greer v Kettle [1937] 4 All ER 396 applied; Mannai Investment
Co Ltd v Eagle Star Life Assurance Co Ltd [1997] 3 All ER 352
applied.
2. Artwork displayed on a room’s walls would not normally be
regarded as furniture. It was settled law that what was annexed
to the land became part of it. However, the question of what
constituted an annexation sufficient for that purpose had to
depend on the circumstances of each case; in particular the
degree of annexation and the object of annexation. It was further
settled law that if the purpose of the annexation was for the
better enjoyment of the object itself, it might remain a chattel,
notwithstanding a high degree of physical annexation. Framed
paintings did not usually constitute fixtures.
April - June 2012
In all the circumstances, the lease did not extend to any of the
paintings. They did not fall within the words “furniture fixtures
and fittings”, as those words had been used in the lease. The
paintings were housed in Savernake Lodge. They never became
part of the building. Further, the paintings did not represent
“fittings”. The word “fitted” would not naturally apply to the
paintings, which were hung rather than “fitted”. The value of the
paintings was of significance. Had the parties intended the lease
to extend to such valuable items, they might have been expected
to refer to them specifically in the lease. The word “fastenings”
was not obviously apt to refer to the paintings but referred
more naturally to an attachment than to the thing attached.
Accordingly, the chains used to secure the paintings might be
fastenings but the paintings themselves would not be.
The lease did not extend to the paintings.
Berkley v Poulett [1977] 1 EGLR 86 applied.
3. In respect of the “self-dealing rule”, it was settled law that if a
trustee sold the trust property to himself, the sale was voidable
by any beneficiary ex debito justitiae however fair the transaction.
The rule was a severe one which applied however honest the
circumstances, even though the price was fair and irrespective of
whether any profit was made by the trustee. The self-dealing rule
could apply where trustees merely concurred in a transaction.
Further, it was settled law that trustees’ acts could be voidable if,
in breach of duty, they had failed to take relevant matters into
account. The rule extended, moreover, to the grant of leases.
In the instant case, the trustees of the 1987 Trust, namely,
the claimant and S, had consented to the grant of a lease,
not to a limited company, but to one of themselves. In those
circumstances, it seemed entirely appropriate that the self-dealing
rule should apply. As both the prospective lessee and a trustee of
the 1987 Trust, the claimant would have been in a position of
real conflict in as regards any decision to consent to the grant of
the lease. S, like the claimant, had not given proper consideration
to the separate interests of the beneficiaries of the 1987 Trust.
Had he done so, he would have been bound to conclude that the
lease was not in fact in the interests of the 1987 Trust. If and in
so far as consent to the lease had been given on behalf of the 1987
Trust, it was vitiated by failure to take relevant considerations
into account as well as under the self-dealing rule. On balance,
the trustees were not precluded by laches or acquiescence from
invoking the self-dealing rule. In all the circumstances, the
trustees were entitled to have the lease set aside.
The lease would be set aside.
© LexisNexis
15
16
April - June 2012
Land Law
A Nightmare for Students?
by Nalina Nadarajah
The subject of Property Law, for some reason or the other has
always been a “student’s nightmare”. Its elusiveness and obscurity
has been regarded by some as some sort of a “puzzle” laden with
much difficulty, its dry and abstract concepts are supposedly
beyond comprehension. This is further enhanced by “linguistic
difficulties and arcane language” and makes it somehow detached
from the reality of people’s lives.
However the author’s intention in this article is to explore the
prevailing values and objectives underlying the basic foundations
of English property law and to show that the subject is indeed
within the grasp of the law student and even more challenging;
also the subject provides both a practical and valuable insight to
the lay person.
English land law has been steeped in history. Through the long
process of development, there have been periods of gradual
change, and more dramatic times, such as the Norman conquest
of 1066 and the property legislation of 1925. Land law has kept
its feudal roots and language but the substance of today’s law is
fundamentally changed.
The law of property is not a thing but rather about people, ie, a
power relationship and the study of property law is ultimately
about an inquiry into an important range of socially defined
relationships and morally conditioned obligations. As A E-S Tay
in “Property and Law in the Society of Mass Production, Mass
Consumption and Mass Allocation”(1977) 10 ARSP(New Series)
87 at 97-98 once said, “… the concept of property, the way in
which it is legally defined and the extent to which it is legally,
socially and politically protected raise immediately the most
fundamental problems of political philosophy and social life – the
relationship between the individual and his social environment,
between the citizen and the State and in modern society between
the personal and the commercial …”
Property law is a network of jural relations between individuals in
respect of valued resources and land law as a body of rules which
ultimately governs the distribution of utility in the particularly
significant resource of realty. This article, therefore, seeks to
explore the underlying ideology governing property law and how
it interacts with key issues on priority and efficiency.
As Karl Renner in The Institutions of Private Law and Their
Social Functions (1949) p 107 once said, “[p]ower over matter
begets personal power”. Property ultimately articulates political
relationship between persons. Land becomes a vital component of
all social and economic engineering. Thus, all property references
are, at some level, a statement about the social legitimacy attaching
to the claim in question – the law of property incorporates a
series of critical value judgments, reflecting the cultural norms,
the social ethics and the political economy prevalent in any given
community.
According to Gray and Gray in The Elements of Land Law, the law
of land comprises “a crystallized expression of values, obligations
and ideologies, all cast in sharp relief against the landscape of the
law”.
One of the fundamental values inherent in property law is the
versatility of land in so far as it governs the expectations and life
chances of an entire community. A significant social interest is to
enable land to be used as a means of sharing out wealth and of
allocating other kinds of benefit or advantage incidental to land
eg, the concept of co-ownership of the family home where the
owner of a legal estate may wish to share the equitable ownership
of the family home with her partner or their children.
The commerciability of land is another value inherent in English
property law. One of the central truisms of market economics is
the idea that the free alienability of property rights in practice
makes it less likely that they will fall into disuse. Thus, the key
focus of the Land Registration Act 2002 is upon the process and
consequence of registered dispositions of estates in land.
McFarlane in The Structure of Property Law (2008) demonstrates
that the special features of land and the special legal rules to which
they give rise are based upon the notion that land is permanent
and it has the quality of endurance; the physical location of land
cannot be shared by another piece of land and in this sense it
is unique; land has the capacity of multiple simultaneous use.
The same piece of land can be used in different ways by many
different people, at the same time; land is capable of meeting
important social needs and this is reflected in a number of special
rules and the limited availability of land demonstrates that land is
an expensive commodity and it also intensifies the need for land
to be freely marketable.
To illustrate the potential tension and conflict which arises when
balancing the relevant values to be preserved, two cases of crucial
relevance in the study of property law become prominent. The
difficult questions of both doctrine and policy are demonstrated
here. The interesting element in the discussion here involves
examining some case laws where the manner in which the
various Judges indulge in evaluating competing principles and
policies are of utmost relevance and interest to demonstrate the
judicial creativity involved. Further, the cases also demonstrate
the kind of interests which land lawyers ought to always bear in
mind when deciding which way the decision should be decided.
Thus the interesting element to note here is that in practice, the
importance of land law and its meaning is really about questions
of priorities ie, which party should have a better interest and to
what extent do the legal rules protect such interests. Further if
land law concerns priorities, whose priority can be better justified
and does land law demonstrate a proper balance in assessing
the interests of the parties. There are many such examples but
in the discussion here, two important land law cases will be
considered. The relationship between the occupiers of land and
the bank is in issue in the cases of: (i) National Provincial Bank v
Ainsworth(1965) AC 1175, HL (“Ainsworth”); and (ii) William’s
& Glyn’s Bank v Boland(1981) AC 487, HL (“Boland”).
April - June 2012
In Ainsworth, Mr and Mrs Ainsworth lived together in Milward
Road, Hastings, Sussex. Mr Ainsworth was registered as owner
of the home. In 1957, Mr Ainsworth moved out. In 1958, he
borrowed £1,000 from the National Provincial Bank. The money
was borrowed as part of a mortgage deal: to secure his duty
to repay that sum plus interest, Mr Ainsworth gave the bank
a particular right (a charge) over his home. This meant that if
Mr Ainsworth were to fall behind in his repayments, the bank
would have a power to sell the land and use the proceeds to
meet his debt. By 1962, Mr Ainsworth had fallen behind on his
repayments to the bank. The bank wished to sell the land. To get
a good price, the bank knew that it had to sell the home with
vacant possession. Because Mrs Ainsworth refused to leave, the
bank applied for an order for possession of the home.
hand and the need for social protection and the maintenance
of a home on the other. The fact that the dispute involves land,
a special kind of thing, does not help us resolve this conflict;
instead, it heightens the tension.
The Court of Appeal found that Mrs Ainsworth had a right to
occupy the land that bound the bank. On that basis, the bank’s
claim for possession would fail. (Lord Denning).
The banks on both these cases may wish to counter-argue against
the above proposition stating that a substantial loan has been
made and as a result of the limited availability of land and
coupled with its social importance, ensures that land has a high
value. If the bank is unable to sell the land, it is likely to be left
substantially out of pocket. It is thus suggested that the wider
consequences of finding in favour of Mrs Ainsworth and Mrs
Boland must be investigated. The legal rules of land law should,
therefore, be made in favour of the banks or the building societies
on this premise.
The House of Lords, however, reversed the finding of the Court
of Appeal. Mrs Ainsworth had to leave the land.
It is submitted here that clearly the House of Lords decision was
based on the content question in contrast to the decision of the
Court of Appeal. Their Lordships found that Mrs Ainsworth’s
right did not count as a property right and so was not capable of
binding the bank.
In Boland, Mr and Mrs Boland lived together in Ridge Park,
Beddington, Surrey. Mr Boland was registered as owner of the
home; Mrs Boland also made a substantial financial contribution
to the costs of acquiring the home. Mr Boland and his brother
were directors of Epsom Contractors Ltd, a building company.
To support the business, Mr Boland borrowed money from the
Williams & Glyn’s Bank. The money was borrowed as part of a
mortgage deal. To secure his duty to repay that sum, plus interest,
Mr Boland gave the bank a particular right (a charge) over his
home. This meant that if Mr Boland were to fall behind in his
repayments, the bank would have a power to sell the land and use
the proceeds to meet his debt. Mr Boland had fallen behind on
his repayments to the bank. The bank wished to sell the land. To
get a good price, the bank knew that it had to sell the home with
vacant possession. Because Mrs Boland refused to leave, the bank
applied for an order for possession of the home.
The Court of Appeal found that Mrs Boland had a right to
occupy the land that bound the bank. On that basis, the bank’s
claim for possession would fail. (Lord Denning).
The House of Lords upheld the finding of the Court of Appeal: the
bank’s action for possession, therefore, failed. (Lord Wilberforce).
It is submitted here that the crucial questions were the content
and defences questions and the House of Lords, in rejecting the
bank’s argument, found that Mrs Boland’s right counted as a
property right and that the bank had no defence to that right.
In both the cases, the Court has a tough choice to make. The
special features of land sharpen the Court’s dilemma. In the
article by McFarlane, The Structure of Property Law (2008), it
is suggested that the dispute between Mrs Ainsworth and Mrs
Boland and the banks in both cases could be characterised as
a wider clash between commerce and market forces on the one
Both Mrs Ainsworth and Mrs Boland may want to point out
the social importance and uniqueness of land; if both of them
are currently using the land as a home and uprooting that home
will cause severe disruption. Further, even if they are able to find
a home elsewhere, it may be in a different location and this can
give rise to disruptions in many aspects of their lives. Hence, it
can be argued from this premise that the legal rules of land law
should lean in favour of protecting the position of those currently
occupying or otherwise making use of land.
First, if banks have systematic problems in recovering loans,
this can have repercussions not just for the bank’s customers but
for the wider economy. Second, if the bank was unable to sell
the land, we need to consider the effect of such a decision on
lenders’ future practice of giving loans. Do banks have to carry
out extensive and expensive checks to ensure the credibility
of its customers and further since land is capable of multiple,
simultaneous use, there might be many potential rights that a
lender will need to watch out for.
The dispute between market forces and social protection thus
draws out the ambivalent nature of land itself. On the one hand,
it is of limited availability and constitutes an important financial
investment: we, therefore, do not want the process of buying land
to be unduly difficult. Yet on the other hand, it is unique and
socially important: we, therefore, do not want to give insufficient
protection to those who use and in particular, occupy land.
Harris in “Legal Doctrine and Interests in Land” in Oxford Essays
in Jurisprudence(1987) provides a valuable insight to the possible
approaches/models that may inform a Court’s approach when
dealing with cases such as Ainsworth and Boland. Two prominent
but contrasting models are identified by Harris:
1. The “utility model of rationality” which is based on what
Weber sees as a non-specialist’s expectation of how the dispute
should be decided: it essentially consists of weighing up on
one side the practical advantages of favouring the occupier
and, on the other, the practical advantages of finding for the
bank.
2. The “doctrinal model of rationality” is based on what Weber
calls “lawyers’ law”: the dispute is resolved by the application
of specific legal rules, not by a general weighing of the
consequences of finding in favour of the occupier or the
bank.
