United Kingdom House of Lords Decisions

Parliamentary Archives,
HL/PO/JU/4/3/1176

HOUSE OF LORDS

ATTORNEY-GENERAL

v.

NISSAN et e contra

Lord Reid

Lord Morris of Borth-y-Gest

Lord Pearce

Lord Wilber- force

Lord Pearson




Lord Reid

MY LORDS,

The Respondent is a British subject being a citizen of the United Kingdom
and Colonies. In 1963 he was the tenant of the Cornaro Hotel near Nicosia
in Cyprus. On 29th December 1963 British forces then operating in Cyprus
took possession of his hotel. The British Government have refused to pay
him compensation and he has brought the present action. The parties agreed
that an Order should be made for the decision of questions of law as a
preliminary issue before the trial. On 27th October 1966 an Order was
made as follows:

" 1. That the following questions of law raised by the pleadings herein
" be decided as a preliminary issue before the trial of the action: —

" (a) Whether, upon the facts pleaded in paragraphs 3 and 5 and
" in the first sentences of paragraphs 4 and 6 respectively of the
" Defence, all or any, and if some only which, of the claims and
" causes of action pleaded in the Statement of Claim are sustainable
" in law;

" (b) Whether, upon the facts pleaded in paragraph 3 and the
" first sentence of paragraph 4 of the Defence, the last two sentences
" of the said paragraph 4 disclose a good defence in law to all or
" any, and if to some only then to which, of the claims and causes
" of action pleaded by the Plaintiff in respect of events occurring
" between the 26th December 1963 and the 27th March 1964; and

" (c) Whether, upon the facts pleaded in paragraph 5 and the
" first sentence of paragraph 6 of the Defence, the last sentence of
" the said paragraph 6 discloses a good defence in law to all or
" any, and if to some only then to which, of the claims and causes
" of action pleaded by the Plaintiff in respect of events occurring
" on and after the 27th March 1964.

" 2. That the Defendant in the action be plaintiff in the Preliminary
" issue."
The parts of the defence referred to in the Order are as follows:

" 3. As a result of civil strife between the Greek and Turkish com-
" munities in the Republic of Cyprus in December 1963 the Govern-
" ments of the United Kingdom, Greece and Turkey on the 24th
" December 1963 addressed the following appeal and offer of good
" offices to the Cyprus Government.

' The British, Greek and Turkish Governments, as signatories of
' the Treaty of Guarantee of 1960. jointly appeal to the Govern-
' ment of Cyprus and to the Greek and Turkish communities in the
' Island to put an end to the present disorders. They appeal to
' the Cyprus Government to fix a suitable hour this evening for
' a cease-fire and to call upon both communities to observe it.

' The three Governments mindful of the rule of law further offer
' their joint good offices with a view to helping to resolve the diffi-
' culties which have given rise to the present situation.'
" On the 25th December 1963 the Cyprus Government issued the
" following communique:

' The Government of the Republic of, Cyprus has accepted an
' offer that the forces of the United Kingdom. Greece and Turkey,



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' stationed in Cyprus and placed under British command, should
' assist it in its effort to secure the preservation of cease-fire and
' the restoration of peace.'

" 4. The relevant British forces operating in the Republic of Cyprus
" between the 26th December 1963 and the 27th March 1964 were
" part of the force under British command assisting the Cyprus Govern-
" ment in its effort to secure the preservation of cease-fire and the
" restoration of peace pursuant to the agreement recorded in the said
" communique, which is hereinafter referred to as ' The Truce Force'.
" In the premises the Truce Force and the British elements comprised
" therein were agents of the Cyprus Government and the actions of the
" Truce Force were Acts of State of the Cyprus Government which are
" not cognizable by this Honourable Court. Alternatively the actions
" of the British element were Acts of State of Her Majesty on the ter-
" ritory of an independent sovereign power performed in pursuance of
" an agreement between Her Majesty and the said power which equally
" are not so cognizable.

"5. On the 4th March 1964 the Security Council of the United
" Nations recommended the creation, with the consent of the Cyprus
" Government, of a United Nations Peace-Keeping Force in Cyprus.
" By a letter of the 4th March 1964 the Foreign Minister of Cyprus
" informed the Secretary General of the consent of the Cyprus Govern-
" ment to the creation of the said Force. The said Force was established
" on the 27th March 1964. The terms of an Agreement concerning the
" Legal Status of the said Force were set out in a letter from the
" Secretary General to the Foreign Minister of Cyprus dated the 31st
" March 1964. The Agreement was by its terms deemed to have taken
" effect from the date of the arrival of the first element of the said
" Force in Cyprus (27th March 1964) and was ratified by Law No. 29 of
" 1964 of the Republic of Cyprus. The Defendant will refer to the
" Agreement for its full term and effect.

" 6. The British forces operating in the Republic of Cyprus from
" and after the 27th March 1964 were contingents of the United
" Nations Force aforesaid. In the premises no action lies against the
" Crown in respect of any of the actions of the said forces."

The first question which arises is whether these facts show that the British
forces were acting as agents of the Cyprus Government when they took
possession of the Respondent's hotel, so as to make their action the act of
the Cyprus Government. I do not think that that is a necessary or even a
reasonable inference from these facts. The Cyprus Government did not ask
the British Government to send military aid. The British Government offered
to send their forces and the Cyprus Government accepted that offer. The
British forces were to act under British Command, and there is no suggestion
that the Cyprus Government had any control over them, or responsibility for
them, or were under any obligation to pay for their services. They were to
assist the Cyprus Government, so no doubt there would be consultation as
to the best manner of rendering assistance. But the British Government had
their own interest in preserving peace in the Middle East. It is common
knowledge that there was grave apprehension of hostilities involving Greece
and Turkey, and no one can say how far a war may spread. Moreover, the
British Government were parties to the treaty of Guarantee of 1960.

It must have been obvious to both Governments when permission was
given for British forces to operate in Cyprus territory that the British forces
would require to use some buildings and other facilities in the area in which
they operated. But nothing is said as to any arrangement about this with
the Cyprus Government, and in particular nothing is said as to whether the
Cyprus Government were even aware that the British forces intended to
take the Respondent's hotel, let alone as to whether they gave any authority
for this.

What the Appellant has to establish is that, no matter what the other
circumstances might be, the facts stated in the defence necessarily show



3

that there was agency. And it was not argued that agency here means
anything different from its ordinary meaning in English law. What was
argued was that unless the British forces were acting as agents for the Cyprus
Government it would not have been lawful under the law of Cyprus for
them to take the hotel without the assent of the occupier. But we do not
know what the law of Cyprus was. No doubt, if no evidence is led as to
foreign law, there is a presumption that it does not differ from English law.
But this case has not reached the stage of leading evidence. And even if
it was unlawful under the law of Cyprus to take the hotel if the British
forces were not agents of the Cyprus Government that does not prove that
they were agents. All the circumstances so far as we know them, seem to
me to point to the conclusion that in taking the Respondent's hotel the
British authorities acted on their own responsibility on behalf of the Crown.

The next question is whether taking possession of the hotel was an act
of State with the consequence that this act of State and its consequence
are not within the jurisdiction of a British Court, and no action can lie for
relief against them. " act of State " is a phrase which has often been used,
but by no means always with the same meaning. It seems to me to be
useless to attempt to define it until one has determined in what circum-
stances a person, injured by an act ordered or ratified by the British Govern-
ment can, and in what circumstances he cannot, obtain redress from the
English Courts. The question may arise in several ways. A servant of the
Crown may by his act infringe the rights of an individual so as to cause him
damage. Then, if that servant of the Crown is sued, the question is whether
it is a defence to him to prove that his act was ordered or ratified by the
Government. Or, secondly, the action of the Government or of its servants
may cause consequential loss to an individual although it does not infringe
any of his ordinary rights. Or, again, the action of the Government or its
servants may be in exercise of the Royal Prerogative in which case the action
is not unlawful but the question is whether the individual is entitled to
compensation.

Where an act of a servant of the Crown in this country infringes the rights
of a British subject it has been settled law for centuries that it is no defence
to plead that the act was ordered or ratified by the Crown or the Govern-
ment. And since the decision of this House in Johnstone v. Pedlar [1921]
2 A.C. 262 it has I think been equally clear that an alien in this country
—other than an enemy alien—is in the same position. And now that it is
possible to sue the Crown directly by virtue of the Crown Proceedings Act
1947 the position must be the same as it would have been if the action had
been brought against the individual wrong-doer.

The other case which is, I think, clear is where the act complained of was
done against an alien outside Her Majesty's dominion. Since Buron v.
Denman (1848) 2 Ex. 167 it has been accepted that if the act was ordered
or has been ratified by the British Government the English Courts cannot
give redress to that alien. He may enlist the support of his own government
who may make diplomatic representations, but he has no legal remedy in
England.

There is as yet no decision as to rights of a British subject who complains
of an infringement of his ordinary rights of property by an act of a servant
of the Crown done outside Her Majesty's dominions. The Respondent con-
tends that he is as much entitled to legal redress against arbitrary actions of
servants of the Crown as is a British subject within the realm. The Appellant
on the other hand contends that he has no legal protection or redress against
such acts if they have been ordered or ratified by the Government: all he
can do is to try to get some member of Parliament to take up his case
in Parliament.

There are dicta favouring the Respondent's contention, generally in cases
where the plaintiff's property was within British territory. And there are
dicta favouring the Appellants' contention, generally in cases where the
plaintiff was an alien outside British territory. I do not think that they can
all be reconciled. But it would in my view be a strange result if it were

324337 A 2

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found that those who have struggled and fought through the centuries to
establish the rights of the subject to be protected from arbitrary acts of the
King's servants have been completely successful with regard to acts done
within the realm, but completely unsuccessful in gaining any legal protection
for British subjects who have gone beyond the territorial waters of the King's
dominions.

Let me take first the leading case of Johnstone v. Pedlar (cit. sup.). There
the plaintiff was an alien within the United Kingdom, so the rights of a
British subject outside the realm were not in issue. But there was a general
discussion of the whole question, and the way in which at least Lord
Finlay, Lord Cave and Lord Phillimore expressed their opinions appears to
me to shew that they must have had this in mind, and must have thought
that it was settled law that British subjects, unlike aliens, were entitled to
legal redress in respect of acts of the executive outside the realm. Lord
Finlay said (at page 271):

" It is the settled law of this country . . . that if a wrongful act
" has been committed against the person or the property of any person
" the wrongdoer cannot set up as a defence that the act was done by
" the command of the Crown. The Crown can do no wrong, and the
" Sovereign cannot be sued in tort, but the person who did the act is
" liable in damages, as any private person would be. This rule of law
" has, however, been held subject to qualification in the case of acts
" committed abroad against a foreigner. If an action be brought in the
" British Courts in such a case it is open to the defendant to plead that
" the act was done by the orders of the British Government, or that
" after it had been committed it was adopted by the British Government.
" In any such case the act is regarded as an act of State of which a
" municipal Court cannot take cognizance. The foreigner who has sus-
" tained injury must seek redress against the British Government through
" his own Government by diplomatic or other means."

Then he cited Buron v. Denman and went on:

" This doctrine has no application to any case in which the plaintiff
" is a British subject."

Lord Cave's statement at page 275 was to the same effect and Lord
Phillimore said at page 295 :

" The defence set up in the present case is sometimes called the
" defence of an act of State. As regards this way of looking at it, I
" cannot put the matter better or more tersely than as I found it put
" in one of the reasons given by the successful plaintiffs in their case as
" Respondents before the Privy Council in Walker v. Baird: 'Because
" ' between Her Majesty and one of her subjects there can be no such
" ' thing as an act of State '. And this proposition was finally accepted
" in the case of Walker v. Baird."

Lord Atkinson and Lord Sunnier did not dissent in any way from these views.
It is true that they were obiter, but it is clear that the whole matter had been
fully considered. I would regard the weight of these opinions as falling
little short of the weight of a considered decision of the House.

Then I take an opinion given in 1728 by eminent counsel who ultimately
became Lord Hardwicke and Lord Talbot. This is set out in Chalmers
Opinions of Eminent Lawyers at vol. II, page 53. Under a treaty made
between the British and French Governments in 1686 the subjects of each
Kingdom were prohibited from certain trading and " if any ships shall be
" found trading contrary to the said treaty upon due proof the said ships
" shall be confiscated ". Counsel said that they " conceive that it was the
" intent of those articles to give power to the King of Great Britain and the
" most Christian King reciprocally to seize and confiscate the ships and
" cargoes belonging to the subjects of each other . . . but we apprehend that
" it was not the intent of this treaty to provide that either of the contracting
" powers should seize and confiscate the ships or goods of their own subjects
" for contravening the said articles; and if such intention had appeared
" we are humbly of opinion that it could not have had its effect with respect
" to His Majesty's subjects unless the said articles had been confirmed by
5

" Act of Parliament". So it must then have been regarded as settled law
that British subjects were as much entitled to legal protection of their property
on the high seas as they were to protection of their property within the
realm. On the other hand, it is, I think, clear that the reasoning in Buron
v. Denman would apply if an alien vessel was seized on the high seas. So
if the Appellant is right we would have the complicated and, I think, irrational
rule—against acts done within the realm protection for both British subjects
and aliens: against acts done on the high seas protection for British subjects
but not for aliens: against acts done in foreign countries no legal protection
for either.

