Scottish High Court of Justiciary Decisons

LORD JUSTICE-CLERK (Cooper).—The charge against the respondent is that in his shop in Inverness he sold to a customer for 7s. a price-regulated article of which the permitted price was 4s. 9d., contrary to section 1 of the Prices of Goods Act, 1939. The sale and its surrounding circumstances are not in dispute. The sole specialty which gave rise to the argument in the Court below and before us depended upon the fact that the sale was made, not by the respondent in person, but in his absence by a subordinate, a servant, acting within the scope of her employment. The Sheriff-substitute, to quote the stated case, "accepted the explanation of the respondent that he took no actual part in the management of the business of the shop, … held that in law the respondent was not responsible for the actings of his said servant and found the respondent not guilty" We are now asked to determine whether the Sheriff-substitute was entitled so to find.

I pause to observe that the precise implications of the respondent's defence are not wholly clear to me. We are specifically told in the findings in fact that it was the respondent's shop; that he there carried on business in his own name as a draper, outfitter and house furnisher; and that the shop assistant in question was his servant, which I take to mean that she was appointed and remunerated by him and answerable to his orders in the discharge of her duties. We are further, I think, entitled to infer, though the findings are silent on the subject, that the stock displayed for sale was acquired with the respondent's money and that the proceeds of the sales went into his pocket. In these circumstances, it is not easy to evaluate or interpret the respondent's uncorroborated statement, on which the Sheriff's judgment apparently proceeded, that "he took no actual part in the management of the business." This, however, is clear, that this is not a case, like many in the reports, in which the person in charge of a business, or owning a business, pleads that a statutory contravention occurred during his temporary absence, or against his orders, and despite his best efforts to secure compliance with the law. The respondent's position, as it was cogently presented to us in argument, is that he personally had nothing to do with the sale in question, that he has chosen to delegate to subordinates the ordinary work of his shop and the conduct of the business transacted therein, and that he is not answerable for the admittedly illicit sale, for which his subordinate must accept sole responsibility. The Solicitor-General was content to meet the argument as so presented, and the case may therefore be described as one which

raises anew the issue of vicarious responsibility for a statutory offence. I am not sure that I wholly agree with that method of describing the issue. I think the question in most cases can more accurately be formulated as a question whether, on a sound construction of a statute or order creating an offence, the obligation imposed by the statute is of such a character that an offence can be committed by, and a prosecution may be taken against, the person carrying on the business even although the act which is the subject of the prosecution may have been committed by some subordinate in his employment acting within the scope of his employment.

Our reports already contain many examples of cases in which it has been held that a malum prohibitum has been created by statutory enactment in such terms and under such circumstances as to impose an absolute obligation of such a kind as to entail this wider liability. In all such cases it has, I think, been the practice to insist that the Crown should show that the language, scope and intendment of the statute require that an exception should be admitted to the normal and salutary rule of our law that mens rea is an indispensable ingredient of a criminal or quasi-criminal act; and I venture to think that it would be a misfortune if the stringency of this requirement were relaxed. Upon the general principle I need say no more, in view of the Full Bench decision in the recent case of Mitchell v. Morrison, except to observe that, in my view, the issue in every case is purely one of the interpretation of the statute or order under consideration, and, further, that the commonest type of case in which so-called vicarious responsibility has been affirmed is where, as in the many decisions under the Licensing Acts, the Legislature intervenes in the public interest to lay down the conditions under which alone a trader may carry on his business.

In my view, the Crown have sufficiently discharged the onus of showing that the Prices of Goods Act, 1939, falls within this category. The Act expressly bears to be a piece of war legislation which is to remain in force only until the end of the emergency which was the occasion of its enactment—section 23, subsection (2). The price control at which it aims is manifestly part of the general financial and economic war policy of the country pursued in the national interest. In addition to penalties by way of fine and imprisonment, provision is made by section 7, subsection (2), on a third or any subsequent conviction, for the making of orders prohibiting the offender from carrying on, or being concerned in the carrying on of, the business in question or any similar business. By section 10 conviction of a contravention of the Act confers upon the buyer the option to avoid certain contracts made with the person carrying on the business or to recover the excess price. Section 12 contains various prohibitions against the holding up of stocks by the person carrying on the business in face of a tender of the permitted price. Finally, section 18