17
18
In the Ainsworth case, Lord Wilberforce considers the nature of
Mrs Ainsworth’s right to occupy her home; that right, arising
when her husband left her was known as a “deserted wife’s
equity”. The Court of Appeal, led by Lord Denning MR, had
held that the “deserted wife’s equity” was capable of binding a
third party, such as a bank later acquiring a charge over land. The
House of Lords, however, rejected that analysis.
Lord Wilberforce’s approach to deciding the case reveals two
possible suggestions. First, whilst there may be good reasons for
allowing Mrs Ainsworth the chance to remain in her home, there
may also be good reasons for protecting a lender, such as the
National Provincial Bank. That point alone is consistent with the
“utility model” – that is, of weighing up the practical advantages
and disadvantages of favouring either the occupier or the bank.
Second, and much more important, is the need to avoid a
“radical departure from sound principles of real property law”.
This can be observed in Harris’s view which gives prominence
to the “doctrinal model” – that is, a decision in favour of Mrs
Ainsworth can be made only if it can be reconciled with the
doctrinal, technical rules of land law. And according to Lord
Wilberforce, those rules meant that Mrs Ainsworth’s right could
not count as a property right ( a right capable of binding the bank)
only if it was “definable, identifiable by third parties, capable in
its nature of assumption by third parties, and have some degree of
permanence or stability”. Because Mrs Ainsworth’s right did not
have those features, the content question was decided against her
and the bank was, therefore, free to remove her from her home.
In the Boland’s case, there was a clear difference between the facts
of Ainsworth and those of Boland. Unlike Mrs Ainsworth, Mrs
Boland had made a significant financial contribution to the cost
of the land owned by her husband. As a result, Mrs Boland’s
right differed from the “deserted wife’s equity” of Mrs Ainsworth.
Instead, Mrs Boland had a right under a trust of land.
Hence, it is first important for us to understand the arguments
forwarded by the William & Glyn’s Bank in their defence.
First, the bank argued that like the “deserted wife’s equity”, that
right failed the content test: it did not count as a property right
that could bind a third party, such as the bank later acquiring
a right in the land. This argument was based on a land law
technicality ie, the doctrine of conversion. According to the bank,
it meant that Mrs Boland’s right under the trust did not give her
a right enabling her to use the land: it only gave her a right to a
share of any money made by her husband from the land.
Second, the bank held that even if Mrs Boland did have a
property right that was capable of binding the bank, the bank
had a defence to that right. The particular defence relied on by
the bank was provided by a land registration statute and was
based on the fact that when the bank acquired its charge, Mrs
Boland’s right was not noted on the entry in the register relating
to her home.
However, this argument by the bank could easily be displaced on
the basis that the lack of registration defence does not apply if the
party with the unregistered property right is in “actual occupation”
of the land. In these circumstances, the property right held by the
party in occupation is known as an “overriding interest” – that
April - June 2012
is, a right that is immune from the lack of registration defence.
Another technical argument raised by the bank was that where a
wife occupies alongside a husband, the wife does not count as a
person in actual occupation. This argument is based on the idea
that if the bank were to investigate the land before making its
loan to the husband, the presence of the wife there would not
alert the bank to the risk that she had a property right in the land.
Both the bank’s arguments were rejected by the Court of Appeal
and the House of Lords. The content and defences question
were thus decided in Mrs Boland’s favour: her right under the
trust counted as a property right in land and, due to her actual
occupation, the lack of registration of that right did not give the
bank a defence to it.
Lord Denning MR was clearly concerned that as had occurred
in Ainsworth over fifteen years earlier, the House of Lords would
reverse the decision of the Court of Appeal and favour the bank
rather than the occupier. His Lordship’s fear was, however,
unjustified.
Clearly, the House of Lords reached different results in Ainsworth
and Boland. In the former case, the bank’s claim for possession
was successful; in the latter, that claim was denied and the
occupying wife won out.
From a doctrinal point of view, that difference can be simply
explained: it depends on the different content of the right held
by each occupier. Mrs Ainsworth’s right, a “deserted wife’s equity”
was not seen as capable of binding the bank; Mrs Boland’s right,
arising under a trust of the land, was capable of doing so. Harris
argues, however, that there is also a difference in the underlying
approach adopted by the House of Lords in each case.
Harris’s analysis emphasises the fact that at a general level,
Ainsworth and Boland each raised the same question: should the
pre-existing right of an occupier, even if it was not created by the
bank nor was necessarily easy for the bank to discover, bind the
bank?
In Ainsworth, the facts that the occupier’s right was uncertain and
hard to discover led the Court, adopting a technical, doctrinal
approach, to find that her right could not bind the bank, because
it did not count as a property right.
In Boland, those same facts did not stand in the occupier’s way.
Harris suggests this is because in Boland, the House of Lords:
(i) prioritised the need to reach what it regarded as a just result;
and (ii) decided that it was just to require banks, before lending
money to an owner of land, to check whether any other occupier
of that land claimed a right in relation to that land, and if so, to
get the consent of that occupier to any right that the owner might
give the bank.
The purpose of studying the Ainsworth and Boland decisions:
1. Land law is clearly very important in practice. The decisions
in each case had significant practical consequences not only
for Mrs Ainsworth and Mrs Boland and the respective banks
but also for many occupiers and mortgage lenders in these
positions.
April - June 2012
2. The cases focused on whether the occupier had a private
right to use land that she could assert against the bank: the
key question was whether the occupier had an interest in
land (ie, a property right) that could bind the bank.
3. The decisions in Ainsworth and Boland highlight the
importance of the content, acquisition and defences
questions.
4. As Harris highlights, the cases such as Ainsworth and Boland
also raise broader questions about the approach that a Court
should adopt when deciding a dispute about private rights to
use land.
The discussion between the validity of the utility model and the
doctrinal model is not simply based on which model is better.
It is not about the utility model being irrelevant or that there is
no need to consider the practical merits or wider justice of the
doctrinal rules of land law. On the contrary, the social importance
of land law means that it is vital not only to understand land law
rules but also to evaluate them. Land law changes over time and
those changes must be based on a view that the previous legal
rules were, in some way, deficient. The developments occurring
after Ainsworth is a classic example to illustrate this point.
As a result of Ainsworth, Parliament enacted the Matrimonial
Homes Act 1967 – the Act established:
1. That a spouse has a qualified statutory right to occupy a
home owned by his or her partner; and
2. That the statutory right to occupy, if protected by registration,
was capable of binding a third party, such as a bank, later
acquiring a right in relation to the matrimonial home.
Parliament thus reformed the law by coming up with a specific,
tailored solution that it believed formed the best compromise
between the need to protect an occupying spouse and the need to
protect a third party such as a bank.
That compromise, now found in the Family Law Act 1996,
ss 30-33 avoids the doctrinal question of whether the right to
occupy counts as a property right; instead, the right is allowed to
bind a third party, such as a bank, only if it is registered. Actual
occupation cannot protect the statutory right to protect: if it is
not registered, it cannot bind a third party. And, even if the right
is registered, a Court still has the discretion to allow a third party
to remove the occupying spouse.
The contrast between the approach adopted in Ainsworth and
the solution implemented by the Matrimonial Homes Act 1967
reflects a wider tension in land law – that is, between judicial and
legislative reform.
Therefore, if it is felt that the existing land law rules need to
be changed, there is a tension between judicial and legislative
reform: can Judges develop the law in the appropriate direction,
or should they hold back and wait for Parliamentary intervention?
A classic example of such a problem arises in relation to the
acquisition of rights under a trust of a family home. Here we
have considered this in the case of Boland and according to Lord
Denning MR in the Court of Appeal in Boland, the Court’s
willingness to recognise such rights stems from a “remarkable
series of decisions” confirmed by the House of Lords in 1970 in
Gissing v Gissing(1971) AC 886.
The topical debate around when a partner can acquire a right
under a trust of a family home demonstrates a wider question
of whether the best response to a particular problem necessarily
consists in changing the land law rules: it may be, as the Law
Commission has suggested in the context of disputes over the
family home, that we have to look beyond land law for a solution.
The Law Commission Report No 278, Sharing Homes: A
Discussion Paper (2005) initially attempted to respond directly
to the criticism that the land law rules make it too difficult
for a partner to acquire a right under a trust of a family home.
However, it concluded that it was impossible to come up with a
satisfactory legislative scheme setting out precisely when a partner
should acquire such a property right. Its focus, therefore, shifted
away from a core land law question (when a party can acquire
a property right in relation to land) to a different question: if
the relationship of cohabiting, but unmarried partners ends, are
there circumstances in which one of the parties should be under a
duty to provide some financial support to the other partner? The
Law Commission in its report, Report No 307, Cohabitation:
The Financial Consequences of Relationship Breakdown (2007)
concluded that Parliament should enact such a scheme.
Hence, one way of analysing the Law Commission’s approach is
to say that it has moved from a “land law” solution to a “family
law” solution. Its focus is no longer on private rights to use land;
rather, it has shifted to the question of whether a partner should
be able to receive financial support.
There is a wealth of material surrounding the fundamental debate
on the appropriate values, which Property Law should enhance
but clearly the balance is not an easy one to strike. However,
recent developments and reforms in the area of property has
shown that both the values have been in one way or the other
preserved by virtue of Parliamentary enactments on one hand
and case law developments on the other.
References:
Kevin Gray and Susan Francis Gray, Elements of Land Law (4th ed).
Roger Smith, Property Law (6th ed).
Judith Ann MacKenzie and Mary Phillips, Textbook on Land Law.
Martin Dixon, Modern Land Law (7th ed).
19
20
April - June 2012
Evidence
Section 114(1)(d) Criminal Justice Act 2003 – A Discussion
on the Discretion of a Judge in Respect of Admitting
Hearsay Evidence Pursuant to the Safety Valve Exception
by Puvanal Sri
The Criminal Justice Act 20031 has brought about some changes,
especially in governing the admissibility of the common law
rule against hearsay and our focus of discussion is in regards to
a special provision known as the “safety valve” provided under
s 114(1)(d) which states:
In criminal proceedings a statement not made in oral
evidence in the proceedings is admissible as evidence of any
matter stated if, but only if the court is satisfied that it is in
the interests of justice for it to be admissible.
This provision as proposed by the Law Commission and provided
by the Criminal Justice Act seems to have relaxed the admission
of hearsay statements. However, the question that arises here is
how much discretion does a Judge have in admitting a hearsay
statement under this exception?
The hearsay rule was applied at common law excluding such
evidence until the Criminal Justice Act 2003 (“CJA”) was
introduced to clarify and reform the law on the admissibility
of hearsay evidence. The law with regards to criminal trials is
governed by Part 11, Chapter 2 of the Criminal Justices Act 2003
(“CJA 2003”) which defines the rule and codifies the exceptions
to it.
In examining this provision, s 114(2) of the Criminal Justice Act
2003 goes on to provide the list factors or considerations which
the Judges will have to take into account in deciding whether or
not to admit a hearsay statement under the safety valve.
As stated in s 114(2):
In deciding whether a statement not made in oral evidence
should be admitted under subsection (1)(d), the court must
have regard to the following factors (and to any others it
considers relevant) —
(a) how much probative value the statement has (assuming
it to be true) in relation to a matter in issue in the
proceedings, or how valuable it is for the understanding
of other evidence in the case;
The major justification for the exclusion of such evidence is fairly
straightforward. Hearsay evidence is not reliable simply because
it carries a possibility of fabrication by witness due to the fact that
such evidence is not given on oath. There is also uncertainty as to
the truth of such statement.
(b) what other evidence has been, or can be, given on the
matter or evidence mentioned in paragraph (a);
(c) how important the matter or evidence mentioned in
paragraph (a) is in the context of the case as a whole;
On the contrary, many have expressed concerns that this rule
may lead to cogent evidence being excluded and hence the denial
of a fair and just outcome. Certain evidence bears credible,
probative and reliable evidence thus giving a clear picture of what
transpired and, therefore, is better than having no evidence at all.
The need for reform was demonstrated by Judges. For example in
the case of Myers v DPP 3 where Lord Reid stated:
(d) the circumstances in which the statement was made;
(e) how reliable the maker of the statement appears to be;
(f ) how reliable the evidence of the making of the statement
appears to be;
(g) whether oral evidence of the matter stated can be given
and, if not, why it cannot;
(h) the amount of difficulty involved in challenging the
statement;
(i) the extent to which that difficulty would be likely to
prejudice the party facing it.
The hearsay rule is classically defined as “an assertion not made by
a person giving oral evidence and which is tendered as evidence of
the matters stated”. The ever popular case which demonstrates the
rule in application is the case of Subramaniam v Public Prosecutor2
where the Privy Council said: “A statement is not hearsay and is
admissible when it is proposed to establish by the evidence, not
the truth of the statement but the fact that it was made”.