The Respondent also relies on Walker v. Baird [1892] AC 491 where it
was held that the fact that the British Government had agreed by treaty to
prevent certain activities did not justify a seizure of a factory in Newfound-
land. This point was dealt with very summarily and I do not think that
the strong Board would have refrained from farther explanation if it had
crossed their minds that the position might have been different if the factory
seized had been one belonging to a British subject but situated in, say,
Greenland.

There arc some indications in some cases that the Court thought that
outside British Dominions the rights of a British subject might be different
from the rights of an alien—e.g. in R. v. Crewe [1910] 2 KB 576 at
page 607. But I would not attach much importance to these.

Until very recently there appears to have been no text book authority
for the proposition that British Courts have no jurisdiction to give redress
to a British subject who has suffered injury to his property by executive
action of the British Government outside the realm. Sir J. Fitzjames Stephen
in his History of the Criminal Law said (at page 61), in considering the
question whether the criminal law applies to what have sometimes been
described as acts of State:

" I understand by an act of State an act injurious to the person or
" to the property of some person who is not at the lime of that act a
" subject of Her Majesty : which act is done by any representative of
" Her Majesty's authority, civil or military, and is either previously
" sanctioned or subsequently ratified by Her Majesty."

And I observe that it is stated in Halsbury's Laws of England, volume VII,
at page 280 : " There can be no act of state against anyone who owes
" allegiance to the Crown ".

Before considering dicta which appear to favour the Appellant's con-
tention I must advert to the kinds of cases in which most of them appear.
Many arise out of annexations of territory by conquest or by cession. The
former sovereign of the annexed territory, being an alien, has no legal
redress even when property confiscated is alleged to include his private
property. And no one, whether a British subject or not, can complain
that, by dispossessing the former sovereign, the Crown has made his rights
against that sovereign worthless. In order to succeed he would have to
found on the act of the Crown as having imposed on the Crown a new
liability. That he cannot do.

In Doss v. Secretary of State for India 19 Ex. 509 the King of Oudh
had been dispossessed after the Indian Mutiny and a creditor of his,
apparently a British subject, being unable to recover against the dispossessed
sovereign, maintained that the Indian Government had become liable to him.
But, as Malins V.C. pointed out, an annexation cannot create new rights
against the new sovereign. I think that the same principle applied to
Rajah Rann v. Secretary of State for India 2 Sutherland P.C. Appeals 726.
Estates had been assigned by the East India Company for the maintenance
of the King of Delhi and when he was deposed and these estates were
resumed, a mortgagee of these estates claimed unsuccessfully the sum due
under the mortgage.

In Cook v. Sprigg [1899] AC 572 Cook had obtained concessions from
the ruler of Pondoland who was thereafter dispossessed. He sued the Colonial
Government and failed. He only had rights against the former ruler.
Similarly in West Rand Central Gold Mining Co. v. Rex [1905] 2 KB 391
the Government of the South African Republic had taken gold bars from



6

the plaintiffs and they claimed that the Crown having annexed the Transvaal
should pay the debt of the former sovereign.

The case of Kamachee Boye Sahaba (1859) 7 Moo. Ind. App. 476 was
founded on, but that only deals with the property of the dispossessed sovereign
and I cannot accept the view that it affords any justification for the sub-
mission that the property of a British subject in conquered territory can be
confiscated.

In my view, none of these cases decides that when the Crown annexes
territory it is entitled to confiscate the property of British subjects which
is in that territory. The rule is, I think, correctly stated by Chitty in his
work on The Royal Prerogative (page 29) " When a country is obtained by
" conquest or treaty the King possesses an exclusive prerogative power over
" it, and may entirely change or new-model the whole or part of its laws
" and political form of government and may govern it by Regulations framed
" by himself". A British subject cannot complain if the new sovereign
alters the law of the annexed territory to his detriment, but he can, in
my view, complain of a confiscation of his property which is not justified
by any law. If the gold bars in the West Rand case had been in the
possession of the British Mining Company when the British troops reached
Johannesburg, I think they would have been entitled to redress if their
gold had then been confiscated. And if Cook had been the owner of land
in Pondoland I do not think that his land could have been confiscated.

It is sometimes said, or at least suggested, that an act of the executive
obtains some additional protection if it is done in execution or fartherance
of some treaty. I do not see why that should be so. If the same act
would be actionable if done by the executive ex proprio motu, how can it
matter that the Government had agreed beforehand with some other Govern-
ment that it would do that act? There is no doubt that it is within the
prerogative right of the Crown to make treaties and no subject, whether
within or outside the realm, can object on the ground that the making of
the treaty has caused him loss. As a result of a treaty certain exports to
the other country might cease because the other country would not receive
them. But a British manufacturer whose former customers ceased to buy
from him as a result of the making of the treaty could not complain. He
could not found on the treaty as the cause of his loss. But it would be quite
another matter if the Crown infringed his ordinary legal rights and founded
on its obligations under a treaty as a defence. That was made clear by the
decision in Walker v. Baird [1892] AC 491. A somewhat similar point
arose in Rustomjee v. Reg. (1875) 1 Q.B. 487 and in War Claimants v. R.
[1932] A.C. 14. Under treaties the Crown received sums of money as com-
pensation for damage done to British subjects, but that fact did not entitle
those subjects to sue. The Crown had not made itself a trustee and the
subject could not found on the treaty: there had been no infringement of any
right of the claimants. And I may refer in this connection to China Naviga-
tion Co. v. Attorney-General [1932] 2 K.B. 197 although no treaty was there
involved. The Crown refused to afford armed protection to British subjects
unless payment was made. The subjects could not object because no legal
right of theirs was infringed by the refusal of an armed escort.

I think that a good deal of the trouble has been caused by using the loose
phrase " act of State " without making clear what is meant. Sometimes it
seems to be used to denote any act of sovereign power or of high policy or
any act done in the execution of a treaty. That is a possible definition, but
then it must be observed that there are many such acts which can be the
subject of an action in Court if they infringe the rights of British subjects.
Sometimes it seems to be used to denote acts which cannot be made the subject
of enquiry in a British Court. But that does not tell us how to distinguish
such acts: it is only a name for a class which has still to be defined. One
definition which has been accepted in some quarters is that of Professor
Wade, quoted in Halsbury's Laws of England, volume VII, at page 279:

" An act of the executive as a matter of policy performed in the course
" of its relations with another state including its relations with the sub-
" jects of that state, unless they are temporarily within the allegiance of
" the Crown, is an act of state."

7

I do not think that this is entirely satisfactory. I am not sure what is meant
by " as a matter of policy." One hopes that all acts of the executive are done
as a matter of policy and not on random decisions, and certainly it would not
be possible for a Court to enquire whether a particular act of the executive
had or had not been done as a matter of policy. And what about acts sub-
sequently ratified? When Captain Denman acted against the Spaniard
(Buron v. Denman cit. sup.) it must have been his policy, for he acted without
orders and, when his act was ratified, the policy may simply have been in
those days to support Her Majesty's officers against foreigners. Then next
" in the course of its relations with another state ": I do not much like this
as a description of a war of conquest. I think one would have to add " or
" against another state or a subject of that state ". I have already said that
I can find no reason why an act performed against a British subject should
take on a different character and become an act of State because done by
the Government in the course of or arising out of its relations with another
state. And Walker v. Baird shews that it does not, at least when done within
British dominions. Professor Wade was no doubt merely attempting to make
the best of a confused body of authority, and not attempting to make new law.
If I attempted that I would certainly do no better. But I would suggest to
your Lordships that we cannot rest content with that. I think we must say
either that all acts of the executive are acts of State, or that acts of the
executive should only be called acts of State in cases where the Court will
not enquire into them or give relief in respect of them but should not be
called acts of State when the Court's jurisdiction is not ousted.

It is sometimes said that the question whether an act done on behalf of or
ratified by the Crown—which here must mean the Government—is an act of
State, depends on the nature or quality of the act, and that it is for the Court
to determine whether any act is an act of State. It is true that the Court
must determine, on such facts as are available, whether the act was done
in purported exercise of a legal right: if it was it cannot be regarded as an
act of state. But if it was not done in purported exercise of any legal right
and was done by an officer of the Crown apparently in the course of his
duty, then it appears to me that it must be for the Crown to say whether it
claims that the act was an act of State. The act may appear to be of a routine
or trivial character. But in a delicate situation there may be discussion and
decision at the highest level about such acts, and the decision to do such
an act may be a decision of high policy. If the Crown claims that such an
act was done as an act of State I do not see what right the Court can have
to reject that claim: the Court cannot enquire into or ask the Crown to
disclose the reason why the act was done. And even if the act was done by
a subordinate officer on his own responsibility, it is always open to the Crown
to ratify it and thereby make it an act of State.

In the present case the Crown claims that the taking and retention of
possession of this hotel was an act of State. For all we know—and we
cannot enquire—it may have been a matter of ministerial policy to take this
hotel. One possibility might be that it was thought better as a matter of
policy to take the property of British subjects so as to avoid any question with
the Cyprus Government if the property of citizens of Cyprus was taken. Or
the Crown may simply have decided to ratify as an act of State the action
of its officers in taking the hotel.

If I thought that any act done against the person or property of a British
subject wherever situated could be an act of State in the sense that he was
deprived of all right to apply to an English Court for redress, then I would
think that the taking of this hotel was an act of State. But for the reasons
which I have already given I am of opinion that a British subject—at least
if he is also a citizen of the United Kingdom and Colonies—can never be
deprived of his legal right to redress by any assertion by the Crown or
decision of the Court that the acts of which he complains were acts of State.
It seems to me that no useful purpose is served by enquiring whether an
act in respect of which a British subject claims legal redress is or is not an
act of State, because a decision of that question can make no difference to
the result.

8

In my judgment, both on principle and on the balance of authority this
act was not of such a character that the Courts have no jurisdiction to enter-
tain the present action. This is sufficient to dispose of the preliminary issue.
But as other matters have been dealt with in argument I think that something
should be said about them.

It appears to be common ground that the Respondent permitted the British
Forces to take possession of his hotel. So no question of trespass arises and
we were not invited to consider the case of British South Africa Co. v.
Companhia de Mocambique [1893] AC 602. The Respondent puts his
case on two main grounds. First he says that there was a contract under
which the Crown are obliged to make payment, or alternatively that there
was a quasi contract, an implied contract or a situation giving rise to a claim
based on unjust enrichment. If act of State is out of the way the Appellant
does not dispute that the case must go to trial on those issues. So the less
I say about them the better.

The other main ground for the claim is that the British Forces took
possession acting under the Royal Prerogative. We are not called on to give
a decision on this matter, but as it formed a ground of decision in the Court
of Appeal I feel bound to say that I am not at all convinced that this is right.
I see great difficulty in holding that the Prerogative recognised in the De
Keyser case [1920] A.C. 505 and in the Burmah case [1965] A.C. I can
operate in foreign territory- And I prefer to offer no opinion on the alterna-
tive tentatively put forward in argument that the taking of the hotel was an
exercise of the Prerogative to regulate the activities of Her Majesty's Forces
wherever they may be. I would dismiss the appeal.

With regard to the cross-appeal I agree with my noble and learned friends
that it must succeed as regards the period during which the British forces
remained in possession of the hotel as part of the United Nations force, but
that it must fail as regards the period after they handed over the hotel to a
Finnish contingent of that force.

Lord Morris of Borth-y-Gest

MY LORDS,

In substance what the Plaintiff claims in this litigation is payment or
compensation, so far denied to him, in relation to the use and occupation of
his hotel. It was occupied by British troops from the 29th December, 1963,
to the 5th May, 1964. The case has not yet been heard nor the facts
ascertained. The reason for this is that it was thought that it would be
useful to decide certain questions of law as a preliminary issue before the
trial of the action. Accordingly, a somewhat precise order was made (and
by consent amended) which formulated the questions of law. When analysed
the questions raise the inquiry whether certain paragraphs and sentences of
paragraphs of the Defence (which are for present purposes accepted) are
sustainable as defences to any and, if so, to which of the causes of action
pleaded in the Statement of Claim. I do not think that we are called upon
to express a view as to whether, independently of the particular defences
now in issue, the claims which are advanced are sustainable in law or to
express a view as to which of them are.

