Scottish Court of Session Decisions

The argument so submitted by the petitioner's counsel might have been effective in an application made during the war or before the establishment of the Clearing Office and the appointment of the Administrator. In the view that I take, however, it has really no bearing on the question of competency raised by the respondents, and indeed counsel for the respondents dealt with the case on that footing. In these circumstances I think that I ought to express no opinion of my own on that statement of the case for the petitioner on its merits.

Counsel for the petitioner also put forward other arguments which for the same reason have no bearing on the question now at issue, and which therefore I think it unnecessary to deal with.

I come now to the question on which both parties—the petitioner and the respondents—join issue, viz., Is this petition competent?

The petition is expressly based on section 5 of the Trading with the Enemy Amendment Act 1914, and in particular sub-section 2 as amended by the later Act of 1916.

In effect section 5, so far as it bears on the question under consideration, provides (by the first sub-section) that the Custodian except in so far as the Court of Session or a judge thereof may otherwise direct, and subject to the provisions of the second sub-section, ‘shall hold any money paid to and any property vested in him under this Act until the termination of the present war, and shall thereafter deal with the same in such manner as His Majesty may by order in Council direct,’ and (by sub-section 2) it is further provided that the property held by the Custodian shall not be liable to be attached or otherwise taken in execution, but the Custodian ‘may,’ if so authorised by the Court or a judge thereof, pay out of the property paid to him in respect of an enemy the whole or any part of any debts due by that enemy and specified in the Order.

The objection taken by the respondents to the competency of the petition is twofold, viz., (1) that the power conferred on the Court by section 5 has come to an end, and (2) that assuming that it is still effectual ( a) it is discretionary in its character, and ( b) if exercised it ought to be merely by way of granting an order authorising the Custodian in his discretion to make a payment out of the moneys held by him.

In considering the question of competency I think it necessary in the first place to keep in view the conditions under which the power conferred on the Court is to be exercised. Regarded generally, the Act (the Trading with the Enemy Amendment Act 1914) is temporary and provisional in its character. Its main objects as disclosed in the preamble are to prevent the payment of money to persons in enemy countries and to preserve during the war money and property belonging to enemies with a view to arrangements to be made at the conclusion of peace.’ Moreover, as regards the provisions in section 5 on which the petitioner founds, these are preceded by a mandatory direction that the Custodian is to hold what is vested in him under the Act until the termination of the war, and is to deal with it thereafter in such manner as shall be directed by an Order in Council.

In my opinion the petition is incompetent. I think that on the sound construction of the statute the Custodian since the termination of the war and the establishment of the Clearing Office under the Administrator is not subject to the orders of Court authorised by section 5 of the statute, and must hold and deal with the funds in his hands in accordance with the directions given or to be given by His Majesty by Order in Council.

Further, with reference to the argument submitted for the petitioner I think this dilemma arises—If the post-war arrangements and directions contemplated by the Act of 1914 do entitle the Administrator to receive from the Custodian the money in his hands this petition is inappropriate and incompetent, and if on the other hand the post-war arrangements and directions already made and given do not authorise the Administrator to receive from the Custodian the funds in his hands and deal with them, or are otherwise defective or incomplete, nevertheless the petition is equally inappropriate and incompetent.

In either case the Court has no power or duty under the statute to intervene at this stage on the lines of the prayer of the petition. The opinion expressed by Mr Justice Russell in the case of Nierhaus ( 1921, 1 Ch. 269), although that case arose under different circumstances, seems to me to recognise and give effect to the construction which I am putting on the statutory provision in this case.”

The petitioner reclaimed, and argued—The Lord Ordinary's construction of section 5 (2) of the Act of 1914 as amended was wrong. The section meant that the property was to be subject to the orders of the Court. Such a matter as this was normally subject to the jurisdiction of the courts, and that jurisdiction could only be excluded by express provision. Under the section therefore this application was competent. Further, where, as here, a valid nexus had been created by the arrestment, and where, as here, it was doubtful whether a vesting order obtained under the Trading with the Enemy Acts was valid, the Court was entitled to interfere and to grant the order which the petitioner sought. Counsel referred to Warre v. Rush, 1922, 38 T.L.R. 900, and in addition to the Acts of 1914 and 1916; the Trustee Act 1893 (56 and 57 Vict. cap. 53) as to the effect of a vesting order; the Trading with the Enemy Amendment Act 1915 (5 and 6 Geo. V, cap. 79), sec. 1; the Trading with the Enemy Amendment Act 1918 (8 and 9 Geo. V, cap. 31), sec. 12; and the Trading with the Enemy (Custodian Direction) Order 1921.

Counsel for the respondent were not called upon.

Lord Skerrington—We heard an able argument from Mr Duffes in support of this reclaiming note, but I confess that he did

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