If we are to extend the law it must be by the development and
application of fundamental principles. We cannot introduce
arbitrary conditions or limitations; that must be left to
legislation: and if we do in effect change the law, we ought
in my opinion only to do that in cases where our decision
will produce some finality or certainty. If we disregard
technicalities in this case and seek to apply principle and
common sense, there are a number of parts of the existing
law of hearsay susceptible of similar treatment, ... The only
satisfactory solution is by legislation following on a wide
survey of the whole field ... A policy of make do and mend is
not appropriate.
Looking at the wording of s 114(2), the Judge must have regard
to the nine factors. In construing the wording of this section,
reference can be made to the case of Taylor4 whereby the trial
Judge admitted hearsay evidence through s 114(1)(d) but could
April - June 2012
not reach a conclusive decision in regards to any factors. On
appeal, the Court of Appeal was required to decide whether a
Judge had to reach a decision in regards each and every one of
the factors.
Rose LJ in the case of Taylor held that s 114(1)(d) does not
impose an obligation on the Judge to reach a conclusion on each
factor. The Judge need only give consideration to those factors
and access the significance of those factors which he considers
relevant. There is nothing in the wording of s 114(2) which
requires a Judge to consider all nine factors or reach a conclusive
decision in relation to any factors.
From Rose LJ’s statement, it is clear that despite the wording of
the statute which states that the Judge must have regard to all the
factors, the Court of Appeal is ready to overlook the fact that the
trial Judge did not in fact consider all factors, especially where the
hearsay evidence is admitted in the interest of justice and regards
the Judge’s decision as an exercise of discretion.
In Taylor, the trial Judge admitted evidence from two prosecution
witnesses whom named T as one of the participant in the attack
which led to a charge of causing grievous bodily harm with intent.
Where the Judge admits evidence after taking into account the
above factors, it will be difficult to challenge such a decision.
There are a good number of cases where the Judge’s discretion
to tender evidence pursuant to this section is justified. The
case of Sparks v R5 would have been one such case where the
three-year-old girl claimed that “a coloured man” committed
the offence. The accused was a Caucasian adult male charged of
assaulting that three-year-old girl. The statement was held to be
inadmissible as it was caught by the rule against hearsay. If the
case was to be decided in light of the CJA coming into force, the
statement could be tendered in the interest of justice pursuant to
s 114(1)(d) CJA 2003.
A recent similar case is the case of R V J(S),6 where the evidence of
what a two and a half- year-old girl said to her mother concerning
the defendant’s actions was admissible under s 114(1)(d). There
is a certain relief today since evidence which is clearly reliable is
admitted via this provision.
Another situation where it is appropriate to use s 114(1)(d) is
demonstrated in the case of Thomas.7 In this case, T was accused
of murdering his girlfriend. The issue that arose was the time of
death. An eight-year-old girl had told a police officer that she had
seen the victim leaving her house after the alleged time of death.
By the time of trial, the child had forgotten the whole incident.
In this situation, arguably s 114(1)(d) can be used to admit this
statement as the chances of fabrication or concoction is hardly
there.
A case like Cooper 8 also qualifies where C was charged and T
who happened to look very similar to C admitted to a friend that
he had in fact committed the assault, and not C. T’s confession
might have been admitted pursuant to s 114(1)(d) CJA 2003.
Maher v DPP 9 is a case decided after the CJA came into force and
hence was able to benefit from the safety valve provision. In this
case, the accused brought an appeal to the High Court arguing
that s 117 of the CJA was wrongly used to tender evidence
contained in a log book. The reason the log was to be tendered
was because the note written by a bystander who witnessed
the incident went missing after the police officer recorded the
content of the note into the log book.
The High Court held that the evidence falls under the discretion
of the Magistrate and hence can be admitted under s 114(1)(d)
as it is clearly in the interest of justice, reliable and of substantial
value.
The Law Commission recommended s 114(1)(d) to circumvent
the possibility of injustice occurring due to the exclusion of
hearsay evidence where it could not fit into any other exceptions.
The purpose of this section as stated by the Law Commission is:
To allow for the admission of reliable hearsay which could not
otherwise be admitted, particularly to prevent a conviction
which that evidence would render unsafe.
However, the Law Commission went on to explain that this
exception should only be used in very limited circumstances.
Although it is clear that the statutory wording does not indicate
that s 114(1)(d) was meant to operate as the last resort(safety
valve), the natural reading of the section and the purpose stated
by the Law Commission seems to suggest that this provision
would only apply when the evidence cannot fall into any other
recognised category of exceptions.
Despite this explanation, the Courts are inclined to actually use
this provision as of right, like other exceptions and give it equal
treatment, if not more, despite it being intended to be a fallback provision and to be used only where an evidence cannot be
tendered under other exceptions to hearsay.
The approach of treating the safety valve as a weapon of first
resort rather than a weapon of last resort can be dangerous.
An illustration of such a case is R v Y.10 In this case, the Court
held that a hearsay statement can be adduced under s 114(1)
(d) even if it tends to incriminate the accused. The statement is
not automatically precluded simply because it incriminates the
accused or may amount to an admission of a certain extent of
guilt by the person who made it. However, the interest of justice
test still has to be satisfied, and attention needs to be given to the
factors set out in s 114(2).
This case of R v Y cited the case of McLean11 as stating the
principle that any type of statement may be admitted under
s 114(1)(d). In McLean where a joint enterprise was alleged, it was
held that an accused was entitled to adduce a hearsay statement
made by his co-accused under s 114(1)(d).
Furthermore, in the case of R v Hayter,12 it was held that s 114(1)
(d) can be used to admit evidence of an out-of-Court statement
by one defendant against the other.
This suggests a propensity for the Courts to use s 114(1)(d) of
the CJA as a code of admissibility rather than inadmissibility, to
treat all sub-sections of s 114(1) as equal, none subordinate to
another and, therefore, any statement which is caught against
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22
the rule against hearsay is admissible under s 114(1)(d), subject
only to s 114(2). The effect of this would render other exceptions
under s 114 nugatory.
The case law of R v Z (“Z”)13 is a very recent case where it laid
down the manner in which an evidence ought to be admitted
pursuant to s 114(1)(d) CJA 2003. In this case the prosecution
seek to admit evidence of a statement made by a witness who was
sexually attacked by the defendant as bad character evidence. The
Court of Appeal held that the trial Judge had wrongly admitted
the hearsay statement where the witness was well and able to
testify, though with much reluctance.
The trial Judge had failed to take into account the factors under
s 114(2), particularly s 114(2)(g) which relates to the witness
being unable to testify and if not, why was the witness unable
to testify? The Court of Appeal said that s 114(1)(d) was to be
applied cautiously, if not the conditions under s 116 CJA 2003
ie, the inadmissibility exception will be circumvented, rendering
it nugatory. Only where the evidence cannot be tendered under
s 116, can it then be tendered pursuant to s 114(1)(d) CJA 2003.
A similar outcome was reached in the case of Finch14 where
the Court of Appeal upheld the trial Judge’s decision not to
admit the confession made in a police interview by the second
defendant which exonerated the first defendant from the offence
of possessing prohibited firearm and ammunition. It is not in
the interest of justice to admit such an evidence since the second
defendant was reluctant to support his statement on oath. This
undermines the reliability of the statement and hence should not
be brought within the exception as it is contrary to the interest
of justice.
Also, when there are breaches under other exceptions for
excluding, such as the Police and Criminal Evidence Act 1984, s
114(1)(d) should not be used to admit such evidence.
In the case of Smith15 the Court of Appeal insisted that evidence
which does not satisfy the criteria for admissibility under s 74
PACE would also fail to meet the criteria required under s 114(2)
CJA 2003.
In the case of Marsh16 the Courts stated that Judges should be
slow in admitting evidence under this exception, especially
where the reliability of a statement depended on the veracity of
the person making such a statement which could not be tested
and where as in this case itself, the reliability of the statement
was obviously open to considerable question. Furthermore, the
defence had other evidence available instead of the statement in
question, hence the exclusion of the evidence was not fatal to the
defence.
As explained by Hughes LJ in the case of Marsh, even when the
defendant invokes s 114(1)(d), “the interest of justice .... are not
synonymous with the interest of the defendant. They mean the
public interest in arriving at the right conclusion in the case,
including of course the acquittal of anyone about whose guilt
there is proper doubt”.
Of course there is the fear that if Judges were to use this provision
widely, it would circumvent conditions of admissibility under
other provisions and may extend it to circumvent confessions
which does not comply with s 76 and s 78 PACE 1984.
April - June 2012
In each case, s 114(1)(d) needs to be applied in its statutory
context. There is no fixed standard as to how much discretion
Judges have in opting to admit an evidence under this exception.
As observed by Stanley Burton LJ in Z para (d) is unhelpfully
drafted. According to his Lordship, it has been referred to as
creating a residual power or as a safety valve. When considered in
isolation, it might be given a wide or a narrow application.
As Dobbs J in Sak v Crown Prosecution Service17 commented,
although there is nothing in the section to indicate that Judges
must take a narrow approach in applying the safety valve
provision, this provision must not be lightly applied and the
Courts must exercise its judgment according to s 114(2) CJA
2003.
There is no doubt that there are benefits arising from using this
provision in the same manner as the other exceptions, but there
are equally flaws in doing so. Arguably, therefore, although there
are no express wording limiting the application of this exception,
the purpose of this section should be taken into account so that
this s 114(1)(d) is not applied in a manner that undermines
or jeopardises other exceptions as it is clear that this exception
is intended to be the last resort in which an evidence can be
admitted after consideration of all the other exception and when
all others fail.
References:
Roderick Munday, Evidence, 5th Edition, Core Text Series.
Ian Dennis, The Law of Evidence (Fourth Edition, Sweet & Maxwell).
Peter Murphy, Murphy on Evidence (Eleventh Edition, Oxford).
Law Com. 254, paras 8.133.
Notes
1
2
3
4
5
6 7
8
9
10
11
12
13
14
15 16
17 Part 11, Chapter 2 of the Criminal Justices Act 2003 (CJA 2003).
Subramaniam v PP [1956] W.L.R. 965.
Myers v DPP [1965] AC 1001.
Taylor [2006] 2 Cr App R .
Sparks v R [1964] AC .
R v J(S) [2009] EWCA Crim 1869.
Thomas [ 1994] Crim LR.
Cooper [1969] 1 QB.
Maher v DPP [2006] EWHC 1271 (Admin).
R v Y [2008] 2 All E.R. 484.
McLean [2008] 1 Cr App R.
R v Hayter [2005] 1 WLR.
R v Z [2009] EWCA Crim 20.
Finch [2007] 1 WLR.
Smith [2007] EWCA Crim 2105.
Marsh [2008] EWCA Crim 1816.
Sak v Crown Prosecution Service [2008] 172 JP 89.
24
April - June 2012
Jurisprudence
John Austin: Is Hart’s Criticism Against Austin’s Command
Theory Fair?
by Puvanal Sri
Austin’s Command Theory
John Austin is considered by many to be the creator of the
school of analytical jurisprudence, as well as, more specifically,
the approach to law known as “legal positivism.” Many critics
including H.L.A Hart have hurled criticisms against Austin’s
command theory. However, whether Austin’s theory is able to
withstand those criticisms will be discussed in this article.
As to what the core nature of law is, Austin’s answer is that laws
are commands of a Sovereign. “A command is an express wish
that something be done and if such a wish is not complied with,
there is willingness and ability to impose ‘an evil’”. To Austin,
rules are general commands applying generally to a class (“The
speed limit on the highway is 120 km/h”) and not specific or
individual commands (“Eat chicken pie today” or “Richard must
eat chicken pie”).
Law to Austin consists of those commands laid down by a
Sovereign. The Sovereign is the entity that enjoys habitual
obedience from the subjects. Austin further suggests that the
underlying reason for obedience is fear of sanction. To Austin,
sanction means a “visitation of evil” whereby failure by the
subject or citizen to obey the command of the Sovereign would
lead to them being punished.
The “Sovereign” is defined by Austin as a person or body of
persons who receives habitual obedience from the bulk of the
population. However as Austin puts it, the “Sovereign” is not
in itself in the habit of obeying others, whether it is another
institution or person.
Austin has given us a simple theory. However, this theory has
been subjected to many criticisms, especially by Professor Hart of
which some will be examined in this article, including whether
Austin’s theory is truly flawed.
that of a gunman’s order backed by threats. According to Hart,
where a command is given, there need not be the threat of harm
in the event of disobedience. According to Hart, to command
is characteristically to exercise authority over men, not power to
inflict harm, as a command is primarily an appeal not to fear, but
to respect authority.
Hart is of the view that making law differs from ordering people
to do things and that the gunman has only temporary superiority
over his victim whereas laws have “standing” or continuing
characteristics. A gunman to Hart does not issue “standing
orders” to be followed time after time by classes of persons, yet
laws pre-eminently have this “standing” or “continuing nature”.
Hart states in his work Essays in Jurisprudence and Philosophy that
Law is surely not “the gunman situation writ large” and legal
orders are surely not to be identified with compulsion or force.