In one of the selected sentences of the Defence it is pleaded that the actions
of the British " elements " were acts of State of Her Majesty on the territory
of an independent sovereign power performed in pursuance of an agreement
between Her Majesty and the said power and were not cognizable by the
Court. The British " elements " referred to were the British forces forming
a part of the Truce Force. A consideration of this plea of act of State has
featured most prominently in the arguments in the Courts. I cannot see that
this can have any bearing on that part of the plaintiff's claim which asserts
that there was a valid and binding contract whereby the Crown undertook
to compensate him. The plaintiff in paragraph 13 of his Statement of Claim
alleges an undertaking was given to him in an interview which took place
on the 29th December, 1963. The facts will have to be ascertained. If there
was a contract I do not think that " act of State " would be an answer to it:
nor does the pleading so assert. I consider, therefore, that on any view the



9

claims in contract must go forward to trial as well as the claim in trespass
to the chattels in the hotel which it was admitted must go.

In his careful judgment the learned judge answered the first of the two
questions of law raised by the pleadings by holding that, upon the facts
pleaded in paragraph 3 of the Defence (the acceptance of an offer of assistance
to help the Cyprus Government to restore and preserve peace) and the facts
pleaded in the first sentence of paragraph 4 of the Defence (reciting that
British forces were, between the 26th December, 1963, and the 27th March,
1964, part of " the Truce Force "), the penultimate sentence of paragraph 4
of the Defence does not disclose a good defence in law. That sentence
read: " In the premises the Truce Force and the British elements comprised
" therein were agents of the Cyprus Government and the actions of the
" Truce Force were Acts of State of the Cyprus Government which are not
" cognizable by this Honourable Court". What was intended was the
contention that the British forces were mere agents for the Cyprus Govern-
ment who were in a position to exercise prerogative powers as the sovereign
government of Cyprus. In my view, both the learned judge and the Court
of Appeal were entirely correct in holding that " the British Elements "
never became the " agents " of the Cyprus Government. The offer of help
was made in the interests of preserving peace. If the " disorders " had
resulted in a war the consequences might have been disastrous and far-
reaching. But though the British forces were present near Nicosia with
the permission of the Cyprus Government no relationship of principal and
agent resulted. Questions whether possession of the plaintiff's hotel was
taken with the acquiescence of the Cyprus Government or with their implied
permission or whether (as suggested in a paragraph in the Defence which
is not now under consideration) there was some later ratification by the
Cyprus Government are questions the relevance of which can be considered
at the trial.

The learned judge further held that the last sentence of paragraph 4 of
the Defence, which I have earlier summarised, " does disclose a good defence
" in law to all the claims and causes of action pleaded by the plaintiff in
" respect of the events occurring between December 26, 1963 and March 27,
" 1964, except the claim pleaded in paragraph 15 of the statement of claim
" for trespass upon the furniture and equipment and other chattels of the
" plaintiff at the Cornaro Hotel, excluding the chattels in his private flat ".
This was the defence of act of State. The detailed findings of the learned
judge which, under the order for the preliminary issue, he was bound to
make, show how involved the " preliminary" matters became. I doubt
whether it was a good plan to have this preliminary issue at all. Before
the learned judge the Crown admitted that they could not plead act of
State in regard to the plaintiff's claim for trespass to his goods in his hotel
yet asserted that they could plead it in answer to his claim for compensation
for taking possession of his hotel. From the point of view of the jurisdiction
of the Court there is an important difference between a claim for trespass
to land situate abroad and a claim for trespass to goods situate abroad
(see British South Africa Co. v. Companhia de Mocambique [1893] A.C.
602): but in agreement with Lord Denning, M.R., it seems to me that the
act of seizing the hotel was the same in quality as the act of seizing the
chattels within the hotel: if the latter act was not an act of State I find
it difficult to understand how the former act could be.

The other part of the finding of the learned judge related to the period
after the 27th March. 1964. In short he held that there could be no
liability after that date. In respect of the period between the 27th March
and the 5th May he held that the British forces became contingents of the
United Nations Peace-Keeping Force and that in that period the British
troops derived their authority to occupy the hotel no longer from Her
Majesty but from the United Nations and occupied it as agents of the
United Nations exclusively. He held that the responsibility of the United
Nations " for what their armed forces did in and to Mr. Nissan's property
" during the second period must be the same as the responsibility of the
" British Government for what its part of the truce force did during the



10

" first period, and that if what the latter did is not cognisable by a municipal
" court, neither is what the former did cognisable. If it is cognisable, it is
" not something for which the Sovereign is responsible."

I pass to consider the validity of the plea of act of State. I have already
noted the terms of the plea. " The actions of the British elements " were
said to be acts of State. The British elements referred to were the British
troops forming part of the truce force. In view of the withdrawal from the
plea of any " actions " in taking or damaging chattels in the hotel the
plea relates to the taking of the possession of the hotel. That action by
the troops was pleaded as having taken place pursuant to the orders of
responsible commanders. It is said to be an act of State because performed
on the territory of an independent sovereign power in pursuance of an
agreement between Her Majesty and that power. This involves consideration
of the phrase " act of State ". The phrase has a variety of meanings. The
making of a treaty may be an act of State: the recognition of a foreign
sovereign or of a foreign state may be: so may a conquest or an annexation.
But when pleaded as a defence it may be used in many ways, such as, for
example, to denote acts of the Crown which once the Court has so held
them to be it has no jurisdiction to examine, or the phrase may be used
to assert that a plaintiff has no claim which he can advance as against a
defendant or to assert that a defendant has an immunity and is not one
against whom a claim can be pursued.

There have been many cases in which following upon a treaty made by
a sovereign or a conquest or an annexation made by a sovereign a plaintiff
has made a claim against the sovereign by which he has sought to obtain
an advantage or benefit for himself or compensation for himself on the
basis that the treaty had been made or that the conquest or annexation
had taken place. In such cases the purpose of a plea of act of State if
made would be not to set up a defence in respect of acts done directly to
a plaintiff but to negative any assertion that by reason of the act of State
any rights enforceable against the sovereign had been given to or created
in the plaintiff. The making of a treaty is an act of prerogative and both
its making and its perfecting will be beyond the domain of municipal law.

In the present case I do not think that the act of taking possession of the
hotel ought to be regarded as an act performed in pursuance of the agreement
between Her Majesty and the Cyprus Government. The making of that
agreement may itself be regarded as an act of State. As a result of it the
British forces were stationed near Nicosia. They were so stationed with the
assent of the Government of Cyprus. The hotel would not have been
occupied had the agreement not been made. But various acts done for the
purpose of providing for the troops, some of which acts might have been
done either in one way or another and some of which might not have been
necessary acts at all, can hardly be described as being done in pursuance
of the agreement so as to make them acts of State. I agree with Winn L.J.
that the act of occupying the hotel ought not to be regarded as an act
necessary for the implementing of an act of State. If the commander of the
troops or one commander of one section of the troops wished to buy pro-
visions locally in order to feed the troops such act of purchase would not
warrant the rather high-sounding title of act of State. If, after a purchase,
there was a refusal to pay for the goods purchased such refusal could not be
justified by a plea of act of State. The provision of shelter or accommodation
for troops is on the same footing. In this connection it may be observed
that a commander might decide to have one form of accommodation for his
force though more modest accommodation not involving anything in the
nature of requisitioning would have sufficed. There is an air of unreality in
talking about acts of State in relation to arrangements for the housing or
provisioning of troops. In their judgment in Cook v. Sprigg [1899] AC 572
it was recognised by the Privy Council that there is a well-established
principle of law that the transactions of independent states between each
other are governed by other laws than those which municipal courts
administer. But, in my view, the transactions which are in review in the
present case though they would not have taken place had there been no



11

arrangement made with Cyprus are far removed from the category of transac-
tions which by reason of being a part of or in performance of an agreement
between states are withdrawn from the jurisdiction of the municipal courts.

As the facts have not yet been ascertained we can only have regard to
the facts as pleaded in the Statement of Claim. It is to be noted that apart
from the allegation of trespass to chattels the plaintiff does not assert that
any tort was committed. Nor need he. He does not assert a trespass to land.
He pleads his claim in various ways. We are not now concerned to consider
the validity of his pleas or of his different ways of asserting liability but only
to consider whether " act of State " is an answer to them all. The plaintiff
asserts that possession of his hotel was taken under prerogative powers and
that there should be payment. He does not found his claim upon the exist-
ence of a treaty between Her Majesty and the Republic of Cyprus. He asserts
alternatively that though he did not consent to the taking of possession he
can found a claim on the basis of assumpsit. In addition to his claim that there
was an express contract he founds his claim either on implied contract or
it is open to him to found it on the basis indicated by Winn L.J. in his
judgment. He reserves his right to advance his claim (once the facts are
found) in any one of various ways. But the Crown cannot change the claim
so as to state it in a way not set out in the Statement of Claim and then say
that on that basis act of State is an answer to it.

It would, I think, be helpful if, when a plea of act of State is being
advanced, some clear indication is given as to the exact basis on which the
plea is said to be an answer to a claim. This is, I think, particularly desirable
since the passing of the Crown Proceedings Act. In his speech in Johnstone
v. Pedlar [1921] 2 AC 262 Lord Sumner (at page 290) said that Buron v.
Denman 2 Ex. 167 was a case rather of the inability of the Court than of
the disability of the suitor:

" Municipal Courts do not take it upon themselves to review the
" dealings of State with State or of Sovereign with Sovereign. They do
" not control the acts of a foreign state done within its own territory,
" in the execution of sovereign powers, so as to criticise their legality
" or to require their justification."

He did also add that—

" What the Crown does to foreigners by its agents without the realm
" is State action also and is beyond the scope of domestic jurisdiction."

Lord Kingsdown in 1859 in delivering the judgment of the Privy Council
in The Secretary of State in Council of India v. Kamachee Boye Sahaba
13 Moo. P.C. 22 had said (at page 75):

" The transactions of independent States between each other arc
" governed by other laws than those which Municipal Courts administer:
" such Courts have neither the means of deciding what is right nor the
" power of enforcing any decision which they may make."

The plaintiff in this case is one beyond the scope of domestic jurisdiction
but he is not a foreigner. If, however, he had been a foreigner the question
arises whether the Crown are intending by this plea of act of State to say
that they decided as a matter of State action to take possession of the
plaintiff's property and to deprive him of it and decided as a matter of State
policy to do so without paying any compensation. I would hope not.

In one of the helpful attempts to undertake the difficult task of giving a
definition of an act of state there are the words " an act of the executive
" as a matter of policy performed in the course of its relations with another
" State including its relations with the subjects of that State unless they are
" temporarily within the allegiance of the Crown ". For reasons which I have
already indicated I do not think that such actions as securing food or shelter
in peace time for troops situate abroad are to be regarded as acts of the
executive performed in the course of relations with another state within the
conception of the above definition. But even if they were I would be surprised
if the contention were advanced that it was " a matter of policy " on the
part of the executive to take food or shelter and not to make payment. I think
that the suggested definition does reflect the consideration that an act of



12

State denotes some act or course of action done or embarked upon as a
result of a positive decision of the Sovereign or the executive. If the phrase
" a catastrophic change constituting a new departure " (per Moulton L.J. in
Saloman v. Secretary of State for India [1906] 1 KB 613, 640) is any guide,
it would, I think, at least rule out the application of the description of act
of State to the events now under consideration. But we do not know the
facts. It might or might not be the case that there was some arrangement
made with the Cyprus Government. Even if there had been, that might not
affect the issue of responsibility as between Mr. Nissan and those who took
his hotel. If a contract to pay was made then no question of act of State
can arise. If there was no firm contract but if an assurance was given by a
responsible Minister that payment or compensation would be made then any
notion that there was a decision of the executive (as a matter of policy) to
take the hotel and not to pay must be ruled out. Apart from these con-
siderations I do not think that the facts pleaded in the defence lay the
foundation for a successful plea of act of State.