provides for the consequences of a conviction of a body corporate. In the light of these amongst other considerations, it appears to me that, when this statute opens, as it does, with a general declaration that it shall be unlawful for any person to sell, agree to sell or offer to sell any price-regulated goods in the course of any business at an excessive price, the intention was to impose an absolute obligation affecting the conduct of the trade or business. If this is so, it is idle for the respondent to seek to escape the responsibilities attaching to the business which he carries on in his shop through the medium of his servants by devolving responsibility for compliance with the Act upon paid employees, or by representing that a sale effected in contravention of the Act by one of these employees within the scope of her employment is not truly a sale by him. Incidentally, the general acceptance of such defences would, I fear, go far towards rendering the Act inoperative. Accordingly I am of opinion that, on the facts found proved, it was the duty of the Sheriff-substitute to convict, and I move your Lordships that we answer the question put to us in the negative.

LORD MACKAY .—I reach the same conclusions. As my line of reasoning follows almost step for step your Lordship's, I shall use my own language but do so in the shortest possible form. Although argued below, and indeed here, as if the question in this case were merely another instance of vicarious criminality or criminal responsibility within a group of some fifteen instances gathered together on page 141 of Mr Trotter's excellent book, I cannot altogether think that the case was properly, or, let me say, with entire propriety, so argued below. So far as that group of cases is concerned, and for so many as have been canvassed before us and so far as I know them, I do not think these cases, whether pro or contra of what is called vicariousness, can all be treated as properly instances of a master being vicariously responsible for a crime that was completely committed by his servant in the course of executing his business. To my thinking, each trading group under the various groups given by Mr Trotter came to be decided on a train of reasonings which depended in every case essentially on two matters—(a) the interpretation of the words of the statute or order by which the prohibition was imposed, or the nature of the special duty positively imposed, and (b) a general presumption against vicariousness in the criminal law of Scotland, a presumption which it falls—and I think in every case the judge or group of judges quoted has said so—upon the Crown or prosecutor to displace. But when I apply this set of conclusions to the present case, and apart altogether from one being responsible for the crime of another, I am of opinion that the Crown has made out a case that the duty (or rather here the prohibition) which was infringed was a prohibition laid primarily upon the owner of the business. I agree in general with those observations

which your Lordship has made in that direction and add shortly the following facts bearing upon the construction of this price-regulating statute. (1) Section 1 proceeds by rendering certain sales or offers "unlawful." (2) Such sales or offers are not sales or offers in general but sales or offers to sell "in the course of any business," and these words in section 1 seem to me to be important in the true construction of the statute. (3) There is provided in a subsequent section (sec. 7 (3)) a complete defence to subordinates merely upon the proof that they did the act of sale or offer upon the instructions of the employer or, indeed the words run on, "of some other specified person. It would be very strange in such a collocation to assume that the prohibition which created a criminal offence was in its nature aimed primarily at the subordinate or hand who did the physical act of handing over the goods. It seems to me that that exceptional protection gives in the construction of the whole Act a sense which indicates that the primary duty—the main duty—is upon those who are responsible for the conduct of the business in general. (4) I think much may be founded upon the construction of the word "seller" within the Act. Who is the seller who is prohibited from selling in the course of business? The seller normally seems to me to mean that person who has the title to the goods, who must warrant his title to the goods, and who can pass on a title to the goods, and, consequently, the person who ultimately receives the cash in each special case, or, if no cash passes, who enters the obligation to pay the cash in his ledger or other book of account. If that be right, then to my mind the subordinate—the saleswoman in this case—was not the primary seller in the course of this business. She neither had the title in the goods nor did she receive for herself the cash, and, if it was a sale for credit, I have no doubt, if it had been investigated, it would be found that the debit would have entered the owner's books. This meaning of the word "seller," which seems to me the primary one, I find, as your Lordship has said, very much corroborated by section 10, in which, after a breach of the prohibition and only after such conviction, the "buyer" is introduced by the statute. Surely "the buyer" is the counterpart of "the seller." And the buyer is given the option after such a conviction of setting aside the sale and recovering from "the seller" the price which he had paid over. Is it to be thought that in that collocation the buyer is to have a remedy against the saleswoman who merely handed over the article at the price which was erroneously paid? It seems to me that the intention of the statute is again clear that it is the owner and the person in control of the business and into whose till the money goes who is to be responsible to the buyer after conviction for restoration in a civil sense of the price which he has erroneously paid. These are four matters and only four—others have occurred to me—which all point the same way; and in agreement, therefore, with your Lordship, as a pure question of construction of this price-regulating statute, I construe it as meaning that the owner of a business is primarily under the duty to see that the price regulations are not infringed. If that be so, we are not set to find a place within the "vicarious responsibility" instances.