It is submitted that Hart’s statement that a law-maker ( “the
Sovereign”) is unlike a gunman is agreed with as both do not
share the same position or status. The gunman is a lay person like
any other person and as Hart pointed out there is no habitual
obedience towards him. However, when he takes out his gun, aims
it at someone and states his wish, his command is immediately
complied with as there exists fear that he (“the gunman”) would
pull the trigger and this obedience is only gained by the gunman
as long as he still holds the gun.
On the other hand, the status of the Sovereign is different
altogether. Every citizen of the country or even that of other
countries knows and recognises the Sovereign. Now the
Sovereign need not do anything but issue commands unlike the
gunman who has to take out his gun before issuing a “command”
or “order” as Hart puts it. According to Austin, citizens obey
the “command” or “law” as Austin calls it, out of fear that
disobedience would result in there being a “visitation of evil”.
Herbert Lionel Adolphus Hart, better known as H.L.A Hart was
an influential legal philosopher of the 20th century. He devoted
Chapters 2, 3 and 4 of his most famous work, The Concept of Law
to criticising Austin’s theory.
Hart contends that Austin failed to realise the difference of being
under an obligation and being obliged. In a gunman situation,
the “victim” so to speak, has no option or choice but is obliged to
the wishes of the gunman; however in society, not every citizen
feels that he or she is obliged to the wishes of the Sovereign or
person in power but feels that they are under an obligation to do
so as they share the same view as the law-maker.
Amongst the many criticisms hurled at Austin’s command
theory, a well-known criticism from which much discussion can
be derived would be Hart equating Austin’s command theory to
For example, a law stating that it is an offence for a person to
throw rubbish into lakes and if caught doing so would be subject
to a fine of $1,000, would receive immense support from nature
Criticism of Austin’s theory
April - June 2012
lovers as they themselves would not throw rubbish into lakes and
would welcome such a law as they feel that they are under an
obligation not to pollute the lakes.
Another example would be that if a lecturer walked into a
classroom and told the students, “You must all hand in your
assignments by next week and anyone who fails to do so will
not be able to attend classes the following semester.” In the event
students handed in their assignment, following Austin’s theory,
the reason students handed in their assignments was because
of fear that they would not be allowed to attend lectures in the
following semester if they did not hand in their assignments.
However according to Hart, Austin failed to account for students
who would willingly hand in their assignments in order to gauge
and improve themselves.
Another criticism of Austin’s theory found in The Concept of
Law is Austin’s failure to provide in his theory, other species of
law which cannot be construed as orders or commands since
they perform a different social function known as the power
conferring rules which confers powers on private individuals and
public officials. It is argued that the significant difference between
“commands” in Austin’s theory and the power conferring rules is
that in the event of a breach of a command, a sanction will follow.
However, where the procedures governing the power conferring
rules are not complied with, a situation of nullity arises. Hart
states that the extension of the concept of sanction to include
nullity would lead to confusion since nullity is a notion totally
different from the punishment that follows from the breach of a
criminal statute.
Nullity according to Hart cannot be assimilated to that of a
punishment attached to a rule as an inducement to distance
oneself from activities which the rule forbids. For Hart, nullity
unlike a sanction cannot be equated to punishment. It can be
derived from this view of Hart’s that he sees Austin’s “visitation
of evil” as a punishment and this view of Hart’s makes perfect
sense as not all non-compliance of law will lead to punishment.
For example, in the UK, failure to comply with s 9 of the Wills
Act would not be followed closely by punishment for noncompliance but the will would be rendered invalid and would
not be upheld by the Courts for want of formalities and so the
wishes of the testator would not materialise. For Hart this is not
a punishment but rather nullity and as such Austin failed to
account for nullity-like punishments.
A further criticism forwarded by Hart is that the law-maker so
to speak must himself be bound by the law that he makes and
Austin’s Sovereign does not comply with this, as according to
Austin, the Sovereign is not in the habit of obeying anyone. This
seems to suggest that Austin’s monarch is free of limitations and
can do whatever His or Her Majesty wishes and issue commands
freely. This, according to Hart, is yet another flaw in Austin’s
theory.
Hence at this point, it is submitted that prima facie Hart’s
criticisms of Austin do make sense and do give us something to
think about. However, both sides of the coin should be looked
at and hence it is only fair that defences in support of Austin’s
theory should be considered.
Defence of Austin’s Theory
When Austin came up with his lectures, he lived in a society
ruled by a monarch and thus based his theory on what was
observed. Now, Hart equates Austin’s command theory to that
of orders backed by threats but was that what Austin intended it
to be? It is argued that the Sovereign cannot possibly be equated
to a gunman. Hart came up with this imaginary gunman and
his orders backed by threat theory, equated it to that of Austin’s
Sovereign and the command theory and concluded that it could
not work as a legal theory as he detected many flaws in it, some
of which were pointed put above.
However, interestingly as Hart puts it, Austin’s command theory
should not and indeed, is not the gunman’s orders backed by
threat. The two are like the North pole and South pole. First,
the gunman does not in any way share the same status as
the Sovereign. The Sovereign is the figure of a state, which is
recognised by the citizens of the state and even those from other
states. On the contrary, the gunman is not recognised by anyone.
The Sovereign has the duty to govern its subjects or citizens
and regulate society through proper administration through its
“agents” which can be argued to be Judges, ministers etc. Hence,
the commands issued by the Sovereign would be to regulate
society and thus would carry the force of a law and is not a forced
order as issued by the gunman. Only when the command issued
by the Sovereign is breached would there be a visitation of evil or
punishment. However, with regard to the gunman situation, the
gunman could pull the trigger even if the order is complied with
as seen in many live examples, where gunmen have pulled their
triggers even though they had got what they wanted.
Thus, it is submitted that Professor Hart had rebranded Austin’s
theory as an order backed by threat theory and it is in the author’s
view that this rebranding is not an accurate branding of Austin’s
theory.
Next with regard to nullity, Hart states that nullity is not a
form of sanction. However, it is submitted that nullity can be
considered a sanction or punishment. It is simply because if one
does not get what one wants, is that not a form of punishment?
For example, if two people are entering into a contract in the
UK and the formalities stated in the Contracts Act 1950 is not
complied with, the contract would be null and void and both
parties cannot be held to the contract. Likewise, if the formalities
and regulations found in the Companies Act is not complied with
when setting up a company, the company cannot be registered
and would not be recognised. Similarly, a marriage would be null
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26
and void if the formality governing the legality of a marriage is
not complied with. It is the author’s view that nullity caused by
non-compliance of rules and regulations laid down by the lawmaker can be taken to be a form of punishment or sanction.
Next, with regard to the commands issued by the Sovereign, as
suggested, the Sovereign is not free of limitations when issuing
a command. In fact, only legal limitation does not bind the
Sovereign. If the Sovereign issues commands that are highly
improper or immoral for example, “to kill all red haired babies”,
the Sovereign would be subjected to condemnation by the
subjects and there would be protests and rebellion against this
command. This inevitably would cause the Sovereign to lose
habitual obedience by its citizens in time. This being the case,
it is submitted that Professor Hart has probably failed to take a
closer look at Austin’s theory before hurling his criticism at it.
It is submitted that Austin’s theory makes sense even today.
For instance, if Jack ( a fictitious character) was driving at
3 am and reaches a traffic light that shows red and there are no
cars to be seen in the vicinity, he would not stop but continue
driving. Most people in this country would. However, if there
was a police patrol car behind him or if there is a camera attached
to the traffic light to capture the number plates of cars that do
not stop at the traffic light when it turns red, Jack would most
probably stop at the traffic light. The reason for this is simple:
Jack fears the punishment that would follow if he fails to stop
when the light turns red, which in his case may be a fine. Hence,
Austin was right in saying that citizens obey the law out of fear
of sanctions as even today, citizens obey the law out of fear of
sanctions. A further example would be a Ruler who ignores the
limitations of statutory law, constitutional law, and international
treaty commitments, while the public and other officials lack the
will or the means to hold that Ruler to the legal norms that are
aimed to constrain his or her actions.
Conclusion
It is in the author’s view that though Hart has put forward
some very interesting criticisms against Austin, Hart has failed
to understand the foundation and era which influenced Austin’s
April - June 2012
writings. In other words, Hart failed to see through Austin’s eyes.
If he did, arguably, he would understand that Austin’s theory
applied perfectly well in his time. In further support of Austin,
Austin could not have possibly foreseen a society governed by
Parliament or any other body divested with power other than
the monarch. The question that arises here is: was Austin’s theory
really flawed as Hart claimed or does it work well within a
community that is governed by a monarch?
Perhaps the answer is just a simple one which is: both Austin
and Hart were right in their own way as their respective theories
represent the era in which they wrote. Hart failed to appreciate
the historical context in which Austin wrote. Hart may be
absolutely right, that “visitation of evil” is not the only reason
why there is habitual obedience by citizens but at the same time
Austin was not wrong. “Visitation of evil” may be the reason why
some of us still obey the body in power.
Thus it is submitted that Austin’s theory is like the Great Wall
of China, which had served an extremely important purpose
during its time but today, though no longer used for the purpose
that it was built, still stands as one of the wonders of the world.
Likewise, Austin’s theory has helped us in our understanding of
jurisprudence during the times of monarch and he ought to be
credited for that.
Austin’s distinct command theory of law has been subjected
to widespread criticism, but its simplicity gives it an evocative
power that continues to attract adherents, the author included.
Reference:
H.L.A Hart, Concept of Law (2nd edition, Clarendon Law Series).
H.L.A Hart, Essays in Jurisprudence and Philosophy (Oxford University Press,
Oxford, 1983).
Wayne Morrison, Elements of Jurisprudence (International Law Book Services,
1994).
J Austin, The Province of Jurisprudence Determined (Cambridge University Press,
9 Mar 1995).
April - June 2012
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April - June 2012
Company Law
Queen’s Bench Division, Commercial Court
Enercon GmbH and another company v Enercon (India) Ltd [2012] EWHC 689 (Comm), [2012]
All ER (D) 47 (Apr)
Before: Justice Eder
23 March 2012
The litigation arose between the claimant German companies and
the defendant Indian company (EIL) regarding a wind energy
joint venture. The parties had been engaged in litigation for
some years in India. The instant proceedings concerned claims
by the claimants under an alleged written agreement between
the first claimant and EIL, concerning intellectual property (the
“IPLA”). The IPLA contained, inter alia, an arbitration clause (cl
18). EIL contended that the IPLA was not legally binding and
that in the alternative, although cl 18.3 stipulated that the “venue
of the arbitration proceedings” would be London, “venue” was
not synonymous with “seat” and on the true construction of
the IPLA, the “seat” of any arbitration would be London, not
India (the seat issue). The claimants sought a declaration under
s 32 of the Arbitration Act 1996 that the seat of the arbitration
was England, and an anti-suit injunction restraining certain
proceedings on behalf of EIL in the Bombay High Court (the
“BHC”). EIL filed its own claim in the Indian Daman District
Court (“DDC”) seeking, inter alia, a declaration that the IPLA
was not a concluded contract and that EIL was not, therefore,
bound by the arbitration agreement. In April 2008, the Indian
Court granted EIL an anti-suit/anti-anti-suit injunction on an
interim basis. In January 2009, the DDC refused an application
by the claimant for EIL’s claims to be referred to arbitration and
for the Indian anti-suit injunction to be lifted. In August 2009,
the DDC allowed the claimants’ appeal against that order. EIL
subsequently filed what it described as “appeals” in the Indian
Court. Those proceedings on their face appeared to be writ
petitions to the BHC for, inter alia, the quashing of the order of
August 2009 (the “order of August 2009”). In November 2011,
the claimants issued proceedings in an Arbitration Claim Form
(the “ACF”). In February 2012, the claimant successfully made an
application without notice to the Court for a freezing injunction
against EIL (the “freezing injunction”). Although the claimants
had previously issued proceedings in the English Court, they had
not chosen to pursue them.
Four applications were before the Court: (i) EIL’s application to
challenge the jurisdiction of the Court regarding the claimant in
the ACF; (ii) the first claimant’s application for the appointment
of an arbitrator; (iii) EIL’s application to set aside or vary the
anti-suit injunctions; and (iv) EIL’s application to set aside or
vary the freezing injunction and the first claimant’s application
to continue the same. The Court gave further consideration to
the question of whether the sea issue should be left to the Indian
Courts and whether EIL had been correct to rely on the stay of
the order pending the hearing of the writ petitions.
The Court ruled:
1. It would be appropriate to stay the proceedings pending
resolution of the writ petitions currently before the BHC.
Any such order would include the requirements that: (i) EIL
undertook all necessary steps to expedite those proceedings; and
(ii) the stay was for a limited period only.
The proceedings would be stayed pending resolution of the writ
petitions.
Abidin Daver, The [1984] 1 All ER 470 applied.
2. On the evidence, the fact that there was a stay of the order
pending the hearing of the writ petitions was enough to enude
that judgment of any finality and conclusiveness it might
otherwise have. EIL was correct to rely on the alleged stay
because, on balance: (i) it had been right about the existence of
such a stay; and (ii) there was sufficient doubt so as to preclude
any possible reliance on res judicata or issue estoppel.
There was no relevant res judicata or issue estoppel.