The case of Buron v. Denman (supra) is of interest but I do not think that
it assists the Crown in the present case. It is to be noted that it was held
that the plaintiff had a property in his slaves and could maintain trespass
for their seizure, the slave trade not being piratical by the law of nations,
and it not appearing that Spain had passed any law abolishing the slave
trade pursuant to a treaty between England and Spain. Whatever abhorrence
may be felt in regard to the slave trade the actions of Captain Denman
were held by the Court to be actions in violation of the plaintiff's rights.
Captain Denman had acted on his own initiative and no doubt with high
minded zeal. His actions were later ratified most specifically by the Lords of
the Admiralty and the Secretaries of State for the foreign and colonial
departments. It was held that this made the position the same as if the
enterprise had been deliberately embarked upon as the act of the State.
There was a trial at Bar with a jury before Parke B, Alderson B, Rolfe B
and Platt B. It fell to Parke B. to direct the jury and the direction he gave
was given after consulting his colleagues. It is interesting to see how he put
it. He said :

" On that subject I have conferred with my learned brethren, and they
" are decidedly of opinion that the ratification of the Crown, communi-
" cated as it has been in the present case, is equivalent to a prior
" command. I do not say that I dissent; but I express my concurrence
" in their opinion with some doubt, because on reflection, there appears
" to me a considerable distinction between the present case and the
" ordinary case of ratification by subsequent authority between private
'' individuals. If an individual ratifies an act done on his behalf, the
" nature of the act remains unchanged, it is still a mere trespass, and
" the party injured has his option to sue either; if the Crown ratifies
" an act, the character of the act becomes altered, for the ratification
" does not give the party injured the double option of bringing his
" action against the agent who committed the trespass or the principal
" who ratified it, but a remedy against the Crown only (such as it is),
" and actually exempts from all liability the person who commits the
" trespass. Whether the remedy against the Crown is to be pursued
" by petition of right, or whether the injury is an act of state without
" remedy, except by appeal to the justice of the state which inflicts it,
" or by application of the individual suffering to the government of his
" country, to insist upon compensation from the government of this—
" in either view, the wrong is no longer actionable. I do not feel so
" strong upon the paint as to say that I dissent from the opinion of my
" learned brethren ; therefore, you have to take it as the direction of
" the Court, that if the Crown, with knowledge of what has been done,
" ratified the defendant's act by the Secretaries of State or the Lords of
" the Admiralty, this action cannot be maintained."

There was, therefore, an exoneration of the defendant. It is to be noted that
even in that case Parke B. did not positively say that there was an act of State
without remedy: he did not exclude the possibility of a Petition of Right:
and he indicated that there could be diplomatic action. But the defendant



13

was not liable. Even had section 2 (1) of the Crown Proceedings Act, 1947,
been in existence the result would presumably have been that an action
against the Crown would have failed.

But the situations in the present case and the claims as formulated differ
fundamentally from those in Buron v. Denman. Though the conception of an
act of State as illustrated in Buron v. Denman has been so recognised
that it cannot now be overthrown I would hope that occasions for depen-
dence on it as a defence will become increasingly rare. I am referring to
times of peace and to times not affected by sudden emergencies. I do not view
with favour a rule which can give immunity if wrongful acts are done
abroad but no immunity if such acts are done in this country and even if
done to a resident foreigner. The general principle has been that if a
wrong is of such a character that it would have been actionable if committed
in England and if the act is not justifiable by the law of the place where
it was committed then an action may befounded in this country (see Phillips
v. Eyre L.R. 6 Q.B.I and Carr v. Fracis Times & Co. [1902] AC 176, 182).
At the end of the report of Buron v. Denman it is stated that counsel for
the plaintiff tendered a bill of exceptions but that later the plaintiff obtained
an order to discontinue " certain terms of settlement of this and other
" similar actions having been agreed to ".

Though in Buron v. Denman it was held that what was equivalent to a
positive command to do a wrongful act gave exoneration to the defendant
there would not be such exoneration in the case of an act done in this
country. In Johnstone v. Pedlar [1921] 2 AC 262 where there was a
wrongful seizure and detention of the property of someone who was an
alien residing in the realm and where there was a positive ratification of
what had been done it was held that it was not a good defence that the
seizure and detention had been adopted and ratified by the Crown as an
act of State. Viscount Finlay (at page 271) said that it was settled law
" that if a wrongful act has been committed against the person or the
" property of any person the wrongdoer cannot set up as a defence that
" the act was done by the command of the Crown ". He regarded it as an
exception if there were " acts committed abroad against a foreigner ".

I assume that if Buron's property and the events concerning it had been
within the jurisdiction no command to Captain Denman however positive
would have availed him. There might still have been something that
might be called an act of State but not in the sense of being a defence to
a claim. It may be that the making of an order for the deportation of an
alien enemy interned in this country is to be regarded as an act of State
(see Kelz v. Ede [1946] 1 Ch. 224: and see Winfield on Torts (8th edition
page 715). The phrase "act of State" can, therefore, be used either in
reference to some apparently wrongful act in respect of which " act of
" State" may or may not be a defence: or the phrase may be used in
reference to some entirely lawful act in respect of which someone who
complains has no basis in law for a complaint and then the phrase is really
not needed as a defence. The position is, therefore, apparently reached
that if some hostile and apparently unlawful act is done abroad by com-
mand of the executive to someone not owing allegiance to the Crown
there is no liability in this country either in the actor or in the executive
(even though the act was not justifiable by the law of the place where
committed) but if the act is done here by such command the Crown would
(after the Crown Proceedings Act) be liable to be sued. I do not regard
the position as satisfactory and in view of the fact that the phrase " act of
" State " has a diversity of meanings and of the fact that when used as a
plea it is not always clear what it is intended to denote I am content to
say that in this case and for the reasons I have given the plea of act of State
does not avail.

The question has been raised whether the defence of act of State can
be pleaded against a British subject. I can imagine circumstances in which
an event abroad, which could be described as an act of State because



14

deliberately (and as a matter of policy) commanded by the executive,
caused damage to a large number of people whose nationality was unknown ;
if it subsequently transpired that one out of the large number was a British
subject would the result be that act of State could be successfully pleaded
against all the others but not against him? In this connection, having in
mind the provisions of the British Nationality Act, 1948, it would be
necessary to have clear definition as to the range of those covered by the
description of British subject. Would the description have to be limited
to those owing allegiance to the Crown? But quite apart from this
point I do not find it necessary in this preliminary issue to express any
opinion on this wider question.

The remaining question raised in the preliminary issue relates to the
period after the 27th March, 1964. British troops continued in occupation
of the hotel until the 5th May, 1964, when they handed it over to Finnish
troops. I see no reason for imposing liability after that date. The position
was, however, that between the 27th March, 1964, and the 5th May, 1964,
the British troops were contingents of the United Nations Force. The pre-
liminary issue which is raised is whether on that basis and upon the facts
pleaded in paragraph 5 of the Defence there is a " good defence in law "
to the claims made. Paragraph 5 of the Defence sets out that early in
March, 1964, the Security Council recommended the creation of a United
Nations Peace-Keeping Force in Cyprus and that the Cyprus Government
consented to this. There followed an agreement between the Secretary-
General and the Government of Cyprus concerning the legal status of the
United Nations Force. The terms of that agreement are contained in a
letter dated the 31st March, 1964, from the Secretary-General to the Foreign
Minister of Cyprus. It is said that the agreement became effective from
the 27th March and that it was later ratified by a law passed in Cyprus.
If there was at that time any liability in the Appellant towards the plaintiff
(which is the question to be determined in the action) I cannot see how that
liability is affected by the terms of an agreement between the Secretary-
General and the Cyprus Government. If. of course, some arrangement was
concluded and was carried out under which liability towards Mr. Nissan
was assumed and was discharged then pro tanto Mr. Nissan could not in a
claim against the Appellant assert any loss. These considerations would I
think apply even if it were correct as seems to be asserted that the United
Nations must be deemed to be a Sovereign State that took over from the
British Government when the British troops became part of the United
Nations Peace-Keeping Force. But that does not represent the true position.
The United Nations is not a state or a sovereign: it is an international organi-
sation formed (inter alia) to maintain international peace and security and to
take effective collective measures for the prevention and removal of threats
to peace: it is based on the principle of the sovereign equality of all its
members: it does not intervene in matters which are essentially within the
domestic jurisdiction of a State.

If the letter from the Secretary-General to the Cyprus Foreign Minister is
being considered I do not find in its terms any provisions that would relieve
the Appellant from liability. Though that letter is the only document referred
to in paragraph 5 of the Defence (and therefore the only document that is
directly relevant in this preliminary issue) attention was also given to the
Regulations for the United Nations Force in Cyprus issued by the Secretary-
General. They were dated the 25th April, 1964. Reference was also made
to letters passing in February 1966 between the Secretary-General and the
United Kingdom Permanent Representative to the United Nations. From the
various documents published in Command 3017 it appears that when the
Security Council passed this Resolution of the 4th March, 1964, they recom-
mended that all costs pertaining to the United Nations Force should be met
in a manner to be agreed upon by the Governments providing contingents
and by the Government of Cyprus though the Secretary-General was able to
accept voluntary contributions in respect of the costs. From the documents
it appears further that though national contingents were under the authority
of the United Nations and subject to the instructions of the Commander the



15

troops as members of the Force remained in their national service. The
British Forces continued, therefore, to be soldiers of Her Majesty. Members
of the United Nations Force were subject to the exclusive jurisdiction of their
respective national states in respect of any criminal offences committed by
them in Cyprus. The Cyprus Government agreed that upon a request from
the commander of the United Nations Force they (the Government) would
assist the Force in obtaining equipment, provisions, supplies and other goods
and services required from local sources for its subsistence and operation.

I would have expected that both in the period of the Truce Force and in
the period of the United Nations Force appropriate arrangements and agree-
ments would have been made between the Governments concerned in regard
to questions concerning the expense involved in supplying the troops. But
whether any arrangements were made or not I do not find warrant from a
study of the terms of the letter of the 31st March, 1964 (which were accepted
by the Cyprus Government), or from a study of the other documents in
Command 3017 for holding on this preliminary issue that no claims made by
the Appellant in regard to the period between the 27th March, 1964, and
the 5th May, 1964, could succeed.

I would, therefore, dismiss the appeal and (to the extent I have set out)
allow the cross-appeal.

Lord Pearce

MY LORDS,

All the judgments in this case are agreed that, on the facts pleaded, the
British Forces were not acting as agents for the Cyprus Government during
the period before the arrival of the United Nations Force. In this they were
clearly right. There is nothing to prevent the Crown acting as agent or
trustee if it chooses to do so, as Lord Atkin said in Civilian War Claimants
Association v. The King [1932] A.C. 14 at page 27. But none of the matters
pleaded raises any such inference. They all point to the British Forces
coming on the scene as allies and helpers, not as agents, and making their
own arrangements for their accommodation. There is nothing to suggest
that they called in aid the Cyprus Government or acted on their instructions
or left it to them to arrange the occupation of the hotel.

All the judgments, however, took the view that during the second period
the British troops no longer occupied the hotel in the Queen's name but in
the name of the United Nations. I do not think so. The United Nations
is not a super-state nor even a sovereign state. It is a unique legal person
or corporation. It is based on the sovereignty of its respective members. But
it is not a principal carrying out its policy through states acting as its agents.
It is an instrument of collective policy which it enforces by using the
sovereignty of its members. In carrying out the policies each member still
retains its own sovereignty, just as any sovereign state, acting under its
treaty obligations to another state, would normally still retain is sovereignty.

This view of the matter is strongly reinforced by the relevant letters and
regulations. They show that the Commander of the United Nations Force
is head in the chain of command and is answerable to the United Nations.
The functions of the force as a whole are international. But its individual
component forces have their own national duty and discipline and remain
in their own national service. The Government of Cyprus (see letter 31st
March, 1964, par. 36) " will, upon the request of the Commander, assist the
" Force in obtaining equipment, provisions, supplies and other goods and
" services required from local sources for its subsistence and operation . . .
" Members of the Force and United Nations officials may purchase locally
" goods necessary for their own consumption ", and so forth. Nowhere is
there a suggestion that the United Nations are primarily liable for anything
in respect of the payment or provisioning or accommodation of the Forces.
The financial liability of the United Nations Secretary-General is that



16

(Regulation 16) " Within the limits of available voluntary contributions he
" shall make provision for the settlement of any claims arising with respect
" to the Force that are not settled by the Governments providing contingents
" or the Government of Cyprus ". This is the antithesis of assuming primary
financial responsibility.

So far as the Government of Cyprus is concerned, it shall (by letter of 24th
March, 1964, paragraph 19) " provide without cost to the Force and in agree-
" ment with the Commander such areas for headquarters, camps, or other
" premises as may be necessary for the accommodation and the fulfilment of
" the functions of the Force ". There is no suggestion that the Government
of Cyprus ever acted on this with regard to the troops with which we are
here concerned. Nor is there any suggestion that the British Government ever
asked it to do so, or altered the existing situation vis-à-vis the Respondent or
even requested the Cyprus Government to take over thereafter the claims of
the plaintiff. Even if the Cyprus Government had agreed with the British
Government to take over the plaintiff's claims this would not have affected
any claims of the plaintiff unless and until the plaintiff accepted this transfer
of responsibility as against the British Government. There is no suggestion
that, during the second period, the United Nations or the Cyprus Government
continued the billeting arrangements or that during the second period anybody
did anything to show that thenceforward the British Government was acting as
agent for either the United Nations or the Cyprus Government, in respect of
billeting, or that they had authority from either to do so.

Therefore it is clear that any liability to the plaintiff in respect of these
premises must fall on those who in fact took and occupied the premises. They
may have had some possible but very tenuous recourse against the Government
of Cyprus, but none, I think, against the United Nations.