I wish to add this, which your Lordship also has touched upon. It does appear to me that the important finding of fact is finding (5)— "that the said assistant was a servant of the respondent and that in carrying out the said sale she was acting in the course of her employment." I cannot see that the learned Sheriff-substitute could have reached his conclusion in law unless he relied upon the further sentence which your Lordship has quoted. "I accepted the explanation," he said, "that the owner took no actual part in the management of the business of the shop." That is not even formally expressed as a finding of fact. It is put as a proffered "explanation." If he had found it established in fact, I should have been immensely surprised, but it is not found as a fact, nor is it stated as a fact. He had a minute of admissions before him. He had very little other evidence, and the evidence of the respondent to that effect, which is said to have been given, was entirely uncorroborated within the body of the evidence so received. It seems to me that what the learned Sheriff-substitute may have done is to accept it as an "explanation" of the man's ignorance of the particular transaction and to have exaggerated the meaning even of the excuse offered. For, in my opinion, this Court ought not to accept from the respondent in this case the view that, while conducting two businesses described both as businesses of outfitters, while on the findings he carried on business under his own name there, and while he employed this girl and no doubt paid her a wage, he was taking no actual part in the management of one, merely because his personal attendance was merely at the other. What seems to me to be the true meaning of his explanation is that he meant that he took no active part in the particular transaction on that particular day. But that he took part in the management of the business in general I think is certain upon the findings, and I am not going to accept from him or from the Sheriff-substitute an explanation, given as an explanation and not as a fact, that he did not in any true sense manage it. I think we must assume on the contrary (a) that he appointed and dismissed those who "sold"; (b) that he set a "course of business" for them, otherwise there could be no tradings; (c) that he instructed them in their duties particularly those determined by the price-control; and (d) that he either ticketed the proper prices on his goods or gave verbal instructions at what general price to offer his goods. That, however, is a view which I put forward only as supplementary to the construction of the statute upon which I agree with your Lordship.

LORD JAMIESON .—I am of the same opinion. The decision of the case turns on the question whether, on a proper construction of the Prices of Goods Act, 1939, the transaction in question was a sale by the respondent. Section 1 of the Act contains an absolute prohibition

against any person selling in the course of any business price-regulated goods at a price in excess of the permitted price. If any person does so, he contravenes the terms of the section, and lays himself open to the penalties for which the Act provides. Now, while the article in question was handed over by an assistant and the price paid to her, the transaction was, in my opinion, none the less a sale by the respondent. It took place in his shop; it was in the course of his business; the assistant was acting in the course of her employment by him; and the money received for the article went into his till. In these circumstances, I think it is clear that, even if section 1 alone were to be looked to, the transaction must fall to be regarded as an unlawful sale by the respondent. But a reference to other sections of the Act confirms me in this view. They point to responsibility resting with the employer, although the sale may have been carried through by an employee. In particular, section 18 shows that a contravention of section 1 may be committed by a corporation, although such a body can only act through the hands of its servants; and in section 10 the rights conferred on the buyer when a conviction has taken place are rights against the "seller," and it would be absurd to hold that in such a case the term "seller" was intended to refer to a mere servant and not to the master. Further, the purposes of the Act, being, as your Lordship pointed out in the course of the debate, to prevent inflation and the consequences that would flow from war profiteering, point to the prohibition being directed against the owner of the business, even although the sale may be conducted by the hands of a subordinate.

We were referred to a number of cases. In my view, those dealing with the licensing laws are most in point. There, as here, the Legislature has imposed conditions restricting the way in which the trader may carry on his trade. In the case of the licensing laws he must comply with the restrictive conditions of his certificate, and in the case of goods coming under the Prices of Goods Act he may not sell at a price exceeding that permitted. In both cases the restrictions are placed on the trader himself, and for failure to comply with these he must, in my opinion, be held responsible.