3. On the true construction of, inter alia, the wording of cl 18.3,
the appropriate venue for the hearing of the claim would be
London.
London would be the “seat” of any arbitration under cl 18.3.
4. In the circumstances, a number of factors justified the
discontinuation of the freezing injunction.
The freezing injunction would not be continued.
© LexisNexis
April - June 2012
Conflict of Laws
Queen’s Bench Division, Commercial Court
West Tankers INC v Allianz SpA (formerly known as Riunione Adriatica Sicurta) and another
[2012] EWHC 854 (Comm) [2012] All ER (D) 166 (Apr)
Before: Flaux J
4 April 2012
The underlying dispute arose out of a collision in August 2000
between the appellant’s vessel “Front Comor” and a pier in Sicily
belonging to Erg Petroli SpA (“Erg”), who had chartered the vessel
from the appellant. The charter contained a London arbitration
clause with English law to apply. Erg made claims against the
appellant for its losses arising out of the collision, and obtained
security in the form of a letter of undertaking from the appellant’s
P&I insurer. The dispute was referred by Erg to arbitration. The
appellant denied liability and counterclaimed for a declaration
of non-liability. Erg was insured by the respondents pursuant to
contracts of insurance which were governed by Italian law. The
respondents paid Erg up to the policy limits and then brought
judicial proceedings in Sicily against the appellants, seeking
to recover the amount paid. The claim was brought by way of
subrogation under Italian law. The appellant sought an anti-suit
injunction from the English Courts to restrain the respondents,
which was granted and made permanent in March 2005. The
respondents were ordered to refer any and all disputes to London
arbitration in accordance with the terms of the charterparty, and
it was declared that the Italian proceedings were disputes arising
out of the charterparty and, therefore, fell within the arbitration
clause. A “leap frog” appeal to the House of Lords followed,
which referred questions to the European Court of Justice
(“ECJ”) concerning jurisdiction. While the matter was pending
before the ECJ, the appellant continued with the arbitration in
London. The tribunal made declarations similar to those of the
Commercial Court. Thereafter, the claim by Erg against the
appellant came on for hearing. The respondents took no part
in the hearing. While the tribunal was considering the terms
of its award, the opinion of the advocate general was delivered.
She concluded that the Council Regulation (EC) 44/2001 (the
“Regulation”) precluded the Courts of a member state from
making an order restraining a person from commencing or
continuing proceedings before the Courts of another member
state because, in the opinion of the Court, such proceedings were
in breach of an arbitration agreement. In light of that opinion,
the tribunal stood over certain issues that arose only between
the appellant and respondents (referred to as issues 8 and 9)
until the ECJ’s judgment. It published a further partial final
award by which it held that the appellant was under no liability
whatsoever (in contract, tort or otherwise) to Erg in respect of
the collision. In the alternative, any liability would be limited
under the Convention on Limitation of Liability for Maritime
Claims 1976. The ECJ then found to the same effect as the
advocate general: the anti-suit injunction was incompatible
with the regulation. The House of Lords, therefore, discharged
the anti-suit injunction, but preserved the declarations of the
Commercial Court that the respondents were obliged to refer
any and all charterparty disputes to arbitration. The Commercial
Court and subsequently the Court of Appeal declined to set aside
the order granting leave to enforce the award under s 66 of the
Arbitration Act 1996. The instant case concerned the question
of whether arbitration fell outside the regulation and, therefore,
an arbitral tribunal was not bound to give effect to the principle
of effective judicial protection.
The Court ruled:
1. Arbitration fell outside the Regulation and, therefore, an
arbitral tribunal was not bound to give effect to the principle of
effective judicial protection.
It followed that the tribunal had been wrong to conclude that it
did not have jurisdiction to make an award of damages for breach
of the obligation to arbitrate or for an indemnity.
2. If, contrary to that conclusion, the tribunal had been obliged
to give effect to the principle of effectiveness or effective judicial
protection, the question still arose as to whether an award of
damages or an indemnity constituted illegitimate interference
with the proceedings in the Italian Court. Neither the advocate
general nor the ECJ contemplated that the arbitral tribunal in
London should decline jurisdiction altogether until the Italian
Court had ruled. In the event that the Italian Court decided in
due course that it did not have jurisdiction and the respondents
were obliged to arbitrate in London, then there would be a strong
case for awarding damages for breach of the duty to arbitrate.
David Bailey QC, Marcus Mander and Elizabeth Lindsay
(instructed by Ince & Co LLP) for the appellant.
Stephen Males QC and Sara Masters (instructed by MFB
Solicitors) for the respondents.
© LexisNexis
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30
April - June 2012
Succession
Outer House, Court of Session
Turner v Turner and others [2012] CSOH 41, 2012 Scot (D) 6/4
Before: Lord Tyre
7 March 2012
This case, which came before the Court for summary trial by
agreement of the parties, raised an important question which had
not previously been the subject of decision by a Scottish Court.
Where an attorney, acting prudently in accordance with the
terms of a continuing power of attorney, disposed of an item of
property from the granter’s estate after the granter had become
incapable of managing his or her own affairs, was a bequest in
the granter’s will of that property thereby adeemed? The late
Miss Isabella Coutts Gordon (“the testatrix”) was born in 1915.
She was formerly the proprietrix and occupier of a house at 33
Dunnottar Avenue, Stonehaven. On 17 April 1996, she granted
a power of attorney in favour of a solicitor, AB, conferring on the
attorney “power to do all things which can lawfully be done by an
attorney” and, in particular, the powers detailed in a schedule to
the deed which included power to sell any part of her means and
estate, heritable or moveable. The power of attorney included
a declaration that “all acts done or granted by my Attorney
in virtue of the powers hereby conferred shall be as valid and
binding as if done or granted by myself ”. The deed concluded:
“And I hereby ratify and confirm all that my Attorney shall do or
cause to be done in virtue of the powers hereby conferred”. On
2 July 1997, the testatrix executed a will, appointing the pursuer
and the first defender as her trustees and executors. In her will
she directed her executors to make over the heritable property
at 33 Dunnottar Avenue to the first defender, and to realise and
make over the residue of the estate equally among the pursuer
and the first to eighth defenders. In 2001, the testatrix became
incapable of managing her own affairs and moved into a nursing
home. In September 2001 the attorney sold the house at 33
Dunnottar Avenue for £71, 250. As regards the sale, the parties
were agreed as follows: “The sale of the house by [AB] was a
prudent act of administration, having regard to the disadvantage
in leaving the house empty with attendant maintenance costs.
It was not a necessary act, not having been an act which [the
testatrix] as principal, had she been sui juris, would have been
constrained to effect, there being sufficient other funds available
to meet the costs of [her] care”. The testatrix died in January
2008. The pursuer and the first defender were confirmed as her
executors on 27 March 2008. The total estate for confirmation
was £220,217. As at 5 April 2011, the value of the estate was
£173,455. The law regarding power of attorney (or, to use
the traditional Scots term, factory and commission) was the
subject of a significant amendment by s 71 of the Law Reform
(Miscellaneous Provisions) (Scotland) Act 1990. Before that
amendment the authority of an attorney or factor acting under a
power of attorney–or factory and commission–terminated in the
event of the mental incapacity of the granter. With effect from 1
January 1991, that rule of law ceased to apply. The current law
was contained in s 15 of the Adults with Incapacity (Scotland)
Act 2000. The provisions of s 15 did not apply to the power of
attorney in the instant case, which was granted in 1997, but by
virtue of para 4 of Sch 4 to the 2000 Act, the attorney became a
continuing attorney on the entry into force of the Act.
Counsel for the pursuer, one of the residuary beneficiaries,
contended that the legacy of the house was adeemed. The short
answer to the special legatee’s claim was that the sole question
was whether the subject of the legacy was in the testatrix’s estate
at death? If not, the legacy was adeemed. The long answer
depended upon the development of the law of both ademption
and conversion. Conversion was dependent upon the presumed
intention of the testatrix. In the instant case the attorney’s act
was equivalent to the testatrix’s act. Because the disposal of the
house was authorised (and prospectively ratified) by the testatrix,
it effected conversion of the heritable property consisting of the
house to moveable property consisting of the proceeds of sale.
Intention was not, however, relevant to ademption. Where,
as here, property had been converted by an appropriately
authorised transaction, it was simply gone from the estate and
the legacy of it was accordingly adeemed. Counsel for the first
defender submitted that a transaction carried out by an attorney
should be regarded as analogous to a transaction carried out,
under pre-2000 law, by a curator bonis. A sale by a curator bonis
effected neither conversion of the property nor ademption of a
legacy thereof, unless it could be shown that it would have been a
necessary and unavoidable act on the part of the ward if sui juris.
By agreement, that was not the position here. The legacy was
not, therefore, adeemed and the first defender was entitled to the
proceeds of sale as a surrogatum for the house.
The Court ruled:
Most attorneys were now appointed (as was the attorney in the
instant case) by a deed conferring upon them a general power to
do everything that the granter could do for himself or herself,
supplemented by a list of specific powers granted without
prejudice to the generality. The attorney was thus, in essence, a
factor or general and special agent appointed and authorised by
the granter to manage his affairs and, in the course of so doing,
to bind him in legal relationships with third parties. There was
April - June 2012
no legal fiction which treated the attorney as the same person in
law as the granter, or which treated the attorney’s acts as those of
the granter. Rather, the attorney’s acts were as valid and binding
on the granter as if they had been carried out by him, and the
attorney was accountable, as was any factor, agent or mandatory,
to the granter for his intromissions. The fact that the power of
attorney in the instant case included a clause that prospectively
ratified and confirmed the acts of the attorney did not make any
difference to that analysis. It was also worth emphasising that
the granter was not divested of any power to act for himself
during the subsistence of the power of attorney. The nature
of the office of curator bonis (which was rendered obsolete by
s 80 of and sch 4 to the 2000 Act) was considered by the Court
in Inland Revenue v McMillan’s Curator Bonis. Lord President
Clyde observed: “The essential purpose of the appointment of
a curator bonis to an incapax is to supersede the latter in the
management of his estates . . . In my view, the curator bonis
is in the same category for the present purpose as an agent or
factor appointed by a capax to manage his affairs and ingather
his estate. In the case of an incapax the Court necessarily has
to make the appointment, because the ward is incapable of
doing so.” Those remarks provided an authoritative statement of
general application, that so far as management of the estate of
the ward/granter (as the case might be) was concerned, a curator
bonis was in a position similar to that of an attorney appointed
by a granter with full capacity, the only difference being that in
the case of a curator bonis, the appointment necessarily had to
be made by the Court. Each was authorised to act on behalf of
a person who, for differing reasons, was or might be unable to
manage his own affairs. The parallel was even closer between, on
the one hand, a curator bonis appointed by the Court and, on the
other, an attorney acting under a continuing power of attorney
granted by a person who had subsequently become incapable.
The Court was satisfied that in addressing the issue which arose
for decision in the instant case, it could and should seek guidance
from case law concerning the effect of the actings of a curator
bonis on succession or on ademption of legacies. Macfarlane’s
Trs v Macfarlane (“Mactarlane’s Trs”) provided clear and binding
authority for the proposition that a sale by a curator bonis of the
subject of a specific legacy did not have ademptive effect unless
the sale would have been a necessary and unavoidable act on the
part of the ward if sui juris. If, therefore, the Court was correct in
the view that in deciding the instant case it should seek guidance
from case law concerning the effect of the actings of a curator bonis
on ademption of legacies, Macfarlane’s Trs provided the requisite
authoritative guidance. On an analysis of the authorities, the
argument on behalf of the first defender, in his capacity as the
beneficiary of the specific bequest of 33 Dunnottar Avenue was
to be preferred. In view of the parties’ agreement that the sale of
the house by the attorney was a prudent act of administration
but not a necessary act in the relevant sense, the bequest of the
house was not adeemed by the sale. The pursuer’s “short answer”
failed to recognise the exception to the general rule for disposals
by a curator bonis that was established in relation to ademption
by Macfarlane’s Trs. So far as the long answer is concerned, first,
Scots law had not at any time adopted authorisation by an
appropriate authority as the relevant test either in relation to
conversion of heritable to moveable property (or vice versa) or
in relation to ademption of special legacies. Instead, Scots law
developed the test of necessity in relation to conversion and
subsequently adopted it in relation also to ademption. Second,
there was no sound basis for deeming the acts of an attorney to be
the acts of the granter of the power, as opposed to treating such
acts as valid and binding upon the granter. Finally, even if it had
accepted that a sale by an attorney operated conversion because
it was authorised, the Court would not have felt able to accept
the next step in the argument, namely that a legacy of heritage
was extinguished by ademption because it had been converted to
moveable property on conclusion of missives for sale. Pollok’s Trs
v Anderson could not have been decided as it was if the argument
were correct.
The first defender was entitled to receive a sum equivalent to the
proceeds of sale of the house. He was also entitled to receive a
sum representing the fruits of those proceeds during the period
since the date of receipt of the sale proceeds. The sum payable
to him by way of such fruits should approximate as closely as
possible to the amount that had actually been earned by deposit
or investment of the proceeds since 2001, after deduction of any
tax paid thereon.