When, however, the British left and the Finns took over, I do not find
any continuing liability on the British. They no longer used or occupied
the premises. The Finns, under the order, presumably, of the United
Nations Commander, took over. The British had no responsibility for the
Finns and no control over the situation. Thereafter the Cyprus Government
might shoulder the responsibility ; or it might be left to the Finns to pay ;
or it might fall on the United Nations to make some payment under Regulation
16 (if they had any available voluntary contributions) in respect of a claim
" not settled " by the Finns or the Government of Cyprus. But, be that as it
may, the British Government thereafter were not liable.

The learned judge held that the whole claim was not cognisable because
it arose out of an act of State. The Court of Appeal, rightly in my
opinion, held that the defence of act of State was not maintainable.

It has long been one of the liberties of the subject that when a wrong is
done to him by the executive he cannot be shut out from justice by the faceless
plea of an act of State.

Sir James Fitzjames Stephen said in his History of the Criminal Law, volume
2, page 65 that " the doctrine as to acts of state can apply only to acts which
" affect foreigners and which are done by the orders or with the ratification
" of the Sovereign. As between sovereign and his subjects there can be no
" such thing as an act of state. Courts of law are established for the express
" purpose of limiting public authority in its conduct towards individuals."
The penultimate sentence almost in exact terms was used in argument and
accepted in Walker v. Baird [1892] AC 491, 494. And it was affirmed by
Lord Phillimore in Johnstone v. Pedlar [1921] 2 AC 262 at 295. In the same
case (at page 272) Viscount Finlay said that the doctrine of act of State
" has no application to any case in which the Plaintiff is a British subject ".

The Crown contention is that this right of the subject whereby he cannot
be shut out from the Courts by the barrier of an act of State applies only to
matters done within the realm. For when a subject is abroad he lives under
the local law and relies on that, so that vis-à-vis the executive of his nation
he is in the same position as a foreigner. The difficulty of applying this
geographical test is that, if it be right, a subject loses his rights against
the executive as soon as he is outside the three mile limit. This would be
an odd and undesirable result.

17

Although there is no legally enforceable duty to protect subjects in foreign
parts (China Navigation Co. [1932] 2 K.B. 197), it would be a novel concept
to hold that a government owes no duty at all to help or protect or refrain
from injuring them. And there seems little logical justification for saying
that although a country owes some measure of protection to its subjects
when they are outside the realm, yet it may treat them as if they were
mere aliens whenever it chooses to impinge upon their personal rights. Also
it must be remembered that aliens abroad can rely upon their own govern-
ments to make representations through diplomatic channels and obtain
redress from our government if they are injured by its acts of State.
But if our government can injure its subjects abroad without remedy in the
Courts, there are no diplomatic channels open to them.

The plaintiff, on the other hand, rests his argument on allegiance. He is
a citizen of the United Kingdom and Colonies. This citizenship gives him
rights which are not local and creates obligations which are not local.
The subject owes allegiance even outside the three mile limit and he has
his corresponding rights.

In Calvin's case (4 Co. I. 77 E.R. 377) a problem arose by reason of the
fact that England and Scotland, though not themselves united, shared one
monarch in the person of James I of England and James VI of Scotland.
Coke C.J. there (page 382) quoted from Glanville "For as the subject
" oweth to the King his true and faithful ligeance and obedience ; so the
" sovereign is to govern and protect his subjects . . . ". He continued
" therefore it is truly said that protectio trahit subjectionem et subjectio
" proiectionem ".

In none of the authorities cited is the point directly dealt with. The
forceful statements in Walker v. Baird and Johnstone v. Pedlar to the effect
that act of State is no defence against the claim of a British subject could
have intended the implication " so long as the subject is within the realm ".
They could also have intended no such implication, and have been meant,
at their face value, to apply wherever the subject might be. I think the
latter slightly more probable, but their Lordships were certainly not directing
their minds to this particular point since in each case the mischief done by
the executive was in fact within the realm. In Salmond on Torts (14th
edition 1765 at 607), the authorities are summed up in the words " A British
" subject owes allegiance to the Crown in whatever part of the world he
" may be: it seems therefore that the Crown cannot plead an act of state
" against him, wherever the wrong may have been committed ".

The case of Rustomjee (2 Q.B.D. 69) laid down that a subject cannot
found a personal claim upon a treaty. If the Crown makes a treaty accepting
compensation for its subjects the subjects cannot sue to recover that
compensation from the Crown. The annexation cases also show the same
principle. A subject cannot enforce engagements which are founded on
treaties (Rann v. Secretary of State for India). Nor can he enforce against
a sovereign who has annexed a country claims which he had against a
previous sovereign. For the annexation is an act of State which is not
cognisable in the Courts. In the words of Lord Kingsdown in the case of
Kamuchee Boyee Saheba (7 Moore's Indian Appeals Cases), " What was
" the real character of the act done in this case? Was it a seizure by
" arbitrary power on behalf of the Crown of Great Britain of the dominions
" and property of a neighbouring state, an act not affecting to justify itself
" on grounds of municipal law? Or was it in whole or in part a possession
" taken by the Crown under colour of legal title of the property of the late
" Rajah of Tangore in trust for those who, by law, might be entitled to
" it on the death of the last possessor. If it were the latter, the defence
" set up has no foundation ". In Forester v. Secretary of State for India it
was held that the particular act of government was not seizure by act of
power but possession taken under legal title on the alleged determination
of a tenure. " If by means of the continuance of the tenure or for other
" cause, a right be claimed in derogation of this title of the Government,



18

'' that claim like any other arising between the Government and its subjects
" would prima facie be cognisable by the municipal Courts of India ". The
cases show that when there has been annexation by the Crown as an act
of State, that annexation cannot be used by a claimant as a foundation
for a claim against the Crown on the basis that by the annexation it has
inherited the liabilities or grants of its predecessor. In Cook v. Sprigg
[1899] A.C. 573, the plaintiff as concessionaire of Pogoland was held to be
barred by act of State from enforcing his concession against the defendant
as Premier of South Africa which had annexed Pogoland. The plaintiff
was a British subject but this point was not relied on and his wide and
rather vague concessions had not been exercised. In the West Rand
case [1905] 2 KB 391, a British company sued the Crown because the
late South African Republic had owed it some gold. Again reliance was
not put on the fact that it was a British subject. It is possible that if the
Crown had taken over the actual gold bars which were the plaintiff's
property, the case might have assumed a different aspect.

There is nothing in any of these cases to suggest that if the Crown
actively interferes with the person or property of a British subject in this
country, he is barred from a remedy in the Courts because that act was
done in carrying out or implementing some act of State such as an
annexation or a treaty with a foreign power. A subject must of course
put up with loss which he suffers indirectly through the treaty obligations of
the Crown. But it seems to me clearly contrary to the liberties of the
subject that he should have no remedy if the Crown within the realm directly
interferes with his liberties of person or property even if it does so in accord-
ance with some treaty with a foreign power. There is some force in the
argument that the interference by the Crown with a subject's liberties of
person or property abroad cannot be barred from consideration in the Courts
by the plea of an act of State. But this is a difficult subject with wide
implications. In the present case it is not necessary to decide it. For the
taking of the Cornaro Hotel does not come within the category of an act of
State. Whatever might be the situation if a clause in the treaty said expressly
that British troops must be stationed in the Cornaro Hotel, in the present
case there was no such necessity. No doubt it was a sensible place for them
to be stationed. But had it not existed, they would have been stationed
elsewhere. There is nothing in the facts pleaded to suggest that the occupa-
tion of the hotel was a sine qua non of the performance of the treaty. It was
quite a subsidiary matter. In my opinion it did not have the character of an
act of State.

When the defences of agency and act of State are disposed of. it becomes
a question whether as between the plaintiff and the executive, the facts
produce a situation in which a legal claim lies for the accommodation which
the plaintiff provided, whether willingly, or against his will, or half-way
between those states of mind, for the use of the executive. Since no law of
Cyprus has hitherto been pleaded one must at present assume that it con-
tains no element which is a deciding factor in the case.

So far as the facts can be said to emerge at this stage they are vague
and hypothetical and may present a somewhat different appearance at the
trial.

Mr. Ackner for the Crown argues that the plaintiff is in a dilemma. Either
he must prove a contract, which it is argued, he cannot do, or he must
rely on a claim ir tort for a trespass committed abroad, a claim which will
not lie in our Courts (British South Africa Co. v. Companhia de Mocambique
[1893] AC 602). The Court of Appeal erroneously, it is said, freed him from
the dilemma by holding that the Prerogative applied abroad. But in my
opinion, even if the Court of Appeal wrongly decided the difficult question of
the Prerogative, it is the defendant rather than the plaintiff who is likely to
be in a dilemma. Admittedly the British occupied the hotel. I do not find
it easy in the present state of the case to see what set of facts the defendant
can establish which does not import an obligation to pay on one ground or
another, whether the Prerogative applies or not.

19

It is confusing to describe the aspect of the Prerogative here in question
as a right to take. It is a right to take and pay. This appears both from
the cases of De Keyser's Hotel [1920] A.C. 505 and the Burmah Oil Company
[1965] AC 1. So far as concerns things which the owner has for sale, there-
fore, the Crown is in no better case than the ordinary man. In a super-
market every man may take and pay for the goods that are displayed. The
Crown has, however, by virtue of the Prerogative a right not only to take
and pay for that which is for sale, but also to take and pay for that which
is not for sale, e.g. the cash-desk of the supermarket, or even the whole
supermarket itself. If it does this properly as of right within the Prerogative,
it must pay for that which it took. If it does this in excess of the Prerogative
either by bluff or by pressure or by common consent, it likewise produces
as a rule a situation in which it must pay for that which it took. The Crown
is in this respect under the common law no better off than any person or
corporation. The question, therefore, (apart from the Prerogative) will be
whether, if some corporation on these facts (whatever they may prove to be)
took over the hotel, it is liable to pay.

Of course, if it can be shown that the plaintiff spoke or behaved in a
way which should objectively be considered a clear representation that he
did not expect or wish to be paid, then his claim is defeated. But the
difficulty of such a contention would be that his general business apparently
was offering accommodation for reward at his hotel, and the British Force
took and occupied more of it than he wished. The only inference, until the
contrary is proved, is that he was wishing and intending to be paid.

It is argued for the Crown that if this was a trespass the case of British
South Africa Company v. Companhia de Mocambique (above) prevents an
action in trespass in this country. But this is not an action in trespass or
tort. If an unwilling shopkeeper cannot prevent a forceful customer from
carrying off something which he does not wish to sell he is entitled to sue
him for the value without relying on tort. His cause of action may be in
contract on the basis that, though unwillingly and under pressure, he did
in fact consent to a sale. It seems odd if the Crown can be heard to claim
that he did not ultimately consent and that their taking was wholly tortious.
But even if the occupation was, on a true analysis of the facts, wholly
tortious, the plaintiff may sue in quasi-contract, waiving the tort. I entirely
agree with the observations of Winn L.J. on this point and with the essay of
Lord Wright and the opinion of Lord Atkin in the case of United Australia
Ltd. [1941] A.C. 1 at 27-29 which the Lord Justice cited.

Thus, there seems on the facts pleaded so far no great importance in the
question whether the British Forces actually occupied the hotel by a valid
use of an existing right to occupy (the Prerogative) which calls for payment,
or by an invalid use of it, or simply by the pressure of circumstances,
which caused an unwilling seller to part with his goods. For in all of
these cases as a rule the willing or unwilling seller is entitled to be paid for
his goods which have been consumed or his hotel which has been occupied
(unless of course it be shown that he was a giver and not a seller). It is
true that in respect of contract there is a plea that there was no authority
on behalf of the executive. Had this been a case where there was no
use of the premises known to the executive (e.g. some private soldiers
occupying the premises on a frolic of their own) there might be substance
in such a plea. So, too, if the plaintiff had been suing on a contract of
which the executive had not in fact had the benefit. But this is not, as
I understand it, put forward as a case where the occupation was unknown to
any responsible officer. Since the army authorities chose to use these
premises, no facts put forward so far provide any grounds for saying that
the executive are not liable for the price of its use and occupation. And
the bargain, if bargain there was, is alleged to have been made by persons
who would be regarded by a reasonable person as having in all the circum-
stances the highest authority to speak on behalf of the executive. However,
all these matters will emerge more clearly when the facts are proved in
evidence.

20

I find the question of the Prerogative difficult. There is an attractive
simplicity about the view that the Prerogative operates only within the
realm. And there seems something odd in finding it employed on foreign
soil by a visiting sovereign who is only there by sufferance of the true
sovereign of the realm. Yet the Prerogative is the power which directs the
movements of forces abroad, and through the centuries until comparatively
recent times it was the source of all their disciplinary procedure. The
Prerogative was the warrant for the presence of British troops in Cyprus.
Therefore, the Prerogative is operating within the lines of the Army when
it is on foreign soil. Of course it cannot operate against an alien in an alien
land. But when Sovereign and subject meet through the operation of the
Prerogative in an Army overseas, there seems no inherent reason why the
Prerogative should not be valid. It seems reasonable that he should, as
part of his allegiance, be under a duty to the Sovereign in respect of the
prerogative right which is for the protection of that realm of which he is a
subject. Therefore, not without some doubt, I think the view that the Pre-
rogative applied and that the Crown were exercising it is probably the
correct view.