© LexisNexis
31
32
April - June 2012
Family Law
Family: The after-shock
by Anna Heenan
The decision in Radmacher v Granatino resulted in an increase in
pre-nuptial agreements. However, that was not the end of the story.
Case law shows that each case is fact-specific and tailored legal advice
is required.
We are now almost two years on from the case of Radmacher v
Granatino [2010] UKSC 42, [2011] 1 All ER 373 (“Radmacher”),
in which the Supreme Court swept away the old rule that prenuptial agreements were contrary to public policy. The result has
been an increase in pre-nuptial agreements by those attempting to
combat the uncertainties of divorce. Courts have a wide discretion
to redistribute property on divorce, which they exercise according
to the principles set out in s 25 of the Matrimonial Causes Act
1973 (MCA 1973) and the concept of “fairness”. It is, however,
widely accepted that the elasticity of “fairness” does little to create
certainty. Recent case law on prenuptial agreements explores the
circumstances in which they will be upheld and provides some
guidance to those seeking a more certain outcome.
The Radmacher Decision
This decision has been the subject of widespread comment and
further analysis is perhaps unhelpful (and somewhat late). It is,
however, useful to review the factors that the Supreme Court
thought would affect the weight given to a pre-nuptial agreement:
1. There must not be undue influence, duress, fraud or
misrepresentation;
2. Exploitation of a dominant position to secure an unfair
advantage may reduce or eliminate the weight given to an
agreement;
3. The parties must have been told about the implications of
the agreement;
4. The Court should consider any lack of disclosure and legal
advice. It would be unusual in the absence of these factors for
a party to be taken to have entered into the agreement with
a full appreciation of its implications. However, if a party
was fully aware of the agreement’s effects and unconcerned
by the detail of the other party’s assets, then this should not
detract from the agreement’s weight; and
5. Unfair terms reduce the weight of the agreement but this
issue is considered in the context of whether the agreement
is unfair in the circumstances of the marriage breakdown.
In particular, an agreement cannot prejudice the reasonable
requirements of children or the needs of a party (although
a party’s needs may be interpreted restrictively than they
would be by a Court). An agreement may also be given more
weight where it seeks to protect pre-marital property than
where it deprives one party of a share in wealth that s/he has
contributed to equally.
Recent cases have made clear that the needs of the parties remain
the critical factor in determining whether prenuptial agreements
should be upheld. However, the requirements for legal advice
and financial disclosure have been interpreted quite differently
depending on the individual circumstances.
Cases in which Weight was Given to the Agreements
ZvZ
In Z v Z [2011] EWHC 2878 (Fam), [2011] All ER (D) 112
(Dec), the parties were French and both were highly intelligent
and well-educated. The husband was a senior manager in a
private equity firm and the parties’ assets totalled approximately
£15m. They entered into a marriage contract in France, which
both parties entered into freely and with a full understanding
of its implications. There was no formal legal advice or financial
disclosure but the wife understood what the agreement meant.
Both parties knew the financial position of the other. The wife
might not have known the full details of the husband’s income
but she knew he was doing well and earning increasing amounts.
The wife argued that the husband had varied the pre-nuptial
agreement. In particular, she relied on an unsigned letter, written
after they had decided upon a trial separation (at that time the
wife wanted the marriage to continue and the husband was
unsure). The letter made very generous provision for the wife.
This letter was not given any weight as neither party had received
legal advice and the husband was under significant pressure.
The original agreement was upheld but the wife received around
40 per cent of the total assets to meet her needs.
VvV
In V v V [2011] EWHC 3230 (Fam), [2012] All ER (D) 18
(Jan), the husband was an Italian banker with pre-earned and
inherited wealth. The wife was Swedish and had not worked since
she was 19. The total assets at the time of divorce were around
£1.28m. The parties had entered into a pre-nuptial agreement
under Swedish law at the husband’s insistence, on which neither
party took legal advice. The agreement excluded the husband’s
pre-marital property, and any property inherited by either party,
from the division of property on divorce.
Charles J held there was no duress, fraud or misrepresentation
and felt the agreement was a “good and powerful” reason for
departing from an equal division of assets on divorce:
1. While the parties did not receive legal advice there was
nothing unfair or difficult to understand;
April - June 2012
2. The wife was indifferent to the value of the husband’s
property so there was no material non-disclosure;
3. There was no finding that the wife felt under undue pressure
to sign or that she was acting against her better judgment;
and
4. The inequality in bargaining power did not reduce the
weight to be given to the agreement.
However, if the husband’s pre-owned assets were excluded and
the remaining assets divided equally, the wife’s financial needs
would not be met. Therefore, the wife was awarded a greater
share than the agreement provided for.
Cases in which Agreements were Given Little or No
Weight
In Kremen v Agrest (No 11) [2012] EWHC 45 (Fam), [2012]
All ER (D) 146 (Jan), the husband was found to have assets of
£20-£30m. The parties had entered into a pre-nuptial agreement
which gave the wife only $1.5m. Although the wife had some idea
of the husband’s wealth, there was no financial disclosure when
the agreement was entered into. The wife received some legal
advice from the husband’s cousin but it was not independent. It
was held that the wife would have understood the literal words
of the agreement, but not what rights she would be losing under
English law as a result.
in Europe and that neither the husband nor the wife were from
Catalonia. This agreement was given no weight whatsoever. The
parties had not discussed whether the agreement was intended
to be influential, let alone binding, if the parties were to divorce
in England and they had received no legal advice on the point.
Therefore, neither party entered into the agreement “with a full
appreciation of its implications” as required by Radmacher.
GS v L
In GS v L [2011] EWHC 1759 (Fam), [2012] All ER (D) 178
(Mar), the parties were Spanish. The husband was a banker and
the wife a homemaker who was highly educated. After they
married they signed a document providing that all future assets
would be held under a matrimonial property regime known as
Sociedad de Gananciales. Although the agreement was signed after
the parties married, post-marital agreements are treated in the
same way as pre-nuptial agreements so the guidance is relevant.
It was held that the primary purpose of the agreement had been
to give the wife financial security if the husband died. The parties
did not have a common intention about what the agreement was
intended to achieve: the wife sought financial security, whereas
the husband wanted to protect his pre-owned assets. Spanish
legal experts could not give a clear explanation of what the
agreement meant under Spanish law so the parties could not
have understood this either. In any event, all of the assets (bar the
husband’s pension), which totaled £4m, were needed to meet the
parties’ needs and they were divided equally.
The agreement was given no weight whatsoever, for various
reasons. In particular, the wife did not freely enter into the
agreement with a full appreciation of its implications, it was the
product of pressure from the husband and there was a material
absence of independent legal advice and disclosure. It would be
grossly unfair to hold the wife to an agreement depriving her of
her fair share of a fortune which she had contributed equally to.
Finally, the award she would have received under the agreement
did not remotely meet her reasonable needs and it grossly
prejudiced the needs of the children.
Conclusion
Mostyn J remarked that it would be unusual to consider that a
party had freely entered into a pre-nuptial agreement with full
appreciation of its effects if there had been no legal advice or full
disclosure.
Independent legal advice and financial disclosure are highly
advisable. While the cases show some flexibility, they indicate
that cases where these safeguards are not present should be the
exception rather than the rule.
BvS
Above all, these cases make clear that Radmacher was not the
end of the story as far as pre-nuptial agreements are concerned.
Details remain to be refined. Pre-nuptial agreements are a very
useful tool in the wealth protection armory but each case is factspecific and tailored legal advice is essential.
In B v S [2012] EWHC 265 (Fam), [2012] All ER (D) 189
(Mar), the parties entered into a Catalonian agreement providing
that the default rules of Catalonia would apply to their property.
It is notable that the default rules in Catalonia are almost unique
The cases are fact-specific and there is clearly a contrast between
the extremes of Kremen v Agrest, on the one hand, and V v V and
Z v Z on the other. Fairness, especially the needs of the parties
and the children, appears to be critical. Z v Z demonstrates that
needs may be interpreted generously, despite the guidance in
Radmacher. This will be particularly relevant where the wealth
has been acquired during the marriage and is not pre-owned by
one of the parties.
© LexisNexis
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April - June 2012
EU Law
Through the Back Door?
by Trevor Tayleur
The European Court of Justice has traditionally refused to extend
horizontal direct effect to Directives. However, its judgments in
Mangold & Kücükdeveci have enabled the horizontal enforcement
of Directive 2007/78 on the grounds that national Courts should
disapply national legislation which infringes the general principle
of equality. This has led to legal uncertainty as the circumstances
in which national Courts should disapply national legislation for
infringing general principles of EU law are far from clear.
It is a basic tenet of EU law that Directives are not capable of
horizontal direct effect. The European Court of Justice (“ECJ”)
has decisively rejected extending horizontal direct effect to
Directives (Faccini Dori v Recreb Srl: C-91/92 [1995] All ER
(EC) 1). However, subsequent judgments of the Court have
clouded the issue (Mangold v Helm: C-144/04 [2006] All ER
(EC) 383 (“Mangold”), and Kücükdeveci v Swedex GmbH & Co
KG: C-555/07 [2010] All ER (EC) 867) (“Kücükdeveci”).
Mangold
Mangold, aged 56, was employed on a fixed-term employment
contract. He subsequently brought proceedings in the German
Courts against his private sector employer, challenging the fixedterm nature of his contract. He argued that the contract breached
Directive 2000/78 (the “Directive”), which prohibits various
types of discrimination, including age. The discrimination
occurred because a German law introduced in 2002 only
permitted fixed term contracts for employees younger than 52
in exceptional circumstances; this restriction did not apply to
employees aged 52 and over.
Although the Directive had been adopted in 2000, its due date
for transposition by member states was not until 2003, and
member states were even allowed to delay transposition until
December 2006. Directives are only capable of having direct
effect after expiry of their transposition date (Pubblico Ministero v
Ratti: 148/78 [1979] ECR 1629) and Mangold had entered into
his contract in July 2003. Accordingly, on a traditional analysis
Mangold would not have been able to rely on the Directive.
The Court did not adopt this analysis. Instead, holding that the
national Court was under a duty to set aside any provision of
national law which conflicted with the Directive even if the time
limit for transposition had not expired. The Court gave two main
reasons for this:
1. Member states were, during the transposition period,
under a duty to refrain from taking measures which would
seriously compromise the attainment of the Directive’s
objectives. This reasoning is uncontroversial, as it does not
extend existing case law (Inter-Environnement Wallonie ASBL
v Région Wallonne: C-129/96 [1998] All ER (EC) 155).
2. Controversially, the Court also invoked general principles of
EU law in its reasoning. The Court stated that the Directive
did not itself lay down the principle of equal treatment in
the field of employment. The source of the actual principle
underlying the prohibition of the forms of discrimination
covered by the Directive (discrimination on the grounds
of religion or belief, disability, age or sexual orientation)
was found “in various international instruments and in the
constitutional traditions common to the member states”.
The principle of non-discrimination on the grounds of age
was, therefore, a general principle of EU law, and observance
of this principle, in particular in relation to age, could not
be conditional on the expiry of the Directive’s transposition
period.
As the German government was unable to justify objectively the
discrimination against older workers, Mangold was effectively
able to rely on an unimplemented Directive horizontally against
his employer. This represented a major extension of existing
case law, as it enabled the horizontal enforcement of a Directive
prior to its transposition date. The Inter-Environnement ruling
had merely resulted in the annulling of the offending national
legislation.
There was uncertainty as to whether the Court’s judgment was
confined to age discrimination or whether it had established a
new principle for enforcing rights granted by EU law. However,
Kücükdeveci made it clear that the Court was establishing a new
principle.
Kücükdeveci
Kücükdeveci had been employed by a German company since
the age of 18. After 10 years’ employment, she was given notice
of termination. The employer gave her the period of notice
applicable to an employee who had been employed for three
years, as German law provided that periods of employment under
the age of 25 should be disregarded when calculating the length
of employment. Following a reference by a German Court, the
ECJ firstly ruled that the national legislation was unlawful, as
“EU law, more particularly the principle of non-discrimination
on grounds of age as given expression by the Directive” precluded
national legislation of this nature. The Court secondly considered
the question whether in proceedings between private individuals,
national Courts had to disapply legislation that infringed the
principle of non-discrimination.
The Court confirmed that Directives could not have horizontal
direct effect. It then restated the principle of indirect effect, viz
a national Court must interpret national law, as far as possible,
in the light of the wording and the purpose of any relevant
April - June 2012
Directive, in order to achieve the Directive’s aims (Marleasing
SA v La Comercial Internacional de Alimentacion SA: C-106/89
[1990] ECR I-4135). The Court then noted that because of
its clarity and precision, the national legislation could not be
interpreted in conformity with the Directive.
Under the traditional approach, the national Court would then
have applied national legislation even though it infringed EU law,
leaving the unfortunate claimant without a remedy against her
employer but with a potential claim for state liability against the
German government. The ECJ, however, did not go down this
route, instead holding that the principle of non-discrimination
on grounds of age was a general principle of EU law to which
the Directive merely gave expression. The national Court was,
therefore, under a duty to disapply any provision of national
legislation breaching this principle.
The Response of National Courts
There was speculation that some national Courts, in particular
the German Federal Constitutional Court (“FCC”), might rebel
at this extension in the reach of EU law. The FCC has accepted
the supremacy of EU law, but has stressed that this is contingent
on the EU acting within the scope of the competences conferred
on it by the member states. The FCC has reserved the right to
review EU law where the EU has acted outside the scope of its
competences. Should this occur, the FCC will declare the EU act
ultra vires and inapplicable in Germany.
In Re Honeywell [2011] 1 CMLR 1067, the FCC considered
whether the judgment in Mangold was ultra vires. However, the
FCC stated ultra vires review of European acts was limited to
“evident” or “obvious” cases of an infringement of competences
and applied only in cases in which an obvious lack of competence
led to a grave shift of the power structure between the EU and
the member states. As age discrimination fell within the scope of
EU law, the ECJ had not created any new competences nor had
it extended an existing competence so as effectively to create a
new competence.
The English Courts have also shown their willingness to abide by
Mangold and Kücükdeveci. X v Mid Sussex Citizens Advice Bureau
[2011] EWCA Civ 28 involved a disability discrimination claim
based in part on the Directive. On the facts, the Court of Appeal
decided it did not need to consider the horizontal effect of the
Directive against a private party. However, Elias LJ stated obiter
that there was a strong argument that Kücükdeveci would have
permitted its direct enforcement. He also doubted the argument
put forward that although protection from age discrimination
might be a fundamental EU right; protection from disability
discrimination was not. Had a reference to the Court of Justice
been necessary, he would also have asked whether the principle
in Kücükdeveci applied to other forms of discrimination. If the
ECJ had answered in the affirmative, which it almost certainly
would have done, the Court of Appeal would surely have loyally
applied the ruling.
An Unnecessary Development
In Kücükdeveci the ECJ reiterated that Directives are not capable
of horizontal direct effect, but then granted them horizontal
direct effect by the back door under the guise of enforcing general
principles of EU law. It is possible to discern some logic in its
reasoning, as in neither Mangold nor Kücükdeveci did the ECJ
actually rule that national Courts should apply the Directive
directly against the employers concerned. The duty imposed on
national Courts was merely to disapply conflicting provisions of
national law. The practical effect, though, is virtually identical.
Both Mangold and Kücükdeveci succeeded in horizontal claims
against private employers.
While it is desirable that victims of discrimination should have
effective remedies, the judgments in these two cases are an
unnecessary development. In both cases the employers had acted
in accordance with clear provisions of German employment
law. By imposing liability on them, the ECJ has penalised the
employers for the German government’s mistake. In the absence
of indirect effect, Mangold and Kücükdeveci would have been
able to pursue damages claims against the German government for
incorrect transposition of the Directive. The German government
could possibly have defended their claims by arguing it had not
committed a sufficiently serious breach of EU law (joined cases
Brasserie du Pêcheur v Germany: C-46 & 48/93 [1996] All ER
(EC) 301). However, to prevent this occurring, the ECJ could
have ruled that in cases involving discrimination, the liability of
member states should be strict. At least the perpetrator of the
error, the government concerned, would then have to pick up the
bill, rather than innocent employers.
Legal Uncertainty
These judgments have also created legal uncertainty. Where
Directives give effect to general principles of EU law, according
to Mangold and Kücükdeveci, national Courts must dis-apply
national legislation which conflict with those principles.
Although it is clear that Directives combating discrimination
give effect to the general principle of equality, it is far from clear
in other fields whether Directives give effect to general principles.
Where a claimant is pursuing a horizontal claim based on
indirect effect and there is a clear conflict between the national
legislation and any relevant Directive, prior to these two cases the
ECJ accepted that the national Court would apply the national
legislation, rather than adopting a contra legem interpretation to
make it comply with EU law (Miret v Fondo de Garantia Salarial:
C-334/92 [1995] 2 CMLR 49). However, where a Directive gives
effect to general principles, this is no longer the case; the national
Court must disapply the offending national law. Unfortunately,
apart from Directives combating discrimination, there is little
guidance about which Directives give effect to general principles.
Mangold and Kücükdeveci will undoubtedly result in more
litigation.
© LexisNexis
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April - June 2012
Law & Literature
War Criminals in Kangaroo Courts
by Sabah Carrim
Post-war literature has the distinct characteristic of retelling stories
and real life incidents from the perspective of the oppressed. It
is through these narratives that we become the bystanders in
torture rooms and gas chambers and get an inkling of what war
victims experienced within the confines of those walls.
2. Should we distinguish between evil doers and their evil
deeds?
Eventually, however, the memory of the psychological injury
endured by these victims wins a distance from the actual events.
This is when post-war literature takes a new turn as writers begin
relating similar stories, but this time from the perspective of the
oppressors – that is the perpetrators themselves. The novel The
Reader is such a story told by a former Judge of a German Court
who embarked on a project to recount the life of an imaginary
SS security guard working for the Third Reich. An account is
given of the trial where she is successfully convicted in a Court set
up by the victors of the war. Hanna Schmitz, the war criminal,
is charged with bloodying her hands with the murder of a few
thousand Jews during the performance of her duties. On close
scrutiny, this story – although fictitious – appears to be an
adaptation of Hannah Arendt’s own account of what transpired
during the trial of Adolf Eichmann in 1961.1 The latter who
occupied the position of Lieutenant Colonel with the SS, was
also charged with the duty of implementing pogroms to evacuate
Jews from the country and exterminate those who had stayed
behind.
4. What is the value of “show trials” set up to try War Criminals?
But there is more to this: during wartime, torture is employed
as a tool of subjugation, control and manipulation in order to
divide, disorient and weaken the enemy. It is then too easy in its
aftermath for the victors to set up Courts in order to decry the
evil nature of the oppressors, hunt them down and then mete
out punishment to do justice to the sufferers. Thus fifteen years
after the Second World War, a man who had been charged with
the task of facilitating and managing the mass deportation of
Jews to ghettos and extermination camps, was condemned in the
tribunal of Jerusalem for being a War Criminal. He was Adolf
Eichmann. In a similar trial depicted by Schlink in The Reader,
Hanna Schmitz is tried for the murder of hundreds of Jews in
Auschwitz. Schmitz was also charged for her inaction in coming
to the rescue of Jewish women who were trapped in a church
that was on fire. Most of them perished in the flames save for
two ladies who bore testimony against her in that trial. Although
both trials – that is of Eichmann and Schmitz – culminate into
successful convictions, readers exposed to the intricacies of the
setting and the psychological makeup of the accused parties
quickly detect other factors that call for more analysis. At first
glance, both these works – that is The Reader and Eichmann in
Jerusalem – put forward the same questions to us:
1. Should oppressors always be the objects of our scorn and the
oppressed the recipients of our sympathy?
3. Do Eichmann and Schmitz deserve a differently formulated
judgment?
These questions will be tackled in turn in the course of this essay.
Should Oppressors be the Objects of Our Scorn and
the Oppressed the Recipients of Our Sympathy?
Much to the surprise of those who have intimate knowledge of
Eichmann and Schmitz’s personality traits, the latter do not carry
the sinister air and display the conduct expected of oppressors
who have committed such despicable and vile actions.2 On the
contrary, both are depicted as ordinary everyday simpletons.
Schlink describes Schmitz as follows:
She had no sense of context, of the rules of the game, of the
formulae by which her statements and those of the others
were totted up into guilt and innocence, conviction and
acquittal.3
We are told that Hanna Schmitz faced a dilemma when she
was offered a job with Siemens which she later turned down to
take up guard duties with the SS. This is because she – Hanna
Schmitz – could not read and write and she was not very proud
about this. At many points in the story, she does everything to
conceal this truth from Michael Berg – the narrator and the
young lad she has an amorous affair with. It is he who realises
that her involvement with the SS only came about because she
had refused the promotion at Siemens fearing that this handicap
would be discovered at some point or the other.4
Eichmann is depicted in similar terms as a “fairly boring and
unimaginative white-collar bureaucrat who, in his understandable
desire to advance his career, helped to perpetrate one of the most
atrocious evils of human history”.5
Originally, Eichmann’s employment with the Vacuum Oil
Company was relatively smooth-going until he was transferred
to Salzburg in 1932 where he said he “lost all joy in (his) work
… no longer liked to sell, to make calls”.6 When he was thus
offered a position by Kaltenbrunner who later became chief of
the Head Office for Reich Security, he simply replied “Why not?”
and that is how he came to be connected with the organisation.
Arendt goes on to explain how this was a boost in status for a
man who was a failure to his social class and was desperate to do
just about anything to get the respect he deserved. Even if he was
April - June 2012
forewarned, she goes on to say that Germany would lose the war
and a terrible fate would await him in the Courts of Jerusalem,
he would not be deterred in any way to give up that miserable
life of his as a traveling salesman for the Vacuum Oil Company.7
Schmitz and Eichmann, therefore, share a common history in
that they were both average individuals who had no particular
achievements to acclaim them. In addition, their future had
nothing promising and job security was definitely an issue.
Having been offered respectable positions in the SS, they were
understandably eager to take up the challenge.
The common histories of the two characters are in harmony with
their semblance of innocence and innocuousness in Court. It is
clear that their involvement with the SS was purely a result of
their circumstances. In wanting to secure their new positions,
and being the slaves of an organisation that had hire/fire power,
it is contended that the thought that dominated their minds was
the standard approval – the “Doggy Pat” – that every member of
an intricate bureaucratic organisation expects from his superior.
Thus every “Doggy Pat” would have the value of securing their
positions even further within the powerful framework that exerted
obvious control over the territory they lived in at that time. It is
averred that the effectiveness of this “Doggy Pat” is only possible
in average individuals who do not have a clear-cut notion of either
a conventional or an individualistic sense of right and wrong. It
appears that they are more prone to relegating higher order values
to the lower ones of sociability, conformity and obedience.8 In
addition to this, the process of routinisation also adds an element
of banality in the real crimes being committed. Through the
mechanism of division of labour in a typical bureaucratic setting,
it becomes easier for the bureaucrat to distance himself from the
actual plan being furthered and his job loses its meaning in the
greater scheme of things. As Berger says, “Bureaucrats value only
their competence, efficiency, and problem-solving abilities.”9
Was it therefore fair to convict Schmitz and Eichmann when
their roles could be likened to mere puppets? Indeed, their
actions followed the nod or approval of their superiors but
this distinction appears unnecessary and futile: in truth, the
operations of the organisation should be looked upon as an
orchestra where deciding whether the violinist is the one who
controls the symphony because he plays his instrument before
the guitarist, is pointless. The whole set-up is cleverly woven,
according to Arendt, to diffuse responsibility for the actions and
decisions taken that may be detrimental for the people. Arendt
deems this bureaucratic setting to be a government by nobody10
– in her opinion the worst form of tyranny. A tyrannical dictator,
at least, she reasons, can still be identified as the mastermind
behind cruel and destructive policies but in the type of setting
that Eichmann and Schmitz were caught up in, it seems to be
difficult to place the blame on one particular player or a few of
them for that matter.11 In the end, the evil bureaucrat is just a
“cog in the machine” and hurling the onus of the blame solely on
his shoulders appears unwarranted.
Should We Distinguish between Evil Doers and Their
Evil Deeds?
How should we react when instead of witnessing signs of the
Eichmann and Schmitz’s sure-footedness in Court, we observe
surprise, confusion – even despair – on being accused of their
crimes? Eichmann, Arendt says, was certified “normal” by half
a dozen psychiatrists. One of them had even “found his whole
psychological outlook, his attitude toward his wife and children,
mother and father, brothers, sisters and friends … not only
normal but most desirable”.12 Although evidence to the contrary
was meted out by other experts, Arendt brings to light the many
other instances that support Eichmann’s general harmlessness. She
reveals how the various classes of stakeholders – the prosecutor,
the defense counsel and the Judges – in the trial were also not
interested in revealing the softer parts of his character. Arendt
opines that in the process they “missed the greatest moral and
even legal challenge of the whole case”.13
As for Hanna Schmitz, her interventions during the trial where in
at least two instances, on being hurled accusations for the crimes
she was charged with, she turns to the Judge and asks: “What
would you have done?”14 The narrator of the story, Michael Berg,
then continues by adding: “Hanna meant it as a serious question.
She did not know what she should or could have done differently,
and, therefore, wanted to hear from the Judge, who seemed to
know everything, what he would have done.”15 This scenario
betrays a tone of helplessness on Hanna’s part where the situation
she was in, did not appear as clear-cut as it would have appeared
to the people present in Court during the trial. Hanna seemed to
be equally under a form of duress of obeying the official orders of
her superiors. If the evil doers are not always connected to their
evil deeds, then where does evil originate from?