The Crown clearly considered that the sending of troops was justified
to protect the realm by stopping a conflagration which might have serious
consequences to the safety of this country if it was allowed to spread.
Of that matter the Crown is the judge.

The War Damage Act, 1965, does not affect this case. The occupation
of the hotel did not occur " during or in contemplation of the outbreak
" of a war in which the Sovereign was or is engaged ". Moreover the Act
only applies to " damage to or destruction of property ". It was directed
to the kind of damage which was the subject of the Burmah Oil case. It
does not cover claims for payment for use and occupation of premises
by the military or the executive. There are two reasons why the Courts
are bound to put a narrow construction on the words. The first is that
the Courts have a duty to protect the liberties of the subject from encroach-
ment, especially where for centuries there has been no such encroachment.
The second is that unless the clearest language is used, it is to be assumed
that no such encroachment was intended by Parliament.

I would therefore dismiss the appeal.

Lord Wilberforce

MY LORDS,

This appeal comes before this House in an unsatisfactory manner. Your
Lordships are asked to decide questions of law, which may be of great
constitutional range and importance, upon the basis of allegations of fact
made in the pleadings, not fully stated or admitted, and which must be
assumed, quite possibly contrary to what may be found at the trial, to be
true. The main issue is as to the Respondent's claim for the occupation
of and damage to his hotel by Her Majesty's forces: but the circumstances
in which possession of the hotel was taken are disputed. Moreover, although
one would think that, as the claim relates to an immovable in a foreign
country, the law of that country would be of some relevance, the pleading
on both sides studiously avoids any commitment as to the legality or other-
wise of what was done. Reference is made in the defence to an alleged
ratification in writing on 30th December, 1963, of the taking of the hotel
signed by the President and Vice-President of Cyprus but we have not been
referred to the Constitution of Cyprus, to the Treaty between the United
Kingdom and Cyprus of 1960, to any agreement regulating visiting forces
in Cyprus, or to any provision of the municipal law of Cyprus. In these
circumstances it is difficult to view the issues with any width of vision and
for my part I feel reluctant, until I can properly survey the field, to do



21

more than deal with the precise points stated in the Master's Order; more
particularly since, on the view which I take, this case cannot be stifled or
decided in limine but must go to trial.

The first point, which is raised by paragraph 4 of the defence, second
sentence, is whether " in the premises " the Truce Force, of which the British
elements formed part, were agents of the Cyprus Government. If they were,
it is claimed that the actions of the Truce Force were acts of state of the
Cyprus Government and not cognisable by the Court. The words "in the
" premises " refer back to the facts (and only to the facts) stated in paragraph
3 and paragraph 4, first sentence. Paragraph 3 sets out the terms of an appeal
addressed to the Cyprus Government in December, 1963, by the governments
of the United Kingdom, Greece and Turkey and a communique of the Cyprus
Government dated 25th December, 1963. This I quote:

" The Government of the Republic of Cyprus has accepted an offer
" that the forces of the United Kingdom, Greece and Turkey, stationed
" in Cyprus and placed under British command, should assist it in its
" effort to secure the preservation of cease-fire and the restoration of
" peace."

Paragraph 4 of this defence alleges in effect that the British forces which
occupied the Respondent's hotel were part of the Truce Force under British
command assisting the Cyprus Government pursuant to the agreement
recorded in the communique.

On these bare facts the question of agency or no agency has first to be
decided. The Court of Appeal, in agreement with John Stephenson J.,
unanimously decided that there was no agency. I agree with them and with
their reasons and would only add that this finding means just what it says
and does not involve any finding that the Truce Force did or did not act,
generally, or in any particular matter with the acquiescence or approval or at
the request of the Cyprus Government. The sole plea is one of agency and
the decision is that the facts pleaded do not make that plea good.

The second point of law referred by the Master's Order is raised in
paragraph 4 (third sentence) of the defence in the following words :

" Alternatively the actions of the British elements were Acts of State
" of Her Majesty on the territory of an independent sovereign power
" performed in pursuance of an agreement between Her Majesty and
" the said power which equally are not so cognizable."

It will be seen that this plea seeks to withdraw the matter from cognisance
by the courts on the two grounds that the acts complained of were (i)
performed abroad and (ii) performed in pursuance of a treaty. It was made
clear by counsel for the Crown that it was the combination of these
characteristics upon which he relied. This necessitates at least some considera-
tion of the doctrine of act of State as it affects British subjects and I shall
have to deal, if only provisionally, with some arguments of general scope.

Naturally, to start with, one looks for a definition. One which is well
known is as follows: " An act of the executive as a matter of policy performed
" in the course of its relations with another state including its relations with
" the subjects of that state unless they are temporarily within the allegiance
" of the Crown." (Professor E. C. S. Wade in British Yearbook of Inter-
national Law (1934) page 103, adopted by Halsbury, Laws of England, 3rd
edition volume VII page 279.) This is less a definition than a construction
put together from what has been decided in various cases; it covers as much
ground as they do, no less, no more. It carries with it the warning that the
doctrine cannot be stated in terms of a principle but develops from case to
case ; it has perhaps the disadvantage that it includes within itself two
different conceptions or rules. The first rule is one which provides a defendant,
normally a servant of the Crown, with a defence to an act otherwise tortious
or criminal, committed abroad, provided that the act was authorised or
subsequently ratified by the Crown. It is established that this defence may
be pleaded against an alien, if done abroad, but not against a friendly alien
if the act was done in Her Majesty's Dominions. It is supported in its positive
aspect by the well-known case of Buron v. Denman (1848) 2 Exch. 167 and
in its negative aspect by Johnstone v. Pedlar [1921] 2 AC 262.

22

The second rule is one of justiciability: it prevents British municipal
courts from taking cognisance of certain acts. The class of acts so protected
has not been accurately defined: one formulation is " those acts of the
" Crown which are done under the prerogative in the sphere of foreign
" affairs" (Wade and Phillips, Constitutional Law, 4th edition, 193). As
regards such acts it is certainly the law that the injured person, if an alien,
cannot sue in a British Court and can only have resort to diplomatic protest.
How far this rule goes and how far it prevents resort to the courts by British
subjects is not a matter on which clear authority exists. From the terms of
the pleading it appears that it is this aspect of the rule upon which the Crown
seeks to rely.

Most of the decided cases are concerned with acts of annexation, or transfer
of territory, and although in our present situation these have become of
historical interest, they may still give us some guidance on principle. The
Respondent sought to discount their relevance by saying that they decide
nothing more than that a claim cannot be entertained by the courts if the
person making it has to rely, as part of his case, upon an act of this
character. I have no doubt that this principle does underlie some of the
decisions, but I do not think that it is sufficient to dispose of them. The
principle is wider than this and must, in my opinion, extend equally to
cases where the " act of State " is complained of, as where it is relied
upon. In either case, the courts are not bound to accept the ipse dixit
of the executive but have the right to decide for themselves whether the
act is, in this sense, an "act of State " (see Forester v. Secretary of State for
India in Council (1872) L.R. Ind. App. Supp. volume 10; Secretary of
State in Council of India v. Kamachee Boye Sahaba 7 Moo. Ind. App. 476
" the next question is what is the real character of the act done in this
"case" per Lord Kingsdown page 531 ; Salaman v. Secretary of State for
India [1906] 1 KB 613, 639). But once the character of the act is decided,
whether it is raised by way of defence to a claim (Salaman's case u.s. Cook
v. Sprigg [1899] AC 572, a case of doubtful authority) or is the basis of
the complaint (Secretary of State in Council of India v. Kamachee Boye
Sahaba u.s. where the act complained of was of a tortious character—see
Secretary of State for India v. Bai Rajbai L.R. 42 I.A. 229, 238) or is
sought to be relied on by the claimant (West Rand Central Gold Mining
Co. Ltd. v. The King [1905] 2 KB 391) cognisance cannot be taken of it
by a municipal court. Whether, in this type of case, any distinction is to be
drawn between claims by British subjects and claims by others is not
brought out by the decisions. One may in fact wonder why, if the character
of the act is what makes it non-cognisable, the quality or nationality of
the plaintiff should enter into the matter. Certainly in some cases, and
probably in others, the plaintiff was a British subject but generally no
reference to this either way appears, nor is this circumstance, or its absence.
a ground of decision. If any guidance on this point is to be obtained from
authority, it must rather be found in Walker v. Baird [1892] AC 491 and
Johnstone v. Pedlar (u.s.).

Walker v. Baird (u.s.) was an appeal to the Privy Council from Newfound-
land where the acts complained of took place. These were the seizure of
the lobster factory of the Respondents, who were British subjects, by the
Appellant commanding H.M.S. Emerald acting, under instruction, to enforce
an agreement as to lobster fishing between Her Majesty and the French
Government. The defendant submitted that the acts complained of " were
" acts and matters of state arising out of the political relations between Her
" Majesty the Queen and the Government of the Republic of France, and
" that they involved the construction of treaties . . ." and the validity of
this defence was submitted (as here) to the Court by way of a preliminary
point of law. The Judicial Committee held that the defence disclosed no
answer and the limited scope of the decision is worth observing:

" This judgment (of the Supreme Court of Newfoundland) was clearly
" right unless the defendant's acts can be justified on the ground that
" they were done by the authority of the Crown for the purpose of



23

" enforcing obedience to a treaty or agreement entered into between
"Her Majesty and a foreign power. The suggestion that they can be
" justified as Acts of State ... is wholly untenable."

Lord Herschell went on to refer to the Attorney-General's argument. The
latter had not, he said, argued generally for a right to invade the rights of
private individuals whenever it was necessary in order to compel obedience
to the provisions of a treaty. He contended (it seems under judicial pressure)
for a more limited proposition: that the Crown had this power in relation
to a treaty arrived at to put an end to a state of war. If this be so, the
power, he contended, must extend to the provisions of a treaty for the
preservation of peace. As to this, Lord Herschell concludes:

" Whether the power contended for does exist in the case of treaties
" of peace, and whether if so it exists equally in the case of treaties akin
" to a treaty of peace, or whether in both or either of these cases inter-
" ference with private rights can be authorised otherwise than by the
" legislature are grave questions upon which their Lordships do not find
" it necessary to express an opinion."

When so eminent a Board expresses itself with such caution as this in
relation to acts done within Her Majesty's dominions, we may be entitled
to feel same hesitation in attempting any general proposition of law in the
much more difficult case where the action takes place outside them.

These hesitations are hardly dispelled by Johnstone v. Pedlar (u.s.). This
was a straightforward case of a tort committed within Her Majesty's
dominions (Ireland, then part of the United Kingdom). The questions debated
were whether the defence of act of State could be raised against the plaintiff
who was regarded as an alien and whether he had forfeited his rights by
violation of his allegiance. It was unanimously held in this House that
he was entitled to recover. There are certain passages in the speeches which,
in words, suggest that in no circumstances, wherever the act complained
of took place, can a defence of act of State be set up against a British subject.
These have been quoted and I shall not repeat them. They are open
to the familiar counterpart arguments that, read literally they support the
proposition, read in their context and secundum materiam they do not.
I shall not extend the discussion since I do not believe that anything said
at this stage of the present case can elevate the status of these dicta in the
former decisions. But it is perhaps fair to remark that two of their Lordships
whose speeches contain, in words, perhaps the strongest dictum as regards
the non-applicability of " Act of State " to British subjects firmly rest their
observations on Walker v. Baird (u.s.) which is undoubtedly a case where
the act took place within the dominions of the Crown (per Viscount Finlay
page 272 ; Lord Phillimore page 295) and those of another are founded
upon a deduction from some remarks of Lord Halsbury in Cook v. Sprigg
which, with respect, seems not to follow from what Lord Halsbury said
(page 280-281). Finally, the type of act with which Johnstone v. Pedlar
was concerned (the seizure of money found on the plaintiff's person) is vastly
different in character from the type of act which the plea (if it exists) seems
adapted to protect, viz. acts in the conduct of foreign relations, or acts in
the execution of a treaty. So I cannot regard Johnstone v. Pedlar as laying
down any rule as to the matter with which we are concerned, or, if it does,
as defining its limits.