Arendt says:
Good can be radical; evil can never be radical, it can only
be extreme, for it possesses neither depth nor any demonic
dimension yet—and this is its horror!—it can spread like
a fungus over the surface of the earth and lay waste the
entire world. Evil comes from a failure to think. It defies
thought for as soon as thought tries to engage itself with
evil and examine the premises and principles from which it
originates, it is frustrated because it finds nothing there. This
is the banality of evil.16
Since time immemorial, a linear relationship has been said to exist
between evil doers and their evil deeds. But in a complex system
of bureaus, where decisions are made in a piecemeal fashion, it
would be unjust to hurl the blame on the shoulders of just a few
persons within the structure. The commission of one evil deed –
or say one evil decision – can easily be imagined to exert a ripple
effect eventually roping in multiple players in the commission of
a succession of evil deeds thereafter. The real extent of damage
is not foreseeable and this is why the cause-effect relationship
established by scientists and technicians has been frowned upon
37
38
by thinkers and philosophers alike. Thus if evil doers are not
always linked to their evil deeds, then this calls for an analysis
for other variables that have intruded in this seemingly simple
relationship. Hannah Arendt attributes Eichmann’s actions to an
“absence of thinking” which in her opinion, happens not just to
stupid people but also to intelligent ones:
Absence of thought is not stupidity; it can be found in
highly intelligent people, and a wicked heart is not its cause;
it is probably the other way round, that wickedness may be
caused by absence of thought.17
So what happens when there is an “absence of thought” on the part
of the evil doer in such situations? Under the sway of a complex
bureaucratic system as the one painted above, where there is “rule
by Nobody”, any innocent party can have his hands tied up with
the verdict of guilty in the commission of monstrous crimes of
great dimensions. All that is needed under the present system
of bureaus is an officer with bleak prospects of rising in social
status, sufficiently desperate for a regular income and generally
bored and unhappy with his status quo, who on being offered
a respectable position, would pounce on every opportunity to
be favoured by his superior. He would then put in the effort
required to further the organisation’s political objectives just to
win the approval of – or get a “Doggy Pat” from – his superior.
There is often a disconnection between the evil doer and the evil
deed in a bureaucratic system where decisions are made from
behind an office desk. Eichmann it is said, did not have to hear
the “screams of pain” and thus “(t)he evil consequences of his
actions were belated and distant”.18
Do Eichmann and Schmitz Deserve a Differently
Formulated Judgment?
Arendt argues that Eichmann’s conviction was correct. She is,
however, critical of the grounds on which the verdict was reached.
Instead she concocts an imaginary judgment where in her view,
the Judges should have said: “We are concerned here only with
what you did, and not with what the possible noncriminal nature
of your inner life and of your motives.”19 Arendt goes on to add
that:
April - June 2012
authority of prerogative powers – it is important to point out the
obvious erosion of the inviolable principle on retrospective law.
According to the international community, as much as freedom
from torture is a jus cogens principle and should not be violated
under any circumstances, the principle against the application of
retrospective legislation carries similar status. Thus, trying “war
criminals” for actions that were deemed legitimate under the
former regime that suffered defeat, is in itself a blatant violation
of international legal principles.
Tribunals faced with such reprisals take solace in the fact that
choosing to condemn war criminals rather than letting them go
scot-free is tantamount to choosing the lesser of two evils; the
bigger evil being letting the criminals go unpunished and the
lesser one being flouting the principle against retrospective law.
Perhaps the arguments for condoning the punishment of war
criminals need to be reformulated without touching on jus cogens
principles or international law: the justification for punishment
of war criminals like Schmitz and Eichmann can be derived
through a closer analysis of the genealogy of punishment.
Punishment, according to Aristotle, is not meant to be a form of
correction or disciplining of the evil doer—because in Grecian
tradition this was deemed impossible to achieve—but rather to
do justice to the plight of sufferers and victims of the wrong.
Letting Schmitz and Eichmann go scot-free would simply not
be the solution required because this is the closest the sufferers
can get to having their anger assuaged through the suffering of
their apparent perpetrators. Arendt says that “the wrongdoer
is brought to justice because his act has disturbed and gravely
endangered the community as a whole, and not because, as in
civil suits damage has been done to individuals who are entitled
to reparation”.21
What is the Value of “Show Trials” Set Up to Try War
Criminals?
Politics is not like the nursery; in politics obedience and
support are the same and just as you supported and carried
out a policy of not wanting to share the earth with the Jewish
people and the people of a number of other nations- as
though you and your superiors had any right to determine
who should and should not inhabit the world- we find that
no one, that is no member of the human race can be expected
to share the earth with you. This is the reason, and the only
reason, you must hang.20
There are many instances in history of War Crimes Tribunals
being set up to convict War Criminals. The question that arises,
now that it is clear that where there is rule by Nobody, convicting
“small fishes” like Eichmann or Schmitz will not do. Accusing
“big fishes” like George W Bush, Donald Rumsfeld and Richard
Cheney, among others, as was done in a recent trial in Kuala
Lumpur22 would also be an affront to the system in place where
in all justice, we should not just be criminalizing human actors,
but also vague and inanimate objects such as systems, concepts
and weaponry for the torture and extermination of war victims.
But putting aside such unrealistic aspirations, the practice of
criminalizing small fishes – in Eichmann’s trial, the Nuremberg
trials or even in the famous Russell Tribunals23 – has moved on
to walloping the big fishes and this is definitely more laudable.
Considering the fact that Eichmann and Schmitz could both have
had their conduct during the Third Reich justified on the premise
that they were “Acts of State” – a legal term to connote that the
orders and actions were carried out under the unquestionable
At the same time, needless to say that these kangaroo Courts
have been derogatively labeled as “show trials” – a term which
when employed by Arendt to describe what she saw of Eichmann
in Jerusalem was fiercely opposed and criticised by Jewish
April - June 2012
authorities. The main argument against these Courts is that the
impartiality of those running such forums is often questionable
and somehow or the other, there is always a creature prowling
backstage with vested interests in the show. Ben-Gurion’s interest
in staging the show trial of Eichmann24 is not different from
Malaysian former Prime Minister Mahathir Mohamad’s recent
attempt to stage a similar one in Kuala Lumpur. Putting aside
their political motives, which is beyond the scope of this essay,
their official reasons appeared to say in the least, noble and
honourable. Ben-Gurion made his intentions clear at the time
of Eichmann’s trial: it was to “educate the young” and the entire
world and to give the Jewish people a voice in making a historic
accounting with its persecutors”.25 Mahathir Mohamad laid out
his intentions too and said that it was to teach the world the
truth about the US government and its evil policies.26 Needless to
say, although these show trials may achieve these aforementioned
objectives effectively, they cast a negative outlook over the very
meaning of an impartial tribunal where sacred principles such
as Nemo judex in causa sua (No man can be a Judge in his own
cause), “Audi alteram partem” (the rule against bias), and nullum
crimen, nulla poena sine praevia lege (law against application of
retrospective legislation) are wilfully laid aside. In the order of
the aforementioned breaches of natural law principles, issues
have arisen about the background of the Judges trying the
cases; criticism has been directed towards the setup of Courts
whose verdicts are already known beforehand and of course,
the imposition of laws that were not necessarily in force at the
time of the commission of the (criminal) acts.27 Controversy also
surrounds the fact that these trials were conducted in absentia of
the accused parties.
However, in many ways the latest version of the kangaroo Court
that was set up in Kuala Lumpur constituted a step made in
advance of previous ones set up to try war criminals. Two areas
of improvement can be discerned: first of all damages were
ordered to the war crime victims for the harm and injury, pain
and suffering they had undergone – even though this tribunal
was merely a tribunal of conscience with no real power of
enforcement. Second, this tribunal targeted the “big fishes” for a
change – although again, it can be averred that the “big fishes”,
as bureaucrats giving out orders from behind their desks, are just
a few players in the system.
In addition to the above, hope has been expressed that despite the
“toothlessness” of the Kuala Lumpur tribunal, the final judgment
should exert a similar influence on the international community.
How? Well, some time ago, the International Criminal Court
which tried the President of Sudan in absentia ordered his arrest
and this led many member states to decry his actions. The result
is that today he cannot visit many countries for fear of arrest. The
Kuala Lumpur War Crimes Tribunal Committee has expressed
similar wishes for the fate of the War Criminals who were tried
and successfully convicted.
Notes
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
Hannah Arendt, Eichmann in Jerusalem: A report on the Banality of Evil
(Penguin Books: New York, 2006).
“Her initial reaction, expressed in letters to Jaspers, McCarthy, an Blucher,
was impressionistic. He isn’t even sinister, she wrote …” (Eichmann in
Jerusalem, “Introduction”, p xii).
Bernhard Schlink, The Reader (Vintage International: New York, 1997), p
109.
The Reader, p114.
Renee Jeffrey, Adam Morton, “Beyond Banality? Ethical Responses to Evil
in Post-September 11”, Adam Morton, International Relations on Evil; Peter
Singer, The President of Good and Evil: Questioning the Ethics of George Bush;
Michael Ignatieff, The Lesser Evil: Political Ethics in an Age of Terror The
Gifford Lectures, International Affairs (Royal Institute of International
Affairs 1944-), Vol 81, No 1 (Jan., 2005), pp 175-186 at p 177.
Eichmann in Jerusalem, p 31.
Ibid, pp 33-35.
Birgit Maier-Katkin and Daniel Maier-Katkin, “At the Heart of Darkness:
Crimes against Humanity and the Banality of Evil”, (Aug 2004) Vol 26, No
3 Human Rights Quarterly pp 584-604 at p 600.
Ronald Berger, “The ‘Banality of Evil’ Reframed: the social construction of
the ‘Final Solution’ to the ‘Jewish Problem’”, (Nov 1993) Vol 34, No 4 The
Sociological Quarterly pp 597-618 at p 609.
Hannah Arendt, “On Violence”, Crises of the Republic (Harcourt Brace and
Company: New York, 1972).
Ibid, pp 137-138 where Arendt says: “If, in accord with traditional political
thought, we identify tyranny as government that is not held to give account
of itself, rule by Nobody is clearly the most tyrannical of all, since there is no
one left who could even be asked to answer for what is being done. It is this
state of affairs, making it impossible to localize responsibility and to identify
the enemy, that is among the most potent causes of the current world-wide
rebellious unrest, its chaotic nature, and its dangerous tendency to get out
of control and to run amuck.”
Ibid.
The Reader, p 127.
Ibid, p 110.
Eichmann in Jerusalem, “Introduction”, p xi.
Hannah Arendt, The Life of the Mind: The Groundbreaking Investigation on
How We Think (Harcourt inc: USA, 1978), p 13.
Paul Formosa, “Understanding Evil Acts”, (Jun 2007) Vol 30, N0 2 Human
Studies pp 57-77 at p 68.
Ibid, p 279.
Ibid, p 261.
See Kuala Lumpur War Crimes Tribunal.
Other similar tribunals would be the Permanent Peoples Tribunal set up in
1976 and the most recent predecessor of the KLWCT: World Tribunal on
Iraq set up in 2005.
Eichmann in Jerusalem, “Introduction”, p xiv.
Ibid, “Introduction”, p xx.
Al Jazeera, Kuala Lumpur Tribunal – “Bush and Blair Guilty” http://www.
perdana.org.my/emagazine/tag/klfcw/ (accessed on 20/06/2012).
These details are unfortunately beyond the scope of this essay.
Tun Mahathir hopes that Malaysians will not invite persons convicted
of war crimes to the country http://my.news.yahoo.com/tun-mahathirhopes-msians-not-invite-persons-convicted-150013407.html (accessed
on 20/06/2012).
39
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unsure by
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ISBN 978-967-400-0
Dato’ Seri Visu Sinn
adurai,
Law of Contract,
Fourth Edition
RM
700
About the Author
Dato’ Seri Dr Visu
Sinnadurai, who also
authored the first
three editions of this
book is
highly respected
by legal profession
als and
academicians in the
region. He is a Fellow
Nottingham Unive
of
rsity, England, form
er Dean
and Professor for
Comparative Law
at the
University of Malay
a and
Specialist of the World a Senior Judicial
Bank, USA. He is a
former Judge of the
High Court of Malay
a and a
former Commissi
oner for Law Revis
ion. The
first three editions
of The Law of Cont
ract
received excellent
reviews and have
been
quoted extensively
in local and intern
ational
case law reporters
and journals.
July-Se
30-1
In 2010, the Mala
ysian Parliament
introduced amendm
ents to the
Consumer Protecti
on Act to provide
for unfair contrac
t terms in
consumer transact
ions. This,
perhaps is the maj
or piece of
legislation, together
with the
Electronic Commer
ce Act, that has
affected contrac
tual relationship
over the past cen
tury.”
Revie
w
mon
Fourth Edition
Dato’ Seri Dr Visu
s Law
Com
Sinnadurai Leading
Cases on the Law
of Contract will be
coming soon!
Sinnadurai Leading
Cases on the Law
of
Contract contains
relevant cases on
the law of
contract in Malaysia.
These edited judgm
ents
of the Malaysian Cour
ts complement the
discussion of these
cases in the Law of
Contract, Fourth
Edition.
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