Text-book writers, on this subject, are no more conclusive than the cases.
Sir James Fitzjames Stephen in his History of the Criminal Law (1883)
includes a passage dealing with acts of State in the criminal law and the
question as he puts it. is " whether the criminal law applies to what have
" sometimes been described as acts of state ". In this context he examines
the criminal consequences of acts done in war or similar circumstance, and
considers such actions as the bombardment of Copenhagen in 1807, the
action of Sir E. Codrington at Navarino and Napoleon's execution of
prisoners at Jaffa. These, in his opinion, fall outside the sphere of the criminal
law, so far as they affect foreigners. As regards the civil law the only cases
he refers to are Buron v. Denman and Secretary of State for India v. Kamachee
Boye Sahaba u.s. and this in order to show that if an act is not a civil wrong,
it cannot, a fortiori, be criminal. But he does not go into the question of the



24

civil remedies of British subjects or foreigners respectively. Dicey, Conflict
of Laws, 7th edition, seems to support the view that British subjects cannot
claim against the British or Colonial Government if the claim arises out of
an act of State outside the United Kingdom or its colonies (page 163 and
footnote 65) but this qualification is discarded without explanation in the
current 8th edition (page 164). Other modern text books such as Halsbury
Laws of England 3rd edition, Salmond on Torts 14th edition base a proposi-
tion upon Walker v. Baird u.s. sometimes prudently qualified in a footnote
and add nothing to the authorities. Lord McNair, dealing with the subject
in relation to treaties, states " in this sense of the term ' act of State' is a
" valid plea and protects the Crown in English Courts against proceedings
" instituted by a British subject or an alien in respect of any damage suffered
" from the conclusions operations or termination of a treaty " but continues
by mentioning the necessity for legislation if performance of the treaty involves
a modification of the rules of statutory or common law administered by
English Courts (Law of Treaties (1961) page 361). In his earlier book he
had expressed the latter qualification as relating to treaties requiring, for their
execution and application in the United Kingdom, a change in or addition
to the law administered in the courts (Law of Treaties 1938 page 13). In his
International Law Opinions (1956) the same learned author, referring to
" acts of the Crown which are done under the prerogative in the sphere of
" foreign affairs " says that they cannot form the basis of an action brought
against the Crown by any person British or alien in British municipal courts.
Such acts are " not justiciable in British courts at the suit either of British
" subjects or of aliens " (I.c.p. volume II page 112). I regard these passages
as publicist authority of weight in favour of the application of the non-
cognizance rule as regards certain types of acts to British subjects.

Thirdly, if and so far as the opinion of the Law Officers constitutes a
source of municipal as contrasted with international law, they speak with an
uncertain voice. The advice of Yorke and Talbot of date 3rd June, 1728,
referred to in Chalmers' Opinions (ii) page 342 seems clearly to relate to the
seizure of British ships in British Plantations—for this the advice that legis-
lation would be required seems correct enough. The advice of Webster
and Clarke dated 16th July, 1890, in relation to the matters litigated in Walker
v. Baird u.s., seems inconsistent with that of Yorke and Talbot and, in
principle, erroneous (McNair Opinions volume 1, page 114); that of James.
Herschell and Deane dated November, 1882, that claims for demurrage by
owners of British merchant ships stopped at Suez by British forces sup-
pressing a rebellion with the consent of the Khedive of Egypt (ib. page 115)
could not be entertained, as covered by " act of State ", a situation factually
not unlike the present, supports the application of the doctrine to British
subjects.

Finally, an attempt was made to derive a rule from constitutional principle :
but this, in my opinion, is precarious. The settlement of 1688 may be said
to have produced the result that, as regards the United Kingdom and its
colonies, the rights of British subjects, and of resident friendly aliens, cannot
be affected by the conclusion of treaties, or other acts in the field of foreign
relations, without legislation making them locally binding: but I can find
no logical compulsion to apply this doctrine abroad. The subject has,
unquestionably, left the Crown, or the executive, a free hand in the conduct
of foreign relations, and I do not know where, in our constitutional principles,
or otherwise than in a general feeling of benevolence to anyone having a
claim against the government, to find an answer to the question whether,
and how far, he is to be taken to assent to consequent executive action. The
converse doctrine that legislation is always required to cover any action affect-
ing British subjects wherever taken is not one that commands automatic-
assent, nor is the proposition that, in such situations as the present justice,
as between the claimant and the British taxpayer who will have to pay if
the claim succeeds, is dependent upon recourse to the courts rather than upon
appraisal by the executive.

In this state of authority and doctrine it appears to me to be impossible
to accept the broad proposition that in no case can the plea of act of State,
in the sense that a particular act by the Crown is not cognisable by a British



25

court, be raised against a British subject. On the contrary, as regards acts
committed abroad in the conduct, under the Prerogative, of foreign relations
with other states, the preponderance of authority and of practice seems to
me to be the other way. No doubt the scope of the Crown's Prerogative,
and the consequent non-justiciability of its acts, is uncertain—as uncertain
as such expressions as " the conduct of foreign relations " or " in the perform-
" ance of treaties ". This is why I am with the Privy Council in Walker v.
Baird in thinking that caution in the stating of general propositions is required.
What fortunately is possible, on consideration of the cases, is to decide whether
the defence as pleaded is a good defence. As to this, I am of opinion that
the acts here alleged are as clearly outside the non-cognizance principle as
were the acts complained of in Walker v. Baird—and for very similar reasons.
The plea is directed not to the " taking " of the Respondent's hotel, but
generally and universally to the " actions of the British elements ", expressions
which might include or seem intended to include, the selection of this hotel
for occupation, the manner in which it was used or damaged, the consumption
of stores therein and the interference with the Respondent's business.
Between these acts and the pleaded agreement with the Government of Cyprus
the link is altogether too tenuous, indeed it is not even sketched out: if
accepted as sufficient to attract the description of act of State it would cover
with immunity an endless and indefinite series of acts, judged by the officers
in command of the troops to be necessary, or desirable, in their interest.
That I find entirely unacceptable.

Before stating a conclusion on the appeal it is necessary to say something
as to other pleaded matters which were debated. First there is the claim
that what was done was done under the Prerogative. I think it is unfortunate
that we have been called upon at this stage in the action to consider this
elusive concept. As the matter stood in the Queen's Bench Division, it did
not arise: John Stephenson J. said that he was not hearing an application
to strike out this head of claim ; he assumed that it might be made good and
he then proceeded, on this assumption, to examine the validity of the defence
of act of State. This was strictly in accordance with the Master's Order.
In the Court of Appeal the discussion took a wider range. By agreement, so
it appears, an additional question was added to the Master's order, wide
enough to let in arguments as to the validity in law of any claim or cause of
action pleaded in the Statement of Claim. Accordingly, the judgments in
the Court of Appeal, though not their formal order, contain observations as
to the plaintiff's right to compensation by virtue of the Prerogative or other-
wise: thus Lord Denning M.R. held that the Prerogative extends to the taking
or destruction of the property of a British subject (" one of Her Majesty's
" subjects ") in a foreign land, by way of extension of the Burmah Oil case
[1965] AC 75 and went on to express the opinion that in any event an
obligation arose at common law. With all respect I am of opinion that these
matters cannot be decided without a knowledge certainly of the circumstances
in which the plaintiff's hotel was taken or occupied and I would also think
of the local law. What rule of English law ought thereafter to be applied
is a matter which, in my view, ought to be left entirely open : for as at present
advised I find great difficulty in seeing how the exercise of the Prerogative
in the independent territory of Cyprus, where, by Statute (Cyprus Act, 1960,)
the Crown enjoys no sovereignty, can be justified, or why the Prerogative
or the English common law should apply as regards an immovable situated
in Cyprus, or why the legality of the act in Cyprus, if it was legal, should
not be a defence (vide Carr v. Fracis Times [1902] A.C. 177). If these, to me,
remarkable consequences are to follow and if the Burmah Oil case is to be
applied by analogy or by extension, that must be by virtue of a very special
set of facts yet to be established. I think it unwise to anticipate their
establishment.

Finally, there is the Respondent's claim in contract, express or implied.
The Crown denies both the alleged implied and express undertaking and also
pleads lack of authority on behalf of the Crown. Here there appears to be a
straight-forward issue of fact to be tried which, in my opinion, should be
tried, and I can find nothing in the pleadings, or in the Master's order which
justifies a decision at this stage that the claim should not proceed. The Court



26

of Appeal, holding that the Respondent had an independent claim to
compensation under the Prerogative or at common law, thought that this set
of allegations carried the matter no further: on their view, this may well be
so, but that should not prevent the Respondent from maintaining it as an
alternative. No opinion, on fact or law, is called for on this part of this case
and at this stage.

From these conclusions it follows that what should now be decided, and
only decided, is that the defences stated in the second and third sentences of
paragraph 4 of the Defence are bad in law and should, in effect, be treated
as struck out.

As regards the cross appeal I agree with the conclusions reached by your
Lordships and generally I agree with the form of order proposed by my
noble and learned friend Lord Pearson.

Lord Pearson

MY LORDS,

One can readily understand and sympathise with the desire of the parties
and their legal advisers and the learned Master to save costs by having a
preliminary hearing on points of law, because this procedure might avoid
the probably heavy expense of taking the oral evidence on the issues of fact.
There are, however disadvantages in this course. The important questions
whether the Truce Force and the British elements comprised therein were
agents of the Cyprus Government, and whether the actions of the British
elements were acts of State of Her Majesty, involve matters of fact as well
as legal doctrine. There are no findings of fact. The assumed facts are
those pleaded in paragraph 3 and the first sentence of paragraph 4 of the
Defence. They are pleaded with the conciseness which is proper to a pleading,
and no further particulars have been supplied. The decisions have to be
given on the assumed facts.

As to the alleged agency, in my opinion this is not established by the
assumed facts. It must have been in the interests of the United Kingdom,
Greece and Turkey as well as Cyprus that the outbreak or the continuance
of civil disturbance or civil war in Cyprus, which might lead to a wider
conflict, should be prevented. Therefore, the Truce Force entered and was
stationed in Cyprus in order to assist the Cyprus Government in its efforts
to secure the preservation of cease-fire and the restoration of peace. There
is no indication that the Truce Force was to be subordinated to the Cyprus
Government and take and carry out its instructions. There would naturally
be co-operation and consultation on an equal footing.

As to the alleged act of State, it is necessary to consider what is meant
by the expression " act of State " even if it is not expedient to attempt a
definition. It is an exercise of sovereign power. Obvious examples are
making war and peace, making treaties with foreign sovereigns, and annexa-
tions and cessions of territory. Apart from these obvious examples, an act
of State must be something exceptional. Any ordinary governmental act is
cognisable by an ordinary court of law (municipal not international): if a
subject alleges that the governmental act was wrongful and claims damages
or other relief in respect of it, his claim will be entertained and heard and
determined by the court. An act of State is something not cognisable by
the court: if a claim is made in respect of it, the court will have to ascertain
the facts but if it then appears that the act complained of was an act of
State the court must refuse to adjudicate upon the claim. In such a case
he court does no come to any decision as to the legality or illegality, or the
rightness or wrongness, of the act complained of: the decision is that because
it was an act of State the court has no jurisdiction to entertain a claim
in respect of it. This is a very unusual situation and strong evidence is
required to prove that it exists in a particular case.

I think that the question whether some governmental act was an act of
State depends upon the nature of the act and (sometimes at any rate) upon
the intention with which it was done, and the intention is to be inferred



27

from words and conduct and surrounding circumstances. Some extracts
from a leading judgment in this branch of the law will assist to show what
is involved.

In the Tanjore case (Secretary of State in Council for India v. Kamachee
Boye Sahaba (1859) 13 Moore P.C. 22) Lord Kingsdown said at pages 75-76:
' The main point taken, and that on which their Lordships think
" that the case must be decided, was this, that the East India Company
" as trustees for the Crown and under certain restrictions are empowered
" to act as a Sovereign State in transactions with other Sovereign States
" in India: that the Rajah of Tanjore was an independent sovereign in
" India: that on his death in the year 1853 the East India Company
" in the exercise of their sovereign power, thought fit, from motives
" of State, to seize the Raj of Tanjore and the whole of the property
" the subject of this suit, and did seize it accordingly; and that over
" an act so done, whether rightfully or wrongfully, no Municipal Court
" has any jurisdiction.

" The general principle of law was not, as indeed it could not, with
" any colour of reason, be disputed. The transactions of independent
" States between each other are governed by other laws than those which
" Municipal Courts administer: such courts have neither the means of
" deciding what is right, nor the power of enforcing any decision which
" they may make."

On page 77 he said:

" The next question is, what is the real character of the act done in
" this case? Was it a seizure by arbitrary power on behalf of the
" Crown of Great Britain, of the dominions and property of a neigh-
" bouring State, an act not affecting to justify itself on grounds of
" municipal law? Or was it, in whole or in part, a possession taken
" by the Crown under colour of legal title of the property of the late
" Rajah of Tanjore in trust for those who, by law, might be entitled
" to it on the death of the last possessor? If it were the latter, the
" defence set up of course has no foundation."

The importance of intention appears from a later passage of Lord
Kingsdown's judgment at page 84, where he said:

" But whatever may be the meaning of this letter, it affords no argu-
" ment in favour of the judgment of the court; but rather an argument
" against it. It shows that the Government intended to seize all the
" property, which actually was seized, whether public or private, subject
" to an assurance that all which, upon investigation, should be found
" to have been improperly seized, would be restored. But even with
" respect to property not belonging to the Rajah, it is difficult to suppose
" that the Government intended to give a legal right of redress to those
" who might think themselves wronged, and to submit the conduct of
" their officers, in the execution of a political measure, to the judgment
" of a legal tribunal. They intended only to declare the course which
" a sense of justice and humanity would induce them to adopt.

" With respect to the property of the Rajah, whether public or private,
" it is clear that the Government intended to seize the whole, for the
" purposes which they had in view required the application of the whole.
" They declared their intention to make provision for the payment of
" his debts for the proper maintenance of his widows, his daughter,
" his relations and dependants; but they intended to do this according
" to their own notions of what was just and reasonable, and not
" according to any rules of law to be enforced against them by their
" own courts."

There is also a passage in the judgment of Turner L.J. in Secretary of
State for India in Council v. Hari Bhanji (1882) Indian L.R. 5 Madras
Series 273, which affords some guidance as to the character of an act of
State (although there is an error if and in so far as it is implied that an
act of State could be committed against a subject within the realm).
He said at page 279:

28

" Acts done by the government in the exercise of the sovereign powers
" of making peace and war and of concluding treaties obviously do not
" fall within the province of municipal law, and although in the adminis-
" tration of domestic affairs the government ordinarily exercises powers
" which are regulated by that law, yet there are cases in which the
" supreme necessity of providing for the public safety compels the
" government to acts which do not pretend to justify themselves by any
" canon of municipal law. . . . Acts thus done in the exercise of
" sovereign powers but which do not profess to be justified by municipal
" law are what we understand to be acts of state of which municipal
" courts are not authorised to take cognisance."

There are, of course, also more modern authorities, but I think it will be

sufficient, for the sake of brevity, to cite the headnote of Salaman v. Secretary

of State in Council in India [1906] 1 KB 613 :

" Where the East India Company, as representing the Crown, has done
" acts of such a nature, and under such circumstances, as to lead to the
" conclusion that those acts were done in the exercise of supreme power,
" as acts of State, and to negative any intention to give thereby legal
" rights, whether contractual or otherwise, to an individual or indi-
" viduals as against the Company, the municipal Courts have no juris-
" diction to question the validity of those acts or to entertain any claim
" in respect thereof by an individual against the Secretary of Slate for
" India as to the successor of the East India Company."

In the relevant pleading (the last sentence of paragraph 4 of the Defence)
and in the argument, reliance was placed on the fact that the acts com-
plained of were done in performance of the treaty (agreement) between the
Cyprus Government and the British, Greek and Turkish Governments. No
doubt the making of the treaty was an act of State, and the performance of
it must to some extent involve acts of State. But I think the things that
were done by the United Kingdom Government had to some extent the
character of acts of State in themselves, apart from the fact that they were
done under a treaty. A British Army was despatched into the territory of
an independent sovereign power with orders to assist in the preservation of
cease-fire and the restoration of peace. That was a military operation,
involving the use of armed force, so far as might be necessary to keep the
peace. It could not be justified under municipal law: it was outside the
sphere of municipal law. being in the sphere of international relations.

But it does not follow that everything which the Truce Force, or elements
of it, did in the foreign territory constitued an act of State. It is not alleged
that the Truce Force had to engage in any fighting or that there was any
urgent military necessity to occupy the hotel. The mere stationing of the
Truce Force in the territory may have been sufficient to keep the peace.
The Truce Force would nevertheless need supplies and accommodation. Con-
ceivably they might have seized the supplies and accommodation in a high-
handed, extra-legal manner as an act of State with the intention of denying
to those affected any right of redress in any municipal court. But it is
unlikely that they would so act in a friendly country, being present there
with the consent and for the assistance of the Government of the country.
It is not reasonable to infer an intention that the occupation of the hotel
should be an act of State. The probable intention was to take the hotel for
the needs of the Army and to leave those affected to pursue whatever legal
remedies they might have. In my opinion, the assumed facts do not show
that there was an act of State.

I wish to reserve the question whether an act done outside the realm could
ever be an act of State in relation to a British subject. The dicta in decided
cases are important, but not decisive, and there are problems involved.
Should the same rule apply to acts on the high seas and to acts in
independent sovereign countries? What is the position if, in a foreign
country, a British army or truce force seizes in one operation a row of ten
houses of which one belongs to a British subject and the other nine to
foreigners? What is the position if, in a foreign country, a British army



29

or truce force seizes a building and goods both belonging to a partnership,
of which some partners are British subjects and others are foreigners? Then
there is the case of the person of British nationality who has settled in a
foreign country and there acquired a business and made a home for
himself and his family: he belongs to the community of that country:
any damage to his property there is a blow to the economy of that country
and any compensation paid to him is a benefit to the economy of that
country: the Government of that country has an interest in his welfare:
he owes local allegiance to that Government and is entitled to its protection,
if the law of that country is the same as English law. How does the rule
in regard to acts of State apply in his case?

Another problem is this: If the plea of act of State is not available in
any circumstances against a British subject, what is the meaning of the
expression " British subject" for this purpose? Does it mean only a citizen
of the United Kingdom and Colonies? Or does it include anyone who is a
"British subject" within the wide definition contained in section 1 of the
British-Nationality and Status of Aliens Act, 1948? Or does it have some
other meaning?

So far, I have been considering only the questions raised under para-
graphs 3 and 4 of the defence. There is another question raised under
paragraphs 5 and 6 of the defence, namely:

" Whether, upon the facts pleaded in paragraph 5 and the first
" sentence of paragraph 6 of the Defence, the last sentence of the
" said paragraph 6 discloses a good defence in law to all or any, and
" if to some only then to which, of the claims and causes of action
" pleaded by the plaintiff in respect of events occurring on and after
" the 27th March, 1964."

The United Nations Force was created and began to operate in Cyprus
on the 27th March, 1964, and the British forces were contingents of it.
I agree with my noble and learned friends, for the reasons given by them,
that these facts and the other facts pleaded in paragraphs 5 and 6 of the
Defence do not establish the plea in the last sentence of paragraph 6 that
" In the premises no action lies against the Crown in respect of any of
" the actions of the said forces ".

On the 5th May, 1964, the hotel was evacuated by the British forces
and thereafter was occupied by Finnish and other non-British contingents.
I agree with my noble and learned friends that, unless the plaintiff is able
to establish some contractual liability, the British Government has no
liability in respect of the continued occupation and use of the hotel and
its equipment and stores from the 5th May, 1964, onwards. The decision of
this point involves an extension of the " terms of reference " -the questions
of law raised by the pleadings and ordered to be decided as a preliminary
issue before the trial of the action—because the change from British to
non-British occupation on the 5th May, 1964, is not alleged in paragraph 5
or paragraph 6 of the defence but in paragraph 12. It has, however, been
common ground between the parties in this appeal that that change of
occupation did take place on that date, and the effect of the change of
occupation has been fully discussed and considered in this appeal. There-
fore, the point ought to be decided in this appeal.

Certain other questions were discussed in the argument of this appeal,
including questions whether the acts complained of, committeed in a foreign
country in relation to a British subject living in that country, could be
said to have been committed in the exercise of some Crown prerogative
and, if so, whether there could be an obligation to compensate the British
subject, and whether a contract was made and, if so, whether it was
authorised, and whether there may be some quasi-contractual liability. It
seems to me that these questions are not properly within the scope of this
appeal. They could not properly be decided as preliminary issues on terms
of reference which do not directly relate to them; especially as the findings
or assumptions of fact which would be needed as a basis for the decisions
are lacking.

30

I now have to consider what should be the form of the order, and some
points of detail are involved.

In substance the Attorney-General's appeal, relating to questions of law
arising under paragraphs 3 and 4 of the Defence, has failed, and the plain-
tiff's cross-appeal, relating to questions of law arising under paragraphs 5
and 6 of the Defence, has succeeded, but subject to a qualification affecting
the duration of the liability.

The original terms of reference, as set out in Master Jacob's order dated
the 27th October, 1966, were as follows:

" (a) Whether, upon the facts pleaded in paragraph 3 and the first
" sentence of paragraph 4 of the Defence, the last two sentences of the
" said paragraph 4 disclose a good defence in law to all or any, and
" if to some only then to which, of the claims and causes of action
" pleaded by the plaintiff in respect of events occurring between the
" 26th December 1963 and the 27th March 1964 ; and

" (b) Whether, upon the facts pleaded in paragraph 5 and the first
" sentence of paragraph 6 of the Defence, the last sentence of the said
" paragraph 6 discloses a good defence in law to all or any, and if to
" some only then to which, of the claims and causes of action pleaded
" by the plaintiff in respect of events occurring on and after the 27th
" March 1964."

The last two sentences of paragraph 4 raised a plea of agency and a plea
of act of State, and the questions of law arising were whether on the assumed
facts (set out in paragraph 3 and the first sentence of paragraph 4) those pleas
or either of them were or was established. The last sentence of paragraph 6
was " In the premises no action lies against the Crown in respect of any
" of the actions of the said forces ", and the question of law arising was
whether on the assumed facts (set out in paragraph 5 and the first sentence
of paragraph 6) that plea was established.

The terms of reference were afterwards amended by consent. A new
paragraph (a) was inserted as follows:

" (a) whether upon the facts pleaded in paragraphs 3 and 5 and in
" the first sentences of paragraph 4 and 6 respectively of the Defence,
" all or any, and if some only which, of the claims and causes of action
" pleaded in the Statement of Claim are sustainable in law."
The original paragraphs (a) and (b) of the terms of reference became para-
graphs (b) and (c).

It seems to me that the amendment was not an improvement, because it
deprived the original terms of reference of their precision. If a decision
has to be given on assumed facts, both the assumed facts and the questions
to be decided should be precisely defined. Moreover, the formulation of
the new paragraph (a) seems to imply that the only relevant facts are those
alleged in paragraphs 3. 4, 5 and 6 of the Defence, whereas the sustainability
in law of the plaintiff's claims and causes of action must be ascertained not
on the basis of those selected and assumed facts only but on the basis of all
the facts duly alleged in the pleadings and proved at the trial. As
Danckwerts L.J.. said at page 343 of the report of his judgment—

" By agreement some additional points were argued before the judge
" and this court, but the result has proved extremely unsatisfactory. The
" court has been compelled to deal with the case on admissions gathered
" with difficulty from the pleadings and assumed facts which may not
" necessarily be true and which may turn out irrelevant when the case
" is tried."'

I should have preferred that the decision on the questions of law arising
under paragraph 3 and 4 of the Defence should be expressed in accordance
with the original terms of reference as follows:

" Upon the facts pleaded in paragraph 3 and the first sentence of
" paragraph 4 of the Defence the last two sentences of the said para-
" graph 4 do not disclose a good defence in law to any of the claims and
" causes of action pleaded by the plaintiff in respect of events occurring
" between the 26th December 1963 and the 27th March 1964."

31

But I do not think it is really necessary to alter the order made by the
Court of Appeal on these questions. Their order was as follows:

" It is declared that the facts pleaded in paragraphs 3 and 4 of the
" Defence do not disclose a defence to any of the claims and causes of
" action pleaded by the plaintiff in respect of the events occurring between
" 25th December 1963 and 27th March 1964."

Their order is to be interpreted as disposing of the two pleas—of agency
and of act of State—which were based solely on the facts alleged in para-
graphs 3 and 4. It does not preclude either party from relying on those facts,
in conjunction with any other relevant facts, for any other purpose of the
action. On that basis the Attorney-General's appeal should be dismissed.

On the other hand, the plaintiff's cross-appeal, relating to the question of
law arising under paragraphs 5 and 6 of the Defence, has succeeded subject
to a qualification affecting the duration of the liability. I think that the cross-
appeal should be allowed, the order made on this issue by the learned trial
judge and upheld by the Court of Appeal should be set aside, and new
declarations should be made substantially on the following lines: —

" (i) upon the facts pleaded in paragraph 5 and the first sentence of
" paragraph 6 of the Defence the last sentence of the said paragraph 6
" does not disclose a defence to any of the claims and causes of action
" pleaded by the plaintiff in respect of events occurring on and after the
" 27th March 1964 ; but (ii) upon the facts so pleaded and the admitted
" facts that the said hotel was evacuated by the British forces on the
" 5th May 1964 and was from that date onwards occupied by Finnish
" and other non-British forces, it is declared that unless the plaintiff is
" able to establish a contractual liability, the British Government has
" no liability to the plaintiff in respect of the continued occupation and
" use of the hotel and its equipment and stores from the 5th May 1964
" onwards."

(324337) Dd. 197022 125 2/69 St.S.